This is a putative class action by AT&T long distance customers in Washington state who allege that AT&T charged them usurious interest rates and municipal utility taxes, despite that fact that they do not live in any municipality -- a violation of Washington’s consumer protection laws.  The trial court denied AT&T’s motion to compel arbitration. AT&T appealed, and the Court of Appeal referred the case to the Washington Supreme Court.
 
On August 28, 2008, the Washington Supreme Court unanimously affirmed the trial court’s ruling.  The court held that (1) several provisions of AT&T's arbitration clause -- a class action ban, a secrecy clause, a shortened statute of limitations, and a limit on the attorneys' fees consumers can recover -- are unconscionable and unenforceable under Washington law; (2) AT&T cannot make its exculpatory class action ban enforceable by designating the law of a state other than Washington in its contract; (3) the Federal Communications Act does not preempt application of Washington's unconscionability law; and (4) the Federal Arbitration Act does not preempt Washington law. 

Public Justice Staff Attorneys Paul Bland and Leslie Bailey were lead counsel on the appeal, and former Public Justice’s Michael Quirk assisted with appellate briefing.  Scott Kane of Lacy & Kane in East Wenatchee, Washington, is co-counsel.

 

Briefs and Documents for the McKee Case

Washington Supreme Court (Case No. No. 81006-I):
Court Decision (August 28, 2008). 
Amicus Brief in Support of Respondent, filed by Washington State Trial Lawyers Association (February 12, 2008).  
Amicus Brief in Support of Respondent, filed by Washington Attorney General (February 12, 2008).
 
Washington Court of Appeals, Div. III (Case No. 243991):
Supplemental Brief of Respondent  (September 13, 2007) This brief explains why AT&T’s class action ban is unenforceable in light of the Washington Supreme Court’s decision in Scott v. Cingular Wireless.
 
Brief of Respondent (January 23, 2006). Our brief argues that neither the Federal Communications Act nor the Federal Arbitration Act preempts Washington’s unconscionability law; that AT&T’s choice-of-law clause is unenforceable; and that the class action ban in AT&T’s arbitration clause is unconscionable under Washington law.