A California attorney has filed a nationwide class action lawsuit against AT&T for fraud and misrepresentation over claims the company baited consumers to purchase Apple iPads with unlimited access and then subjected them to Internet Overcharging schemes after AT&T ended its unlimited data plan.

Lieff Cabraser Heimann & Bernstein, LLP claims AT&T knew it was going to break its promise to thousands of customers who were told they could switch between unlimited and limited data plans as their needs changed.  On June 7th, AT&T ended its unlimited data plan but grandfathered existing contract customers, permitting them to retain the plan indefinitely.  But if a customer changed to a limited usage plan or discontinued service, they lose the chance to get the unlimited plan back.

Apple and AT&T announced this policy change with less than one week’s notice to their customers and only about a month after Apple and AT&T began selling 3G-enabled iPads.  Apple and AT&T had promised consumers flexibility with their data plans, allowing them the ability switch back and forth between the limited data plan, the unlimited data plan, and no data plan.

No more.

“The availability of an unlimited data plan was a key reason why consumers paid the extra $130 charge to access the 3-G network, and their ability to switch in and out of the unlimited data plan was also an important consideration in the decision to purchase an iPad,” stated Lieff Cabraser attorney Michael W. Sobol. “The complaint alleges that Apple and AT&T should have known at the time they were promoting the availability of unlimited data plans, they were not going to keep that promise.”

“I originally purchased a standard iPad. Three weeks later, I returned it to the Apple store, paying an additional $130 plus sales tax to upgrade to an iPad with 3G capability. I thought the iPad 3G was worth the additional money because, with the unlimited data plan, I could work outside my office or home and access all the data I needed for a fixed, monthly price,” commented plaintiff Adam Weisblatt of Fulton, New York. “But I also knew that for several months each year, with my schedule, a lesser expensive, limited data plan was sufficient. I would have never purchased a 3G-capable iPad if I knew Apple and AT&T were planning on suddenly taking away from me the freedom to opt in and out of an unlimited data plan at my choice.”

The proposed class plaintiffs seek to represent a nationwide class consisting of all individuals and entities within the United States who purchased or ordered an Apple iPad 3G on or before June 6, 2010.

Consumers wishing to join the suit can contact the law firm for additional details.  There are no details on exactly what the attorneys will be seeking from AT&T.

Class action lawsuits have often delivered far more in benefits and compensation to the law firm that filed the lawsuit, with consumers usually left with discount coupons or less than $10 in compensation.  In this case, demanding AT&T deliver on its marketing promises or permitting customers to return their iPads for full refunds would seem appropriate.  Thanks to Stop the Cap! reader Marcus for the news tip.

When dealing with an increasingly deregulated telecommunications industry, legislative relief from bad company practices is usually unavailable.  Some customers turn to the courts, through class action lawsuits brought against companies that can’t or won’t do the right thing.  Unfortunately, all too often such actions never bring more than bottom dollar refunds or coupons that can only be redeemed with the provider that treated you badly in the first place.  The real spoils are reserved for the lawyers bringing the case.

In Illinois, that has been proven true yet again as a Madison County judge orders refunds of $21.20 for nearly 700,000 formerly-Illinois Bell business customers who deserved refunds dating back to 2001, but never got them.

Judge Daniel Stack ruled that AT&T, current owner of the impacted area, should pay $21,671,857 total.

But more than $7,000,000 of that will never reach wrongfully charged customers.  Instead, that money will be diverted to pay the lawyers who brought the class action case.

The Madison-St. Clair Record did the math:

[Judge Stack] awarded a third of the judgment, more than $7 million, to class action lawyers Terrence O’Leary of Granite City, Glenn Bradford of Edwardsville, Thomas Londrigan and Timothy Londrigan of Springfield, and Mary Leahy of Springfield.

Stack wrote that they expended more than 3,000 hours on the case.

That would mean they made about $2,400 an hour.

Subtracting their fee leaves less than $15 million for customers, and Stack conceded that complete payment “may be impossible and/or impracticable.”

He ruled that Land of Lincoln Legal Assistance Foundation should receive all funds that remain after AT&T has issued credits to current customers.

Legal firms that bring class action lawsuits should be paid for taking the risk of bringing the case, but far too often they, along with one or two original class members, profit handsomely while those actually harmed are left with little once the spoils are divided.  Lawyers and key class members are paid in full (or well beyond) while those victimized are handed lunch money or coupons for a free month of phone features or some other limited value giveaway.  Doesn’t this call into question why any customer would want to participate in such suits in the first place?