OPINION AND ORDER
KORNMANN, District Judge.
[¶ 1.] Northern Valley filed this diversity action to collect for amounts allegedly due from Qwest for providing originating and terminating telephone access services. Plaintiff alleged claims for breach of contract and breach of implied contract arising out of federal and state tariffs, violation of the Telecommunications Act of 1996 ("the Act" of "the 1996 Act"), 47 U.S.C. §§ 201 and 203, collection action pursuant to state tariff, and unjust enrichment. Plaintiff seeks damages in the amount of $885,051 for amounts claimed to be due from May 1, 2007 to July 1, 2008, interest, attorneys fees, punitive damages, and injunctive relief. Defendant moved (Doc. 16) to dismiss the unjust enrichment claim.
[¶ 2.] The 1996 Act amended the Communications Act of 1934 to promote "competition and the reduction of regulation in the telecommunications industry, in order to secure lower prices and higher quality services for American telecommunications consumers and to encourage the rapid deployment of new telecommunications technology." Verizon Wireless VAW LLC v. Sahr, 2006 DSD 15, ¶ 10, 457 F.Supp.2d 940, 944-945 (citing Telecommunications Act of 1996, Pub.L. No. 104-104, purpose statement; 110 Stat. 56 (1996)). "Before the Act was passed, incumbent local exchange carriers ["ILECs"] served as the exclusive providers of local telephone service, which was considered a natural monopoly." Iowa Telecommunications Services, Inc. v. Iowa Utilities Bd., 563 F.3d 743, 745-746 (8th Cir.2009). The 1996 Act imposed a duty upon ILECs to provide interconnection with their networks to any requesting telecommunications carrier, including a competing local carrier in the same calling area. Id. at 746.
[¶ 3.] Northern Valley is a competitive local exchange carrier ("CLEC") that offers local telephone service. CLECs are companies that were not the original monopoly telephone company in a specific area at the time of the 1996 Act. Verizon Wireless (VAW) LLC v. Kolbeck, 2007 DSD 30, ¶ 10, 529 F.Supp.2d 1081, 1086. Northern Valley owns the wires which allow telephone calls to be delivered to homes and businesses of its customers.
[¶ 4] Qwest, for the purposes of this action, is an interexchange carrier ("IXC") that provides long distance service to its customers. A long distance carrier cannot complete, i.e. deliver, its customer's call by itself. Its customer's local exchange carrier ("LEC") has to originate the call and the LEC, for the intended call recipient, must terminate the call. The long distance carrier pays both LECs "access compensation" for the use of their equipment and services in connecting and terminating the call. See Alma Communications Co. v. Missouri Public Service Com'n, 490 F.3d 619, 621 (8th Cir.2007).
[¶ 5.] Northern Valley provides "terminating switched access service" to Qwest to enable Qwest to deliver its customers' long distance calls to Northern Valley's customers. "Termination" is the "switching of the telecommunications traffic at the terminating carrier's end office switch, or equivalent facility, and delivery of such traffic to the called party's premises." 47 C.F.R. § 51.701(d).
[¶ 6.] Tariffs are schedules setting forth the terms and conditions of services and rates for common carriers. See 47 C.F.R. 61.3(rr). Northern Valley filed tariffs with the Federal Communications Commission ("FCC") (for interstate calls) and the South Dakota Public Utilities Commission ("the PUC") (for intrastate calls) and its access services are therefore governed by the rates set forth in Northern Valley's tariffs. Like a contract,
[¶ 8.] When considering a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, the district count must accept the allegations of the complaint as true and must construe them liberally in plaintiffs' favor. Stufflebeam v. Harris, 521 F.3d 884, 886 (8th Cir.2008), Quinn v. Ocwen Federal Bank FSB, 470 F.3d 1240, 1244 (8th Cir.2006), Booker v. City of St. Louis, 309 F.3d 464, 467 (8th Cir.2002), Duffy v. Landberg, 133 F.3d 1120, 1122 (8th Cir.1998). Whisman ex rel. Whisman v. Rinehart, 119 F.3d 1303, 1308 (8th Cir.1997), and Hafley v. Lohman, 90 F.3d 264, 266 (8th Cir.1996). Dismissal under Fed. R.12(b)(6) is appropriate only when it "appears beyond doubt that plaintiffs can prove no set of facts in support of their claim which would entitle them to relief." Levy v. Ohl, 477 F.3d 988, 991(8th Cir.2007)(quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).
[¶ 9.] Fed.R.Civ.P. 8(d) allows parties to plead in the alternative:
Fed.R.Civ.P. 8(d)(2), (3).
[¶ 10.] The South Dakota Supreme Court has held, however, that:
Burch v. Bricker, 724 N.W.2d 604, 609-610 (S.D.2006)(quoting Mooney's, Inc. v. South Dakota Dept. of Transp., 482 N.W.2d 43, 47 (S.D.1992)) (quoting in turn Thurston v. Cedric Sanders Co., 80 S.D. 426, 125 N.W.2d 496, 498 (1963)). In this case, however, Qwest contends that the services provided by Northern Valley do not fall within the terms of the tariffs. Therefore, there is no procedural bar to plaintiff alleging both contract and unjust enrichment claims.
[¶ 11.] Qwest claims Northern Valley's unjust enrichment claim must be dismissed based upon the filed rate doctrine, also called the filed tariff doctrine. The Communications Act requires every common carrier
American Tel. and Tel. Co. v. Central Office Telephone, Inc., 524 U.S. 214, 221, 118 S.Ct. 1956, 1962, 141 L.Ed.2d 222 (1998) (internal citations omitted). The Supreme Court described the basic contours of the filed rate doctrine under the ICA:
AT & T v. Central Office Telephone, 524 U.S. at 221-22, 118 S.Ct. at 1962-63 (quoting Louisville & Nashville R. Co. v. Maxwell, 237 U.S. 94, 97, 35 S.Ct. 494, 495, 59 L.Ed. 853 (1915)). The filed rate doctrine is strictly applied. AT & T v. Central Office Telephone, 524 U.S. at 223, 118 S.Ct. at 1963.
[¶ 12.] The Second Circuit has explained:
Marcus v. AT & T Corp., 138 F.3d 46, 58 (2nd Cir.1998)(citing, inter alia H.J. Inc. v. Northwestern Bell Tel. Co., 954 F.2d 485, 488 (8th Cir.1992)). Accord, Verizon Delaware, Inc. v. Covad Communications Co., 377 F.3d 1081, 1086 (9th Cir.2004). The doctrine is applied to prevent a cause of action that implicates either the nondiscrimination strand or the nonjusticiability strand. Marcus v. AT & T Corp., 138 F.3d at 59. "[T]he focus for determining whether the filed rate doctrine applies is the impact the court's decision will have on agency procedures and rate determinations." H.J. v. Northwestern Bell, 954 F.2d at 489. The doctrine does not apply where the claim does "not attack the rate itself' or does "not require the court to `second-guess' the rate-making agency [here, the FCC]." Id. at 490.
[¶ 13.] AT & T v. Central Office Telephone was a claim brought by a purchaser and reseller of bulk long distance services asserting, inter alia, state-law claims for breach of contract and tortious interference with contractual relations (Central Offices' contracts with its customers) alleging that AT & T had promised and failed to deliver various service, provisioning, and billing options in addition to those set forth in the tariff. The Supreme Court held that Central Office's tortious interference claim was "wholly derivative of the contract claim for additional and better services ... the tort claim was based on AT & T's refusal to provide [Central Office] with certain types of service... the claims in this case, even the tort claim ... stem from the alleged failure of AT & T to comply with its contractual relationship." American Tel. and Tel. Co. v. Central Office Telephone, Inc., 524 U.S. at 226, 118 S.Ct. at 1964-65. "The rights as defined by the tariff cannot be varied or enlarged by either contract or tort of the carrier." Id. at 227, 118 S.Ct. at 1965 (quoting Keogh v. Chicago & Northwestern R. Co., 260 U.S. 156, 163, 43 S.Ct. 47, 49, 67 L.Ed. 183 (1922)). Thus, the Supreme Court held that the filed rate doctrine prohibited Central Office's tort claims against AT & T.
[¶ 14.] The question here is whether the filed rate doctrine applies with equal force to Northern Valley's tort claim for unjust enrichment because such a claim is "wholly derivative of the contract claim"-i.e., Northern Valley's unjust enrichment claim "stem[s] from the alleged failure of [Qwest] to comply with its contractual relationship." AT & T v. Central Office Telephone, 524 U.S. at 226, 118 S.Ct. at 1964-65. AT & T v. Central Office Telephone was not an action to collect amounts billed under a tariff but was instead an action seeking to enforce additional conditions of delivery promised by the carrier.
[¶ 15.] In the unjust enrichment claim, Northern Valley seeks to recover from Qwest for the value of switched access services provided during the applicable time period alleged in the complaint. This claim is a "preemptive strike" at IXC claims in other traffic pumping cases that the conference calls which were terminated by the LECs were not covered under the tariffs and therefore could not be billed as tariffed services. If those services are not covered by the tariff, can Northern Valley sue for unjust enrichment to collect the value of those services?
[¶ 16.] Then Chief Justice Rehnquist, in his concurring opinion in AT & T v. Central Office Telephone, stated:
AT & T v. Central Office Telephone, 524 U.S. at 229, 118 S.Ct. at 1966 (Rehnquist, Chief Justice, concurring).
Id. at 230-31, 118 S.Ct. at 1966-67.
[¶ 17.] Qwest contends that recovery for switched access services under an unjust enrichment theory would result in Qwest paying a rate different from other IXCs who purchased switched access services from Northern Valley and were charged rates set forth in Northern Valley's tariffs. Qwest contends that such a recovery would violate the antidiscriminatory policy at the heart of the Communications Act and which policy the filed rate doctrine exists to enforce. I do not think this is necessarily true. Northern Valley is required to charge all IXCs the same rate for the same services. The antidiscrimination policy applies to ensure that purchasers of services covered by the tariff will pay the same rate. The policy does not per se extend to services not covered by the tariffs. If the policy does extend to non-tariff services, all that would be required is that Northern Valley provide such call termination services to all IXCs under the same terms and conditions. There is no claim, at this stage of the pleadings, that Northern Valley has failed to do so. In fact, Northern Valley has nearly identical claims pending against IXCs AT & T and Sprint, seeking payment for switched access services.
[¶ 18.] Qwest contends that Northern Valley is prohibited by the Communications Act from providing services except as set forth in its tariffs. Therefore, Qwest contends, if the termination of conference calls does not fall within the call termination services described in its tariffs, Northern Valley is prohibited from providing the services and, therefore, from charging for such services. Northern Valley cites to In re Hyperion Telecommunications, Inc., FCC 97-219, 12 F.C.C.R. 8596 (June 19, 1997), a decision of the FCC which held that the 1996 Act established a permissive detariffing policy for nondominant (i.e. CLEC) carriers which permitted, but does not require, such carriers to file
[¶ 19.] Qwest does not challenge Northern Valley's contention but instead argues that, once it files a tariff for switched access services, the tariff governs and Northern Valley cannot claim unjust enrichment. However, since the pleadings were filed in conjunction with the motion to dismiss, Qwest has filed an answer denying that the calls Northern Valley is seeking compensation for are subject to the access tariffs.
[¶ 20] Qwest contends that Northern Valley was required to either file tariffs or negotiate contracts with the IXCs for terminating access services and that providing services not covered by either a tariff or a contract prohibits Northern Valley from collecting for such services. Qwest's argument assumes facts not before the Court at this time and is therefore rejected.
[¶ 21.] In a similar case filed in this District, Chief Judge Schreier granted Qwest's motion to dismiss a CLEC's unjust enrichment claim. Sancom, Inc. v. Qwest Communications Corporation, 643 F.Supp.2d 1117 (D.S.D. June 19, 2009). Judge Schreier concluded that
Sancom v. Qwest, 643 F.Supp.2d at 1126.
[¶ 22.] In another case filed in this District, Judge Piersol also dismissed unjust enrichment and quantum meruit claims under the filed rate doctrine. Splitrock Properties, Inc. v. Qwest Communications Corporation, 2009 WL 2827901 (D.S.D. August 28, 2009). Judge Piersol reasoned that granting relief for such claims "would have the effect of changing the rate charged for services rendered pursuant to a valid tariff." Id. at *2.
[¶ 23.] Prior to these opinions, both Judges Schreier and Piersol denied motions by CLECs to dismiss the counterclaims filed by the IXCs under the filed rate doctrine. See Sancom, Inc. v. Sprint Communications Company Limited Partnership, 618 F.Supp.2d 1086 (D.S.D.2009), Sancom, Inc. v. Qwest Communications Corporation, CIV. 07-4147-KES, 2008 WL 2627465 (D.S.D. June 26, 2008) and Northern Valley Communications, LLC v. MCI Communications Services, Inc., CIV 07-1016-KES, 2008 WL 2627519 (D.S.D. June 26, 2008). In each of those cases the district court found that the filed rate doctrine did not bar the counterclaims because the IXCs were not challenging the reasonableness of the rates charged by the CLECs, but were instead asserting that the CLECs were billing for services not set forth in the tariff.
[¶ 24.] The filed rate doctrine has been called into question based upon the FCC's
[¶ 25.] Where, as here, it is alleged that the charges as set out in Northern Valley's tariffs do not apply to the type of traffic at issue in this case, the filed rate doctrine would not apply to defeat Northern Valley's unjust enrichment claim. Iowa Network Services, Inc. v. Qwest Corp., 466 F.3d 1091, 1097 (8th Cir.2006).
[¶ 26.] Most of the cases dealing with motions to dismiss under the filed rate doctrine discuss the FCC's ruling in Qwest Communications Corp. v. Farmers & Merchants Mutual Telephone Company, Mem. Op. & Order, File No. EB-07-MD-001, FCC 07-175, 22 F.C.C.R. 17973 (October 2, 2007). In that case, the FCC held that the conference calling companies were "end users" under the relevant tariff and therefore Farmers' charges to Qwest did fall within the terms of Farmers' tariff. However, the FCC granted reconsideration for further development of the record on January 29, 2008. FCC 08-29, 23 F.C.C.R. 1615. The order granting reconsideration was the basis of Judge Piersol's denial of the motion to dismiss on March 20, 2009, in Sancom v. Sprint, supra.
[¶ 27.] Apparently the FCC has not yet filed any opinion on reconsideration in Farmers. Notwithstanding any opinions in other so-called traffic pumping cases, the motion to dismiss Northern Valley's unjust enrichment claim should be denied. It is unclear on the present record whether Northern Valley's conference calling customers are "end users," covered by the tariffs in question. "In the absence of clarity regarding how those services are classified and regulated, it would be premature to address application of the filed rate doctrine to [the parties'] claim[s]." Tekstar Communications, Inc. v. Sprint Communications Co. L.P., 2009 WL 2155930, *3 (D.Minn.2009). Further, it is not yet absolutely clear to this Court whether the filed rate doctrine is applicable, given the 1996 Act's "detariffing" policy.
[¶ 28.] Finally, Qwest contends that Northern Valley has failed to state a claim for unjust enrichment.
John Morrell & Co. v. Halbur, 2007 WL 3003150, *3 (N.D.Iowa 2007).
[¶ 29.] A claim for "unjust" enrichment implies illegal or inequitable behavior by Qwest in obtaining the benefits conferred by Northern Valley. Commercial Trust and Sav. Bank v. Christensen, 535 N.W.2d 853, 858 (S.D.1995). Northern Valley has alleged such behavior by Qwest.
[¶ 30.] It is clear that Qwest, as an IXC, claims to not have chosen to use the services of Northern Valley to complete conference calls for Qwest's customer. Rather, Northern Valley is alleged (in this and in other cases) to pay a marketing fee to another entity to induce Qwest's customers to call a Northern Valley telephone number which results in Qwest's obligation to use Northern Valley's services to terminate the call. There may be serious doubts as to whether Northern Valley could ever prove the element of inequity. However, to survive dismissal, Northern Valley must allege "only enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 570, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007). "[A] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and `that a recovery is very remote and unlikely.'" Id.
[¶ 31.] Now, therefore,
[¶ 32.] IT IS ORDERED that Qwest's motion, Doc. 16, to dismiss the unjust enrichment claim set forth in Count VI of the complaint is denied.