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TracFone Wireless, Inc. v. CNT Wireless LLC

United States District Court, S.D. Florida

November 8, 2019

CNT WIRELESS LLC, et al., Defendants.



         THIS CAUSE came before the Court on Plaintiff TracFone Wireless, Inc.'s (“TracFone”) Motion for Limited Expedited Discovery and Service in Canada (the “Motion”) [ECF No. 5]. The Court has reviewed the Motion and is otherwise fully advised. For the reasons that follow, the Motion is GRANTED.


         In TracFone's Complaint [ECF No. 1] and Motion, TracFone alleges that Defendants are engaged in an unlawful international mobile telephone trafficking scheme that violates the Terms and Conditions accompanying the devices, as well as federal and state law. TracFone alleges that Defendants' conduct is causing TracFone to suffer substantial monetary losses and other injury.

         TracFone claims that Defendants are engaging in a scheme whereby they purchase bulk quantities of subsidized TracFone Devices, primarily popular iPhones, at big box retailers such as Walmart, whether in store or online. Defendants then unlock the devices, which are otherwise locked to TracFone's wireless service by special proprietary software developed and owned by TracFone.

         TracFone claims that it has evidence indicating that Defendants then resell the TracFone Devices for profit domestically and abroad. TracFone's investigators witnessed Defendants making bulk sales of TracFone devices in recent months. TracFone has also produced declarations from Sair Ali, a known cell phone trafficker in Dubai, showing that Defendants trafficked over 17, 000 TracFone devices over a three-month period in 2018. TracFone believes Defendants have trafficked substantially more devices to date and continue to engage in this scheme and that Defendants have enlisted the help of friends, family, and other as-yet-unknown co-conspirators to effectuate their scheme.

         TracFone's Motion details its concern that certain non-parties are likely in possession of information relating to Defendants' scheme but are not under any obligation to preserve or produce such information, including non-parties such as UPS, FedEx, banking institutions, and retailers such as Target. Tracfone has produced a declaration from Kevin Wehling, TracFone's Fraud Investigations Manager, that attests to how TracFone takes steps to combat fraud and the steps it took once it learned of Defendant's alleged fraudulent activities. Mr. Wehling's declaration further details how TracFone has attempted to gather information pertaining to Defendants' scheme from various non-parties (Target, Apple, Best Buy, Walmart, Bank of America, UPS, and FedEx), and how those efforts have been frustrated due to the fact that such non-parties are under no legal obligation to preserve and share their information.


         Tracfone seeks to engage in expedited discovery and to serve both process and third-party discovery subpoenas via FedEx or UPS, including on Canadian third parties not in the United States. Each is addressed in turn.

         I. Tracfone May Engage in Expedited Discovery.

         TracFone requests expedited discovery in this case prior to the parties' scheduling conference pursuant to Federal Rule of Civil Procedure 26(f) so it can learn the full extent of the nature and scope of Defendants' alleged ongoing unlawful conduct as quickly as possible to stop Defendants' alleged misconduct. TracFone also seeks expedited discovery to mitigate any additional harm Defendants' alleged improper activities have caused to TracFone's customers and to learn the identities of its legitimate customers whom Defendants have allegedly defrauded so that TracFone can take steps to make these customers whole.

         The Federal Rules of Civil Procedure provide that discovery may commence before the parties have engaged in a discovery conference if ordered by the Court. Fed.R.Civ.P. 26(d) & (f). Federal courts allow parties to conduct expedited discovery in advance of a Rule 26(f) conference where the party establishes “good cause” for such discovery. See, e.g., GE Seaco Servs., Ltd. v. Interline Connection, N.V., No. 09-23864-CIV, 2010 WL 1027408, *1 (S.D. Fla. Mar. 18, 2010). “Good cause can be shown by establishing some impelling urgency which necessitates action forthwith and excuses giving notice to the other party.” Ghaffari v. Collins Tower Ass'n, No. 13-21037-CIV, 2013 WL 12141254, at *1 (S.D. Fla. June 18, 2013) (citing GE Seaco Servs., LTD., 2919 WL 1027408, at *1) (internal quotations omitted).

         The Court agrees, based on the record in this case, that good cause exists to allow expedited discovery particularly upon consideration of Tracfone's concerns about evidence preservation. The Court further finds that expedited discovery is warranted so that TracFone may mitigate any additional irreparable harm caused by Defendants' alleged ongoing scheme. See, e.g., TracFone Wireless, Inc. v. SCS Supply Chain LLC, 330 F.R.D. 613, 615 (S.D. Fla. 2019) (finding that “good cause exists for expedited discovery into Defendants' alleged unlawful activity and the harm such alleged activity has caused TracFone.”).

         II. Tracfone May Serve Third-Party Discovery ...

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