Nearly 10,000 Verizon (NYSE:VZ) wireless customers have “lawyered up” in an attempt to undermine the proposed $100 million Verizon class-action lawsuit settlement regarding misleading administrative fees the company added to customer wireless bills. Indeed, lawyers of the customers are making the case that their clients should be allowed to arbitrate against the company, eschewing the proposed settlement.
So, what exactly does this mean for potential recipients of the class action?
At the very least, it complicates Verizon’s legal path forward. Indeed, the company’s proposed $100 million settlement was essentially an attempt to avoid mass arbitration against the company for its deceptive administrative charges. By accepting the settlement distribution, recipients would forgo any right to pursue further legal action against Verizon on the matter.
Rather than accept Verizon’s proposed settlement, however, lawyers from a separate group of plaintiffs have filed a motion to intervene in the class action as well as a motion to compel arbitration. Indeed, lawyers from Murphy Advocates and Goldstein Russel & Woofter filed the motions on behalf of Murphy’s collective 9,970 Verizon clients.
According to Murphy, the firm has advanced more than $3 million in arbitration initiation fees to the American Arbitration Association, arguing their clients not be lumped into the class action’s injunction, which would prevent them from pursuing arbitration.
Indeed, only 10 of Murphy and Goldstein Russel’s clients actually want to take part in the settlement, with the vast majority favoring further legal pursuit.
Verizon Class-Action Lawsuit Under Duress
While Murphy and Goldstein Russel’s proposal stands to complicate the approved class action substantially, it’s unclear whether arbitration on behalf of their clients is a real possibility.
In prior Verizon litigation, the company has attempted to require customers to arbitrate in sets of 10 claims at a time while other claimants await the outcome of prior “batches” of claims. This process incentivizes claimants to accept a global deal rather than spend the money on arbitrators should some early batches come out unsuccessful.
However, California and New Jersey courts decided last year that Verizon’s arbitration contract was essentially void, as it would take years to arbitrate all the cases.
According to Evan Murphy, his challenge isn’t an attempt to undermine the already accepted $100 million settlement but to protect his clients’ rights to pursue arbitration.
“Our objection is not to what prompted the settlement, but to Verizon’s attempt to use the settlement to eliminate our arbitrations… Whether Verizon (or plaintiffs’ counsel) agrees with our strategy is irrelevant.”
Verizon has, perhaps expectedly, accused Murphy of attempting to disrupt the Verizon class-action lawsuit settlement that will offer “significant benefits” to customers.
A Middlesex County Court Judge will hear arguments on Murphy’s motion to intervene in February.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
