Northern Valley Commc'ns LLC v. Qwest Commc'ns Corp., Civ. 09-1004.

• Decision Date: 29 March 2010
• Docket Number: No. Civ. 09-1004.,Civ. 09-1004.
• Citation: 711 F.Supp.2d 1018
• Parties: NORTHERN VALLEY COMMUNICATIONS, LLC, Plaintiff, Counterclaim Defendant,v.QWEST COMMUNICATIONS CORPORATION, Defendant, Counterclaim Plaintiff,Global Conference Partners, LLC, Counterclaim Defendant.
• Court: U.S. District Court — District of South Dakota

711 F.Supp.2d 1018

NORTHERN VALLEY COMMUNICATIONS, LLC, Plaintiff, Counterclaim Defendant,v.QWEST COMMUNICATIONS CORPORATION, Defendant, Counterclaim Plaintiff,Global Conference Partners, LLC, Counterclaim Defendant.

No. Civ. 09-1004.

United States District Court,

D. South Dakota,

Northern Division.

March 29, 2010.

James M. Cremer, Bantz, Gosch & Cremer, LLC, Aberdeen, SD, Joseph P. Bowser, Michael B. Hazzard, Ross A. Buntrock, Arent Fox LLP, Washington, DC, for Plaintiffs.

Christopher Wayne, Madsen Thomas John Welk, Boyce Greenfield Pashby & Welk, Sioux Falls, SD, Charles W. Steese, Steese, Evans & Frankel, P.C., George Baker Thomson, Jr., Qwest Services Corporation, Denver, CO, for Defendants.

Anthony Lee Osborn, Jeana L. Goosmann, Jeremy J. Cross, Goosmann Law Firm, P.L.C., Sioux City, IA, Jennifer P. Bagg, Mark James O'Connor, Lampert, O'Connor & Johnston, P.C., Washington, DC, for Counterclaim Defendant and Counter-Claimant.

OPINION AND ORDER

CHARLES B. KORNMANN, District Judge.

INTRODUCTION

Northern Valley filed this diversity action to collect for amounts allegedly due from Qwest for providing originating and terminating telephone access services. The background of this case is set forth in Northern Valley Communications, LLC v. Qwest Communications Corp., 659 F.Supp.2d 1062 (D.S.D.2009).

Briefly, Northern Valley is a competitive local exchange carrier (“CLEC”) that offers local telephone service in South Dakota. Qwest, for the purposes of this action, is an interexchange carrier (“IXC”) that provides long distance service to its customers. Northern Valley provides “terminating switched access service” to Qwest to enable Qwest to deliver its customers' long distance calls to Northern Valley's customers.

Global Conference is a California corporation that provides conference calling services to IXC's customers for low or no fees. The relationship between Global Conference and Northern Valley is disputed. Northern Valley alleges that Global Conference is an end user of Northern Valley's telephone lines, entitling Northern Valley to bill Qwest for terminating calls made to the telephone lines leased by Global Conference at the rate set forth in its tariff. Qwest alleges in its counterclaims that Global Conference is not an end user and Northern Valley is therefore not entitled to bill Qwest for terminating calls pursuant to Northern Valley's tariffs.

Northern Valley alleges Qwest has failed to pay switched access charges to complete calls from Global Conference's customers. Qwest filed counterclaims against Northern Valley and Global Conference alleging that, by virtue of their relationship, they have engaged in a “traffic pumping” scheme. The alleged scheme involves Northern Valley providing telephone numbers to Global Conference, Global Conference advertising free conference calls in an attempt to generate long distance calls through Qwest to Northern Valley's numbers, Northern Valley billing Qwest for call termination, and splitting the profits with Global Conference as “marketing fees.”

Northern Valley moved (Doc. 58) to dismiss Counts IV, V, and VI of Qwest's counterclaims against Northern Valley for lack of standing ¹ Qwest moved (Doc. 86) to dismiss Count III of Global Conference's counterclaims against Qwest for failure to state a claim.

RELATED CASES

This is just one of many cases involving the same controversy that have been filed in the District of South Dakota and elsewhere. The IXCs refer to these cases as traffic pumping cases. The ILECs refer to them as conference calling cases.

The first of these cases filed in the District of South Dakota were Northern Valley Communications, LLC v. MCI Communications Services, Inc., d/b/a Verizon Business Services, Civ. 07-1016 and Sancom, Inc. v. MCI Communications Services, Inc., d/b/a Verizon Business Services, Civ. 07-4106. Verizon filed counterclaims and third party claims against Global Conference Partners, LLC, d/b/a/ Quality Conferencecall.com, in one case and Freeconferencing Corp and Citrix Online LLC ² in the other case. The counterclaim defendants in turn filed counterclaims against Verizon. Those cases were consolidated under Civ. 07-1016KES.

Sancom filed a similar action against Qwest Sancom, Inc. v. Qwest Communications Corp., Civ. 07-4147KES. Qwest filed counterclaims and third party claims against FreeConference in that action.

Plaintiffs and third party defendants in Civ. 07-1016 and Civ. 07-4147 filed motions to dismiss Verizon's counterclaims and third party claims on the basis of the filed rate doctrine. They also claimed that the counterclaims failed to state a claim. They further contended that the counterclaims were foreclosed by the FCC's decision in Qwest Communications Corp v. Farmers & Merchants Mutual Telephone Company, Mem Op. & Order, File No. EB-07-MD-001, FCC 07-175, 22 F.C.C.R. 17973 (Oct. 2, 2007) (“ Farmers I ”). Finally, Global moved to have the case transferred to the FCC pursuant to the primary jurisdiction doctrine. Judge Schreier denied the motions Northern Valley v. MCI, 2008 WL 2627519 (D.S.D. June 26, 2008), and Sancom v. Qwest, 2008 WL 2627465 (D.S.D. June 26, 2008).

Verizon moved in Civ. 07-1016 to dismiss the third party defendant's counterclaims against Verizon for failure to state a claim and lack of standing. Judge Schreier denied the motion to dismiss for failure to state a claim but granted the motion to dismiss the requests for injunctive and declaratory relief for lack of standing. Northern Valley v. MCI, 2009 WL 763570 (D.S.D. March 19, 2009).

Northern Valley, Sancom, and Verizon filed stipulations for dismissal as to their claims and counterclaims.

The matter was still pending as to Verizon's claims against Global Conference and FreeConference and their counterclaims against Verizon. MCI Communications Services, Inc., d/b/a Verizon Business Services v. Global Conference Partners, LLC, d/b/a Quality ConferenceCall.Com and Free Conference Corp, Civ. 07-1016KES. However, the parties stipulated for the dismissal of those claims and counterclaims on March 22, 2010. Sancom v. MCI, Civ 07-4107, which had been consolidated with 07-1016, is still pending.

Qwest has filed a motion for partial summary judgment in Civ. 07-4147 on the basis, inter alia, of the filed rate doctrine. Sancom and Free Conferencing filed motions for summary judgment on the merits and an amended motion for summary judgment. Those motions are pending.

Sancom also filed an action against Sprint Sancom, Inc. v. Sprint Communications Company Limited Partnership, Civ. 07-4107KES. Sprint filed counterclaims and third party claims against Free Conferencing Corporation of America and Telejunctions LLC. Sancom filed a motion to dismiss Sprint's counterclaims under the primary jurisdiction doctrine and, alternatively, moved to stay the counterclaims pending referral to the FCC. The third party defendants also moved to dismiss Sprint's third party claims. Prior to transfer of the case to Judge Schreier Judge Piersol denied the motions pending the FCC's reconsideration of Farmers I. Sprint's motion for judgment on the pleadings as to breach of implied contract and unjust enrichment claims on the basis of the filed rate doctrine is pending.

Northern Valley filed a similar action against Sprint Northern Valley Communications, LLC v. Sprint Communications Company Limited Partnership, Civ. 08-1003KES. Sprint filed counterclaims and third party claims against Global Conference Partners. Northern Valley and Global Conference moved to dismiss Sprint's claims under the filed rate doctrine, on the basis of failure to state a claim, and on the basis of the FCC's decision in Farmers I. Those motions were denied on July 30, 2008, Doc. 25. Northern Valley filed a motion for partial summary judgment, seeking payment for calls terminated to “traditional” customers, i.e. non-conference calling traffic. Sprint filed a motion for judgment on the pleadings as to breach of implied contract and unjust enrichment claims on the basis of the filed rate doctrine. Those motions are pending.

Splitrock Properties filed an action against Qwest Splitrock Properties, Inc. v. Qwest Communications Corporation, Civ. 08-4172KES. Qwest filed counterclaims and a third party claim against Free Conferencing. Free Conferencing filed counterclaims against Qwest. Qwest's motion to dismiss Free Conferencing's counterclaims and motion to join Alliance Communications Cooperative, Inc. as a counterclaim defendant are pending.

Apparently unhappy with the decisions issued in the District of South Dakota, Sancom and Northern Valley filed actions against AT & T, Qwest, and XO in the Southern District of New York. Those cases were transferred to the District of South Dakota. Those cases are Sancom, Inc. v. AT & T Corp., Civ, 08-4211KES, Northern Valley Communications, LLC v. AT & T Corp., Civ 09-1003CBK, and Northern Valley Communications, LLC v. Qwest Communications, Civ 09-1004CBK.³ A motion for judgment on the pleadings based upon the filed rate doctrine is pending in Sancom v. AT & T, Civ. 08-4211. As previously set forth, motions to dismiss claims filed by both Northern Valley and Qwest are pending in the present action, Civ. 09-1004.

Splitrock Properties filed an action against Sprint, Splitrock Properties, Inc. v. Sprint Communications Company Limited Partnership, Civ. 09-4075KES. Sprint filed counterclaims against Splitrock in that action. Sprint's motion to dismiss some of the plaintiff's claims based upon the filed rate doctrine is pending.

United States District Judge Joan N. Ericksen issued an opinion in July of 2009, staying and referring to the FCC Tekstar Communications, Inc. v. Sprint Communications Company, D. Minn. Civ 08-1130, Doc. 145 (now assigned to Chief Judge Michael J. Davis). Also pending in the District of Minnesota are Qwest v. Tekstar, D, Minn. Civ. 10-490 MJD, and Mid-Communications, Inc. v. Sprint, D.Minn. 09-3496-MJD (formerly District of Virginia No....