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Global Crossing Bandwidth, Inc. v. PNG Telecommunications

January 22, 2007

GLOBAL CROSSING BANDWIDTH, INC., PLAINTIFF,
v.
PNG TELECOMMUNICATIONS, INC., DEFENDANT.



The opinion of the court was delivered by: Michael A. Telesca United States District Judge

DECISION and ORDER

INTRODUCTION

Plaintiff Global Crossing Bandwidth, Inc., ("Global Crossing") brings this action pursuant to diversity jurisdiction alleging that the defendant PNG Telecommunications, Inc., ("PNG") breached a contract entered into by the parties, reneged on a promise, and made intentional or innocent misrepresentations upon which plaintiff relied to its detriment. Specifically, Global Crossing contends that PNG breached an agreement to purchase certain telecommunications services for three years by discontinuing those services after only one year. Plaintiff also alleges that PNG failed to honor a non-contractual obligation to retain services for three years, and made misrepresentations with respect to its intention to retain plaintiff's services. Plaintiff seeks damages and a declaratory judgment that PNG is obligated to pay certain amounts that plaintiff alleges are owing, as well as other damages.

PNG denies plaintiff's allegations, and moves to dismiss three of the four counts of the Complaint. Specifically, PNG moves to dismiss plaintiff's claim of breach of contract on grounds that Global Crossing has failed to allege all requisite elements of a breach of contract claim. PNG also seeks dismissal of plaintiff's promissory estoppel claim on grounds that because the parties are parties to a contract, there is no basis for a claim under a theory of promissory estoppel. Finally, defendant moves to dismiss plaintiff's allegations of misrepresentation on grounds that they fail to state a claim, or are duplicative of the plaintiff's contract claims. Plaintiff opposes defendant's motion to dismiss, and cross-moves for summary judgment with respect to its breach of contract claim.

For the reasons set forth below, I grant defendant's motion to dismiss Counts One and Three of the Complaint without prejudice, deny defendant's motion to dismiss Count Two of the Complaint, and deny plaintiff's motion without prejudice as moot.

BACKGROUND

In 1998, plaintiff Global Crossing and defendant PNG entered into a Carrier Services Switchless Agreement ("CSSA") under which PNG agreed to purchase various commercial voice communications services from Global Crossing. The CSSA was amended on several occasions over the years, and in June, 2003, the parties entered into Amendment No. 10 (the "Amendment"). Under this Amendment, PNG undertook to purchase data communications services from Global Crossing, including "wavelength" services.

In November, 2004, PNG discontinued its wavelength service on grounds that its data service was not as profitable as had been hoped. Global Crossing objected to PNG's discontinuance of the wavelength service on grounds that Amendment 10 required PNG to retain the service for a minimum of three years. Global Crossing alleges that it provided discounted rates to PNG in consideration of the three-year duration of the contract. PNG contends that it was free to cancel the wavelength service at any time. Global Crossing seeks in excess of $2,734,360 in damages as a result of PNG's alleged breach of contact.

DISCUSSION

I. Defendants' Motion to Dismiss

Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for dismissal of the Complaint where the plaintiff has failed to state a claim upon which relief can be granted. When evaluating a Rule 12(b)(6) motion, the court must ascertain, after presuming all factual allegations in the pleading to be true and viewing them in the light most favorable to the plaintiff, whether or not the plaintiff has stated any valid ground for relief. Ferran v. Town of Nassau, 11 F.3rd 21, 22 (2d Cir. 1993), cert. denied, 513 U.S. 1014 (1994). The court may grant a Rule 12(b)(6) motion only where "`it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'"

Allen v. WestPoint-Pepperell, Inc., 945 F.2d 40, 44 (2d Cir. 1991) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).

II. Plaintiff has Failed to State a Cause of Action with Respect to its Claims for Breach of ...


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