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Till v. Sprint Solutions

March 30, 2010

ERIC TILL, ET AL., PLAINTIFFS,
v.
SPRINT SOLUTIONS, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Rufe, J.

MEMORANDUM OPINION AND ORDER

Plaintiffs Eric Till and Till Communications, Inc. bring this action against Defendants Sprint Solutions, Inc. and Sprint Nextel, Inc. ("Sprint"), alleging intentional interference with existing and prospective contractual relations, breach of contract, negligent misrepresentation, libel, and alternatively, intentional misrepresentation. Now before the Court is Defendants' Motion to Dismiss the Amended Complaint.*fn1 For the reasons set forth below, the Motion will be granted.

I. FACTUAL AND PROCEDURAL HISTORY

On October 1, 2005, Plaintiffs entered into a five-year Independent Marketing and Exclusive Licensee Agreement ("License Agreement") with VIP Wireless, Inc. ("VIP Wireless"), under which Plaintiffs would sell VIP Wireless designated communications services and telephones to the retail public.*fn2 Paragraph 9 of the License Agreement provides that VIP Wireless "may immediately terminate [the License Agreement] if [VIP Wireless] determines that [Plaintiffs have] engaged in...fraud or any other illegal activity or activity that is harmful to [VIP Wireless]."*fn3 Shortly after signing the Licensing Agreement, Plaintiffs leased a VIP Wireless Retail Store in Feasterville, Pennsylvania ("VIP Wireless Feasterville").*fn4

In October 2008, Defendant Sprint entered into an Authorized Representative Agreement ("AR Agreement") with VIP Wireless, which permitted VIP Wireless to sell Sprint products and services, and to subcontract a portion of its telecommunications sales obligations.*fn5 Paragraph 17 of the AR Agreement contains a dispute resolution clause, which requires that all disputes arising out of or in connection with the agreement be resolved in accordance with specific dispute resolution procedures outlined in "Exhibit E - Dispute Resolution" of the AR Agreement.*fn6

Exhibit E provides that the parties to the AR Agreement waive the right to litigate their contract disputes in court and mandates that such disputes must first be submitted to mediation, and if mediation fails, then to binding arbitration.*fn7

After the AR Agreement was executed, Plaintiffs, Sprint, and VIP Wireless entered into a Subcontractor Consent Agreement ("Subcontractor Agreement"), which granted Plaintiffs the right to sell Sprint telecommunications services pursuant to the terms and conditions of the AR Agreement at its VIP Wireless Feasterville store.*fn8 Paragraph 2 of the Subcontractor Agreement provides that: "Subcontractor acknowledges and agrees that it is bound by the terms and conditions of the AR Agreement."*fn9

On January 15, 2009, a Sprint employee sent two internal emails to VIP Wireless employees, with the subject line "Outbound Customer Calls - VIP Wireless (Feasterville) 2237", regarding Plaintiffs' submission of potentially improper or fraudulent reimbursement vouchers to Sprint.*fn10 On March 2, 2009, VIP Wireless terminated its Subcontractor Agreement with Plaintiffs pursuant to Paragraph 9.3 of the License Agreement. As a result, Plaintiffs had to immediately cease operation of the VIP Wireless Feasterville store and they went out of business shortly thereafter.*fn11

On April 28, 2009, Plaintiffs filed the instant action as a five-count Complaint, seeking damages allegedly incurred from the loss of their business as a result of the termination of their subcontract.*fn12 On July 15, 2009, Plaintiffs filed an Amended Complaint. On July 29, 2009, Defendants filed the instant Motion, requesting the Court to dismiss Plaintiffs' Amended Complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1), on grounds that a superceding mandatory arbitration agreement exists between the parties. In the alternative, Defendants' Motion seeks dismissal of Counts I, II, IV, and V of the Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).*fn13

The Court has carefully reviewed Defendants' Motion to Dismiss the Amended Complaint, Plaintiffs' Memorandum of Law in Opposition to Defendants' Motion to Dismiss Plaintiffs' Amended Complaint*fn14 , Defendants' Reply Brief in Support of Motion to Dismiss Amended Complaint*fn15 , Plaintiffs' Sur-Reply Brief in Opposition to Defendants' Motion to Dismiss Amended Complaint*fn16 , and all accompanying materials, and this matter is now ready for disposition.

II. L EGAL S TANDARD

Federal Rule of Civil Procedure 12(b)(1) allows a party to move for dismissal of any claim for which the district court lacks subject matter jurisdiction.*fn17 When considering a 12(b)(1) motion, the court "review[s] only whether the allegations on the face of the complaint, taken as true, allege sufficient facts to invoke the jurisdiction of the district court."*fn18 When subject matter jurisdiction is challenged by the defendant, the plaintiff bears the burden of persuasion.*fn19

Pursuant to 9 U.S.C. § 3, a court may stay litigation of an action that is subject to a written arbitration agreement.*fn20 In actions where all of the issues are arbitrable, it is appropriate for a court to dismiss the complaint, rather than stay the proceedings.*fn21 The court must consider:

(1) whether the parties entered into a valid agreement to arbitrate; and (2) whether the plaintiff's claims fall with the substantive ...


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