Plaintiffs seek more than $20 million in suit against SBC
12/11/03
By BILL DRAPER
Associated Press Writer
KANSAS CITY, Mo. (AP) -- Thousands of small businesses
in five states, including Texas, will receive legal notices next week in
a class-action
lawsuit filed against Southwestern Bell Advertising that claims the company
bilked advertisers out of more than $20 million in late fees.
Filed in Jackson
County Circuit Court in November 2001, the lawsuit claims SBC violated its
contract with customers by charging a $25 late fee to
businesses that advertised in its yellow pages and didn't pay their bills
on time.
Two Kansas City-area companies - Liberty Cellular Inc., of Liberty, and
Blast Inc., of Kansas City - filed the initial suit. A Jackson County judge
granted the suit class-action status in August 2002 on the breach of contract
claims.
The court granted partial summary judgment to the plaintiffs on those claims
earlier this year. The next step is to determine how much money the phone
company will have to pay back to its customers.
The mailings, and legal notices to be printed in major daily newspapers
in Missouri, Kansas, Arkansas, Oklahoma and Texas on Sunday and Dec. 21,
are intended to help identify members of the class. It potentially includes
any advertising customer who paid the $25 "collection activity fee."
An attorney for the plaintiffs, Theodore C. Beckett of Kansas City, compared
SBC's actions with the Enron and WorldCom scandals, and said the lawsuit
is an effort to hold SBC accountable.
"The bottom line in this case and others like it is this: greed is
not good," Beckett
said. Bob Mueller, a spokesman for SBC Smart Yellow Pages, said the company
believes it was justified in charging late fees to customers who are late
making
payments. He said the wording in the company's contract with advertisers
allows SBC to collect the fee.
"The fee is never an issue for customers who pay their bills on time," Mueller
said. "It's not unusual in business to charge such a fee."
The lawsuit contends the $25 fee is not addressed in the contract, which
instead stipulates that advertisers must pay an interest rate of 1.5 percent
per month if their bill is not paid by the due date.
Mueller said he's not sure how much money the company could be forced to
pay back because there are a number of issues still being litigated.
"This is basically a dispute about something in the contract," he said. "We
firmly believe the language in the contract allowed us to (collect the
fee). There is nothing deceptive about this. It's common practice, and
very legitimate."
Copyright 2003 Associated Press. All rights reserved.
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