Northern Valley Communications, LLC v. Qwest Communications Corp.

659 F. Supp. 2d 1062, 2009 DSD 11, 2009 WL 3164856
CourtDistrict Court, D. South Dakota
DecidedSeptember 25, 2009
DocketCIV 09-1004
StatusPublished
Cited by5 cases

This text of 659 F. Supp. 2d 1062 (Northern Valley Communications, LLC v. Qwest Communications Corp.) is published on Counsel Stack Legal Research, covering District Court, D. South Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Northern Valley Communications, LLC v. Qwest Communications Corp., 659 F. Supp. 2d 1062, 2009 DSD 11, 2009 WL 3164856 (D.S.D. 2009).

Opinion

OPINION AND ORDER

KORNMANN, District Judge.

INTRODUCTION

[¶ 1.] Northern Valley filed this diversity action to collect for amounts allegedly due from Qwest for providing originating and terminating telephone access services. Plaintiff alleged claims for breach of contract and breach of implied contract arising out of federal and state tariffs, violation of the Telecommunications Act of 1996 (“the Act” of “the 1996 Act”), 47 U.S.C. §§ 201 and 203, collection action pursuant to state tariff, and unjust enrichment. Plaintiff seeks damages in the amount of $885,051 for amounts claimed to be due from May 1, 2007 to July 1, 2008, interest, attorneys fees, punitive damages, and injunctive relief. Defendant moved (Doc. 16) to dismiss the unjust enrichment claim.

*1064 BACKGROUND

[¶ 2.] The 1996 Act amended the Communications Act of 1934 to promote “competition and the reduction of regulation in the telecommunications industry, in order to secure lower prices and higher quality services for American telecommunications consumers and to encourage the rapid deployment of new telecommunications technology.” Verizon Wireless VAW LLC v. Sahr, 2006 DSD 15, ¶ 10, 457 F.Supp.2d 940, 944-945 (citing Telecommunications Act of 1996, Pub.L. No. 104-104, purpose statement; 110 Stat. 56 (1996)). “Before the Act was passed, incumbent local exchange carriers [“ILECs”] served as the exclusive providers of local telephone service, which was considered a natural monopoly.” Iowa Telecommunications Services, Inc. v. Iowa Utilities Bd., 563 F.3d 743, 745-746 (8th Cir.2009). The 1996 Act imposed a duty upon ILECs to provide interconnection with their networks to any requesting telecommunications carrier, including a competing local carrier in the same calling area. Id. at 746.

[¶ 3.] Northern Valley is a competitive local exchange carrier (“CLEC”) that offers local telephone service. CLECs are companies that were not the original monopoly telephone company in a specific area at the time of the 1996 Act. Verizon Wireless (VAW) LLC v. Kolbeck, 2007 DSD 30, ¶10, 529 F.Supp.2d 1081, 1086. Northern Valley owns the wires which allow telephone calls to be delivered to homes and businesses of its customers.

[¶4] Qwest, for the purposes of this action, is an interexchange carrier (“IXC”) that provides long distance service to its customers. A long distance carrier cannot complete, i.e. deliver, its customer’s call by itself. Its customer’s local exchange carrier (“LEC”) has to originate the call and the LEC, for the intended call recipient, must terminate the call. The long distance carrier pays both LECs “access compensation” for the use of their equipment and services in connecting and terminating the call. See Alma Communications Co. v. Missouri Public Service Com’n, 490 F.3d 619, 621 (8th Cir.2007). 1

[¶ 5.] Northern Valley provides “terminating switched access service” to Qwest to enable Qwest to deliver its customers’ long distance calls to Northern Valley’s customers. “Termination” is the “switching of the telecommunications traffic at the terminating carrier’s end office switch, or equivalent facility, and delivery of such traffic to the called party’s premises.” 47 C.F.R. § 51.701(d).

[¶ 6.] Tariffs are schedules setting forth the terms and conditions of services and rates for common carriers. See 47 C.F.R. 61.3(rr). Northern Valley filed tariffs with the Federal Communications Commission (“FCC”) (for interstate calls) and the South Dakota Public Utilities Commission (“the PUC”) (for intrastate calls) and its access services are therefore governed by the rates set forth in Northern Valley’s tariffs. Like a contract, 2 a tariff controls the relationship between the carrier and its customers. Marcus v. AT & T Corp., 138 F.3d 46, 56 (2d Cir.1998).

*1065 [¶ 7.] Though not applicable to the pending motion to dismiss, I would note that this is just one of a number of other cases pending in the District of South Dakota and elsewhere which were filed by CLECs against IXCs alleging failure to pay switched access charges. 3 In each of these cases, the defendant IXCs have alleged that the plaintiff LECs have engaged in “traffic pumping” schemes with various companies offering conference calling services whereby the LECs provide telephone numbers to the conference calling company, the conference calling company advertises free conference calls in an attempt to generate long distance calls through the IXCs to the LEC’s number, the LECs bill the IXCs for call termination, and split the profits with the conference calling company as “marketing fees.” One of the defenses asserted by the IXCs is that these calls do not “terminate” with an end user in the LEC’s network and therefore the switched access services provided by Northern Valley to terminate such calls are not covered by Northern Valley’s tariffs and therefore, Northern Valley may not collect from IXCs.

DECISION

[¶ 8.] When considering a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, the district count must accept the allegations of the complaint as true and must construe them liberally in plaintiffs’ favor. Stufflebeam v. Harris, 521 F.3d 884, 886 (8th Cir.2008), Quinn v. Ocwen Federal Bank FSB, 470 F.3d 1240, 1244 (8th Cir.2006), Booker v. City of St. Louis, 309 F.3d 464, 467 (8th Cir.2002), Duffy v. Landberg, 133 F.3d 1120, 1122 (8th Cir.1998). Whisman ex rel. Whisman v. Rinehart, 119 F.3d 1303, 1308 (8th Cir.1997), and Hafley v. Lohman, 90 F.3d 264, 266 (8th Cir.1996). Dismissal under Fed. R.12(b)(6) is appropriate only when it “appears beyond doubt that plaintiffs can prove no set of facts in support of their claim which would entitle them to relief.” Levy v. Ohl, 477 F.3d 988, 991(8th Cir.2007)(quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

[¶ 9.] Fed.R.Civ.P. 8(d) allows parties to plead in the alternative:

(2) Alternative Statements of a Claim or Defense.

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Bluebook (online)
659 F. Supp. 2d 1062, 2009 DSD 11, 2009 WL 3164856, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northern-valley-communications-llc-v-qwest-communications-corp-sdd-2009.