AT&T Fends Off First Amendment Challenge to Arbitration

By Perry Cooper

AT&T Mobility LLC customers can’t get around the arbitration clause in their service contracts by invoking the First Amendment right to petition, the Ninth Circuit affirmed Dec. 11.

Judicial enforcement of the arbitration agreement alone doesn’t establish the state action needed to bring a constitutional challenge, Judge Richard C. Tallman wrote for the U.S. Court of Appeals for the Ninth Circuit.

The constitutional argument was one in a growing list of creative ways plaintiffs’ attorneys have sought to get around arbitration clauses as courts are increasingly willing to apply them to keep plaintiffs out of court.

No State Action

AT&T customers allege the company falsely advertised that its mobile service customers could use “unlimited data.” In reality AT&T “throttled,” or intentionally slowed down, customers’ data speed once they reached an undisclosed usage cap.

The lower court granted AT&T’s motion to compel arbitration.

The customers argued that the court’s order violated the petition clause by forcing them to give up their right to have a court adjudicate their claims.

But the First Amendment only protects against government action.

“There is no state action here,” the appeals court said. AT&T’s conduct isn’t fairly attributable to the government and the government didn’t encourage AT&T’s actions, it said.

Judges Michael Daly Hawkins and William A. Fletcher joined the opinion.

Wolf Haldenstein Adler Freeman & Herz LLP; Lieff Cabraser Heimann & Bernstein LLP; Morgan & Morgan Complex Litigation Group; and others represented the customers.

Mayer Brown LLP represented AT&T.

The case is Roberts v. AT&T Mobility LLC , 9th Cir., No. 16-16915, 12/11/17 .

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bloomberglaw.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bloomberglaw.com

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