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Northern Valley Communications, LLC v. MCI Communications Services

March 19, 2009

NORTHERN VALLEY COMMUNICATIONS, LLC, A SOUTH DAKOTA LIMITED LIABILITY COMPANY, PLAINTIFF,
v.
MCI COMMUNICATIONS SERVICES, INC., D/B/A VERIZON BUSINESS SERVICES, A DELAWARE CORPORATION, DEFENDANT,
GLOBAL CONFERENCE PARTNERS, LLC, D/B/A QUALITY CONFERENCECALL.COM, COUNTERCLAIM DEFENDANT.
SANCOM, INC., A SOUTH DAKOTA CORPORATION, PLAINTIFF,
v.
MCI COMMUNICATIONS SERVICES, INC., D/B/A VERIZON BUSINESS SERVICES, A DELAWARE CORPORATION, DEFENDANT.
FREECONFERENCING CORP., A NEVADA CORPORATION, AND CITRIX ONLINE LLC, A DELAWARE LIMITED LIABILITY COMPANY, COUNTERCLAIM DEFENDANTS.



The opinion of the court was delivered by: Karen E. Schreier Chief Judge

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS COUNTERCLAIM DEFENDANT'S COUNTERCLAIMS

Plaintiffs Northern Valley Communications, LLC (Northern Valley) and Sancom, Inc. each brought suit against MCI Communications Services, Inc., d/b/a Verizon Business Services (Verizon), seeking to obtain payment for services they allegedly provided to Verizon. Verizon filed a thirteen-count counterclaim against plaintiffs and also against Global Conference Partners, LLC (GCP), Free Conferencing Corp., and Citrix Online LLC. GCP, in turn, filed a five-count counterclaim against Verizon. Verizon moves to dismiss GCP's counterclaims. GCP opposes the motion.

BACKGROUND

Viewed in the light most favorable to GCP, the nonmoving party, and as is relevant to this order, the facts are as follows: Northern Valley is a South Dakota local exchange company that provides telecommunication services to its customers and originating and terminating access services to long-distance companies.*fn1 Verizon is a long-distance carrier that has utilized the originating and terminating services provided by Northern Valley since 2000.

GCP is a small business that provides teleconferencing services to its customers. GCP offers standard conference calling services for free and premium services for a fee. GCP maintains a long-term relationship with Northern Valley. Pursuant to this relationship, customers using GCP's free standard conference calling services are given a telephone number to dial. They use their own long-distance carriers to call the number, which connects them to a conference call bridge located on the Northern Valley network. Conference call participants are connected to each other at and by the bridge. Northern Valley then charges the long-distance carrier that transmitted the call to the bridge the normal terminating access fee. Northern Valley pays GCP a marketing fee based on the amount of conference call traffic generated by its teleconferencing services.

At some point, Verizon became aware of GCP's relationship with Northern Valley, that GCP's teleconferencing services were competing with Verizon's conferencing services, and that some of Verizon's long-distance customers were using the long-distance services provided by Verizon to place calls to GCP's conference call bridge in order to use GCP's teleconferencing services. Then, GCP alleges, Verizon began engaging in acts of illegal self-help with the intent of harming both GCP and Northern Valley. Specifically, GCP alleges that Verizon refused to pay Northern Valley some or all of the access charges associated with calls to GCP's conference call bridge while not refusing to pay other local exchange carriers access charges associated with calls to GCP bridges located on other networks. As a result, GCP alleges, Verizon is indebted to Northern Valley, and Verizon knew that by failing to pay Northern Valley, GCP would, in turn, suffer damage from lost revenues.

Northern Valley filed suit against Verizon seeking to collect unpaid access charges. Verizon then asserted counterclaims against Northern Valley and GCP, alleging that they participated in an unlawful scheme to increase traffic and access charges billed to Verizon. GCP counterclaimed against Verizon, alleging that Verizon tortiously interfered with GCP's business relations with Northern Valley, engaged in unjust or unreasonable practices in violation of § 201(b) of the Communications Act, and engaged in unreasonable discrimination in violation of § 202(a) of the Communications Act. GCP seeks monetary, injunctive, and declaratory relief on its counterclaims. Verizon moves to dismiss all of GCP's counterclaims.

STANDARD

In considering a motion to dismiss a counterclaim, whether on the ground of lack of subject matter jurisdiction or for failure to state a claim upon which relief can be granted, the court assumes all facts alleged in the counterclaim are true and construes the counterclaim liberally in the light most favorable to the claimant. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed. 2d 90 (1974), overruled on other grounds by Davis v. Scherer, 468 U.S. 183, 191, 104 S.Ct. 3012, 3017, 82 L.Ed. 2d 139 (1984). The court should dismiss only if "it appears beyond a doubt that the [claimant] can prove no set of facts which would entitle the [claimant] to relief." Coleman v. Watt, 40 F.3d 255, 258 (8th Cir. 1994). "The issue is not whether a claimant will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims. Indeed it may appear on the face of the pleadings that a recovery is very remote and unlikely but that is not the test." Scheuer, 416 U.S. at 236.

DISCUSSION

I. Rule 12(b)(6)--Failure to State a Claim

Verizon argues that GCP has failed to state a claim upon which relief can be granted with respect to its tortious interference with business relations claim. To prove a claim for tortious interference, GCP must show: (1) the existence of a valid business relationship or expectancy between GCP and Northern Valley; (2) knowledge by Verizon of the relationship or expectancy; (3) an intentional unjustified act of interference on the part of Verizon; (4) proof that the interference caused the harm sustained; and (5) damages. See St. Onge Livestock Co. v. Curtis, 650 N.W.2d 537, 541 (S.D. 2002).

Verizon admits that GCP has alleged (1) the existence of a valid business relationship between GCP and Northern Valley, (2) Verizon's knowledge of this relationship, and (3) an intentional unjustified act of interference by Verizon. Verizon argues, however, that GCP has failed to allege a causal link and damages. Upon review of GCP's counterclaims, the court finds that GCP has satisfied the requirements of Federal Rule of Civil Procedure 8(a)(2). "[Rule] 8(a)(2) requires only 'a short and plain statement of the claim showing that the pleader is entitled to relief.' Specific facts are not necessary; the statement need only 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.' " Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 2200, 167 L.Ed. 2d 1081 (2007) (quoting Fed. R. Civ. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964, 167 L.Ed. 2d 929 (2007)).

GCP's allegations give Verizon notice that GCP claims that Verizon engaged in acts of illegal self-help that caused harm to GCP. GCP alleges that Verizon engaged in these acts because it was "opposed to the relationship between Northern Valley and GCP, as well as opposed to the competition with its services [posed by GCP]." Counterclaim Defendant GCP's Answer to Verizon's Counterclaims, Counterclaims and Jury Demand (GCP's Counterclaims), Docket 86 ¶ 35. GCP further alleges that Verizon acted with "the intent of harming both GCP and Northern Valley." GCP's Counterclaims ¶ 36. For example, GCP alleges that Verizon refused to pay Northern Valley for the terminating access charges associated with calls made to the GCP conference call bridge located on Northern Valley's network. GCP's Counterclaims ¶¶ 37, 38b, 38d. And, GCP alleges, "[b]y failing to pay Northern Valley, Verizon knew that GCP would, in turn, suffer damage from the lost revenues." GCP's Counterclaims ¶ 40. GCP further alleges that "Verizon took calculated steps to unjustly, intentionally and maliciously interfere with the business ...


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