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Global Crossing Bandwith, Inc. v. OLS

March 19, 2009


The opinion of the court was delivered by: David G. Larimer United States District Judge


Plaintiff, Global Crossing Bandwidth, Inc. ("Global"), has brought this action pursuant to the Court's diversity jurisdiction under 28 U.S.C. § 1332, alleging claims against defendants OLS, Inc. and TeleUno, Inc. arising out of the alleged breach of a telecommunications services contract. On July 8, 2008, the Court issued a Decision and Order ("summary judgment decision"), familiarity with which is assumed, that: (1) denied defendants' motions for summary judgment and to strike; (2) granted Global's cross-motion for summary judgment on the issue of liability with respect to two aspects of Global's claims, but denied Global's motion on the issue of damages as to those claims; and (3) granted in part and denied in part Global's motion for summary judgment on defendants' counterclaims. See Dkt. #87.

Since the summary judgment decision was filed, the parties have filed three new motions. Global has filed a motion for entry of judgment in its favor (Dkt. #91), in the amount of roughly $1.8 million, plus interest. Defendants have filed a motion to stay further proceedings in this case (Dkt. #93) pending determination of certain issues by the Federal Communications Commission ("FCC"), and a motion for "clarification" of the summary judgment decision (Dkt. #96). This Decision and Order constitutes my ruling on those three motions, all of which are denied.


I. Defendants' Motion to Stay

Defendants move for an order staying this action until the FCC has decided three issues: (1) whether Global has violated the prohibition of unreasonable practices contained in § 201(b) of the Federal Communications Act ("FCA" or "Act"), 47 U.S.C. § 201(b)*fn1 ; (2) whether the minimum monthly usage charges ("MMUCs") imposed by plaintiff constitute "unreasonable and unjust charges" in violation of § 201(b); and (3) whether Global's billing and collection practices have violated §§ 201(b) and 203(c) of the Act.*fn2 In support of that motion, defendants state that they filed a petition with the FCC on September 19, 2008, seeking a declaratory ruling that Global's practices and charges are unreasonable and that they violate §§ 201(b) and 203(c) of the Act. Dkt. #94-2.

Defendants base their motion on the "primary jurisdiction" doctrine, which "comes into play whenever enforcement of [a] claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such a case the judicial process is suspended pending referral of such issues to the administrative body for its views." Mathirampuzha v. Potter, 548 F.3d 70, 83 (2d Cir. 2008) (quoting United States v. Western Pac. R.R. Co., 352 U.S. 59, 63-64 (1956)). "Under the doctrine, a court defers to the agency for advisory findings and either stays the pending action or dismisses it without prejudice." Johnson v. Nyack Corp., 86 F.3d 8, 11 (2d Cir. 1996) (citing Reiter v. Cooper, 507 U.S. 258, 268-69 (1993)).

"Primary jurisdiction is a judge-made doctrine [that] serves two principal interests: 'consistency and uniformity in the regulation of an area which Congress has entrusted to a federal agency; and the resolution of technical questions or facts through the agency's specialized expertise, prior to judicial consideration of the legal claims.'" TCG New York, Inc. v. City of White Plains, 305 F.3d 67, 74 (2d Cir. 2002) (quoting Golden Hill Paugussett Tribe v. Weicker, 39 F.3d 51, 59 (2d Cir. 1994)), cert. denied, 538 U.S. 923 (2003). The Second Circuit "ha[s] also cited judicial economy as an interest that the primary jurisdiction doctrine can serve." TCG New York, 305 F.3d at 74 (citing Johnson, 964 F.2d at 123); but see Tassy v. Brunswick Hosp. Center, Inc., 296 F.3d 65, 68 n. 2 (2d Cir. 2002) (noting that "the Supreme Court has never identified judicial economy as a relevant factor").

"Since the inception of the doctrine, courts have resisted creating any fixed rules or formulas for its application." Tassy, 296 F.3d at 68 (citing Western Pac. R.R., 352 U.S. at 64). The Second Circuit in particular has "emphasize[d] that primary jurisdiction is a discretionary doctrine whose applicability in any given case depends on 'whether the reasons for the existence of the doctrine are present and whether the purposes it serves will be aided by its application in the particular litigation,'" and that "[t]he doctrine cannot be applied mechanically." Id. at 72 (quoting Western Pac. R.R., 352 U.S. at 64).

Although there is thus "[n]o fixed formula ... for determining whether an agency has primary jurisdiction," courts typically consider four factors when making that determination:

(1) whether the question at issue is within the conventional experience of judges or whether it involves technical or policy considerations within the agency's particular field of expertise; (2) whether the question at issue is particularly within the agency's discretion; (3) whether there exists a substantial danger of inconsistent rulings; and (4) whether a prior application to the agency has been made.

Schiller v. Tower Semiconductor Ltd., 449 F.3d 286, 295 (2d Cir. 2006) (internal quotation marks omitted); accord F.T.C. v. Verity Int'l, Ltd., 443 F.3d 48, 60 (2d Cir. 2006), cert. denied, 549 U.S. 1278 (2007). The Second Circuit "ha[s] noted as well that '[t]he court must also balance the advantages of applying the doctrine against the potential costs resulting from complications and delay in the administrative proceedings.'" Ellis v. Tribune Television Co., 443 F.3d 71, 83 (2d Cir. 2006) (quoting National Comms. Ass'n, Inc. v. AT & T Co., 46 F.3d 220, 223 (2d Cir. 1995)).

Although the doctrine should be applied flexibly, then, the case law establishes that it should not be lightly invoked or applied, and that cases in which its application is warranted tend to be the exception, not the norm. See, e.g., AT&T Corp. v. Nudell, No. 07-1603, 2008 WL 2986776, at *7 (D.Md. July 30, 2008) ("The doctrine 'should be invoked sparingly, as it often results in added expense and delay'") (quoting Red Lake Band of Chippewa Indians v. Barlow, 846 F.2d 474, 477 (8th Cir. 1988)) (additional internal quotation marks omitted); Lipton v. MCI Worldcom, Inc., 135 F.Supp.2d 182, 191 (D.D.C. 2001) ("The doctrine of primary jurisdiction is a flexible tool used to allocate 'business between court and agency', and should seldom be invoked unless a factual question requires both expert consideration and uniformity of resolution") (quoting United States v. McDonnell Douglas Corp., 751 F.2d 220, 224 (8th Cir. 1984)).

With respect to the case at bar, it is true that there is authority suggesting that issues involving the application and interpretation of the FCA may be appropriate subjects for initial consideration by the FCC, and that a court faced with such issues should stay its hand until the agency has had an opportunity to pass upon them. See, e.g., Ellis, 443 F.3d at 81-93 (discussing why district court should have invoked primary jurisdiction doctrine and allowed FCC to address licensing issue in the first instance). Simply because a matter falls within the FCC's jurisdiction does not necessarily mean that the primary jurisdiction doctrine is applicable, however. As stated, the doctrine should not be applied mechanically or according to some rigid formula. See id. at 82 (primary-jurisdiction "[a]nalysis is on a case-by-case basis") (quoting General Elec. Co. v. MV Nedlloyd, 817 F.2d 1022, 1026 (2d Cir. 1987), cert. denied, 484 U.S. 1011 (1988)).

In that regard, one of the factors that can affect the equation in a given case is whether the party invoking the primary jurisdiction doctrine has made a prior application to the agency. See id. at 89 ("if prior application to the agency is absent, this factor may weigh against referral of the matter to the agency on the basis of primary jurisdiction"). See, e.g., National Comms. Ass'n, 46 F.3d at 222 (noting the district court's determination that, because "no prior application had been made to the FCC," this "factor[ ] did not favor referral to the FCC"); United States ex rel. Taylor v. ...

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