Sprint Back In Court Over Early Termination Fees

A California judge is ordering a new trial in a class-action lawsuit against Sprint regarding its contract cancellation fees that could potentially cost $300 million.
Sprint Nextel could be forced to pay up to $300 million as a California judge has ordered a new trial in a class-action lawsuit regarding its early termination fees, or ETF.

Another California judge had previously ruled against Sprint for the cancellation fees, but jury verdicts found that subscribers did breach their contracts with Sprint when they terminated early. The amount of damages, if any, has been up in the air, and the new trial could be a boon for the plaintiffs.

"We had already won on the key issue in the case by providing that Sprint's termination fees are illegal," said Scott Bursor, the plaintiffs' lead trial counsel, in a statement. "But this latest ruling eliminates any reduction or set off against our claim and restores every penny of our $299 million victory."

Sprint said the new trial is completely unwarranted and it will appeal the decision.

"We're not surprised that the plaintiffs' attorneys brought this motion given that they lost the jury verdict and were awarded zero damages from the original jury decision," a Sprint spokesman told InformationWeek. "However, we're baffled as to why a new trial was granted based merely on an unsupported assumption of what the jury must have been thinking when it reached its verdict."

The third-largest U.S. wireless carrier is also facing a $1.2 billion nationwide ETF lawsuit from the same attorneys, but that could be derailed thanks to a recent $17.5 million settlement from Sprint.

The wireless carrier joins the likes of AT&T, T-Mobile, and Verizon Wireless in changing its ETF policy. The $200 Sprint cancellation fee now decreases by $10 per month beginning in month six of the contract, and the adjusted ETF only applies to new contracts.

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