Unimax Communications LLC v. T-Mobile USA Inc

District Court, W.D. Washington·Decided October 4, 2024·No. 2:23-cv-01830·Unknown

Opinion

1 2 3

4 5 UNITED STATES DISTRICT COURT AT SEATTLE 7 UNIMAX COMMUNICATIONS LLC, CASE NO. C23-01830-KKE 8

Plaintiff, ORDER GRANTING DEFENDANT’S 9 v. SECOND MOTION TO DISMISS

10 T-MOBILE USA INC,

11 Defendant.

12 Unimax Communications LLC (“Unimax”) sued T-Mobile USA Inc. (“T-Mobile”) for 13 over $27,000,000 in damages allegedly resulting from the improper cancellation of three sets of 14 purchase orders (“POs”) for mobile phones. Because the parties’ contract explicitly allowed T- 15 Mobile to cancel the orders, the Court granted T-Mobile’s prior motion to dismiss. The Court 16 granted Unimax leave to amend its two tort claims but cautioned that any tort claim based on the 17 cancellation of the POs would be dismissed. Despite the Court’s admonition, Unimax’s first 18 amended complaint (“FAC”) pleads tort claims that are again based on T-Mobile’s proper exercise 19 of its contractual rights. As such, both claims fail and T-Mobile’s motion to dismiss is granted. 20 // 21 // 22 // 23 24 1 I. BACKGROUND1 2 A. Factual Background2 3 Unimax “is a manufacturer and supplier of mobile devices[.]” Dkt. No. 27 ¶ 1.1. Unimax

4 and T-Mobile entered into a Master Service Agreement (“MSA”) with an effective date of May 5 28, 2021, wherein Unimax would supply products, as described in a “Product Supplement,” to T- 6 Mobile. Dkt. No. 27 ¶¶ 3.3, 3.5; Dkt. No. 1-1 at 2, 75–80.3 The MSA includes multiple addenda 7 and attachments, including the Original Equipment Manufacturing and Supply Addendum 8 (“OEM”). Dkt. No. 1-1 at 26–47. One of the provisions in the OEM states: 9 (c) Modifications to Purchase Orders. T-Mobile will have the right, without penalty, additional cost or liability, to make changes to any Purchase Order 10 delivered to Supplier including, without limitation, cancelling or moving a Specified Delivery Date. However, changes requiring volume increases shall 11 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 12 delivered in the same manner as a Purchase Order. Id. at 30 (OEM § 3.1(c)). Finally, the parties agreed that “[a]cceptance [of the product] by T- 13 Mobile shall be a condition precedent to the right of Supplier to receive payment in full[.]” Id. at 14 4 (MSA § 2.2(a)). 15 Between May 2021 and December 2021, T-Mobile issued multiple POs to Unimax for 16 U696CL mobile devices. Dkt. No. 27 ¶¶ 3.6–3.7. This dispute arises from POs dated September 17 18 19 1 The Court assumes for purposes of a motion to dismiss that the facts alleged in the FAC are true. Edmonson v. City 20 of Martinez, 17 F. App’x 678, 679 (9th Cir. 2001).

21 2 A fuller recitation of the facts underlying this dispute can be found in the Court’s previous order granting T-Mobile’s motion to dismiss. Dkt. No. 25 at 1–3. Even though that recitation was based on Unimax’s original complaint, Unimax’s FAC has not changed the factual allegations in any meaningful way. See Dkt. No. 29 (redline of FAC 22 compared to original complaint).

23 3 The FAC “incorporates by reference” the exhibits filed with the initial complaint. Dkt. No. 27 at 1. This violates Local Rule 15(a) which states amended pleadings “must not incorporate by reference any part of the preceding pleading, including exhibits.” Local Rules W.D. Wash. LCR 15(a). That said, the Court will consider the exhibits 24 (Dkt. No. 1-1) incorporated into the FAC for purposes of this motion. 1 2021, November 2021, and December 2021. Dkt. No. 1-1 at 89–134 (providing copies of the 2 cancelled POs). 3 In June 2022, T-Mobile informed Unimax of “reports of possible power issues” with the

4 U696CL devices that would require an investigation and a hold on shipping further devices. Dkt. 5 No. 27 ¶ 3.7. From that notification through October 2022, the parties exchanged information, 6 analyzed the devices, and determined “there was a Power Amplifier Issue.” Id. ¶ 3.27. 7 In January 2023, during the ongoing investigation, Unimax met with “Casey Ryan, 8 Principal Product Manager at T-Mobile and Brett Madison, T-Mobile OEM Senior Manager” at a 9 tradeshow in Las Vegas. Dkt. No. 27 ¶ 3.29. Unimax alleges that “T-Mobile representatives 10 represented to Unimax they were going to [be] moving forward with the PO[s] for 427,560 11 U696CL mobile devices.” Id. After this event, T-Mobile continued to request additional 12 information and testing. Id. ¶¶ 3.29–3.42. Finally, on May 4, 2023, “T-Mobile cancelled the

13 outstanding POs for 427,500 Unimax U696CL devices.” Id. ¶ 3.43. On May 16, 2023, T-Mobile 14 sent a letter confirming cancellation of the 427,500 U696CL phones and citing to OEM section 15 3.1(c). Id. ¶ 3.45, Dkt. No. 1-1 at 136. 16 Unimax alleges that Casey Ryan “intentionally obtained a position at T-Mobile for the 17 purposes of terminating T-Mobile’s PO[s] for 427,500 Unimax U696CL devices.” Dkt. No. 27 18 ¶ 3.49. Unimax claims that T-Mobile then “award[ed] the contract to Schok” (id. ¶ 3.53) and that 19 Casey Ryan then left T-Mobile to work at Schok (id. ¶ 5.45). 20 Unimax argues that “based on the representation and assurances from T-Mobile that it 21 [would] accept T-Mobile’s POs for 427,500 Unimax U696CL devices, [Unimax] owes its supplier, 22 Great Talent[,] millions of dollars for the manufacturing, development and continued storage of

23 these U696CL devices.” Dkt. No. 27 ¶ 3.50. 24 1 B. Procedural Background 2 Unimax sued T-Mobile on November 28, 2023, alleging four causes of action: declaratory 3 judgment, breach of contract, intentional interference with prospective economic

4 advantage/inducing breach of contract, and fraudulent and/or negligent misrepresentation. Dkt. 5 No. 1 ¶¶ 4.1–4.25. Upon T-Mobile’s motion to dismiss, the Court dismissed each cause of action, 6 allowing Unimax to replead its claims for intentional interference and misrepresentation. Dkt. No. 7 25 at 1. The Court dismissed the breach of contract claim because “the contract permits T-Mobile 8 to cancel POs for products not yet received[.]” Id. at 9. As the declaratory judgment claim sought 9 a ruling regarding the appropriateness of the cancellation of the POs, the Court also dismissed that 10 claim. Id. at 14–15. The Court found that Plaintiff insufficiently pled the misrepresentation and 11 intentional interference with business expectancy claims. Id. at 10–14. And while the Court 12 allowed Unimax to replead the tort claims, the Court warned that any amended claims based on T-

13 Mobile’s cancellation of the POs would be dismissed. Id. at 11–12, 14. The Court denied 14 Unimax’s motion for reconsideration because the “motion merely reiterates arguments the Court 15 already considered or inappropriately posits new theories without authority.” Dkt. No. 30 at 1. 16 On June 14, 2024, Unimax filed the FAC, repleading claims for intentional interference 17 with prospective economic advantage/inducing breach of contract and fraudulent or negligent 18 misrepresentation. Dkt. No. 27. On May 31, 2024, T-Mobile filed this motion to dismiss the FAC. 19 Dkt. No. 28. Unimax responded (Dkt. No. 31), and T-Mobile filed a reply (Dkt. No. 32). Neither 20 party requested oral argument. The matter is ripe for the Court’s consideration. 21 // 22 //

23 // 24 // 2 A. Legal Standard 3 In evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court

4 examines the complaint to determine whether, if the facts alleged are true, the plaintiff has stated 5 “a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (quoting 6 Bell Atl. Corp. v. Twombly, 550 U.S.

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

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