PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION
[PROPOSED] DISCOVERY PLAN AND SCHEDULING ORDER
[DRAFT — PREPARED FOR USE UPON LIFTING OF STAY — NOT YET FILED]
Prepared by Calderwood & Harkness LLP, 1200 K Street NW, Suite 900, Washington, D.C. 20005, on behalf of Defendants Northgate Telecommunications PLC ("NTP") and Northgate Networks America Inc. ("NNA") (collectively, "Defendants" or "Northgate").
Draft prepared by Aaron Liu and Monica Reyes; reviewed by Elaine Forsythe.
Internal Reference No.: C&H-2022-ATR-00419
Right-click to update Table of Contents
I. INTRODUCTION AND BACKGROUND
This Proposed discovery Plan and Scheduling Order (the "Plan") is submitted pursuant to Rule 26(f) of the Federal Rules of Civil Procedure and Local Civil Rule 16 of the United States District Court for the Eastern District of Virginia. The Plan is prepared by counsel for Defendants Northgate Telecommunications PLC and Northgate Networks America Inc. in anticipation of the lifting of the stay currently in effect in this action, and is intended for negotiation with Plaintiff's counsel, Hargrove, Winslow & Burke LLP (Victoria Hargrove, lead partner; Daniel Stoyanov, senior associate), and subsequent submission to this Court as either a joint or contested proposal pursuant to Federal Rule of Civil Procedure 26(f)(2) and Local Civil Rule 16(B).
Procedural History. Plaintiff Ridgepoint Communications Inc. ("Ridgepoint" or "Plaintiff") filed this action on September 19, 2022, asserting a single count of monopolization under Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2. Defendants filed a Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6) on November 28, 2022. On March 14, 2023, the Court entered an Order (Dkt. 47) staying all proceedings in this action pending resolution of the parallel proceeding before the Federal Communications Commission in Docket WC-23-0042, captioned In the Matter of Northgate Networks America Inc. — Complaint Regarding Interconnection Obligations under Section 251 (the "FCC Proceeding"). In the same Order, the Court denied Defendants' Motion to Dismiss without prejudice, with leave to renew the motion following the lifting of the stay. The proceedings have remained stayed since that date, a period now exceeding sixteen months.
Nature of the Action. Plaintiff Ridgepoint Communications Inc. alleges a single count of monopolization under Section 2 of the Sherman Act, 15 U.S.C. § 2. Specifically, Ridgepoint claims that Defendants' refusal to grant interconnection and physical colocation access at fourteen (14) specific central-office and meet-me-room facilities located in the Philadelphia–Baltimore–Washington, D.C. corridor (the "Disputed Facilities," as identified in Appendix A hereto) constitutes unlawful monopolization of the purported "last-mile enterprise fiber-optic transport services market." Ridgepoint contends that Northgate's Wholesale Access Policy (the "WAP"), adopted in January 2020, was designed to and did exclude Ridgepoint and other competitive local exchange carriers ("CLECs") from interconnecting at the Disputed Facilities, thereby allegedly foreclosing competition in the purported relevant market.
Damages and Relief Sought. Ridgepoint seeks damages in the amount of $127 million in alleged lost profits over a projection period of 2022 through 2027, trebled to $381 million under Section 4 of the Clayton Act, 15 U.S.C. § 15. Ridgepoint further seeks permanent injunctive relief compelling interconnection access at all fourteen Disputed Facilities on terms to be determined by the Court.
Defendants' Position. Defendants deny all claims and contend, among other things, that the Wholesale Access Policy reflects a legitimate, non-pretextual business decision motivated by documented capacity constraints at the Disputed Facilities (each of which operates at or above 85% capacity utilization); that Ridgepoint cannot establish the requisite elements of a refusal-to-deal claim under the standards articulated in Harborview Holdings Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004), and Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985); and that Ridgepoint's proposed relevant market definition is implausibly narrow. Defendants further contend that Ridgepoint's damages theory is speculative and unsupported by credible evidence.
This Plan sets forth the parties' proposed schedule for discovery and pretrial proceedings, structured to provide sufficient time for comprehensive fact and expert discovery while advancing this case toward resolution in a manner consistent with the Court's well-known preference for the expeditious management of its docket. All deadlines are expressed as calendar intervals from "Day 0," defined as the date on which the Court's stay is formally lifted by written order.
II. PROPOSED SCHEDULE OVERVIEW
The following master timeline sets forth the principal milestones for this action. All deadlines are expressed in calendar days from Day 0, which is defined as the date on which the Court enters an order lifting the stay imposed by the March 14, 2023 Order (Dkt. 47). The parties recognize that these dates are proposed and subject to modification by the Court. To the extent any deadline falls on a weekend or federal holiday, the applicable deadline shall be the next business day in accordance with Federal Rule of Civil Procedure 6(a).
Note Regarding Concurrent Proceedings. Defendants reserve the right to renew their Motion to Dismiss, which was denied without prejudice by the Court's March 14, 2023 Order. The proposed schedule is designed to accommodate parallel briefing on the Renewed Motion to Dismiss and the commencement of fact discovery. Given the substantial age of this case — filed in September 2022, with proceedings stayed since March 2023 — Defendants agree that fact discovery should proceed concurrently with the pendency of any renewed dispositive motion, subject to the parties' respective rights to seek appropriate relief in the event the motion is granted. This approach is consistent with the efficient administration of justice and the expectations of this Court's individual practices for complex commercial litigation.
III. RENEWED MOTION TO DISMISS
A. Defendants' Intent to Renew
Defendants intend to refile their Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6) within forty-five (45) days of the lifting of the stay. The Court's March 14, 2023 Order expressly denied the original Motion to Dismiss without prejudice, with leave to renew following the lifting of the stay. Defendants' renewed motion will be updated to account for developments in the FCC Proceeding and any intervening legal authority.
B. Anticipated Arguments
The Renewed Motion to Dismiss will advance the following principal arguments, which were set forth in Defendants' original motion and which Defendants intend to supplement and refine:
(a) Failure to State a Refusal-to-Deal Claim. Ridgepoint's claim fails to satisfy the exacting standards for a refusal-to-deal theory of monopolization under Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985), and Harborview Holdings Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004). As the Supreme Court emphasized in Trinko, the right of a monopolist to choose its trading partners is one of the most fundamental principles of antitrust law, and Section 2 does not impose a general duty to deal with competitors. Ridgepoint cannot plausibly allege the narrow circumstances that the Aspen Skiing exception requires.
(b) WAP as Legitimate Unilateral Business Decision. The Wholesale Access Policy is a facially neutral business decision adopted by Northgate in January 2020 and applied uniformly to all wholesale access applicants. The WAP established objective criteria — including a minimum annual revenue commitment of $5 million and demonstrated capacity to utilize allocated space — that Ridgepoint does not and cannot satisfy. A firm's unilateral decision to adopt rational business policies does not give rise to antitrust liability, even if such policies have the incidental effect of disadvantaging a competitor. See Pac. Bell Tel. Co. v. Greaves Corporation, 555 U.S. 438, 448 (2009).
(c) Absence of Prior Voluntary Course of Dealing. The Aspen Skiing framework requires evidence of a pre-existing voluntary course of dealing that the defendant terminated in order to harm a competitor. The prior Master Interconnection Agreement between Northgate and Ridgepoint (effective June 15, 2015, through June 14, 2020) covered only three (3) of the fourteen (14) Disputed Facilities, all located in northern Virginia. Ridgepoint cannot plausibly allege that Northgate voluntarily dealt with Ridgepoint at the remaining eleven facilities, as no interconnection arrangement ever existed at those locations. Even as to the three northern Virginia facilities, the MIA expired by its own terms, and the subsequent holdover arrangement was a month-to-month accommodation, not a voluntary course of dealing giving rise to antitrust obligations.
(d) Implausibly Narrow Relevant Market Definition. Ridgepoint's proposed relevant market — "last-mile enterprise fiber-optic transport services" of 1 Gbps and above in the Philadelphia–Baltimore–Washington, D.C. corridor — is artificially narrow and fails to account for substantial competitive alternatives including cable-based ethernet services, fixed wireless access, wholesale ethernet transport, and self-provisioning by enterprise customers. An implausibly defined relevant market is fatal to a Section 2 claim at the pleading stage. See Newcal Indus., Inc. v. Ikon Office Sol., Inc., 513 F.3d 1038, 1044 (9th Cir. 2008).
C. Proposed Briefing Schedule
Defendants propose the following briefing schedule for the Renewed Motion to Dismiss:
• Defendants' Renewed Motion to Dismiss: Day 0 + 45 days
• Plaintiff's Opposition: 30 days after filing of motion (Day 0 + 75 days)
• Defendants' Reply: 15 days after filing of opposition (Day 0 + 90 days)
• Oral Argument: At the discretion of the Court (estimated Day 0 + 105 days)
D. Concurrent discovery
Given the age of this case and the duration of the stay, Defendants agree that fact discovery should proceed concurrently with the briefing and pendency of the Renewed Motion to Dismiss. This approach recognizes the Eastern District of Virginia's "rocket docket" tradition and the importance of avoiding unnecessary delay. Nothing in this agreement to concurrent discovery shall be construed as a waiver of Defendants' right to seek a stay of discovery on specific topics or issues if warranted by the resolution of the motion.
E. Supplementation Based on FCC Proceeding
The FCC Proceeding (Docket WC-23-0042) remains pending before Administrative Law Judge Robert Fenwick. The evidentiary hearing in that proceeding was held January 22–24, 2024; post-hearing briefs were filed March 15, 2024; and reply briefs were filed April 12, 2024. ALJ Fenwick's initial decision has not yet been issued. Defendants reserve the right to supplement their Renewed Motion to Dismiss to account for ALJ Fenwick's initial decision, when issued, to the extent it bears on the legal sufficiency of Ridgepoint's claims. Any such supplementation will be made promptly and with notice to Plaintiff's counsel and the Court.
IV. INITIAL DISCLOSURES UNDER FRCP 26(a)(1)
Initial disclosures pursuant to Federal Rule of Civil Procedure 26(a)(1) shall be exchanged within thirty (30) days of the lifting of the stay, as set forth in Section II above. The following sets forth the anticipated scope and content of each party's initial disclosures, to the extent presently known.
A. Defendants' Anticipated Initial Disclosures
1. Individuals Likely to Have discoverable Information (FRCP 26(a)(1)(A)(i)). Defendants anticipate identifying the following individuals, among others, as persons likely to have discoverable information that Defendants may use to support their claims or defenses:
(a) Diane Okoro, U.S. President, Northgate Networks America Inc., 8200 Dulles Corner Boulevard, Suite 1100, Tysons Corner, VA 22182. Ms. Okoro is expected to have information regarding the management of Northgate's U.S. operations, the adoption and implementation of the Wholesale Access Policy, decisions regarding Ridgepoint's interconnection requests, capacity management at the fourteen Disputed Facilities, and competitive strategy in the Mid-Atlantic market.
(b) Patrick Salazar, Chief Regulatory Officer, Northgate Telecommunications PLC, 14 Broadwall Lane, London SE1 9PQ, United Kingdom. Mr. Salazar is expected to have information regarding Northgate's regulatory compliance posture, its obligations under Sections 251 and 252 of the Telecommunications Act of 1996, the FCC Proceeding, the regulatory rationale for the Wholesale Access Policy, and the development of Northgate's interconnection policy framework.
(c) Catherine Ng, U.S. Deputy General Counsel, Northgate Networks America Inc., 8200 Dulles Corner Boulevard, Suite 1100, Tysons Corner, VA 22182. Ms. Ng is expected to have information regarding the legal oversight of interconnection decisions, the litigation hold implemented on September 21, 2022, communications with Ridgepoint's legal counsel, and the legal review of the Wholesale Access Policy. Certain information within Ms. Ng's knowledge may be subject to the attorney-client privilege and/or work product protection, and Defendants reserve all rights with respect thereto.
(d) Additional Northgate personnel involved in the adoption and implementation of the Wholesale Access Policy, capacity planning and utilization analysis at the fourteen Disputed Facilities, interconnection request processing, and related commercial and operational functions. The identities of such additional individuals will be set forth in Defendants' formal initial disclosures.
2. Documents and Tangible Things (FRCP 26(a)(1)(A)(ii)). Defendants anticipate providing copies or descriptions by category and location of the following categories of documents that Defendants may use to support their defenses:
(a) The Wholesale Access Policy, as adopted in January 2020, including all versions, amendments, and internal policy guidance memoranda relating thereto.
(b) Capacity utilization data for each of the fourteen Disputed Facilities, demonstrating that each facility operates at or above eighty-five percent (85%) capacity utilization, together with underlying methodology and supporting engineering analyses.
(c) The original Master Interconnection Agreement between Northgate Networks America Inc. and Ridgepoint Communications Inc., effective June 15, 2015, through June 14, 2020 (the "MIA"), governing interconnection and colocation at three northern Virginia facilities.
(d) Documentation relating to the month-to-month holdover arrangement that continued following the expiration of the MIA, under which Ridgepoint continued to occupy space at three northern Virginia facilities at a rate of $14,400 per month per facility (representing 120% of the prior $12,000 per month rate under the MIA).
(e) Correspondence between Northgate and Ridgepoint regarding Ridgepoint's interconnection and colocation requests submitted between March 2021 and August 2022 for the fourteen Disputed Facilities.
(f) Internal analyses and supporting documentation relating to the business justifications for the Wholesale Access Policy.
3. Computation of Damages (FRCP 26(a)(1)(A)(iii)). Defendants deny liability in its entirety and contend that Ridgepoint is not entitled to any damages. To the extent a computation of damages is applicable, Defendants reference the preliminary rebuttal analysis prepared by Dr. Priya Narasimhan, Managing Director, Ellsworth Economic Consulting LLC, which estimates that Ridgepoint's alleged lost profits, if any, would amount to no more than $18 million to $24 million on a pre-trebling basis, reflecting corrections to Plaintiff's demand projections, pricing assumptions, and failure to account for available alternative infrastructure. Dr. Narasimhan's full analysis will be set forth in her expert report.
4. Insurance Agreements (FRCP 26(a)(1)(A)(iv)). Defendants will disclose the following insurance agreements that may be applicable to satisfy all or part of a possible judgment in this action:
(a) Directors & Officers / Entity Liability Policy, issued by Clarendon Mutual Insurance Ltd., with a per-occurrence limit of $50,000,000 and a self-insured retention of $10,000,000.
(b) Excess liability insurance tower:
• First excess layer: Avalon Specialty Underwriters Inc., $30,000,000 in excess of the Clarendon primary policy.
• Second excess layer: Pinnacle Re Ltd., $20,000,000 in excess of the Avalon layer.
B. Plaintiff's Anticipated Initial Disclosures
Based on information presently available to Defendants, Plaintiff's initial disclosures are anticipated to include the following:
(a) Individuals with discoverable information: Gregory Trent, Chief Executive Officer and Founder of Ridgepoint Communications Inc.; Samira Hashemi, Chief Operating Officer of Ridgepoint Communications Inc.; and Theodore Braun, General Counsel of Ridgepoint Communications Inc. Additional witnesses may include Ridgepoint's network engineering, sales, and finance personnel.
(b) Computation of damages: Plaintiff's damages model is based on an alleged $127 million in lost profits over a projection period from 2022 through 2027, as computed by Plaintiff's retained economic expert, Dr. Leonard Kuo, Professor of Economics at Cavendish University. The methodology underlying this computation will be the subject of Dr. Kuo's expert report and is expected to include demand projections, pricing assumptions, and identification of allegedly lost customer accounts.
(c) Documents supporting Plaintiff's claim: Interconnection and colocation requests submitted by Ridgepoint to Northgate between March 2021 and August 2022 for the fourteen Disputed Facilities; correspondence between the parties; and Ridgepoint's internal business plans and financial projections.
V. DOCUMENT DISCOVERY
A. Scope and Proportionality
All document discovery in this action shall be governed by the scope and proportionality standards set forth in Federal Rule of Civil Procedure 26(b)(1). The parties recognize that this case involves complex antitrust claims requiring extensive document review and production, and the parties are committed to conducting discovery in a manner that is proportional to the needs of the case, taking into account the importance of the issues at stake, the amount in controversy ($381 million as alleged by Plaintiff), the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.
Given the complexity of the antitrust claims, the breadth of the discovery issues, and the significant damages at stake, the parties propose that each side may serve up to forty (40) Requests for Production of Documents, inclusive of all discrete subparts. This limit is subject to modification by agreement of the parties or by order of the Court upon a showing of good cause.
The relevant subject-matter categories for document discovery are anticipated to include the following, without limitation:
(a) The Wholesale Access Policy. All documents relating to the adoption, implementation, and internal deliberations concerning the Wholesale Access Policy, including drafts, memoranda, board presentations, meeting minutes, email correspondence, and analyses prepared in connection with the WAP's development and approval in January 2020.
(b) Capacity Utilization Data. Capacity utilization data for each of the fourteen Disputed Facilities identified in Appendix A hereto (from 401 N. Broad Street, Philadelphia, PA 19108, through 8100 Boone Boulevard, Tysons Corner, VA 22182), including monthly or quarterly utilization reports, engineering assessments, capital expenditure plans, and expansion or contraction analyses for each facility.
(c) Master Interconnection Agreement and Holdover Arrangement. All documents relating to the Master Interconnection Agreement between Northgate Networks America Inc. and Ridgepoint Communications Inc. (effective June 15, 2015, through June 14, 2020), including the original agreement, all amendments, side letters, and correspondence relating to its negotiation, performance, and expiration. Documents relating to the subsequent month-to-month holdover arrangement, including the establishment of the $14,400 per month per facility rate.
(d) Interconnection and Colocation Requests. All documents relating to Ridgepoint's interconnection and colocation requests submitted to Northgate between March 2021 and August 2022 for the fourteen Disputed Facilities, including the requests themselves, Northgate's internal analyses and deliberations regarding each request, and all responses provided to Ridgepoint.
(e) Northgate's Responses and Internal Deliberations. All documents reflecting Northgate's internal deliberations, analyses, and decision-making with respect to each of Ridgepoint's interconnection and colocation requests at the fourteen Disputed Facilities.
(f) Market Studies and Competitive Analyses. All market studies, competitive analyses, business plans, strategic planning documents, and investor presentations relating to last-mile enterprise fiber-optic transport services in the Philadelphia–Baltimore–Washington, D.C. corridor, including any analyses of Northgate's competitive position, market share, or competitive threats from CLECs or other carriers.
(g) Revenue Data and Market Share Information. Revenue data and customer information relevant to the calculation of market shares in the purported relevant market, including Northgate's annual revenue attributable to enterprise fiber-optic transport services in the relevant geographic area. The parties have identified a significant dispute regarding Northgate's market share: Plaintiff alleges a 68% share, while Defendants contend the correct figure is approximately 31% when the relevant market is properly defined to include cable-based ethernet, fixed wireless, and wholesale ethernet services.
(h) Ridgepoint's Financial Projections and Business Plans. All financial projections, business plans, strategic analyses, and alternative infrastructure assessments prepared by or on behalf of Ridgepoint Communications Inc. during the relevant period, including documents prepared for Ridgepoint's board of directors, management team, and investors.
(i) Caravel Capital Partners LP. All communications between Ridgepoint and Caravel Capital Partners LP (1700 JFK Boulevard, Suite 2900, Philadelphia, PA 19103) regarding this litigation, litigation funding arrangements, the November 2018 leveraged buyout of Ridgepoint (in which Caravel acquired a 78% equity interest for approximately $510 million), and any board-level discussions regarding the decision to file or fund this lawsuit.
(j) FCC Proceeding Materials. All documents produced to, obtained from, or generated in connection with the FCC Proceeding in Docket WC-23-0042, to the extent not publicly available on the FCC's Electronic Comment Filing System.
B. E-discovery and ESI Protocol
1. E-discovery Vendor. Defendants have engaged Candela discovery Solutions Inc. ("Candela"), located at 200 Park Avenue South, 14th Floor, New York, NY 10003, as their e-discovery vendor and managed review provider for this litigation. Kenji Takahashi serves as Candela's project manager for this matter.
2. Document Collection. Since the implementation of the litigation hold on September 21, 2022, Candela has collected approximately 1.2 million documents from twenty-three (23) custodians across Northgate Networks America Inc. and Northgate Telecommunications PLC. Custodians include senior management, regulatory affairs, legal, network engineering, sales, and operations personnel with responsibilities relevant to the Disputed Facilities, the Wholesale Access Policy, and Northgate's interactions with Ridgepoint.
3. Preliminary Review. Candela has conducted a preliminary review of the collected documents and has identified approximately 87,000 documents as potentially responsive to Plaintiff's anticipated discovery requests. This estimate is based on initial keyword searches and custodian-based filtering and is subject to refinement based on the negotiation of search terms and other ESI protocol parameters with Plaintiff's counsel.
4. Review Platform. All collected documents are hosted on the Concordia Review™ platform, which provides for document review, coding, production, and privilege logging functionality. To the extent Plaintiff's counsel utilizes a different review platform, the parties will confer regarding the format and mechanics of document productions and cross-platform compatibility.
5. Proposed ESI Protocol. The parties propose to negotiate and submit a detailed ESI protocol governing the following subjects:
(a) Format of Production. Whether documents shall be produced in native format, as TIFF images with associated load files (including extracted text and metadata), or in a combination of formats depending on document type (e.g., native for spreadsheets and databases, TIFF for correspondence and presentations).
(b) Metadata Fields. The specific metadata fields to be produced for each document type, including but not limited to custodian, date created, date modified, date sent, author, recipients, file name, and file path.
(c) De-Duplication. The methodology for de-duplicating documents across custodians and within custodians, including the hash algorithm to be applied and the scope of de-duplication (global vs. custodian-level).
(d) Search Term Negotiation. The process for negotiating and validating search terms, including the use of sample testing to assess precision and recall rates. The parties will exchange proposed search terms and meet and confer in good faith to reach agreement on a final search term protocol.
(e) Technology-Assisted Review (TAR). The use of technology-assisted review (also known as predictive coding or continuous active learning) for the review and coding of documents, including the protocols for seed set selection, training, validation, and quality control. The parties will confer regarding the acceptability of TAR workflows and the disclosure requirements associated therewith.
(f) Clawback Agreement. A clawback agreement pursuant to Federal Rule of Evidence 502(d), providing that the inadvertent production of privileged or work-product-protected documents shall not constitute a waiver of privilege or work product protection, and establishing a procedure for the prompt notification, return, and sequestration of inadvertently produced privileged materials.
6. Timing. The parties shall meet and confer regarding the ESI protocol within twenty-one (21) days of the Rule 26(f) conference. The parties will submit the agreed-upon ESI protocol to the Court for entry as an order, or will identify any disputes for resolution by the Court.
C. Document Production Schedule
The parties propose the following schedule for document production:
(a) Service of Requests for Production. Requests for Production of Documents shall be served within fourteen (14) days of the Rule 26(f) conference.
(b) Responses and Objections. Written responses and objections to Requests for Production shall be due thirty (30) days after service of the requests, in accordance with Federal Rule of Civil Procedure 34(b)(2)(A).
(c) Rolling Productions. Rolling document productions shall commence within forty-five (45) days of service of the Requests for Production. The parties shall make reasonable efforts to ensure that document productions are substantially complete within one hundred twenty (120) days of service of the requests.
(d) Privilege Logs. Privilege logs identifying documents withheld on the basis of attorney-client privilege, work product protection, or any other applicable privilege shall be exchanged within one hundred fifty (150) days of service of the Requests for Production. Privilege logs shall comply with the requirements of Local Civil Rule 26(B) and shall identify each withheld document by date, author, recipient(s), general subject matter, and the specific privilege or protection asserted.
(e) Meet and Confer on Privilege Disputes. The parties shall meet and confer in good faith to resolve any disputes regarding privilege designations before filing any motion to compel production of documents withheld on privilege grounds. Any motion to compel production of documents claimed as privileged shall include a certification that the parties have met and conferred in good faith and have been unable to resolve the dispute.
D. Third-Party Subpoenas
The parties anticipate that third-party discovery will be necessary in this action. Anticipated third-party discovery targets include, without limitation:
(a) Caravel Capital Partners LP, 1700 JFK Boulevard, Suite 2900, Philadelphia, PA 19103. Documents to be sought from Caravel include materials relating to the litigation funding arrangement with Ridgepoint (if any), the November 2018 leveraged buyout (in which Caravel acquired a 78% equity interest in Ridgepoint for approximately $510 million), Ridgepoint's post-acquisition business strategy and financial performance, and board-level decisions regarding this litigation and the FCC Proceeding.
(b) Federal Communications Commission, records from Docket WC-23-0042 that are not publicly available, to the extent obtainable by subpoena or other lawful process. The parties will confer regarding the most efficient method for obtaining non-public FCC records, including the possibility of a joint request to the FCC.
(c) Competing carriers and enterprise customers in the relevant geographic market, to be identified during the course of discovery. These third parties may possess information relevant to the definition of the relevant market, the availability of competitive alternatives to Northgate's last-mile fiber services, and the impact (if any) of Northgate's Wholesale Access Policy on competition in the Philadelphia–Baltimore–Washington, D.C. corridor.
All third-party subpoenas shall be served no later than sixty (60) days before the close of fact discovery (i.e., no later than Day 0 + 210 days), in order to allow sufficient time for compliance, negotiation, and any motions to quash or for protective orders.
VI. INTERROGATORIES
Each party may serve up to twenty-five (25) interrogatories (including all discrete subparts) pursuant to Federal Rule of Civil Procedure 33. Interrogatories shall be served within thirty (30) days of the Rule 26(f) conference, and responses shall be due thirty (30) days after service, in accordance with Rule 33(b)(2).
A. Defendants' Anticipated Interrogatory Topics
Defendants anticipate serving interrogatories on the following topics, among others:
1. Identification of all Ridgepoint personnel involved in the preparation, submission, and follow-up of the interconnection and colocation requests at the fourteen Disputed Facilities between March 2021 and August 2022, including each individual's title, role, and the specific requests in which each individual participated.
2. The factual and analytical basis for Ridgepoint's proposed relevant market definition, including the product market (last-mile enterprise fiber-optic transport services at 1 Gbps and above) and the geographic market (the Philadelphia–Baltimore–Washington, D.C. corridor), including all facts, data, and analyses considered by Ridgepoint in formulating its market definition.
3. The factual and analytical basis for Ridgepoint's computation of $127 million in alleged lost profits over the 2022–2027 projection period, including the demand projections, pricing assumptions, cost assumptions, discount rate, and identification of each specific customer or potential customer whose business Ridgepoint alleges it lost or would have obtained but for Northgate's alleged conduct.
4. Identification and description of all alternative infrastructure providers, carriers, and other entities from which Ridgepoint has obtained, attempted to obtain, or considered obtaining interconnection, colocation, or last-mile fiber transport services at or near the fourteen Disputed Facilities, including the terms of any such arrangements and the reasons for any failure to obtain such services.
5. A full description of the relationship between Ridgepoint Communications Inc. and Caravel Capital Partners LP, including any agreements, understandings, or arrangements pursuant to which Caravel has funded, agreed to fund, or may fund this litigation or the FCC Proceeding.
6. A complete accounting of Ridgepoint's fiber-optic network infrastructure, including the total route-miles of fiber owned or leased by Ridgepoint (alleged to be approximately 6,200 route-miles), the geographic distribution of such route-miles, and the location and capacity of Ridgepoint's own facilities in the Philadelphia–Baltimore–Washington, D.C. corridor.
7. Details of Ridgepoint's FY 2021 annual spend with Northgate (alleged to be approximately $1.8 million), including a breakdown by facility, service type, and contractual basis.
B. Plaintiff's Anticipated Interrogatory Topics
Based on the issues raised in Plaintiff's complaint and the FCC Proceeding, Defendants anticipate that Plaintiff will serve interrogatories on the following topics, among others, and will prepare accordingly:
1. The factual and analytical basis for the Wholesale Access Policy, including the complete drafting history, the identities of all individuals involved in the development and approval of the WAP, all internal deliberations regarding the WAP, and all documents considered in connection with the WAP's adoption in January 2020.
2. Capacity utilization data and the methodology used to calculate capacity utilization at each of the fourteen Disputed Facilities, including the definition of "capacity," the frequency and manner of measurement, and the specific utilization figures for each facility for each quarter from January 2018 through the present.
3. Identification of all wholesale partners and applicants who have met the $5 million minimum annual revenue commitment established by the Wholesale Access Policy, including the identities of such partners, the terms of their wholesale agreements, and the facilities at which they maintain interconnection or colocation.
4. A complete description of Northgate's prior dealings with competitive local exchange carriers — including but not limited to Ridgepoint — at each of the fourteen Disputed Facilities, including the identities of all CLECs that have been granted or denied interconnection or colocation access at each facility.
5. Northgate's financial data relevant to U.S. revenue (reported at approximately $2.41 billion for FY 2022) and market share in the purported relevant market, including a breakdown of revenue by service type, customer type, and geographic area within the Philadelphia–Baltimore–Washington, D.C. corridor.
VII. REQUESTS FOR ADMISSION
Each party may serve up to thirty (30) Requests for Admission pursuant to Federal Rule of Civil Procedure 36. Requests for Admission shall be served within sixty (60) days of the Rule 26(f) conference, and responses shall be due thirty (30) days after service, in accordance with Rule 36(a)(3).
Anticipated topics for Requests for Admission include, without limitation:
(a) Authenticity of key documents, including the Master Interconnection Agreement (effective June 15, 2015, through June 14, 2020), the Wholesale Access Policy (adopted January 2020), and all interconnection request correspondence between Ridgepoint and Northgate between March 2021 and August 2022.
(b) Undisputed historical facts relevant to the parties' prior relationship, including the dates of execution and expiration of the MIA, the monthly rate under the holdover arrangement ($14,400 per month per facility), and the number of facilities covered by the MIA (three northern Virginia facilities).
(c) Ridgepoint's status as a certificated competitive local exchange carrier ("CLEC") in the relevant jurisdictions.
(d) Northgate's total route-miles of fiber-optic infrastructure in the United States (approximately 42,000 U.S. route-miles).
(e) Other undisputed factual predicates relevant to the claims and defenses in this action.
VIII. DEPOSITIONS
A. Fact Depositions
Each party may take up to twelve (12) fact depositions, each limited to seven (7) hours of on-the-record testimony in accordance with Federal Rule of Civil Procedure 30(d)(1). This limit includes depositions taken pursuant to Rule 30(b)(1) (individual depositions) and Rule 30(b)(6) (corporate designee depositions). All fact depositions shall be completed within the 270-day fact discovery period (i.e., by Day 0 + 270 days).
1. Defendants' Anticipated Fact Deposition Witnesses
Defendants anticipate noticing and taking the depositions of the following individuals and entities during fact discovery:
(a) Gregory Trent — Chief Executive Officer and Founder, Ridgepoint Communications Inc., 3500 Market Street, Suite 700, Philadelphia, PA 19104.
Anticipated Topics: The founding, growth, and operation of Ridgepoint Communications Inc.; Ridgepoint's business strategy and competitive positioning in the Philadelphia–Baltimore–Washington, D.C. corridor; the interconnection and colocation requests submitted to Northgate between March 2021 and August 2022; Ridgepoint's competitive strategy and alternative infrastructure options; alleged lost business opportunities; the relationship between Ridgepoint and Caravel Capital Partners LP, including the November 2018 leveraged buyout and Caravel's role in post-acquisition operations; the decision to file this lawsuit and the FCC complaint; and Ridgepoint's communications with counsel regarding pre-litigation strategy (to the extent not privileged).
(b) Samira Hashemi — Chief Operating Officer, Ridgepoint Communications Inc., 3500 Market Street, Suite 700, Philadelphia, PA 19104.
Anticipated Topics: Ridgepoint's day-to-day operations and network planning; the identification and evaluation of interconnection and colocation opportunities at the fourteen Disputed Facilities; efforts to secure alternative infrastructure or interconnection arrangements with other carriers; customer relationships and the impact (if any) of Northgate's alleged conduct on Ridgepoint's customer base; demand projections and revenue forecasts underlying the damages claim; and Ridgepoint's network architecture and capacity in the relevant geographic area.
(c) Theodore Braun — General Counsel, Ridgepoint Communications Inc., 3500 Market Street, Suite 700, Philadelphia, PA 19104.
Anticipated Topics: Pre-litigation correspondence between Ridgepoint and Northgate regarding interconnection requests; the FCC complaint (Docket WC-23-0042); Ridgepoint's regulatory strategy; and communications with the FCC, state public utility commissions, and other regulatory bodies. This deposition will be conducted subject to appropriate privilege limitations, and Defendants reserve the right to seek a ruling from the Court on any privilege disputes that may arise.
(d) Richard Cavanaugh — Managing Partner, Caravel Capital Partners LP, 1700 JFK Boulevard, Suite 2900, Philadelphia, PA 19103.
Anticipated Topics: Caravel's November 2018 leveraged buyout of Ridgepoint Communications Inc. (78% equity acquisition valued at approximately $510 million); Ridgepoint's post-acquisition strategy and financial performance; Caravel's role (if any) in funding this litigation or the FCC Proceeding; board-level decisions regarding Ridgepoint's interconnection strategy, competitive positioning, and decision to pursue legal action against Northgate; and Caravel's involvement in Ridgepoint's business plan projections and financial forecasts.
(e) Dr. Leonard Kuo — Professor of Economics, Cavendish University (Plaintiff's retained economic expert).
Note: Dr. Kuo's deposition will be taken during the expert discovery phase (Day 0 + 375 through Day 0 + 405), not during fact discovery. The anticipated topics are set forth in Section IX below.
(f) FRCP 30(b)(6) Deposition of Ridgepoint Communications Inc. — Corporate designee(s) to be identified by Ridgepoint in response to the deposition notice.
Anticipated Topics: Ridgepoint's organizational structure, management hierarchy, and corporate governance; the interconnection and colocation requests submitted to Northgate at each of the fourteen Disputed Facilities; all communications between Ridgepoint and Northgate from January 2018 through the present; Ridgepoint's revenue and financial data (including reported FY 2022 revenue of approximately $387 million); customer lists and contractual relationships; the availability and utilization of alternative fiber infrastructure in the relevant geographic area; Ridgepoint's network planning and capital expenditure decisions; and the basis for Ridgepoint's damages computation.
2. Plaintiff's Anticipated Fact Deposition Witnesses
Based on the issues in this case and the identities of the key Northgate personnel identified in Defendants' anticipated initial disclosures, Defendants anticipate that Plaintiff will seek to depose the following individuals and entities. Defendants will prepare each witness for deposition in accordance with applicable law and professional obligations:
(a) Diane Okoro — U.S. President, Northgate Networks America Inc., 8200 Dulles Corner Boulevard, Suite 1100, Tysons Corner, VA 22182.
Anticipated Topics: Management of Northgate's U.S. operations; the Wholesale Access Policy, including its adoption, rationale, and implementation; decisions regarding Ridgepoint's interconnection and colocation requests at the fourteen Disputed Facilities; capacity management and utilization at each of the Disputed Facilities; competitive strategy in the Mid-Atlantic market for enterprise fiber services; Northgate's relationships with other wholesale partners and CLECs; and Northgate's response to the FCC complaint.
(b) Patrick Salazar — Chief Regulatory Officer, Northgate Telecommunications PLC, 14 Broadwall Lane, London SE1 9PQ, United Kingdom.
Anticipated Topics: Northgate's regulatory compliance obligations, including those arising under Sections 251 and 252 of the Telecommunications Act of 1996; the FCC Proceeding (Docket WC-23-0042); the regulatory rationale and justification for the Wholesale Access Policy; the development of Northgate's interconnection policy framework; and Northgate's interactions with the FCC and state regulatory commissions.
(c) Catherine Ng — U.S. Deputy General Counsel, Northgate Networks America Inc., 8200 Dulles Corner Boulevard, Suite 1100, Tysons Corner, VA 22182.
Anticipated Topics: Legal oversight of interconnection decisions and the Wholesale Access Policy; communications with Ridgepoint's legal counsel regarding the interconnection requests (subject to appropriate privilege limitations); the litigation hold implemented on September 21, 2022 (subject to privilege limitations); and the legal analysis underpinning Northgate's responses to Ridgepoint's requests. Defendants will assert attorney-client privilege and work product protection as appropriate during this deposition.
(d) FRCP 30(b)(6) Deposition of Northgate Networks America Inc. — Corporate designee(s) to be designated by Northgate in response to the deposition notice.
Anticipated Topics: The adoption of the Wholesale Access Policy in January 2020 and its subsequent implementation across Northgate's U.S. operations; capacity utilization at each of the fourteen Disputed Facilities, including the methodology for calculating utilization and the specific utilization figures for each facility; the prior Master Interconnection Agreement with Ridgepoint (June 15, 2015, through June 14, 2020) and the terms and circumstances of its expiration; the holdover arrangement and its terms ($14,400 per month per facility, representing 120% of the prior $12,000 per month rate under the MIA); the wholesale partner qualification criteria established by the WAP, including the $5 million minimum annual revenue commitment; market analyses and competitive assessments relating to last-mile enterprise fiber services in the Philadelphia–Baltimore–Washington, D.C. corridor; and Northgate's financial data, including U.S. revenue of approximately $2.41 billion for FY 2022.
(e) Sir Malcolm Prentice, KBE — Chief Executive Officer, Northgate Telecommunications PLC, 14 Broadwall Lane, London SE1 9PQ, United Kingdom.
Anticipated Topics: Group-level strategic decisions regarding Northgate's U.S. operations; involvement (if any) in the approval of the Wholesale Access Policy; competitive strategy for the U.S. market; and oversight of Northgate Networks America Inc.
Note: Defendants anticipate objecting to the deposition of Sir Malcolm Prentice on the grounds of the apex doctrine, which generally prohibits the deposition of senior corporate officers absent a showing that the officer has unique, non-repetitive, firsthand knowledge of the facts at issue and that the information cannot be obtained through less burdensome means. See Thomas v. Int'l Bus. Machs., 48 F.3d 478, 483 (10th Cir. 1995); Celerity, Inc. v. Ultra Clean Holding, Inc., No. C 05-4374, 2007 WL 205067, at *3 (N.D. Cal. Jan. 25, 2007). If Plaintiff notices Sir Malcolm's deposition, Defendants will seek a protective order from the Court. In the alternative, any deposition of Sir Malcolm would require travel to London, United Kingdom, or the parties' agreement on a remote deposition conducted via videoconference, with appropriate safeguards regarding document handling and authentication.
B. Deposition Logistics
The parties propose the following logistical framework for the conduct of depositions in this action:
1. Location. Unless otherwise agreed by the parties, depositions of party witnesses shall be conducted in Washington, D.C. Depositions of non-party witnesses shall be conducted at the location of the deponent or such other location as may be agreed upon by the parties and the deponent.
2. London-Based Witnesses. Depositions of witnesses located in London, United Kingdom (including Sir Malcolm Prentice and, to the extent applicable, Patrick Salazar) shall be subject to a meet-and-confer process between the parties regarding location and format. Defendants will propose that any such depositions be conducted by remote videoconference to reduce cost and logistical burden, consistent with Federal Rule of Civil Procedure 30(b)(4), which permits depositions by remote means unless the Court orders otherwise.
3. Videotaping. Either party may arrange for the videotaping of any deposition upon reasonable notice to the opposing party and the deponent. Videotaped depositions shall be conducted in accordance with Federal Rule of Civil Procedure 30(b)(3)(A).
4. Court Reporting. Real-time court reporting shall be provided at all depositions. Costs of court reporting and transcription shall be borne by the noticing party, with copies available to the opposing party at the standard transcript rate.
IX. EXPERT DISCOVERY
A. Expert Reports
Expert discovery shall proceed in accordance with the following schedule and the requirements of Federal Rule of Civil Procedure 26(a)(2).
1. Plaintiff's Opening Expert Reports — Due Day 0 + 300 Days
Plaintiff is anticipated to submit the opening expert report of the following retained expert:
Dr. Leonard Kuo, Professor of Economics, Cavendish University. Dr. Kuo is expected to offer opinions on (i) the definition of the relevant product market (last-mile enterprise fiber-optic transport services at 1 Gbps and above) and geographic market (the Philadelphia–Baltimore–Washington, D.C. corridor); (ii) Northgate's alleged 68% share of the relevant market; (iii) the competitive effects of Northgate's alleged refusal to deal, including the foreclosure of competition in the relevant market; and (iv) Ridgepoint's damages, estimated at $127 million in lost profits over the 2022–2027 projection period. Dr. Kuo's report is expected to set forth his methodology, data sources, and the assumptions and analyses underlying his opinions, in compliance with Rule 26(a)(2)(B).
2. Defendants' Responsive Expert Reports — Due Day 0 + 345 Days
Defendants intend to submit the responsive expert reports of the following retained experts:
(a) Dr. Priya Narasimhan, Managing Director, Ellsworth Economic Consulting LLC, 1455 Pennsylvania Avenue NW, Suite 850, Washington, D.C. 20004.
Dr. Narasimhan will offer opinions on economics, including (i) the definition of the relevant market, which Defendants contend should be defined more broadly than Plaintiff's proposed market to include cable-based ethernet services, fixed wireless access, and wholesale ethernet transport, among other competitive alternatives; (ii) the correction of Northgate's market share from the alleged 68% to approximately 31% under the properly defined relevant market; (iii) a rebuttal of Dr. Kuo's damages analysis, including a detailed critique of Plaintiff's demand projections, pricing assumptions, and failure to account for available alternative infrastructure; and (iv) a corrected damages estimate of $18 million to $24 million on a pre-trebling basis, based on more realistic assumptions about Ridgepoint's likely lost profits.
Dr. Narasimhan is a former Chief Economist of the FCC Wireline Competition Bureau and has extensive experience in telecommunications economics and antitrust analysis.
(b) Dr. Anton Berger, Senior Advisor, Torrence Policy Group LLC, 7925 Jones Branch Drive, Suite 510, McLean, VA 22102.
Dr. Berger will offer opinions on regulatory matters, including (i) the FCC regulatory framework applicable to interconnection and colocation obligations under Sections 251 and 252 of the Telecommunications Act of 1996; (ii) the commercial reasonableness of Northgate's Wholesale Access Policy in light of the applicable regulatory framework and industry practice; (iii) the capacity utilization analysis for the fourteen Disputed Facilities and the engineering rationale for the WAP's capacity-based restrictions; and (iv) the implications of the FCC Proceeding for the antitrust claims in this action.
Dr. Berger is a former Deputy Bureau Chief of the FCC Wireline Competition Bureau and has over twenty years of experience in telecommunications regulatory policy and analysis.
3. Plaintiff's Rebuttal Expert Reports — Due Day 0 + 375 Days
Plaintiff may submit rebuttal expert reports responding to Defendants' expert reports, limited to topics addressed in Defendants' responsive reports, in accordance with Federal Rule of Civil Procedure 26(a)(2)(D)(ii).
B. Expert Depositions
Expert depositions shall be completed during the period from Day 0 + 375 through Day 0 + 405. Each expert deposition shall be limited to seven (7) hours of on-the-record testimony in accordance with Federal Rule of Civil Procedure 30(d)(1).
The parties anticipate that the following expert depositions will be taken:
1. Dr. Leonard Kuo — Plaintiff's economic expert. To be deposed by Defendants' counsel regarding his market definition analysis, market share calculations (including the basis for the 68% market share figure), damages methodology (including the $127 million lost profits computation), demand projections, pricing assumptions, data sources, and the reliability and methodology of his opinions.
2. Dr. Priya Narasimhan — Defendants' economic expert. To be deposed by Plaintiff's counsel regarding her broader market definition, corrected market share calculations (approximately 31%), damages rebuttal analysis ($18–$24 million pre-trebling), and critique of Dr. Kuo's methodology and assumptions.
3. Dr. Anton Berger — Defendants' regulatory expert. To be deposed by Plaintiff's counsel regarding his opinions on the regulatory framework, the commercial reasonableness of the WAP, the capacity utilization analysis, and the relationship between the FCC regulatory proceedings and the antitrust claims.
C. Daubert Motions
Any motion to exclude expert testimony under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and its progeny, shall be filed concurrently with or as part of dispositive motions (Day 0 + 435 days). The parties anticipate the following potential Daubert challenges:
(a) Defendants' anticipated challenge to Dr. Kuo. Defendants anticipate challenging Dr. Kuo's market definition methodology and damages computation under Daubert and Federal Rule of Evidence 702. Defendants will contend that Dr. Kuo's proposed relevant market is unsupported by reliable economic methodology, that his market share calculations are based on an artificially narrow market definition, and that his damages model relies on speculative demand projections and fails to account for available alternative infrastructure.
(b) Plaintiff's anticipated challenge to Dr. Berger. Defendants anticipate that Plaintiff may challenge Dr. Berger's regulatory opinions as impermissible legal conclusions or, alternatively, as outside the scope of permissible expert testimony under Rule 702. Defendants will defend the admissibility of Dr. Berger's opinions as based on his specialized expertise in telecommunications regulation and as helpful to the trier of fact in understanding the regulatory framework applicable to the parties' conduct.
X. DISPOSITIVE MOTIONS
A. Filing Schedule
Dispositive motions, including motions for summary judgment under Federal Rule of Civil Procedure 56, shall be filed by Day 0 + 435 days. Opposition briefs shall be due thirty-five (35) days after the filing of the dispositive motion (Day 0 + 470 days). Reply briefs shall be due twenty (20) days after the filing of the opposition (Day 0 + 490 days). Oral argument on dispositive motions shall be at the discretion of the Court.
B. Defendants' Anticipated Summary Judgment Motion
Defendants anticipate filing a motion for summary judgment on some or all of Plaintiff's claims. The anticipated grounds for summary judgment include the following:
(a) No Genuine Dispute of Material Fact Under the *Aspen Skiing* / *Trinko* Framework. The undisputed evidence will show that Northgate's refusal to grant interconnection access at the fourteen Disputed Facilities does not satisfy the narrow requirements for a refusal-to-deal claim under Aspen Skiing and Trinko. The evidence will demonstrate that Northgate did not terminate a pre-existing voluntary and profitable course of dealing at the Disputed Facilities (except for the three northern Virginia facilities previously covered by the expired MIA), that the WAP is a facially neutral policy applied uniformly to all applicants, and that Northgate's conduct is fully consistent with legitimate competitive behavior by a firm exercising its right to choose its trading partners.
(b) Legitimate Business Justification. The WAP is a legitimate, non-pretextual business justification supported by documented capacity utilization data demonstrating that each of the fourteen Disputed Facilities operates at or above 85% capacity utilization. The adoption of the WAP was motivated by genuine capacity constraints and Northgate's need to manage limited colocation and interconnection space at high-demand facilities, not by any anticompetitive intent.
(c) Relevant Market. Ridgepoint's proposed relevant market — "last-mile enterprise fiber-optic transport services" at 1 Gbps and above — is improperly narrow as a matter of law and fails to account for commercially reasonable substitutes, including cable-based ethernet services, fixed wireless access, wholesale ethernet transport, and self-provisioning by enterprise customers. The evidence will show that the properly defined relevant market includes these alternatives and that Northgate's market share in the properly defined market is approximately 31%, which is insufficient to establish monopoly power as a matter of law.