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AT&T Wireless’s Welcome Guide Ruled Not Part of Consumer Contract

Court Denies Petition to Compel Arbitration. Trial on “Deceptive” Coverage Maps to Proceed

June 9, 2005
San Francisco

A Los Angeles court has ruled that AT&T Wireless Welcome Guide, the brochure contained in mobile telephone boxes provided to customers after the purchase of wireless service which contains an arbitration clause, is not a part of the contract with consumers.

Defendant AT&T Wireless brought a petition to compel arbitration of the claims of named plaintiffs, arguing that their allegations of false advertising should not be heard in Los Angeles Superior Court but should be sent to a private arbitrator. In denying defendant AT&T Wireless’s motion to compel arbitration, a judge of the Los Angeles Superior Court’s complex department held that AT&T Wireless customers could not be bound by the terms of a document that was provided after the customer purchased his or her phone. Citing long-standing California precedent, the Court ruled that a consumer cannot be bound by proposed contract terms located in a document that they had no reason to know was contractual in nature. Because AT&T Wireless’s Welcome Guide discusses the features of mobile phones, such as voicemail, long before disclosing to customers that they are waiving important legal rights, the document could not be considered a part of a consumer’s contract with AT&T Wireless.

Defendants brought the petition to compel consumers to arbitration on the eve of trial, arguing that the Court no longer had jurisdiction over plaintiffs’ claims. The trial on whether the coverage maps of AT&T Wireless (now Cingular) are deceptive will now go forward.

Lerach Coughlin Stoia Geller Rudman & Robbins LLP filed the class action suit in Superior Court for Los Angeles County against LA Cellular, AT&T Wireless and Bellsouth Cellular on behalf of customers who are victims of the cell phone company’s deceptive practices in 1998. The case alleges false and misleading advertising based on the wireless companies’ promises of seamless wireless coverage throughout the four-county Los Angeles region. Each of the four named plaintiffs allege they were misled by defendants’ promises that they would receive wireless coverage in areas near their homes, places of employment and other well-traveled areas. AT&T Wireless was recently acquired by Cingular Wireless, creating one of the nation’s largest wireless carriers. Both defendants joined in the petition to compel the plaintiffs’ claims to arbitration.

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