Qwest Commc'ns Co. v. Free Conferencing Corp.
| Decision Date | 03 January 2014 |
| Docket Number | Civil No. 10–490 (MJD/SER). |
| Citation | 990 F.Supp.2d 953 |
| Parties | QWEST COMMUNICATIONS COMPANY, LLC, Plaintiff, v. FREE CONFERENCING CORP., et al., Defendants. |
| Court | U.S. District Court — District of Minnesota |
OPINION TEXT STARTS HERE
John T. Osgood, Sandra L. Potter, and Charles W. Steese, Steese, Evans & Frankel, PC, and Jason D. Topp, CenturyLink, Counsel for Plaintiff.
Daniel J. Herber and Jonathan W. Dettmann, Faegre Baker Daniels LLP, Counsel for Defendant Free Conferencing Corp.
Larry D. Espel, Green Espel PLLP, Counsel for Defendant Audiocom, LLC.
Gregory R. Merz, Gray Plant Mooty Mooty & Bennett, PA, Counsel for Defendants Basement Ventures, LLC and Vast Communications, LLC.
Edward P. Gothard, Nowalsky, Bronston & Gothard, PLLP, and Kelly K. Pierce, Ross & Orenstein LLC, Counsel for Defendant Ripple Communications, Inc.
Kelly K. Pierce, Esq., Ross & Orenstein LLC, Minneapolis, MN, for Defendant Ripple Communications, Inc.
The above-entitled matter comes before the Court upon the Amended Report and Recommendation of United States Magistrate Judge Steven E. Rau dated November 20, 2013. All parties, with the exception of Global Conference Partners, filed objections to the Amended Report and Recommendation.
Pursuant to statute, the Court has conducted a de novo review upon the record. 28 U.S.C. § 636(b)(1); Local Rule 72.2(b). Based upon that review, the Court ADOPTS the Amended Report and Recommendation of United States Magistrate Judge Rau dated November 20, 2013. The Court further declines to dismiss, for the reasons explained in the Report and Recommendation at pages 18–20 and 26–27, Qwest's request, under Count I, for damages incurred as a result of traffic delivered through the least cost routing system. The Court also declines to certify any questions to the Minnesota Supreme Court because this is not a case involving “a close question and lack of state sources enabling a nonconjectural determination” such that the Court should “avoid its responsibility to determine all issues before it.” Perkins v. Clark Equip. Co., Melrose Div., 823 F.2d 207, 209 (8th Cir.1987) (citation omitted).
Accordingly, based upon the files, records, and proceedings herein, IT IS HEREBY ORDERED:
1. The Court ADOPTS the Amended Report and Recommendation of United States Magistrate Judge Steven E. Rau dated November 20, 2013 [Docket No. 250].
2. Defendant Free Conferencing Corporation's Motion to Dismiss First Amended Complaint [Docket No. 139] is GRANTED in part and DENIED in part as follows:
a. To the extent the Motion seeks dismissal of Count I: Tortious Interference with Contracts (Intrastate and Interstate Access Tariffs), it is DENIED;
b. The Motion is GRANTED in all other respects, and the following claims are dismissed: Count II: Common Law Unfair Competition; Count IV: Fraudulent Concealment; Count V: Tortious Interference with Qwest's LCR Contracts; and Count VI: Unjust Enrichment.
3. Defendant Audiocom LLC's Motion to Dismiss Amended Complaint [Docket No. 144] is GRANTED in part and DENIED in part as follows:
a. To the extent the Motion seeks dismissal based on lack of subject-matter jurisdiction, it is DENIED;
b. To the extent the Motion seeks dismissal of Count I: Tortious Interference with Contracts (Intrastate and Interstate Access Tariffs), it is DENIED;
c. The Motion is GRANTED in all other respects, and the following claims are dismissed: Count II: Common Law Unfair Competition; Count III: Second Unfair Competition Claim; Count IV: Fraudulent Concealment; Count V: Tortious Interference with Qwest's LCR Contracts; and Count VI: Unjust Enrichment.
4. Defendants Vast Communications and Basement Ventures LLC's Motion to Dismiss [Docket No. 166] is GRANTED in part and DENIED in part as follows:
a. To the extent the Motion seeks dismissal of Count I: Tortious Interference with Contracts (Intrastate and Interstate Access Tariffs), it is DENIED;
b. The Motion is GRANTED in all other respects, and the following claims are dismissed: Count II: Common Law Unfair Competition; Count IV: Fraudulent Concealment; Count V: Tortious Interference with Qwest's LCR Contracts; and Count VI: Unjust Enrichment.
5. Defendant Ripple Communications, Inc.'s Motion to Dismiss Pursuant to Rule 12(b)(6) and 12(b)(1) [Docket No. 176] is GRANTED in part and DENIED in part as follows:
a. To the extent the Motion seeks dismissal based on lack of subject-matter jurisdiction, it is DENIED;
b. To the extent the Motion seeks dismissal of Count I: Tortious Interference with Contracts (Intrastate and Interstate Access Tariffs), it is DENIED;
c. The Motion is GRANTED in all other respects, and the following claims are dismissed: Count II: Common Law Unfair Competition; Count III: Second Unfair Competition Claim; Count IV: Fraudulent Concealment; Count V: Tortious Interference with Qwest's LCR Contracts; and Count VI: Unjust Enrichment.
The above-captioned case comes before the undersigned on Defendant Free Conferencing Corporation's (“Free Conferencing”) Motion to Dismiss First Amended Complaint (“Free Conferencing's Mot. to Dismiss”) [Doc. No. 139], Defendant Audiocom LLC's (“Audiocom”) Motion to Dismiss Amended Complaint (“Audiocom's Mot. to Dismiss”) [Doc. No. 144], Defendants Vast Communications (“Vast”) and Basement Ventures' (collectively, “Vast/Basement Ventures”) Motion to Dismiss (Vast/Basement Ventures' Mot. to Dismiss”) [Doc. No. 166], Defendant Global Conference Partners' (“GCP”) Motion to Dismiss Qwest's First Amended Complaint (“GCP's Mot. to Dismiss”) [Doc. No. 170], and Defendant Ripple Communications, Inc.'s (“Ripple”) Motion to Dismiss Pursuant to Rule 12(b)(6) and 12(b)(1) (“Ripple's Mot. to Dismiss”) [Doc. No. 176]. The Motions were referred to the undersigned for a Report and Recommendation (“R & R”) pursuant to 28 U.S.C. § 636(b)(1)(B) and District of Minnesota Local Rule 72.1, and heard on June 27, 2013. (Order of Referral Dated April 19, 2013, “April 2013 Referral”) [Doc. No. 156]; (Order of Referral Dated May 15, 2013, “May 2013 Referral”) [Doc. No. 183]; (Minute Entry Dated June 27, 2013) [Doc. No. 235].1
The Court filed its Report and Recommendation on November 8, 2013. (Report and Recommendation Dated Nov. 8, 2013, “Nov. 8, 2013 R & R”) [Doc. No. 242]. Since then, it has discovered three typographical errors. In the interest of clarity, the Court amends its Report and Recommendation to correct those errors, which appear on pages 21, 29, and 34 of this Report and Recommendation and are denoted by footnotes.
GCP filed for bankruptcy the day after the Motions to Dismiss were heard. (Notice of Pendency of Global Conference Partners' Bankruptcy Proceeding & Automatic Stay) [Doc. No. 234]. Notwithstanding GCP's automatic bankruptcy stay, this case may still proceed against Audiocom, Basement Ventures, Free Conferencing, Ripple, and Vast. See11 U.S.C. § 362(a), Am. Prairie Constr. Co. v. Hoich, 560 F.3d 780, 789 (8th Cir.2009) () (quotations and citations omitted). Thus, although much of this R & R applies with equal force to GCP because it is in substantially the same position as the remaining Defendants (Audiocom, Free Conferencing, Basement Ventures, Vast, and Ripple, collectively “Defendants”), the R & R does not address GCP's Motion to Dismiss.
This case arises out of Plaintiff Qwest Communications Company LLC's (“Qwest”) allegations that Defendants caused Tekstar Communications, Inc. (“Tekstar”) to breach its tariffs, resulting in Qwest's payment to Tekstar of illegal charges. (First Am. Compl., “FAC”) [Doc. No. 120 ¶ 3]. Tekstar and two Defendants, Audiocom and Free Conferencing, were named in the initial Complaint. (Compl.) [Doc. No. 1]. Tekstar has since been dismissed from this case, and Qwest filed an amended Complaint against Audiocom, Free Conferencing, Vast/Basement Ventures,GCP, and Ripple. (Order Dated Jan. 15, 2013, “Tekstar Dismissal Order”) [Doc. No. 99]; (FAC).
For the reasons stated below, the Court recommends that Defendants' Motions to Dismiss be granted in part and denied in part.
I. BACKGROUNDA. Factual Background2
Qwest, a long-distance carrier (“LDC”), delivered long-distance calls to phone numbers assigned to Defendants, which are all free conferencing service companies (“FCSCs”) using a local exchange carrier (“LEC”), Tekstar. (FAC ¶ 10). The origin of a call appears to dictate the method of delivery. For the purposes of this case, Qwest's calls are delivered in one of three ways. ( Id. ¶ 80).3 First, a Qwest long-distance customer may make a phone call to a phone number associated with one of the Defendants. ( Id. ¶ 80.A). Qwest delivers the call directly to Tekstar, who then delivers the call to one of the Defendants' phone numbers. ( Id.). Second, a customer of another LDC may make a call to one of the Defendants that the customer's LDC passes to Qwest. ( Id. ¶ 80.B). Qwest then delivers the call to Tekstar, who is acting as a wholesale carrier and then delivers the call to one of the Defendant's phone numbers. ( Id.). Finally, Qwest may deliver the call through what it calls “Least–Cost Routing.” ( Id. ¶ 80.C). This method involves Qwest first delivering a call from one of its customers to another LDC. ( Id.).4 The LDC then delivers the call to Tekstar for final delivery to one of the Defendant's phone numbers. ( Id.). In this instance, the LDC provides wholesale delivery. ( Id. ¶¶ 34, 80.C) This method is used when it is cheaper for Qwest to use another LDC as an intermediary than it would be for Qwest to deliver the call directly to Tekstar—hence the term Least–Cost Routing. ( Id. ¶ 80.C.).
Companies (LECs) like Tekstar typically service customers within a certificated local exchange area, also called a local calling area.5 ( Id. ¶ 33). LDCs deliver calls from one local...
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