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Pacific Bell Telephone Co. v. 88 Connection Corporation

United States District Court, S.D. California

August 14, 2014

PACIFIC BELL TELEPHONE COMPANY, et al., Plaintiffs,
v.
88 CONNECTION CORPORATION, Defendant.

ORDER GRANTING PERMANENT INJUNCTION [DOC. 16]

M. JAMES LORENZ, District Judge.

Pending before the court is Plaintiffs' supplemental motion for a permanent injucntion against Defendant 88 Connection Corporation. Defendant has not appeared in this action and has not opposed Plaintiffs' motion. The Court finds this motion suitable for determination on the papers submitted and without oral argument under Civil Local Rule 7.1(d)(1). For the following reasons, the Court GRANTS Plaintiffs' motion for a permanent injunction, details of which are explained below.

I. BACKGROUND

According to the Complaint, Plaintiffs operate telecommunications networks which, inter alia, "give other long-distance telecommunications providers access to their networks so that the other long-distance telecommunications providers' customers can initiate calls." ( Compl. [Doc. 1] ¶ 1.) In return, Plaintiffs are entitled to payment of "switched access charges" pursuant to federal tariffs. ( Id. ¶ 13.) Plaintiffs allege that Defendant is liable to them for its failure to pay these "switched access charges" on calls that originated on Plaintiffs' networks using Defendant's prepaid calling cards. ( Id. ¶ 36.)

The Complaint contains only one cause of action, for violation of federal tariffs. ( Compl. ¶¶ 33-42.) In their prayer for relief, Plaintiffs seek (1) declaratory relief; (2) injunctive relief; (3) an accounting "of interexchange minutes improperly disguised as local traffic that should have been treated as long-distance access traffic, and for which 88 [] should have paid international and/or interstate switched access service charged but evaded payment"; and (4) monetary damages or restitution "in the amount of the international and/or interstate switched access service charges (including interest and late payment fees) that the [Plaintiffs] are entitled to pursuant to their lawful federal tariffs and which 88 [] has failed to pay." ( Id. 13-14.) On December 6, 2013, Plaintiffs moved for default judgment and a permanent injunction.

On January 3, 2013, the Court granted in part and denied in part Plaintiffs motion for default judgment and a permanent injunction. ( January 3, 2014 Order [Doc. 15].) The Court granted the motion, to the extent that it sought a default judgment for monetary damages of $4, 013, 459. ( Id. 6-7.) The motion was denied and held in abeyance, however, to the extent it sought injunctive relief, because the moving party failed to address the proper standard for a permanent injunction. ( Id. 7-8.) Plaintiff was granted leave to file supplemental briefing with respect to their claims for injunctive relief, and did so on January 30, 2014. ( Id .; Supplemental Brief [Doc. 16].) Defendant has not responded or appeared in this matter.

II. LEGAL STANDARD

Under to Rule 55(b), a court may order default judgment following the entry of default by the Clerk of the Court. After default has been entered, the factual allegations of the complaint are taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987). An entry of default does not automatically entitle a plaintiff to a court-ordered judgment. See Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986). Rather, granting or denying relief is within the court's discretion. See id.

When default judgment is granted, the scope of relief is limited by Federal Rule of Civil Procedure 54(c): "A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings."

III. DISCUSSION

Having already determined that default judgment was appropriate, the Court must now turn to whether the plaintiffs have established their entitlement to a preliminary injunction. A party is entitled to permanent injunctive relief if it can show (1) an irreparable injury; (2) an inadequate remedy at law to compensate the injury; (3) that an injunction is warranted after balancing the hardships between the parties; and (4) the public interest would not be harmed by granting the injunction. eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006).[1]

A. Plaintiffs Have Established Irreparable Injury

In the previous order, the Court detailed how Defendants are using Plaintiffs networks without providing compensation, in direct violation of federal law. Because Plaintiffs have presented undisputed evidence that Defendants violations are ongoing, Plaintiff has and is suffering irreparable harm, because Defendants conduct has caused Plaintiff to provide network services without being properly compensated. Moreover, given the nature of this dispute, Plaintiff would be forced to repeatedly file suit to recover the future originating ...


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