AT&T Corp. v. Aventure Commc'n Tech., LLC
| Decision Date | 19 September 2016 |
| Docket Number | No. 4:07-cv-00043–JEG,4:07-cv-00043–JEG |
| Citation | 207 F.Supp.3d 962 |
| Parties | AT&T CORPORATION, Plaintiff/Counterclaim Defendant, v. AVENTURE COMMUNICATION TECHNOLOGY, LLC; and Futurephone.com, LLC, Defendants/Counterclaim Plaintiffs. |
| Court | U.S. District Court — Southern District of Iowa |
James F. Bendernagel, Jr, Michael J. Hunseder, Sidley Austin LLP, Washington, DC, Richard W. Lozier, Jr., Belin McCormick, P.C., Des Moines, IA, Brian A. McAleenan, David W. Carpenter, Sidley Austin LLP, Chicago, IL, for Plaintiff/Counterclaim Defendant.
Gary M. Joye, Maxwell M. Blecher, Blecher Collins Pepperman & Joye, P.C., Los Angeles, CA, Paul D. Lundberg, Lundberg Law Firm P.L.C., Sioux City, IA, Jonathan E. Canis, Arent Fox LLP, Washington, DC, Thomas George Fisher, Jr., Des Moines City Attorney, Des Moines, IA, for Defendants/Counterclaim Plaintiffs.
TABLE OF CONTENTS
Before the Court and addressed in this Order is a Motion to Dismiss filed by Defendant/Counterclaim Plaintiff Aventure Communication Technology, LLC (Aventure) against Plaintiff/Counterclaim Defendant AT&T Corp. (AT&T). Also before the Court and addressed in this Order is a Motion to Dismiss by AT&T against Defendant/Counterclaim Plaintiff Futurephone.com LLC (Futurephone) and a Motion for Judgment on the Pleadings filed by AT&T against Aventure.
On July 23 and 24, 2014, the Court conducted omnibus hearings on AT&T's motion to dismiss, motion for judgment on the pleadings, and motions for summary judgment, ECF Nos. 162, 197, 243, and 246, respectively, and on Aventure's motions to dismiss and for summary judgment, ECF Nos. 222 and 251, respectively.1 Representing AT&T were Attorneys Michael Hunseder and Richard Lozier. Representing Aventure were Attorneys Paul Lundberg and Gary Joye. Representing Futurephone was Attorney Gary Joye. This order addresses Aventure's motion to dismiss and AT&T's motions to dismiss and for judgment on the pleadings, which are fully submitted and ready for disposition.2
Although discussed in greater detail below, a snapshot of the scope of this access stimulation litigation is warranted at the outset of this order. Like this Court, other district courts have experienced long delays in similar access stimulation cases. See discussion infra Part III.B. For example, in the District of Minnesota, the Qwest v. Free Conferencing Corp. , 0:10–cv–00490 (D.Minn) case, which was filed almost seven years ago, has been punctuated with stays, questions to the Federal Communications Commission (FCC), settlements between several parties, and discovery disputes. That court recently conducted a nine-day bench trial over just one claim, which took over nine months to complete, and now awaits the district court's decision. Similarly, in the District of South Dakota, the Qwest v. Free Conferencing , 4:07–cv–04147 (D.S.D.) case, which was filed nine years ago, was stayed due to referral to the FCC. As with the case in Minnesota, during the stay, several parties settled and when the stay lifted, two parties remained. That court conducted a six-day bench trial over three state law claims. The appellate decision in that case was just filed by the Eighth Circuit Court of Appeals on September 15, 2016. See Qwest Cornmc'ns Corp. v. Free Conferencing Corp. , 837 F.3d 889, No. 15–2406, 2016 WL 4896397 (8th Cir. Sept. 15, 2016). Another nine-year-old case out of the Southern District of New York, AH Am. Tel. Co. v. AT&T, 1:07-cv-00861-WHP (S.D.N.Y.), was stayed for referral to the FCC more than sevèn years ago and remains stayed as the FCC's damages decision is on review before the Court of Appeals for the District of Columbia Circuit, see Am. Tel. Co. v. FCC , 15-1354 (D.C. Cir. filed Oct. 16, 2015). With this glimpse of the course of this litigation, the Court now considers the motions before it.
AT&T alleges claims against Aventure that arise under the Telecommunications Act of 1996, 47 U.S.C. § 201 et seq. (), and alleges claims that arise under Iowa state law against Aventure and Futurephone. Aventure and Futurephone raise counterclaims that arise both under the Act and Iowa law. This Court has original jurisdiction over the federal question claims, see 28 U.S.C. § 1331, and supplemental jurisdiction over the state law claims, see id § 1367.
The Communications Act of 1934, 47 U.S.C. § 151 et seq., is the comprehensive act that codified telecommunication regulations and created the Federal Communications Commission (FCC or Commission) to oversee and regulate the telecommunications industry.4
The Communications Act of 1934 required telecommunications carriers to file tariffed rates with the FCC and to provide notice to the FCC and to the public when they changed their tariffs, see § 203(c), but it did nothing to regulate or protect equipment sellers or competitors, see Essential Commc'ns Sys., Inc. v. Am. Tel. & Tel. Co. , 610 F.2d 1114, 1120 (3d Cir.1979). Thus, American Telephone and Telegraph (AT&T), the parent company of the Bell System, continued to dominate the telecommunication industry. See id.
In the 1980s, fifty years after the passage of the Communications Act of 1934, and following decades of litigation between the U.S. Department of Justice (DOJ) and AT&T, the telecommunication industry confronted a massive corporate reorganization.6 As part of a consent decree in the second of two cases between the DOJ and AT&T, United States v. Am. Tel. & Tel. Co. , 552 F.Supp. 131 (D.D.C.1982), aff'd sub nom. Maryland v. United States , 460 U.S. 1001, 103 S.Ct. 1240, 75 L.Ed.2d 472 (1983), AT&T was divested of the local arms of the Bell System—the Bell Operating Companies (BOCs)—which were reorganized into seven Regional BOCs (RBOCs). United States v. W. Elec. Co. , 569 F.Supp. 990, 993–94 & n. 11 (D.D.C.1983). The Bell System territories were divided into 164 local access and transport areas (LATAs) that "mark[ed] the boundaries beyond which a Bell Operating Company [could] not carry telephone calls." Id. The BOCs (1) performed exchange telecommunications, that is, transported traffic between telephones located within a LATA; and (2) provided exchange access within a LATA, that is, linked a subscriber's telephone to their long distance carrier's nearest transmission facility, but only to and from telephones...
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