Arbitration News

AT&T Wireless Customers Received A “Welcome Guide” With The Telephone That Contained The Terms And Conditions Of The Wireless Service

Customers who purchase a mobile telephone for use on the AT&T wireless system are subject to the terms and conditions of a wireless service agreement that comes with the phone. The customer has 30 days in which to review the terms and to cancel the agreement. Over the years, the exact language of the wireless service agreement has been altered, and there are three variations at issue in the lawsuits here.2 All three versions contain an arbitration clause calling for the arbitration of all disputes arising out of the wireless service agreement. All three versions provide that the arbitration is to be governed by the wireless industry arbitration rules of the American Arbitration 1 The issue is pending before the California Supreme Court in Discover Bank v.Superior Court , review granted April 9, 2003 (S113725), and Mandel v. Household Bank, review granted April 9, 200 (S113699). 2 In 2001 and 2002, AT&T Wireless customers received a “welcome guide” with
the telephone that contained the terms and conditions of the wireless service. The plaintiffs in the Meoli lawsuit received a welcome guide. Beginning in 2003, customers received a wireless service agreement. The plaintiffs in the Marlowe lawsuit received a wireless service agreement. Association. Moreover, under all three versions the customer retains the right to bring an action in small claims court notwithstanding the agreement to arbitrate all disputes.The arbitration clause allows only individual claims to be heard in arbitration. The early versions of the wireless service agreement provided that the arbitrator could not award relief on a class-wide or representative basis. The later version is even more explicit: “[A]ny arbitration will be conducted on an individual basis and not on a consolidated, class-wide, or representative basis.”

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	Did You Know?
	There is one drawback to arbitration. There are no guarantees that arbitration will be a fair process. Once a decision is rendered in a binding arbitration, the parties are generally stuck with that decision. Without the right to appeal, there is always the risk of being subject to the whims and prejudices of the arbitrator. Overall, this is probably the biggest drawback to the arbitration process.