Firstcom, Inc. v. Qwest Corp.

• Decision Date: 09 February 2009
• Docket Number: No. 07-3548.,07-3548.
• Citation: 555 F.3d 669
• Parties: FIRSTCOM, INC., a Minnesota Corporation, Appellant, v. QWEST CORPORATION, a Colorado Corporation, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

555 F.3d 669

FIRSTCOM, INC., a Minnesota Corporation, Appellant, v. QWEST CORPORATION, a Colorado Corporation, Appellee.

No. 07-3548.

United States Court of Appeals, Eighth Circuit.

Submitted: June 9, 2008.

Filed: February 9, 2009.

David Edwin Wandling, Minnetonka, MN, for appellant.

Marianne Dolores Short, argued, Heather D. Redmond, Theresa M. Bevilacqua, on the brief, Minneapolis, MN, for appellee.

Before MURPHY, BYE, and SHEPHERD, Circuit Judges.

SHEPHERD, Circuit Judge.

Firstcom, Inc. ("Firstcom") appeals the district court's¹ order dismissing all of its claims against Qwest Corporation ("Qwest"). We affirm.

I.

Firstcom and Qwest, both providers of telecommunications services, were competitors within Minnesota. "The telecommunications industry is regulated by Chapter 5 of the Federal Communications Act of 1934, as amended by the Telecommunications Act of 1996, codified at 47 U.S.C. § 151 et seq." (the "Act"). TON Servs., Inc. v. Qwest Corp., 493 F.3d 1225, 1229 (10th Cir.2007). Prior to the amendments, "local telephone service was provided by companies holding monopolies which were subject to regulation by local governments," but, in enacting the 1996 amendments, "Congress chose to encourage competition among telephone service providers and to impose greater federal regulation." Sw. Bell Tel., L.P. v. Mo. Pub. Serv. Comm'n, 530 F.3d 676, 680 (8th Cir.2008). In addition, the Minnesota Telecommunications Act of 1996 ("MTA"), Minn.Stat. § 237.01 et seq., facilitates "competitive entry into the local telephone market." US West Commc'ns, Inc. v. Minn. Pub. Util Comm'n, 55 F.Supp.2d 968, 974 (D.Minn. 1999).

The Act categorizes telecommunications carriers and, depending on the classification, imposes duties. Pursuant to the Act, Firstcom and Qwest are both local exchange carriers ("LECs"), of which there are two types: (1) incumbent local exchange carriers ("ILECs"), and (2) competitive local exchange carriers ("CLECs").² Qwest is an ILEC, and Firstcom is a CLEC. The Act requires that Qwest, as an ILEC, "provide access to its network to [Firstcom, a CLEC] through interconnection agreements," and, in exchange, Qwest is "allowed to charge reasonable and nondiscriminatory rates for this access." Quick Commc'ns, Inc. v. Mich. Bell Tel. Co., 515 F.3d 581, 583 (6th Cir.2008); see 47 U.S.C. § 252(d). Pursuant to the Act, interconnection agreements must "be submitted for approval to the State commission," 47 U.S.C. § 252(e)(1), which, in Minnesota, is the Minnesota Public Utilities Commission ("MPUC"), see Minn.Stat. § 237.02.

Firstcom and Qwest entered into interconnection agreements. Under those agreements, Qwest sold telephone services to Firstcom. Firstcom did not remain profitable and ceased its normal business operations in 2001. At that time, Al Jaffe & Associates ("AJA") purchased all or substantially all of Firstcom's assets. In 2002, Firstcom formally dissolved. AJA later assumed the Firstcom name.

In 2004, twelve shareholders of the original Firstcom filed an action against Qwest, alleging violations of the Act and the MTA as well as Minnesota common law claims of negligence, promissory estoppel, and fraudulent misrepresentation. The action related to "secret" interconnection agreements between Qwest and two CLECs, Eschelon Telecom ("Eschelon") and McLeod USA Telecommunications ("McLeod").³ Specifically, the plaintiffs alleged that Qwest provided Eschelon and

McLeod with voicemail services and a greater level of customer service relative to billing, despite Qwest's representations to Firstcom that this was not the case. The plaintiffs further asserted that, as a result of Qwest's wrongful conduct, the original Firstcom was unable to continue its business. On September 18, 2006, the district court granted Qwest's motion for summary judgment as the shareholders lacked standing because AJA had purchased the original Firstcom's legal rights. See Firstcom, Inc. v. Qwest Corp., No. 04-995, 2006 WL 2666301, at *5-6 (D.Minn. Sept.18, 2006). The shareholders did not appeal.

On November 21, 2006, AJA, under the name of Firstcom,⁴ brought this action against Qwest asserting the same claims as the 2004 lawsuit and adding a claim of negligence. Qwest moved to dismiss the action, and the district court granted the motion. As to Firstcom's federal claim, the district court found that the claim was time-barred and that equitable tolling did not apply. The district court determined that, even assuming the MTA granted a private cause of action, Firstcom could not pursue it because the MTA expired three months before this action was filed. Finally, the district court found that Firstcom's alleged state law claims were preempted by the Act. Firstcom brings this appeal.

II.

Firstcom contends that the district court erred because none of its claims were properly dismissed. We review the district court's grant of Qwest's motion to dismiss de novo. See Owen v. Gen. Motors Corp., 533 F.3d 913, 918 (8th Cir.2008).

A.

Firstcom contends the district court improperly dismissed its federal claim because: (1) the longer four-year limitations period in 28 U.S.C. § 1658(a), rather than the two-year limitations period in section 415 of the Act, applies so that the claim is timely; (2) even if section 415 applies, the claim is timely under the doctrine of equitable tolling. Firstcom asserts that the claim was tolled until September 2006, when it first learned that it had a cause of action against Qwest via the district court's dismissal of the shareholders' suit for lack of standing. Firstcom further asserts that equitable tolling applies here because the interests that statutes of limitations seek to protect have been afforded to Qwest as it received timely notice of the claim when it was asserted in 2004 in the shareholders' lawsuit.

We find unpersuasive Firstcom's argument that the four-year limitations period in 28 U.S.C. § 1658(a) applies to its claim under the Act. Section 1658(a) provides that "[e]xcept as otherwise provided by law, a civil action arising under an Act of Congress ... may not be commenced later than 4 years after the cause of action accrues." 28 U.S.C. § 1658(a) (emphasis added). "Section 1658(a) is a `fallback' provision that applies only where no specific statute of limitations governs the particular claim at issue." Am. Cellular Corp. & Dobson Cellular Sys., 22 F.C.C.R. 1083, 1089 (2007); see N. Star Steel Co. v. Thomas, 515 U.S. 29, 34 n. *, 115 S.Ct. 1927 (1995) (describing section 1658 as a "general, 4-year limitations period for any federal statute [enacted after Dec. 1, 1990] without one of its own"); Campbell v. Amtrak, 163 F.Supp.2d 19, 22 (D.D.C.2001) (characterizing section 1658 as the "federal default statute of limitations").

Section 415(b) of the Act mandates a two-year limitations period for "[a]ll complaints against carriers for the recovery of damages...." 47 U.S.C. § 415(b). Because Firstcom's claim for damages under the Act is specifically governed by the limitations period set forth in section 415(b) of the Act, section 1658(a) has no application here. See Am. Cellular Corp., 22 F.C.C.R. at 1088 (holding that section 415 provided a two-year limitation on "[a]ll complaints against carriers for the recovery of damages" under the Act); see also AT & T Commc'ns of the Mountain States, Inc. v. Qwest Corp., No. 2:06CV00783DS, 2007 WL 1342657, at * 1 (D.Utah May 4, 2007) (unpublished) (holding that a damages claim under the Act is subject to two-year limitations period); AT & T Commc'n of the Midwest v. Qwest Corp., No. 8:06CV625, 2007 WL 2743491, at * *2-3 (D.Neb. Feb.27, 2007) (unpublished) (same). Thus, the two-year limitations period of section 415(b) governs Firstcom's federal claim. According to Firstcom's complaint, Qwest's alleged wrongful conduct occurred no later than 2002, more than two years prior the filing of the complaint in 2006.

However, Firstcom also contends that its claim is rendered timely by the doctrine of equitable tolling. We review de novo the district court's determination that equitable tolling is inapplicable to the statute of limitations here. See E.J.R.E. v. United States, 453 F.3d 1094, 1098 (8th Cir.2006). "The doctrine of equitable tolling permits a plaintiff to sue after the statutory time period has expired if he has been prevented from doing so due to inequitable circumstances." Pecoraro v. Diocese of Rapid City, 435 F.3d 870, 875 (8th Cir.2006) (quotation omitted). "Because statutes of limitations protect important interests of certainty, accuracy, and repose, equitable tolling is an exception to the rule, and should therefore be used only in exceptional circumstances." Motley v. United States, 295 F.3d 820, 824 (8th Cir. 2002) (quotation omitted); see Riddle v. Kemna, 523 F.3d 850, 857 (8th Cir.2008) ("Equitable tolling is an exceedingly narrow window of relief." (quotation omitted)); Pecoraro, 435 F.3d at 875 ("Courts generally require strict compliance with a statute of limitations and rarely invoke doctrines such as equitable tolling to alleviate a plaintiff from a loss of his right to assert a claim.").

Firstcom, as "[t]he party ... claiming the benefit of an exception to the operation of a statute of limitations[,] bears the burden of showing that [it] is entitled to [equitable tolling]." Motley, 295 F.3d at 824. This generally involves "establishing two elements: (1) that [it] has been pursuing [its] rights diligently, and (2) that some extraordinary circumstance stood in [its] way." Riddle, 523 F.3d at 857 (quoting Walker v. Norris, 436 F.3d 1026, 1032 (8th Cir.2006)). According to Firstcom's complaint, "[b]eginning in the fall and winter of 2002 representatives of Firstcom first became aware of ... improper, illegal, and anti-competitive conduct by Qwest in relation to its business dealings with CLECs generally, and Firstcom specifically." Compl. ¶ 23. In 2004, shareholders of the former Firstcom brought suit alleging the same...