James E. Cecchi

Lindsey H. Taylor

CARELLA, BYRNE, CECCHI

OLSTEIN, BRODY & AGNELLO

5 Becker Farm Road

Roseland, New Jersey 07068

(973) 994-1700

(additional counsel on signature page)

Attorneys for Plaintiffs

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

IN RE SPRINT PREMIUM DATA PLAN

MARKETING AND SALES PRACTICES

LITIGATION

Master Case No. 10-6334 (SDW)

MDL No. 2228

DECLARATION OF

SCOTT A. BURSOR IN OPPOSITION

TO SPRINT’S MOTION TO COMPEL

BILATERAL ARBITRATION AND

DISMISS OR STAY ALL ACTIONS

I, Scott A. Bursor, declare:

1. I am an attorney at law licensed to practice in New York, California, and Florida,

and I am a partner in Bursor & Fisher, P.A., co-counsel of record for Plaintiffs. I have personal

knowledge of the facts set forth in this declaration, and, if called as a witness, could and would

competently testify thereto under oath.

2. Attached hereto as Exhibit 1 is a true and correct copy of the invoices for

arbitrator compensation in Brown v. Cellco Partnership d/b/a Verizon Wireless, AAA Case No.

11 494 01274 05, which were used to estimate the likely cost of arbitrator compensation for

Plaintiffs’ claims.

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3. Attached hereto as Exhibit 2 is a true and correct copy of an excerpt from

AT&T’s Petition for Writ of Certiorari in AT&T Mobility LLC v. Concepcion, Supreme Court

Docket No. 09-983, dated January 25, 2010.

Uncertain Content and Omitted Essential Terms Of The Arbitration Agreement

4. Sprint’s arbitration agreement contained in its “Service Agreement: General

Terms and Conditions of Service” states in relevant part that “[t]he arbitration will be governed

by the arbitration rules selected by the Arbitrator.” Sprint Terms and Conditions of Service at 12

(Miller Decl. Exh. A, Docket No. 37-6).

5. In the event Plaintiffs seek arbitration of their individual claims, it is impossible

for them (or Sprint) to know what arbitration rules will be selected and applied by the arbitrator,

or even what arbitration administrator will be used. This is significant because there are

numerous arbitration administrators (American Arbitration Association, “AAA”; Judicial

Arbitration and Mediation Service. “JAMS”; National Arbitration Forum, “NAF”; individual

arbitrators, etc...) that could preside over Plaintiffs’ claims and an infinite number of variations

in the arbitral rules that could be “selected by the Arbitrator.”

6. Sprint’s arbitration agreement also provides that, “[w]e will agree on the

arbitrator, and if we cannot agree, then the arbitrator will be appointed by the Court as provided

by the FAA.” Sprint Terms and Conditions of Service at 12 (Miller Declaration Exhibit “A”,

Docket No. 37-6).

The Real Costs To Arbitrate Plaintiffs’ Claims

7. Plaintiffs allege that Sprint double-bills or over-bills wireless customers who had

already subscribed to an “unlimited” data plan at a fixed monthly price, by charging those

customers an additional $10.00 per month per line “Premium Data Add-On” fee for the same

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unlimited data service they had already paid for, at a contractually agreed price that did not

include these charges. See 2

nd Consolidated Am. Complaint ¶ 2 (Docket No. 35). Plaintiffs seek

to recover that $10 per month per line charge, and an injunction requiring Sprint to “cease the

improper billing of ‘Premium Data’ charges.” See id. ¶¶ 76(b), 82(b), 86(b), 99(a), and 108(c).

It would cost each of the twelve individual Plaintiffs approximately $150,575.00 to $200,575.00,

exclusive of attorneys’ fees, to pursue those claims in an individual arbitration. Those costs are

broken down as follows:

Expenses To Pursue Individual Arbitration Of Claims Asserted in IN RE SPRINT

PREMIUM DATA PLAN MARKETING AND SALES PRACTICES LITIGATION

(Excluding Attorneys’ Fees & Expenses)

Expense Category Amount

Plaintiffs’

Share

Plaintiffs'

Expense Reference

Arbitrator Compensation $101,150.00 50.00% $50,575.00 ¶¶ 9-14

Expert Expense For Initial

Study

$50,000.00 to

$75,000.00 100.00%

$50,000.00 to

$75,000.00 ¶¶ 15-21

Expert Fees For Additional

Analysis And Testimony

$50,000.00 to

$75,000.00 100.00%

$50,000.00 to

$75,000.00 ¶¶ 22-27

Total

$150,575.00 to

$200,575.00

8. In addition to the foregoing expenses, an individual arbitration of Plaintiffs’

claims would involve attorneys’ fees of approximately $1.1 million, plus an additional $40,000

in attorneys’ expenses. See ¶¶ 28-30, below.

Sprint’s General Terms and Conditions of Service Would Require Plaintiffs To Bear

Expenses For His Own Witnesses And Half Of The Arbitrators’ Fees

9. Sprint’s arbitration agreement contained in its “Service Agreement: General

Terms and Conditions of Service” states in relevant part that “[Sprint] will cover any

arbitration administrative or filing fees above: (a) $25 if you are seeking less than $1,000

from us; or (b) the equivalent court filing fees for a court action in the appropriate jurisdiction if

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you are seeking $1,000 or more from us.” Sprint Terms and Conditions of Service at 12 (Miller

Decl. Exh. A, Docket No. 37-6) (emphasis added).

10. At first blush, it would appear that arbitration might only cost $25 or a couple

hundred dollars in court filing fees under these terms. But in reality, the terms providing for an

almost cost-free arbitration are largely illusory as a result of Sprint’s inclusion of the following

clause:

“We each are responsible for our respective costs relating to

counsel, experts, and witnesses, as well as any other costs

relating to the arbitration.”

Id. (emphasis added).

11. The fact that a claimant, under Sprint’s arbitration agreement, is responsible for

costs relating to arbitration is undisputed. Sprint specifically admits that “[b]oth parties are

responsible for the costs of the arbitration...” See Sprint’s Motion to Compel Bilateral

Arbitration at 11 (Docket No. 37-1).

12. The exact cost relating to arbitration depends on the “rules” selected by the

arbitrator, his/her hourly rate, the number of hours the arbitrator works on the case, and other

factors. These figures cannot be forecast with precision. They can, however, be estimated based

on experience in similar cases.

13. The most analogous case for estimating the cost of arbitrator compensation is

Brown v. Cellco Partnership d/b/a Verizon Wireless, AAA Case No. 11 494 01274 05 (hereafter,

“Brown”). I was lead counsel for the claimants in Brown, who asserted claims challenging

Verizon Wireless’ early termination fees as unlawful contractual penalties. Brown was filed in

June 2005 and was settled in June 2008. Brown is comparable to Plaintiffs’ case because both

involve disputes over the legality of charges billed by a wireless carrier, and both involve issues

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requiring expert testimony. Since Brown was a class arbitration, it had more complex procedural

issues than I would anticipate here. But the factual evidence concerning early termination fees in

Brown was relatively straightforward. Plaintiffs’ case is more technically complex, involving

issues related to the assessment of download speeds, bandwidth consumption and a comparison

of phone models and service levels. I would expect an arbitrator would be required to spend

roughly the same amount of time on Plaintiffs’ case as was required in Brown.

14. Eugene I. Farber was appointed as the arbitrator in Brown. Mr. Farber’s services

were billed at $350 an hour. Arbitrator compensation accrues not only for in-hearing time, but

also for “study” time. These hourly charges can become quite hefty when time must be

expended on discovery disputes, motion practice, and scheduling conferences. Unlike federal

judges, arbitrators do not have the benefit of law clerks to assist with research, preparation for

hearings, and drafting of opinions and orders. Thus Mr. Farber, like most arbitrators, did this

work himself. True and correct copies of Arbitrator Farber’s billing invoices are attached hereto

as Exhibit 1. From September 30, 2005 through August 22, 2007, Arbitrator Farber billed

$101,150 for 289 hours of work on Brown. I would expect an arbitrator would bill about the

same amount on Plaintiffs’ case. This estimate is conservative because hourly rates have

certainly increased in the past six years.

Sprint’s General Terms and Conditions of Service Would Require Plaintiffs To Bear

Expert Fees For Testing and Analysis

15. Plaintiffs allege that Sprint double-bills or over-bills Plaintiffs who had already

subscribed to an “unlimited” data plan at a fixed monthly price, by charging those customers an

additional $10.00 per month per line “Premium Data Add-On” fee for the same unlimited data

service they had already paid for, at a contractually agreed price that did not include these

charges. See 2

nd Consolidated Am. Complaint ¶ 2 (Docket No. 35).

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16. Plaintiffs further allege that the “Premium Data Add-On” fee is “not a charge for

4G service” and “not a charge for premium data content.” See 2

nd Consolidated Am. Complaint

¶¶ 7-8 (Docket No. 35). Instead, the “Premium Data Add-On” fee is a “made-up term that Sprint

created to disguise the fact that it was simply charging an additional fee for data service for

which customers had already paid, and which Sprint was already obligated to provide, under

existing contracts for Unlimited Data Plans.” See id. ¶ 10.

17. My law firm conducted an extensive presuit investigation that included

correspondence with at least 436 Sprint customers regarding the double-billing or over-billing

described in the complaint and review of thousands of pages of bills, contracts, and cellphone

data plans.

18. In order to further substantiate these claims, Plaintiffs would need to retain an

expert in telecommunications and economics and pay for a “premium data study.” The

methodology of that study is described in the Declaration of Colin B. Weir, submitted herewith.

19. Mr. Weir is an expert in telecommunications and economics. See Weir Decl. ¶ 1.

According to Mr. Weir, the following would need to be accomplished as part of an initial study

to scientifically substantiate Plaintiffs’ claims:

a. Review the claimant’s wireless bills pre- and post-commencement of the

“premium data charge”;

b. Review the claimant’s contract and other associated documentation

concerning the terms and conditions for service relevant to the provision of

the unlimited data service;

c. Review Sprint’s publicly available documentation, terms and conditions of

service, and other associated documents;

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d. Review Sprint’s available rate plans, pricing, and offers;

e. Subscribe to Sprint unlimited data service on at least two handsets for

purposes of comparison testing

i. One EPIC or EVO

ii. At least one other smartphone with an unlimited data plan as a

comparison;

f. Build and configure a testing environment capable of assessing download

speeds, bandwidth consumption and online experience to allow for

comparison of phone models and service levels;

g. Examine the handsets to determine whether the EVO/EPIC provides

additional carrier-specific/provided content, products or services above and

beyond what Sprint normally includes in its unlimited data bundle

i. Crosscheck with Sprint’s terms and conditions;

h. Determine, in the controlled setting described above, whether the EVO/EPIC

provided an “enhanced” data experience in any way;

i. Determine if the “premium data charge” was a charge for 4G service;

i. Review Sprint’s available 4G data plans, and any relevant contracts,

terms and conditions

ii. Research Sprint’s rollout and availability of 4G service

j. Review Sprint’s, its lawyers, and/or its experts response to any such claim and

research the validity of any such response;

k. Draft a report of findings, including methodology and conclusions.

Weir Decl. ¶ 5.

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20. Mr. Weir reports that he has participated in numerous cases involving

telecommunications providers and specifically wireless carriers. Weir Decl. ¶ 8. He estimates

that “a claimant filing an arbitration with similar claims as in the instant matter, would spend, at

a minimum, between $50,000-$75,000 as part of a initial study simply to scientifically

substantiate their claim.” Id.

21. Given the relatively small amount at stake for an individual consumer, no one

would have an economically rational reason to expend the resources necessary to do the testing

and investigation necessary to further substantiate these claims.

Sprint’s General Terms and Conditions of Service Would Require Plaintiffs To Bear

Expert Fees For Additional Testing, Analysis, And Testimony In Arbitration

22. Plaintiffs’ case involves complex technical issues related to the assessment of data

speeds, bandwidth consumption and on-line experience across a wireless network and analyzing

the composition of data. Both sides will have to present written expert testimony, will likely

have to make their experts available for deposition, and to testify live at an arbitration hearing.

Each of these things was required in the Brown arbitration.

23. Mr. Weir reports that he would anticipate additional work associated with

preparing the case for arbitration and the ongoing arbitration of the case, including but not

limited to:

a. Assist counsel with discovery including attendance at discovery depositions of

Sprint employees as well as depositions of persons most knowledgeable with

respect to the specific details of the “premium data charge”;

b. Respond to discovery, including providing deposition testimony, as

propounded by respondent;

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c. Review and analyze responsive expert and non-expert reports and/or

testimony as proffered by respondent, including assistance with discovery

thereon including attendance at deposition(s) of respondent’s experts and

other witnesses and, as required, preparation of a rebuttal report responsive to

respondent’s rebuttal evidence;

d. Attend arbitration hearings or proceedings as required, including standing for

cross-examination by defendant;

e. Provide such other research and analysis as may be requested by counsel.

Weir Decl. ¶ 7.

24. Mr. Weir estimates that “[a] claimant would likely spend at least [an additional

$50,000-$75,000] on expert fees to prepare the case for the arbitration process[,] ... [which]

would bring total expenditures to between $100,000 and $140,000.00.” Id. ¶ 8.

25. Mr. Weir further estimates that “[s]eeing the case all the way through the

arbitration process to full hearing on the merits would add additional costs.” Id.

26. Under Sprint’s arbitration agreement, an individual Plaintiff would be required to

bear these expenses. Sprint Terms and Conditions of Service at 12 (Miller Decl. Exh. A, Docket

No. 37-6).

27. My firm will advance these costs in a class action. No one would advance them

to arbitrate an individual claim where the likely recovery is less than $200.

Attorneys’ Fees And Expenses

28. Plaintiffs would also incur attorneys’ fees and expenses to pursue their individual

arbitration. It is difficult to forecast such fees with precision, but it is possible to estimate them

based on prior experience. For the reasons discussed above, the most analogous case is the

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Brown arbitration. I would expect attorneys would be required to spend roughly the same level

of effort to competently present Plaintiffs’ individual case as was required in Brown.

29. The table below shows the lodestar fee and expenses claimants’ counsel reported

in Brown, and which were approved by a court during the settlement approval process:

Brown v. Cellco Partnership d/b/a Verizon Wireless

AAA Case No. 11 494 01274 05

Firm Lodestar Fee Expenses

Law Offices of Scott A. Bursor $416,859.25 $74,887.39

Faruqi & Faruqi LLP $127,767.50 $7,725.75

Gilman & Pastor LLP $119,616.00 $4,220.30

Mager & Goldstein LLP $51,903.17 $3,477.36

Lite DePalma Greenberg LLC $79,005.00 $194.73

Freed & Weiss LLC $294,161.91 $9,236.09

Total $1,089,312.83 $99,741.62

The expense figure, however, includes $58,736.68 billed by Mr. Weir’s firm for expert work. To

avoid double-counting, the total expense figure should be reduced by that amount, to $41,004.94.

30. Based on my experience, I would expect that the prosecution of Plaintiffs’ claims

in arbitration would require attorneys’ fees of approximately $1.1 million, plus an additional

$40,000 in attorneys’ expenses. My firm will do this work, and advance these costs, on a

contingent-fee basis in a class action. No one would do so in an individual arbitration where the

likely recovery is less than $200.

I declare under penalty of perjury that the foregoing is true and correct, and that this

declaration was executed at New York, New York this 15th day of August, 2011.

Scott A. Bursor

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