Dozens of government agencies in California have banded together to file a whistleblower lawsuit against AT&T, Sprint, T-Mobile and Verizon.
According to a press release, the case, brought in Sacramento Country Superior Court under the California False Claims Act, alleges that the wireless companies overcharged government customers by more than $100 million.
The 42 government intervenors and the whistleblower are represented by Constantine Cannon LLP. The action was unsealed by the Court on December 7, 2015.
The suit claims that the wireless companies have ignored two cost-saving requirements included in master contracts under which California state and local government customers purchased wireless services.
Specifically, the master contracts required the carriers to determine and report to the government customers which rate plan selections would result in the lowest cost – referred to as “rate plan optimization” – and to provide wireless services at “the lowest available cost.”
“The carriers promised optimization in order to win these government contracts, which are worth billions of dollars,” said Anne Hayes Hartman, a partner at Constantine Cannon. “But while they were happy to take the government’s money, the carriers simply ignored their commitments to bill using the lowest cost rate plans. The carriers profited and taxpayers paid the price.”
Rate plan optimization is a computerized service that analyzes individuals’ usage patterns quarterly and identifies the least expensive service or rate plan for each phone or user. The suit claims that selecting the rate plan that best matches usage patterns can reduce costs by 20 to 30 percent over the term of a contract.
The lawsuit alleges overcharges to the government of more than $100 million.
John Johnson, a spokesman for Verizon, said his company had done nothing wrong.
“Verizon complied with all of its contractual obligations,” Johnson said in an emailed statement. “In fact, after an extensive two-year investigation, the California Attorney General declined to intervene and prosecute this matter, further demonstrating that the case lacks any merit.”
A Sprint spokeswoman said Sprint is proud of the work it has done for government customers in California, adding that Sprint disagrees with the allegations in the complaint, and looks forward to presenting the “true story at the appropriate opportunity.”
AT&T declined to comment on the mattter and T-Mobile has yet to respond.
Filed Under: Carriers
