T-Mobile Presses Case to Transfer T-Mobile/Sprint Class Action to NY

The class action in U.S. District Court in Chicago challenging T-Mobile's 2020 buy of Sprint “has no identifiable nexus to this district,” and so should be transferred to the U.S. District Court in Manhattan and Judge Victor Marrero, who wrote the decision clearing the acquisition to proceed, said T-Mobile Friday in a memorandum of law (docket 1:22-cv-03189) in support of its motion to transfer the case. Seven AT&T and Verizon customers sued in June to “undo the merger” on behalf of millions of subscribers whose subscription rates allegedly soared due to the transaction’s anticompetitive impact.

Marrero, “having previously adjudicated a challenge to the exact same merger, has vast experience with the law, evidence, and theories at issue here,” said T-Mobile. The plaintiffs’ “protestations” that T-Mobile is “forum shopping” to place the case in a friendly court “fail to obscure the reality that it is Plaintiffs who have manufactured a case so full of factual and legal defects that it should be dead on arrival in any district,” said the memorandum.

The plaintiffs “cannot and do not deny that obvious and exceptional efficiencies would flow from having Judge Marrero preside over this case,” said T-Mobile. “Having concluded a lengthy bench trial about the merger at issue, Judge Marrero is ideally suited to evaluate Plaintiffs’ claims that, despite the commitments imposed by the FCC and the DOJ and the failure of proof on the merits at trial by state antitrust enforcers, the merger has nonetheless caused customers of Verizon and AT&T to suffer anticompetitive effects.”

Plaintiffs ignore Marrero’s “170-page opinion analyzing market structure and competitive effects under Section 7 of the Clayton Act, the very same statute invoked here,” said T-Mobile. “Plaintiffs would likewise have the Court turn a blind eye to these efficiencies because Judge Marrero (like the DOJ and the FCC) permitted the merger to proceed.”

Judges in the Northern District of Illinois “have transferred cases with the expectation that a particular judge in the transferee district will handle the matter,” said T-Mobile. “Here, Judge Marrero is intimately familiar with the facts and circumstances of the merger,” it said. Marrero “presided over a trial in which numerous witnesses from the merging companies,” plus Dish Network and other interested parties testified, in addition to “renowned economists,” it said. The judge wrote a 170-page opinion “evaluating the evidence in great detail,” it said. “As a result of this experience, Judge Marrero is in the best position to preside over this case as well.”

Plaintiffs argue that the case should remain in Chicago because the named plaintiffs are located near the court, said T-Mobile. But case law shows a class plaintiff’s home forum is irrelevant to the transfer analysis, it said. That's because in a nationwide class action with millions of potential members, like this one, any venue selected is bound to be inconvenient to some plaintiffs, it said. Six of the seven named plaintiffs don't live in the Northern District of Illinois, and three even “reside in a neighboring state, making some travel unavoidable,” it said.

It's “uncontroverted” that none of the events giving rise to plaintiffs’ claims “took place in this district,” argued T-Mobile. “Instead, this action arises out of a merger agreement that was negotiated, signed, and closed in New York, and pricing decisions made by Verizon and AT&T in New York and Dallas, respectively,” it said. “New York thus has the strongest connection to this lawsuit, diminishing the significance of Plaintiffs’ forum choice and further supporting transfer to New York.”

Plaintiffs seek to “downplay the nexus with New York” by citing other locations where some merger discussions may have occurred, said T-Mobile. “But even if credited, that argument does not negate the fact that most of the key events at issue here did occur in New York and none occurred in this district.”

The remaining “convenience factors” heavily favor transfer to the Southern District of New York, said the memorandum. “T-Mobile has identified, by name, six non-party witnesses located within the SDNY or otherwise within that court’s subpoena power and described what their testimony would include.”

Plaintiffs’ suggestion that these witnesses may not actually testify “is belied by their own allegations,” said T-Mobile. As one example, plaintiffs “place great weight” on Verizon CEO Hans Vestberg’s statements to investors about potential price increases due to inflation, it said. They “cannot now seriously suggest his testimony will not be needed at trial,” it said. “As for convenience of the parties, large corporations and putative classes are presumed capable of litigating in any district, so this factor is, at worst, neutral.”