Core Commc'ns, Inc. v. Verizon Md. LLC

• Citation: 744 F.3d 310
• Decision Date: 06 March 2014
• Docket Number: No. 12–2572.,12–2572.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)
• Parties: CORE COMMUNICATIONS, INC., Plaintiff–Appellant, v. VERIZON MARYLAND LLC, as successor entity to Verizon Maryland, Inc., Defendant–Appellee, and Maryland Public Service Commission; Steven B. Larsen, In his official capacity as Chairman of the Maryland Public Service Commission; Harold D. Williams, In his official capacity as Commissioner of the Maryland Public Service Commission; Allen M. Freifeld, In his official capacity as Commissioner of the Maryland Public Service Commission; Susanne Brogan, In her official capacity as Commissioner of the Maryland Public Service Commission; Lawrence Brenner, In his official capacity as Commissioner of the Maryland Public Service Commission, Defendants.

744 F.3d 310

CORE COMMUNICATIONS, INC., Plaintiff–Appellant,

v. VERIZON MARYLAND LLC, as successor entity to Verizon Maryland, Inc., Defendant–Appellee,andMaryland Public Service Commission; Steven B. Larsen, In his official capacity as Chairman of the Maryland Public Service Commission; Harold D. Williams, In his official capacity as Commissioner of the Maryland Public Service Commission; Allen M. Freifeld, In his official capacity as Commissioner of the Maryland Public Service Commission; Susanne Brogan, In her official capacity as Commissioner of the Maryland Public Service Commission; Lawrence Brenner, In his official capacity as Commissioner of the Maryland Public Service Commission, Defendants.

No. 12–2572.

United States Court of Appeals, Fourth Circuit.

Argued: Dec. 12, 2013.

Decided: March 6, 2014.

ARGUED:Ralph Lee Gleaton, II, Gleaton Wyatt Hewitt, PA, Greenville, South Carolina, for Appellant. Scott H. Angstreich, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, D.C., for Appellee. ON BRIEF:Andrew M. Hetherington, Jessica C. Collins, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, D.C., for Appellee.

Before WILKINSON, KING, and GREGORY, Circuit Judges.

Affirmed by published opinion. Judge KING wrote the opinion, in which Judge WILKINSON and Judge GREGORY joined.

KING, Circuit Judge:

Plaintiff Core Communications, Inc. appeals the district court's award of summary judgment to defendant Verizon Maryland, LLC, successor to Verizon Maryland, Inc. (interchangeably “Verizon”), with respect to a pair of tort claims pursued by Core under Maryland law. See Core Commc'ns, Inc. v. Verizon Md., Inc., No. 1:02–cv–03180, 2012 WL 3292899 (D.Md. Aug. 10, 2012), ECF No. 66 (the “Memorandum Opinion”). Core contends that the court further erred when, as a result of granting partial reconsideration of its Memorandum Opinion, it awarded nominal damages of only one dollar to Core on its related claim for breach of contract. See Core Commc'ns, Inc. v. Verizon Md., Inc., No. 1:02–cv–03180 (D.Md. Nov. 27, 2012), ECF No. 73 (the “Reconsideration Order”). As explained below, we affirm.

I.

A.

The Telecommunications Act of 1996, Pub.L. No. 104–104, 110 Stat. 56 (codified as amended in scattered sections of 47 U.S.C.) (“the Act”), was designed to increase competition in local telephone markets. See Verizon Commc'ns, Inc. v. FCC, 535 U.S. 467, 489, 122 S.Ct. 1646, 152 L.Ed.2d 701 (2002). To that end, the Act required established telephone companies to enter into contracts known as interconnection agreements (in the singular, an “ICA”) with new market entrants seeking to connect with existing networks. See47 U.S.C. § 251. In the Baltimore area, Verizon was the established phone company, that is, the incumbent local exchange carrier (“ILEC”), and Core was one of several new market entrants, known as competitive local exchange carriers (in the singular, a “CLEC”). Pursuant to the Act, Core sought an ICA with Verizon, and, in order to expedite negotiations, the two companies agreed—at Core's suggestion—to adopt the terms of a previously approved ICA between Verizon's predecessor and another CLEC. On July 14, 1999, the companies jointly submitted their proposed ICA to the Maryland Public Service Commission (the “PSC”) for its review and approval. On September 15, 1999, the PSC approved that ICA (the “Core ICA”).¹

On July 27, 1999, while the PSC's approval of the Core ICA was pending, Core wrote Verizon to request that the proposed interconnection—as to which Core would be a wholesale customer of Verizon—be accomplished by September 10, 1999. At a meeting between Core and Verizon on August 11, 1999, the companies agreed that Core's interconnection would occur at Verizon's “Wire Center” in Baltimore, which was “on-net” with Verizon, that is, the Wire Center was physically connected to Verizon's central network and housed the needed equipment. In tension with Core's proposed timeline, however, Verizon estimated that it would take another four to six months before the essential new equipment for Core's interconnection—including an OC–12 multiplexer (the “OC–12 Mux”) and a corresponding OC–12 facility ring (the “OC–12 IOF Ring”)—was available for use.

Desiring to avoid having its preferred date of interconnection delayed for several months, Core suggested that, instead of installing the new OC–12 Mux and OC–12 IOF Ring, Verizon should utilize an existing multiplexer and “Loop Ring” already in the Wire Center. Verizon acknowledged that it would be technically feasible to use the existing equipment for the Core interconnection, but, as a matter of internal policy, it declined to do so. On August 15, 1999, Verizon advised Core that, in any event, the existing multiplexer and Loop Ring were already assigned to a Verizon “customer of record.” ² Only later did Verizon disclose that the customer of record to which it had referred was Core itself, already a Verizon retail customer in a separate context. The existing equipment was never used for the Core interconnection, and the new OC–12 Mux and OC–12 IOF Ring were installed by Verizon in late November 1999. The Core interconnection was consummated on December 23, 1999.

On October 8, 1999, Core filed a complaint with the PSC, alleging that Verizon had breached the Core ICA by delaying the interconnection. In 2004, the PSC ruled against Verizon, concluding that Verizon was obliged, under the Core ICA, to use its existing equipment and make the Core interconnection by September 18, 1999, as Core had requested. In 2008, Verizon sought review of the PSC's adverse order by filing a complaint for declaratory relief in the District of Maryland, as it was entitled to do under the Act.³ Verizon's district court complaint (“ Civil No. 08–503”) requested a declaration that Verizon had neither violated the Core ICA nor any duty of good faith and fair dealing relating thereto. In June 2009, the court granted Verizon's request for summary judgment, thereby overturning the PSC's 2004 decision ruling Verizon in breach of the Core ICA. See Verizon Md., Inc. v. Core Commc'ns, Inc., 631 F.Supp.2d 690 (D.Md.2009). Core appealed the court's ruling, and we reversed. See Verizon Md., Inc. v. Core Commc'ns, Inc., 405 Fed.Appx. 706 (4th Cir.2010) (unpublished) (the “first appeal”). In so doing, we concluded that “Verizon had a duty to provide Core with the requested interconnection [in September 1999] and therefore breached [the Core ICA].” Id. at 714. We then remanded the matter to the district court for further proceedings, “including a determination of damages” and an assessment of “whether Verizon also breached an implied duty of good faith and fair dealing.” Id.⁴

B.

On October 13, 2011, the district court consolidated the remand proceedings in Civil No. 08–503 with a separate seven-count complaint that had been filed by Core against Verizon in the Circuit Court for Baltimore City nine years earlier, in 2002. Asserting federal question jurisdiction,Verizon had removed the state court complaint to the District of Maryland (“Civil No. 02–3180”), where, on January 8, 2003, it was administratively closed without prejudice to being reopened upon disposition of the PSC proceedings.

In its 2002 complaint, Core alleged a single count for breach of contract; three related claims for promissory estoppel, unjust enrichment, and breach of warranty; and three state law tort claims—misrepresentation (both negligent and intentional), concealment (both negligent and intentional), and unfair competition. Notably, the parties agreed in the consolidated proceedings—and also agree here—that our decision in the first appeal is entitled to preclusive effect on the issue of Verizon's liability for the breach of contract claim alleged in Core's 2002 complaint. The tort claims alleged in Civil No. 02–3180 derived from the proposition that Verizon had lied to Core about the reasons for delaying Core's interconnection in 1999, such delay constituting Verizon's breach of the Core ICA. In a similar vein, Core alleged that Verizon had improperly failed to disclose, in or about August 1999, Core's status as the Verizon “customer of record” assigned to the existing equipment at the Wire Center in Baltimore.

The district court's 2011 consolidation of the proceedings in Civil No. 08–503 and Civil No. 02–3180 engendered an early round of dispositive motions. After hearing argument, the court ruled, by order of February 2, 2012, that Core's promissory estoppel, unjust enrichment, and breach of warranty claims had been rendered superfluous by the first appeal, inasmuch as Core could recover nothing on those claims that it was not already entitled to for Verizon's breach of the Core ICA. At the same time, Core conceded that there was no independent action under Maryland law for breach of a duty of good faith and fair dealing, effectively removing that claim from the litigation. Thus, as of early 2012, the following issues remained for resolution in the consolidated proceedings: (1) Core's damages for Verizon's breach of the Core ICA; and (2) Core's tort claims for misrepresentation, concealment, and unfair competition.⁵

On remand following the first appeal, the parties, in aid of the consolidated proceedings, engaged in further discovery. Of some importance was Verizon's deposition of Bret Mingo, Core's president. Mingo testified about, among other things, Core's initial entry into the telecommunications marketplace in Maryland in 1997. With respect to Verizon's refusal in August 1999 to use the existing multiplexer and Loop Ring at the Wire Center for Core's interconnection, Mingo clarified that Verizon had never maintained that such an interconnection was impossible. Instead, Verizon had asserted that the interconnection would violate its internal policies. Mingo also acknowledged that Verizon had never advised Core that Verizon intended to unduly delay the Core interconnection or deliberately...