An Alameda County Superior Court judge has ruled that a lawsuit brought against major cell phone carriers challenging those fees can proceed to class action status. Judge Ronald Sabraw did not rule on the merits of the case, which alleges that the cancellation fees violate California contract law, but simply ruled the case can move to class certification.
The suit was brought by the law firm of Lerach Coughlin Stoia Geller Rudman & Robbins, which has an office in San Francisco, on behalf of a dozen or so California cell phone users against Verizon Wireless, Sprint and Nextel.
AARP supported the case by supplying an attorney to represent the plaintiffs.
"It's a very strong case. We strongly believe that the carriers are charging illegal penalties in these early termination fees," said AARP attorney Stacy Canan. "We are very encouraged by the fact the court has granted class certification; it could indeed have an impact on this practice."
The court said the class could include others who have had to pay termination fees. However, the court denied a motion allowing current subscribers of cellular services to join the class.
The court's decision "In Re: Cell phone termination fee cases," or docket number JCCP 4332, was made late last week and announced by AARP on Monday.
The suit seeks to recoup the fees these consumers paid in early cancellation fees and to enjoin the companiesfrom charging such fees in the future.
It claims that the fees dampen competition because they temporarilylockconsumers into one service.
The fees generally run from $150 to $200, according to the case and AARP. Fees are generally charged if a customer wants to drop service before a contract term is up, which is typically one or two years. Sometimes, a cancellation fee provision is put in place when a consumer switches plans with the same carrier.
A Verizon Wireless spokeswoman for the company's Northern California region said the company cannot comment on pending litigation.
Business Writer Barbara Grady can be reached at firstname.lastname@example.org or (510) 208-6427.