United States District Court, D. South Dakota, Southern Division
Sprint Communications Company L.P., Plaintiff, Counter
Defendant: Philip R. Schenkenberg, Scott G. Knudson, PRO HAC
VICE, Briggs & Morgan, P.A., Minneapolis, MN; Tommy Drake
Tobin, Winner, SD.
Native American Telecom, LLC., Defendant, Counter Claimant:
Scott R. Swier, LEAD ATTORNEY, Swier Law Office, Prof. LLC,
Avon, SD; Stephen Wald, LEAD ATTORNEY, PRO HAC VICE,
Partridge Snow & Hahn LLP, Boston, MA.
ORDER GRANTING IN PART AND DENYING IN PART
SPRINT'S MOTION FOR SUMMARY JUDGMENT AND GRANTING IN PART
AND DENYING IN PART NAT'S MOTION FOR SUMMARY
E. SCHREIER, UNITED STATES DISTRICT JUDGE.
are cross-motions for summary judgment. Plaintiff, Sprint
Communications Company, L.P., seeks summary judgment on
Counts I and IV of defendant Native American Telecom,
LLC's (NAT) amended counterclaim. NAT seeks summary
judgment on all of Sprint's claims, as well as summary
judgment on Counts I and IV of its amended counterclaim. For
the following reasons, the court grants in part and denies in
part Sprint's motion and grants in part and denies in
part NAT's motion.
pertinent, undisputed facts are as follows:
provides nationwide long-distance telephone services and is
known under the telecommunications regulatory framework as an
interexchange carrier (IXC). Sprint delivers long-distance
calls to a local exchange carrier (LEC) for termination to
end-users. Under the FCC's current regulatory framework,
Sprint pays the LEC a terminating access charge based on the
LEC's interstate access tariff, which is filed with the
October 2008, the Crow Creek Sioux Tribal authority
authorized NAT to provide telecommunications service on the
Crow Creek Reservation subject to the tribe's laws.
Pursuant to the 2008 approval order, NAT began to operate as
an LEC. NAT filed its first interstate tariff with the FCC,
which became effective on September 15, 2009. NAT's
second interstate tariff became effective on November 30,
2010, and canceled and replaced NAT's tariff number one.
NAT revised its tariff number two, which revision became
effective on June 26, 2011. NAT's third interstate tariff
was filed with the FCC in August 2011, and became effective
on August 23, 2011.
also operates a free conference calling system (used for
conference calling, chat-lines, and similar services) in
connection with Free Conferencing Corporation (Free
Conferencing). A party using NAT's services does not pay
NAT for the conference call, but rather is assessed charges
by the party's telecommunications provider. NAT then
bills the telecommunications provider an access fee as
defined in its interstate tariff. NAT's access charges,
which were billed to Sprint for conference calls, are at
paying two of NAT's bills for charges connected to
conference calls, Sprint ceased paying NAT's terminating
access tariffs because Sprint believed that NAT was involved
in a traffic-pumping scheme, otherwise known as access
stimulation, to generate traffic from free conference calls
and chat services. On August 16, 2010, Sprint filed suit
against NAT alleging a breach of the Federal Communications
Act (FCA) and a state-law unjust enrichment claim. Docket 1.
March 8, 2011, NAT amended its answer and asserted
counterclaims against Sprint alleging a breach of contract
and a collection action pursuant to its tariffs, a breach of
implied contract resulting from a violation of its tariffs,
and a quantum meruit/unjust enrichment claim. NAT also sought
declaratory relief. Docket 99.
November 29, 2011, the FCC released its Connect America
Fund final rule, which addresses access stimulation and
traffic pumping. See Connect America Fund; A
National Broadband Plan for Our Future; Establishing Just and
Reasonable Rates for Local Exchange Carriers; High-Cost
Universal Service Support, 76 Fed.Reg. 73830 (Nov. 29,
2011). The FCC also created a transitional framework for VoIP
intercarrier compensation. Id. at ¶ 19. On
December 27, 2011, this court issued an order directing the
parties to discuss what effect, if any, the FCC's
Connect America Fund final rule had on the issues
presented in this case. Docket 128. Then, on February 22,
2012, this court issued an order discussing the final rule
and determined that it did not apply retroactively. Docket
141 at 9-11 (" Thus, the final rule is inapplicable to
the time period before the final rule became
effective." ). As part of the same order, this court
granted Sprint's then-pending motion to stay this
proceeding and referred three issues to the FCC for
resolution. Id. at 25. This court also directed the
parties to issue periodic updates describing the status of
the FCC proceeding. This court received these updates over
the next two years, which showed that the status of the FCC
referral remained unchanged since November 2012.
Compare Docket 154 with Docket 163. Because
of the limited progress on the FCC referral, a telephonic
status conference was held on July 23, 2014. See
parties stated that they had been engaged in litigation
before the South Dakota Public Utilities Commission (SDPUC).
Docket 169 at 5. In that litigation, NAT was granted a
certificate of authority by the SDPUC to provide certain
telecommunications services in South Dakota. Based on the
results of the SDPUC litigation and the lack of action by the
FCC during the period of the stay, the parties discussed
whether some of the disputes in this case remained viable.
Id. at 8-10. The court proposed entering an order
that would lift the stay, withdraw the issues that had been
referred to the FCC, and establish deadlines for the parties
to amend the complaint, counterclaims, and to file any
motions to dismiss. Id. at 12. The court also stated
that it would rule on any motions to dismiss based on a
statute of limitations defense and that a new referral of
issues to the FCC could then be discussed. Id. With
the parties in agreement, a formal order was issued that same
day. See Docket 168.
did not amend its complaint. NAT amended its counterclaim on
September 9, 2014, and added a number of allegations that
arose during the period of the stay and FCC referral. Docket
172. A number of procedural motions have since been filed by
the parties. Relevant to the present discussion are the
parties' cross-motions for summary judgment. Docket 211,
judgment on all or part of a claim is appropriate when the
movant " shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a
matter of law." Fed.R.Civ.P. 56(a); see also
In re Craig, 144 F.3d 593, 595 (8th Cir. 1998). The
moving party can meet its burden by presenting evidence that
there is no dispute of material fact or that the nonmoving
party has not presented evidence to support an element of its
case on which it bears the ultimate burden of proof.
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106
S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has
met this burden, " [t]he nonmoving party may not
'rest on mere allegations or denials, but must
demonstrate on the record the existence of specific facts
which create a genuine issue for trial.'" Mosley
v. City of Northwoods, Mo., 415 F.3d 908, 910 (8th Cir.
2005) (quoting Krenik v. Cnty. of Le Sueur, 47 F.3d
953, 957 (8th Cir. 1995)). " Further, 'the mere
existence of some alleged factual dispute between the parties
is not sufficient by itself to deny summary judgment. . . .
Instead, the dispute must be outcome determinative under
prevailing law.'" Id. (quoting Get Away
Club, Inc. v. Coleman, 969 F.2d 664, 666 (8th Cir.
1992)). The facts, and inferences drawn from those facts, are
" viewed in the light most favorable to the party
opposing the motion" for summary judgment.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)
(quoting United States v. Diebold, Inc., 369 U.S.
654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962)).
Sprint's Motion for Partial Summary Judgment
seeks summary judgment on Counts I and IV of NAT's
amended counterclaim. Count I of NAT's amended
counterclaim seeks to enforce each of NAT's interstate
tariffs and to recover the amounts NAT billed to Sprint
pursuant to those tariffs. Docket 172 at 17. Count IV seeks
declaratory relief regarding Sprint's obligations
pursuant to NAT's tariffs. Id. at 18-19.
Alternatively, Sprint argues that NAT's cross-motion for
summary judgment on Counts I and IV of its amended
counterclaim should be denied.
Whether Sprint Can Move for Summary
asserts that Sprint cannot move for partial summary judgment
because Sprint has not amended its complaint to include the
grounds upon which Sprint's motion is
founded. Sprint is seeking partial summary
judgment as a defendant on Counts I and IV of NAT's
amended counterclaim. In its answer to NAT's
counterclaim, Sprint denied that NAT's tariffs were
enforceable and pleaded several affirmative defenses on
point. Sprint's answer was sufficient to raise the
grounds it now pursues, and Sprint was not required to first
amend its complaint before seeking partial summary judgment
on Counts I and IV of NAT's amended counterclaim.
Whether NAT Was Authorized to Provide Telecommunications
Services on the Crow Creek Reservation Prior to June 12,
undisputed that the Crow Creek Sioux Tribal Utility Authority
granted NAT a certificate of authority to provide
telecommunications services on the Crow Creek Reservation in
October 2008. Docket 212 at ¶ 2; Docket 220 at ¶ 2.
That certificate purported to allow NAT to operate as a CLEC
on the Reservation. Docket 14-4 at 1 n.1. It is also
undisputed that NAT filed an application with the SDPUC in
October 2011 to provide intrastate access services in South
Dakota that originate or terminate off the Reservation.
Docket 212 at ¶ 11; Docket 240 at ¶ 11. Further, it
is undisputed that the SDPUC did not grant NAT a certificate
of authority until June 12, 2014. Docket 220 at ¶ 23;
Docket 240 at ¶ 23. Sprint contends that the SDPUC--and
not the Tribal Utility Authority--was the only regulatory
body that could grant NAT the authority to act as a CLEC
whether on the Reservation or not. Until it received that
authority from the SDPUC, Sprint argues that NAT could not
enforce any of its interstate tariffs.
the original Communications Act of 1934, the Supreme Court
[W]hile the Act would seem to divide the world of domestic
telephone service neatly into two hemispheres-one comprised
of interstate service, over which the FCC would have plenary
authority, and the other made up of intrastate service, over
which the States would retain exclusive jurisdiction-in
practice, the realities of technology and economics belie
such a clean parceling of responsibility.
La. Pub. Serv. Comm'n v. F.C.C., 476 U.S. 355,
360, 106 S.Ct. 1890, 90 L.Ed.2d 369 (1986). Although "
the world of domestic telephone service" described by
was " fundamentally restructured" by the
Telecommunications Act of 1996, AT& T Corp. v. Iowa
Utils. Bd., 525 U.S. 366, 371, 119 S.Ct. 721, 142
L.Ed.2d 834 (1999), the Court's observation of separate
domains remains relevant today. And while the issue before
the Court involved only two spheres occupied by the federal
and state governments, the question before this court is
whether Indian tribes occupy a third.
Supreme Court has recognized " the Federal
Government's longstanding policy of encouraging tribal
self-government." Iowa Mut. Ins. Co. v.
LaPlante, 480 U.S. 9, 14, 107 S.Ct. 971, 94 L.Ed.2d 10
(1987). " This policy reflects the fact that Indian
tribes retain 'attributes of sovereignty over both their
members and their territory.'" Id. (quoting
United States v. Mazurie, 419 U.S. 544, 557, 95
S.Ct. 710, 42 L.Ed.2d 706 (1975)). For years, the FCC has
also acknowledged that Native American tribes have a role in
ensuring that " all Americans, in all regions of the
United States, have the opportunity to access
telecommunications and information services." In the
Matter of Statement of Policy on Establishing A
Government-to-Government Relationship with Indian
Tribes, 16 FCC Rcd. 4078 at *1 (F.C.C. 2000). In an
Indian Telecom Initiatives booklet, the FCC stated
that it " is committed to facilitating increased access
to telecommunications in Indian Country." Docket 46-4 at
1. The Commission listed the benefits of increased
telecommunications services on tribal lands, including access
to education and employment opportunities, public safety
services, and government programs. See Docket 46-4.
The agency has also pledged its support for securing those
services on tribal lands: " In a series of steps
undertaken since 1998, the FCC, in consultation with tribal
leaders and other government agency officials, has sought to
address concerns about barriers to telecommunications service
deployment and subscribership in Indian Country. Concerns
addressed include geographic isolation, lack of information,
and economic obstacles." Docket 46-5 at 9.
has further acknowledged that Indian tribes are sovereign and
that it would " endeavor to work with Indian Tribes on a
government-to-government basis consistent with the principles
of Tribal self-government to ensure . . . that Indian Tribes
have adequate access to communications services."
Statement of Policy, 16 FCC Rcd. 4078 at *2. "
The FCC recognizes the rights of tribal governments to set
their own communications priorities and goals for the welfare
of their membership." Docket 46-5 at 3. Thus, the FCC
has not only expressed a need to include Indian tribes in the
world of domestic telecommunications, but has also recognized
that the sovereignty possessed by Indian tribes makes them an
has found that Tribes possess the authority to regulate
telecommunications services on tribal land. See
In the Matter of Western Wireless Corporation, 16
FCC Rcd. 18145 (F.C.C. 2001). In Western Wireless, a
carrier sought to deploy a wireless service to members of the
Oglala Sioux Tribe on the Pine Ridge Reservation in South
Dakota. Id. at ¶ 6. The question before the FCC
involved a determination of which body--the Tribe, the State,
or the FCC--had regulatory authority over Western
Wireless's services. The FCC noted that the " case
presents the issue of the extent of tribal authority over a
non-tribally owned carrier that intends to serve both tribal
members and others on the reservation." Id. at
¶ 13. Under those facts, the FCC ultimately found that
both the state and the Tribe had regulatory authority over
certain aspects of Western Wireless's services.
Id. at ¶ 23. Tribes are not, as Sprint
contends, wholly excluded from regulating the provision of
telecommunications on tribal land.
the SDPUC acknowledged the difficult question of which body
had regulatory authority over NAT and the services it
provided. Docket 211-5 at 9 (SDPUC Opinion) (noting "
[s]ome of the lack of clarity is likely due to the questions
regarding jurisdiction of the Commission over NAT" and
that NAT requested " whatever authority that this
Commission determined it needed." ). In fact, the SDPUC
did not believe it had sole regulatory authority.
Id. at 16 (" The Commission finds it has the
necessary jurisdiction to grant a certificate of authority to
NAT . . . . However, the Commission finds that it does not
have primary regulatory authority over the provision of
service by NAT to members on the reservation as NAT is a
telecommunications company operating on the Crow Creek
Reservation as a limited liability company formed under the
Crow Creek Sioux Tribe." ). The Commission, however, did
not make additional conclusions about the extent of the
Tribe's authority over services provided on the
Reservation. Id. But the Commission did respond to
Sprint's argument that NAT was operating illegally in the
state because it did not have a certificate of authority, and
concluded that " NAT's operation without a [state]
certificate of authority does not bar it from receiving a
[state] certificate of authority." Id. at 13.
Crow Creek Sioux Tribal Utility Authority expressly granted
NAT, a majority tribally-owned entity, permission to provide
local telecommunications services on the Crow Creek
Reservation. That permission included the authority to act as
a CLEC on the Reservation. In light of the observations made
by the FCC, the FCC's Western Wireless decision,
the federal government's long-standing recognition of
encouraging tribal self-government, and the SDPUC's
response to Sprint's argument that NAT was operating
illegally, the court finds that the Tribe possessed its own
authority to confer such permission upon NAT. The fact that
NAT also sought and obtained permission to provide similar
services outside the Reservation from the SDPUC in no way
divested the Tribe of the regulatory authority it enjoyed on
the Reservation. Cf. Western Wireless, 16
FCC Rcd. 18145 at ¶ 23. Consequently, the court finds
that NAT had sufficient authority to provide local
telecommunications services on the Reservation prior to
receiving the state's permission to provide those
services off the Reservation.
Whether NAT's Interstate Tariffs Number 1 and Number 2
to this court's February 22, 2012, order, the FCC had
issued several opinions involving litigation between IXCs and
LECs that were similar to the parties' disputes here.
See In the Matter of Qwest Commc'ns Corp. v.
Farmers & Merchs. Mut. Tele. Co., 22 FCC Rcd. 17973
(F.C.C. 2007) ( Farmers I ); In the Matter of
Qwest Commc'ns Corp. v. Farmers & Merchs. Mut. Tele.
Co., 24 FCC Rcd. 14801 (F.C.C. 2009) ( Farmers
II ); In the Matter of Qwest Commc'ns Corp. v.
Farmers & Merchs. Mut. Tele. Co., 25 FCC Rcd. 3422
(F.C.C. 2010) ( Farmers III ); AT& T Corp. v.
YMax Commc'ns Corp., 26 FCC Rcd. 5742 (F.C.C. 2011);
In the Matter of All American Telephone Co., et al. v.
AT& T Corp., 26 FCC Rcd. 723 (F.C.C. 2011) ( All
American I ); In the Matter of Qwest Commc'ns
Co., LLC. v. Northern Valley Commc'ns, LLC, 26 FCC
(F.C.C. 2011) ( Northern Valley I ); In the
Matter of Sprint Commc'ns Co., L.P. v. Northern Valley
Commc'ns Co., LLC., 26 FCC Rcd. 10780 (F.C.C.
2011) ( Northern Valley II ).
Additionally, the Farmers line of cases had been
appealed to and affirmed by the D.C. Circuit Court of
Appeals. Farmers & Merchs. Mut. Tele. Co. v. FCC,
668 F.3d 714, 399 U.S. App.D.C. 169 (D.C. Cir. 2011). Since
the time of the February 2012 order, several other opinions
from the Commission have been issued discussing similar
disputes. See In the Matter of AT& T Corp. v.
All American Tele. Co., 28 FCC Rcd. 3477 (F.C.C. 2013) (
All American II ); In the Matter of Qwest
Commc'ns Co., LLC v. Sancom, Inc., 28 FCC Rcd. 1982
(F.C.C. 2013). The D.C. Circuit Court of Appeals has
also affirmed the Northern Valley line of cases.
Northern Valley Commc'ns, LLC v. FCC, 717 F.3d
1017, 405 U.S. App.D.C. 223 (D.C. Cir. 2013).
the exception of All American I and Northern
Valley II (which involved the same tariff at issue in
Northern Valley I ), the court's February 22,
2012, order discussed and analyzed each of the
then-contemporary FCC decisions. See Docket 141.
Sprint suggests the subsequent decisions from the FCC and
D.C. Circuit enable this court to determine for itself
whether NAT properly billed Sprint for access services
pursuant to its tariffs.
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