AT&T Customers File Arbitration Cases Seeking to Block T-Mobile Merger

A group of lawyers has filed arbitration cases on behalf of 11 AT&T customers in hope of blocking the company’s planned $39 billion acquisition of T-Mobile USA.

The New York-based firm of Bursor & Fisher law firm filed a 236-page arbitration demand on Thursday, alleging that the proposed deal would harm competition in violation of the Clayton Antitrust Act.

Although the deal already requires approval from the Department of Justice and Federal Communications Commission, the law firm is seeking to represent individual AT&T customers who want to bring their own legal challenges to the deal.

“Government enforcement is an important part of the antitrust laws, but the Clayton Act also permits private parties who may be adversely affected to challenge a proposed merger,” attorney Scott Bursor said in a statement. “That means any AT&T cellphone, data or iPad customer who will suffer higher prices and diminished service because of this merger can sue to stop it from happening.”

The firm, which has set up a Web site arguing its case, said it plans to file additional arbitration cases on Friday, with hopes of filing hundreds of such cases. AT&T’s standard contract terms prevent class-action suits but allow for disputes to be brought up for arbitration, at AT&T’s expense.

In an interview, Bursor talked about how that could help in this case.

“If we bring 100 cases and we lose 99 of them we are going to win,” Bursor told AllThingsD. “We just need one arbitrator to say, ‘Wait a minute, this merger is going to hurt competition.'”

Bursor and his firm have been involved in other consumer suits against the wireless industry, including a class-action suit against Sprint Nextel over its early termination fees and another dispute with AT&T over the locking of handsets.

An AT&T representative was not immediately available for comment.

AT&T has lined up backing from a number of governors and other elected officials, as well as high-tech firms, labor and other groups; meanwhile, Sprint has been fighting the deal, along with several consumer groups and smaller wireless carriers. This week, Senator Herb Kohl, a top democrat on antitrust matters, called on the federal government to block the deal.

In its earnings call on Thursday, AT&T said it remains confident the deal will win approval and close in the first quarter of next year, despite the objections.