A federal judge has revived a lawsuit that angry customers filed against AT&T over the company's throttling of unlimited mobile data plans.

The decision comes two years after the same judge decided that customers could only have their complaints heard individually in arbitration instead of in a class-action lawsuit.

The 2016 ruling in AT&T's favor was affirmed by a federal appeals court. But the customers subsequently filed a motion to reconsider the arbitration decision, saying that an April 2017 decision by the California Supreme Court "constitutes a change in law occurring after the Court's arbitration order," Judge Edward Chen of US District Court for the Northern District of California said in the new ruling issued last week.

The state Supreme Court "held that an arbitration agreement that waives the right to seek the statutory remedy of public injunctive relief in any forum is contrary to California public policy and therefore unenforceable," Chen wrote.

AT&T argument rejected

AT&T argued that the court shouldn't consider the new argument, saying that plaintiffs raised it too late. The plaintiffs could have made the same argument before the April 2017 Supreme Court ruling, since the ruling was based on California laws that "were enacted decades ago," according to AT&T.

Chen was not persuaded, noting that "there had been no favorable court rulings" the plaintiffs could have cited earlier in the case. "The Court also finds that Plaintiffs acted with reasonable diligence once there was a ruling favorable to them," Chen wrote.

The state Supreme Court ruling is applicable in this case because the customer agreement between AT&T and the plaintiffs "contained the problematic provision above barring public injunctive relief in any forum (arbitration or otherwise)," Chen wrote. "That renders the arbitration agreement in its entirety—per the poison pill—a nullity."

Chen did rule that arbitration should be compelled for one of the plaintiffs, who lives in Alabama, but not for the plaintiffs that live in California. Chen thus granted the plaintiffs' motion to reconsider its arbitration ruling, and—upon reconsideration—denied AT&T's motion to compel arbitration for California residents.

As a result, the plaintiffs can now proceed with their case in US District Court against AT&T. However, AT&T will appeal Chen's latest decision, presumably in the US Court of Appeals for the Ninth Circuit. "We respectfully disagree with the decision and we plan to appeal," AT&T told Ars.

This isn't the only lawsuit AT&T faces over its unlimited data throttling. The Federal Trade Commission has been trying to get refunds for customers since October 2014, but AT&T claimed the FTC has no jurisdiction over the company. Last month, the Ninth Circuit appeals court ruled against AT&T, allowing the FTC to continue its lawsuit against the company.

Customers’ suit seeks refunds

The proposed class-action lawsuit in California was filed in July 2015. An amended complaint alleged that AT&T "lured consumers into purchasing smartphones, wireless data cards and mobile service plans by aggressively promoting 'unlimited' data service plans without disclosing, or adequately disclosing, that its so-called 'unlimited' plans are actually limited."

AT&T had been throttling customers' unlimited data plans for the remainder of each month after non-LTE users exceeded 3GB of data usage and after LTE users exceeded 5GB. Shortly before the lawsuit was filed, AT&T eased up on the aggressive throttling so that it no longer applied 24 hours a day. Currently, AT&T customers can be throttled after using 22GB in a month but only during periods of "network congestion."

The 2015 complaint sought certification of the class of customers who were affected by the throttling and an injunction permanently barring AT&T from continuing the alleged "improper conduct and practices."

Plaintiffs also sought refunds for customers, financial damages including "all profits and unjust enrichment that Defendant obtained as a result of its unlawful, unfair, and fraudulent business practices and conduct," and further damages "for Defendant’s knowing, willful, and intentional conduct."