Struggling Sprint Nextel suffered another defeat, as a California court ruled it would have to pay $73 million in a case challenging the carrier’s practice of charging customers a fee who want to cancel their contracts before they are up. Called early termination fees, Verizon Wireless and AT&T face similar suits in various state courts over the practice; the charges argue that customers should not have to pay to switch service providers. The FCC has even taken up the cause in an attempt to strike a balance between carriers’ and states’ abilities to regulate the fees customers are charged.
Scott Bursor, an attorney representing the plaintiffs, reportedly said that this decision “sounds the death knell for the industry’s petition seeking a preemption ruling from the FCC—a ruling the industry has never been able to win in court.”
While carriers have announced changes to their early termination fee structures, carriers still face multiple suits over the practice.
The California case ruled that Sprint owes its former customers roughly $73 million in refunds. But the ruling isn’t final, (is it ever?) and Sprint has two weeks to respond to the court’s decision, then the California Superior Court will make a final ruling.