Xfinity Presses Again for Expedited Discovery in Handset Trafficking Case

Contrary to the assertions of defendants SellLocked, Guru Holdings and owner Jakob Zahara that Xfinity Mobile’s motion for expedited discovery should be denied in XM’s handset trafficking complaint (see 2212190054), expedited discovery to third parties “is necessary to preserve relevant evidence,” said the wireless provider in a Dec. 22 reply in support of its motion (docket 2:22-cv-01950) in U.S. District Court for Arizona in Phoenix.

XM’s Nov. 16 complaint alleges the defendants use XM’s financial incentives to buy phones via “unlawful methods” to circumvent policies intended to protect the company and its customers, and then resell the phones “for a substantial profit.” The complaint said the defendants use fake or stolen identities to access customer accounts or set up fraudulent ones with the purpose of “obtaining as many phones as possible for resale.”

The defendants argue that expedited discovery “is not warranted” because there is no risk third parties such as UPS, PayPal, FedEx, DHL, Amazon eBay and Craigslist will destroy evidence, said XM’s reply. But defendants fail “to cite to any authority to support this proposition,” it said, noting the evidence sought is transitory in nature and can be destroyed relatively easily or deleted in the normal course of business.

Even if XM were to send a request to third parties to preserve evidence, “those third parties would be under no legal obligation to do so,” said XM’s reply. “Given the transitory nature of the information sought and the lack of any legal obligation upon third parties to preserve evidence, good cause exists for expedited discovery directed at those third parties.”

Expedited discovery also is warranted because XM is being “irreparably harmed” by the defendants’ conduct, and the defendants “failed to demonstrate any plausible harm they may suffer from the limited discovery sought,” said the reply. Though the defendants accuse XM of failing to provide sufficient evidence of irreparable harm, “they fail to provide any evidence of their alleged harm and summarily conclude” that limited third-party discovery could have a chilling effect on their business, and could irreparably harm their business relationships, it said. “Defendants cannot have it both ways.”

The defendants also “cannot hide behind any sort of notion” that XM has identified only 13 phones involved in the fraudulent trafficking scheme, rendering any harm to XM as “somehow de minimis,” said XM’s reply. The “very purpose” of the expedited discovery sought “is to ascertain the extent” of the defendants’ unlawful conduct, it said. The defendants “cannot in good faith state there is no more evidence of their wrongdoing” while simultaneously refusing to allow XM “to serve discovery requests relevant to that issue,” it said.