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Cablevision Lightpath, Inc. et al v. Verizon New York Inc. et al

August 30, 2011

CABLEVISION LIGHTPATH, INC. ET AL, PLAINTIFFS,
v.
VERIZON NEW YORK INC. ET AL, DEFENDANTS.



The opinion of the court was delivered by: Azrack, United States Magistrate Judge:

ORDER

On May 20, 2011, Cablevision Lightpath, Inc., Cablevision Lightpath-CT, Inc., Cablevision Lightpath-NJ, Inc., Bresnan Broadband of Colorado, LLC, Bresnan Broadband of Montana, LLC, Bresnan Broadband of Utah, LLC, and Bresnan Broadband of Wyoming, LLC ("plaintiffs" or "Cablevision") filed this action against Verizon New York Inc., Verizon New Jersey Inc., and MCI Communications d/b/a Verizon Business, Inc. ("MCI" or "Verizon Business") (collectively, "defendants" or "Verizon"). Defendants moved to disqualify plaintiffs' counsel, Jenner & Block LLP ("Jenner"), on the grounds that Jenner previously represented MCI in similar circumstances. See generally Defs.' Mot. to Disqualify Counsel ("Mot. to Disqualify"), ECF No. 23. The Honorable Carol B. Amon referred the motion to me for decision. Order of June 15, 2011. I heard oral argument on the motion on August 9, 2011. CITE. For the reasons discussed below, defendants' motion is granted.

I. BACKGROUND

A. Plaintiffs' Claims

Telecommunications carriers, like Cablevision and Verizon, assess one another fees, including charges known as "access charges," when they access each other's networks. Pls.' Mem. in Opp'n ("Opp'n Mem.") 4, ECF No. 24. These carriers have local affiliates, like Verizon New York and Verizon New Jersey, that handle local traffic, and other entities, like Verizon Business, that handle long distance traffic. Opp'n Mem. 4--5. The type of rate charged by carriers depends on whether traffic is exchanged between local affiliates, in which case the rates are set by interconnection agreements, or long distance, in which case the rates are set by "filed tariffs or posted price lists depending on the particular state." Id. at 5.

Recently, Verizon ceased paying access charges to Cablevision for traffic that originates or terminates in Voice over Internet Protocol ("VoIP") format. Id. at 5. Verizon did so based on the belief that "tariffed access charges do not apply to VoIP traffic." Mot. to Disqualify 2. Cablevision brought this suit to compel Verizon Business to pay the rates set by the filed tariffs, and to compel Verizon New York and Verizon New Jersey to pay the rates set by the interconnection agreements. See Opp'n Mem. 5--6. In the alternative, Cablevision makes equitable claims contending that "Verizon used valuable services provided by Cablevision, and that Verizon's past history of paying Cablevision's invoices weighs in favor of valuing Cablevision's services at their tariffed prices." Opp'n Mem. 6 (citing Compl. ¶¶ 63--73).

B. Jenner's Former Representation of MCI/Verizon Business

From the late 1960s until 2006, Jenner served as MCI's primary outside counsel and chief regulatory firm. Mot. to Disqualify 3; Mot. to Disqualify Ex. 1, Decl. of Curtis L. Groves ("Groves Decl.") ¶ 5, ECF No. 23--1. In 2006, MCI merged with Verizon, and after that merger, the entity formerly known as MCI became known as Verizon Business (to avoid confusion, this entity will be referred to as "MCI" pre-merger, and "Verizon Business" post-merger). Mot. to Disqualify 5; Opp'n Mem. 7--8. Defendants assert that, beginning in 2001, Jenner advised MCI with respect to the applicability of access charges to VoIP traffic at least four times. See infra Part II.B; Mot. to Disqualify 3.

Further, in 2005, Jenner defended MCI in an action brought by a local telephone company that sought, among other things, a ruling that MCI was required to pay tariffed access charges for traffic between VoIP carriers and traditional circuit switched providers. Mot. to Disqualify 4; Opp'n Mem. 7. Jenner successfully argued on behalf of MCI that access charges are inapplicable to VoIP traffic. Mot. to Disqualify 4 (citing Southwestern Bell Tel., L.P. v. Missouri Pub. Serv. Comm'n, 461 F. Supp. 2d 1055, 1079 (E.D. Mo. 2006)). Later in 2005, MCI again retained Jenner to represent it in connection with MCI's merger with Verizon. Id. at 5. Verizon Business, as MCI is now known post-merger, contends that this representation put Jenner attorneys "in a position to obtain confidential information relating to all aspects of Verizon Business's operations and business plans."*fn1 Id.

II. DISCUSSION

Because courts must "bear in mind a party's right to choose his or her counsel and the possibility that a disqualification motion has been brought for tactical reasons," Acme Am. Repairs, Inc. v. Katzenberg, No. 03-CV-4740, 2007 WL 952064, at *4 (E.D.N.Y. Mar. 29, 2007) (citing Hempstead Video, Inc. v. Village of Valley Stream, 409 F.3d 127, 132 (2d Cir. 2005)), "[m]otions to disqualify opposing counsel are viewed with disfavor in the Circuit," Bennett Silvershein Assoc. v. Furman, 776 F. Supp. 800, 802 (S.D.N.Y. 1991). Consequently, the moving party's burden of proof is a high one. See Evans v. Artek Sys. Corp., 715 F.2d 788, 791--92 (2d Cir. 1983). However, "any doubt should be resolved in favor of disqualification." Revise Clothing, Inc. v. Joe's Jeans Subsidiary, Inc., 687 F. Supp. 2d 381, 387 (S.D.N.Y. 2010) (citing Hull v. Celanese Corp., 513 F.3d 568, 571 (2d Cir. 1975)).

In order to prevail on a motion to disqualify, the movant must demonstrate: (1) the moving party is a former client of the adverse party's counsel; (2) there is a substantial relationship between the subject matter of the counsel's prior representation of the moving party and the issues in the present lawsuit; and (3) the attorney whose disqualification is sought had access to, or was likely to have had access to, relevant privileged information in the course of his prior representation of the client.

Evans, 715 F.2d at 791. If the movant is able to establish a substantial relationship, a rebuttable presumption is created that the attorney had, or likely had, access to relevant privileged information. See Gov't of India v. Cook Indus., Inc., 569 F.2d 737, 741 (2d Cir. 1978) ...


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