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Metropcs New York, LLC v. 35-46 Broadway, Inc.

United States District Court, W.D. Washington, Seattle

July 18, 2018

METROPCS NEW YORK, LLC, a Delaware corporation, Plaintiff,
v.
35-46 BROADWAY, INC., a New York corporation; and ABDALLAH NOFAL, DAWOD NOFAL and SAED NOFAL, individuals; and GEE4BEE WIRELESS, INC., a New York corporation, Defendants.

          ORDER GRANTING MOTION FOR PRELIMINARY INJUNCTION

          RICARDO S. MARTINEZ CHIEF UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         This matter comes before the Court on Plaintiff MetroPCS New York LLC's (“MetroPCS”) Motion for Preliminary Injunction. Dkt. #23. Plaintiff seeks an Order enjoining Defendants 35-46 Broadway, Inc., Abdallah Nofal, Dawod Nofal, Saed Nofal and Gee4Bee Wireless, Inc. from selling competing wireless telephone and wireless internet services for six months, within two miles of the location Defendants used to sell MetroPCS services, as provided for under 35-46 Broadway's Exclusive Subdealer Agreement (“Subdealer Agreement”) with MetroPCS. Id. Defendants have failed to respond. For the reasons set forth below, the Court now GRANTS Plaintiff's motion for preliminary injunction.

         II. BACKGROUND

         Plaintiff initially filed this matter on October 20, 2017. Dkt. #1. To date, no Defendants have appeared, and the Court has entered default against all Defendants except Gee4Bee Wireless, Inc. Dkt. #16. Plaintiff filed an Amended Complaint on April 3, 2018. Dkt. #19. The instant motion followed on June 14, 2018.

         According to Plaintiff, MetroPCS is a wireless telephone carrier with a national network and brand. Dkt. #25 at ¶ 2. MetroPCS sells wireless personal communications services to its customers, including voice communications, wireless internet services, ringtones, SMS texting, instant messaging, and other wireless phone and data services. Id. MetroPCS focuses on offering “unlimited” pay-in-advance (“prepaid”) plans. Id. It relies on its dealers and subdealers to market and sell MetroPCS-packaged mobile wireless telephones, data modems, and accessories to users of MetroPCS's service, and to provide customer service. Id.

         Defendant Abdallah Nofal, on behalf of 35-46 Broadway, executed an Exclusive Subdealer's Agreement to sell MetroPCS brand services (“Subdealer Agreement”) on or about August 20, 2015. Id. at ¶ 3 and Dkt. #24 at ¶ 11, Ex. E. Paragraph 1 of the Subdealer Agreement provided that “Exclusive Subdealer shall comply with all terms and conditions of the Dealer Agreement, including but not limited to . . . [the] covenant not to compete (Section 16.7).” Dkt. #24 at ¶ 11, Ex. E. Pursuant to the Dealer Agreement, 35-46 Broadway agreed that it would not solicit or divert MetroPCS customers during the term of the Dealer Agreement and for six months following termination:

All customers are owned by MetroPCS and not by Dealer. During the term of this Agreement and for a period of six (6) months after termination of this Agreement (whether voluntary or involuntary, with or without cause), Dealer, its principals, owners, partners, members, shareholders, officers, directors, employees, agents (“Affiliated Persons”) and any entity in which an Affiliated Person owns an interest and/or any successor entity to Dealer (Affiliated Entity”) shall not at any time (i) request any MetroPCS customer to curtail or cancel its business with MetroPCS, or (ii) otherwise solicit, divert or attempt to divert any such MetroPCS customer from patronizing MetroPCS.

Id., Ex. F at ¶ 2.4 and Ex. E at ¶ 1.

         The Dealer Agreement also contains a six-month non-competition period after termination or expiration of the agreement:

Dealer covenants and agrees that during the Term of this Agreement and for a period of at least six (6) months following any termination or expiration of this Agreement, Dealers shall not, and will cause its Affiliated Persons and Affiliated Entities, not to directly or indirectly (including by licensing) engage or participate in, or acquire, manage, operate, control or participate in the management, operation or control of, either alone or jointly, any entity that engages in the sale, resale or distribution of any wireless telephone or wireless internet data service including, without limitation, any other wireless phone, or wireless internet service, or service plan that offers unlimited local and/or long distance calls and/or unlimited wireless internet service for a flat price, within a two (2) mile radius of Dealer's MetroPCS Storefront Locations. If Dealer breaches this warranty and covenant, then, in addition to any other legal or equitable remedy that MetroPCS may have, the post-termination of this warranty covenant will be extended for one (1) day for each day during which the Dealer's breach was ongoing.

Dkt. #24 at ¶ 12, Ex. F at ¶ 16.7.

         The non-compete and non-solicitation provisions expressly apply to 35-46 Broadway itself, and to its owners, shareholders, members, officers, partners, and directors (“Affiliated Persons”) and any entity in which an Affiliated Person owns an interest (“Affiliated Entity”). Id., Ex. F at ¶ 2.4 and Ex. E at ¶ 1.

         Defendant 35-46 Broadway (through Abdallah Nofal) executed the Subdealer Agreement on or about August 20, 2015. Dkt. #25 at ¶ 3 and Dkt. #24 at ¶ 11, Ex. E. Plaintiff alleges that on or before May 2017, 35-46 Broadway breached the Subdealer Agreement, as a result of which MetroPCS' Master Dealer (Licensed Products) provided Defendants a Notice of Termination of the Subdealer ...


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