Mobile-phone dealers in Michigan are suing personal communications services provider Omnipoint Communications Services L.L.C., claiming the operator entered into bogus master dealer agreements with them.
Three dealers have filed lawsuits against Omnipoint in a Michigan circuit court. The lawsuits filed by Michigan Wireless PCS Inc., Korkis & Korkis Inc. and First Class Communications could be consolidated into a class-action lawsuit.
Omnipoint has filed an answer to the lawsuit against Michigan Wireless and moved it into federal court. Omnipoint denies Michigan Wireless’ claims.
“Omnipoint signs up master dealers under marketing agreements that we think are shams because they are contracts that give Omnipoint complete discretion to either honor a product order, dishonor a product order or change the program in mid-stream and not pay,” charged the dealers’ attorney Edward Duke with Pierce, Duke & Mengel plc. “They suggest to people that they have exclusive territories and then flood the territory with other dealers and then sub-dealers.”
Omnipoint and its attorney declined to comment.
According to claims in Michigan Wireless’ lawsuit, which is similar to the other two, Omnipoint set a sales quota requiring the dealer to activate a minimum of 1,000 customers each month. The more product it sold, the higher the activation fee per customer Michigan Wireless would receive. However, the lawsuit charges that Omnipoint attempted to prevent Michigan Wireless from receiving the higher activation fees by encouraging other master dealers to sell in its territory and by refusing to accept orders so to interfere with Michigan Wireless’ relationship with its own sub-agents. Omnipoint denied these allegations.
Michigan Wireless also claims Omnipoint violated laws by telling the dealers they were receiving an exclusive territory in which to sell Omnipoint products. The promise was contrary to the written agreement.
In its response, Omnipoint asserts that Michigan Wireless agreed under the contract to be a nonexclusive master dealer and that Omnipoint’s territory was a nonexclusive territory. Its written agreement with Michigan Wireless superseded all previous agreements, said Omnipoint.
