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Sprint Nextel Corp. can sue AT&T Inc. over its proposed purchase of T-Mobile USA Inc., a federal judge ruled, saying the fact that the companies are competitors doesn’t bar a private antitrust lawsuit.
U.S. District Judge Ellen Segal Huvelle in Washington said last week that the suit by Sprint, and another by Cellular South Inc. to block the $39 billion deal, can proceed. Still, the judge dismissed several claims, limiting the cases to Sprint’s allegations regarding access to mobile devices and Cellular South’s complaints involving roaming fees as well as devices.
“Where private plaintiffs have successfully pleaded antitrust injury, the fact that they are defendants’ competitors is no bar,” Huvelle said in her ruling.
Sprint and Cellular South will now be able to “supplement” the Justice Department’s lawsuit to stop the deal, Andrew Gavil, a law professor at Howard University in Washington, said in an email. While the government will try to prove how the merger would harm consumers, the companies will attack the way the transaction might diminish competition in the wireless telephone industry, he said.
“It is an important victory for Sprint and Cellular South,” Gavil said.
AT&T argued that Overland Park, Kan.-based Sprint can’t challenge the purchase under antitrust law because it’s a competitor rather than a consumer. It also contended that Sprint’s claims that the acquisition would hurt its business are unfounded.
Cellular South Inc., based in Ridgeland, Mississippi, filed a similar lawsuit that AT&T also asked Huvelle to dismiss. The company changed its name to C Spire in September.
Huvelle scheduled a hearing on the cases for Dec. 9.
“We believe the limited, minor claims they have left are entirely without merit,” Wayne Watts, AT&T’s senior executive vice president and general counsel, said in an e-mailed statement.
Sprint and Cellular South issued statements saying they were “pleased” that the judge allowed them to “continue fighting” the proposed merger.
Gina Talamona, a Justice Department spokeswoman, declined to comment.
The government’s case is U.S. v. AT&T Inc., 11-01560; Sprint’s case is Sprint Nextel Corp. v. AT&T Inc., 11-01600; and Cellular South’s case is Cellular South Inc. v. AT&T Inc., 11-01690, U.S. District Court, District of Columbia (Washington).
