T-Mobile Faces Class Action Lawsuit Over Alleged Store Closures Following Sprint Merger

T-Mobile finds itself entangled in a class action lawsuit, unable to reach a mediated agreement concerning allegations that it forced predominantly minority-owned stores to close instead of fulfilling promises to open hundreds of new stores post-the T-Mobile and Sprint merger.

A virtual mediation session held on December 18 between the stores and T-Mobile failed to yield an agreement, prompting T-Mobile to request the court proceed with its motions to dismiss. The plaintiffs, however, are urging the court to initiate full discovery before considering these dismissal motions.

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The Sprint class action claims revolve around accusations that T-Mobile, in collaboration with master dealer Arch Telecom, conspired to close or acquire the minority-owned stores at minimal or no compensation. The plaintiffs are seeking substantial damages, including $1 billion in punitive damages and $100 million in compensatory damages, along with attorneys' fees.

The lawsuit contends that the actions go beyond corporate greed and dishonesty, focusing on T-Mobile's blatant violations of the law. The merger between T-Mobile and Sprint, which took place in April 2020, is at the center of anticompetitive acquisition claims, allegedly causing significant financial losses to U.S. small businesses and subscribers of AT&T and Verizon.

The legal battle continues in the U.S. District Court for the Eastern District of New York, with T-Mobile's efforts to dismiss the claims countered by the plaintiffs' insistence on full discovery to address jurisdictional concerns and determine the parties responsible for approving lease extensions through 2027.

The outcome of this class action lawsuit may have broader implications for T-Mobile as it navigates allegations related to its business practices following the high-profile merger with Sprint.