North American Catholic Educational Programming Foundation, Inc., et al. v. Clearwire Spectrum Holdings II LLC, et al. (Lawyers Weekly No. 09-023-18)

COMMONWEALTH OF MASSACHUSETTS   SUFFOLK, ss.                                                                                   SUPERIOR COURT                                                                                                             CIVIL ACTION                                                                                                             No. 15-3118 BLS 2     NORTH AMERICAN CATHOLIC EDUCATIONAL  PROGRAMMING FOUNDATION, INC. et al.[1] Plaintiffs   vs.   CLEARWIRE SPECTRUM HOLDINGS II LLC, CLEARWIRE LEGACY LLC and SPRINT SPECTRUM, L.P., Defendants   MEMORANDUM OF DECISION AND ORDER ON DEFENDANTS’ MOTION TO STAY ACTION   Plaintiffs 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 Clearwire’s parent, and a dispute arose between Sprint and the plaintiffs as to what services Sprint was obligated to provide plaintiffs’ 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 plaintiffs’ consent – consent which they were entitled to withhold unless Sprint agreed to provide broadband access to plaintiff’s customers that was equivalent to what Clearwire itself would have provided had there been no sublicense. Plaintiffs filed this lawsuit in October 2015 seeking equitable relief and specific performance.  In November 2015, this Court allowed plaintiffs’ 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 plaintiffs’ customers to access the Clearwire broadband network free of charge.  On June 24, 2016, this Court allowed plaintiffs’ 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 DENIED. In 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 […]

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