Palm Springs Mile Associates, LTD. v. T-Mobile USA, Inc.

District Court, S.D. Florida·Decided December 29, 2020·No. 1:20-cv-22841·Unknown

Opinion

United States District Court for the Southern District of Florida

Palm Springs Mile Associates, LTD, ) and Philips Lake Worth, LLC, ) Plaintiffs, ) ) Civil Action No. 20-22841-Civ-Scola v. ) ) T-Mobile USA, Inc., and others, ) Defendants. )

Omnibus Order Denying Motions to Dismiss This matter is before the Court upon the motions to dismiss filed by Defendant T-Mobile USA, Inc. (“T-Mobile”) and Defendant Sprint Solutions, Inc. (“Sprint Solutions” and, together with T-Mobile, the “Defendants”). (Def. T- Mobile’s Mot. to Dismiss, ECF No. 40; Def. Sprint Solution’s Mot. to Dismiss, ECF No. 46.) This case arises from the ripple effects of T-Mobile’s recent acquisition of Sprint Corporation (“Sprint”) and its subsidiaries, including Sprint Solutions. As part of the acquisition, T-Mobile and Sprint Solutions allegedly made adjustments to operations that resulted in certain brick and mortar stores ceasing to sell Sprint-branded products. Palm Springs Miles Associates, Ltd. (“PSM”) and Philips Lake Worth, LLC (“PLW” and, together with PSM, the “Plaintiffs”) are landlords who leased retail space to tenants (Store 19 and Store 21) that sold Sprint-branded products, but were allegedly forced to go out of business after T-Mobile and Sprint Solutions decided to pull the Sprint-branded products from the Tenants’ stores. These allegations form the basis of the Plaintiffs’ claims that the Defendants tortiously interfered with and conspired to tortiously interfere with the Plaintiffs’ contracts (i.e., lease agreements) and business relationships with the Tenants. The Defendants filed separate, but largely duplicative, motions to dismiss Counts IV, V, and VI of the amended complaint (ECF No. 24 (“complaint”)) on the basis that the Plaintiffs failed to state a claim against the Defendants and that the Court lacks personal jurisdiction over the Defendants. Having reviewed the motions, the record, and the relevant legal authorities, the Court denies the motions to dismiss (ECF Nos. 40, 46). 1. Background and Facts1 In or about April of 2020, T-Mobile completed its $26.5 billion acquisition by merger of Sprint Corporation, including Sprint Solutions, Inc. (ECF No. 34 at ¶2.) Following the merger, T-Mobile had a combined total of more than 5,000 retail stores, including stores throughout the State of Florida. (Id. at ¶3.) T- Mobile provides wireless communications services throughout the United States, including in Florida, where it is registered to do business. (Id. at ¶22.) Following the merger, T-Mobile has 57 stores in Miami, 39 stores in Orlando, 31 stores in Tampa, and 30 stores in Jacksonville. (Id.) By virtue of the combination of T- Mobile and Sprint, the competitive relationship between them, including Sprint Solutions and its dealers, was eliminated. (Id. at ¶4.) The complaint alleges that T-Mobile and Sprint Solutions “acquired a peculiar and pronounced power of coercion over their now-combined dealers (and those dealers’ landlords), as evidenced by the actions they took to mandate the closure of Store 19 and Store 21 (collectively, the ‘Tenants’) businesses.” (Id.) The closure of those two stores allegedly interfered with the Tenants’ lease agreements and business relationships with the Plaintiffs, causing the Plaintiffs harm. (Id.) T-Mobile and Sprint Solutions “had the power to determine the fate of Tenants’ businesses, and Tenants’ performance (or not) of their Leases.” (Id.) The crux of this lawsuit is the allegation that T-Mobile and Sprint exercised their “combined power over the fate of their retailers’ businesses” and, “acting in concert, ‘mandated’ the closure of various retail locations, including the two Stores at issue in this case, and the resulting breach of Tenants’ Leases with Plaintiffs.” (Id. at ¶5.) There are two leases at issue in this case—the Hialeah Lease and the Sprint Lake Worth Lease (“Lake Worth Lease”). The following background sets forth the details of those two leases insofar as they are pertinent to the instant motions to dismiss The Hialeah Lease was entered on or about March 8, 2000, between PSM, as Landlord, and Store 19’s predecessor in interest, Vidal, as tenant. (Id. at ¶26.) The Hialeah Lease expires on June 30, 2024 and the total Rent and other charges for the remaining term of the Hialeah Lease exceed $182,000. (Id. at ¶28.) The second lease, the Lake Worth Lease, was entered on or about February 15, 2012, between PLW, as Landlord, and Store 21’s predecessor in interest, Vidal, as tenant. (Id. at ¶35.) The Lake Worth Lease expires on September 30, 2023 and the total Rent and other charges for the remaining term of the Lake Worth Lease exceed $114,000. (Id. at ¶37.)

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Palm Springs Mile Associates, LTD. v. T-Mobile USA, Inc., (S.D. Fla. 2020).

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