SEATTLE, WASHINGTON (October 15, 2008) Two former internet service customers of Qwest Communications International, Inc. ("Qwest") today filed a multi-state class action lawsuit in the United States District Court for the Western District of Washington.  The lawsuit seeks to void a $200 "Early Termination Fee" Qwest charges customers who cancel their service before the expiration of a purported term commitment, generally of two years. The class, if approved, would cover Qwest customers in Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming.

According to the Complaint, Qwest surprises customers with the ETF when they seek to cancel service.  The documents that Qwest provides to customers state that the arrangement is month-to-month, but Qwest contends that customers orally agreed to the longer term.  When plaintiff Robin Vernon asked for proof of this supposed oral agreement, however, Qwest was unable to provide it.  Plaintiffs claim that the supposed oral agreements are unenforceable under the Statute of Frauds, a long-established principle of contract law that requires that agreements for periods of over one year must be set out in signed writings.

"It is shocking that a company as sophisticated as Qwest says in writing that customers have committed to only a month, next tries to spring the supposed term commitment and ETF on them when they wish to cancel, and finally inflicts debt collectors on them when they refuse to pay a $200 fee that is not payable according to Qwest's own written document," said Dan Bryden of Sprenger & Lang, one of the attorneys for plaintiffs.  "We are interested in talking with other Qwest customers who have faced similar surprises."

Plaintiffs also claim that the $200 ETF is unenforceable because Qwest has not even attempted to estimate its actual losses from early termination of a contract.  The fee is the same, regardless of whether the contract is terminated after one month or 23 months.  Thus, according to the Complaint, the fee is unreasonably excessive for many consumers.

The lawsuit seeks damages on behalf of customers who were subjected to the fee and an order from the court prohibiting Qwest from engaging in the same practices in the future.

"Consumers deserve better from a company that touts itself as the 'premier' provider of high speed internet service," said co-counsel Beth Terrell of Terrell, Marshall & Daudt.

Added co-counsel Kimberlee Gunning, "$200 is a lot of money to these consumers, especially in these tough economic times.  Qwest's penalties prevent consumers from changing to a cheaper service or cancelling internet service completely to tighten their belts."

As described in the prior entries, since we filed the class action lawsuit challenging Qwest's breach of its price-for-life guarantee, Qwest has been arguing that the arbitration provision contained in its Subscriber Agreement bars any subscriber from bringing a class action lawsuit in court. If it prevails in this argument, consumers' only choices would be to proceed in an individual arbitration against Qwest, to file a small claims court action, or not to bring any type of legal challenge to an increase in the guaranteed price.

Senior Judge Miller, to whom the case was assigned, scheduled a trial concerning our challenge to the validity of the Subscriber Agreement. Before the trial could occur, however, he retired. The case has been reassigned to Judge Christine Arguello. She has not yet scheduled a trial in the case.

In the meantime, the Supreme Court issued a ruling in April 2011 in a case called AT&T Mobility v. Concepcion. The Supreme Court held that federal law preempted application of California's law to invalidate ATTM's arbitration and class action waiver provision. Since then, numerous courts throughout the country have followed that decision in holding that the arbitration and class action waiver provisions of other companies could not be invalidated under the laws of other states.

Although this case is on hold, in May Qwest renewed its motion to compel arbitration and dismiss the companion class action case challenging the validity of Qwest's imposition of early termination fees based on the ruling in the ATTM case. We, of course, opposed the motion. Click here to read the briefs in that case. As you will see, despite the decision in AT&T Mobility v. Concepcion, we believe that Qwest's provision was so outrageous that a court should invalidate it.

A hearing was held on Qwest's motion in that case before Magistrate Judge Shaffer on October 7, 2011. He has not yet issued a decision. We will update the website after we receive a ruling.

DENVER, COLORADO (December 7, 2009)  A customer of Qwest Communications International, Inc. ("Qwest") whom the company induced to pay higher prices for internet service by promising that his rates would be locked in "for life" today filed a multi-state class action lawsuit in the United States District Court for the District of Colorado.  The lawsuit seeks to enforce Qwest's promise and collect damages for past violations of the "Price for Life Guarantee."  The class, if approved, would cover Qwest customers in Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming.

According to the Complaint, Qwest has promoted the supposed "Price for Life Guarantee" for several years.  When Qwest informed the plaintiff, a retired law enforcement officer, that it was increasing his supposedly locked-in rate, he called to complain.  The Complaint alleges that Qwest told him that it had enjoyed such a tremendous response to the "Price for Life Guarantee" that it decided to change the offered price to a promotional rate and then raise the monthly rate.

"It is shocking that Qwest would induce customers to pay inflated prices by telling them that those rates were fixed, and then callously decide that the response was sufficiently great that it could blatantly break its promise," said Michael Lieder of Sprenger & Lang, one of the attorneys for plaintiffs.  "We are interested in talking with other Qwest customers who were similarly ambushed."

Last year, the same group of lawyers filed a class action lawsuit against Qwest over the $200 "early termination fee" that Qwest imposes on customers whose service is terminated for any reason prior to the expiration of a supposed two-year commitment.  In that case, plaintiffs allege that a two-year commitment is not contained in the written documents and that, even if it were, the fee is unreasonably excessive.  The ETF case also is proceeding in the federal district court in Denver.

"The juxtaposition of the two cases is striking," said co-counsel Beth Terrell of Terrell, Marshall & Daudt.  "On the one hand, Qwest enforces against customers a promise that they have not made.  On the other hand, it ignores its own promise made to induce customers to acquire its internet service."

In the ETF case, Qwest is seeking to enforce an arbitration and class action waiver clause that it slips into the small print of a supposed agreement that is sent to customers after they commence service and which they are never asked to sign.  Presumably Qwest will adopt the same tactic in this case, which plaintiff will oppose.  Co-counsel Kimberlee Gunning explained, "Under Qwest's provision, the plaintiff would have had to pay more in arbitrator's fees than his losses to date.  Such a provision that imposes litigation costs in excess of the amount at stake is designed for one purpose and one purpose only:  to provide a complete shield to companies from legal actions challenging their illegal behavior."