• by Wendy Davis  @wendyndavis, March 6, 2017

AT&T wireless customers are asking a federal appeals court to revive their class-action lawsuit alleging that the company advertised "unlimited data," only to throttle users who exceeded a monthly cap.

The lawsuit was sent to arbitration last year, after U.S. District Court Judge Edward Chen in the Northern District of California found that AT&T's terms of service required arbitration of disputes.

The consumers are now asking the 9th Circuit Court of Appeals to reverse that finding and restore the lawsuit. In papers filed with the 9th Circuit last week, the consumers argue that the Federal Arbitration Act -- which they say enables companies to include arbitration agreements in contracts -- unconstitutionally deprives people of their right to petition the courts.

"By permitting parties with substantially greater bargaining power to impose consumer adhesion forced arbitration clauses and commanding courts to enforce them, the FAA, as now applied, enables private entities like AT&T, with the government’s imprimatur, to deprive consumers of their First Amendment right to sue in court," the consumers argue.

The legal dispute dates to 2014, when three California residents alleged in a class-action complaint that AT&T duped people by selling "unlimited" mobile broadband plans, throttling users who hit monthly caps ranging from 3GB to 5 GB.

From 2011 until 2015, AT&T allegedly throttled more than 3.5 million customers with "unlimited" data plans. The company recently revised its throttling practices, and now only slows down customers who exceed 22 GB in a month. AT&T also now only throttles those users when the network is congested.

The Federal Trade Commission also sued AT&T over the slowdowns. A three-judge panel of the 9th Circuit dismissed the FTC's lawsuit in August, ruling that the agency lacks authority to sue common carriers like AT&T. The FTC has asked the court to reconsider that decision, but the 9th Circuit hasn't yet ruled on that request.

In addition to the class-action lawsuit and the FTC litigation, AT&T still faces the prospect of Federal Communications Commission sanctions. Last June, that agency proposed fining AT&T $100 million for allegedly failing to adequately disclose its throttling policies to consumers.

The FCC alleged in a “notice of apparent liability” that AT&T's failure to explain its throttling policies to consumers violates its duty to transparently disclose its broadband practices.

AT&T is contesting the FCC's proposed fine.