T-Mobile Calls Itself ‘Victim’ of Breach That Exposed Data of 37M Customers

The Jan. 19-disclosed “criminal cyberattack,” of which T-Mobile was the “victim,” affected only “non-sensitive information” of T-Mobile customers, said the carrier’s opposition Thursday at the Judicial Panel on Multidistrict Litigation to the Feb. 8 petition to transfer the 16 resulting class actions for pretrial consolidation under a single judge. That’s important because all the customers whose personal information was breached “are contractually obligated to resolve their claims against T-Mobile through individual arbitration, not class action litigation,” it said.

T-Mobile “will therefore move to compel arbitration of each named plaintiff’s claims,” said its opposition. If granted, those motions to compel “will eliminate class action litigation” over the cyberattack, it said. The JPML should therefore deny the petition because transfer won’t promote “the just and efficient” adjudication of the litigation, it said.

T-Mobile’s motions to compel turn on "plaintiff-specific evidence showing that the plaintiff agreed to individual arbitration," said the opposition. Transfer for coordinated or centralized pretrial proceedings won’t “eliminate those individualized inquiries,” it said. It rather would “add a layer of litigation procedure that is inconsistent with the strong federal policy favoring the prompt enforcement of arbitration agreements,” it said. It’s also “unlikely to provide any result in a protracted timeline for resolving the gating issue of arbitration,” it said.

There’s “nothing complex or specialized” about motions to compel, said the opposition. “These are just the types of motions that district courts resolve on a routine basis,” it said. Denying the transfer petition “will allow the district courts in which the actions were filed to resolve the motions as they would have,” if not for that petition, it said. In the “unlikely event” the motions to compel are denied, the parties can file a new petition to transfer, and the JPML can revisit the question of transfer and consolidation, it said.

Transfer for coordinated pretrial proceedings “is appropriate only when there are civil actions involving common questions of fact pending in different districts,” and transfer will “facilitate the convenience of the parties and witnesses and promote the just and efficient conduct of the action,” said the opposition. The petitioners haven’t and can’t establish “that the requirements for centralization are satisfied here,” and the JPML should deny the petition, it said.

In moving to compel arbitration, T-Mobile will establish that each named plaintiff is contractually obligated to arbitrate, and that it’s not “a rote exercise that can be resolved with common evidence,” said the opposition. For each named plaintiff, “T-Mobile will present the court with individual, plaintiff-specific evidence establishing the facts and circumstances by which the plaintiff agreed” to T-Mobile’s terms and conditions that includes an arbitration agreement, it said. T-Mobile also affords customers “an opportunity to opt-out of the arbitration agreement,” it said. “So for each named plaintiff, T-Mobile will also present individualized evidence that the plaintiff did not opt out.”

Transferring the related actions to a single court won’t eliminate “the need for these individualized, plaintiff-by-plaintiff assessments,” said the opposition. T-Mobile would still be required “to make the same individualized showing for each named plaintiff, and an MDL court would still be required to determine whether each named plaintiff is bound by T-Mobile’s arbitration agreement,” it said.

Transfer is “improper” because individualized issues in the multiple class actions “swamp common issues,” said the opposition. The JPML “has repeatedly held that transfer should be denied when individual factual questions predominate over common questions,” it said.

None of the petitioners’ remaining arguments supports transfer, said the opposition. One such argument is that an MDL is necessary “to avoid the risk of inconsistent rulings,” it said. Though that’s a “legitimate concern” in many data breach actions, “here a gating issue to any class action litigation is arbitration,” it said. There’s “no risk of inconsistent rulings on that issue” because each motion to compel will be decided based on plaintiff-specific evidence, it said.

Plaintiffs in 11 of the class actions who filed the Feb. 8 petition want their cases transferred and consolidated in U.S. District Court for Western Washington in Seattle. Eight responses to the petition were filed by JPML’s Thursday’s deadline. Those eight appeared evenly divided among wanting the cases transferred and consolidated in Western Washington, the District of Kansas in Kansas City or the Western District of Missouri in Kansas City. If the JPML disagrees with T-Mobile’s opposition and decides to transfer the cases, T-Mobile’s fallback preference is the District of Kansas or of Missouri, close to its secondary headquarters in Overland Park, Kansas, it told the JPML Thursday.

The litigation issues “are such that oral argument will benefit the JPML in its deliberations and ultimate decision-making role,” said T-Mobile. The parties disagree whether transfer and consolidation “is appropriate,” and if the actions are consolidated, “what the proper transferee forum is,” it said. The motion for transfer “raises issues that are particularly appropriate for argument,” it said. T-Mobile stipulated with plaintiffs to stay the various cases pending the outcome of the JPML's decision.