Superior Court of Massachusetts, Suffolk, Business Litigation Session
NORTH AMERICAN CATHOLIC EDUCATIONAL FOUNDATION, INC. et al.
CLEARWIRE SPECTRUM HOLDINGS II, LLC et al.
Date: February 9, 2018
(with first initial, no space for Sullivan, Dorsey, and
Walsh): Sanders, Janet L., J.
MEMORANDUM OF DECISION AND ORDER ON DEFENDANTSâ
MOTION TO STAY ACTION
L. Sanders Justice of the Superior Court
are non-profit entities that hold licenses from the Federal
Communications Commission (FCC) to operate Educational
Broadband Services (EBS) channels in certain geographic
markets. In 2006, plaintiffs granted access to a portion of
their wireless communication spectrum to defendants Clearwire
Spectrum Holdings, LLC and Clearwire, Legacy, LLC (Clearwire)
pursuant to various written Agreements, including Master
Royalty and Use Agreements (MRUAs). The defendant Sprint
Spectrum, L.P. (Sprint) subsequently acquired all the stock
in Clearwireâs parent, and a dispute arose between Sprint and
the plaintiffs as to what services Sprint was obligated to
provide plaintiffsâ customers. Plaintiffs took the position
that Clearwire had effectively sublicensed its use of the
broadband spectrum to Sprint, and that, pursuant to the
Agreements, this required plaintiffsâ consent-consent which
they were entitled to withhold unless Sprint agreed to
provide broadband access to plaintiffâs customers that was
equivalent to what Clearwire itself would have provided had
there been no sublicense.
filed this lawsuit in October 2015 seeking equitable relief
and specific performance. In November 2015, this Court
allowed plaintiffsâ Motion for a Preliminary Injunction,
concluding that plaintiffs had demonstrated a substantial
likelihood of prevailing on the merits. The injunction among
other things required defendants to maintain Cost Free
Educational Accounts (CFEAs) that entitle plaintiffsâ
customers to access the Clearwire broadband network free of
charge. On June 24, 2016, this Court allowed plaintiffsâ
Motion for Partial Summary Judgment as to Count One of the
Complaint, which focused on the single issue of consent.
After some period of negotiation seeking a global resolution,
two of the six plaintiffs in the instant action filed
arbitration claims seeking damages, the MRUAs requiring them
to pursue any monetary remedy in that forum. Defendants now
move to stay this action until the arbitration is concluded.
This Court concludes that this Motion must be
support of the motion, defendants cite the broad arbitration
provision in the MRUAs and argue that under the Federal
Arbitration Act, it would be an abuse of discretion not to
stay the instant action because the claims its raises
substantially overlap with those issues being presented to a
three-member arbitration panel. A stay is appropriate, they
argue, in order to avoid duplicative discovery and the risk
of inconsistent results. In response, the plaintiffs contend
that there is no overlap between the claims that they assert
in this Court and the claims brought in arbitration. They
also note that the MRUAsâ dispute resolution provision has a
broad carve-out that entitle plaintiffs to pursue their
equitable claims in court. This Court is persuaded by
the MRUAs do indeed set forth detailed dispute resolution
procedures that require arbitration, they also state that
"notwithstanding" that provision, a party has
"no obligation to arbitrate claims for injunctive
relief, specific performance, or other equitable relief"
and that such claims can be pursued in state or federal
courts in Boston. § 11.12(c)(viii). Indeed, a party has
a right to "obtain specific performance of the terms
of" the MRUA "in addition to other remedies which
may be available, including money damages ..." §
11.11. The MRUAs further provide that "no remedy ... is
intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to
every other remedy given hereunder ..." Id.
Finally, a partyâs "election of any one or more remedies
... shall not constitute a waiver of the right to pursue
other available remedies at any time." Id.
These various provisions read together clearly permit the
parties to seek resolution of their differences in two
different arenas, depending on the kind of relief they seek.
the defendantsâ assertion of overlap, there does not appear
to any substantial overlap when plaintiffsâ claims in this
Court are compared to the single claim for damages that two
of the six named plaintiffs are pursuing in
arbitration. Any overlap that does exist was due to
the defendantsâ decision first to assert counterclaims in the
instant matter and then to assert essentially the same
counterclaims in the arbitration proceeding. In other words,
the overlap is of the defendantsâ own making. Plaintiffs
unsuccessfully sought to dismiss the counterclaims in the
arbitration matter precisely to avoid this overlap but
defendants successfully opposed that effort by arguing that
the MRUAs specifically contemplate potential parallel
proceedings "no matter how close the relationship
is" between their own counterclaims in court and their
counterclaims in arbitration. This Court sees no reason why
that is not equally true for plaintiffs, who seek to pursue
their claims for equitable relief in court at the same time
that they seek monetary damages in arbitration. As to
duplication in discovery that can be easily avoided if the
parties work cooperatively together.
 Chicago Instructional Technology
Foundation, Inc., Denver Area Educational Telecommunications
Consortium, Inc., Instructional Telecommunications
Foundation, Inc., Portland Regional Educational
Telecommunications Corporation, and Twin Cities Schoolsâ
Telecommunications Group, Inc.
 Those portions of the pleadings which
described the arbitration claims have been impounded so this
Court does not include a ...