An Illinois federal magistrate judge ordered Dish and AT&T to produce key documents in a proposed consumer class action targeting T-Mobile over its purchase of Sprint, finding the material from the wireless companies, especially Dish, to be centrally important to the suit.

U.S. Magistrate Judge Albert Berry III on Friday issued two decisions granting motions to compel, with some limitations, against the wireless carriers, who are nonparties to the suit. The motion against AT&T came only from consumers. Both the consumers and T-Mobile itself had sought to compel Dish, which played a central role in the U.S. Department of Justice settlement clearing the underlying merger, picking up key Sprint assets meant to prop it up as a new fourth national wireless carrier.

In both orders, Judge Berry limited the time period for documents, largely allowing Dish and AT&T to avoid turning over material predating the Sprint acquisition's April 1, 2020, closing — the case, he said, is really only about what wireless companies did after the transaction wrapped. But he found clear relevance for material after the merger, including on how AT&T viewed the merger and Dish's plans — which five years later appear to have floundered — to establish itself as a rival national carrier. And he rejected Dish's assertions that the demands amount to an undue burden.

"Although the court is sensitive to Dish's position as a non-party to the litigation, Dish's relationship to the merger puts them in a unique position compared to the average subpoena recipient," Judge Berry said, noting that Dish "took an active role in pushing the merger through," including in helping successfully push back on a court challenge by a group of state attorneys general unsatisfied with the DOJ deal. The satellite television provider, Judge Berry noted, told the court in that case that it stood ready to compete aggressively.

"Dish is not an innocent bystander being swept into a suit it had nothing to do with; Dish's post-merger actions are central to the claims being made in this suit, and the documents plaintiffs seek are highly relevant in this action. Additionally, these documents are not likely to be available to plaintiff from other sources; they need to come from Dish," Judge Berry said. "Therefore, while the cost may be high to Dish, the court cannot say that burden would be undue, in light of the facts and circumstances surrounding this case."

Judge Berry called on the parties to negotiate on search terms in both orders.

AT&T and Verizon customers allege in the instant suit that the Sprint acquisition lowered wireless competition and allowed their carriers to raise prices. On Friday, Judge Berry said they're entitled to a variety of Dish material, including communications with the trustee monitoring its compliance with the DOJ deal and internal discussions of its competitive capabilities. And he rejected Dish arguments that its quarterly reports to the trustee should be enough, calling those reports "crafted to demonstrate that it is fulfilling its post-merger obligations to compete with T-Mobile, AT&T, and Verizon."

"Such manicured submissions, alone, are unlikely to present a complete picture of Dish's efforts. As an example, underlying documents used to prepare reports and communication regarding the competitive efforts being put forth by Dish provide a complete picture of the information plaintiffs seek here," he said. "The court does not believe it is appropriate to force plaintiffs to rely on the submissions alone and concludes that plaintiffs need access to Dish's unvarnished views of its post-merger actions to adequately litigate their claims against T-Mobile and demonstrate the anti-competitive effects of the merger on the wireless services market."

Conversely, Judge Berry said Dish has provided enough "structured data" about subscribers and a pair of small subsidiaries, rejecting a request for more. He did, however, deny Dish's request for cost-sharing, without prejudice, finding Dish should have anticipated the discovery and is better able to bear the costs than plaintiffs, and that the case is of major public importance.

In granting T-Mobile's motion against Dish, Judge Berry said the third party must produce information about network access leased from AT&T that the plaintiffs contend put it in the position of not wanting to undercut the other wireless companies on whom it is heavily dependent. He rejected Dish arguments that T-Mobile lacks "a substantial need" based on assertions the defendant could simply look to sources like investor filings and the trustee reports.

"Dish argues that T-Mobile's experts can then reverse engineer the costs by analyzing these filings. ... However, as T-Mobile points out, the materials Dish points to are bottom-line numbers that do not break out the specific cost of spectrum purchase from AT&T," Judge Berry said. "The court is at a loss as to how T-Mobile's experts would be able to retrieve the data they seek from the materials Dish claims are sufficient, and Dish provides no explanation."

As for AT&T, Judge Berry ordered the wireless company to produce information like its assessment of the merger and post-transaction competition, as well as pricing. He said AT&T "appears to concede" most of the information is relevant, except for pre-merger material — whose production he rejected — and external communications with Dish and Verizon about the transaction.

"Discussions between AT&T and Verizon or Dish related to the merger could be relevant by providing insight into these competitors' respective views of the wireless services landscape after the merger was completed, including, inter alia, Dish's ability to compete with other MNO carriers," Judge Berry said in mandating their production. "However, the court is skeptical that these communications are likely to yield a rich vein of information for plaintiffs to prove their case. It seems unlikely that these competitors would tip their hands to each other regarding such sensitive commercial information as pricing decisions."

Judge Berry said he "strongly urges" the plaintiffs to negotiate closely tailored search terms. He rejected assertions that the sought discovery is an undue burden, writing off AT&T's one-sentence complaint that running the search would require pulling up 8 terabytes of compressed data.

"It is unclear from AT&T's submissions what the costs would be to export, host, and review this data, whether deduplication could limit the burden of review, or how many hours it would take to review," he said. "The court is completely in the dark and will not speculate about such costs and potential burdens. Without more, the court cannot find that AT&T has adequately demonstrated undue burden."

Judge Berry also said that the limits he's placed on discovery likely make the 8 terabyte estimate "stale." And there too he called on the parties to come together to hone the search. He also partially limited a request for structured data, mandating data from 2018 forward rather than 2015 forward as requested. And he rejected a request for fields of data that AT&T doesn't "maintain in the usual course of business."

Counsel for the customers, T-Mobile, Dish and AT&T did not immediately respond late Monday to requests for comment.

The customers are represented by Brendan P. Glackin, Lin Y. Chan, Nicholas W. Lee, Sarah D. Zandi and Jules A. Ross of Lieff Cabraser Heimann & Bernstein LLP, Gary I. Smith Jr., Swathi Bojedla and Renner K. Walker of Hausfeld LLP, Robert Litan and Joshua P. Davis of Berger Montague, and Joel A. Flaxman and Kenneth N. Flaxman of Kenneth N. Flaxman PC.

T-Mobile is represented by Rachel S. Brass, Caeli A. Higney and Minae Yu of Gibson Dunn & Crutcher LLP, and Clifford C. Histed and Michael E. Martinez of K&L Gates LLP.

Dish is represented by Monica McCarroll, Kevin A. Reiss and Rana B. Dawson of Redgrave LLP.

AT&T is represented by Mark Filip, Martin L. Roth and Molly Kelley of Kirkland & Ellis LLP.

The case is Dale et al. v. Deutsche Telekom AG et al., case number 1:22-cv-03189, in the U.S. District Court for the Northern District of Illinois.