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Tuesday, February 25, 2020

Judge denies Canadian tribe's motion to dismiss breach of contract suit over broadband internet deal

By Jonathan Bilyk | Jun 13, 2014


A native Canadian tribe will need to continue to defend itself in Chicago's federal court against a breach of contract suit lodged by a Warrenville company over an allegedly broken business deal to bring wireless broadband Internet service to the tribe's islands near the Michigan-Ontario border.

On June 6, U.S. District Court Judge John J. Tharp Jr. denied the Walpole Island First Nation’s jurisdictional-focused motion to dismiss the suit brought against it by wireless systems consultant and distributor WAV Inc., which does business as Apriz.

That suit, which Apriz filed in December 2013, centers on a deal the company reached with the tribe to install and operate wireless broadband systems on its islands.

Walpole Island First Nation (WIFN) is the governing body for a population of about 2,000 people living on Walpole Island and several other islands in the tribe's Indian reserve at the mouth of the St. Clair River, on the northeast corner of Lake St. Clair in Ontario, Canada, about 30 miles northeast of Detroit, Mich.

According to Apriz’s complaint, WIFN approached the company through an agent about four years ago, seeking the west suburban Chicago company’s help with installing the equipment necessary to bring better broadband access to the Indian reserve’s populace.

The tribe also allegedly indicated it wanted to make this particular installation the first step in a plan to extend the network to its other nearby islands, potentially creating a new revenue source for it.

Under the terms of an agreement reached in 2012, Apriz states in its suit that WIFN  agreed to pay it $5,000 a month for the next five years after the broadband equipment was installed and operational.

While Apriz contends it completed its end of the bargain, the company contends WIFN reneged on the promised payments, after allegedly declaring the project a failure and stating it no longer wished to move forward with the plans.

Asserting that WIFN's actions cost it more than $300,000, Apriz's suit asked the court to determine the tribe had breached the parties' contract and to make it to pay the company $300,000, plus interest and late fees.

In response, WIFN sought dismissal of the suit, arguing that Chicago's federal court lacked jurisdiction over the matter as the case involves business dealings in Ontario.

Tharp, however, rejected the tribe's jurisdictional argument and ruled in favor of Apriz on the motion to dismiss.

While the work to install the wireless broadband equipment was performed on Walpole Island, Tharp said the facts of the case --WIFN's solicitation of Apriz, its extensive negotiations with the company and the long-term nature of the contract --established the kinds of connections needed to give the Chicago's federal court jurisdiction.

The judge particularly noted in his 12-page opinion that the two parties had agreed in their contract to let Illinois law govern the deal.

And Tharp said he did not believe litigating the case in Chicago would present WIFN with a “serious burden,” as the tribe seemed to have chosen Apriz, in part, because it was located relatively close to the Walpole Islands.

"WIFN has not argued that there is a 'serious burden' in litigating in Illinois, nor has it argued that the procedural or substantive polices of Canada or its own sovereign law are at risk," Tharp wrote. "[O]n the other hand, the plaintiff’s interests in litigating in its home country—let alone its home state—are not 'minimal.'"

Tharp's June 6 ruling means Apriz's lawsuit will proceed in Chicago's federal court. He set a June 18 status hearing in the matter.

Court documents show Chicago attorney Douglas Whitcomb Graham is representing WIFN and Apriz is being represented by James Vincent Garvey and Jeremy Ross Heuer of Vedder Price P.C. in Chicago.

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