Unigestion Holdings S.A. v. UPM Tech., Inc.

Citation580 F.Supp.3d 932
Decision Date18 January 2022
Docket NumberCase No. 3:15-cv-185-SI
Parties UNIGESTION HOLDINGS, S.A., d/b/a Digicel Haiti, Plaintiff, v. UPM TECHNOLOGY, INC., d/b/a UPM Telecom, Inc., and UPM Marketing, Inc.; Benjamim Sanchez a/k/a Benjamin Sanchez Murillo; Baltazar Ruiz; Tyler Allen; and Duy "Bruce" Tran, Defendants.
CourtU.S. District Court — District of Oregon

Robert C.L. Vaughan, Cherine Smith Valbrun, and Leah B. Storie, Kim Vaughan Lerner llp, One Financial Plaza, Suite 2001, Fort Lauderdale, FL 33394; and Anne M. Talcott and Kathryn E. Kelly, Schwabe, Williamson & Wyatt pc, 1211 SW Fifth Avenue, Suite 1900, Portland, OR 97204. Of Attorneys for Plaintiff.

Christopher W. Savage, Davis Wright Tremaine llp, 1919 Pennsylvania Avenue NW, Suite 800, Washington, DC 20006; and Kathryn P. Salyer, Eleanor A. DuBay, and Blake Van Zile, Tomasi Salyer Martin, 121 SW Morrison Street, Suite 1850, Portland, OR 97204. Of Attorneys for Defendants.


Michael H. Simon, District Judge.

Plaintiff Unigestion Holdings, S.A., doing business as Digicel Haiti, Inc. (Digicel Haiti), provides mobile telecommunications services in Haiti. In its Third Amended Complaint (ECF 200), Digicel Haiti asserts claims of fraud, conversion, and unjust enrichment. Digicel Haiti brings these claims against UPM Technology, Inc. (UPM), Duy "Bruce" Tran, Benjamin Sanchez, Baltazar Ruiz, and Tyler Allen.1 UPM is an Oregon corporation that, among other things, facilitated international calls from the United States to other countries.

Digicel Haiti contends that UPM defrauded Digicel Haiti. At its core, Digicel Haiti asserts that UPM linked calls from people in the United States seeking to call people in Haiti to Digicel Haiti's communications network in a manner that resulted in lower rates than what Digicel Haiti typically charged for inbound international calls. The parties agree that UPM purchased bulk quantities of Digicel Haiti's SIM cards from third-party vendors.2 UPM would then recharge or "top off" a SIM card by paying other third-party vendors, who would remit at least a portion of that payment to Digicel Haiti, along with specific identifying information for that card. After receiving and recharging the SIM cards issued by Digicel Haiti, UPM would install multiple Digicel Haiti SIM cards in UPM's computer servers (known as "SIM Units"), which were typically in Oregon.

After this, the alleged fraud would take one of two possible forms. Digicel Haiti refers to one form as "bypass fraud," which UPM calls "in-country bypass" or simply as "bypass." For bypass, UPM would use its SIM Units to take calls that began in the United States and transmit them via the internet, in Voice-over-Internet Protocol (VoIP) format, to a Gateway device maintained and operated by UPM in Haiti. A Gateway device can contain up to sixteen radios, or radio transmitters. After being received by the UPM Gateway device in Haiti, the call (which began in the United States) would be transmitted to Digicel Haiti's communications network in Haiti, for termination in Haiti.3 Through this operation, a call that began in the United States would appear to Digicel Haiti to be a local call that had begun in Haiti. Thus, Digicel Haiti would only charge that call as a local call (and reduce the remaining balance on the associated SIM card accordingly), rather than as a more expensive inbound international call. UPM does not deny that it engaged in this practice but denies that it constitutes fraud.4

Under the second form, UPM would obtain Digicel Haiti SIM cards and install multiple SIM cards in UPM's SIM Units, as described above. UPM would then register these cards with Digicel Haiti for Digicel Haiti's discounted program known as "Roam Like You're Home" (RLYH). When a call that originates in the United States intended for Haiti reached UPM's switches in the United States, UPM (again using its SIM Unit) would route that call ultimately to Digicel Haiti's network in Haiti, typically through a Digicel Haiti roaming partner. Digicel Haiti's network would recognize that call as having begun in the United States but would charge that call (and reduce the value remaining on the SIM card accordingly) at the lower rate under Digicel Haiti's RLYH program, rather than at the higher rate for inbound international roaming calls. Digicel Haiti contends that its RLYH program was only intended to be used by individual subscribers to that program and not for use in UPM's aggregated SIM Unit model. Thus, Digicel Haiti refers to this practice as "RLYH fraud." UPM does not deny that it engaged in this practice but denies that it constitutes fraud.

Digicel Haiti originally alleged "that when UPM transmits a call to Digicel's network, UPM conceals both the original telephone number associated with the non-Digicel subscriber and the fact that the call comes from UPM's Servers [Units] rather than an individual cellular handset device." See Unigestion Holding, S.A. v. UPM Tech., Inc. , 160 F. Supp. 3d 1214, 1227 (D. Or. 2016). Digicel Haiti also originally alleged that "UPM accomplishes the concealment both by manipulating the SIM card data to ‘package’ the data with the non-Digicel customer's call and by using software to replicate the calling patterns of Digicel's local Haitian subscribers. This replication avoids any abnormal call volume to any particular Digicel cellular tower, which Digicel could detect, or flag, as a sign of ‘bypass’ operations." Id. As discussed below, Digicel Haiti has produced no evidence that UPM "manipulated" the SIM card data to "disguise" the original telephone number associated with the person in the United States who began the call to Haiti. UPM has shown that Digicel Haiti's network did not request that information and there was no place for UPM to provide it. Digicel Haiti presented no evidence to the contrary.

As also discussed below, there is a factual dispute over whether UPM used software specially designed to simulate (or replicate) the calling patterns of Digicel Haiti's local Haitian subscribers to mislead Digicel Haiti and avoid detection by Digicel Haiti (and deactivation of the associated SIM cards). UPM had this software, often called "human behavior software," but whether it used this software to mislead Digicel Haiti is disputed. Digicel Haiti has presented evidence that UPM used human behavior software to direct and vary the use of specific SIM cards (including the timing and duration of calls using a specific SIM card) to avoid detection by Digicel Haiti. If Digicel Haiti detected that a SIM card was being used in either of the two ways described above, Digicel Haiti would deactivate (or de-authenticate) that SIM card from further use.

In Defendants’ Amended Answer, Affirmative Defenses, and Counterclaims to Plaintiff's Third Amended Complaint (ECF 244), UPM asserts several counterclaims against Digicel Haiti. UPM alleges that Digicel Haiti violated several sections of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151, et seq. (Communications Act). UPM contends that Digicel Haiti's "roaming" agreements with several United States telecommunications carriers made Digicel Haiti subject to the Communications Act and that Digicel Haiti's deactivating (or de-authenticating) the Digicel Haiti SIM cards that UPM bought from third parties constitutes an unlawful restriction on the "resale" of telecommunication services in violation of the Communications Act. UPM also asserts counterclaims alleging breach of implied-in-fact contract, money had and received, conversion, unjust enrichment, and intentional interference with prospective economic advantage.

The Court has set a ten-day jury trial to begin on April 4, 2022. Now before the Court are five motions filed by the parties. First, UPM, joined by the Individual Defendants, seeks summary judgment against all claims asserted by Digicel Haiti (ECF 255). Second, the Individual Defendants move for summary judgment, asserting that they cannot be held personally liable, even if Digicel Haiti were to prevail against UPM (ECF 259). Third, Digicel Haiti seeks summary judgment against all counterclaims asserted by UPM (ECF 264). Fourth, Digicel Haiti moves for partial summary judgment to establish Defendants’ liability for fraud (ECF 269). Finally, Digicel Haiti, through a Daubert motion and alternative motion in limine , seeks to exclude or limit the testimony of UPM's expert witness Joseph Gillan, which the parties agree is relevant only to UPM's counterclaims (ECF 272).


Rule 56(a) of the Federal Rules of Civil Procedure states that a party is entitled to summary judgment if the "movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party has the burden of establishing the lack of a genuine dispute of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards Inc. v. Sixshooters Inc. , 251 F.3d 1252, 1257 (9th Cir. 2001). Although "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge ... ruling on a motion for summary judgment," the "mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient ...." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 252, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation and quotation marks omitted).

The first sentence of Rule 56(a) provides: "A party may move...

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