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California Lawsuit: Mobile Carriers Cheated Government Customers Out of $100 Million

Government entities in California have joined a lawsuit that accuses the nation’s biggest mobile-phone carriers of bilking government customers out of more than $100 million.

AT&T, Sprint, T-Mobile and Verizon ignored provisions in master contracts that required the carriers report to customers rate plans that would result in the lowest cost and provide wireless services at the ‘”the lowest available cost,’” according to Constantine Cannon LLP, a law firm that is representing the plaintiffs, which include a whistleblower.

“The carriers promised optimization in order to win these government contracts, which are worth billions of dollars,” said Anne Hayes Hartman, a partner at Constantine Cannon, in a press release announcing the action. “But while they were happy to take the government’s money, the carriers simply ignored their commitments to bill using the lowest cost rate plans.”

OnTheGo, a rate-plan analysis firm, brought the complaint, which is pending in the Sacramento County Superior Court. Forty-two government entities in California including a number of cities and counties have joined in the action, which was brought under the California False Claims Act and unsealed by the court on Dec. 7.

“We are proud of the work we have done for our government customers in California and across the nation,” Sprint told Channel Partners. “Sprint disagrees with the allegations in the complaint, and we look forward to presenting the true story at the appropriate opportunity.” 

John Johnson, a spokesman for Verizon, said the company met its contractual obligations.

“In fact, after an extensive two-year investigation, the California Attorney General declined to intervene and prosecute this matter,” Johnson told us, “further demonstrating that the case lacks any merit.”

AT&T did not immediately respond Wednesday to a request for comment; T-Mobile declined comment.

The contracts date back to 2005, reported the San Francisco Chronicle, which also noted the plaintiffs will be seeking at least $500 million in damages.


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