Grand Wireless, Inc. v. Verizon Wireless, Inc.
2014 U.S. App. LEXIS 5276
1st Cir.2014Background
- Grand's Massachusetts action against Verizon and McCahill asserted a RICO claim against McCahill and state-law claims against both defendants; the case was removed to district court and Verizon/McCahill moved to compel arbitration; Grand sought narrow interpretation arguing non-signatory McCahill could not arbitrate; district court denied arbitration; appellate panel reverses and remands.
- The Exclusive Authorized Agency Agreement governed Grand's Verizon sales agency, including customer relationships and confidentiality provisions like subscriber lists being Verizon’s property.
- The arbitration clause requires arbitration of any controversy arising out of or relating to the Agreement under AAA/WIA rules; certain matters (IP issues, seeking to compel/arbitrate, seeking to confirm/attack awards, emergency relief) are excluded.
- Grand operated storefronts under the Agreement from 2002-2011; termination occurred in July 2011 with a possible extension to October 2011; Grand alleged McCahill authorized a misleading mailing to customers.
- Grand's RICO and related claims center on communications and actions tied to the Verizon-Grand relationship and alleged termination effects, implicating the Agreement's terms and the relationship between Grand and Verizon.
- The district court adopted Grand's view that the arbitration clause was narrow and did not presumptively cover the dispute; on appeal, the court reverses, holding the clause broadly covers the dispute and McCahill can invoke the clause as Verizon's employee.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of arbitration clause | Grand: clause narrowly interpreted, excludes non-signatories. | Verizon/McCahill: clause broad; covers disputes arising out of/relating to the Agreement. | Broad scope; claims fall within arbitration. |
| Non-signatory employee invocation | Grand: employee cannot invoke arbitration since not a signatory. | McCahill, as Verizon employee, may invoke under agency principles. | Employee entitled to invoke arbitration under agency doctrine. |
| Presumption of arbitrability | Grand: presumption not triggered due to presumed narrow clause. | Presumption applies to broad clauses; disputes covered. | Presumption favored arbitral coverage; applies to this clause. |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (federal policy favoring arbitration; FAA section 2 applicability)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (contract validity and arbitration clause integrity)
- Dialysis Access Ctr., LLC v. RMS Lifeline, Inc., 638 F.3d 367 (1st Cir. 2011) (presumption of arbitrability in scope questions)
- Granite Rock Co. v. Int'l Bhd. of Teamsters, 130 S. Ct. 2847 (2010) (broad arbitration clauses covered disputes; ambiguities resolved in favor of coverage)
- First Options of Chi., Inc. v. Kaplan, 514 U.S. 938 (1995) (state-law contract formation principles govern arbitrability decisions; opinions guide interpretation)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009) ( Carlisle discusses nonparties and arbitration; limits of nonparty relief under FAA)