In a move that could affect thousands of iPhone users and other AT&T customers subject to early termination fees, AT&T Mobility has responded to a class action suit by announcing that “AT&T Mobility strongly denies any wrongdoing, but has agreed to settle to avoid the burden and cost of further litigation.” The suit was filed in the U.S. District Court for the district of New Jersey. If you were an AT&T Mobility customer at any time during the period from January 1, 1998 through November 4, 2009 this settlement may effect you.

The suit alleged that the flat-rate early termination fee in AT&T's wireless contracts was illegal. If you had a contract with a flat-rate early termination fee during that period, or were charged or paid the fee during that period (perhaps from an earlier contract), then you have the option of submitting a claim to be part of the settlement class. It should be stressed that the court has not yet approved the settlement, though they are typically approved when things reach agreement between both sets of attorneys.

AT&T has agreed to create a settlement fund of $16 million in cash and $2 million in non-cash benefits for all who qualify and elect to be members of the class settlement. Your rights under this proposed settlement and the forms needed to submit a claim as part of this class are at http://www.attmetfsettlement.com/. The current deadlines are March 24, 2010 if you want to get out of, or object to, the settlement, and June 4, 2010 to submit your claim to be included.

The timing of this settlement is significant, given the growing expectation that Apple will be announcing deals with other carriers (like Brand V) tomorrow.