A boutique law firm that was created to represent MetroPCS Communications Inc. is suing T-Mobile US Inc., claiming the company was liable for damages for ending its contract after a merger with MetroPCS.
According to the complaint filed today in U.S. District Court for the District of Columbia, former Paul Hastings lawyers resigned in 2011 to create Telecommunications Law Professionals, or TLP, a Washington-based firm that began specifically to support MetroPCS. After T-Mobile bought MetroPCS earlier this year, T-Mobile told TLP in May that it was ending the contract.
The firm is arguing T-Mobile breached the contract signed between the firm and MetroPCS, which T-Mobile didn't object to as they were finalizing the merger. Although TLP has other clients, the firm claimed that because MetroPCS was its biggest client by design, it wouldn't be able to operate in its current form if T-Mobile severed ties.
A T-Mobile spokesperson could not immediately be reached for comment. TLP is being represented by Barry Cohen of Crowell & Moring.
According to the complaint, MetroPCS hired Paul Hastings's telecommunications group and partner Carl Northrop beginning in 2004 to handle a variety of legal matters. Over the next seven years, according to the complaint, Paul Hastings was increasingly conflicted out of work with MetroPCS because Verizon Wireless and AT&T Mobility were also clients.
In 2011, Northrop and two other Paul Hastings attorneys that had worked with MetroPCS reached an agreement with the company to spin off and create their own shop. Under the terms of the retainer agreement, according to the complaint, MetroPCS would pay a fixed monthly fee that would cover the new firm's expenses for at least two years.
"The Agreement established a creative, innovative and mutually-beneficial attorney-client relationship, not based on the hourly billing used by Paul Hastings in servicing the MetroPCS account and which is prevalent in the legal profession," TLP said in the complaint.
In late 2012, Deutsche Telekom AG, the owner of T-Mobile, entered an agreement to merge MetroPCS with T-Mobile in a billion-dollar deal. TLP claimed that in the months that followed, T-Mobile knew about MetroPCS' arrangement with TLP and never expressed any objection.
In May, the firm said it learned T-Mobile wanted to terminate the agreement at the end of the month. "There was no cause for the purported termination of the Retainer Agreement other than T-Mobile's decision to use other legal counsel for its telecommunciations law needs," it alleged.
The firm is seeking the money it claims T-Mobile would have paid under the retainer agreement to support TLP through the summer of 2015.
The case wasn’t immediately assigned to a judge.
This article has been updated to clarify TLP's claims against T-Mobile.