On Wednesday, Solution Center Inc. filed a complaint contending that once Sprint Communications Inc. and T-Mobile USA Inc. merged in 2020, they “systematically dismantled its business” using unfair practices, duress, and deceit. The District of Connecticut lawsuit states claims for fraud and fraudulent inducement, breach of contract, and for violations of the business fairness and franchise laws of Connecticut and Washington state.
The 49-page filing recites Solution Center’s history as a private, mostly family-owned company that, like other dealer-franchisees, operates stores under a wireless carrier’s brand and sells wireless plans, cell phones, and accessories. In operation since 2006 with Nextel, the plaintiff asserts that it was a successful dealer that worked with Sprint then T-Mobile following their eventual merger.
The complaint argues that leading up to the merger, the defendants misled Solution Center and other authorized dealers about their future. Relying on Sprint’s representations, the plaintiff expanded its operations only to have them shrunk once the merger was consummated.
To this end, the new entity bearing T-Mobile’s name, reportedly notified the plaintiff that it would be closing or taking over a total of nine of Solution Center’s 28 stores, a number greater than what it promised earlier. The filing accuses T-Mobile of “weaponizing … the contractual relationship” based on false promises about dealers’ growth potential and supposedly limited post-merger retail store closures.
T-Mobile reportedly engaged in several other deceitful acts in the course of the parties’ business relationship including failing to honor the plaintiff’s extant contract with Sprint, lying to induce it to enter into contracts with terms that T-Mobile then misconstrued and misapplied, while simultaneously pressuring it with economic duress, leaving the plaintiff no choice but to sign T-Mobile’s agreements or face insolvency.
The filing notes that as to the agreements, Solution Center was given an impossibly short deadline to review T-Mobile’s documents and not permitted to negotiate any terms.
As a result of T-Mobile’s allegedly fraudulent misrepresentations, Solutions Center claims it was forced to exit the business and suffered losses in excess of $25 million. The complaint requests various types of damages and a jury trial. The plaintiff is represented by Kilpatrick Townsend & Stockton LLP.