Good news for T-Mobile customers. In a class action brought against T-Mobile, this past week, the plaintiffs have successfully argued that T-Mobile cannot prevent its customers from filing a class action against it. The plaintiffs are suing over non-prorated early termination fees and the selling of SIM-locked handsets.PDF Link.
T-Mobile, as many other cell phone companies do these days, had written into its contract with customers that any disputes between T-Mobile and the customers had to be resolved by arbitration. Requiring customers to go to arbitration means that customers cannot sue, and more importantly it means that customers cannot file class actions. The result, if the contractual terms requiring arbitration were valid, would be that the most abusive cell phone company practices could not be limited by customers bringing lawsuits.
However, in the suit Gatton et al. v. T-Mobile USA, Inc., the plaintiffs convinced the trial court that the contractual provision requiring arbitration was unconscionable and therefore not enforceable. On June 22, 2007, the California appeals court affirmed the trial court's ruling. The class action is going forward.
Presumably, this means that customers of other cell phone companies will be able to sue their own cell phone companies as well. The particular grievances against T-Mobile in this class action are the imposition of non-prorated early termination fees and the selling of SIM-locked handsets. Both of these are common to other cellular carriers, although it's not clear from the appellate opinion whether T-Mobile is doing something extra-shady with the SIM-locking. (The appellate opinion states, "T-Mobile requires equipment vendors to alter the handsets they sell to T-Mobile by locking them with SIM locks and setting the SIM unlock code based on a secret algorithm provided by T-Mobile.") So if this suit is ultimately successful in California, it may not take long before non-prorated early termination fees and SIM-locked handsets die a long-awaited death.