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North County Communications Corp. v. Sprint Spectrum

June 24, 2010


The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge


This case comes before the Court on Defendants' motion to dismiss Plaintiff's sixth claim for relief. Plaintiff filed an opposition to the motion, and Defendants filed a reply. After thoroughly considering these memoranda and the relevant legal authority, the Court grants Defendants' motion to dismiss.


On February 10, 2010, Plaintiff filed its First Amended Complaint ("FAC"). This filing coincided with the Ninth Circuit's decision in North County Commc'ns Corp. v. California Catalog & Tech, 594 F.3d 1149 (9th Cir. 2010). The FAC alleges Plaintiff is a competitive local exchange carrier ("CLEC") that provides switched local exchange, exchange access, and other telecommunications service in, among other states, California. (FAC ¶ 8.) In addition, the FAC alleges Defendants are commercial mobile radio service providers ("CMRS") as defined by the Federal Communications Act of 1934 and are operating within the regulations implemented by the Federal Communication Commission ("FCC") section 332.*fn1 (FAC ¶ 10.) Plaintiff alleges that Defendants' customers have called Plaintiff's customers and their calls have been properly terminated by Plaintiff and in turn reasonable compensation is warranted for this service. (FAC ¶¶ 17-22.) Plaintiff's sixth claim for declaratory relief incorporates allegations contained in paragraphs 1 through 50 of their FAC, but not paragraphs 51 through 91. (FAC ¶ 92.) The sixth claim seeks declaratory relief as follows:

Plaintiff is entitled to be compensated for the termination of the traffic which the Defendants sent and continue to send to the Plaintiff's end-users, and Plaintiff is informed and believes that the Defendants unreasonably contend otherwise. An actual controversy exists between the parties. A judicial declaration of the parties' respective rights and obligations is necessary and proper, and such a declaration is in furtherance of justice. Accordingly, Plaintiffs request a judicial declaration stating that (1) the number of calls and the number of minutes originating on the Defendants' networks and terminated on the Plaintiff's network up through the time of trial, (2) that the Plaintiff is entitled to receive compensation for the termination of calls to Plaintiff's end-users which originate on the Defendants' networks, and (3) that the Defendants are required to commit to compensate Plaintiff at a rate to be determined by court or appropriate administrative agency. (FAC ¶ 94.)

On March 3, 2010, the parties jointly agreed that the ruling in NCC would affect the claims alleged by Plaintiff in this complaint. (Joint Mot. to Extend at 1:18-22.) Plaintiff stated it would evaluate whether an amended complaint should be filed. (Id. at 1: 23-24.) Ultimately, Plaintiff elected not to amend its complaint, prompting Defendants to file the present motion.


Defendants raise several arguments in support of their motion to dismiss Plaintiff's sixth claim for declaratory relief. First, Defendants assert that the ruling in NCC is controlling as to whether Plaintiff's sixth claim for declaratory relief should be dismissed. Second, Defendants argue that Plaintiff's sixth claim seeks relief under federal telecommunications law, not general contract law. Finally, Defendants reason that the joint motion to extend between the two parties gave Plaintiff notice and a reasonable amount of time to amend their claim for declaratory relief to avoid potential conflict with the holding in NCC.

A. Standard of Review

In two recent opinions, the Supreme Court established a more stringent standard of review for 12(b)(6) motions. See Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). To survive a motion to dismiss under this new standard, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556).

"Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950 (citing Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007)). In Iqbal, the Court began this task "by identifying the allegations in the complaint that are not entitled to the assumption of truth." Id. at 1951. It then considered "the factual allegations in respondent's complaint to determine if they plausibly suggest an entitlement to relief." Id. at 1951.

B. NCC v. CC&T

In NCC, the Ninth Circuit addressed whether a private right of action existed under 47 U.S.C. § 251(b) or 47 C.F.R. § 20.11(b) for plaintiffs to seek compensation in federal court from CMRS providers. North County Commc'ns Corp., 594 F.3d at 1155. Prior to the enactment of the 1996 Telecommunications Act and continuing thereafter, the FCC enumerated several rules to govern connections between CLECs and CMRS providers. Id. at 1153. The FCC determined that 47 U.S.C. § 251(b)(5) "obligates CLECs to establish reciprocal compensation arrangements for the exchange of intraMTA [Major Trading Area] traffic between CLECs and CMRS providers." Id. The FCC stated further that traffic originating and terminating within the same MTA was to be governed by reciprocal compensation obligations under 47 U.S.C. § 251(b)(5), not interstate or intrastate access charges. Id.

Both 47 U.S.C. ยง 251(b)(5) and the FCC's reciprocal compensation rules reference an arrangement between CLECs and CMRS providers, however, neither addressed the specific type of arrangement necessary to trigger reciprocal compensation or what would result if no arrangement was organized ...

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