Verizon Wireless lost a key ruling Friday when a Philadelphia judge said a lawsuit over cell phone charges could move forward as a class action case.
The ruling overturned a prior decision which mandated the case be arbitrated on a person-by-person basis, as is typically done for disputes over small consumer contracts.
The lawsuit filed by plaintiffs Keith Litman and Robert Wachtel goes back to 2005, when Verizon began charging its wireless customers a 40 cents monthly administrative fee. Verizon later raised that fee to 70 cents per month.
Litman and Wachtel are disputing the fee, alleging that the administrative charges have “nothing to do with the costs associated with any individual wireless line, and are entirely discretionary on the part of Defendant.”
The plaintiffs allege Verizon is making upwards of $42 million per month on the administrative fee.
Plaintiffs Keith Litman and Robert Wachtel filed their lawsuit in October 2007 and have since been fighting to have it recognized as a class action suit. The pair argued that individual arbitration of small claims became void after a 2006 New Jersey Supreme Court ruling.
The ruling by the Third Circuit U.S. Appeals Court, which includes New Jersey, supports Litman and Wachtel’s argument.
Verizon Wireless declined to comment on the ruling.
Filed Under: Industry regulations