Sprint’s cellphone trafficking case ends in jury verdict favoring KCK businessman

Brian Vazquez battled corporate giant Sprint for five days short of five years. A federal jury delivered his victory last Thursday.

Vazquez already had persuaded an appeals court to overturn the $1 in damages he’d been ordered to pay Sprint. And eight jurors have now agreed to reject the last Sprint claim still standing after years of proceedings.

But Vazquez isn’t done battling.

“I wanted to beat them because I wanted to protect my name,” said Vazquez, 37, who runs a small cellphone business from his home in Kansas City, Kan.

Sprint’s court pleadings had said Vazquez was involved in something sinister.

The Overland Park-based wireless company claimed five years ago Tuesday that Vazquez and his company, The Middle Man Inc., were part of a massive conspiracy that it called the “bulk handset trafficking scheme.”

Scheme participants, including Vazquez and Middle Man, allegedly bought expensive iPhones and other devices from Sprint at subsidized prices. These were enticingly low prices, available only when buyers agreed to a two-year service contract.

The schemers then allegedly would resell the phones, often overseas and at full price. They robbed Sprint by the amount of its subsidy that could total $400 on one iPhone, according to Sprint and its attorneys.

“There’s a real, pernicious problem that’s developed over the past at least five or six years, and this case is one of many that have been undertaken by wireless carriers in the United States to try and put a stop to it,” James Baldinger, an attorney representing Sprint, said of Vazquez and Middle Man in a 2013 federal court hearing.

“What the evidence will show,” Baldinger said, “is that the defendant’s business, as we have learned, is essentially premised entirely on defrauding Sprint and defrauding consumers.”

At one point, Sprint declared publicly that it had filed 42 lawsuits against 152 traffickers and had gotten permanent injunctions 37 times and final judgments totaling $93 million.

And Baldinger had talked to The Star about the lawsuit against Vazquez and Middle Man and about cellphone trafficking in a 2013 article about unlocking cellphones.

None of it made sense to Vazquez.

Middle Man, he said, works with Sprint customers, often businesses. His business is not a Sprint dealer, but it helps customers set up new lines, save money on their bills, and upgrade and program phones. It also sells accessories and fixes phones. It buys and resells a few phones, “onesies and twosies,” Vazquez had said in the 2013 article.

“Why me? I help Sprint customers,” Vazquez said last week about the lawsuit. “I help customers to this day.”

Vazquez’s attorney, Jim Kernell, similarly wondered why Middle Man, why Vazquez, when he looked up other cases Sprint had filed. He said the complaints were “nearly identical,” that each focused on this bulk trafficking scheme and had little to say about how the people and companies being sued were involved.

“In all these cases, the facts were identical. The only thing that changed were the names,” Kernell said

Sprint’s case against Vazquez and Middle Man, and their counterclaims against Sprint, wound through court proceedings until a week before the trail was set to begin Feb. 3, 2015.

Chief Judge J. Thomas Marten of the U.S. District of Kansas granted Sprint’s motion to dismiss all its claims against Vazquez and all but one against Middle Man. Instead of a trial, Marten granted Sprint’s one claim, that Middle Man had breached its contract with Sprint. He awarded Sprint $1 in damages from Middle Man.

The single dollar was at Sprint’s request. But the case was far from over.

Vazquez appealed.

The dollar in damages didn’t bother him. Vazquez said he was fighting for principle, fighting for others who he said faced similar “bullying” lawsuits but could not or did not fight. Vazquez wanted to save others from similar suffering at the hands of Sprint and its attorneys.

All of that amounted to “rhetorical flourishes,” said the U.S. 10th Circuit Court of Appeals in Colorado in its ruling on June 8, 2016. The appeals court, however, also reversed the judge’s breach of contract ruling against Vazquez and sent the case back to Kansas for trial.

Last Thursday afternoon, after three days of trial and five hours of deliberation, the jury of eight found that Vazquez had not breached its contract with Sprint regarding any of the three iPhones that had become the focus of the litigation.

It is unclear whether Sprint will seek to appeal the case. A Sprint spokeswoman said Monday that the verdict disappointed the company and that it was evaluating its “next steps.”

Either way, the legal wrangling continues.

Vazquez had sued Sprint in August 2015 in Wyandotte County District Court. This time, he claimed there was a scheme, one involving Sprint and attorneys working for the company.

Vazquez’s lawsuit dubbed it the “fraudulent litigation scheme.”

The lawsuit said it involved “unlawful litigation practices,” “false allegations” and “cookie-cutter complaints with no basis in fact,” all with the goals of “extracting a settlement from financially over-matched defendants and collecting exorbitant legal fees in the process.”

The lawsuit claims 13 counts of malicious prosecution and one count each of abuse of process, intentional and negligent infliction of emotional distress and defamation. It seeks unspecified damages against Sprint, the law firm of Carlton Fields Jorden Burt LLP that handled the federal complaint originally, Carlton Fields attorney Baldinger and other attorneys.

A spokeswoman for Carlton Fields declined to comment.

This story was originally published March 14, 2017 at 7:00 AM with the headline "Sprint’s cellphone trafficking case ends in jury verdict favoring KCK businessman."