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Wireless Warehouse, Inc. v. Boost Mobile

March 10, 2010


The opinion of the court was delivered by: Marc L. Goldman United States Magistrate Judge


Plaintiff Wireless Warehouse, Inc. has brought this action against Defendant Booth Mobile, LLC, based on Defendant's alleged false promises and interference with Plaintiff's business relationships. The matter is before the Court on Defendant's motion to compel arbitration and stay proceedings, or in the alternative, to dismiss the complaint. For the reasons set forth below, the Court DENIES Defendant's motion.

I. Facts and Procedural History

Plaintiff Wireless Warehouse, Inc., a Georgia Corporation, is a wireless communications master dealer that provides services to hundreds of sub-dealers in the United States. (Compl. ¶6.) Defendant Boost Mobile, LLC is a division of Sprint that offers wireless phones and services without contracts or activation fees. (Compl. ¶7.) Plaintiff and Defendant entered into a one-year Prepaid Wireless Product Agreement in 2005, which they renewed in March of 2006, and again on March 7, 2007. (Compl. ¶7.)

The agreement at issue is the Prepaid Wireless Product Agreement that the parties executed on March 7, 2007, with an effective date of April 1, 2007. The Agreement created a distributor-supplier relationship between the parties and outlined the terms by which Wireless (the distributor) was to sell Boost's products. (Anderson Decl. Ex. A.)

The Agreement stated that "The following provisions, and the Attachments to this Letter, govern the relationship between the parties[.]" (Anderson Decl. Ex. A at 1.) The Agreement further stated that its terms would be "From and including April 1, 2007 (the "Effective Date") to but excluding the first anniversary of the Effective Date." (Anderson Decl. Ex. A at 1.) It also provided that "[t]his Agreement expires at the end of the Term unless renewed in writing by the parties." (Anderson Decl. Ex. A at 12.) The Agreement could be terminated "by Supplier for its convenience, for any reason or no reason, upon thirty (30) days written notice to the Distributor." (Anderson Decl. Ex. A at 17.)

The Agreement contained the following additional relevant provisions:

Governing Law: This Agreement is governed by the laws of the Commonwealth of Virginia, regardless of conflicts of law provisions.

Entire Agreement; Conflicts: This Agreement, including its exhibits, constitutes the final and full understanding between the parties and supercedes all previous agreements, understandings, negotiations and promises, whether written or oral, between the parties with respect to its subject matter. This agreement is intended to supercede all previous agreements on the same subject matter that Distributor previously signed with Supplier. No amendments to this Agreement will be binding on either party unless executed by both parties in writing.

Non-Waiver: No waiver of any term or condition of this Agreement, either generally or in a particular instance, will be effective unless waiver is in writing and signed by an authorized person of the party against which the waiver is being asserted. (Anderson Decl. Ex. A at 19.)

The Agreement also included a Dispute Resolution Addendum, stating that "All Disputes under this Agreement are subject to the following dispute resolution process." (Anderson Decl. Ex. A at 25.) The Addendum required that, in the event of a dispute under the Agreement, the parties must first engage in negotiation. (Anderson Decl. Ex. A at 25.) If negotiation does not resolve the matter, they must then submit the dispute to mediation. (Anderson Decl. Ex. A at 25.) If mediation does not prove successful, the parties must comply with the following arbitration clause:

Arbitration. No party may commence arbitration until a Dispute has been subject to both negotiation and mediation in accordance with this Agreement. Either party may initiate arbitration with respect to a Dispute by filing a written demand for arbitration pursuant to the Wireless Industry Arbitration Rules of the AAA at any time after the 45th calendar day following the date that a request for mediation of such Dispute was first submitted, or, if earlier, the date that mediation is terminated. This applies to all causes of action, whether nominally a "claim," "counterclaim," or "cross-claim," arising under common law or any state or federal statute. (Anderson Decl. Ex. A at 25.) The Addendum also included the following provisions:

Waiver of Rights. Supplier and Distributor each waive: their rights to litigate Disputes in court, except as set forth in Section 4 of this Addendum below;*fn1 to receive a jury trial; and to participate as a plaintiff or as a class member in any claim on a class or consolidated basis or in a representative capacity.

Survival. The provisions of Addendum will continue in full force and effect subsequent to and notwithstanding the expiration ...

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