T-Mobile has secured permission to appeal a judge’s decision that allowed a potential class action lawsuit by millions of Verizon and AT&T subscribers to proceed. The lawsuit challenges T-Mobile’s $26 billion acquisition of rival Sprint in 2020.
Illinois U.S. District Judge Thomas Durkin ruled on Wednesday that T-Mobile can appeal his order to the 7th U.S. Circuit Court of Appeals in Chicago immediately, rather than waiting for a later stage in the case.
The consumer lawsuit alleges that the merger led Verizon and AT&T, though not named as defendants, to raise prices for wireless services. The plaintiffs seek to reverse the merger.
T-Mobile and the plaintiffs’ lawyers have yet to comment on Wednesday’s ruling.
This sets the stage for a significant appeal that will test the boundaries of antitrust law. T-Mobile’s main argument is that Verizon and AT&T subscribers lack legal “standing” to claim damages resulting from T-Mobile’s Sprint acquisition. T-Mobile contends that AT&T and Verizon control their own network prices, and any price changes cannot be directly attributed to the merger.
Previously, T-Mobile and Sprint successfully defended against a separate legal challenge from several states, and the U.S. Justice Department settled with the merged company, mandating some asset divestitures.
The consumers’ proposed class action involves seven subscribers of AT&T or Verizon in Illinois and Indiana, who have labeled the T-Mobile-Sprint deal as “one of the most anti-competitive acquisitions in history.” Judge Durkin had refused to dismiss the lawsuit in November.
T-Mobile’s attorneys pushed for an immediate appeal for efficiency reasons, arguing that the plaintiffs’ broad interpretation of antitrust standing is unprecedented.
The plaintiffs’ lawyers, however, argued that the case should proceed to a jury trial before any appeal. They expressed concerns that a potential delay in the appeals court could further complicate efforts to undo a merger that is already four years old.
The case is Dale v. Deutsche Telekom AG, filed in the U.S. District Court for the Northern District of Illinois under case number 1:22-cv-03189.
Plaintiffs are represented by Brendan Glackin of Lieff Cabraser Heimann & Bernstein, Gary Smith Jr of Hausfeld, Eric Cramer of Berger Montague, and Joel Flaxman and Kenneth Flaxman of Kenneth N. Flaxman PC. T-Mobile’s legal representation includes Clifford Histed of K&L Gates and Rachel Brass of Gibson, Dunn & Crutcher.
