Verizon and AT&T have agreed to pay $116 million to settle a lawsuit over whistleblower claims that the wireless providers overcharged California state and local governments for years.
The lawsuit alleged the two carriers, along with Sprint and T-Mobile, violated contracts in which the carriers had promised to optimize rate plans to make sure public agencies were getting the best prices among the companies’ shifting offerings, according to a news release from the law firms representing the whistleblower and the public agencies.
“To seal a multibillion-dollar deal, the carriers promised to help public agencies find the most efficient rate plans and save taxpayer dollars,” Anne Hayes Hartman, an attorney from San Francisco-based firm Constantine Cannon, said in a news release. “But when the time came to deliver on those promises, the carriers instead chose to pad their bottom lines.”
The state of California, its public universities and nearly 300 cities, counties, special districts and other entities all signed up with the carriers under an umbrella contract, said Wayne Lamprey, another attorney with Constantine Cannon.
Sprint and T-Mobile, which were also sued, previously settled for $9.6 million combined, according to the release. The carriers denied wrongdoing. Verizon will pay $68 million to resolve the case, and AT&T agreed to pay $48 million.
“Verizon settled these meritless claims to avoid a protracted legal battle that would only have benefited the plaintiff and his attorneys,” Verizon spokesman Rich Young said in an emailed statement.
“We complied with our contracts and the law, and we deny any wrongdoing,” AT&T spokesman Jim Greer said in an emailed statement. “However ... the parties have decided to settle rather than continue costly and time-consuming litigation.”
About three dozen government entities — mostly cities and counties, along with the California State University and University of California university systems — joined the lawsuit. The city and county of Sacramento, along with the cities of Fresno and Rancho Cucamonga, were among them.
Sacramento County will receive $3.1 million, the city $950,000, Lamprey said. The University of California Regents will receive $13.1 million and California State University will receive $2.9 million, he said.
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