MANHATTAN (CN) - The now-defunct wireless company LightSquared can pursue claims that Garmin and other GPS makers caused its bankruptcy, a federal judge ruled.
U.S. District Judge Paul Berman's decision Thursday hands a small victory to the former network but defeat to its investor, led by billionaire Phil Falcone's hedge fund Harbinger Capital Partners.
LightSquared and the investors had brought separate suits in 2013 that blamed LightSquared's bankruptcy the year before on the refusal by GPS makers to coexist with LightSquared on the same spectrum, a term that encompasses the range of electromagnetic radio waves used to carry sound, images, and data information.
Hoping that LightSquared would have created significant competition for companies like AT&T and Verizon, if it had gone live, the investors said they poured "billions of dollars" into the new wireless network in 2010.
Berman found Thursday, however, that the investors' claims failed to demonstrate standing.
In upholding LightSquared's negligent-misrepresentation and constructive-fraud claims against the GPS companies - Garmin International Inc., Trimble Navigation Ltd. and Deere & Co. - Berman found it plausible Thursday that the companies omitted the full truth, even if they did not break any written promises.
The GPS makers' "conclusory, vague and open-ended" representations may have failed to "disclose that they had designed their receivers to 'listen in' on LightSquared's spectrum and that they were therefore subject to potential overload," the 41-page opinion states.
Welcoming Berman's decision in a statement, LightSquared reiterated its position "that that any interference issues are caused by the design of GPS receivers and not the design of LightSquared's proposed network."
As LightSquared did not specify the money damages the company demanded, it remains unclear how much, or whether, the dismissed charges lower the GPS companies' potential exposure.
Harbinger and Garmin's lawyers did not respond to a request for comment.
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