Copenhaver sends AT&T cell phone cases to arbitration
CHARLESTON – U.S. District Judge John Copenhaver has stopped a class action suit that accused AT&T Mobility of sneaking roadside service charges into monthly cellular telephone bills.
On Jan. 20, Copenhaver enforced an arbitration provision in contracts that James Strawn and James Staton signed with AT&T Mobility predecessor Cingular.
"Strawn and Staton have not demonstrated any basis to invalidate the arbitration provision," Copenhaver wrote.
He rejected their backup argument that if he ordered arbitration he should let them pursue it on a class basis.
"The arbitration provision does not contemplate that option," he wrote.
Strawn and Staton sued Cingular in 2006, in Kanawha Circuit Court. They alleged violations of West Virginia consumer law and claimed penalties up to $200.
Cingular removed the suit to federal court, arguing that the national Class Action Fairness Act applied because the amount in controversy exceeded $5 million.
Strawn and Staton moved to remand the suit to Kanawha County, denying that the class sought $5 million.
Copenhaver granted their motion, but the U.S. Fourth Circuit appeals court in Richmond reversed him last June.
Fourth Circuit judges found that 58,800 customers paid roadside service fees. They multiplied that by a $200 penalty and valued the case at $11,760,000.
After they sent the case back to Copenhaver, AT&T Mobility renewed a previous motion to compel arbitration.
AT&T Mobility offered an option, pointing out that the contracts allowed Strawn and Staton to seek damages in small claims court.
In West Virginia, claims up to $5,000 proceed in magistrate court.
Strawn and Staton answered that they couldn't file small claims because they each sought $5,170.59 in damages.
They declared the contract unconscionable, but Copenhaver disagreed.
"First, they assert that the ability to institute a small claims case is illusory inasmuch as the damages they personally suffered exceed the West Virginia jurisdictional maximum for magistrate court," he wrote.
"It is, of course, the Legislature, not AT&T, that sets the magistrate court jurisdictional maximum," he wrote.
"That observation aside, an unconscionability finding on the suggested basis might encourage aggrieved AT&T customers to simply inflate their damage claims in an attempt to avoid the arbitration provision," he wrote.
He wrote that AT&T offered small claims court as an informal, speedy and convenient alternative to arbitration.
"It would be inappropriate to use this unusually customer centered provision to invalidate the arbitration provision on unconscionability grounds," he wrote.
He retired the case to the inactive docket and ordered the parties to submit a final order at the conclusion of arbitration.
Jeffrey Wakefield of Flaherty, Sensabaugh and Bonasso in Charleston represented AT&T Mobility. So did four lawyers with Crowell and Moring in Washington and two at Mayer Brown in Washington.
Harry Bell, William Bands and Tim Yianne, all of Bell and Bands in Charleston, represented Strawn and Staton.