Sprint Nextel Corporation v. Middle Man, Inc., The et al
MEMORANDUM AND ORDER denying 198 The Middle Man's Renewed Motion for Class Certification; denying 199 Sprint's Motion to StrikeJury Demand. Signed by Chief Judge J. Thomas Marten on 1/12/2017. (mam)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
SPRINT NEXTEL CORPORATION,
Case No. 2:12-cv-02159-JTM-KGS
THE MIDDLE MAN, INC., and
BRIAN K. VAZQUEZ,
MEMORANDUM AND ORDER
This matter is before the court on defendant The Middle Man Inc.’s renewed
motion for class certification (Dkt. 198), and on plaintiff Sprint’s motion to strike
defendant’s jury demand (Dkt. 199). For the reasons set forth below, the court concludes
that the motions should be denied.
I. Renewed Motion for Class Certification (Dkt. 198).
The Middle Man, Inc. (“TMMI”) made class action allegations in counterclaims
filed on November 7, 2012. Dkt. 37. It moved to certify a class on March 1, 2013. Dkt. 81.
On July 24, 2013, the court denied the motion, finding TMMI had not shown that the
numerosity requirement of Fed. R. Civ. P. 23(a) was satisfied. Dkt. 105 at 3. In light of
that finding the court did not address whether the requirements of Rule 23(b) were met.
On November 13, 2013, TMMI filed a renewed motion for certification, asserting
that “at least 503 small businesses located in 45 states are members” of the putative
class. Dkt. 109 at 7. The court denied the renewed motion on March 19, 2014, finding
the certification issue to be moot in light of the court’s rulings against TMMI on its
counterclaims, including its ruling that the terms of the Sprint purchase contract
prohibited the resale of phones purchased on a Sprint account. Dkt. 119 at 3.
Based on a series of rulings, the court then granted summary judgment in favor
of Sprint on its claim for breach of contract and awarded it nominal damages of $1.00.
Dkt. 166. The court also granted Sprint’s motion for voluntary dismissal of its other
claims. Dkt. 157. Judgment was entered on January 27, 2015. Dkt. 169. TMMI appealed,
and on June 8, 2016, the Tenth Circuit’s mandate reversing and remanding was filed.
Dkt. 179. The Tenth Circuit found there were genuine issues of fact precluding
summary judgment in favor of either party on Sprint’s breach of contract claim.
On June 27, 2016, the court referred the matter to Judge Sebelius for formulation
of an updated pretrial order. Dkt. 180. Before that could be accomplished, however,
Sprint moved to vacate the voluntary dismissal of its other claims. Dkt. 182. The court
rejected that motion on September 19, 2016, finding no grounds to undo Sprint’s
decision to dismiss everything but its breach of contract claim. Judge Sebelius then
conducted a final pretrial conference and filed an updated pretrial order on November
4, 2016. Dkt. 197. The order set forth a schedule that included an in limine conference on
March 1, 2017, and a three-day trial to begin March 7, 2017. The pretrial order said
nothing about class actions claims or a motion or schedule for class certification.
One week later, on November 11, 2016, TMMI moved for renewed class
certification of Count I of its counterclaim with respect to “all individuals and entities
nationwide engaged in the retail sale of pre-owned wireless mobile phones originally
programmed to operate on the Sprint network.” Dkt. 198 at 4.
Having reviewed the briefs and the arguments of the parties, the court
concludes that the renewed motion for class certification should be denied. If TMMI
wanted to resurrect the prospect of a class action, it should have done so before now,
and certainly should have raised the issue in connection with the updated pretrial
order. A pretrial order “controls the course of the action unless the court modifies it.”
Fed. R. Civ. P. 16(d). “The court may modify the order issued after a final pretrial
conference only to prevent manifest injustice.” Fed. R. Civ. P. 16(e). The court accepts
TMMI’s assertions that Rule 23 grants the court some flexibility in issuing or amending
class certification orders (see Fed. R. Civ. P. 23(d)(2)), and that Rule 16(e) is not an
exorable command against modification of a pretrial order. Cf. Monfore v. Phillips, 778
F.3d 849, 851 (10th Cir. 2015) (standard is not meant to preclude any flexibility; “trials
are high human dramas [and] surprises always emerge”). But the circumstances here
simply do not warrant modification of the pretrial order.
Relevant factors in considering whether to amend a pretrial order include: (1)
prejudice or surprise to the party opposing trial of the issue; (2) the ability of that party
to cure any prejudice; (3) disruption to the orderly and efficient trial of the case by
inclusion of the new issue; and (4) bad faith by the party seeking to modify the order.
Koch v. Koch Indus., 203 F.3d 1202, 1222 (10th Cir. 2000). See also Trierweiler v. Croxton &
Trench Holding Corp., 90 F.3d 1523, 1543 (10th Cir.1996) (“We interpret the assertion of
an issue not listed in the pretrial order as the equivalent of a formal motion to amend
the order....”). The first two factors here weigh against modification of the order, as
converting the matter to a class action at this late date would surely prejudice Sprint.
The fourth factor weighs in favor of modification, as there is no indication that TMMI
seeks certification in bad faith. The third factor, however, weighs strongly against
modification of the pretrial order. After years of tenacious litigation by the parties, this
case has now been finally reduced to a straightforward trial on the meaning of the terms
in the parties’ contract. The parties agreed to the schedule adopted in the pretrial order,
including trial of the remaining issues on March 7, 2017. Not only would compliance
with that schedule be impossible if the case were certified for class action treatment, but
the litigation would in some respects be set back to square one. TMMI has not shown
that modification of the pretrial order to allow it to assert a class action counterclaim at
this point is necessary to prevent manifest injustice.
II. Motion to Strike Jury Demand (Dkt. 199).
Sprint moves to strike TMMI’s demand for a jury trial, arguing that the parties
waived the right to a jury trial under the Terms and Conditions of the Sprint purchase
contracts. In response, TMMI argues that a bench trial is inconsistent with the Tenth
Circuit’s remand and that Sprint has consented to a jury trial “at least ten times in this
lawsuit.” Dkt. 202 at 3.
Like TMMI’s request for class certification, Sprint’s effort to withdraw its own
jury demand and to strike the jury demand of TMMI comes too late. Sprint demanded a
jury trial in all of its pleadings, it agreed to a jury trial in previous pretrial orders (Dkts.
139, 143), and it made no prior effort in five years of litigation to limit its own jury
request or to strike TMMI’s jury demand.
Sprint’s pleadings demanded “a trial by jury on all triable issues.” See e.g. Dkt. 1
at 30. It now asserts that the word “triable” excluded its breach of contract claim
because of a provision in the Terms and Conditions stating that “to the extent allowed
by law, we each waive any right to trial by jury in any lawsuit….” Dkt. 199-1 at 12; Dkt.
199 at 2. The court rejects the argument that use of the word “triable” in this manner
effectively excluded the breach of contract claim. Such a limitation was not spelled out
in Sprint’s pleadings, was not reasonably discernable from the language itself, and is
inconsistent with Sprint’s failure to timely assert any limitation or objection to TMMI’s
jury demand until now. Notwithstanding the waiver provision in the parties’ contract,
the parties still might have chosen to forego the waiver and submit their claims to a
jury, or one party might have sought to have the waiver declared invalid, making the
claims “triable” by jury. Rule 38 permits a party to demand a jury trial on any issue
triable of right by a jury. It further provides that once made, a proper demand “may be
withdrawn only if the parties consent.” Fed. R. Civ. P. 38(d). Moreover, even when a
jury trial is not demanded, the court may, on motion, order a jury trial “on any issue for
which a jury might have been demanded.” Fed. R. Civ. P. 39(b). Having made an
ostensibly proper jury demand and litigated under that posture for five years, Sprint
cannot withdraw the jury demand at this point. See CBR Fundgin, LLC v. Jones, 2015 WL
5431969, * (W.D. Tenn. Sept. 15, 2015) (“Plaintiff engaged in the express act of
demanding a jury trial, rather than merely remaining silent or failing to object to the
other side's demand. [cite omitted] Therefore, this Court finds that Plaintiff engaged in
a clear, unequivocal, and decisive act that demonstrated an intent to waive its right to
enforce the contractual jury waiver provision.”); Dell’Orfano v. Romano, 962 F.2d 199, 202
(2nd Cir. 1992) (“A [party] is entitled to rely on [another party’s] jury demand to
preserve his own right to jury trial”).
IT IS THEREFORE ORDERED this 12th day of January, 2017, that The Middle
Man’s Renewed Motion for Class Certification (Dkt. 198) and Sprint’s Motion to Strike
Jury Demand (Dkt. 199) are DENIED.
___s/ J. Thomas Marten______
J. THOMAS MARTEN, JUDGE
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