Ill. Judge Certifies for Interlocutory Appeal His Denial of T-Mobile’s Motion to Dismiss

U.S. District Judge Thomas Durkin for Northern Illinois in Chicago granted T-Mobile’s motion to certify for interlocutory appeal to the 7th U.S. Circuit Appeals Court his Nov. 2 denial of the carrier’s motion to dismiss the claims of seven AT&T and Verizon customers seeking to vacate T-Mobile’s 2020 Sprint buy on antitrust grounds (see 2311290042), said the judge’s signed memorandum opinion and order Wednesday (docket 1:22-cv-03189).

T-Mobile seeks to challenge on interlocutory appeal Durkin’s holding that the plaintiffs adequately alleged standing under the antitrust laws to bring their claims challenging T-Mobile/Sprint, said the order. Amicus briefs from the U.S. Chamber of Commerce (see 2312070029) and CTIA (see 2312120052), supported T-Mobile’s motion for interlocutory appeal, while the plaintiffs opposed it (see 2312150001).

A district court follows four statutory criteria in determining whether a section 1292(b) petition for interlocutory appeal should be granted, said the order. There must be a question of law, it must be controlling, it must be contestable, and its resolution must promise to speed up the litigation, it said.

The plaintiffs don’t contest that the question is controlling, in that interlocutory reversal might save time for the district court, and time and expense for the litigants, said the order. Nor do the plaintiffs dispute that the question’s resolution will speed up the litigation, because if the 7th Circuit reverses the denial of the motion to dismiss, the entirety of the litigation in the district court is almost certain to end, it said.

The plaintiffs argue that antitrust standing isn’t a pure question of law, “but a mixed question of fact and law,” said the order. Durkin didn’t make any factual findings in denying T-Mobile’s motion to dismiss, it said. Instead, he ruled, as a matter of law, that the plaintiffs had antitrust standing “based on the factual allegations in the complaint,” it said.

Durkin’s remark that discovery might reveal that the higher wireless prices the plaintiffs paid following the transaction were wholly independent of the merger merely acknowledges the different standards that apply to a Rule 12(b)(6) motion to dismiss and a Rule 56(a) motion for summary judgment, said the order: “Accordingly, the question presented is a question of law for the purposes of section 1292(b).”

A question is contestable “when substantial grounds for a difference of opinion exist,” said the order. Though Durkin believes his denial of T-Mobile’s motion to dismiss was “rightly decided, there are substantial grounds for a difference of opinion” on whether the plaintiffs have plausibly alleged antitrust standing by showing a “direct link” between their harm and the merger’s “market restraint,” it said.

Durkin’s denial of T-Mobile’s motion to dismiss was based on his interpretation of “relevant authority,” said the order. Section 4 of the Clayton Act limits the class of plaintiffs who can bring actions under that statute to those whose injuries were proximately caused by a defendant’s antitrust violations, it said.

On Durkin’s “read,” the complaint set forth “a plausible theory that AT&T and Verizon customers were injured at the “first step” as direct consumers in the market where the merger “allegedly restrained competition and raised prices,” said the order. T-Mobile argues that the denial of its motion to dismiss misapplied the “first step” principle, it said.

In T-Mobile’s view, because AT&T and Verizon set their own prices, the plaintiffs’ injuries “are several steps removed from the T-Mobile-Sprint merger,” said the order. According to T-Mobile, the higher prices the plaintiffs paid aren’t “surely attributable” to the purchase, but instead “purely derivative” of AT&T and Verizon’s pricing decisions, it said.

T-Mobile additionally contends that intervening economic factors and business decisions are “obvious alternative explanations” that undermine the plausibility of the direct causal link that the plaintiffs allege, said the order. Durkin’s denial order “explained that the alternative explanations offered by T-Mobile were not so obvious that they undermined the plausibility of the merger directly causing the elevated prices,” it said.

Durkin believes his interpretation of the relevant standards was "the most reasonable, but there is plenty of room for debate,” said the order. Because there are “substantial grounds for a difference of opinion,” and the 7th Circuit may very well side with T-Mobile, the question posed “is contestable for the purpose of section 1292(b),” it said.