Unimax Communications LLC v. T-Mobile USA Inc

District Court, W.D. Washington·Decided May 31, 2024·No. 2:23-cv-01830·Unknown

Opinion

UNITED STATES DISTRICT COURT AT SEATTLE UNIMAX COMMUNICATIONS LLC, CASE NO. C23-01830-KKE Plaintiff, v. ORDER GRANTING MOTION TO DISMISS T-MOBILE USA INC, Defendant.

Unimax Communications LLC (“Unimax”) sues T-Mobile USA Inc. (“T-Mobile”) for over $27,000,000 in damages allegedly resulting from the improper cancellation of three sets of purchase orders for mobile phones. T-Mobile now moves to dismiss, arguing that the parties’ contract expressly reserves T-Mobile’s right to cancel purchase orders without limitation and without additional cost. Because the Court agrees that the cancellation falls squarely within T- Mobile’s contractual rights, Unimax’s breach of contract claim fails and cannot be amended. Unimax also fails to plead its tort claims. But because the Court is not persuaded that amendment of the tort claims is futile, the Court grants Unimax limited leave to amend its complaint as to the intentional interference with an economic advantage and misrepresentation claims. I. BACKGROUND Unimax and T-Mobile entered into a Master Service Agreement (“MSA”) with an effective date of May 28, 2021, wherein Unimax would supply products, as described in a “Product Supplement,” to T-Mobile. Dkt. No. 1-1 at 3, 74. The MSA includes multiple addenda and attachments, including the Original Equipment Manufacturing and Supply Addendum (“OEM”). Id. at 26–47. The OEM provides detail on the “specific terms and conditions covering the

manufacturing and supply of Products by [Unimax] for and to T-Mobile.” Id. at 26. In general, the purchase process requires Unimax to submit a Product Supplement, identifying the product, purchase price, and any specific requirements or terms; T-Mobile can then submit a Purchase Order (“PO”), identifying the product/SKU, payment terms, and delivery date and location; and Unimax can choose to accept the PO or not depending on the circumstances. Id. at 29–30 (OEM § 3); Dkt. No. 1 ¶¶ 3.5–3.6; Dkt. No. 17 at 8. One of the provisions in the OEM states: (c) Modifications to Purchase Orders. T-Mobile will have the right, without penalty, additional cost or liability, to make changes to any Purchase Order delivered to Supplier including, without limitation, cancelling or moving a Specified Delivery Date. However, changes requiring volume increases shall require a new Purchase Order issued [sic] and will require separate confirmation of Supplier. Change requests must be made in writing (the “Modification Notice”) and delivered in the same manner as a Purchase Order. Dkt. No.1-1 at 30 (OEM § 3.1(c)). Finally, T-Mobile will “remit all undisputed Charges” to Unimax within 90-days “after the date that an invoice is uploaded into T-Mobile’s accounts payable system” and “[a]cceptance [of the product] by T-Mobile shall be a condition precedent to the right of Supplier to receive payment in full.” Id. at 4 (MSA § 2.2(a)). Between May 2021 and December 2021, T-Mobile issued multiple POs to Unimax for U696CL mobile devices. Dkt. No. 1 ¶¶ 3.7, 3.8. This dispute arises from POs dated September 2021, November 2021, and December 2021. Dkt. No. 1-1 at 89–134 (providing copies of the cancelled POs). In June 2022, T-Mobile informed Unimax “of reports of possible power issues” with the U696CL devices that would require an investigation and a hold on shipping further devices. Dkt. No. 1 ¶ 3.10. From that notification through October 2022, the parties exchanged information, analyzed the devices, and determined “there was a Power Amplifier Issue.” Id. ¶¶ 3.11–3.21. In January 2023, during the ongoing investigation, Unimax met with “Casey Ryan,

Principal Product Manager at T-Mobile and Brett Madison, T-Mobile OEM Senior Manager” at a tradeshow in Las Vegas. Id. ¶ 3.24. Unimax alleges that “T-Mobile representatives represented to Unimax they were going to [be] moving forward with the PO’s for 427,560 U696CL mobile devices.” Id. After this event, T-Mobile continued to request additional information and testing. And, finally, on May 4, 2023, “T-Mobile cancelled the outstanding POs for 427,500 Unimax U696CL devices.” Id. ¶ 3.36 (cancelled POs attached at Dkt. No. 1-1 at 88–134). On May 16, 2023, T-Mobile sent a letter confirming cancellation of the 427,500 U696CL phones and citing to OEM section 3.1(c). Dkt. No. 1 ¶ 3.37, Dkt. No. 1-1 at 136. Unimax alleges T-Mobile then purchased “Unimax’s competitor’s devices” and that Casey

Ryan then “started working for Quality One Wireless” and was “instrumental in awarding the contract to Quality One Wireless.”1 Dkt. No. ¶¶ 3.44–3.45. Unimax filed the complaint on November 28, 2023, alleging four causes of action: declaratory judgment, breach of contract, intentional interference with prospective economic advantage/inducing breach of contract, and fraudulent and/or negligent misrepresentation. Dkt. No. 1 ¶¶ 4.1–4.25. T-Mobile now seeks to dismiss each of these claims. Dkt. No. 17.

1 Though the complaint alleges that Casey Ryan went to work for Quality One Wireless, Unimax’s briefing refers to Casey Ryan going to work for a company called “Schok.” Dkt. No. 20 at 4, 12. A. Jurisdiction The Court has subject matter jurisdiction because the amount in controversy exceeds

$75,0002 and the parties are citizens of different states. 28 U.S.C. § 1332. T-Mobile is a citizen of Washington and Delaware. Dkt. No. 1-2; see 28 U.S.C. § 1332(c). Unimax is a citizen of California. Dkt. No. 24; see Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006) (“[A]n LLC is a citizen of every state of which its owners/members are citizens.”). “[F]ederal courts sitting in diversity apply state substantive law.” Cuprite Mine Partners LLC v. Anderson, 809 F.3d 548, 554 (9th Cir. 2015). The parties agree the MSA and OEM Addendum are governed by Washington law. Dkt. No. 1-1 at 13. B. Legal Standard T-Mobile seeks to dismiss each of Unimax’s four claims under Federal Rule of Civil Procedure 12(b)(6). Dkt. No. 17 at 6. Dismissal under Rule 12(b)(6) may be based on either the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). At this stage, the Court accepts as true all factual allegations in the complaint and construes them in the light most favorable to the nonmoving party. Gonzalez v. Google LLC, 2 F.4th 871, 885 (9th Cir. 2021), rev’d on other grounds by Gonzalez v. Google LLC, 143 S. Ct. 1191 (2023) (per curiam). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see Fed. R. Civ. P. 8(a)(2) (a plaintiff must make a “short and plain statement of the claim showing that the

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Unimax Communications LLC v. T-Mobile USA Inc, (W.D. Wash. 2024).

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