Sprint Nextel Corp. v. Simple Cell Inc.
248 F. Supp. 3d 663
| D. Maryland | 2017Background
- Sprint sued multiple device resellers alleging they trafficked in stolen or fraudulently obtained Sprint phones and asserted 16 claims; Sprint moved for partial summary judgment against Wireless Buybacks defendants and Simple Cell defendants; defendants filed cross-motions and Wireless Buybacks moved to lift a TRO.
- Defendants sold large volumes of Sprint phones; Sprint obtained defendants’ purchase/sales records containing ESNs and produced spreadsheet analyses purporting to identify phones tied to theft, loss, upgrade fraud, or installment/lease accounts.
- Sprint relied on two ESN spreadsheets derived from multiple internal databases; Sprint sought to admit those spreadsheets as business records, while defendants treated them as inadmissible summaries under Fed. R. Evid. 1006.
- Breithaupt (Sprint fraud investigator) submitted declarations estimating phone-level damages and describing database work; the court admitted some lay damage testimony but excluded hearsay statements and declined to treat the spreadsheets as business records.
- The court granted summary judgment to Sprint on breach of contract against Wireless Buybacks (liability only), denied summary judgment on conversion/replevin/unfair competition/unjust enrichment/conspiracy and other torts where Sprint’s ESN evidence or late-disclosed data were not considered on summary judgment, denied numerous cross-motions, and denied Wireless Buybacks’ motion for relief from the TRO (but directed Sprint to supply underlying documentation if it wished to use Rule 1006 summaries later).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of Sprint ESN spreadsheets | Spreadsheets are business records under Fed. R. Evid. 803(6) and independently admissible | Spreadsheets are Rule 1006 summaries of voluminous records; Sprint must produce underlying data | Spreadsheets are treated as summaries and not admissible as business records on the present record; Sprint may use Rule 1006 if it provides underlying data to defendants |
| Hearsay portions of Breithaupt decl. | Statements recounting third‑party communications prove phone provenance | Those statements are inadmissible hearsay (not business records or statements against interest) | Portions recounting conversations (LaFleur, Kennedy, Katy ISD, Breeden Mechanical) excluded as hearsay; underlying employee notes not produced so business‑records exception fails |
| Lay opinion on damages by Breithaupt | Breithaupt may estimate per‑phone revenue losses | Defendants argue such estimates are expert territory requiring disclosure | Breithaupt may testify as a lay witness under Fed. R. Evid. 701 based on his particularized company knowledge |
| Breach of contract (Count 1) against Wireless Buybacks | Wireless opened Sprint accounts, ordered 667 phones, failed to pay; Sprint seeks summary judgment for breach and damages | Wireless argues waiver, estoppel, Sprint’s own breach (failure to invoice ETFs), and liquidated‑damages limit | Court finds Wireless Buybacks liable for breach; declines to decide damages amount at summary judgment; injunctive relief denied now |
| Breach of contract — Simple Cell cross‑motion | Sprint contends Simple Cell bought phones from Sprint; requests summary judgment | Simple Cell says it never contracted with Sprint | Genuine dispute of fact exists; Simple Cell’s motion denied; Sprint’s belated request for summary judgment denied as not timely pled |
| Tortious interference (Count 3) | Sprint: defendants solicited upgrades and induced contractual breaches harming Sprint | Defendants: purchases were legitimate resale; no inducement or knowledge of contract breaches | Denied for Wireless Buybacks on summary judgment — court finds sufficient evidence Wireless knew of contractual resale bans and induced purchases; cross motions with Simple Cell denied due to disputed facts |
| Conversion / Replevin (Counts 15–16) | Sprint: ESN analyses show tens of thousands of stolen phones in defendants’ possession | Defendants: Sprint lost possessory interest once sold to customers; ESN analysis unreliable and indistinguishable lost vs stolen; some Sprint proof was undisclosed | Denied — Sprint relied on ESN analyses and late‑disclosed Third Breithaupt data not considered; conversion/replevin not resolved on summary judgment |
| Unfair competition / Unjust enrichment / Conspiracy | Sprint relies primarily on ESN analyses and related evidence to show deception, unjust benefit, and conspiratorial agreements | Defendants argue record disputes, lack of independent tort injury for conspiracy, and contractual/legitimate commerce | Summary judgment denied on unfair competition, unjust enrichment (alternative remedies), and conspiracy claims due to evidentiary gaps and fact disputes |
| CFAA and trademark claims re: Simple Cell; involvement of Tijerina | Sprint alleges Simple Cell paid Tijerina to access Sprint systems (CFAA) and engaged in infringing resale practices | Simple Cell argues lack of intent to defraud and insufficient proof of unauthorized access or likelihood of confusion | Denied — factual development required; CFAA and trademark summary judgment denied for Simple Cell |
| Motion to lift TRO re: 1,114 iPhones | Wireless: third‑party checks (CheckMend) reported phones clean; asks to sell phones or require Sprint to justify hold and increase bond | Sprint: TRO requires Sprint to determine phones not stolen; third‑party flags are not controlling; Sprint identified theft/fraud coding for many ESNs | Denied — TRO remains; court directed Sprint to provide underlying documentation for disputed ESNs so Rule 1006 use may be possible; bond unchanged |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard) (establishes materiality/genuine dispute test)
- Libertarian Party of Va. v. Judd, 718 F.3d 308 (4th Cir.) (definition of a genuine dispute)
- Potamkin Cadillac Corp. v. B.R.I. Coverage Corp., 38 F.3d 627 (2d Cir.) (database extractions and business‑records analysis)
- U-Haul Int’l, Inc. v. Lumbermens Mut. Cas. Co., 576 F.3d 1040 (9th Cir.) (electronic records extracted for litigation may be business records but special scrutiny applies)
- Southern States Rack & Fixture, Inc. v. Sherwin-Williams Co., 318 F.3d 592 (4th Cir.) (factors for excluding late‑disclosed evidence under Rule 37)
- Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514 (4th Cir.) (preventing unsupported claims from proceeding to trial)
- Myers v. Kayhoe, 892 A.2d 520 (Md.) (contractual waiver standards)
- Darcars Motors of Silver Spring, Inc. v. Borzym, 841 A.2d 828 (Md.) (elements of conversion)