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Alliance Communications Cooperative, Inc. v. Global Crossing Telecommunications

February 11, 2010

ALLIANCE COMMUNICATIONS COOPERATIVE, INC.; BERESFORD MUNICIPAL TELEPHONE COMPANY; INTERSTATE TELECOMMUNICATIONS COOPERATIVE, INC.; KENNEBEC TELEPHONE COMPANY, INC.; MCCOOK COOPERATIVE TELEPHONE COMPANY; AND SPLITROCK PROPERTIES, INC., PLAINTIFFS,
v.
GLOBAL CROSSING TELECOMMUNICATIONS, INC., DEFENDANT AND THIRD-PARTY PLAINTIFF,
v.
GOLDEN WEST TELECOMMUNICATIONS COOPERATIVE, INC.; BRIDGEWATER-CANISTOTA INDEPENDENT TELEPHONE COMPANY; VIVIAN TELEPHONE COMPANY; JAMES VALLEY COOPERATIVE TELEPHONE COMPANY; NORTHERN VALLEY COMMUNICATIONS, LLC; MIDSTATE COMMUNICATIONS, INC.; MIDSTATE TELECOM, INC.; VALLEY TELECOMMUNICATIONS COOPERATIVE ASSOCIATION, INC.; VENTURE COMMUNICATIONS COOPERATIVE, INC.; WESTERN TELEPHONE COMPANY; FAITH MUNICIPAL TELEPHONE COMPANY; ONVOY, INC.; TRANS NATIONAL COMMUNICATIONS INTERNATIONAL, INC.; EXPRESS COMMUNICATIONS, INC.; AND SOUTH DAKOTA NETWORKS, LLC., THIRD-PARTY DEFENDANTS.
GOLDEN WEST TELECOMMUNICATIONS COOPERATIVE, INC.; BRIDGEWATER CANISTOTA INDEPENDENT TELEPHONE COMPANY; VIVIAN TELEPHONE COMPANY; JAMES VALLEY COOPERATIVE TELEPHONE COMPANY; NORTHERN VALLEY COMMUNICATIONS, LLC; MIDSTATE COMMUNICATIONS, INC.; MIDSTATE TELECOM, INC.; SIOUX VALLEY TELEPHONE COMPANY; VALLEY TELECOMMUNICATIONS COOPERATIVE ASSOCIATION, INC.; VENTURE COMMUNICATIONS COOPERATIVE, INC.; WEST RIVER COOPERATIVE TELEPHONE COMPANY; SOUTH DAKOTA NETWORK, LLC; PLAINTIFFS,
v.
ONVOY, INC. AND TRANS NATIONAL COMMUNICATIONS INTERNATIONAL, INC. DEFENDANTS, GLOBAL CROSSING TELECOMMUNICATIONS, INC.; DEFENDANT AND THIRD-PARTY PLAINTIFF,
v.
EXPRESS COMMUNICATIONS, INC., ALLIANCE COMMUNICATIONS COOPERATIVE, INC.; BERESFORD MUNICIPAL TELEPHONE COMPANY; INTERSTATE TELECOMMUNICATIONS COOPERATIVE, INC.; KENNEBEC TELEPHONE COMPANY, INC.; MCCOOK COOPERATIVE TELEPHONE COMPANY; SPLITROCK PROPERTIES, INC., THIRD-PARTY DEFENDANTS
GOLDEN WEST TELECOMMUNICATIONS COOPERATIVE, INC.; BRIDGEWATER CANISTOTA INDEPENDENT TELEPHONE COMPANY; VIVIAN TELEPHONE COMPANY; JAMES VALLEY COOPERATIVE TELEPHONE COMPANY; NORTHERN VALLEY COMMUNICATIONS, LLC; MIDSTATE COMMUNICATIONS, INC.; MIDSTATE TELECOM, INC.; SIOUX VALLEY TELEPHONE COMPANY; VALLEY TELECOMMUNICATIONS COOPERATIVE ASSOCIATION, INC.; VENTURE COMMUNICATIONS COOPERATIVE, INC.; WEST RIVER COOPERATIVE TELEPHONE COMPANY; WESTERN TELEPHONE COMPANY; FAITH MUNICIPAL TELEPHONE COMPANY; CHEYENNE RIVER SIOUX TRIBE TELEPHONE AUTHORITY; RC COMMUNICATIONS, INC.; UNION TELEPHONE COMPANY OF HARTFORD; ARMOUR INDEPENDENT TELEPHONE COMPANY; AND SOUTH DAKOTA NETWORK, LLC, PLAINTIFFS,
v.
ONVOY, INC.; TRANS NATIONAL COMMUNICATIONS INTERNATIONAL, INC.; DEFENDANTS, AND SPRINT COMMUNICATIONS COMPANY LIMITED PARTNERSHIP, DEFENDANT AND THIRD-PARTY PLAINTIFF,
v.
EXPRESS COMMUNICATIONS, INC., THIRD-PARTY DEFENDANT.
KENNEBEC TELEPHONE COMPANY, INC. AND SANTEL COMMUNICATIONS COOPERATIVE, INC., PLAINTIFFS,
v.
SPRINT COMMUNICATIONS COMPANY LIMITED PARTNERSHIP, DEFENDANT AND THIRD-PARTY PLAINTIFF,
v.
EXPRESS COMMUNICATIONS, INC., THIRD-PARTY DEFENDANT.
ALLIANCE COMMUNICATIONS COOPERATIVE, INC.; BERESFORD MUNICIPAL TELEPHONE COMPANY; INTERSTATE TELECOMMUNICATIONS COOPERATIVE, INC.; MCCOOK COOPERATIVE TELEPHONE COMPANY; SPLITROCK PROPERTIES, INC.; STOCKHOLM-STRANDBURG TELEPHONE COMPANY AND TRI-COUNTY TELECOM, INC.; PLAINTIFFS,
v.
SPRINT COMMUNICATIONS COMPANY LIMITED PARTNERSHIP, DEFENDANT AND THIRD-PARTY PLAINTIFF,
v.
EXPRESS COMMUNICATIONS, INC., THIRD-PARTY DEFENDANT AND FOURTH-PARTY PLAINTIFF,
v.
ONVOY, INC. AND TRANS NATIONAL COMMUNICATIONS INTERNATIONAL, INC., FOURTH-PARTY DEFENDANTS.



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

ORDER

Plaintiffs move for reconsideration of the court's order denying defendant Onvoy, Inc.'s (Onvoy) motion for summary judgment, granting defendant Trans National Communications International, Inc.'s (TNCI) motion for summary judgment, denying defendant Global Crossing Telecommunications, Inc.'s (Global Crossing) motion for summary judgment, granting in part and denying in part defendant Sprint Communications Company Limited Partnership's (Sprint) motion for summary judgment, granting plaintiffs' motion for summary judgment on Global Crossing's counterclaims, and granting in part and denying in part third-party defendant Express Communications, Inc.'s (Express) motion for summary judgment on Global Crossing's and Sprint's third-party complaints. See Order, Docket 253. Specifically, plaintiffs seek reconsideration of the court's factual determination that "none of defendants subscribed to plaintiffs' switched access services by submitting an Access Order as prescribed in the tariffs." Id. at 22. Plaintiffs also seek reconsideration of the court's ruling that TNCI, Global Crossing, and Sprint did not constructively order services under plaintiffs' tariffs. Onvoy, TNCI, Global Crossing, and Sprint oppose plaintiffs' motion to reconsider.

BACKGROUND

Plaintiffs, a group composed of local exchange carriers (LECs) located in South Dakota, and centralized equal access provider South Dakota Network, LLC (SDN), filed this consolidated action against defendants to recover access charges allegedly owed pursuant to plaintiffs' tariffs filed with the Federal Communications Commission (FCC) and the South Dakota Public Utilities Commission (SDPUC). A number of counterclaims, third-party complaints, and cross-claims were also filed, but plaintiffs' present motion does not implicate those claims.

On September 21, 2009, the court issued an order ruling on defendants' summary judgment motions (hereinafter referred to as "summary judgment order"). The court found that "none of defendants subscribed to plaintiffs' switched access services by submitting an Access Order as prescribed in the tariffs," but went on to consider whether each defendant constructively ordered services under plaintiffs' tariffs. Id. at 22. The court found that there were disputed issues of material fact relating to the issue of whether Onvoy constructively ordered originating access services under plaintiffs' tariffs and was therefore liable for the associated access charges. As a result, the court denied Onvoy's motion for summary judgment. With respect to TNCI, Global Crossing, and Sprint, however, the court found as a matter of law that these parties did not receive access services under plaintiffs' tariffs (with respect to the traffic at issue), and as a result did not constructively order access services and become liable for access charges. Thus, the court granted TNCI's motion for summary judgment and denied Global Crossing's and Sprint's motions for summary judgment on the limited issue of whether Global Crossing and Sprint had paid plaintiffs for access services they admitted to ordering and receiving.

Plaintiffs now argue that the court erred in finding that "none of defendants subscribed to plaintiffs' switched access services by submitting an Access Order as prescribed in the tariffs" and in failing to consider issues of material fact that may establish that TNCI, Global Crossing, and Sprint are liable under the constructive ordering doctrine. The court will consider plaintiffs' second contention first.

STANDARD

The Federal Rules of Civil Procedure do not mention motions to reconsider. The Eighth Circuit has instructed courts to consider such motions either under Rule 59(e) or Rule 60(b). Sanders v. Clemco Indus., 862 F.2d 161, 168 (8th Cir. 1988); see also Schoffstall v. Henderson, 223 F.3d 818, 827 (8th Cir. 2000) (holding that Rule 59(e) applies to a motion to reconsider); Broadway v. Norris, 193 F.3d 987, 989 (8th Cir. 1999) (analyzing whether Rule 59(e) or Rule 60(b) applies to a motion to reconsider). Here, plaintiffs move under Rule 59(e), which permits a party to file a motion to alter or amend a judgment within ten days*fn1 of that judgment. Fed. R. Civ. P. 59(e). Rule 59(e) refers to entry of judgment, but some authority indicates that a district court may entertain a Rule 59(e) motion before the entry of final judgment on a separate document. Sanders, 862 F.2d at 168 n.12.

"Motions for reconsideration serve a limited function: to correct manifest errors of law or fact or to present newly discovered evidence." Hagerman v. Yukon Energy Corp., 839 F.2d 407, 414 (8th Cir. 1988) (quoting Rothwell Cotton Co. v. Rosenthal & Co., 827 F.2d 246, 251 (7th Cir.), as amended, 835 F.2d 710 (7th Cir. 1987)). A Rule 59(e) motion cannot be used "to introduce new evidence that could have been adduced during pendency of the summary judgment motion. . . . Nor should a motion for reconsideration serve as the occasion to tender new legal theories for the first time." Concordia College Corp. v. W.R. Grace & Co., 999 F.2d 326, 330 (8th Cir. 1993) (quoting Hagerman, 839 F.2d at 414). District courts have broad discretion in determining whether to grant a motion for reconsideration. Hagerman, 839 F.2d at 413-14.

DISCUSSION

I. Motion to Reconsider Court's Finding That TNCI, Global Crossing, and Sprint Did Not Constructively Order Services

Plaintiffs seek reconsideration of the portion of the court's summary judgment order that concludes that, as a matter of law, the constructive ordering doctrine does not apply to TNCI, Global Crossing, and Sprint. Plaintiffs "submit that because of the business relationships that existed among all of the parties, the constructive ordering doctrine may apply to all of the carriers in this case, and the trier of fact should be allowed to view the flow of traffic among all of the carriers and then determine the respective liability of the parties." Plaintiffs' Memorandum of Law in Support of Their Motion for Reconsideration of Memorandum Opinion and Order Dated September 29, 2009, Docket 255 at 11-12. The court finds that plaintiffs do not advance any new evidence or arguments of law explaining why the court should change the summary judgment order and deny TNCI's, Global Crossing's, and Sprint's motions for summary judgment. Plaintiffs' failure to provide any new reasons why summary judgment was inappropriate is reason enough for the court to deny plaintiffs' motion for reconsideration of this portion of the court's summary judgment order. See Schoffstall, 223 F.3d at 827 (finding that district court did not abuse its discretion by denying a motion for reconsideration where the movant merely restated the arguments it made in opposition to summary judgment and provided no additional reasons why summary judgment was inappropriate). But the court has considered the substance of plaintiffs' arguments and finds them to be without merit.

Plaintiffs request that the court reconsider the business relationships that existed between the various parties and find that in light of these business relationships, the constructive ordering doctrine "should be applied through the entire communications path of the traffic, not just isolated segments of the path." Id. at 14. Plaintiffs' argument misses the rule that the terms of the relevant tariffs, and not the business relationships of the parties or the entire communications path of the traffic, are dispositive of the issue of liability for access charges pursuant to those tariffs. As the court explained in the summary judgment order, because plaintiffs seek to recover access charges owed pursuant to their tariffs, the relevant question is whether plaintiffs provided each defendant with access services pursuant to their tariffs. See Advamtel LLC v. AT & T Corp., 118 F. Supp. 2d 680, 683 (E.D. Va. 2000) (explaining that to recover for amounts charged pursuant to their tariffs, plaintiffs must show that they operated under a valid tariff and that they provided services to the customer pursuant to that tariff); see also American Tel. & Tel. Co. v. City of New York, 83 F.3d 549, 552 (2d Cir. 1996) (setting out terms of relevant tariff in determining whether defendant was obligated to pay charges under the tariff).

Here, plaintiffs' tariffs apply to plaintiffs' "customers," and a "customer" is an individual or entity that subscribes to the services offered therein. An individual or entity may subscribe to the services offered in plaintiffs' tariffs "in one of two ways: (1) by affirmatively ordering . . . or (2) by constructively ordering" the service. City of New York, 83 F.3d at 553. Under the constructive ordering doctrine, an individual or entity that does not follow the ordering provisions contained within the relevant tariff is deemed to have subscribed to or ordered the services offered in the tariff if the receiver of services (1) is interconnected in such a manner that it can expect to receive access services, (2) fails to take reasonable steps to prevent the receipt of services, and (3) does in fact receive ...


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