AT&T Customers Challenge T-Mobile Merger via Arbitration

More than 1,000 individuals have retained a New York-based law firm, Bursor & Fisher, to oppose AT&Ts $39 billion acquisition of T-Mobile USA by filing challenges to the merger through arbitration.

AT&Ts contracts give every customer the right to arbitration,” said Scott A. Bursor, one of the attorneys representing AT&T customers, in a statement Tuesday.  

Bursor & Fisher, which has launched a website, said the American Arbitration Association has begun administering the cases despite AT&Ts objection that arbitrators lack authority to block the merger.

Our 236-page arbitration demand lays out the extensive evidence demonstrating that this merger will cause serious harm to consumers,” said Barry Davis, a Miami-based trial lawyer working with Bursor & Fisher. Weve hired experts who are prepared to testify at arbitration hearings across the country, and we will soon have more than one thousand arbitration cases on file, any one of which could stop this merger.”

AT&T claims the AAA has no authority whatsoever to affect a merger that federal and state regulators are reviewing.

This action is a waste of time and money because AT&Ts arbitration agreement with our customers recently upheld by the Supreme Court allows individual relief for individual claims,” an AT&T spokesman said. It specifically prohibits any proceeding seeking broad relief like the Bursor & Fisher law firm has filed.”

AT&Ts arbitration agreement, the spokesman added, allows an arbitrator to award individual relief, not large-scale, class-wide relief impacting more than 100 million people in a single stroke.” 

The spokesman said AT&T hasn’t filed anything with the courts to date in order to dismiss the cases before the AAA, but the company is considering its options.  

Bursor & Fisher is employing a creative strategy to challenge AT&Ts acquisition of T-Mobile: Use AT&Ts wireless customer contracts to oppose the transaction through binding arbitration in hundreds and potentially thousands of individual cases.

The Clayton Antitrust Act allows a person who may be affected by a merger to sue in federal court to prevent the transaction if the effect of the deal is to create a monopoly or substantially decrease competition. The problem is AT&Ts wireless-customer agreements prohibit customers from suing in court for any reason and instead require arbitration, according to Bursor & Fisher.

The law firm has provided a link to AT&Ts wireless customer agreement, which requires that a customer resolve a dispute through binding arbitration or small claims court rather than through courts of general jurisdiction. The contract clause precludes class actions and class arbitrations. Arbitration is less formal than a lawsuit in court, using a neutral arbitrator to decide a case rather than a judge or jury and is subject to very limited court review, AT&T explains in its customer agreement.

AT&Ts contracts require the telecom provider to pay all costs of arbitration, and provide for a guaranteed minimum recovery of $10,000 if an arbitrator finds in favor of the customer, Bursor & Fisher said.

The Federal Communications Commission and U.S. Department of Justice are currently reviewing the merger between AT&T and T-Mobile in a deal that will eliminate the fourth-largest U.S. mobile operator and enable AT&T to become the largest wireless provider with more than 132 million customers, based on second-quarter results.

T-Mobile USA has been struggling with subscriber losses, but consumer groups and other critics contend the merger will drive up prices and reduce choices in a U.S. wireless market that is largely controlled by AT&T and Verizon Wireless.

AT&T also has received a considerable outpouring of support for the deal from lawmakers, governors, large corporations and others.

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