Court Won't Revive Class-Action Against AT&T Over Broadband Slowdowns

Siding with AT&T, a federal appeals court has refused to revive a class-action alleging that the company falsely advertised "unlimited data" but throttled wireless users who exceeded a monthly cap.

The ruling, issued Monday by a three-judge panel of the 9th Circuit Court of Appeals, upheld a trial judge's decision to send the matter to arbitration.

The battle dates to 2014, when three California residents alleged in a class-action complaint that AT&T duped people by selling "unlimited" mobile broadband plans, and then throttling users who hit monthly caps ranging from 3 GB 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, and only when the network is congested.)

U.S. District Court Judge Edward Chen in the Northern District of California sent the lawsuit to arbitration on the grounds that AT&T's terms of service required arbitration of disputes.

The consumers then asked the 9th Circuit Court to restore the lawsuit. Among other arguments, they said the Federal Arbitration Act -- which they contend enables companies to include arbitration agreements in contracts -- unconstitutionally deprives people of their right to petition the courts.

The 9th Circuit rejected that argument, stating that the Supreme Court has already ruled that arbitration agreements are enforceable. "Plaintiffs disagree with this case law, but we are bound by it," the judges wrote.

The Federal Trade Commission also sued AT&T over the mobile broadband slowdowns. A three-judge panel of the 9th Circuit dismissed the FTC's lawsuit last year, ruling that the agency lacks authority to sue common carriers like AT&T. The court later agreed to reconsider that ruling, but has not yet issued a decision.

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