AT&T Pushes for Arbitration in Customer’s SIM Swapping Crypto Hack Case

AT&T says that a man who sued the company for his six-figure cryptocurrency loss after being victimized by a SIM swap must arbitrate his claims. The agreement he signed in 2009 is valid and enforceable, AT&T Mobility LLC argued on Wednesday over the plaintiff’s contentions that the arbitration provision is unconscionable.

The case began in September, when the Texas man sued AT&T for failing to protect his account. Specifically, the plaintiff accused his wireless carrier of permitting a SIM swap to occur, handing his phone number to hackers who were then able to log into his cryptocurrency account and steal 159.8 Etherum tokens, which reportedly hit $4,200 per token following the theft.

The complaint noted that though the details of the heist were unknown to the plaintiff, such as exactly how the SIM swap occurred, AT&T’s lapse violated its own policy, the Federal Communications Act, the Texas Deceptive Trade Practices Act, and other common law duties.

In late November, AT&T moved to compel arbitration. The plaintiff opposed, and in this week’s filing, the company reiterated arguments as to why, under the Federal Arbitration Act the Houston, Texas court must send the case to the para-judicial forum. 

The cellular carrier explained that under state law and in order to demonstrate unconscionability, a plaintiff must both prove that the circumstances surrounding the adoption of the arbitration provision and the fairness of the provision itself are suspect.

The company rebutted arguments that the plaintiff had no power to negotiate the terms of AT&T’s binding contract, that the arbitration provision was a surprise, and that AT&T’s failure to attach the Arbitration Association of America’s Commercial Arbitration Rules rendered it procedurally unconscionable. The movant said the plaintiff’s arguments were without authoritative support, that this district has upheld AT&T’s arbitration clause in the past, and that the Supreme Court has upheld a similar version.

As to substantive unconscionability, the company dismissed the plaintiff’s argument as superficial. The litigant allegedly “made no argument that the terms of the contract are one sided, nor has he discussed the terms of the agreement at all,” the reply said. The filing added that the dispute falls squarely within the reach of the agreement, and that there are no other reasons why the court should set it aside.

The plaintiff is represented by Richard E. Brown Attorney at Law PC and AT&T by Kilpatrick Townsend & Stockton LLP.