By Mike Scarcella

Nov 3 (Reuters) - Fox Corp FOXA.O streaming unit Tubi has ended a lawsuit it filed against law firm Keller Postman for allegedly manufacturing thousands of arbitration claims over Tubi's advertising practices.

Tubi in a filing in the federal court in Washington, D.C., on Friday said it was dismissing the lawsuit after reaching a confidential settlement resolving the underlying arbitration claims.

Keller Postman's Warren Postman in a statement said Tubi unilaterally dropped the lawsuit against the firm and that no money was exchanged.

"Tubi’s suit was meritless from the start, and we believe it was filed as a tactic to smear Keller Postman’s reputation in the hopes that would pressure us to recommend settlement of our clients’ claims for less than they were worth," Postman said.

Tubi in a statement said the underlying arbitration claims have been resolved.

San Francisco-based Tubi sued Keller Postman last year, claiming the law firm had schemed to induce tens of thousands of Tubi subscribers to lodge arbitration claims against Tubi under a California law that bans using age and gender to target advertising.

Keller Postman had called the case a tactical lawsuit that Tubi pursued to evade its own contractual provisions that require users to bring arbitration claims to resolve consumer grievances. The firm has denied any wrongdoing.

In mass arbitrations like those Keller Postman spearheaded against Tubi, hundreds or thousands of individuals bring identical arbitration claims. The tactic emerged in recent years as an alternative to class action litigation as corporate defendants found success forcing claims into arbitration under customer or user agreements.

Tubi and Keller Postman in September said in a court filing that the two sides had reached an agreement to settle claims by Keller Postman clients who brought an arbitration demand against Tubi.

As part of the arbitration settlement, Keller Postman dismissed its appeal on behalf of ten individuals in a state court class action in Illinois against Tubi, a court filing showed.

Tubi in the class action agreed to pay nearly $20 million to settle advertising-related claims. The company denied any wrongdoing.

Tubi, which is free and supported by ads, in June said it had reached more than 100 million monthly active users.

The case is Tubi Inc v Keller Postman LLC, U.S. District Court for the District of Columbia, No. 1:24-cv-01616-ACR.

For Tubi: Brandon Fox, Kelly Morrison and Sati Harutyunyan of Jenner & Block

For Keller Postman: Warren Postman, Fred Messner and Kiran Bhat of Keller Postman

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Fox's Tubi sues law firm over 'manufactured' mass arbitration claims

(Reporting by Mike Scarcella)

((Mike.Scarcella@thomsonreuters.com;))