California iPhone user wins $850 small claims case against AT&T in data throttling

Pro-tem Judge Russell Nadel found in favor of iPhone user Matt Spaccarelli on Friday in Ventura Superior Court in Simi Valley, saying it wasn't fair for AT&T to purposely slow down his iPhone, when it had sold him an “unlimited data” plan.
By GREG RISLING and PETER SVENSSON Published: February 25, 2012
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When AT&T started slowing down the data service for his iPhone, Matt Spaccarelli, an unemployed truck driver and student, took the country's largest telecommunications company to small claims court. And won.

His award: $850.

Pro-tem Judge Russell Nadel found in favor of Spaccarelli on Friday in Ventura Superior Court in Simi Valley, saying it wasn't fair for the company to purposely slow down his iPhone, when it had sold him an “unlimited data” plan.

Spaccarelli could have many imitators. AT&T has some 17 million customers with “unlimited data” plans who can be subject to throttling. That's nearly half of its smartphone users. AT&T forbids them from consolidating their claims into a class action or taking them to a jury trial. That leaves small claims actions and arbitration.

Late last year, AT&T started slowing down data service for the top 5 percent of its smartphone subscribers with “unlimited” plans. It had warned that it would start doing so, but many subscribers have been surprised by how little data use it takes for throttling to kick in — often less than AT&T provides to those on limited or “tiered” plans.

Spaccarelli said his phone is being throttled after he's used 1.5 gigabytes to 2 gigabytes of data within a new billing cycle. Meanwhile, AT&T provides 3 gigabytes of data to subscribers on a tiered plan that costs the same — $30 per month.

When slowed down, the phone can still be used for calls and text messaging, but Web browsing is painfully slow, and video streaming doesn't work at all.

AT&T spokesman Marty Richter said the company will appeal the judge's ruling.

Companies with as many potentially aggrieved customers as AT&T usually brace themselves for a class-action lawsuit. But last year, the Supreme Court upheld a clause in the Dallas-based company's subscriber contract that prohibits customers from taking their complaints to class actions or jury trials.

That means thousands — and possibly hundreds of thousands — of people who feel abused by AT&T's policy could seek to challenge the company, one by one, in arbitration or small claims court. The customer contract specifies that those who win an award from the company in arbitration that is greater than the company's pre-arbitration settlement offer will get at least $10,000. Spaccarelli picked the same amount for his claim, though AT&T's stipulation about a minimum award doesn't apply in small claims.

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