Lieff Cabraser Civil Justice Blog
Ninth Circuit Court Upholds Ruling Keeping AT&T Internet Throttling Suit in Court and Out of Private Arbitration

Plaintiffs Defeat Motion to Dismiss AT&T Hidden Monthly Billing Fees Class Action

As reported by law360(subscription), AT&T was unsuccessful in seeking the dismissal of a class action lawsuit filed by Lieff Cabraser & co-counsel on behalf of plaintiffs who claim AT&T adds hidden fees to each customer’s bill and misleadingly passes those fees off as a legitimate surcharge.

Magistrate Judge Laurel Beeler’s order said the carrier’s move to dismiss the suit was invalid. AT&T argued the plaintiffs and the proposed class could not pursue relief because they were still current AT&T customers who were now aware of the charge. Judge Beeler did not agree that plaintiffs would have to leave their current provider to pursue legal action. “It seems a funny position to require the plaintiffs to break their contract to challenge unfair practices about fees for their services,” the order noted.

Judge Beeler found the plaintiffs could still file a suit even if they continued to use AT&T, because the carrier “deceptively and unfairly disclosed [the administrative fee] as a pass-through cost.” The court also ruled that AT&T’s “100 days” contract provision, which bars customers from pursing legal action for bills older than 100 days, was not valid because the carrier “masqueraded” the fee. The order also said the customers’ claims were within the statute of limitations as each new bill triggered a new limitations period ranging from three to four years.

The plaintiffs in the lawsuit, originally filed in June 2019, said they signed up with AT&T under the impression they would pay a “particular monthly price,” but allege that in 2013 AT&T started adding an administrative fee of 61 cents to their bill each month which was eventually increased to $1.99 per month over the next five years. The customers claimed AT&T received “hundreds of millions of dollars in ill-gotten gains” though this under-handed practice, as well as by hiding the fees in an obscure section of customers’ billing statements.

The plaintiffs are represented by Michael W. Sobol, Roger N. Heller, Sarah R. London and Avery S. Halfon of Lieff Cabraser Heimann & Bernstein LLP, and Daniel M. Hattis and Paul Karl Lukacs of Hattis & Lukacs.