A class action lawsuit charging Los Angeles cellular carriers with price fixing is set to go to trial July 7 in Orange County Superior Court, nearly four years after it was filed.
Arthur Garabedian, who sells cellular phones and service for cellular resellers and agents in Los Angeles, filed a class action suit on behalf of Los Angeles cellular subscribers in November 1993. The lawsuit claims AirTouch Communications Inc. and Los Angeles Cellular Telephone Co. agreed to fix and stabilize prices at which cellular service was offered at wholesale and retail rates. AT&T Wireless Services Inc. and BellSouth Corp. are joint owners of Los Angeles Cellular and are named in the suit along with other companies that are either involved or were formerly involved with the two cellular carriers since 1987. The class numbers about 1 million.
Earlier this month, Garabedian’s attorney filed a second class suit against the carriers that alleges the same actions, but includes the time period from 1993 to the present and allows for additional subscribers to add their names to the class action, which also numbers about 1 million. The first suit covers six years prior to 1993.
“The fact is, we have very strong evidence that this has occurred,” said Garabedian’s attorney, J. David Franklin of Franklin & Franklin in La Jolla, Calif. Franklin said Garabedian became aware of the carriers’ price fixing practices in 1993 through a friend.
“We’ve been looking at this for a while and continue to find no evidence of price fixing,” said Amy Damianakes, AirTouch spokeswoman.
The complaints allege that in January 1987, about two years after Los Angeles Cellular was granted a cellular license, Los Angeles Cellular announced to its employees that it would charge $1 less than AirTouch (then known as PacTel Corp.) for monthly rates and 1 cent less per minute for airtime rates. Concerned, the upper management personnel of AirTouch and other defendants involved with the company met with personnel from Los Angeles Cellular. As a result of the meeting, all parties agreed to make the same wholesale and retail prices for cellular service, claims Garabedian.
“The combination, conspiracy or agreement to fix, tamper with or stabilize the prices for cellular radio service at retail is a continuing activity, and that there occurred in June 1993 an overt act in furtherance of the conspiracy, to wit, the defendants, and each of them, established identical or nearly identical bucket rate plans for cellular radio service at retail in the Los Angeles market area,” stated the latest complaint.
The complaint also alleges that on one or more occasions before the California Public Utilities Commission, the defendants made intentionally false public statements that they were not involved in any anti-trust combinations and purposefully never applied for any increases or decreases in the wholesale rates for cellular service with the commission.
“The artificial inflation of wholesale rates has also caused retail rates for cellular radio service to be higher than they otherwise would be,” said the complaint. “As a direct consequence, plaintiff and plaintiff’s class have been damaged because they were forced to pay higher rates for cellular radio service at retail than they otherwise would have had to pay had there not been a price fixing, price tampering or price stabilizing conspiracy …”
Garabedian claims the carriers participated in schemes in that last four years to maintain an equal market share of customers. These schemes included increasing or decreasing security deposits, waiving activation fees or changing the amounts of commissions being paid to cellular agents.
