MCI Telecommunications Corp. v. Teleconcepts, Inc.

Citation71 F.3d 1086
Decision Date08 December 1995
Docket NumberNo. 94-5426,94-5426
Parties, 33 Fed.R.Serv.3d 687 MCI TELECOMMUNICATIONS CORPORATION v. TELECONCEPTS, INCORPORATED, Defendant/Third-Party Plaintiff-Appellant, v. BELL OF PENNSYLVANIA, Third-Party Defendant-Appellee, Teleconcepts, Incorporated, Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Charles J. Casale, Jr. (argued), Trenton, New Jersey, for Defendant/Third Party Plaintiff-Appellant Teleconcepts, Inc.

Kenneth M. Denti (argued), Duane, Morris & Heckscher, Marlton, New Jersey, for Plaintiff-Appellee MCI Telecommunications Corp.

Lisa M. Bellino (argued), Marks, O'Neill, Reilly & O'Brien, P.C., Philadelphia, PA, for Third-Party Defendant-Appellee Bell of Pennsylvania.

Before: GREENBERG, NYGAARD and McKEE, Circuit Judges.


McKEE, Circuit Judge.

MCI Telecommunications ("MCI"), a long distance telecommunications service provider, has sued Teleconcepts to recover the cost of services MCI provided under MCI's Federal Communications Commission tariff ("FCC tariff"). Teleconcepts raised the untimely service of the complaint and the statute of limitations as defenses, and also brought a third-party action against Bell of Pennsylvania ("Bell"), Teleconcepts' local telephone exchange carrier. Bell disclaimed liability under the terms of its Pennsylvania Public Utility Commission Tariff ("PUC Tariff"). The district court held that the action was not time-barred and that "good cause" existed for the late service of the complaint. The court also granted summary judgment to both MCI and Bell holding that the FCC and PUC tariffs both placed the responsibility for unauthorized telephone calls on Teleconcepts.

Because we find that MCI's action was partially barred by the statute of limitations, and that the doctrine of primary jurisdiction required the district court to transfer the third-party complaint to the Pennsylvania Public Utility Commission, we will reverse in part and remand for further proceedings.


Teleconcepts owns coin operated telephones--commonly referred to as "pay phones"--that it places on the premises of various businesses. MCI supplied long distance telephone service to Teleconcepts from January 1988 through March 1990 under the terms and conditions of the tariff MCI had filed with the Federal Communications Commission. When Teleconcepts' pay phones are used, Teleconcepts incurs a cost to Bell of Pennsylvania for the use of Bell's telephone lines. The monthly bill for the line charges also includes the customer's long distance charges for the preceding month. Teleconcepts' November 1989 bills from MCI for long distance calls included long distance service charges for international telephone calls in excess of $7,000. Teleconcepts was billed under six different account numbers, which presumably represent six different Teleconcepts' pay phones. The November charges exceeded prior months' long distance charges to such an extent that Teleconcepts was certain that a billing error had occurred, and so informed Bell. However, since Bell was merely a conduit for billing long distance charges, it responded by telling Teleconcepts to contact its long distance carrier--MCI.

Teleconcepts contacted MCI and informed it of the numerous long distance calls to the Dominican Republic and Puerto Rico that Teleconcepts believed had not been made from any of its phones and requested a credit. When MCI refused, Teleconcepts told MCI that it would not pay for these long distance charges, but MCI continued to provide long distance service. When Teleconcepts received its December bills it discovered over $13,000 in doubtful charges to Puerto Rico and the Dominican Republic. Teleconcepts again refused to pay these charges.

On December 27, 1989, MCI notified Teleconcepts that its long distance service was terminated. However, for some reason, MCI failed to terminate long distance service until the following March. In the interim, Teleconcepts continued to receive bills containing exorbitant long distance charges, and Teleconcepts continued to refuse to pay. Finally, MCI sued Teleconcepts to recover the amount of unpaid charges for long distance services MCI had provided to Teleconcepts through March 1990--$47,565.84.

Eventually, Teleconcepts came to believe that the questioned telephone calls had resulted from a fraudulent process known as "hacking." 1 This occurred when a person called an 800 number on a pay phone and remained silent until the receiving party hung up. A second dial tone would then be given to the 800 caller who could then call anywhere he or she desired without placing any additional coins in the telephone.

On January 15, 1992, MCI filed its initial summons and complaint in an effort to collect the unpaid charges from Teleconcepts. MCI attempted service through the Mercer County Sheriff's Department, but its initial attempt was unsuccessful. Service was eventually made on June 25, 1992. Teleconcepts responded by filing a third-party complaint against Bell of Pennsylvania in which it alleged that Bell was responsible for the defect in the dial tone that allowed the illegal "hacking" and that Bell should therefore indemnify Teleconcepts for any liability it may have to MCI. 2 Teleconcepts eventually moved to dismiss the complaint because MCI had failed to effect service of process within 120 days of filing of the complaint as required by Federal Rule of Civil Procedure 4(j). In an order dated September 15, 1992, the district court denied Teleconcepts' motion to dismiss MCI's complaint finding that "good cause" excused the late service.

Subsequently, the parties filed cross-motions for summary judgment. Teleconcepts claimed that MCI's action was untimely since it was not filed within the two year statute of limitations contained in the Communications Act. Teleconcepts argued that MCI's cause of action accrued either when it refused to pay the November 1989 bills, or at the latest, on December 27, 1989, when MCI gave notice that Teleconcepts' long distance services were terminated. MCI countered by arguing that its action was timely because Teleconcepts' services continued until March 1990 despite the December 27, 1989 disconnect notice. MCI further argued that under a 30 day payment provision of its federal tariff, final payment of the bills would not become due until either April 1990, or January 27, 1990, at the earliest even accepting Teleconcepts' position. Thus, MCI claimed the operative date for commencing an action was either March or April of 1992, or at the earliest, January 27, 1992.

The district court denied Teleconcepts' motion for summary judgment in a memorandum opinion and order dated December 28, 1993. Additionally, the court held that MCI's federal tariff placed responsibility for unauthorized calls on Teleconcepts, and thus, granted MCI's cross-motion for summary judgment. The court also granted MCI's request for attorney's fees and, in a separate memorandum opinion and order dated February 25, 1994, determined the reasonable amount of such fees to be $11,812.50. The court also held that the PUC tariff placed responsibility for unauthorized calls on payphone owners, and therefore granted summary judgment in favor of Bell and against Teleconcepts in a memorandum and order entered on June 20, 1994.

On appeal, Teleconcepts challenges the district court's denial of its motion to dismiss for failure to timely serve the complaint, the denial of its motion for summary judgment on the statute of limitations defense, the grant of summary judgment in favor of Bell, and the amount of the attorney's fee award.

A. Appellate Jurisdiction

We must first determine whether we have jurisdiction to review the issues raised by Teleconcepts on appeal. The notice of appeal reads as follows:

Teleconcepts, Inc., defendant-third party plaintiff appeals to the United States Court of Appeals for the Third Circuit from an order of summary judgment disposing the remaining claims of the District Court for the District of New Jersey entered in this case June 20, 1994, in favor of third party defendant, Bell of Pennsylvania and December 28, 1993 in favor of plaintiff, MCI Telecommunications, Inc.

App. at 1.

Federal Rule of Appellate Procedure 3(c) provides, in pertinent part, that a notice of appeal "must designate the judgment, order or part thereof appealed from...." Fed.R.App.P. 3(c). If a party does not satisfy the requirements of Federal Rule of Appellate Procedure 3(c), then the appellate court does not acquire jurisdiction over the undesignated issues. United States v. Rivera Constr. Co., 863 F.2d 293, 298 (3d Cir.1988). Even though the notice of appeal does not mention the September 15, 1992 order (denying Teleconcepts' motion to dismiss) or the district court's February 25, 1994 memorandum and order (calculating MCI's award of reasonable attorney's fees), Teleconcepts challenges both of these decisions in its brief to this court. MCI argues that we did not acquire jurisdiction over these issues since these orders are neither directly nor indirectly referred to in the notice of appeal. Appellee's brief at 6.

"Our jurisprudence liberally construes notices of appeals." Drinkwater v. Union Carbide Corp., 904 F.2d 853, 858 (3d Cir.1990). Thus, we have held that it is proper to exercise appellate jurisdiction over orders not specified in the notice of appeal if " 'there is a connection between the specified and unspecified order, the intention to appeal the unspecified order is apparent and the opposing party is not prejudiced and has a full opportunity to brief the issues.' " Lusardi v. Xerox Corp., 975 F.2d 964, 972 (3d Cir.1992) (quoting Williams v. Guzzardi, 875 F.2d 46, 49 (3d Cir.1989)). These factors are present here.

We have repeatedly held that " 'since ... only a final judgment or order is appealable, the appeal of a final judgment draws into question all...

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