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Northern Valley Communications, LLC v. Sprint Communications Company Limited Partnership

March 19, 2009

NORTHERN VALLEY COMMUNICATIONS, LLC, PLAINTIFF,
v.
SPRINT COMMUNICATIONS COMPANY LIMITED PARTNERSHIP, DEFENDANT AND THIRD-PARTY PLAINTIFF,
v.
GLOBAL CONFERENCE PARTNERS, LLC, THIRD-PARTY DEFENDANT.



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 THIRD-PARTY DEFENDANT'S COUNTERCLAIMS

Plaintiff, Northern Valley Communications, LLC (Northern Valley), brought suit against Sprint Communications Company Limited Partnership (Sprint), seeking to obtain payment for services it allegedly provided to Sprint. Sprint filed a third-party complaint against Global Conference Partners, LLC (GCP), alleging unjust enrichment and civil conspiracy. GCP, in turn, filed a five-count counterclaim against Sprint. Sprint 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 Sprint is a long-distance carrier that utilizes the originating and terminating services provided by Northern Valley.

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, Sprint became aware of GCP's relationship with Northern Valley, that GCP's teleconferencing services were competing with Sprint's conferencing services, and that some of Sprint's long-distance customers were using the long-distance services provided by Sprint to place calls to GCP's conference call bridge in order to use GCP's teleconferencing services. Then, GCP alleges, Sprint began engaging in acts of illegal self-help with the intent of harming both GCP and Northern Valley. Specifically, GCP alleges that Sprint 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, Sprint is indebted to Northern Valley, and Sprint knew that by failing to pay Northern Valley, GCP would, in turn, suffer damage from lost revenues.

Northern Valley filed suit against Sprint seeking to collect unpaid access charges. Sprint then filed counterclaims against Northern Valley and a third- party complaint against GCP, alleging that they participated in an unlawful scheme to increase traffic and access charges billed to Sprint. GCP counterclaimed against Sprint, alleging that Sprint 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. Sprint 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)(1)--Standing

Sprint claims that GCP lacks standing to bring all of its counterclaims because GCP has not alleged that it suffered injuries caused by Sprint. "Article III, § 2, of the Constitution restricts the federal 'judicial Power' to the resolution of 'Cases' and 'Controversies.' That case-or-controversy requirement is satisfied only where a [claimant] has standing." Sprint Comm. Co. v. APCC Servs., Inc., 128 S.Ct. 2531, 2535, 171 L.Ed. 2d 424 (2008). "Standing includes both a constitutional and a prudential component." Jewell v. United States, 548 F.3d 1168, 1172 (8th Cir. 2008). The "irreducible constitutional minimum of standing" consists of three elements: "[f]irst, a party must have suffered an 'injury in fact,' an actual or imminent concrete and particularized invasion to a legally protected interest; second, the injury must be fairly traceable to the challenged action of the defendant; and third, the injury must be redressable by a favorable decision." Id. (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed. 2d 351 (1992)). "Even if a [claimant] meets the minimal constitutional requirements for standing, there are prudential limits on a court's exercise of jurisdiction." Id. One of these limits is the rule that a person ordinarily does not have standing to assert the legal claims of third parties (the third-party standing rule). Sprint Comm., 128 S.Ct. at 2544. Another limit is the rule that the claimant must be intended to be included as a claimant under the statute conferring the cause of action. See Davis v. U.S. Bancorp, 383 F.3d 761, 767 (8th Cir. 2004).

The party invoking federal jurisdiction bears the burden of establishing that it has standing. Lujan, 504 U.S. at 561. "At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice, for on a motion to dismiss we presume that general allegations embrace those specific facts that are necessary to support the claim." Stalley v. Catholic Health Initiatives, 509 F.3d 517, 521 (8th Cir. 2007). The court must examine the allegations in the counterclaim "to ascertain whether the particular plaintiff is ...


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