SIM Swap Dispute ‘Should Be Returned’ to Arbitration, Says T-Mobile Motion to Compel

T-Mobile seeks to compel plaintiff Jesus Marcos’ SIM swap claims to arbitration because he “repeatedly consented” to T-Mobile’s terms and conditions, including their arbitration provisions, said T-Mobile’s memorandum of points and authorities Monday (docket 5:24-cv-00085) in U.S. District Court for Central California in Riverside in support of its motion to compel. T-Mobile seeks to stay the litigation, pending the completion of the arbitration.

Marcos’ 18-count fraud complaint alleges he lost hundreds of thousands of dollars in cash and cryptocurrency as a result of T-Mobile’s negligence in the SIM swap (see 2401170020). He further alleges that T-Mobile transferred control of his account and phone number through the unauthorized SIM swap to an unauthorized individual, disconnecting the phone number from his phone’s SIM card and connecting the number to a SIM card under the control of the unauthorized individual.

Marcos doesn’t dispute that he agreed to arbitrate disputes with T-Mobile, said the memorandum. In August 2022, he submitted the same dispute to arbitration with the American Arbitration Association, as was required under the terms and conditions he agreed to, it said. But the AAA purported to close the arbitration under an “arbitral fee provision” in Section 1281.97 of the California Civil Procedure Code, it said.

Though T-Mobile promptly paid the arbitration fee, Marcos declined to reopen the arbitration, “choosing to pursue his claims in court,” said the memorandum. More than a year after the AAA closed the arbitration, Marcos brought this lawsuit “asserting the same claims from the arbitration,” it said. This dispute “should be returned to arbitration,” it said.

The parties agreed to have an arbitrator determine all disputes between the parties, “including disputes over the purported technical breaches of the arbitral fee provision,” said the memorandum. The case should be returned to arbitration so that the arbitrator “can decide that issue in the first instance as the parties agreed,” it said.

If the court reaches the fee dispute, it should rule that the Federal Arbitration Act preempts application of Section 1281.97 “because the statute imposes restrictions on arbitration agreements that are not generally applicable to contracts,” said the memorandum. T-Mobile didn't violate Section 1281.97, it said. Rather, the AAA failed to comply with the fee statute “by not timely providing T-Mobile with an accurate invoice of the administrative fees T-Mobile purportedly owed,” it said.

The AAA instead sent separate “inconsistent requests” for payment for $300 and $500, said the memorandum. T-Mobile timely paid the full amount due, $500, to the AAA, it said. Even if the court finds that Section 1281.97 applies and that T-Mobile’s actions were “in contravention” of the statute, the court “may excuse any such violation because any failure to timely pay the AAA’s fees was inadvertent,” it said. T-Mobile’s counsel repeatedly attempted to apply credits to satisfy the $500 invoice before the AAA “administratively closed the arbitration,” it said.