More than forty California government entities have joined a lawsuit filed by a whistleblower against Verizon, AT&T, Sprint, and T-Mobile.
The government intervenors and the whistleblower are represented by Constantine Cannon LLP.
Verizon is being represented by Mathew Rosengart at Greenberg Traurig in Los Angeles.
Sprint is being represented by Colin Murray of Baker & McKenzie in San Francisco.
T-Mobile is being represented by Aaron Ford of Snell & Wilmer in Las Vegas.
The action was unsealed by the Court on December 7, 2015.
The wireless companies are alleged to have ignored two cost-saving requirements included in the master contracts under which California state and local government customers purchased wireless services.
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.”
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.
Selecting the rate plan that best matches usage patterns reduces costs by 20-30% over the term of a contract.
Although the master contracts with the government required it, the wireless carriers did not prepare or provide rate plan optimization reports, the lawsuit alleges.
As the carriers did not bill government customers utilizing the most cost effective rate plans, the defendants are also alleged to have failed to provide service at the “lowest available cost.”
The carriers’ failure to live up to their contractual promises, the lawsuit alleges, resulted in overcharges to the government of more than $100 million.
“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.”
“We look forward to recovering the lost savings and securing ongoing contract compliance for the many government entities that were damaged,” said Wayne T. Lamprey, a partner at Constantine Cannon.
The action was brought by OnTheGo Wireless, which has been one of the leading rate plan analysis firms in the country and a pioneer in the field of rate plan optimization.