Venture Commc'ns Coop., Inc. v. James Valley Coop. Tel. Co., 3:20-CV-03011-RAL

CourtUnited States District Courts. 8th Circuit. United States District Courts. 8th Circuit. District of South Dakota
Writing for the CourtROBERTO A. LANGE CHIEF JUDGE
PartiesVENTURE COMMUNICATIONS COOPERATIVE, INC., Plaintiff, v. JAMES VALLEY COOPERATIVE TELEPHONE COMPANY, and NORTHERN VALLEY COMMUNICATIONS, LLC, Defendants.
Decision Date18 March 2021
Docket Number3:20-CV-03011-RAL

VENTURE COMMUNICATIONS COOPERATIVE, INC., Plaintiff,
v.
JAMES VALLEY COOPERATIVE TELEPHONE COMPANY,
and NORTHERN VALLEY COMMUNICATIONS, LLC, Defendants.

3:20-CV-03011-RAL

UNITED STATES DISTRICT COURT DISTRICT OF SOUTH DAKOTA CENTRAL DIVISION

March 18, 2021


ORDER ON PENDING MOTIONS

There are four pending motions in this case: (1) Defendants' Motion to Compel, Doc. 33, seeking to compel better responses from Plaintiff to three requests for production and one request for admission; (2) Defendants' Motion to Compel Answers to Interrogatories, Doc. 34, seeking to compel better answers from Plaintiff to three interrogatories; (3) Plaintiff's Motion for an Order Compelling Production of Documents, Doc. 35; and (4) Plaintiff's Motion for Leave to File Amended Complaint, Doc. 38. Plaintiff opposes Defendants' Motions to Compel, Docs. 37, 40, and Defendants oppose Plaintiff's Motion to Compel and motion to amend its complaint, Docs. 41, 43. The motions have been thoroughly briefed with a number of additional documents submitted into the CMECF record. Docs. 33, 33-1-33-6, 34, 34-1-34-3, 35, 36, 36-1-36-4, 37, 37-1-37-2, 38, 38-1, 39, 39-1-39-2, 40, 41, 41-1-41-5, 42, 43, 44, 45, 46. This Court cannot help but wonder how much further along this case might be if the parties had put as much effort into working cooperatively in discovery as they have in staking out positions on the discovery disputes.

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I. Motion for Leave to Amend Complaint

This Court first addresses Plaintiff's Motion for Leave to File Amended Complaint, Doc. 38. Plaintiff filed the motion within the time set by the Rule 16 Scheduling Order in this case, Doc. 29 at ¶ 4, and attached the proposed amended complaint highlighting changes as required by Local Rule. D.S.D. Civ. LR 15.1; Doc. 38-1. The proposed amended complaint adds no new party and, despite alleging civil conspiracy in the Fifth Cause of Action and for reasons explained below, no new cause of action. Doc. 38-1. Rather, the proposed amended complaint augments allegations under the heading "The Parties' Longstanding Disputes" to contend that part of Defendants' animus toward Plaintiff stems from Defendants' "access stimulation" or "traffic pumping" practices being opposed by Plaintiff's CEO Randy Houdek in his capacity as "an active member" of the Board of Managers of South Dakota Network, LLC (SDN), a provider network to which both Plaintiff and Defendants belong. Doc. 38-1 at 11-12. Plaintiff's other substantive change in the proposed amended complaint is to allege a Fifth Cause of Action of Civil Conspiracy. Doc. 38-1 at 19-20. The civil conspiracy allegations no doubt are connected to this Court's discussion in its prior Opinion and Order of civil conspiracy as an alternative ground why Defendant James Valley Cooperative Telephone Company (James Valley) should not be dismissed. Doc. 20 at 8-9.

Defendants' Opposition to Plaintiff's Motion for Leave to File Amended Complaint, Doc. 43, argues, with some merit, that a parent company like James Valley cannot form a civil conspiracy with a wholly-owned subsidiary like Northern Valley Communications, LLC, citing cases including Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 771-77 (1984) (holding that a parent corporation and its wholly owned subsidiary are incapable of conspiring with one another under § 1 of the Sherman Act); Fogie v. THORN Am., Inc., 190 F.3d 889, 898-

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99 (8th Cir. 1999) (holding that a parent corporation and its subsidiaries are incapable of committing a RICO conspiracy). Defendants also argue that the added allegations supporting Defendants' alleged motive to act tortiously or otherwise wrongly to undermine Plaintiff is "implausible" and thus leave to amend should be denied.

No South Dakota court has directly addressed whether a parent and subsidiary can form an agreement actionable as a civil conspiracy under South Dakota law. See Berg v. Johnson & Johnson, CIV. 09-4179-KES, 2013 WL 12411821, at *2 (D.S.D. Sept. 12, 2013). Indeed, there is quite a split of authority over whether a parent and subsidiary can form an agreement actionable as a civil conspiracy. Some courts find that a civil conspiracy can arise from the actions of a parent and subsidiary. See Fortis Advisors LLC v. Fishawack Med. Commc'n Ltd., No.: 20cv607-LAB-AGS, 2021 WL 308279, at *4-5 (S.D. Cal. Jan. 29, 2021) (rejecting defendants' argument that Copperweld Corp. forecloses an actionable civil conspiracy between a parent corporation and its subsidiary under California law); Stryker Corp. v. Ridgeway, Nos. 1:13-CV-1066, 1:14-CV-889, 2015 WL 5308038, at *16-17 (W.D. Mich. Sept. 10, 2015) (holding that a parent corporation and its subsidiary can commit a civil conspiracy under Michigan law because such entities are separate and distinct from one another); All Energy Corp. v. Energetix, LLC, 985 F. Supp. 2d 974, 995 (S.D. Iowa 2012) (finding no Iowa cases adopting the intracorporate immunity doctrine and declining to apply the doctrine on a motion to dismiss for failure to state a claim); ASARCO LLC v. Am. Min. Corp., 382 B.R. 49, 76-80 (S.D. Tex. 2007) (predicting that a civil conspiracy between a parent corporation and its wholly owned subsidiary is actionable in at least some circumstances under Arizona law based on 50-state survey conducted by the court); TRC Self Storage Dev., LLC v. Public Storage, Inc., No. 07-cv-00351-WDM-MEH, 2007 WL 2936322, at *3 (D. Colo. Oct. 9, 2007) (holding that plaintiff alleged enough facts to state a...

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