Aug 28 2008

A&T deal “unconscionable”

Published by at 3:01 pm under Washington

wa courts

Washington Supreme Court

Get this from the decision today in Michael McKee v. AT&T Corporation by the Washington Supreme Court: “AT&T’s Consumer Services Agreement is substantively unconscionable and therefore unenforceable to the extent that it purports to waive the right to class actions, require confidentiality, shorten the Washington Consumer Protection Act statute of limitations, and limit availability of attorney fees. We emphasize that these provisions have nothing to do with arbitration.”

It’s too bad more people don’t read appellate court decisions, because a lot of telephone ratepayers would really enjoy this one. Here’s the court’s description of where the case started:

McKee lives near Wenatchee, Washington, and signed up for AT&T
long distance phone service in November 2002. His monthly bills included a Wenatchee city utility tax surcharge, even though he lives outside the
Wenatchee city limits. When he called AT&T to resolve this issue, at first,
the various operators merely tried to sell him a new long distance package.
Finally, he was told that taxes were assessed by zip code. Unfortunately,
McKee’s zip code includes people who live both inside and outside the
Wenatchee city limits. McKee contends that AT&T collects the tax from all
of its customers who live within the zip code, whether the customers owe the
tax or not. A late fee of 1.5 percent applies if the customer does not pay all
charges on time. The charges McKee challenges amount to no more than $2
in any given month, less than $20 total in a year. But McKee notes that after
many years and many customers, small amounts add up to very large sums.
After his individual attempts to resolve his billing issues with AT&T
failed, McKee filed this class action lawsuit, alleging violations of
Washington’s Consumer Protection Act, chapter 19.86 RCW, and
Washington’s usury statute, chapter 19.52 RCW, as well as negligence and
breach of contract. AT&T removed the action to federal district court,
claiming McKee had raised federal law in his complaint. After the complaint
was amended to omit any reference to federal law, the federal court remanded the case back to Chelan County Superior Court.
AT&T then moved to compel arbitration under its Consumer Services
Agreement. At the time McKee agreed to use AT&T as his long distance
provider, he did not sign any agreement with AT&T and was not informed of
any terms and conditions associated with AT&T service. After he began
using AT&T, it sent him mail, which may have included a contract. He had
not retained any of the mail and did not know the terms of his agreement with AT&T. In support of the motion to compel arbitration, AT&T employees
Howard Spierer and April Morlock filed declarations averring that a specific
agreement was sent to McKee in November as part of his “fulfillment
package” and attached a copy of that agreement to their declarations. We
detail the specifics of the declarations because AT&T later repudiated the
declarations it filed and the agreement it sought to enforce.

Yep, sounds like dealing with a phone company. And that, the court says, essentially is “unconscionable.”

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