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Northern Valley Communications, LLC v. Qwest Communications Company

February 16, 2012

NORTHERN VALLEY COMMUNICATIONS, LLC, PLAINTIFF,
v.
QWEST COMMUNICATIONS COMPANY, LLC, DEFENDANT.



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

ORDER

Plaintiff, Northern Valley Communications, LLC, brought suit against defendant, Qwest Communications Company, LLC, alleging that Qwest failed to pay Northern Valley's access charges for completing calls to free conferencing calling services. Qwest moves under Federal Rule of Civil Procedure 12(b)(6) to dismiss Northern Valley's claim number two and claim number three in part and under Rule12(f) to strike paragraph 62(D) in the complaint and request number three in the prayer for relief. Docket 17. Northern Valley resists and moves for oral argument on Qwest's motion. Docket 21. Qwest's motion is granted, and Northern Valley's motion is denied.

BACKGROUND

According to the complaint, Northern Valley is a telecommunications provider located in Aberdeen, South Dakota. Under the telecommunications parlance, Northern Valley is known as a competitive local exchange carrier (CLEC), also known as a local exchange carrier (LEC). Qwest is known as an interexchange carrier (IXC) and provides long-distance services.

Generally, an IXC utilizes its own telephone lines to carry a call across a state or across the country. But an IXC does not own the telephone lines located within the local exchange. Instead, a CLEC imposes upon an IXC an access charge to originate (an "originating" switched access charge) or terminate (a "terminating" switched access charge) a long-distance phone call on a line located within the local exchange. The access charge for interstate long-distance calls is determined by a tariff filed by the CLEC with the Federal Communications Commission (FCC), and the charge for intrastate long-distance calls is determined by a tariff filed with the South Dakota Public Utilities Commission. The interstate tariff filed with the FCC is at issue in this order. The FCC allows a rural CLEC to charge a higher tariff rate than a non-rural CLEC. Northern Valley is a rural CLEC.

Northern Valley filed its tariff number two with the FCC on November 15, 2004, which became effective on November 16, 2004. Pursuant to tariff number two, Northern Valley billed Qwest for access charges when Qwest customers utilized free conference calling services, which used Northern Valley's equipment. Northern Valley charged Qwest its typical rural access charge for the free conference calls.

Since May 1, 2007, Qwest has refused to pay Northern Valley's invoices. Northern Valley brought suit against Qwest to recover charges pursuant to its tariff number two. This suit was assigned to Judge Charles B. Kornmann. See Northern Valley Commc'ns, LLC v. Qwest Commc'ns Corp., Civ. 09-1004-CBK. Judge Kornmann stayed the case and referred some issues to the FCC. Id. at Docket 159.

On July 8, 2010, Northern Valley filed tariff number three with the FCC, which became effective on July 23, 2010, and remained effective until June 7, 2011. On December 29, 2010, Northern Valley filed transmittal number four with the FCC, which modified tariff number three. The amended tariff number three provides that Northern Valley will be reimbursed for its reasonable attorney's fees if it has to initiate litigation to recover its access charges from another carrier.

Northern Valley has been charging for services under tariff number three since July 23, 2010. Qwest has not paid any of Northern Valley's invoices billed under tariff number three. As of April 18, 2011, when Northern Valley filed this action, Northern Valley asserted that Qwest owes it $230,000. Additional charges continue to accrue daily.

STANDARD OF REVIEW

Rule 12(b)(6) Standard

A motion to dismiss under Fed. R. Civ. P. 12(b)(6) challenges the legal sufficiency of the complaint. Neitzke v. Williams, 490 U.S. 319, 326--27 (1989) ("[I]f as a matter of law it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations a claim must be dismissed." (internal citation and quotations omitted)). "To survive a motion to dismiss, the factual allegations in a complaint, assumed true, must suffice 'to state a claim to relief that is plausible on its face.' " Ritchie v. St. Louis Jewish Light, 630 F.3d 713, 716 (8th Cir. 2011) (quoting Northstar Indus., Inc. v. Merrill Lynch & Co., 576 F.3d 827, 832 (8th Cir. 2009)).

To meet the plausibility standard, the complaint must contain "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, ____, 129 S. Ct. 1937, 1949 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (reasoning that a plaintiff must allege enough facts to "nudge [its] claims across the line from conceivable to plausible[.]"). In making this determination, the court must accept the facts alleged as true, even if they are doubtful. Twombly, 550 U.S. at 555.

Rule 12(f) Standard

Under Fed. R. Civ. P. 12(f), the court may strike any "redundant, immaterial, impertinent, or scandalous matter" from a pleading. The district court enjoys liberal discretion to strike pleadings pursuant to Rule 12(f). BJC Health Sys. v. Columbia Cas. Co., 478 F.3d 908, 917 (8th Cir. 2007) (citing Nationwide Ins. Co. v. Cent. Mo. Elec. Coop., Inc., 278 F.3d 742, 748 (8th Cir. 2001)). Courts, however, disfavor striking an entire complaint. Id. (citing Stanbury Law Firm, P.A. v. I.R.S., 221 F.3d 1059, 1063 (8th Cir. 2000)).

DISCUSSION

I. Motion to Dismiss Claim Number Two In its second claim for relief, Northern Valley asserts that Qwest has violated the Federal Communications Act (FCA), specifically 47 U.S.C. § 201(b), by refusing to pay Northern Valley's access service charges. Qwest argues that the FCC's decision in All American Telephone Co. v. AT&T Corp., 26 FCC Rcd. 723 (2011), 2011 WL 194539, precludes Northern Valley from asserting a claim under the FCA for Qwest's failure to pay Northern Valley's tariffed charges. Northern Valley responds that All American is not controlling because it is currently under reconsideration and is contrary to Supreme Court and prior FCC precedent.

In All American, three CLECs that offered free conferencing services filed suit against an IXC, which refused to pay their terminating and originating tariffed access charges, alleging violations of 47 U.S.C. §§ 201(b), 203(c). 26 FCC Rcd. at 724-25. The United States District Court for the Southern District of New York referred the case to the FCC, which elected to determine two issues: (1) whether the IXC violated § 201(b), § 203(c), or any other FCA provision by failing to pay the CLECs' tariffed access charges; and (2) if the IXC violated ...


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