An attorney who filed a class-action lawsuit against reseller Econopage Inc. announced he will amend that suit to include claims against paging carriers Paging Network Inc. and PageMart Wireless Inc.
Econopage is the now-defunct San Jose, Calif.-based reseller that abruptly closed its doors after carriers PageNet, PageMart and Metrocall Inc. all terminated their service agreements with the company, claiming Econopage had defaulted on its payments. With more than 200,000 customers, Econopage is believed to be the largest reseller to default in this way.
Alec Trueblood, a lawyer with the San Francisco law firm of Chavez & Gertler L.L.P., who filed a class-action lawsuit on behalf of Econopage customers, said he decided to include carriers in lawsuit because he believes they knew of and condoned the fraudulent practices of Econopage.
“They knew of Econopage’s financial problems yet continued to allow them to offer multiyear contracts,” he said. “They knew or should have known that Econopage would collapse.”
The lawsuit he originally filed Oct. 27 against Econopage in San Francisco Superior Court-which charged breach of contract, sales below cost (illegal in California), unfair business practices and violations of the Consumer Legal Remedies Act-has not been amended yet, but Trueblood expects to do that in the next few weeks.
Another class-action lawsuit that essentially puts forth the same claims was filed against the same carriers Oct. 27 by attorney Steve Keller of the Burlingame, Calif., law firm Cotchett and Pitre. Both lawyers expect the two suits to be consolidated by the court.
Responding to the lawsuits, Scott Baradell, director of corporate communications at PageNet, said, “It’s totally baseless. It’s a clear example of going after the deep pockets … The bottom line is, we are no more privy to Econopage’s balance sheet than anyone else.”
Bridget Cavanaugh, spokeswoman for PageMart, expressed much of the same sentiment. “Basically, we feel these cases are without merit.”
Further legal fallout was predicted by Aaron Arnot, co-founder and chief operation officer of Econopage. Arnot said he intended to file a lawsuit against the carriers as well.
“These people are not going to get away with it,” he said. “My sole goal in life is vindication.” Although no legal action had been taken at press time, Arnot said he is now trying to “find somebody to go up against” the carriers.
Arnot claims Econopage was doing fine until his airtime providers discovered he was looking to sell the company. He believes the carriers feared losing the 200,000-plus subscribers Econopage provided and instead conspired to put him out of business by altering their resale agreements to the point where it was impossible for him to continue.
“His statements have been completely fabricated,” Baradell said. “If he decides to try and take the carriers to court, the false nature of his claims will be shown to the world.”
Apparently, Orange County, Calif.-based reseller Econo-page of Southern California is not affiliated with the Econopage in default. PageNet said that “the discontinuation of Econopage Inc. subscribers does not affect the subscribers of Econopage of Southern California.”
Officials at Econopage of Southern California refused to comment on whether the situation has affected that business.
