A New York-based law firm is waging a creative legal battle to block AT&T Inc's
With its Fight the Merger campaign, Bursor & Fisher is seeking to stop the mega-deal by inundating AT&T with arbitration claims. The firm, which historically handled consumer class actions against AT&T, maintains the merger would violate federal antitrust law and stifle competition in the wireless market. The firm is using its website to recruit AT&T customers willing to initiate arbitration proceedings.
So far, 750 customers have volunteered, according to Scott Bursor, the firm's founding partner. The firm has sent around 700 notices of dispute to AT&T and 20 arbitration demands, Bursor said.
Fight the Merger is a not-so-veiled reference to a class action that AT&T customers lost in the Supreme Court in April. In that case, AT&T Mobility v. Concepcion, customers sued AT&T for allegedly advertising discounted cell phones, but charging sales tax on the full price. The Supreme Court sided with AT&T, ruling that clients who signed phone contracts containing mandatory arbitration clauses waived their right to bring a class action against the company. AT&T could enforce a contractual term that required customers to arbitrate their disputes individually.
Bursor & Fisher decided to try to turn that setback into an advantage for customers.
If (AT&T) wants to arbitrate on an individual basis, that's what we'll do, Bursor said.
His firm has appointed a network of attorneys across the country to represent every customer willing to challenge the merger before an arbitrator.
IN THEIR AGREEMENT
AT&T's customer contract provides that any consumer who prevails in arbitration is entitled to a $10,000 payment. To recruit clients, Bursor & Fisher is promoting the AT&T payment offer on its Fight the Merger site, with a suggestion customers will win. The AT&T contract also promises double attorney's fees to successful customers, which explains the firm's willingness to take on the arbitration cases.
In AT&T Mobility v. Concepcion, the carrier emphasized these financial incentives to the Supreme Court to defend the fairness of its contract.
Now we're going to put that to the test, Bursor said.
AT&T responded in an emailed statement that the Bursor & Fisher's claims are completely without merit and that an arbitrator does not have the authority to block the merger currently under review by the Federal Communications Commission and the Department of Justice.
Andrew Gavil, an antitrust law professor at Howard University Law School, said he doubted an arbitrator would have the power to prevent the merger, but it would turn on language in the contract and what types of disputes were committed to arbitration. He said Bursor & Fisher might be trying to strong-arm AT&T into arguing that the arbitration clause does not cover antitrust claims, thereby reopening the door to a traditional class action lawsuit.
AT&T has already argued in a letter to the American Arbitration Association that the arbitration clause was intended for individual billing disputes, not a $39-billion-dollar antitrust case, according to Bursor. But the arbitration clause is broad, covering all claims arising out of or relating to any aspect of the relationship between us, whether based on contract, tort, statute, fraud, misrepresentation or any other legal theory, according to a copy of the contract posted on the firm's website.
The firm is bringing the arbitration claims under the Clayton Antitrust Act.
Bursor said his firm has no intention of forcing AT&T into a traditional class action lawsuit. He expects AT&T to settle, given the daunting prospect of fighting more than 750 arbitrations, any one of which could stop the deal.
If they didn't want to have individual arbitrations, then they shouldn't have put this clause in their agreement, Bursor said. AT&T wrote this and we're going to force them to honor it.
(Reporting by Terry Baynes; editing by Andre Grenon)