AOL Loses Appeal to Halt Class-Action Suit

AOL Time Warner is now considering its options after failing to win an appeal against a mounting class-action suit, stemming from allegations of false advertising for its ISP services.

On Wednesday, U.S. District Court judges in Florida re-opened the case of Miles, et al v. America Online, Inc., the Internet unit of New York-based AOL Time Warner. In August, AOL had filed an appeal against the lawsuit’s status as a class action — trying to avoid being exposed to claims from potentially thousands of users.

But judges struck down the appeal from the online giant, and now America Online spokesperson Nicholas Graham said the company is “considering our legal options.”

Still, Graham said the appellate court’s decision had little to with the intrinsic merits of the case.

“It was strictly a procedural motion, and not a decision in any way based on the merit of the underlying case,” he said, adding that America Online has “consistently … disagreed with the court’s opinion that this is a matter in which class certification is appropriate or even feasible.”

The suit, first filed in February 2000, arises from the issue of whether AOL provided sufficient notification in its advertising that subscribers might be required to use long-distance dialup numbers. In its ads, America Online promised “unlimited Internet access” for $19.95 per month. The ads did run a small-print disclaimer, stating that users might incur a charge by using long-distance numbers.

Additionally, the suit alleges that AOL’s software — which searches a directory for numbers not currently being used — switches to long-distance numbers after exhausting an unreasonably short list of local access numbers.

Among the lawsuit’s charges are that America Online violated Florida’s Deceptive and Unfair Trade Practices Act (and similar laws in other states) and the federal Computer Fraud and Abuse Act.

AOL, meanwhile, maintains that it’s done nothing wrong, and is being unfairly singled out.

“We strongly believe we follow standard industry practice concerning notification to existing and prospective members on connectivity and access issues as well as telecommunications charges,” Graham said.

The class includes all current and former AOL members who received long-distance charges stemming from AOL use and either cancelled the service within 75 days of the first charge, changed their AOL access number within 75 days, or wrote to AOL complaining about the charges within six months.

The suit isn’t the first class action claim against the online giant. In one case, users are suing for computer damages resulting from America Online’s version 5 software. In another, America Online volunteers are claiming they deserve to be paid the minimum wage under fair labor laws. In a third suit, Muslim users of the service claim they have been subjected to hate speech in its chat rooms.

Several years ago, America Online agreed to a class-action settlement stemming from delays suffered when the service failed to keep up with exploding demand for ISP access, after offering a flat-rate plan as an alternative to its hourly plan. In 1997, the firm also gave away free online time to plaintiffs in a class action suit that charged the firm had unfairly over-billed online usage.

In February, AOL won a dismissal of class-action suit charging that America Online’s pop-up ads wrongfully ate into users’ paid online time.

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