Unimax Commc'ns v. T-Mobile Inc.

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UNIMAX COMMUNICATIONS LLC, Plaintiff, v. T-MOBILE USA INC, Defendant.

No. C23-01830-KKE

United States District Court, W.D. Washington, Seattle

October 4, 2024

ORDER GRANTING DEFENDANT'S SECOND MOTION TO DISMISS

Unimax Communications LLC (“Unimax”) sued 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 (“POs”) for mobile phones. Because the parties' contract explicitly allowed T-Mobile to cancel the orders, the Court granted T-Mobile's prior motion to dismiss. The Court granted Unimax leave to amend its two tort claims but cautioned that any tort claim based on the cancellation of the POs would be dismissed. Despite the Court's admonition, Unimax's first amended complaint (“FAC”) pleads tort claims that are again based on T-Mobile's proper exercise of its contractual rights. As such, both claims fail and T-Mobile's motion to dismiss is granted. // //

I. BACKGROUND^[1]

A. Factual Background^[2]

Unimax “is a manufacturer and supplier of mobile devices[.]” Dkt. No. 27 ¶ 1.1. 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. 27 ¶¶ 3.3, 3.5; Dkt. No. 1-1 at 2, 75-80.^[3] The MSA includes multiple addenda and attachments, including the Original Equipment Manufacturing and Supply Addendum (“OEM”). Dkt. No. 1-1 at 26-47. 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.

Id. at 30 (OEM § 3.1(c)). Finally, the parties agreed that “[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. 27 ¶¶ 3.6-3.7. 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. 27 ¶ 3.7. From that notification through October 2022, the parties exchanged information, analyzed the devices, and determined “there was a Power Amplifier Issue.” Id. ¶ 3.27.

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. Dkt. No. 27 ¶ 3.29. 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. Id. ¶¶ 3.29-3.42. Finally, on May 4, 2023, “T-Mobile cancelled the outstanding POs for 427,500 Unimax U696CL devices.” Id. ¶ 3.43. 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). Id. ¶ 3.45, Dkt. No. 1-1 at 136.

Unimax alleges that Casey Ryan “intentionally obtained a position at T-Mobile for the purposes of terminating T-Mobile's PO[s] for 427,500 Unimax U696CL devices.” Dkt. No. 27 ¶ 3.49. Unimax claims that T-Mobile then “award[ed] the contract to Schok” (Id. ¶ 3.53) and that Casey Ryan then left T-Mobile to work at Schok (Id. ¶ 5.45).

Unimax argues that “based on the representation and assurances from T-Mobile that it [would] accept T-Mobile's POs for 427,500 Unimax U696CL devices, [Unimax] owes its supplier, Great Talent[,] millions of dollars for the manufacturing, development and continued storage of these U696CL devices.” Dkt. No. 27 ¶ 3.50.

B. Procedural Background

Unimax sued T-Mobile 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. Upon T-Mobile's motion to dismiss, the Court dismissed each cause of action, allowing Unimax to replead its claims for intentional interference and misrepresentation. Dkt. No. 25 at 1. The Court dismissed the breach of contract claim because “the contract permits T-Mobile to cancel POs for products not yet received[.]” Id. at 9. As the declaratory judgment claim sought a ruling regarding the appropriateness of the cancellation of the POs, the Court also dismissed that claim. Id. at 14-15. The Court found that Plaintiff insufficiently pled the misrepresentation and intentional interference with business expectancy claims. Id. at 10-14. And while the Court allowed Unimax to replead the tort claims, the Court warned that any amended claims based on T-Mobile's cancellation of the POs would be dismissed. Id. at 11-12, 14. The Court denied Unimax's motion for reconsideration because the “motion merely reiterates arguments the Court already considered or inappropriately posits new theories without authority.” Dkt. No. 30 at 1.

On June 14, 2024, Unimax filed the FAC, repleading claims for intentional interference with prospective economic advantage/inducing breach of contract and fraudulent or negligent misrepresentation. Dkt. No. 27. On May 31, 2024, T-Mobile filed this motion to dismiss the FAC. Dkt. No. 28. Unimax responded (Dkt. No. 31), and T-Mobile filed a reply (Dkt. No. 32). Neither party requested oral argument. The matter is ripe for the Court's consideration.

II. ANALYSIS

A. Legal Standard

In evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court examines the complaint to determine whether, if the facts alleged are true, the plaintiff has stated “a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007)). A claim is plausible if the plaintiff pleads “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.

“If a motion to dismiss is granted, a court should normally grant leave to amend unless it determines that the pleading could not possibly be cured by allegations of other facts.” Chinatown Neighborhood Ass'n v. Harris, 33 F.Supp.3d 1085, 1093 (N.D. Cal. 2014).

B. Unimax's Intentional Interference with Business Expectancy or Contract Claim Is Dismissed.

In Washington, “a claim for tortious interference with a contractual relationship or business expectancy requires five elements”: (1) a valid contractual relationship or business expectancy; (2) defendants' knowledge of that relationship or expectancy; (3) “intentional interference inducing or causing a breach or termination of the relationship or expectancy; (4) that defendants interfered for an improper purpose or used improper means; and (5) resultant damage.” Leingang v. Pierce Cnty. Med. Bureau, Inc., 930 P.2d 288, 300 (Wash. 1997). The Court dismissed Unimax's claim for insufficiently pleading each element (Dkt. No. 25 at 12-13) and because “any argument that cancellation of the POs improperly interfered with Unimax's relationship with Great Talent fails and cannot be repleaded.” Id. at 14. The Court granted Unimax leave to amend to allege any improper actions separate from the PO cancellation. The Court cautioned Unimax “that merely repackaging its failed contract claim as a tort claim will not survive future dispositive motions.” Id.

Rather than plead additional facts, Unimax revised this cause of action to rely even more explicitly on the exact legal theory the Court previously rejected. The FAC now alleges, “T-Mobile's cancellation of PO[s] caused the termination of the business relationship as Unimax [] has gone out of business.” Dkt. No. 27 ¶ 4.21. Again, T-Mobile's exercise of its contractual rights cannot be “improper.” See Goodyear Tire & Rubber Co. v. Whiteman Tire, Inc., 935 P.2d 628, 636 (1997) (Wash.Ct.App. 2012) (finding actions could not be improper when dealership contracts reserved tire company's right to act); Birkenwald Distrib. Co. v. Heublein, Inc., 776 P.2d 721, 727 (Wash.Ct.App. 1989) (affirming dismissal of tortious interference claim where defendant's “means were not wrongful because [defendant] had a contractual right to select a distributor of its choice to replace [plaintiff]”).

Unimax's intentional interference with a business expectancy or contract claim is dismissed.

C. Unimax's Misrepresentation Claims Are Dismissed.

To plead a claim for fraudulent misrepresentation, Unimax must plead these elements:

(1) representation of an existing fact, (2) materiality, (3) falsity, (4) the speaker's knowledge of its falsity, (5) intent of the speaker that it should be acted upon by the plaintiff, (6) plaintiff's ignorance of its falsity, (7) plaintiff's reliance on the truth of the representation, (8) plaintiff's right to rely upon the representation, and (9) damages suffered by the plaintiff.

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