Ina Fried

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Breaking: AT&T Sues in Federal Court to Stop Merger-Blocking Arbitration Effort

Aiming to keep its T-Mobile acquisition on track, AT&T said late on Friday that it has filed eight federal suits aimed at thwarting a law firm’s attempt to block the deal via arbitation.

The suits were filed in eight jurisdictions across the U.S. where the Bursor & Fisher law firm has filed arbitration cases.

The law firm has been seeking to attack AT&T’s planned T-Mobile acquisition by bringing arbitration cases on behalf of individual AT&T customers. The firm recently said that it had signed up more than 1,000 customers looking to attack the deal.

AT&T has maintained that the arbitration clause in its contract with customers cannot be used for such efforts.

“This merger will provide tremendous benefits for customers and unleash billions of dollars in badly needed investment, creating many thousands of well-paying jobs that are vitally needed given our weakened economy — a fact that’s been recognized by consumers, public officials and groups of all types,” AT&T told AllThingsD. “However, the bottom line here is an arbitrator has no authority to block the merger or affect the merger process in any way. AT&T’s arbitration agreement with our customers — recently upheld by the Supreme Court — allows individual relief for individual claims. Bursor & Fisher is seeking class-wide relief wrapped in the guise of individual arbitration proceedings, which is specifically prohibited by AT&T’s arbitration agreement. Accordingly, the claims are completely without merit. We have filed suit in order to stop this abusive action.”

AT&T, of course, is seeking to buy T-Mobile USA in a deal valued at $39 billion. The deal requires FCC and Department of Justice approval, but a number of governmental and other organizations have sought to have their say as well.

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The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald