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AT&T sues law firms trying to block T-Mobile deal

AT&T reportedly files eight lawsuits in federal courts around the country against two law firms that are signing up AT&T customers to enter arbitration in an attempt to block the $39 billion merger with T-Mobile.

AT&T is striking back at the law firm Bursor & Fisher, which is trying to block AT&T's $39 billion merger with T-Mobile USA, according to a report from Reuters.

AT&T to buy T-Mobile

Last week, AT&T reportedly filed eight lawsuits in eight different federal court jurisdictions against Bursor & Fisher and a second plaintiffs' firm, Faruqi & Faruqi, claiming that the firms have been pressuring AT&T into "an extortionate settlement" by encouraging AT&T customers to file multiple claims against the merger.

Bursor & Fisher began its "Fight The Merger" campaign in July and has been signing up AT&T customers to demand arbitration from the company. In its arbitration filings, Bursor & Fisher alleges that the deal between AT&T and T-Mobile would violate the Clayton Antitrust Act and harm competition in the wireless market.

Bursor & Fisher has already filed 26 arbitration demands and more than 900 notices of dispute on behalf of AT&T customers who oppose the merger, Reuters reports.

As the result of a U.S. Supreme Court decision in April, cell phone customers lost their right to file class action lawsuits against wireless carriers if they had signed an agreement with an arbitration clause. The court ruled that consumers had to use the arbitration process to resolve disputes rather than class action lawsuits.

Since Bursor & Fisher filed its first arbitration claims, AT&T has said the claims filed against it are without merit and that an arbitrator has no authority to block the merger or affect the merger process in any way.

Now AT&T is suing the law firms bringing the arbitration, claiming that the antitrust claims are out of the jurisdiction of arbitration. AT&T has accused the law firms of "taking a thousand bites at the apple" in hopes of finding one arbitrator willing to block the merger.

Even though, customers have filed individual arbitration claims, which would be decided separately by individual judges, AT&T says that the claims are really an attempt to act as a class. The claims are not seeking damages, since the deal has not been finalized. Instead, the arbitration claims are seeking to block the merger. AT&T also said that the antitrust claims cannot be decided in arbitration.

In a public statement regarding the lawsuits, AT&T reiterated the many benefits the merger will offer customers, including more investment in the wireless networks and the creation of thousands of "well-paying jobs hat are vitally needed given our weakened economy."

But it also emphasized its main point, which is that arbitration is no place to decide whether a merger that has not happened yet has harmed consumers.

"The bottom line here is an arbitrator has no authority to block the merger or affect the merger process in any way," an AT&T spokeswoman said. "AT&T's arbitration agreement with our customers--recently upheld by the Supreme Court--allows individual relief for individual claims. Bursor & Fisher is seeking class-wide relief wrapped in the guise of individual arbitration proceedings, which is specifically prohibited by AT&T's arbitration agreement. Accordingly, the claims are completely without merit. We have filed suit in order to stop this abusive action."

Scott Bursor, a partner at Bursor & Fisher, said that AT&T is grasping at straws.

"The American Arbitration Association has already overruled AT&T's objections and has moved forward with the arbitration process," he said in a statement. "AT&T's filing of these lawsuits appears to be an act of desperation, since AT&T now realizes it faces a substantial likelihood that one or more of these arbitrations will indeed stop the takeover from happening. But AT&T's legal arguments are frivolous. We expect the courts will reject AT&T's arguments and dismiss these cases very quickly. AT&T's desperate lawsuits will not interfere with the ongoing arbitration proceedings."