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Sprint Communications Co. L.P. v. Crow Creek Sioux Tribal Court

United States District Court, D. South Dakota, Southern Division

February 26, 2016

SPRINT COMMUNICATIONS COMPANY L.P., Plaintiff,
v.
CROW CREEK SIOUX TRIBAL COURT, NATIVE AMERICAN TELECOM, LLC., and B. J. JONES, in his official capacity as special judge of Tribal Court; Defendants.

MEMORANDUM OPINION AND ORDER

KAREN E. SCHREIER UNITED STATES DISTRICT JUDGE.

Plaintiff, Sprint Communications Company, L.P., moves the court for reconsideration of its August 5, 2015 order granting in part and denying in part the parties’ cross motions for summary judgment. Docket 256. Sprint also moves the court for partial summary judgment on Count 1 of Sprint’s complaint. Docket 258. Additionally, Sprint moves the court to compel defendant, Native American Telecom, LLC (NAT), to respond fully to Sprint’s discovery requests. Docket 268. NAT resists each of Sprint’s motions and moves the court to compel Sprint to respond fully to NAT’s discovery requests. Docket 273. Sprint resists NAT’s motion. For the following reasons, the court denies Sprint’s motion for reconsideration, grants Sprint’s motion for summary judgment, grants in part and denies in part Sprint’s motion to compel, and grants in part and denies in part NAT’s motion to compel.

BACKGROUND

The facts of this case are more fully set forth in the court’s August 7, 2015 order granting in part and denying in part cross motions for summary judgment from both parties. See Docket 250. On September 15, 2015, a telephonic status conference was held. Docket 254 (Transcript). This matter is now set for a court trial to begin on April 12, 2016. Docket 267.

I. Sprint’s Motion for Reconsideration

Sprint inquired during the status conference if the court would reconsider a factual matter in the court’s August 5, 2015 order. Docket 254 at 14. Sprint explained that the parties entered into a stipulation during the South Dakota Public Utilities Commission (SDPUC) proceeding that limited “the geographic scope of NAT’s certification from the [SD]PUC.” Id. Sprint believed that this fact was important and that the court’s order should “sync up with what the South Dakota Commission found.” Id. at 15. The court directed Sprint to file a motion that the court could rule on after NAT had an opportunity to respond.

DISCUSSION

Sprint argued in its motion for partial summary judgment (Docket 223) that NAT could not enforce any of its interstate tariffs prior to receiving a certificate of authority from the SDPUC. Although in 2008 NAT received a certificate of authority from the Crow Creek Sioux Tribal Utility Authority to provide telecommunication services on the Crow Creek Reservation, NAT did not receive a certificate of authority from the SDPUC until June 12, 2014. Sprint contended that NAT was not operating as a competitive local exchange carrier (CLEC) until it received a certificate of authority from the SDPUC, and NAT’s tariffs were unenforceable prior to that time.

This court disagreed. The court addressed several arguments raised by Sprint, for example, whether the SDPUC believed that it had sole regulatory authority over NAT and whether the SDPUC found that NAT was operating illegally in the state prior to receiving the SDPUC’s certificate of authority. Docket 250 at 10-11. The court found that Sprint’s arguments were not supported by the SDPUC decision. And based on the court’s review of case law concerning tribal sovereignty, decisions and statements of policy from the FCC regarding the provision of telecommunication services on tribal land, and the SDPUC proceeding itself, the court concluded:

The 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.

Docket 250 at 11.

Here, Sprint’s argument concerns the court’s reference to NAT’s authority to provide telecommunications services “off the Reservation.” Sprint asserts that although NAT applied for a certificate of authority from the SDPUC to provide services both on and off of the Reservation, the SDPUC only addressed those services offered by NAT on the Reservation. Sprint asks the court to reconsider the court’s description of the scope of NAT’s authority and to revisit the court’s legal conclusion to deny Sprint’s summary judgment motion on this issue. Docket 257 at 8 (“The Court should correct that misstatement . . . and grant Sprint’s motion for summary judgment as to the time period before June 12, 2014.”).

The court denies Sprint’s motion for reconsideration. To the extent that Sprint’s factual argument is an accurate summary of what the SDPUC considered, the alleged factual error does not change the court’s analysis. The court found that the tribal regulatory agency “expressly granted NAT . . . permission to provide local telecommunications services on the Crow Creek Reservation.” Docket 250 at 11 (emphasis added). The court also found that “the Tribe possessed its own authority to confer such permission upon NAT.” Id. In other words, the court found that NAT was operating as a CLEC on the Reservation since 2008 by virtue of the tribal regulatory agency’s grant of authority. Thus, the court disagreed with Sprint’s argument that NAT was not a CLEC prior to receiving a certificate of authority from the SDPUC in 2012. Although NAT also sought and eventually received permission from the SDPUC, that does not mean that the Tribe was without sufficient authority to grant NAT permission to operate on the Reservation. Thus, Sprint’s motion for reconsideration is denied.

II. Sprint’s Motion for Partial Summary Judgment

Sprint moves for partial summary judgment on Count 1 of its complaint. Count 1 asserts that NAT violated the Communications Act by improperly billing Sprint for access charges. Docket 1 at 15-17.

LEGAL STANDARD

Summary 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 (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. Cty. 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 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)).

DISCUSSION

Section 201(b) of the Communications Act provides that any “charge, practice, classification, or regulation that is unjust or unreasonable is deemed to be unlawful[.]” 47 U.S.C. § 201(b). And under § 207 of the Act, any person may seek compensation in federal court for damages arising under a violation of § 201(b). 47 U.S.C. § 207; Glob. Crossing Telecomms., Inc. v. Metrophones Telecomms. Inc., 550 U.S. 45, 47 (2007) (“Communications Act language links § 201(b) to § 207, which authorizes any person ‘damaged’ by a violation of § 201(b) to bring a lawsuit to recover damages in federal court.”). One method of demonstrating that a party has engaged in an unjust or unreasonable practice is to show that the practice violates an FCC rule or regulation that implements § 201(b). Glob. Crossing Telecomms., Inc., 550 U.S. at 54 (explaining that “the FCC has long implemented § 201(b) through the issuance of rules and regulations.”).

The FCC has declared as unjust and unreasonable the practice of billing for access services that are not provided to an “end user” or “customer” under the terms of a LEC’s interstate tariff. See In the Matter of Qwest Commc’ns Corp. v. Farmers & Merchs. Mut. Tel. Co., 24 FCC Rcd. 14801, ¶ 26 (FCC 2009) (Farmers II) (concluding that the free conference calling companies were not “end users” under Farmers’ tariff and “that Farmers’ practice of charging Qwest tariffed switched access rates for its termination of traffic from the conference calling companies is unjust and unreasonable in violation of section 201(b) of the Act.”).[1] The FCC has also declared as unjust and unreasonable the practice of tariffing access charges for calls to entities to whom the LEC offers free service. In the Matter of Qwest Commc’ns Co., LLC, v. Northern Valley Commc’ns, LLC, 26 FCC Rcd. 8332, ¶ 9 (FCC 2011) (Northern Valley I) (explaining that Northern Valley’s tariff violated § 201(b) because it “purports to permit Northern Valley to charge IXCs for calls to or from entities to whom Northern Valley offers its services free of charge[.]”).[2]

The court addressed in its August 5, 2015 order whether NAT’s various interstate tariffs were lawful or otherwise enforceable. Of relevance to Sprint’s pending summary judgment motion is NAT’s original and revised tariff number 1. This court found:

NAT’s interstate tariff number 1 was filed with the FCC and became effective on September 15, 2009. It was then revised and amended on October 21, 2009, to be effective on October 22, 2009. Docket 250 at 16 (internal citations omitted).[3] The court concluded that NAT attempted to bill Sprint for access services involving calls delivered to Free Conferencing, but based on the particulars of the NAT-Free Conferencing relationship, Free Conferencing was not an “end user” or “customer” under the terms of NAT’s original and revised tariff number 1. Docket 250 at 22-23. Thus, under the FCC’s Farmers line of cases, NAT was not entitled to bill Sprint for those calls. The court concluded that NAT’s original and revised tariff number 1 purported to allow NAT to bill Sprint for access charges for calls delivered to entities (namely Free Conferencing) to whom NAT offered free service. Id. at 17-18. Thus, under the FCC’s Northern Valley line of cases, the court concluded that NAT could not enforce its original and revised interstate tariff number 1.

Sprint’s motion for summary judgment asks the court to declare explicitly what Sprint argues was stated implicitly: NAT violated § 201(b)’s prohibition on unjust and unreasonable practices by improperly billing Sprint for access charges under NAT’s original and revised tariff number 1. Although NAT disagrees with the court’s conclusions in the August 5, 2015 order, NAT acknowledges that “applying the Court’s ruling leads to the summary judgment determination that Sprint seeks in its Motion.” Docket 263 at 2. The court agrees. The court has already determined that NAT improperly billed Sprint in contravention of Farmers and Northern Valley. Because the FCC has determined that the practices NAT engaged in are unjust and unreasonable (and therefore unlawful) under § 201(b), Sprint is entitled to summary judgment in its favor on this claim. Thus, under § 207, Sprint is entitled to damages.

Sprint paid $29, 170.27 to NAT during the time that NAT’s original and revised tariff number 1 was in effect. Docket 260 at 2. NAT acknowledges that it has received that amount. Docket 263 at 1-2. The parties dispute, however, when the issue of damages should be decided. According to NAT, the court should await the outcome of the parties’ trial and assign damages as part of a final order as opposed to doing so in a piecemeal fashion. Sprint argues that judgment should be entered now, along with prejudgment interest. The court agrees and directs Sprint to calculate the prejudgment interest as of March 17, 2016, and to file its calculation by March 4, 2016. NAT shall file any objections by March 14, 2016.

Sprint also seeks an award of attorneys’ fees. Section 206 of the Communications Act provides that

In case any common carrier shall do . . . any act, matter, or thing in this chapter prohibited or declared to be unlawful, . . . such common carrier shall be liable to the person or persons injured thereby for the full amount of damages sustained in consequence of any such violation of the provisions of this chapter, together with a reasonable counsel or attorney's fee, to be fixed by the court in every case of recovery, which attorney's fee shall be taxed and collected as part of the costs in the case.

47 U.S.C. § 206. This statute provides for the award of reasonable attorneys’ fees to the injured party in cases where the court has determined that the injured party is entitled to recover damages. Am. Tel. & Tel. Co. v. United Artists Payphone Corp., 852 F.Supp. 221, 225 (S.D.N.Y. 1994) (“Thus, the Court concludes that under 47 U.S.C. § 206, attorney’s fees may only be awarded to a party that has recovered damages.”), aff’d 39 F.3d 411 (2d Cir. 1994). Because the court has concluded that Sprint is entitled to recover damages on Count 1 of its complaint, Sprint is also entitled to an award of its reasonable attorneys’ fees. The amount of reasonable attorneys’ fees will be determined after trial.

III. The Parties’ Cross Motions to Compel

LEGAL STANDARD

Several amendments to the Federal Rules of Civil Procedure took effect on December 1, 2015. Those amendments “shall govern in all proceedings in civil cases thereafter commenced and, insofar as just and practicable, all proceedings then pending.”[4] Although the commencement of this case predates those amendments by more than five years, both of the parties’ motions to compel were filed after December 1, 2015. Thus, “as just and practicable, ” the amended Federal Rules of Civil Procedure will apply.

The scope of discovery in a civil case is governed by Federal Rule of Civil Procedure 26. As amended, the rule provides that unless otherwise limited by a court order, the parties may discover any non-privileged matter that is “relevant to any party’s claim or defense and proportional to the needs of the case.” Fed.R.Civ.P. 26(b)(1). Chief Justice John Roberts wrote in his Year-End Report on the Federal Judiciary that amended Rule 26(b)(1) “crystalizes the concept of reasonable limits on discovery through increased reliance on the common-sense concept of proportionality.”[5] Whether a discovery request is proportional is determined by considering “the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed.R.Civ.P. 26(b)(1). Evidence that falls within this scope is discoverable even if it would not be admissible at trial. Id.

Both parties’ motions to compel concern Rule 33 interrogatories and Rule 34 requests for production. Amended Rule 33 now refers to Rule 26(b)(1) as well as Rule 26(b)(2). Fed.R.Civ.P. 33(a)(1). This addition is meant “to reflect the recognition of proportionality in Rule 26(b)(1).” Advisory Committee Notes (2015 Amendment). Amended Rule 34(b) now prohibits boilerplate objections and requires a party objecting to a request for production to “state with specificity the grounds for objecting, including the reasons” and “whether any responsive materials are being withheld.” Fed.R.Civ.P. 34(b)(2)(B), (C). Thus, “[a]n objection may state that a request is overbroad, but . . . should state the scope that is not overbroad.” Advisory Committee Notes (2015 Amendment). And “[t]he producing party . . . need[s] to alert other parties to the fact that documents have been withheld and thereby facilitate an informed discussion of the objection.” Id. Amended Rule 34 also contains a new provision that “[t]he production must then be completed no later than the time for inspection specified in the request or another reasonable time specified in the response." Fed.R.Civ.P. 34(b)(2)(B).

If a party resists discovery, the requesting party may move for an order compelling disclosures or discovery. Fed.R.Civ.P. 37(a)(1). The Supreme Court has long recognized that “[m]utual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts he has in his possession.” Hickman v. Taylor, 329 U.S. 495, 507 (1947).

The requesting party must make a threshold showing that the requested information falls within the scope of discovery under Rule 26(b)(1). Hofer v. Mack Trucks, Inc., 981 F.2d 377, 380 (8th Cir. 1992). “Mere speculation that information might be useful will not suffice; litigants seeking to compel discovery must describe with a reasonable degree of specificity, the information they hope to obtain and its importance to their case.” E.E.O.C. v. Woodmen of the World Life Ins. Soc., No. 8:03-CV-165, 2007 WL 1217919 at *1 (D. Neb. Mar. 15, 2007) (citing Cervantes v. Time, Inc., 464 F.2d 986, 994 (8th Cir. 1972)). Once the requesting party has satisfied its threshold showing, the burden then shifts to the party resisting discovery to show specific facts demonstrating that the discovery is irrelevant or disproportional. See Penford Corp. v. Nat'l Union Fire Ins. Co., 265 F.R.D. 430, 433 (N.D. Iowa 2009); St. Paul Reinsurance Co. v. Commercial Fin. Corp., 198 F.R.D. 508, 511 (N.D. Iowa 2000). But the articulation of mere conclusory objections that something is “overly broad, burdensome, or oppressive, ” is insufficient to carry the resisting party's burden-that party must make a specific showing of reasons why the particular discovery should not be had. Cincinnati Ins. Co. v. Fine Home Managers, Inc., Civ. No. 4:09-CV-234-DJS, 2010 WL 2990118, at *1 (E.D. Mo. July 27, 2010); see also Burns v. Imagine Films Entm't, Inc., 164 F.R.D. 589, 593 (W.D.N.Y. 1996).

DISCUSSION

In its August 5, 2015 order, the court denied Sprint’s motion for summary judgment as it pertained to NAT’s tariff number 3. That tariff was filed on August 8, 2011, to become effective August 23, 2011. Docket 250 at 30. The court found that NAT’s tariff number 3 was analytically indistinguishable from the tariff at issue in the FCC’s Farmers line of cases. Id. Thus, whether NAT properly billed Sprint for access charges under that tariff depends on whether Free Conference is an “end user” or “customer” under the terms of the tariff. Id. Under this analysis, the court must apply a multi-factor test, articulated by the FCC, that assesses the actual business relationship between NAT and Free Conferencing. Id.[6] Those factors include: (1) Whether the conference calling companies would pay for the LEC’s services; (2) Whether the LEC treated the conferencing company like other customers; (3) Whether the LEC and conference companies operated under an exclusivity agreement; (4) Whether the LEC handled the conferencing company’s traffic differently; (5) Whether the LEC’s agreements with the conference companies contained terms that did not resemble traditional agreements for tariffed services; and (6) Whether the LEC timely reported revenues from its services or submitted Universal Service contributions. See Farmers II, 24 FCC Rcd. 14801 at ¶¶ 12-20. The court concluded that material facts concerning the NAT-Free Conferencing relationship were genuinely disputed, and therefore, the Farmers analysis could not be applied summarily. Docket 250 at 30-31.

The court and parties discussed the issues in this case that remained for trial at the status conference. According to counsel for NAT, NAT’s primary concern was a determination of its rights with respect to its right to receive payment under its tariff number 3 from the effective date of the CAF Order going forward. Docket 254 at 7, 8-9. The CAF Order became effective on December 29, 2011. The parties agreed that discovery should be allowed from that point through 2015. Sprint estimated that it had received some discovery up through 2013 but that Sprint would require additional and updated information for 2014 and 2015. Id. at 8. Sprint explained that the bulk of the discovery it required would be circumscribed to exploring the NAT-Free Conferencing relationship within the framework of the FCC’s Farmers analysis. Id. at 10.

The court allowed the parties to conduct discovery concerning NAT’s request for payment under its interstate tariff number 3. Id. at 13 (reiterating that “NAT is limiting its request for damages to any charges after the CAF Order forward.”). The court stated: “The documents need to be updated. Any depositions will be limited to just new facts during the periods of 2014 and 2015.” Id. at 254. A scheduling order to that effect was entered the same day. Docket 253.[7]

A. Meet and Confer Requirement

Rule 37(a)(1) requires the parties to meet and confer in good faith to attempt to resolve discovery disputes prior to filing a motion to compel. Fed R. Civ. P. 37(a)(1). In addition, this court’s local rules impose a similar requirement. See D.S.D. Civ. L.R. 37.1. Based on the affidavits and exhibits submitted by both parties, the court is satisfied that the meet and confer requirement has been fulfilled regarding both motions to compel.

B. Sprint’s Motion to Compel

Before addressing the specifics of Sprint’s motion, the court must address a reoccurring contention regarding many of Sprint’s discovery requests and NAT’s responses to them. Almost all of NAT’s responses contain an objection that Sprint is improperly attempting to discover information from prior to 2014. Following the September 15, 2015 status conference, the court entered a scheduling order that stated: “Discovery should be limited to new facts that have developed during 2014 and 2015.” Docket 253 at 1; Docket 267 at 1 (amended scheduling order). NAT reads the court’s order to preclude discovery of any information prior to 2014. See, e.g., Docket 272 at 8 (“The Court’s pretrial order of September 15, 2015 limited discovery to ‘new facts that have developed [during] 2014 and 2015.’ ”).

NAT stated that it will argue at trial that it is entitled to collect the access charges it has billed to Sprint from December 29, 2011 through 2015. One of the primary issues at trial will be the application of the Farmers analysis to the NAT-Free Conference relationship during that time frame. The Farmers analysis is fact-driven and whether an entity is treated as an “end user” or “customer” can change over time. As the court explained in its August 5, 2015 order: “It is apparent from the [2012] amended agreement that NAT and Free Conferencing set out to alter their relationship, but it is unclear whether they in fact did so or actually reached a mutual agreement to do so.” Docket 250 at 31. In other words, the court could not adjudicate summarily when or if Free Conferencing became an “end user” or “customer” under the terms of NAT’s tariff number 3. Under NAT’s view, however, Sprint would be precluded from discovering any relevant information from late 2011 until 2014 that bears on the answer to that question.

The court disagrees; neither the court’s discovery order nor principles of basic fairness support NAT’s position. Sprint acknowledged that it obtained some discovery concerning the NAT-Free Conferencing relationship through 2013, but Sprint was unsure whether it possessed complete records for that time and also requested discovery through 2015. As the court directed, the discovery Sprint previously received would need to be updated. The court’s use of the word “should” and its reference to “new facts that have developed during 2014 and 2015” in the scheduling order is meant to avoid duplicative discovery. But the court’s order does not, as NAT suggests, mean that Sprint must rely solely on the information prior to 2014 that Sprint already has in its possession. As a matter of basic fairness, it would be unjust to insulate the NAT-Free Conferencing relationship from inquiry prior to 2014 because that period of time may be critical to the Farmers analysis. Similarly, it would be unjust to allow NAT to support its arguments with relevant evidence prior to 2014 while simultaneously prohibiting Sprint from discovering relevant evidence prior to 2014. Thus, if Sprint has properly requested otherwise discoverable information, NAT’s objection to the request because it is not limited to information from 2014 and 2015 is overruled.

1. Interrogatories

Interrogatory No. 15: For periods between January 2012 - present, and for calls from Sprint to NAT numbers assigned to Free Conferencing or another Call Connection Company, identify (by type, manufacturer, model number, quantity, and ownership) the equipment on the Reservation that NAT used to deliver calls to the Call Connection Company, and identify (by type, manufacturer, model number, quantity, and ownership) the equipment used by the Call Connection Company to terminate the calls.
NAT Response: NAT objects to this request to the extent it is not limited to “new facts during the periods of 2014 and 2015, ” as ordered by the Court during the status conference on September 15, 2015. Subject to that objection, NAT states that there are no new facts responsive to this interrogatory.

Docket 270-3 at 4.

Sprint attests that it has not received the type of information sought by this interrogatory. Docket 270 at ¶ 12. Sprint also asserts that it has learned recently that additional conference calling companies other than Free Conferencing are receiving calls through NAT. According to Sprint, the information sought by its interrogatory would be relevant to the Farmers analysis because it could show that NAT handled the conference calling companies’ traffic differently than it did for other customers. NAT responds that the interrogatory is overbroad because it seeks information about conference calling companies other than Free Conferencing. NAT states it will not attempt to recover access fees for calls ...


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