Apple is facing yet another iPhone lawsuit (YAIL), as Jason Medway has launched a new class action against the company. Mr. Medway and his attorneys allege the iPhone has a fault that prevents it from staying reliably connected to AT&T's 3G network, that Apple knows about the fault, and yet does nothing to warn customers or correct the problem.

AppleInsider broke the news of the lawsuit Thursday, which was filed in California on behalf of other California residents who the suit was equally duped by Apple's false claims of speed for the iPhone 3G.

"Despite knowledge that the iPhone 3G cannot maintain consistent 3G service," the case alleges, "[Apple] continues to solicit new orders in a multimillion-dollar television and print advertising campaign for the iPhone 3G. Apple simply replicated the problems by providing consumers with replacement phones and thus subject to the same issues which prompted the replacements."

The complaint added, "thousands of consumers who purchased Apple's iPhone 3G and accompanying 3G service from AT&T have experienced broken promises regarding the phone's transmission speeds."

The class action is seeking damages of US$5 million, which includes full restitution of their iPhone costs as well as all profits Apple received from sales of the iPhone 3G (plus interest). Oh, and attorney fees -- we shouldn't forget the attorney fees.