AT&T Reaches $18 Million Settlement in New Jersey ETF Class Action Case

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Without admitting any wrongdoing, AT&T Mobility has reached a settlement in a class action lawsuit alleging that their flat-rate early termination fee was unlawful. If the settlement is approved, AT&T will pay out a total of $16 million in cash and $2 million in "non-cash benefits" to NJ residents whose AT&T wireless contract included a flat-rate ETF provision any time after 1998.

Again, there's no wrongdoing admitted here and it's only one state, but still significant that AT&T doesn't feel confident enough in their case to see it through to the end.

Update: AT&T has sent us the following statement, which again clarifies that they've admitted no wrongdoing, and also notes that the settlement pertains to an ETF policy that has since changed as of 2008:

We strongly deny any wrongdoing, and no court has found AT&T Mobility committed any wrongdoing regarding these fees. However, we have agreed to settle to avoid the burden and cost of further litigation.

It's important to note that the litigation involves old early termination fee policies of the old AT&T Wireless and Cingular. In 2008 we introduced a new, more flexible early termination fee policy, in which we pro-rate the ETF if you are a new or renewing wireless customer who enters a one- or two-year service agreement.


And here is the original notice concerning the settlement:

Important Notice from the United States District Court for the District of New Jersey about a Class Action Settlement
Para ver este aviso en espanol, visita
A Class Action Settlement Could Affect Your Rights If You:
• Subscribed to wireless telephone service from AT&T Mobility LLC ("AT&T Mobility") or its predecessors and paid or were charged a flat-rate early termination fee ("ETF") at any time after January 1, 1998; or
• Your contract included a flat-rate ETF provision at any time after January 1, 1998.
A proposed Settlement has been reached in a class action alleging that AT&T Mobility's flat-rate ETF (generally between $150 and $175) was unlawful. The Settlement resolves several other cases that challenge AT&T Mobility's flat-rate ETF. AT&T Mobility strongly denies any wrongdoing, but has agreed to settle to avoid the burden and cost of further litigation. The sole purpose of this notice is to inform you of the Settlement so that you may decide what to do.
If the Settlement is approved, a settlement fund of $16,000,000 in cash and $2,000,000 in non-cash benefits will be created. Class Members who submit Claim Forms may receive monetary or other benefits. You may also choose to exclude yourself from, or object to, the Settlement. The Court has appointed attorneys to represent the Class. You may hire your own attorney, but only at your own expense.
For a full description of the Settlement, related Court documents, and deadlines and forms, please visit
• Claim Forms are due June 14, 2010, but the date may be extended.
• Requests to exclude yourself from the Settlement must be submitted to the Settlement Administrator and are due March 24, 2010.
• You or your lawyer has the right to appear before the Court and object to the Settlement. Any objections to the Settlement are due March 24, 2010, and any objections to attorneys' fees requested are due April 12, 2010.
• The Court will determine whether to approve the Settlement at a Fairness Hearing on April 14, 2010 at 10:00 a.m. in the United States District Court for the District of New Jersey.
• If you do not exclude yourself by March 24, 2010 and you are a member of the Class, you will be bound by the terms of the Settlement and give up your rights to sue in court or arbitration regarding issues in the case.
You can get a Claim Form at by calling 1-888-228-0885 or
by writing the AT&T Mobility ETF Settlement Claims Administrator, c/o Rust Consulting, Inc., P.O. Box 2266, Faribault, MN 55021-2386.
Questions may also be directed to Class Counsel by email at
Please do not contact AT&T Mobility or the Court with questions about this Settlement.