Handset Reseller Denies Fraud in Support of its Motion to Dismiss

Globalgurutech “does not fraud anyone or commit any crimes,” said the phone reseller in a Wednesday reply (docket 1:23-cv-337) in support of its motion to dismiss an Xfinity Mobile complaint alleging the company and its owner, Jakob Zahara, traffic in stolen phones (see 2211170061). There's nothing “civilly or criminally improper about GGT’s business practices,” said the reply filed in U.S. District Court for Arizona in Phoenix.

The reseller’s motion to dismiss the XM lawsuit should be denied because its arguments are “factually and legally incorrect,” said Xfinity in its January opposition (see 2301110008). Many of the reseller’s arguments have been considered and rejected by other courts, XM said.

In its Wednesday reply, GGT said its business is to buy cellphones “from their legal and rightful owners” and it requires those sellers to warrant that they're the rightful owners. GGT has “never bought any XM phones (either singly or in bulk) directly” from Xfinity Mobile or its dealers, it said. The reseller buys its phones from individuals “one-at-a-time” through its SellLocked.com website, it said.

Occasionally, GGT buys phones in bulk, from airlines or police departments, said the reply, “but never from an unknown individual.” It negotiates a purchase price with a customer “that is fair to both parties,” it said. “Despite how often Plaintiffs allege it, GGT does not defraud anyone or commit any crimes.”

XM’s general assertions aren't well grounded in fact, said the reply, saying the assertions by XM’s counsel were developed over 10 years “suing a wide variety of people.” GGT has been “inadvertently caught up in the cell phone industry’s massive litigation dragnet.”

Cellphone carriers “act in concert, all using Plaintiff’s counsel,” to “sue any and all phone resellers,” said the reply. The typical action asserts at least 12 complex causes of action in federal court and then the company quickly serves “a deluge of subpoenas on the company’s entire business network, which cripples the business.” That forces the reseller into a settlement, including the agreement never to buy or sell any phones again, said the reply.

The defendant opposed XM’s motion for expedited discovery in December (see 2212270006), which the plaintiff said was necessary to “preserve relevant evidence.” XM’s complaint alleges the defendant buys phones illegally to circumvent policies intended to protect XM and its customers and then resells the phones for a “substantial profit.”