Sprint Nextel has received preliminary court approval to pay a $17.5 million settlement for litigation surrounding its early termination fees.
U.S. District Judge Jose Linares in New Jersey Federal Court said the settlement does not mean Sprint is off the hook for the $73 million a California judge has said Sprint must pay customers in another ETF lawsuit. However, the settlement could potentially shutter a $1.2 billion class-action lawsuit brought against Sprint over the fees.
Scott Bursor, the lead attorney in the class-action case said he was displeased with news of the settlement, and may seek to block it in New Jersey federal court. The settlement would go into effect in March 2009. Sprint changed its ETF policy for new customers who signed a contract on or after Nov. 2. The new policy drops the $200 termination fee by $10 increments beginning in the sixth month of the contract, meaning that by the 15th month of the contract, the ETF is down to $100, which Sprint calls an industry-low.
Earlier this spring, early termination fees came under closer scrutiny from the FCC, which had been discussing ways the carriers could work with customers to give them more flexibility in their contracts.
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