Submitted by counsel for Defendants with Defendants' Motion to Stay Pending Resolution of FCC Proceeding, filed March 6, 2023
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION
[PROPOSED]
ORDER GRANTING DEFENDANTS' MOTION TO STAY PROCEEDINGS PENDING RESOLUTION OF FCC PROCEEDING AND DENYING MOTION TO DISMISS WITHOUT PREJUDICE
This matter comes before the Court on the Motion to Stay Pending Resolution of FCC Proceeding (Dkt. No. 47) filed by Defendants Northgate Telecommunications PLC and Northgate Networks America Inc. (collectively, "Defendants" or "Northgate") on March 6, 2023, together with the accompanying Memorandum of Law in Support of Motion to Stay (Dkt. No. 47-1) and the Declaration of Patrick Salazar, Chief Regulatory Officer of Northgate Telecommunications PLC (Dkt. No. 47-2).
Plaintiff Ridgepoint Communications Inc. ("Plaintiff" or "Ridgepoint") filed its Opposition to Defendants' Motion to Stay Proceedings (Dkt. No. 49) on March 10, 2023.
The Court heard oral argument on Defendants' previously filed Motion to Dismiss Plaintiff's Complaint Under Federal Rule of Civil Procedure 12(b)(6) (Dkt. No. 28) on February 22, 2023. At the conclusion of the hearing, the Court took the Motion to Dismiss under advisement and invited the parties to submit supplemental briefing on any jurisdictional or procedural issues bearing on the efficient resolution of this matter.
The Court notes that Plaintiff Ridgepoint Communications Inc. filed a formal complaint before the Federal Communications Commission ("FCC") on February 7, 2023, which was docketed as In the Matter of Northgate Networks America Inc. — Complaint Regarding Interconnection Obligations under Section 251, FCC Docket No. WC-23-0042 (the "FCC Proceeding"). The FCC complaint alleges that Northgate Networks America Inc. violated interconnection obligations imposed on incumbent local exchange carriers under Sections 251 and 252 of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, 47 U.S.C. §§ 251–252, by refusing to provide Ridgepoint with interconnection and physical colocation access at specified telecommunications facilities in the Mid-Atlantic region.
The complaint in this action, filed September 19, 2022 (Dkt. No. 1), asserts a single cause of action under Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2, alleging monopolization of the market for wholesale telecommunications interconnection and colocation services in the Mid-Atlantic region. Specifically, Ridgepoint alleges that Defendants' refusal to grant Plaintiff interconnection and physical colocation access at fourteen (14) specified facilities located in the Commonwealth of Virginia, the State of Maryland, and the District of Columbia constitutes anticompetitive conduct designed to maintain and extend Northgate's monopoly power in the relevant market.
The Court has considered the Motion to Stay, the supporting memorandum and declaration, the opposition brief, the full record in this matter including all prior filings and submissions, and the arguments of counsel presented at the February 22, 2023 hearing and in connection with the instant Motion.
The Court acknowledges that counsel for Defendants are Elaine Forsythe, Howard Bellamy, Aaron Liu, and Monica Reyes of Calderwood & Harkness LLP, Washington, D.C., and counsel for Plaintiff are Victoria Hargrove and Daniel Stoyanov of Hargrove, Winslow & Burke LLP, Washington, D.C.
Having considered the foregoing, and for the reasons stated below, the Court makes the following findings and enters the following Order.
FINDINGS
I. The Primary Jurisdiction Doctrine Supports a Stay
The Court finds that the primary jurisdiction doctrine counsels in favor of a stay of these proceedings pending the resolution of the parallel regulatory proceeding before the FCC in Docket No. WC-23-0042. The doctrine of primary jurisdiction is a prudential doctrine that applies when a court and an administrative agency have concurrent jurisdiction over a matter, and the issues raised require the resolution of questions that are within the special competence of the agency. See Reiter v. Cooper, 507 U.S. 258, 268 (1993); United States v. W. Pac. R.R. Co., 352 U.S. 59, 63–64 (1956). The doctrine is designed to promote proper relationships between the courts and administrative agencies charged with particular regulatory duties, and to ensure the uniform and expert administration of regulatory schemes. Id.
The FCC possesses specialized expertise over interconnection disputes arising under Sections 251 and 252 of the Communications Act of 1934, as amended, including the obligations of incumbent local exchange carriers ("ILECs") and competitive local exchange carriers ("CLECs") with respect to interconnection, colocation, and unbundling at telecommunications facilities. Congress vested the FCC with broad authority to implement and enforce the interconnection framework established by the Telecommunications Act of 1996, and the FCC has developed a substantial body of rules, orders, and precedent governing the rights and obligations of carriers in this domain. See, e.g., Quillon Industries v. Iowa Utils. Bd., 525 U.S. 366 (1999); Harborview Holdings Inc. v. FCC, 535 U.S. 467 (2002). The resolution of interconnection and colocation disputes requires the application of technical and regulatory expertise that the FCC is uniquely positioned to provide.
The issues raised in the FCC Proceeding — including whether Defendants' Wholesale Access Policy, as applied through the denial of Plaintiff's interconnection and colocation requests at the fourteen (14) facilities at issue, complies with the requirements of Sections 251 and 252 — overlap substantially with the factual and legal issues underlying Plaintiff's Section 2 Sherman Act claim in this action. Plaintiff's antitrust theory is premised on the assertion that Defendants' refusal to deal constitutes exclusionary conduct in violation of Section 2. The lawfulness of that refusal under the Communications Act and the FCC's implementing regulations bears directly on whether Defendants' conduct can be characterized as anticompetitive under the Sherman Act or, alternatively, whether it represents the exercise of legitimate rights under the regulatory framework. The FCC's determination regarding the reasonableness and lawfulness of Defendants' interconnection practices under Sections 251 and 252 may be dispositive of, or at a minimum materially inform, the antitrust issues presented in this case. See Trinko (Harborview Holdings Inc. v. Law Offices of Curtis V. Trinko, LLP), 540 U.S. 398, 411–12 (2004) (recognizing the interplay between regulatory obligations under the Telecommunications Act and antitrust liability under the Sherman Act).
II. Judicial Economy and the Avoidance of Inconsistent Results
A stay will promote judicial economy by avoiding duplicative proceedings and the potential for inconsistent outcomes between this Court and the FCC on overlapping interconnection issues. Both proceedings require examination of the same underlying facts — including the nature of Defendants' network facilities, the terms of Defendants' Wholesale Access Policy, Plaintiff's interconnection and colocation requests, and Defendants' stated reasons for denying those requests. Permitting both proceedings to advance simultaneously risks the expenditure of substantial judicial and party resources on issues that may ultimately be resolved or narrowed by the FCC's expert determination. Moreover, the risk of inconsistent outcomes — where this Court might reach conclusions regarding the reasonableness of Defendants' interconnection practices that differ from the FCC's findings on the same issues — weighs strongly in favor of deferral. The FCC Proceeding is already underway, with Administrative Law Judge Robert Fenwick having been assigned to the matter on February 14, 2023, and an initial scheduling conference anticipated in the near term.
III. The Parties' Interests Are Adequately Protected
A stay does not unduly prejudice Plaintiff, which itself initiated the FCC Proceeding on February 7, 2023 — approximately five months after filing the instant action — and therefore cannot claim surprise at the regulatory forum addressing these issues. By choosing to pursue the regulatory remedy concurrently with this litigation, Plaintiff acknowledged the relevance and competence of the FCC to adjudicate the interconnection dispute at the heart of both proceedings. Furthermore, Plaintiff has not identified any irreparable harm that would result from a temporary pause in these proceedings. The stay preserves all parties' rights in this action, which may be resumed upon the conclusion of the FCC Proceeding. Defendants' rights are similarly preserved, as they will retain the ability to refile or renew their Motion to Dismiss following the lifting of the stay.
ORDER
Based upon the foregoing findings, and for good cause shown, IT IS HEREBY ORDERED as follows:
Section 1: Stay of All Proceedings
IT IS HEREBY ORDERED that all proceedings in Ridgepoint Communications Inc. v. Northgate Telecommunications PLC et al., Case No. 1:22-cv-01487-CMW (E.D. Va.), are STAYED pending the resolution of the proceeding before the Federal Communications Commission in In the Matter of Northgate Networks America Inc. — Complaint Regarding Interconnection Obligations under Section 251, FCC Docket No. WC-23-0042.
The stay shall remain in effect until:
(a) the FCC issues a final order in Docket No. WC-23-0042, including the exhaustion or expiration of all administrative review or reconsideration procedures available before the FCC (but not including any appeal to a federal court of appeals from such final order); or
(b) further order of this Court.
Section 2: Motion to Dismiss Denied Without Prejudice
IT IS FURTHER ORDERED that Defendants' Motion to Dismiss Plaintiff's Complaint Under Federal Rule of Civil Procedure 12(b)(6) (Dkt. No. 28), filed November 14, 2022, is DENIED WITHOUT PREJUDICE. Denial without prejudice shall not be construed as a ruling on the merits of any argument raised in the Motion to Dismiss or in the parties' briefing and oral argument thereon. Defendants may refile or renew the Motion to Dismiss after the stay is lifted, at which time the Court will establish an appropriate briefing schedule. Nothing in this Order limits the grounds upon which Defendants may seek dismissal following the lifting of the stay, including any grounds that may be informed by the outcome of the FCC Proceeding.
Section 3: Discovery Suspended
IT IS FURTHER ORDERED that all discovery in this action, including but not limited to the service of interrogatories, requests for production of documents, requests for admission, notices of deposition, and depositions, is SUSPENDED for the duration of the stay. No party shall serve any discovery request, and no party shall be required to respond to any pending discovery request, during the pendency of the stay.
Notwithstanding the foregoing, nothing in this Order relieves the parties of their obligations to preserve documents and electronically stored information ("ESI") in accordance with their respective litigation hold obligations and the Federal Rules of Civil Procedure, including but not limited to Federal Rules of Civil Procedure 26(a) and 37(e). The parties shall continue to take all reasonable steps to identify, locate, and preserve documents and ESI relevant to the claims and defenses asserted in this action for the duration of the stay.
Section 4: Joint Status Reports
IT IS FURTHER ORDERED that the parties shall file JOINT STATUS REPORTS with the Court every ninety (90) days from the date of this Order, or within fourteen (14) days following any significant development in FCC Docket No. WC-23-0042, whichever is earlier. The first joint status report shall be due on or before June 12, 2023.
Each joint status report shall advise the Court of:
(a) the current status of the FCC Proceeding, including any scheduling orders, hearings, or decisions issued by ALJ Fenwick or the Commission since the prior report;
(b) any anticipated timeline for the FCC's resolution of the matter, to the extent known to the parties; and
(c) whether either party seeks to modify or lift the stay, and if so, the basis for such request.
Joint status reports shall not exceed five (5) pages in length, exclusive of any attachments. In the event the parties are unable to agree on the content of a joint status report, each party may file a separate status report of no more than three (3) pages.
Section 5: Motion to Lift Stay
IT IS FURTHER ORDERED that either party may move to lift the stay upon a showing of good cause, including but not limited to:
(a) unreasonable delay in the FCC Proceeding, such that continued deferral would cause material prejudice to the moving party;
(b) issuance of the ALJ's initial decision or the FCC's final order in Docket No. WC-23-0042; or
(c) changed circumstances that materially affect the basis for the stay as set forth in this Order.
Any motion to lift the stay shall be filed in accordance with the Local Rules of this Court and shall be accompanied by a supporting memorandum setting forth the grounds for relief. The opposing party shall have fourteen (14) days to file a response.
Section 6: Administrative Closure
IT IS FURTHER ORDERED that the Clerk of Court shall administratively close this case for statistical purposes, subject to reopening upon motion of either party or order of the Court. Administrative closure shall not constitute a dismissal or disposition on the merits of any claim or defense. The Court retains jurisdiction over this matter for all purposes, including the enforcement of the parties' document preservation obligations and the resolution of any disputes arising under this Order.
Section 7: Reservation of Rights
IT IS FURTHER ORDERED that nothing in this Order shall be construed as a ruling on the merits of any claim or defense in this action, or as a determination regarding the applicability or preclusive effect of any findings, conclusions, or orders reached by the FCC in Docket No. WC-23-0042. The Court expressly reserves judgment on all questions of law and fact, including but not limited to the sufficiency of Plaintiff's complaint, the applicability of the antitrust laws to Defendants' conduct, and the weight or deference to be accorded to any determination by the FCC.
SO ORDERED.
________________________________________
THE HONORABLE CLAUDIA M. WENTWORTH United States District Judge Eastern District of Virginia
Date: _____, 2023
[Adopted and entered by the Court on March 14, 2023]
PREPARED AND SUBMITTED BY:
CALDERWOOD & HARKNESS LLP
By: ________
Elaine Forsythe (Va. Bar No. 48192) Howard Bellamy (admitted pro hac vice) Aaron Liu (admitted pro hac vice) Monica Reyes (admitted pro hac vice) 1200 K Street NW, Suite 900 Washington, D.C. 20005 Telephone: (202) 555-4100 Facsimile: (202) 555-4101 eforsythe@calderwoodharkness.com
Counsel for Defendants Northgate Telecommunications PLC and Northgate Networks America Inc.
CERTIFICATE OF SERVICE
I hereby certify that on March 6, 2023, a true and correct copy of the foregoing Proposed Order Granting Defendants' Motion to Stay Proceedings Pending Resolution of FCC Proceeding and Denying Motion to Dismiss Without Prejudice was served on all counsel of record via the Court's CM/ECF electronic filing system, which will send notification of such filing to the following:
Victoria Hargrove Daniel Stoyanov HARGROVE, WINSLOW & BURKE LLP 900 17th Street NW, Suite 600 Washington, D.C. 20006 Telephone: (202) 555-7800 vhargrove@hwblaw.com dstoyanov@hwblaw.com
Counsel for Plaintiff Ridgepoint Communications Inc.
________________________________________
Aaron Liu Lead Associate CALDERWOOD & HARKNESS LLP 1200 K Street NW, Suite 900 Washington, D.C. 20005
RIDGEPOINT COMMUNICATIONS INC.,
<!-- indent:1 -->3500 Market Street, Suite 700<!-- /indent -->
<!-- indent:1 -->Philadelphia, PA 19104,<!-- /indent -->
<!-- indent:2 -->Plaintiff,<!-- /indent -->
Case No. 1:22-cv-01487-CMW
<!-- indent:1 -->v.<!-- /indent -->
The Honorable Claudia M. Wentworth
NORTHGATE TELECOMMUNICATIONS PLC
and NORTHGATE NETWORKS AMERICA INC.,
<!-- indent:1 -->8200 Dulles Corner Boulevard, Suite 1100<!-- /indent -->
<!-- indent:1 -->Tysons Corner, VA 22182,<!-- /indent -->
<!-- indent:2 -->Defendants.<!-- /indent -->