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Sprint Nextel Corporation v. Middle Man, Inc.

United States District Court, Tenth Circuit

October 31, 2013

SPRINT NEXTEL CORPORATION, Plaintiff,
v.
THE MIDDLE MAN, INC., AND BRIAN K. VAZQUEZ, Defendants.

MEMORANDUM AND ORDER

J. THOMAS MARTEN, District Judge.

The court has before it dueling motions for judgment on the pleadings by plaintiff/counterclaim defendant Sprint Nextel Corporation and defendant/counterclaimant The Middle Man, Inc. See Dkts. 90 & 92. The parties each seek judgment on Count I of Middle Man's counterclaim. After reviewing the parties' arguments, the court is prepared to rule.

I. Background

Middle Man buys and resells pre-owned wireless phones, including phones originally programmed to operate on the Sprint network. Typically, Middle Man buys these phones from consumers who sell them online at sites like Craigslist.com. The phones Middle Man purchases arrive in various states of use, from being unused and in the original packaging to showing signs of wear and tear.

Sprint filed suit in this case alleging, among other claims, that Middle Man induces Sprint customers to resell their phones in violation of their service agreement with Sprint. In Count I of its counterclaim, Middle Man seeks declaratory relief that the terms and conditions agreed to by Sprint customers do not preclude them from selling the phones they purchased from Sprint.

The terms and conditions accompanying each new Sprint phone contain several clauses that are relevant to this issue. The contract states:

Restrictions on Using Services.
You can't use our Services: (a) in a way that could cause damage or adversely affect any of our other customers or our reputation, networks, property or Services; or (b) in any way prohibited by the terms of our Services, the Agreement, or our Policies. You cannot in any manner resell the Services to another party.

Dkt. 1, Exh. 1 at 6. On the last page of the contract, under the heading "Other Important Terms, " the same language is found: "You cannot in any manner resell the Services to another party." Id. at 12.

The contract includes a "Basic Definitions" section, which provides definitions relevant to the issue:

"Service" means Sprint branded or Nextel branded offers, rate plans, options, wireless services, billing services, applications, programs, products, or Devices on your account with us.

Id. at 5.

"Device" means any phone, aircard, mobile broadband device, any other device, accessory, or other product that we provide you, we sell to you, or ...

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