Generation Mobile Preferred, LLC v. Roye Holdings, LLC

Generation Mobile Preferred, LLC v. Roye Holdings, LLC

Opinion

OPINION AND ORDER ACCEPTING AND ADOPTING THE MAGISTRATE JUDGE'S OCTOBER 29, 2021 REPORT AND RECOMMENDATION [20]

Movants Roye Holdings, LLC and Frank Roye ("the Roye parties") initiated this miscellaneous action to enforce a subpoena issued to T-Mobile USA, Inc. ("T-Mobile") in a pending arbitration under Section 7 of the Federal Arbitration Act ("FAA"), 9 U.S.C. § 7. The matter is now before the Court on Magistrate Judge Kimberly G. Altman's report and recommendation to deny T-Mobile's motion to dismiss and/or for summary judgment. (ECF No. 20.) T-Mobile has filed objections to the report and recommendation. (ECF No. 22.) Having conducted a de novo review of the parts of the Magistrate Judge's report to which specific objections have been filed, the Court OVERRULES T-Mobile's objections and ACCEPTS and ADOPTS the report and recommendation (ECF No. 20). Accordingly, the Court DENIES T-Mobile's motion to dismiss and/or for summary judgment (ECF No. 12).

I. Background

Claimants Generation Mobile Preferred, LLC, Generation [*2]  Mobile, LLC, and Digicom, Inc. initiated arbitration proceedings against the Roye Parties on June 14, 2017. (ECF No. 1-3.) The arbitration relates to the September 2016 merger of three Sprint dealers, Generation Mobile, LLC, Digicom, Inc., and Roye Holdings, LLC, to form Generation Mobile Preferred, LLC. The Roye parties filed a counterclaim against the claimants and a third-party complaint against the principals of Generation Mobile, LLC and Digicom, Inc., Joe Barbat and Raid Yousef. (ECF No. 1-4.) Both the demand for arbitration and the counterclaim and third-party complaint brought state law claims. TMobile is not a party to the arbitration but according to the Roye parties, it became important to the case following the merger between Sprint and T-Mobile, which took place in August 2020. (ECF No. 1, PageID.3.) The Roye parties state T-Mobile holds information that will "either corroborate or discredit the arguments raised by the parties regarding the buyout, the interim valuation amount and the distribution of funds remaining in [Generation Mobile Preferred, LLC]'s bank accounts." (Id. at PageID.5.)

On November 23, 2020, the arbitrator issued a subpoena requiring T-Mobile to produce [*3]  certain responsive documents and to produce one or more representatives for deposition by certain deadlines. (ECF No. 1-6.) T-Mobile, however, informed the Roye parties that its policy is generally to refuse to recognize subpoenas issued in arbitration proceedings. The Roye parties then initiated this miscellaneous action and filed their motion to issue subpoena, which was granted on January 6, 2021. (ECF Nos. 1, 4.) The Roye parties later filed a motion to compel, arguing T-Mobile failed to fully comply with the subpoena. (ECF No. 5.) In response to the motion to compel, T-Mobile argued this Court lacked subject matter jurisdiction to enter the January 6, 2021 subpoena and the subpoena was procedurally defective. After a telephonic status conference with the Magistrate Judge, T-Mobile filed its motion to dismiss and/or for summary judgment. (ECF No. 12.) After briefing was complete on this motion, the Magistrate Judge issued the present report and recommendation, addressing the issue of jurisdiction only. (ECF No. 20.) The motion to compel remains pending and will be addressed along with any arguments regarding the subpoena itself by the Magistrate Judge if the threshold issue of [*4]  jurisdiction is resolved in favor of the Roye parties.

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