GPS International Technologies, Inc. v. Verizon Communications, Inc. et al.

Background

GPS International Technologies, Inc. (GPSI) provides asset-tracking services using wireless GPS trackers and a cloud-based application. GPSI entered into a Verizon Wireless Vertical Solution Provider M2M Agreement with Verizon Wireless in 2013. The agreement required Verizon to provide wireless lines and data services and included an arbitration clause requiring disputes arising from the agreement to be arbitrated before the American Arbitration Association under specified industry rules.

According to GPSI’s complaint, Verizon Wireless later required GPSI to migrate lines from older networks to newer service, charged GPSI early-termination fees, interrupted service after GPSI initially did not pay those fees, and later charged reconnection fees. Verizon Wireless again interrupted service in February 2023. GPSI sued, asserting breach of contract, breach of the implied duty of good faith and fair dealing, tortious interference with contract, tortious interference with prospective business relations, fraudulent inducement, negligent misrepresentation, and unjust enrichment.

The defendants moved to compel arbitration under the Federal Arbitration Act and to stay the federal case while arbitration proceeded. Bennett separately moved to compel arbitration and adopted the other defendants’ arguments.

Arbitration Agreement and Procedural Preconditions

GPSI did not dispute that it signed the agreement and its amendments or that the arbitration clause was valid. It argued instead that the defendants had not satisfied contractual preconditions to arbitration, including written legal notice and a meeting within 30 days. GPSI also argued that the defendants waived arbitration through their pre-lawsuit conduct.

The court held that these issues concerned procedural conditions for using arbitration, not whether a duty to arbitrate existed. It ruled that the arbitrator should decide whether the preconditions were satisfied. The court likewise ruled that GPSI’s waiver argument was for the arbitrator because it was based on the defendants’ conduct before the lawsuit, rather than conduct during the litigation.

Claims Against Nonsignatories

GPSI argued that Verizon Communications and Bennett could not compel arbitration because they did not sign the agreement. The court rejected that argument. It held that GPSI was required to arbitrate claims against Verizon Communications because those claims were identical to the claims against the other defendants, arose from the same facts, and were covered by the agreement’s broad language requiring arbitration of any dispute arising from the agreement.

The court reached the same conclusion for Bennett. The complaint alleged that Bennett acted as Verizon’s agent, and GPSI’s claims against her arose from or related to her work for Verizon and the conduct that allegedly breached the agreement. The court therefore held that the arbitration clause covered GPSI’s claims against Bennett.

Tort Claims

The court held that GPSI’s tort claims—Counts III through VII—were also within the arbitration clause. Rather than applying the older approach that first classified an arbitration clause as broad or narrow, the court applied ordinary contract-interpretation principles and examined whether the claims touched matters covered by the parties’ agreement.

The court concluded that GPSI’s tort claims were based on Verizon’s termination of service and imposition of fees. The agreement addressed when Verizon could terminate service and impose fees. Because deciding whether Verizon acted within those contractual rights was central to GPSI’s claims, the court held that the tort claims arose from or related to the agreement and had to be arbitrated.

Disposition

The court referred GPSI’s claims to arbitration and stayed the federal case pending the arbitration’s outcome. It granted the defendants’ motion to compel arbitration and granted Bennett’s separate motion to compel arbitration. The Clerk of Court was directed to terminate the motions at Docket Nos. 18 and 31. The parties were ordered to file a joint status report by January 15, 2026, and every 60 days afterward. The opinion did not decide whether Verizon or the other defendants actually breached the agreement or committed the alleged torts.