Brittan Communications v. Southwestern Bell Tele.
| Decision Date | 09 November 2001 |
| Docket Number | No. CIV.A. G-00-480.,CIV.A. G-00-480. |
| Parties | BRITTAN COMMUNICATIONS INTERNATIONAL CORPORATION Plaintiff, v. SOUTHWESTERN BELL TELEPHONE COMPANY Defendant. |
| Court | U.S. District Court — Southern District of Texas |
Alton C. Todd, Friendswood, TX, William J. Eggleston, Tracy L. Jackson, Eggleston & Briscoe, Houston, TX, for Plaintiff.
Philip J. John, Jr., J. Bruce McDonald, Baker Botts,c Houston, TX, Madeline Eileen Dabney, San Antonio, TX, for Defendant.
ORDER GRANTING DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS AND GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Now before the Court is Defendant Southwestern Bell Telephone Company's ("SWBT") Motion for Judgment on the Pleadings, or, in the alternative, Motion for Summary Judgment as to claims brought by Plaintiff Brittan Communications International Corporation ("Brittan") pursuant to the Communications Act, 47 U.S.C. §§ 151-613, the Telecommunications Act of 1996, 47 U.S.C. §§ 251-53, and the Texas Deceptive Trade Practices Act, Tex.Bus. & Com.Code § 17.41 et seq. ("DTPA"). Also before the Court is SWBT's Motion for Summary Judgment as to Plaintiff's Texas state law claims of fraud, tortious interference with contractual relations and tortious interference with business relations. At the outset, the Court notes that the instant Motions involve hotly contested issues, extensive briefing and numerous objections by both parties to the summary judgment evidence. The Court has carefully and thoughtfully reviewed all of the materials on file in this matter, and in light of all the evidence presented, the Court concludes that, for the reasons articulated below, SWBT's Motion for Judgment on the Pleadings is GRANTED with respect to Brittan's claims brought pursuant to the Communications Act and the Telecommunications Act of 1996, and SWBT's Motion for Summary Judgment is GRANTED with respect to Brittan's DTPA, fraud and tortious interference claims.
Brittan began operating as a switchless reseller of long-distance telephone services in 1995. Brittan did not have its own telecommunications facilities, but rather leased long-distance access from existing long-distance carriers. Brittan then resold the leased long-distance services to its customers in forty-two states. Brittan was headquartered in Houston, Texas and approximately 40% of Brittan's customers were located in the five-state area within which SWBT provides local telephone service.1
As is common in the telecommunications industry, Brittan billed its customers through local exchange carriers, here SWBT. In order to do so, Brittan submitted its charges to a third-party billing aggregator with whom Brittan had a contract, namely, Billing Concepts or its subsidiaries, U.S. Billing and Zero Plus Dialing (collectively "Billing Concepts").2 Brittan was one of multiple long-distance providers on whose behalf Billing Concepts performed billing aggregation services. Billing Concepts aggregated Brittan's charges with those of the other long-distance providers and submitted them to SWBT. SWBT would then place Brittan's charges on the bills of its local telephone service customers. Once the SWBT customers remitted payments, SWBT would forward the monies received to Billing Concepts, which would then transfer the funds to Brittan in due course.
In November 1998, SWBT ceased billing Brittan's customers for Brittan-generated charges, without first informing Brittan that it intended to do so. Thus, while Brittan's customers continued to make long-distance calls, for which Brittan had to pay its lessors, Brittan was unable to bill those customers through SWBT.
According to SWBT, it suspended billing services for Brittan in response to a large number of "slamming" and "cramming" complaints by SWBT's local customers.3 In late October of 1998, after SWBT conducted a survey of customer complaints, SWBT concluded that resale of long-distance services by Brittan was generating a high volume of these complaints. In fact, the survey results indicated that more complaints had been filed against Brittan than against any other long-distance provider.
Before any action against Brittan was taken, SWBT sent a letter to Billing Concepts outlining its concerns regarding customer complaints. Instead of suspending its billing for Brittan-generated charges immediately, SWBT provided Billing Concepts with additional time to review the cause of the numerous complaints, and requested that Billing Concepts inform SWBT of any reasons known to Billing Concepts that would prevent SWBT from taking action against Brittan. SWBT alleges that because it did not receive sufficient information (namely, plans outlining a specific framework designed to reduce end user customer complaints) from Billing Concepts in a timely manner, SWBT suspended its acceptance of billing from Billing Concepts for all Brittan-generated charges.
On or about November 24, 1998, Billing Concepts informed SWBT that Brittan should be reinstated on Southwestern Bell's billing tables.4 On November 30, 1998, SWBT responded to Billing Concepts, informing them that Brittan would be placed on the billing table by December 24, 1998. On December 15, 1998, Southwestern Bell resumed billing for Brittan-generated charges submitted by Billing Concepts. The money collected from those bills was distributed in the normal course of business.
SWBT seeks judgment on the pleadings under Fed.R.Civ.P. 12(c) with respect to Brittan's claims brought pursuant to the Communications Act and the Telecommunications Act of 1996.
In reviewing a motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c), the Court must base its decision solely on the pleadings. See Youngblood v. Bender, 104 F.Supp.2d 618, 619 (E.D.La. 2000). Such a motion may be granted only if the moving party clearly establishes that no issue of material fact remains to be resolved and that it is entitled to judgment as a matter of law. See J.M. Blythe Motor Lines Corp. v. Blalock, 310 F.2d 77, 78 (5th Cir.1962); Halkias v. General Dynamics Corp., 825 F.Supp. 123, 124 (N.D.Tex.1993), vacated on other grounds 56 F.3d 27 (5th Cir.1995). In reviewing a motion for judgment on the pleadings, a district court must view the facts presented in the light most favorable to, and draw all reasonable inferences in favor of, the nonmoving party. See Youngblood, 104 F.Supp.2d at 619; Park Center, Inc. v. Champion International Corp., 804 F.Supp. 294, 301 (S.D.Ala.1992); See also 5A Charles Alan Wright and Arthur R. Miller, Federal Practice and Procedure § 1368 (2d ed.2001). By reviewing a Rule 12(c) motion in this manner, courts insure that the rights of the non-moving party are decided as if there had been a trial. See Eristavi-Tchitcherine v. Lasser, 164 F.2d 144, 145 (5th Cir.1947).
The Communications Act, 47 U.S.C. §§ 151-613, authorizes the Federal Communications Commission ("FCC") to regulate interstate and foreign telephone and radio communication. See 47 U.S.C. §§ 151, 152(a). Under Title II of the Communications Act, 47 U.S.C. §§ 201-224, the FCC is given explicit authority to regulate particular aspects of "communication service" by interstate and international communications common carriers. See, e.g., 47 U.S.C. § 201(a) (). Section 202(a) of Title II provides:
It shall be unlawful for any common carrier to make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services for or in connection with like communication service, directly or indirectly, by any means or device, or to make or give any undue or unreasonable preference or advantage to any particular person, class of persons, or locality, or to subject any particular person, class of persons, or locality to any undue or unreasonable prejudice or disadvantage.
47 U.S.C. § 202(a). By its express terms, § 202(a) only applies to situations "for or in connection with" common carrier communication services.
Brittan alleges that SWBT's temporary suspension of billing and collection services for Brittan-generated charges submitted by Billing Concepts violated § 202(a). SWBT maintains, however, that billing and collection services are not "common carrier communication services," and thus, not subject to regulation under Title II of the Communications Act. After careful consideration of applicable FCC opinions and the relevant case law, the Court concludes that SWBT's position is correct.
In 1986, the FCC issued a decision, In the Matter of Detariffing of Billing & Collection Services, 1986 WL 291513, 102 F.C.C.2d 1150 (1986), which resulted in the detariffing of billing and collection services under Title II. See id. at 1168. In that decision, the FCC concluded that billing and collection services performed for a long-distance company were not a "communication service," but were instead a "financial and administrative service." Id. As such, the FCC would not regulate billing and collection services provided by local exchange carriers under Title II of the Act. See id. at 1169; see also Pub. Serv. Comm. of Md. v. FCC, 909 F.2d 1510, 1512 (D.C.Cir.1990) (); Int'l Audiotext Network v. AT & T, 893 F.Supp. 1207, 1223 (S.D.N.Y.1994) (). Although the FCC relaxed its position somewhat in a subsequent decision, stating that "[u]pon further analysis, we believe that... billing and collection is incidental to the...
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