Biddeford Internet Corp. v. Verizon New England, Civil No. 06-91-P-C.

• Decision Date: 12 October 2006
• Docket Number: Civil No. 06-91-P-C.
• Citation: 456 F.Supp.2d 165
• Parties: BIDDEFORD INTERNET CORPRATION d/b/a Great Works Internet, Plaintiff v. VERIZON NEW ENGLAND INC. d/b/a Verizon Maine, Defendant.
• Court: U.S. District Court — District of Maine

456 F.Supp.2d 165

BIDDEFORD INTERNET CORPRATION d/b/a Great Works Internet, Plaintiff v. VERIZON NEW ENGLAND INC. d/b/a Verizon Maine, Defendant.

Civil No. 06-91-P-C.

United States District Court, D. Maine.

October 12, 2006.

COPYRIGHT MATERIAL OMITTED

David P. Silk, Sidney St. F. Thaxter, Curtis, Thaxter, Stevens, Broder, & Micoleau, Portland, ME, for Plaintiff.

John J. Aromando, Pierce, Atwood LLP, Portland, ME, for Defendant.

ORDER ENFORCING ARBITRATION FOR PART OF PLAINTIFF'S BREACH OF CONTRACT CLAIM AND DENYING DEFENDANT'S MOTION TO DISMISS

GENE CARTER, Senior District Judge.

Now before the Court is the Motion of Defendant Verizon New England Inc. to Enforce Arbitration Agreement and to Dismiss Plaintiffs Complaint, or, Alternatively, to Stay Proceedings and to Compel Arbitration. See Docket Item No. 9. Plaintiff Biddeford Internet Group d/b/a Great Works Internet ("GWI") objects to Verizon's Motion. After considering the argumentation of the parties on the Motion, the Court will enforce the parties' agreement to arbitrate that part of their dispute arising after February 1, 2005 and deny Verizon's Motion to Dismiss.

Rule 12(b)(6) Legal Standard

When deciding a motion to dismiss under Rule 12(b)(6), the court accepts the well-pleaded facts as true and draws all reasonable inferences in favor of the plaintiff. Gorski v. N.H. Dep't of Corr., 290 F.3d 466, 473 (1st Cir.2002); Pihl v. Massachusetts Dep't of Educ., 9 F.3d 184, 187 (1st Cir.1993). The defendant is entitled to dismissal for failure to state a claim only if "it clearly appears, according to the facts alleged, that the plaintiff cannot recover on any viable theory." Langadinos v. American Airlines, Inc., 199 F.3d 68, 69 (1st Cir.2000) (citations omitted)¹

I. FACTS

This case arises out of a dispute between GWI and Verizon concerning the terms and conditions under which Verizon provides GWI, an internet service provider, access to a portion of Verizon's telecommunications network that allows GWI to provide broadband data services such as digital line subscriber ("DSL") over the same copper loop that Verizon uses to provide voice services to retail end-user customers. Such wholesale services furnished to GWI are referred to as high frequency portion of a copper loop ("HFPL") or "line sharing." Complaint ¶ 8. The parties entered into an Interconnection Agreement on October 3, 2001, which included a provision regarding the rates that GWI must pay Verizon for line sharing arrangements. Id. ¶ 6. The Interconnection Agreement between GWI and Verizon was approved by the Maine Public Utilities Commission ("MPUC") on December 18, 2001. Id. ¶ 7. The rates for line sharing established in the Interconnection Agreement are based on the Total Element Long-Run Incremental Cost ("TELRIC") methodology. Id. ¶ 10. The Interconnection Agreement has not been terminated by either party. Id. ¶ 21. GWI's Complaint alleges that "[c]ommencing on October 2, 2004, Verizon breached its obligations to GWI under the Interconnection Agreement, when it, inter alia, refused to provide new line sharing arrangements to GWI and refused to honor the charges for most existing customers as set in the Interconnection Agreement." Complaint ¶ 29.

In addition to the allegations in the Complaint, Verizon requests that the Court consider the content of a document entitled "Vista Agreement," which is not referred to in GWI's Complaint. See Vista Agreement attached as Exh. B to the Declaration of Amy Stern (Docket Item No. 10). Typically, consideration of any documents not attached to the complaint, or not expressly incorporated therein, is not permitted, unless the proceeding is properly converted into one for summary judgment under Rule 56. See Fed.R.Civ.P. 12(b)(6). The First Circuit has, however, permitted a limited exception to this rule for documents the authenticity of which are not disputed by the parties; for official public records; for documents central to plaintiffs' claim; or for documents sufficiently referred to in the complaint. See, e.g., Clorox Co. P.R. v. Proctor & Gamble Commercial Co., 228 F.3d 24, 32 (1st Cir. 2000) (considering advertising material outside of the complaint in a motion to dismiss false advertising claim because material was "integral" to assessing the complaint's allegations); Romani v. Shearson Lehman Hutton, 929 F.2d 875, 879 n. 3 (1st Cir.1991) (considering offering documents submitted by defendants with motion to dismiss claim of securities fraud); Fudge v. Penthouse Int'l, Ltd., 840 F.2d 1012, 1014-15 (1st Cir.1988) (considering allegedly libelous article submitted by defendants with motion to dismiss).

In this case, the Vista Agreement was entered into by GWI and Verizon and became effective February 1, 2005. See Vista Agreement attached as Exh. B to the Stern Dec. The Vista Agreement provides that, in lieu of line sharing, Verizon will sell GWI access to the HFPL through a new "Service." Id. In the Vista Agreement, the parties agreed that "all Line Sharing arrangements that [GWI] obtains from Verizon shall be converted to the [Vista] Service and shall be billed at the rates set forth in Attachment 2," which are different from the TELRIC rates previously agreed to in the Interconnection Agreement. Id. § 2. Moreover, the Vista Agreement contains an integration clause, expressing the parties' intent that the contract constitutes the entire agreement and that it supersedes all prior agreements with respect to line sharing after February 1, 2005.² Id. § 4.

Verizon asserts, and GWI does not dispute, that line sharing described in the Interconnection Agreement and the Vista Service are equivalent—both involve access to the HFPL for DSL Internet service. Id § 2. With the subject matter of these two agreements being congruent and the Vista Agreement being the most recent expression included in the record of the parties' intent with respect to line sharing, the Court is satisfied that the Vista Agreement is central to GWI's claim that Verizon breached the Interconnection Agreement by refusing to provide new line sharing arrangements and honor the TERIC rates for existing customers. In addition, the Court notes that no unfair prejudice results to GWI as a consequence of the Court's consideration of the Vista Agreement because, as a signatory of the Vista Agreement, GWI had notice of its existence. Therefore, the Court will consider the Vista Agreement in ruling on Verizon's Motion to Dismiss.³

II. DISCUSSION

A. Dispute Resolution Provision of the Vista Agreement

The Vista Agreement includes a dispute resolution provision, which requires that if the parties are unable to reach agreement the dispute will be resolved by binding arbitration. Id. § 15.1. By failing to invoke the dispute resolution provision of the Vista Agreement and commencing suit, Verizon argues that GWI has violated the dispute resolution provision of the Vista Agreement. Verizon asks this Court to enforce the dispute resolution provision of the Vista Agreement and dismiss GWI's Complaint. GWI does not challenge the validity of the Vista Agreement but, rather, responds that the doctrine of judicial estoppel prevents, Verizon from relying on the Vista Agreement because such reliance is contradictory to the position Verizon took in another recent case filed in this Court involving Verizon. See Verizon New England, Inc. v. Maine Public Utilities Commission, 05-53-B-C.

1. Application of Judicial Estoppel

In order to successfully assert the doctrine of judicial estoppel a litigant must have "made a bargain" with the court of the first proceeding by making certain representations to the court in order to obtain a particular "benefit" from the court. United States v. Levasseur, 846 F.2d 786, 792-93 (1st Cir.1988). Additionally, the position taken in the second litigation must be "inconsistent with the one successfully and unequivocally asserted by that same party in a prior proceeding." Brewer v. Madigan, 945 F.2d 449, 455 (1st Cir.1991). GWI argues that Verizon's position regarding the validity of the Interconnection Agreement in Verizon New England, Inc. v. Maine Public Utilities Commission, 05-53-B-C is patently incompatible with the position Verizon now espouses in this case.

In the prior litigation, between Verizon and the MPUC, the controversy related to whether the MPUC properly interpreted the Interconnection Agreement and whether Verizon is obligated to supply Section 271 services provided for by the Intercon nection Agreement at TELRIC rates. The Vista Agreement was not part of the record in that case and, thus, Verizon was free to seek a determination with respect to the MPUC's interpretation of the Interconnection Agreement and its obligations under the terms of the Interconnection Agreement. In this case, GWI asserts that Verizon's contradictory position is that the Interconnection Agreement is void. The Court does not understand that to be Verizon's position here. In fact, Verizon expressly asserts that with the exception of line sharing "the Interconnection Agreement continues to govern other services provided by Verizon to GWI." Reply of Defendant Verizon New England Inc. (Docket Item No. 15) at 3. Verizon's position on the instant motion is that the Vista Agreement, which was entered into subsequent to the Interconnection Agreement, supersedes the latter and provides the terms for, and governs, the parties' current agreement with respect to line sharing. Verizon's position .regarding the specific contractual agreement made by Verizon and GWI in the Vista Agreement is separate from, and not inconsistent with, Verizon's position taken with respect to the interpretation of the Interconnection Agreement in the prior litigation. The Court is not persuaded that this case presents the appropriate circumstance for the application of judicial estoppel.

GWI also asserts that Verizon has not sought MPUC approval to modify or amend the Interconnection Agreement and, thus, that...