Cellphone Termination Fee Cases

*303 Opinion

These consolidated appeals are from a judgment after trial in a consumer class action against wireless telephone carrier Sprint Spectrum, L.P. (Sprint), challenging its policy of charging early termination fees (ETF’s) to customers terminating service prior to expiration of defined contract periods. 1 The trial court found the ETF’s to be unlawful penalties under Civil Code section 1671, subdivision (d), 2 enjoined enforcement, and granted restitution/damages to the plaintiff class in the amount of ETF’s collected by Sprint during the class period, $73,775,975. A jury found that class members who had been charged ETF’s had violated the terms of their contracts with Sprint, and that Sprint’s actual damages exceeded the ETF charges Sprint had collected. The resulting setoff negated any monetary recovery to the class. The trial court, reasoning that the jury had failed to follow its instructions on Sprint’s actual damages, granted the plaintiffs’ 3 motion for a partial new trial on that issue.

Sprint appeals the decision invalidating the ETF’s and enjoining their enforcement, and the court’s grant of the motion for partial new trial on damages. Plaintiffs cross-appeal,…