SoftBank ‘Never Set Foot’ in Ill., Says Motion to Dismiss T-Mobile/Sprint Case

The plaintiffs who oppose SoftBank’s motion to dismiss their class action for lack of personal jurisdiction and improper venue rely on “a boundless and unprecedented theory of personal jurisdiction” to assert their opposition, said SoftBank’s reply memorandum Friday (docket 1:22-cv-03189) in U.S. District Court for Northern Illinois in Chicago. Seven consumers, all AT&T or Verizon customers, brought the lawsuit in June to vacate T-Mobile’s 2020 Sprint buy, alleging the transaction stifled competition, causing their own wireless rates to skyrocket (see 2210110003).

SoftBank is a Japanese corporation “that has never set foot in Illinois,” said its reply memorandum. “Its sole connection to this lawsuit is that it signed the T-Mobile-Sprint merger agreement in its role as a former shareholder in Sprint,” it said. The plaintiffs nevertheless claim SoftBank “can be sued in Illinois based on a multi-step chain of events,” it said.

The plaintiffs allege SoftBank should have foreseen that the merger would and did allow T-Mobile to raise prices, and that AT&T and Verizon “followed suit,” said the reply memorandum. They also allege AT&T and Verizon customers are paying higher prices for wireless services in Illinois as a result, it said.

But the connection the plaintiffs try to establish between SoftBank and Illinois is “indirect and speculative,” said the reply memorandum. If that connection is deemed sufficient to establish personal jurisdiction, “then virtually any party to a merger transaction could be subject to suit in any jurisdiction in which trickle-down competitive effects of the transaction might be felt,” it said.

Their assertions are “not enough” under the Clayton Act for the plaintiffs to establish proper venue and personal jurisdiction over SoftBank, said the reply memorandum. They must identify “purposeful contacts” that SoftBank, “not T-Mobile or anyone else,” had in Illinois, it said. Yet they don’t identify a single SoftBank action “that targeted Illinois,” it said.

The plaintiffs instead cite “a grab-bag of post-merger actions by T-Mobile,” and investments in Chicago-based companies by non-SoftBank entities, “that have no connection to this action,” said the reply memorandum. But under the law of the 7th Circuit, the plaintiffs can’t “impute the conduct of those other entities” to SoftBank unless they establish that SoftBank controlled those entities, “a showing they have not made,” it said.