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$38 Million Pac Bell Settlement

The Problem

Pac Bell’s bills for residential phone service included late fees of $2.50 plus 2%, per month on past due balances.  Our client, Luis Alberto Mier, paid five of these charges.  Though the amounts were relatively small, the charges carried effective interest rates ranging from 43% to more than 90%.

What We Did

We filed a class action lawsuit on behalf of Mr. Mier alleging these late fees violated California law because they had no relationship to any actual loss caused by late payment.  We prosecuted the case for 3 years, won a contested class certification motion, and the judge appointed us to represent more than 1.8 million customers who paid these late fees.  We defeated Pac Bell’s summary judgment motion, and took the case to the brink of trial. The day before opening statements at the trial, Pac Bell agreed to settle for $38.6 million.

What Our Clients Got

The court granted our client, Luis Alberto Mier, a $5,000 award.  The class members he represented got cash refunds or bill credits refunding a portion of the illegal fees.