San Francisco, CA (December 8, 2015) – More than 40 California government entities have joined a lawsuit filed by a whistleblower against Verizon, AT&T, Sprint, and T-Mobile. The case, brought in Sacramento County Superior Court under the California False Claims Act, alleges that the wireless companies overcharged government customers by more than $100 million. The government intervenors and the whistleblower are represented by Constantine Cannon LLP. 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. Specifically, 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. Further, 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 with extensive experience representing whistleblowers and government entities in False Claims Act cases. “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 and former Assistant U.S. Attorney.
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.
Regents of the University of California
Los Angeles County
San Bernardino County
Santa Cruz County
City of Capitola
City of Chino
City of Corona
City of Fortuna
City of Long Beach
City of Oxnard
City of Rancho Cucamonga
City of Ripon
City of Riverside
City of Sacramento
City of San Bernardino
City of San Mateo
City of Santa Cruz
City of Santa Rosa
City of Vernon
City of Victorville
Grossmont Union High School District
Irvine Unified School District
Kaweah Delta Health Care District
Kings Canyon Unified School District
Olivenhain Municipal Water District
Sonoma County Water Agency
Rosemead School District
Saddleback Valley Unified
San Diego Unified School District
Santa Cruz Public Libraries
Torrance Unified School District
Victor Valley Transit Authority
Whittier Union High School District
Woodbridge Fire District
About Constantine Cannon LLP
Constantine Cannon, with offices in New York, Washington D.C., San Francisco and London, has deep expertise in practice areas that include antitrust and complex commercial litigation, whistleblower representation, government relations, securities and e-discovery. The firm’s antitrust practice is among the largest and most well recognized in the nation. Constantine Cannon’s experience spans across multiple industries including healthcare, banking, electronic payments, insurance, high tech, telecommunications, the Internet and government contracting.
Constantine Cannon’s whistleblower lawyer practice represents whistleblowers under the False Claims Act, the Dodd-Frank Act, and the various federal and state laws that encourage industry insiders to report evidence of fraud or misconduct. The firm was one of the first in the country to bring a claim under the whistleblower provisions of the Dodd-Frank Act. To learn more about Constantine Cannon’s whistleblower practice, click here. To learn more about the firm generally, click here.
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