151 F. Supp. 3d 1294
M.D. Fla.2015Background
- Blitz Telecom Consulting bought telephone numbers from carriers and resold them (often to prepaid calling-card providers); Peerless assigned numbers to Blitz under an IP Control Agreement requiring Peerless to pay Blitz a 30% "co-marketing fee" based on collected revenues.
- From 2010 until mid-2012 Peerless paid monthly commissions; after the Northern District of Texas decision in Southwestern Bell Tel. Co. v. IDT (the "IDT Decision") Peerless stopped paying, citing the Contract’s "Change in Law" clause.
- The Change in Law clause allows renegotiation if a "legislative, regulatory, judicial or other legal action" materially affects a party’s ability to perform a material obligation.
- Blitz sued for breach of contract, quantum meruit, declaratory relief, and equitable accounting; Peerless counterclaimed and moved for summary judgment, arguing (among other things) that the IDT Decision changed the law, excused performance, and that the Contract was illegal because Blitz is allegedly an uncertified carrier.
- The court treated contract law under Illinois law (choice-of-law clause) and certain equitable claims under Florida law, and evaluated cross-motions for summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the IDT Decision constitutes a change in telecommunications law that permits invoking the Contract’s Change in Law clause | Blitz: IDT is not a binding change in law and did not affect Peerless’ material obligation to pay co-marketing fees | Peerless: IDT held prepaid card providers liable for access charges broadly, materially affecting Peerless’ ability to collect revenues and thus perform | Court: IDT (a district court decision) cannot change federal law for non‑parties; it did not materially affect any material contractual obligation — Peerless may not invoke Change in Law (summary judgment for Blitz on this declaration) |
| Whether there is an actual controversy and whether declaratory relief is duplicative | Blitz: declaratory relief is appropriate to resolve rights under the Contract | Peerless: Contract terminated/new agreement; declaratory relief is duplicative of other claims | Court: An actual, ripe controversy exists; declaratory relief is not barred as duplicative — Peerless’ summary judgment on Count III denied; Blitz granted partial summary judgment on the specific declaration that IDT did not authorize invoking Change in Law |
| Whether Blitz is entitled to an equitable accounting remedy | Blitz: transactions are complex, discovery incomplete, money damages may be unascertainable without an accounting | Peerless: no fiduciary relationship, adequate remedy at law, transactions calculable under contract | Court: Accounting is a remedy, not a standalone claim — Blitz’s Count IV (styled as a claim) dismissed; but an equitable accounting remains available as a remedy if liability is found because transactions are sufficiently complex and legal remedy may be inadequate (denied summary judgment to Peerless on remedy availability) |
| Whether the Contract is illegal because Blitz is an uncertified telecommunications carrier | Blitz: it is not a common carrier and thus not subject to FCC §214 certification requirement | Peerless: Blitz functionally provided telecom services without certification, rendering the Contract unenforceable | Court: Peerless did not show Blitz undertakes to serve all indifferently (first prong of common-carrier test); cannot establish illegality at summary judgment — Defendant’s claim denied |
Key Cases Cited
- American Elec. Power Co. v. Connecticut, 564 U.S. 410 (2011) (district courts cannot make binding precedent beyond parties to the case)
- Aetna Life Ins. Co. v. Haworth, 300 U.S. 227 (1937) (declaratory-judgment actions require an actual controversy under Article III)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment burden-shifting framework)
- Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (definition of genuine dispute of material fact at summary judgment)
- Nat’l Ass’n of Regulatory Util. Comm’rs v. FCC, 533 F.2d 601 (D.C. Cir. 1976) (test for common-carrier status: serves all indifferently)
- Zaki Kulaibee Establishment v. McFliker, 771 F.3d 1301 (11th Cir. 2014) (equitable accounting is a remedy, and prerequisites for obtaining an accounting)