In re Universal Service Fund

In re Universal Service Fund

Appeal to the Tenth Circuit of an order compelling a class of all AT&T long distance customers who do not live in California into individual arbitration pursuant to a class action ban in AT&T’s telephone service contract.  The case involves allegations that AT&T has wrongly overcharged its customers for its contributions to the Universal Service Fund.

Public Justice is co-lead appellate counsel on an appeal to the Tenth Circuit challenging an order compelling a class of all AT&T long distance customers who do not live in California into individual arbitration pursuant to a class action ban in AT&T’s telephone service contract.  (We are involved in one part of the appeal.  The appeal involves three separate classes, with appeals of separate rulings concerning each class).  We argue that the district court erred in holding that the Federal Communications Act preempts state contract law that might find any term of AT&T’s arbitration clause to be substantively unconscionable and that AT&T’s class action ban is not unconscionable under New York law.

The case involves allegations that AT&T has wrongly overcharged its customers for its contributions to something called the Universal Service Fund (“USF”).  Under federal law, phone companies are required to bill their customers a small sum and contribute it to the USF, which is used for purposes including ensuring that persons in rural areas get phone service.  The plaintiffs allege that AT&T billed customers more than the required amount for its USF contributions, thereby making a secret profit.  

Warren Burns of Susman Godfrey and Paul Bland of Public Justice are co-lead counsel on the appeal.  They are supported by Public Justice Board Member Roger Mandel of Stanley Mandel & Iola, and Public Justice Power-Cotchett Fellow Tami Alpert, Kazan-Walace Fellow Matt Melamed, and Staff Attorney Leslie Bailey (who are the lead authors on Public Justice’s portion of the briefs).