AT&T Loses California Case After Lying To Consumers About 'Unlimited' Data Throttling

from the ill-communication dept

Back in 2014 the FTC sued AT&T for selling "unlimited" wireless data plans with very real and annoying limits. The lawsuit noted that, starting in 2011, AT&T began selling "unlimited" plans that actually throttled upwards of 90 percent of your downstream speeds after using just two or three gigabytes of data. AT&T spent years trying to wiggle out of the lawsuit via a variety of legal gymnastics, including at one point trying to claim that the very same net neutrality and FCC Title II rules AT&T was trying to kill prevented the FTC from holding it accountable.

Nearly a decade after the battle began, the company agreed last fall to a $60 million settlement with the FTC without actually admitting any wrongdoing. That $60 million, after lawyers get a cut, will be split among millions of customers who signed up for AT&T unlimited data plans before 2011. Moving forward, AT&T also has to clearly disclose any limits on its "unlimited data plans" in a conspicuous manner (read: not hidden via fine print or embedded in a hyperlinked asterisk).

But AT&T took another hit last week in a different five-year-old case in California over the throttling. There, AT&T's attempt to ban consumers from suing it for bad behavior was initially upheld by a court ruling in 2016. But a 2017 California Supreme Court decision effectively changed the state's arbitration law, resulting in that AT&T victory being overturned in 2018. AT&T appealed that decision but last week lost the appeal, allowing the case to proceed:

"AT&T appealed that ruling to the US Court of Appeals for the Ninth Circuit, but a three-judge panel at that court rejected AT&T's appeal in a ruling issued Tuesday. Judges said they must follow the California Supreme Court decision—known as the McGill rule—"which held that an agreement, like AT&T's, that waives public injunctive relief in any forum is contrary to California public policy and unenforceable."

"Because we are bound by our decision in Blair [another case involving the McGill rule], we hold that AT&T's arbitration agreement is unenforceable. Accordingly, we affirm the district court's order denying AT&T's motion to compel arbitration," judges wrote Tuesday."

While class action lawsuits certainly have problems (lawyers getting new boats while plaintiffs get pennies being chief among them), they have been known to shift corporate behavior now and again. And however flawed the US class action system is, the binding arbitration system is arguably worse, giving even more power to giant corporations like AT&T, who've already successfully lobbied federal consumer protection and antitrust enforcement into an apathetic coma.

Folks upset at states amping up their consumers protection efforts (see: net neutrality, privacy) should place the blame where it belongs: a wholly corrupted federal government that threw serious consumer protection and corporate accountability overboard thirty to forty years ago.

Filed Under: california, class action, data throttling, fcc, ftc, truth in advertising, unlimited
Companies: at&t


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  • identicon
    Anonymous Coward, 25 Feb 2020 @ 6:43am

    AT&T lost a case? What, did Richard Bennett have to come up for air?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 25 Feb 2020 @ 6:47am

    Thank You

    From the above: "a wholly corrupted federal government that threw serious consumer protection and corporate accountability overboard thirty to forty years ago. " Implying that both U. S. political parties are at fault.

    As a critic of both the Republicans and the Democrats, I wish to say thank you for the above criticism. (I strongly agree) It is time to recognize that both parties are self-serving. Further, both parties will cover for one-another, in order to promote the status-quo. I recognize that the current extreme polarization of politics in the U. S. makes this difficult.

    Nonetheless I think it is worth while to say "Thanks" when thanks is due.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 25 Feb 2020 @ 7:56am

      Re: Thank You

      "Further, both parties will cover for one-another, in order to promote the status-quo. I recognize that the current extreme polarization of politics in the U. S. makes this difficult. "

      The two parties work toward a common goal of dominance over the people, the methods employed vary but do seem to follow a pattern in which one party is much more tolerant of abusive behavior than the other party. The polarization to which you refer occurs in the masses and is typically there due to the provocations of the politicians. Politicians may tell you about all their personal beliefs/opinions but we all know they are lies. They take a position that will benefit their political standing and it has nothing to do with morals/ethics/logic.

      TLDR: There are assholes in every crowd.

      reply to this | link to this | view in chronology ]

    • identicon
      not me, 25 Feb 2020 @ 8:01pm

      Re: Thank You

      Drawing a 100% equivalence between the two parties is just a scheme used by the more corrupt of the two to level the field. It does not help us at all.

      reply to this | link to this | view in chronology ]

  • identicon
    tz, 25 Feb 2020 @ 6:58am

    Arbitration can be far worse than class action if the aggrieved figure it out.

    https://www.courthousenews.com/judge-accuses-doordash-of-trying-to-squirm-out-of-arbitration/

    D oor Dash now has to spend $11M in arbitration fees - CA limits the consumer to $250, and it is $1500 just to start an arbitration, and 10x that minimum to get to an arbitrator, all but the $250 paid for by the company.

    Indegogo also found this out the hard way when they cancelled Alt-Hero comics.

    And there have been other cases. You can easily bankrupt a company via arbitration claims.

    There are a few more landmines for corporations, but I didn't know about the one that hit AT&T.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 25 Feb 2020 @ 7:58am

      Re:

      It costs 250 just to file a claim?
      What does a law suit cost to file?

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 25 Feb 2020 @ 9:00am

        Re: Re:

        It varies by State, court, and sometimes case type and size. Sometimes less, sometimes more. The fee isn’t really the point. In arbitration you have no effective appeal from legal errors, no jury and no right to proper discovery (it’s all up to the arbitrator). DoorDash just didn’t want to pay the costs of arbitration for all those cases, which are much greater than $250 for the company

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 25 Feb 2020 @ 10:42am

          Re: Re: Re:

          "In arbitration you have no effective ......... "

          Yes, I know. I was curious because arbitration was sold as being less expensive, less lengthy and overall a better process because of that -
          But it's not, for many reasons.

          reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 25 Feb 2020 @ 7:42am

    an agreement, like AT&T's, that waives public injunctive relief in any forum is contrary to California public policy and unenforceable.

    How is this just a California thing? The First Amendment specifically says that the people have a right to petition the government for the redress of grievances. Any agreement that a company attempts to force upon you saying otherwise is unconscionable and (should be) 100% unenforceable.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 25 Feb 2020 @ 7:59am

      Re:

      Jurisdiction

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 25 Feb 2020 @ 8:38am

        Re: Re:

        What about jurisdiction? Preemption says that federal laws dominate all state laws. The First Amendment is part of the ultimate federal law. Therefore, how can the right to petition the government for redress of grievances not be universal across the entire USA?

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 25 Feb 2020 @ 9:36am

          Re: Re: Re:

          The Federal Government is using AT&T to get copies of all of the information that flows through their pipes. In return for this unconstitutional access, AT&T gets away with whatever they want. This is why all governments need to be destroyed and rebuilt every generation at a minimum.

          reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 25 Feb 2020 @ 10:46am

          Re: Re: Re:

          Why yes, you have found one of their hypocrisies.

          reply to this | link to this | view in chronology ]

    • identicon
      teka, 25 Feb 2020 @ 10:11am

      Re:

      petition the government for the redress of grievances.
      for grievances with/against the government.

      This is just like the way it is not 1st amendment-related censorship when a moderator deletes your post from a company website.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 25 Feb 2020 @ 10:12am

    thirty to forty years ago

    ronald reagan

    reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 25 Feb 2020 @ 11:47am

    60 million?

    for the lawyers, over the last 6 years of work..
    Even if they take 1/2...Who are the customers they wil n

    reply to this | link to this | view in chronology ]

    • icon
      ECA (profile), 25 Feb 2020 @ 11:50am

      Re: 60 million?

      who are the customers they are going to pay??
      How to Justify paying this one over that??

      Current customers are going to pay it, any way you look at it.
      And when the money is gone, Just disappears, Where did it go??

      How in hell did they get 60 million over all the money they took??

      reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 25 Feb 2020 @ 3:39pm

    The lawsuit noted that, starting in 2011, AT&T began selling "unlimited" plans that actually throttled upwards of 90 percent

    will be split among millions of customers who signed up for AT&T unlimited data plans before 2011.

    3 years, even among !% of the country.. 3 million, thats not allot for 60 million...$20

    reply to this | link to this | view in chronology ]

    • icon
      ECA (profile), 26 Feb 2020 @ 2:46pm

      Re:

      WHY
      dont they investigate how much ATT Billed to others..
      IT should not be hard..
      Then Double or triple it, to lay the lawyers..
      WHY do we as the customer PAY for our lawyers?? and they dont pay us for NEEDING a lawyer??

      reply to this | link to this | view in chronology ]


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