SIM Swap Victims ‘Strenuously’ Oppose T-Motion Bid to Compel Arbitration, Judge Told

Plaintiffs Feliks Roitman and Yekaterina Shkolnik “strenuously object” to defendant T-Mobile’s assertion that their claims should be in arbitration rather than in U.S. District Court for Eastern New York in Brooklyn, their counsel wrote U.S. District Judge Eric Vitaliano in a letter opposition Friday (docket 1:23-cv-06159) to T-Mobile’s anticipated motion to compel arbitration.

The two T-Mobile customers allege the carrier’s “gross negligence in hiring, training, and supervising its employees” enabled a SIM card swap that let criminals steal $130,000 from their savings. Roitman and Shkolnik allege an unidentified person unknown to them entered a T-Mobile location in Oakland, California, in November 2021 and initiated a SIM swap on Roitman’s account, while the family was at home in New York (see 2308170015). Roitman held the family’s account in his name, including lines for Shkolnik and their son.

The standard that the Eastern District of New York must apply when reviewing a motion to compel arbitration “is essentially the same standard for reviewing a motion for summary judgment,” said the counsel, Steven Yuniver of Sinayskaya Yuniver Law in Brooklyn. T-Mobile “failed to prove the existence of an arbitration clause,” or the plaintiffs’ acceptance of it, said Yuniver’s letter.

T-Mobile hasn’t and can’t demonstrate that Roitman and Shkolnik “agreed to the arbitration of their causes of action,” said Yuniver. As those facts are unproven, and are issues of fact that are “vigorously contested” by the plaintiffs, a motion to compel at this time represents a waste of the court’s time and resources, he said.

It’s “well-settled law” that where there’s conflict between state and federal law, federal law prevails, and the plaintiffs don’t “contest this underpinning of jurisprudence,” said Yuniver’s letter. The plaintiffs assert there’s no such conflict between the Federal Arbitration Act and Section 399-c of New York’s General Business Law, it said.

Section 399-c doesn’t “prohibit outright” the arbitration of any type of claim, it merely prohibits mandatory arbitration “from being foisted on consumers,” said Yuniver’s letter. All New York citizens “are freely permitted to elect arbitration” but aren’t to be forced into it by multinational corporations, “which is in keeping with the intent of the FAA,” it said.

The FAA isn’t the “unassailable shield” that T-Mobile “would like it to be,” said Yuniver’s letter. Multiple exceptions have been carved out of the FAA, it said. Arbitration can’t be compelled “since the purported arbitration agreement is part of a contract which is invalid on the grounds of fraud” that enabled the unlawful SIM swap to take place to the plaintiffs’ detriment, it said. T-Mobile failed to live up to the very security safeguards it advertises on its website, it said.

Plaintiff Roitman “was induced into signing a contract” with T-Mobile with those security “assurances in mind,” said Yuniver’s letter. That the plaintiffs were victimized by “the very lack of processes” that T-Mobile pledged to have deployed to protect their account “evidences the fraudulent representations” that induced Roitman to enter “a contractual relationship with T-Mobile,” it said.

The plaintiffs contend the purported arbitration agreement “is unenforceable as it was unconscionable,” said Yuniver’s letter. Even if the court “were to find that there was a valid agreement between the parties,” T-Mobile’s bid to compel arbitration fails because the plaintiffs’ claims don’t “arise from T-Mobile’s service, and so are not a dispute they agreed to submit to arbitration,” it said.

The plaintiffs don’t bring claims arising from T-Mobile’s reception or billing or coverage or rates, “as one might reasonably foresee when imagining future entanglements with a cellular provider,” said Yuniver’s letter. “The actions and failures of T-Mobile were so outrageous, unforeseen, and outside the scope of the contract that the arbitration clause cannot apply here,” it said.

As a bodyguard can’t claim that robbing his client “was contemplated in the making of the contract,” neither can T-Mobile assert that its “active participation” in the theft of the plaintiffs’ $130,000 “was part of a cellular contract,” said Yuniver’s letter. The actions leading to the plaintiffs’ victimization weren't “an immediate, foreseeable result of the performance of contractual duties” and so aren’t covered by arbitration, it said. The plaintiffs didn’t, and couldn’t “agree to submit these resultant claims to arbitration,” it said.

It can’t be “understated here” that the plaintiffs don’t bring causes of action “under a mere breach of contract,” said Yuniver’s letter. “The underlying actions were criminal,” it said. T-Mobile’s “criminal activity” wasn’t contemplated in the contract, and the plaintiffs’ claims “fall squarely outside the scope of the purported arbitration clause,” it said. “As there could be no way” for the plaintiffs to foresee that T-Mobile “would actively aid criminals in stealing their identities and savings,” any arbitration clause “does not apply,” it said..