938 F.3d 113
4th Cir.2019Background
- Sprint sold heavily discounted "upgraded" phones tied to multi-year service contracts; arbitrageurs (like Wireless Buybacks) bought those upgraded phones from customers and resold them for profit.
- Sprint sued Wireless Buybacks for tortious interference, alleging Sprint’s written Terms & Conditions barred customers from reselling Sprint phones and Wireless Buybacks induced breaches.
- The district court granted partial summary judgment for Sprint, finding the contract unambiguously prohibited resale and that Wireless Buybacks induced breaches; the parties then entered a stipulated judgment for $26.9 million while reserving appeal rights.
- Wireless Buybacks appealed; the Fourth Circuit considered appellate jurisdiction over the stipulated judgment and interpreted the stipulation as binding but conditioned on the scope of liability determined by the district court.
- On the merits the central dispute was whether Sprint’s Terms & Conditions unambiguously forbade resale of phones owned outright but not active on Sprint’s network (category (4) phones); the court found the contract ambiguous as to the definition of “Services” and "on your account with us."
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Finality / appellate jurisdiction over stipulated judgment | Stipulated judgment is final; damages binding if any liability is found | Stipulation conditioned on outcome makes judgment non-final | Court had jurisdiction; construed stipulation as binding but tied to scope of liability determined below (not a device to manufacture jurisdiction) |
| Whether contract unambiguously prohibited resale of customer‑owned, deactivated phones | "Nature of our Service" + "You cannot resell the Services" mean all customer devices ("Services" includes any "Devices on your account with us") | Definition of "Services" is ambiguous: a phone bought outright and disconnected is a "good," not a "service"; "on your account" can mean only active/obligated items | Contract ambiguous as to whether deactivated/outright‑owned phones are within "Services"; summary judgment for Sprint vacated |
| Whether extrinsic evidence (or lack thereof) permits summary judgment despite ambiguity | No extrinsic evidence shows customers interpreted contract to permit resale; so Sprint wins as matter of law | Contra proferentem and available extrinsic evidence create genuine issue of fact | Ambiguity remains after record review; under Maryland contra proferentem ambiguity is resolved against drafter (Sprint), so summary judgment improper |
| Whether separate promise to activate devices (from emails/sales reps) supports summary judgment | Customers agreed to activate upgraded devices on Sprint's account; Wireless Buybacks induced sales in breach | Any such promise is (1) not in the integrated contract and (2) not shown to have been accepted by all customers | No admissible contractual promise proved: activation term not in written contract and insufficient evidence it was imposed/accepted for relevant customers; cannot support summary judgment |
Key Cases Cited
- Microsoft v. Baker, 137 S. Ct. 1702 (Sup. Ct. 2017) (final-judgment rule and limits on devices to manufacture appellate jurisdiction)
- Board of Trustees v. Humbert, 884 F.3d 624 (6th Cir. 2018) (stipulated damages conditioned on appeal can defeat finality)
- Innovation Ventures, LLC v. Nutrition Science Laboratories, LLC, 912 F.3d 316 (6th Cir. 2018) (distinguishing Humbert; durable stipulations can permit appeal)
- Sprint Nextel Corp. v. Middle Man, Inc., 822 F.3d 524 (10th Cir. 2016) (interpreting same Sprint contract language; cited for ambiguity analysis)
- Dumbarton Improvement Ass’n v. Druid Ridge Cemetery Co., 73 A.3d 224 (Md. 2013) (Maryland objective contract‑interpretation rules; treat contract language first)
- Daugherty v. Kessler, 286 A.2d 95 (Md. 1972) (tortious‑interference liability does not require defendant’s correct legal understanding of facts)