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

CourtDistrict Court, S.D. Florida
DecidedDecember 29, 2020
Docket1:20-cv-22841
StatusUnknown

This text of Palm Springs Mile Associates, LTD. v. T-Mobile USA, Inc. (Palm Springs Mile Associates, LTD. v. T-Mobile USA, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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

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.)

1 The Court accepts the Plaintiffs' factual allegations as true for the purposes of evaluating the Defendants’ motions to dismiss. Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997). The complaint alleges that all parties to and those responsible for the obligations under the leases (e.g., guarantors and assignees) breached the leases and related agreements by failing and refusing to meet their contractual obligations to pay rent and other charges for the premises leased from the Plaintiffs. (Id. at ¶44.) On June 3, 2020, PSM sent written notice to Store 19 that it was in breach of the Hialeah Lease for failure to pay rent timely. (Id. at ¶45.) On June 4, 2020, PLW sent written notice to Store 21 that it was in breach of the Lake Worth Lease for failure to pay rent timely. (Id. at ¶46.) In response, on or about June 4, 2020, the Tenants, through counsel, sent separate correspondence to the Plaintiffs claiming that “with virtually no notice, . . . Sprint issued a tsunami of a letter [on April 29, 2020] providing one (1) day notice that it was shutting off its supply chain” and that, as a result, the Tenants were “mandated to close its stores” immediately. (Id. at ¶47 (quoting Exhibit 13, ECF No. 34-13 at 2).) The complaint alleges that “T-Mobile and Sprint Solutions had the power to determine the fate of Tenants’ business, and the Tenants’ performance or not of their Leases.” (Id. at ¶59.) According to the Plaintiffs, the store closures were the result of “efforts to integrate the two companies under the T-Mobile brand.” (Id. at ¶61 (quoting ECF No. 34-13, Exhibit 13 at 10 (April 29, 2020 Letter)).) The April 29, 2020 “tsunami” letter is signed by Cody Welker as Vice President of Sprint Solutions, Inc. and the Sprint logo appears at the top of the letter. (ECF No. 34-13 at 2.) The letter states, in relevant part: As is publicly known, Sprint completed its merger with T-Mobile with an effective date of April 1, 2020. The efforts to integrate the two companies under the T-Mobile brand are well-underway. As part of this integration, we have evaluated all Sprint and T-Mobile-branded retail locations in a distribution optimization effort. The withdrawal of approval for the Facility/Facilities and the closing of the Facility/Facilities listed in Exhibit A are directly related to this optimization effort in relation to the merger. This letter serves as Sprint’s written notice pursuant of Sprint’s withdrawal of approval for this Facility/these Facilities pursuant to the AR Agreement. (Id.) As discussed further below, the parties dispute the extent to which the text of the April 29, 2020 letter reveals whether the closure mandate came from Sprint alone or from both Sprint and T-Mobile. The complaint alleges that although the April 29, 2020 letter was signed by Cody Welker as Vice President of Sprint Solutions, Mr. Welker’s LinkedIn information shows that he was a Senior Director of National Dealers for T-Mobile at the time the letter was sent. (ECF No.

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Palm Springs Mile Associates, LTD. v. T-Mobile USA, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/palm-springs-mile-associates-ltd-v-t-mobile-usa-inc-flsd-2020.