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Sprint Nextel Corporation (S) Avoids Class-Action Lawsuit – for $20

Sprint Nextel Corporation (NYSE:S) finally got a break on a legal case involving false roaming charges on wireless customers. This week, a federal appeals panel rules that a class-action lawsuit will not go through, and instead the claims must be addressed in arbitration.

Sprint Nextel Corporation (NYSE:S)

James Pendergast brought a federal class-action lawsuit against Sprint Nextel Corporation (NYSE:S) and its subsidiaries in 2008 on charges of breach of contract negligent misrepresentation and a violation of a Florida law regarding deceptive trade practices. Pendergast’s individual damage claim was about $20.  The appeals court got the case because Pendergast appealed a lower court ruling that the arbitration policy in the company’s wireless contract is not “unconscionable,” as Pendergast claimed, citing a Flroda state law that allow for a class-action option lieu of arbitration .

Sprint Nextel Corporation (NYSE:S) used a 2007 amendment to its Terms and Conditions document, which indicated that customers had to go to arbitration on all disputes, expect for those that fit under the jurisdiction of small-claims court. However, Pedergast claimed that the class-action waiver was unconscionable, and thus should void the arbitration clause.  Since this case was brought up, the U.S. Supreme Court affirmed arbitration clauses in a pair of similar cases, which the U.S. Court of Appeals for the 11th Circuit referred to in its ruling.  “Resolution of Pendergast’s appeal requires only a straightforward application of Concepcion and Cruz,” the ruling by a three-judge panel said. “We need not decide whether the class action waiver here is unconscionable under Florida law or if it frustrates the remedial purposes of the FDUTPA, because to the extent Florida law would invalidate the class action waiver, it would still be preempted by the FAA [Federal Arbitration Act]. … Under Concepcion, both the class action waiver and the arbitration clause must be enforced according to their terms.”

There was no report about how many Sprint Nextel Corporation customers (NYSE:S) were a part of the class seeking claims that the company falsely charged for roaming for calls outside of its network.

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