AT&T Sues Law Firm Over Attempt To Block T-Mobile Deal
AT&T's own justifications for the merger suffered a major blow last week when an unredacted document posted to the FCC's website demolished the company's claims that it needed to buy T-Mobile in order to shoulder the cost of upgrading its LTE network to cover an estimated 97 percent of the US. AT&T's own estimates calculated that the cost of expanding its network from 80 percent to 97 percent of the US at $3.8B—less than ten percent the price of the T-Mobile acquisition. The document also noted that AT&T had decided not to build out to 97 percent due to cost concerns, one week before the company offered $39 billion for its smaller rival.
AT&T's justifications for the merger haven't stood up well to scrutiny. The company has attempted to cloak its inadvertent admission behind a fog of "nothing to see here, folks"
AT&T is suing Bursor & Fisher over the number of arbitration claims the firm has brought against the company. After a Supreme Court decision last year ruled that cell phone customers who signed contracts containing mandatory arbitration clauses must comply with those clauses and may not form class action lawsuits, a traditional suit became possible. (AT&T, it should be noted, strongly supported the court's decision.) Now, the company is unhappy that it finds itself facing 26 demands for arbitration and over 900 notifications of dispute, complaining that Bursor & Fisher are "taking a thousand bites at the apple" in hopes of finding an arbitrator who will support their claims.
"The bottom line here is an arbitrator has no authority to block the merger or affect the merger process in any way," an AT&T spokeswoman said. "AT&T's arbitration agreement with our customers--recently upheld by the Supreme Court--allows individual relief for individual claims. Bursor & Fisher is seeking class-wide relief wrapped in the guise of individual arbitration proceedings, which is specifically prohibited by AT&T's arbitration agreement. Accordingly, the claims are completely without merit. We have filed suit in order to stop this abusive action."
The law firm has already fired back. Scott Bursor, a partner with Bursor & Fisher, stated: "The American Arbitration Association has already overruled AT&T's objections and has moved forward with the arbitration process," he said in a statement. "AT&T's filing of these lawsuits appears to be an act of desperation, since AT&T now realizes it faces a substantial likelihood that one or more of these arbitrations will indeed stop the takeover from happening. But AT&T's legal arguments are frivolous. We expect the courts will reject AT&T's arguments and dismiss these cases very quickly. AT&T's desperate lawsuits will not interfere with the ongoing arbitration proceedings."
Bursor and Fisher have launched a website where any AT&T subscriber can sign up if they oppose the merger.