990 F. Supp. 2d 953
D. Minn.2014Background
- This case involves Qwest's claims that Tekstar and several free-conferencing providers pumped traffic to Defendants through Tekstar’s tariffs and Least-Cost Routing, generating unlawful charges to Qwest.
- Tekstar assigned phone numbers to Defendants and housed equipment in Minnesota, though Defendants did not reside there and some equipment was outside Tekstar’s certificated area.
- Tekstar’s charges to Qwest were based on FCC/MPUC tariffs; inter-state and intra-state rates (4.3 cents and 7 cents per minute) were allegedly improperly billed to Qwest.
- GCP filed for bankruptcy, but the case proceeds against Audiocom, Free Conferencing, Vast/Basement Ventures, Ripple, and Tekstar’s absence does not preclude proceeding against others; Tekstar was dismissed earlier.
- Qwest filed an amended complaint asserting five claims against all Defendants (Count I, II, IV, V, VI) and an additional unfair competition claim (Count III) against Audiocom and Ripple; Qwest seeks damages for alleged violations of tariffs and related schemes.
- Qwest contends jurisdiction exists under diversity with more than $75,000 in controversy; Canfield’s analysis supports damages exceeding $75,000 against Audiocom and Ripple.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction under §1332(a)? | Qwest asserts damages exceed $75,000 and complete diversity. | Audiocom and Ripple argue damages may be less than $75,000 and lack of complete diversity. | Court finds jurisdiction exists; denies dismissal for lack of subject-matter jurisdiction. |
| Tortious interference with contract (Count I) viability | Qwest pleads contracts via Tekstar tariffs and that Defendants procured breach. | Defendants contend lack of proof of breach or justification; some argue misapplication of law. | Count I survives; denial of dismissal on this claim. |
| Unfair competition (Counts II and III) viability | Qwest alleges unfair competition via Tekstar-violating conduct and statutory schemes; Restatement support. | Unfair competition requires underlying tort and Minnesota law limits theory; Restatement approach lacking support. | Count II dismissed for lack of underlying tort; Count III dismissed for same reason. |
| Fraudulent concealment viability (Count IV) | Defendants concealed terms of contracts; deliberate concealment or duty based on special knowledge. | No duty to disclose; lack of particularity. | Count IV dismissed; fraudulent concealment not adequately pled. |
| Tortious interference with Least-Cost Routing contracts (Count V) viability | Qwest alleges interference with LCR contracts via preferential deals. | Minnesota law requires procurement of a breach (E-Shops) for this claim. | Count V dismissed; procurement of breach not pled. |
| Unjust enrichment viability (Count VI) | Qwest seeks recovery of profits unjustly obtained from Tekstar charges. | Qwest had legal remedies against Tekstar; unjust enrichment inappropriate given potential double recovery. | Count VI dismissed. |
Key Cases Cited
- E-Shops Corp. v. U.S. Bank Ass’n, 678 F.3d 659 (8th Cir.2012) (elements of tortious interference; damages and causation standards)
- Am. Tel. & Tel. Co. v. Central Office Tel., Inc., 524 U.S. 214 (S. Ct. 1998) (filed-rate doctrine; tariffs as contracts; notice considerations)
- Bell v. Hershey, 557 F.3d 953 (8th Cir.2009) (jurisdictional minimum; preponderance standard)
- Caldas v. Affordable Granite & Stone, Inc., 820 N.W.2d 826 (Minn. 2012) (unjust enrichment; quasi-contract and remedies)
- Kopp v. Kopp, 280 F.3d 883 (8th Cir.2002) (jurisdictional burden by preponderance of the evidence)