Class action lawsuit in the works over AT&T’s updated data plans, iPad singled out

Wed, Jun 30, 2010


In early June, AT&T updated its data plan pricing structure and did away with unlimited data plans for both iPhone and iPad owners. Users who had previously signed up for an unlimited data plan, however, were grandfathered in and were able to maintain their current billing set up. At the same time, iPad 3G owners who purchased the device before AT&T’s new changes yet never signed up for an unlimited data plan are now precluded from doing so.

So not surprisingly, plaintiffs are already initiating a class-action lawsuit against both AT&T and Apple, alleging that the two companies purposefully mislead consumers and deceptively advertised a pricing plan whose terms were abruptly adjusted without warning. The lawsuit accuses AT&T and Apple of fraud and misrepresentation.

Lieff Cabraser Heimann & Bernstein, LLP is the law firm leading the charge, and they note on their website:

Plaintiffs allege that Apple and AT&T deceptively promoted that consumers could both sign up for an unlimited data plan and have the ability to switch, month by month, between that unlimited data plan or one with a 250MB limit as their needs changed.

As of June 7, 2010, Apple and AT&T decided to discontinue the “unlimited data” plan they had heavily advertised in connection with their sales of the 3G-enabled iPads. Apple and AT&T had promised consumers flexibility with their data plans, allowing them the ability switch back and forth between the limited data plan, the unlimited data plan, and no data plan.

The complaint alleges that iPad purchasers who initially opted for the limited data plan have been stripped of their ability to later opt for the unlimited data plan. Even those customers currently signed up for the unlimited data plan cannot switch to a limited plan and then later opt for the unlimited plan, as was originally promised. Apple and AT&T announced this policy change with less than one week’s notice to their customers and only about a month after Apple and AT&T began selling 3G-enabled iPads.

The complaint also alleges that consumers were dissuaded from purchasing the base model iPad and were instead talked into purchasing the more expensive iPad 3G model.

Our take? Yes, it sucks if you bought an iPad 3G hoping to make use of an unlimited data plan. Is it worth going to court over? No. This “sue first” mentality is clogging up our courts with frivolous and downright pointless lawsuits. In any event, the proposed class seeks to encompass all iPad 3G owners who purchased their device on or before June 6.

All that said, we’re not too confident this case will go anywhere given that iPad advertising came with a blurb noting that “terms and conditions can change without notice.” The one potential red flag is that the terms changes so quickly after the iPad 3G went on sale. That might provide just enough wiggle room for the case to survive Summary Judgment.

As one commentor points out on MacDailyNews:

Nobody is switching anyone who signed up for the unlimited plan. AT&T never promised the availability of unlimited plan in perpetuity. Plans change all the time. So, what is “reasonable” period of time for a plan to have to be available, before AT&T can change it? How much in advance should AT&T notify the public of their intention to change the plans?

It seems that these are the questions that the class suit wants answered, since law doesn’t define them. AT&T didn’t breach any contracts here. The suit alleges only unfair business practices, and that’s where the the court will have to figure out how unfair is unfair.”



1 Comments For This Post

  1. Ted Machi Says:

    This is nothing but a classic bate and switch. Someone doesn’t give much thought to pressing a dot on the screen and not knowing a decision may be an irreversable error. “Sue first” mentality? I don’t think so. It’s more like “greed first” mentality!

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