Astro Tel, Inc. v. Verizon Florida LLC et al
ORDER: The Motion to Dismiss is GRANTED without prejudice with respect to Counts 4-6, 8, and 11-13 of the Amended Complaint. The Motion to Dismiss is otherwise denied. AstroTel may file a Second Amended Complaint by May 15, 2012. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 5/4/2012. (KAK)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
Case No. 8:11-cv-2224-T-33TBM
VERIZON FLORIDA, LLC and
VERIZON COMMUNICATIONS, INC.,
This matter comes before the Court pursuant to Defendants
Verizon Florida, LLC and Verizon Communications, Inc.’s Motion
to Dismiss (Doc. # 27), filed on November 4, 2011. Plaintiff
AstroTel, Inc., filed a Response to Verizon’s Motion to
Dismiss on December 2, 2011. (Doc. # 32).
For the reasons
that follow, the Court grants in part and denies in part
Verizon’s Motion to Dismiss.
Factual and Procedural Background
provides basic local telephone services, enhanced services,
and Internet access to Florida residences and small to midsize businesses. (Doc. # 9 at ¶ 7).
AstroTel also operates
its own telecommunications network which provides services to
more than half of the state. (Id.).
In providing these
services, AstroTel directly competes with Verizon.1 (Id. at ¶
17). Due to the nature of the telephone industry, significant
infrastructure is required to provide both basic and enhanced
telephone services.2 (Id. at ¶¶ 19-21).
owns the only facilities capable of providing these services
in AstroTel’s operating area. (Id. at ¶ 23).
access to portions of Verizon’s network such as local loops
and transports, so that AstroTel may provide basic local phone
services. (Id. at ¶ 22).
AstroTel filed suit against Verizon (Doc. # 8) and
subsequently filed an Amended Complaint on October 3, 2011.
(Doc. # 9). In the Amended Complaint AstroTel describes
(3) ordering field installers to close AstroTel’s orders
as completed even though they were not complete;
Verizon Communications, Inc. is the parent corporation
of Verizon Florida, LLC. (Doc. # 9 at ¶ 5). The Court
collectively refers to both entities as “Verizon” herein.
Basic local telephone services connect one customer to
another using telephone lines or wires. (Id. at ¶ 18).
Enhanced services include features such as voice mail. (Id.).
(4) repeatedly billing for services not installed;
(5) disparaging and misrepresenting AstroTel’s products
to the public and damaging AstroTel’s reputation;
(6) supplying false bills at rates substantially higher
than those approved by the state;
(7) using AstroTel’s confidential information for
Verizon’s own marketing purposes in an attempt to
persuade AstroTel subscribers to switch companies;
(8) failing or refusing to provide access to facilities
(9) cross-subsidizing its unregulated services such as
Internet Access Services, wireless mobile telephone
service and television service with its regulated local
telecommunications services creating an illegal price
squeeze in an effort to prevent AstroTel from competing
in the market for local telephone service.
(Id. at ¶ 8).
The Amended Complaint contains six counts arising under
federal law: (Count 1) monopolization, (Count 2) attempted
monopolization, (Count 3) monopoly leveraging, (Count 4)
The remaining seven counts arise under Florida
law: (Count 7) tortious interference with contract, (Count 8)
interference with prospective business relations, (Count 9)
disparagement, (Count 11) civil conspiracy, (Count 12) unjust
enrichment, and (Count 13) equitable accounting.3
pursuant to Fed.R.Civ.P. 12(b)(6).
On a motion to dismiss, this Court accepts as true all
the allegations in the complaint and construes them in the
light most favorable to the plaintiff.
Jackson v. Bellsouth
Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004).
this Court favors the plaintiff with all reasonable inferences
from the allegations in the complaint.
Stephens v. Dep’t of
Health & Human Servs., 901 F.2d 1571, 1573 (11th Cir. 1990)
(“On a motion to dismiss, the facts stated in [the] complaint
and all reasonable inferences therefrom are taken as true.”).
However, the Supreme Court explains that:
While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide
the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action
will not do. Factual allegations must be enough to
raise a right to relief above the speculative
AstroTel’s Amended Complaint also contains “Count 14"
in which AstroTel requests a permanent injunction.
demand for relief is not a complaint count, it is not
necessary to examine AstroTel’s request for injunctive relief
under the rubric of Rule 12(b)(6), Fed.R.Civ.P.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)(internal
Further, courts are not “bound to accept
as true a legal conclusion couched as a factual allegation.”
Papasan v. Allain, 478 U.S. 265, 286 (1986).
By attaching various documents to the Motion to Dismiss
Complaint, Verizon has invited the Court to broaden the scope
The Court declines to do so.4
Antitrust Liability under Trinko
antitrust claims on the basis of Verizon Commc’ns, Inc. v. Law
Offices of Curtis V. Trinko, 540 U.S. 398, 408-09 (2004) and
In a case with strikingly similar facts to the
present suit, the Trinko Court emphasized that competitors in
the telecommunications industry have no duty to cooperate with
Although the Court could consider the external
documents and convert the Motion to Dismiss into a Motion for
Summary Judgment pursuant to Rule 12(d), Fed.R.Civ.P., the
Court determines that it would not be appropriate to do so at
this early juncture.
The Court will give the parties an
opportunity to conduct discovery before moving forward with
Summary Judgment analysis.
antitrust liability where there is a complex regulatory scheme
Telecommunications Act of 1996). 540 U.S. at 411.
Although Verizon is generally correct in the assertion
that Trinko forestalls antitrust claims based on refusals to
deal with a competitor, Trinko does not prevent AstroTel from
bringing antitrust claims based on other valid antitrust
theories, to wit:
In Trinko, the plaintiff brought a claim under § 2
of the Sherman Act, arguing that Verizon failed to
fulfill orders of rival carriers in violation of a
detailed regulatory scheme enacted by Congress.
The Court found that the legislation at issue did
not foreclose antitrust claims. Nevertheless, the
Court ruled that the plaintiff failed to state a
claim under traditional antitrust principles
because plaintiff’s claim would not have existed in
the absence of the legislation-–prior to the
legislation, Verizon had no obligation to share its
facilities with its competitors.
Parsons v. Bright House Networks, Case No. 2:09-cv-267-AKK,
2010 U.S. Dist. LEXIS 55277, at *26-27 (N.D. Ala. Feb. 23,
As a general matter, antitrust law “does not restrict
the long recognized right of [a] trader or manufacturer
engaged in . . . business, freely to exercise his own
independent discretion as to the parties with whom he will
deal.” United States v. Colgate & Co., 250 U.S. 300, 307
2010)(citing Trinko, 540 U.S. at 404-11)(internal citations
and emphasis omitted).
If AstroTel’s antitrust allegations
were limited to its complaint that Verizon failed to share its
AstroTel, the Court would end its antitrust analysis here,
based on Trinko.
However, the Amended Complaint raises other
antitrust claims that do not sound in failure to deal with a
competitor, such as disparagement, monopolization, tying, and
Accordingly, the Court declines to dismiss
the antitrust claims based on Trinko’s holding.
Count 1 - Monopolization
Section 2 of the Sherman Act prohibits monopolization,
attempts to monopolize, and conspiracy to monopolize any part
of trade or commerce.
15 U.S.C. § 2.
The Act and subsequent
case law have distinguished anticompetitive behavior from
“growth or development as a consequence of a superior product,
business acumen, or historic accident.” United States v.
Grinnell Corp., 384 U.S. 563, 570-71 (1966).
“The offense of monopolization under Sherman § 2 has two
elements: (1) the possession of monopoly power in the relevant
market and (2) the willful acquisition or maintenance of that
power.” Id. Monopoly power is defined as the power to control
prices or exclude competition, and may be inferred from a
firm’s predominant share of a market.
Id. at 571.
market must be defined for both the product and the location
where the alleged monopolizer is operating. Smithkline Corp.
v. Eli Lilly & Co., 575 F.2d 1056, 1063-64 (3d Cir. 1978).
AstroTel defines the product market as “(1) basic analog
dial-tone service to residences and small to medium-sized
businesses” and “(2) ‘enhanced services’” and defines the
geographic market as the State of Florida. (Doc. # 9 at ¶¶ 18,
AstroTel alleges that Verizon controls more than 75% of
this relevant market, enough to infer that Verizon enjoys
monopoly status under Grinnell.
Verizon does not dispute the
market definitions or the market share alleged by AstroTel.
Therefore, prong one of the Grinnell monopolization test is
acquisition or maintenance of monopoly power. 384 U.S. at 570571. However, the line between lawful competitive conduct and
unlawful monopolization is difficult to draw.
As stated in
Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 458-59
(1993), “It is sometimes difficult to distinguish robust
without a legitimate business purpose that makes sense only
because it eliminates competition.”
Morris Commc’ns Corp. v.
PGA Tour, Inc., 364 F.3d 1288, 1295 (11th Cir. 2004).
Examples of such unlawful anticompetitive conduct include
instituting sham litigation,6 providing false information to
retailers, and systematically removing a competitor’s display
racks or products from retail establishments.7
Eleventh Circuit has remarked that “even an act of pure malice
by one business competitor against another, without more,
fails to state a claim under the federal antitrust laws.” Id.
(internal citation and quotation marks omitted).
The Court determines that AstroTel meets its burden for
establishing monopolization with respect to the second prong,
concerning willful maintenance of monopoly power. The Amended
Complaint alleges several acts committed by Verizon including
falsification of records for services that were not installed,
billing for services that were not installed, misuse of
Prof’l Real Estate Investors, Inc. v. Columbia Pictures
Indus., Inc., 508 U.S. 49, 56 (1993)(defining “sham
litigation” in the context of antitrust law); Andrx Pharms.,
Inc. v. Elan Corp., 421 F.3d 1227, 1233 (same).
See, e.g., Conwood Co., L.P. v. U.S. Tobacco Co., 290
F.3d 768, 776, 783-88 (6th Cir. 2002)(finding Sherman
violation when defendant (1) deliberately provided false
information to retail establishments to exclude competitors
from the market and (2) removed the competitor’s point of sale
racks from retail establishments).
confidential and protected information, price squeezing, and
misrepresentation regarding AstroTel’s services, and false
billing. (Doc. # 9 at ¶¶ 8).
At this preliminary juncture,
anticompetitive behavior contemplated by the statute.
Motion to Dismiss is therefore denied as to Count 1 of the
2. Count 2 - Attempted Monopolization
To state a claim for attempted monopolization, AstroTel
must show “(1) that the defendant has engaged in predatory or
monopoly power.” Spectrum Sports, 506 U.S. at 456.
Anticompetitive conduct is “conduct which unfairly tends
to destroy competition itself.
Id. at 458.
antitrust law was created “for the protection of competition
not competitors.” Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,
429 U.S. 477, 488 (1977)(emphasis in original).
actionable, Verizon’s conduct “must harm the competitive
process and thereby harm consumers . . . . Harm to one or more
competitors [does] not suffice.” United States v. Microsoft
Corp., 253 F.3d 34, 58 (D.C. Cir. 2001)(emphasis added).
noted above, this Court has preliminarily determined that
AstroTel has sufficiently alleged that Verizon engaged in
A plaintiff claiming attempted monopolization must allege
that the defendant specifically intended to control prices or
destroy competition and took action to effectuate that result.
Times-Picayune Pub. Co. v. United States, 345 U.S. 594, 626
monopoly in the detailed, 54-page Amended Complaint. (Doc. #
9 at ¶ 8).
Among other allegations, AstroTel complains that
unshakeable goal: to protect and defend the monopoly that it
inherited and to defeat and dismantle competition in any
possible manner. To achieve this goal, Verizon has undertaken
a variety of actions for the sole purpose of preventing the
erosion of its monopoly power.” Id. at ¶ 30.
Verizon’s actions as alleged in the Amended Complaint are
sufficient to establish the specific intent necessary to
support AstroTel’s claim.
Thus, AstroTel meets the pleading
requirements to state a claim for attempted monopolization
under Sherman § 2.
The Court therefore denies the Motion to
Dismiss as to Count 2 of the Amended Complaint.
3. Count 3 - Monopoly Leveraging
Monopoly leveraging involves a firm using its market
power in one market to gain more market share in another
market, other than by competitive means.
Indus., Inc. v. Fla. Power & Light Co., 145 F.3d 1258, 1262
(11th Cir. 1998).
Eastman Kodak Co. v. Xerox Corp., 504 U.S. 451 (1992),
provides an example of monopoly leveraging.
In Eastman, the
Kodak sold copiers to customers, allowing the customers to
service their own machines or go through an independent
substantial sales, it claimed all of the repair work for
The court found that this move had the potential
to raise the total cost of the copier/service package above
the competitive level and above the price that Kodak could
have charged had it begun with the copier/service package from
the outset. Id.
Here, AstroTel alleges that Verizon used its market power
in the basic services market to gain an advantage in the
Specifically, AstroTel alleges that Verizon has denied and
delayed AstroTel’s ability to combine basic and enhanced
At this preliminary juncture, the Court
Accordingly, Count 3 of the Amended Complaint survives the
Motion to Dismiss.
4. Count 4 - Tying
Count 4 of AstroTel’s Amended Complaint alleges Verizon’s
violation of Sherman § 1 by tying internet and television
services with basic local telephone service. (Doc. # 9 at ¶
Tying is “an agreement by a party to sell one product
but only on the condition that the buyer also purchases a
different (or tied) product.” N. Pac. Ry. Co. v. United
States, 356 U.S. 1, 5 (1958).
Not all tying arrangements violate the Sherman Act; a
plaintiff must allege five elements of an illegal tying
arrangement: (1) an actual tying and tied product, (2) some
evidence of coercion showing that the seller in fact forced
the buyer to purchase the tied product, (3) some evidence that
the seller has sufficient market power to carry out the
coercion, (4) anticompetitive effects in the tied market, and
(5) more than an insubstantial amount of interstate commerce
in the tied product market. Amey, Inc. v. Gulf Abstract &
Title, Inc., 758 F.2d 1486, 1502-03 (11th Cir. 1985).
The essential nature of a tying arrangement requires that
the products in the first element be distinct. N. Pac. Ry.
Co., 356 U.S. at 5. Distinctness in tying claims rests on the
character of demand for the two items, not just the functional
relationship between them.
Jefferson Parish Hosp. Dist. No.
2 v. Hyde, 466 U.S. 2, 19 (1984), abrogated on other grounds
by Ill. Tool Works Inc. v. Indep. Ink, Inc., 547 U.S. 28
AstroTel alleges that Verizon is tying its internet
and television service to the enhanced and basic telephone
services. (Doc. # 9 at ¶ 72).
This allegation is sufficient
to meet the first element of a tying claim.
Although AstroTel has alleged tied services, the Court
agrees with Verizon that “[t]he complaint fails to plead
specific factual allegations regarding . . . anticompetitive
effects, or level of involvement in interstate commerce . . .
Furthermore, the complaint alleges no coercion by Verizon that
could have forced customers to purchase the tied product.”
(Doc. # 27 at 13).
Therefore, the Court dismisses Count 4 of
the Amended Complaint without prejudice and with leave to
5. Civil RICO - Count 5
“To state a RICO claim, a plaintiff must plead (1) that
the defendant (2) through the commission of two or more acts
(3) constituting a ‘pattern’ (4) of ‘racketeering activity’
(5) directly or indirectly [participates in the specific
prohibited activity in] (6) an ‘enterprise’ (7) [that affects]
interstate or foreign commerce.”
McCulloch v. PNC Bank Inc.,
298 F.3d 1217, 1225 (11th Cir. 2002). Verizon has challenged
the sufficiency of elements four and six arguing that “the
complaint fails to adequately plead the predicate acts of
racketeering activity.” (Doc. # 27 at 14).
In the Amended Complaint, AstroTel alleges that Verizon
has engaged in the predicate acts of mail fraud pursuant to 18
U.S.C. § 1341, and wire fraud pursuant to 18 U.S.C. § 1343.
(Doc. # 9 at ¶ 81).
The federal RICO statute includes both
activity.” 18 U.S.C. § 1961(1)(B).
However, AstroTel’s allegations of fraud must not only
comply with the pleading requirements articulated in Twombly
and Iqbal but also with the heightened pleading standard of
Rule 9(b), Fed.R.Civ.P., which require a party alleging fraud
to “state with particularity” the circumstances underlying the
Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283,
1290 (11th Cir. 2010).
To meet this burden, AstroTel must
misrepresentations made; (2) the time, place, and person
responsible for the statement; (3) the content and manner in
[Verizon] gained by the alleged fraud.” Id. at 1291.
AstroTel has failed to carry its burden regarding the
predicate acts of mail and wire fraud.
The Amended Complaint
bases the predicate acts upon “continued submission of false
and fraudulent invoices and other information to AstroTel.”
(Doc. # 9 at ¶ 82). The most specific allegation simply
alleges that Verizon “supplied false bills to AstroTel for
services it has not ordered or received, services which were
ordered but never provided, services which had been previously
substantially higher than those approved by state regulators.”
(Id. at ¶ 8(k)).
AstroTel fails to plead the necessary “who,
what, when, where, and how” of the alleged fraud as required
by Rule 9(b). See Mizzaro v. Home Depot, Inc., 544 F.3d 1230,
1237 (11th Cir. 2008). As a result, the Court dismisses Count
5 of the Amended Complaint without prejudice and with leave to
6. Count 6 - Lanham Act
The Lanham Act prohibits false advertising as follows:
Any person who, on or in connection with any goods
or services . . . uses in commerce any word, term,
name, symbol, or device, or any combination
thereof, or any false designation of origin, false
or misleading description of fact, or false or
misleading representation of fact, which-–in
commercial advertising or promotion, misrepresents
geographic origin of his or her or another person’s
goods, services, or commercial activities, shall be
liable in a civil action by any person who believes
that he or she is likely to be damaged by such act.
28 U.S.C. § 1125(a)(1)(B)(emphasis added).
Here, Verizon contends that AstroTel cannot meet the
requirement that the alleged representations be made in an
advertisement or promotion.
Although the Lanham Act does not
define either “advertising” or “promotion,” courts within the
Eleventh Circuit use the following four-part test set forth in
Gordon & Breach Science Publishers S.A. v. American Institite
of Physics and American Physical Society, 859 F. Supp. 1521,
representation falls within the ambit of the Lanham Act:
"commercial advertising or promotion" under [the
Lanham Act], they must be: (1) commercial speech;
(2) by a defendant who is in commercial competition
with plaintiff; (3) for the purpose of influencing
consumers to buy defendant's goods or services.
While the representations need not be made in a
"classical advertising campaign," but may consist
instead of more informal types of "promotion," the
sufficiently to the relevant purchasing public to
constitute "advertising" or "promotion" within that
See Futuristic Fences, Inc. v. Illusion Fence Corp., 558 F.
Supp. 2d 1270, 1279 (S.D. Fla. 2008)(finding that the Gordon
four-part test has been adopted by the majority of other
circuits and is utilized by the district courts within the
customers about Verizon’s superior service, and (3) Verizon’s
representations to AstroTel’s customers that AstroTel did not
pay its bills. (Doc. # 9 at ¶¶ 8(i)-(j), 9).
The Court finds
that these communications do not rise to the level necessary
to constitute an advertisement or promotion under the Lanham
sufficiently to the relevant purchasing public within the
See Fashion Boutique of Short
comments to twelve customers and nine investigators was not an
advertising or promotion under the Lanham Act because the
relevant purchasing public was comprised of thousands of
AstroTel has failed to state a claim under the Lanham Act
because it did not sufficiently allege that Verizon’s conduct
constituted an advertisement or promotion.
Thus, Count 6 of
the Amended Complaint is dismissed without prejudice and with
leave to amend.
interference with a contractual or business relationship under
Florida law, a plaintiff must assert: “(1) the existence of a
business relationship that affords the plaintiff existing or
prospective legal rights; (2) the defendant's knowledge of the
business relationship; (3) the defendant's intentional and
unjustified interference with the relationship; and (4) damage
to the plaintiff.” Int'l Sales & Serv., Inc. v. Austral
Insulated Prods., Inc., 262 F.3d 1152, 1154 (11th Cir. 2001)
(quoting Ethan Allen, Inc. v. Georgetown Manor, Inc., 647 So.
2d 812, 814 (Fla. 1994)).
AstoTel has alleged facts sufficient to survive Verizon’s
relationships between AstroTel and at least one customer.
(Doc. # 9 at ¶ 96). Although AstroTel does not plead specific
customer contracts that were injured, that is not necessary at
this point in the litigation.
AstroTel meets the remaining
relationship and intentionally interfered with it, resulting
in the customer switching from AstroTel to Verizon. (Doc. # 9
at ¶ 96-100). Count 7 of the Amended Complaint thus survives
Verizon’s Motion to Dismiss.
8. Count 8 - Interference with Prospective Business
AstroTel alleges that Verizon intentionally excluded
AstroTel from competing in the Florida region and, as a
result, improperly interfered with AstroTel’s prospective
business relations with customers. (Doc. # 9 at ¶¶ 105-06).
A claim for interference with a prospective business relation
completed if not for the defendant’s intervention.
Co. v. City of Jacksonville, 38 F. Supp. 2d 1338, 1347 (M.D.
interference with a business’s relationship to the community
at large.” Ethan Allen, Inc., 647 So. 2d at 815.
prospective business relationship, AstroTel has alleged that
Verizon interfered with its ability to do business in general.
Accordingly, AstroTel failed to allege facts sufficient to
support this claim.
Count 8 of the Amended Complaint is
accordingly dismissed without prejudice and with leave to
9. Count 9 - Unfair Competition
Unfair competition is a creature of common law and serves
as an “umbrella for all statutory and nonstatutory causes of
action arising out of conduct that is contrary to honest
practice in industrial and commercial matters.” Third Party
Verification, Inc. v. Signaturelink, Inc., 492 F. Supp. 2d
1314, 1325 (M.D. Fla. 2007)(internal citation omitted).
state a claim for unfair competition under Florida common law
a party must plead (1) deceptive or fraudulent conduct of a
competitor and (2) likelihood of consumer confusion.” Id. at
AstroTel has met its burden of pleading deceptive or
fraudulent conduct of a competitor. The statements by Verizon
employees to AstroTel customers are sufficient to meet the
federal pleading standards. (Doc. # 9 at ¶ 8(i)).
has also met its burden in pleading a likelihood of consumer
customers, including an assertion that AstroTel is a “useless
customers about the nature of AstroTel’s business. (Id.).
Verizon’s Motion to Dismiss.
10. Count 10 - Business Defamation and Disparagement
Verizon has allegedly made several false statements and
misrepresentations about AstroTel to AstroTel’s customers.
(Doc. # 9 at ¶¶ 8; 116).
AstroTel bases its claim for
business defamation and disparagement on these statements.
“The reputation of a corporation can be injured by a
false publication of defamatory matter, which prejudices its
trade or business, or deters third persons from dealing with
St. Paul Fire & Marine Ins. Co. v. Naples Cmty. Hosp.,
Inc., 585 So. 2d 374, 376 (Fla. 2d DCA 1991).
sufficiently pled facts to support a claim for defamation and
allegations that Verizon made false representations about
AstroTel and that those representations have harmed AstroTel’s
business. (Doc. # 9 at ¶¶ 116-20).
Thus, Count 10 survives
Verizon’s Motion to Dismiss.
11. Count 11 - Civil Conspiracy
conspiracy with “other defendants” to “unlawfully depriv[e]
AstroTel of its legal rights.” (Doc. # 9 at ¶ 49).
A civil conspiracy requires: (a) an agreement
between two or more parties, (b) to do an unlawful
act or to do a lawful act by unlawful means, (c)
the doing of some overt act in pursuance of the
conspiracy, and (d) damage to plaintiff as a result
of the acts done under the conspiracy.
Nationwide Mut. Co. v. Ft. Myers Total Rehab Ctr., Inc., 657
F. Supp. 2d 1279, 1291 (M.D. Fla. 2009) (citing Charles v.
Fla. Foreclosure Placement Ctr., LLC, 988 So. 2d 1157, 1159-60
(Fla. 3d DCA 2008)).
AstroTel’s civil conspiracy claim fails
because, under the facts and circumstances alleged in the
agreement between two or more parties.
Communications, Inc. and Verizon Florida, LLC. (Doc. # 9 at ¶
2). As previously explained, Verizon Florida is a subsidiary
of Verizon Communications. (Id.).
Pursuant to the intra-
corporate conspiracy doctrine, alleged agreements between an
employee and the company the employee works for cannot form
the basis for a civil conspiracy claim. Copperweld Corp. v.
Independence Tube Corp., 467 U.S. 752, 769 (1984)(holding that
“[t]he officers of a single firm are not separate economic
actors pursuing separate economic interests, so agreements
among them do not suddenly bring together economic power that
was previously pursuing divergent goals”).
relationship: “there can be little doubt that the operations
of a corporate enterprise organized into divisions must be
judged as the conduct of a single actor [and] the coordinated
activity of a parent and its wholly owned subsidiary must be
viewed as that of a single enterprise.” Id. at 770-71.8
Therefore, the Court dismisses Count 11, civil conspiracy,
without prejudice and with leave to amend.
12. Count 12 - Unjust Enrichment
AstroTel alleges that Verizon unjustly enriched itself by
accumulating profits from unfairly appropriated customers.
(Doc. # 9 at ¶¶ 125-27).
To state a claim for unjust enrichment, a plaintiff
must plead the following elements: 1) the plaintiff
has conferred a benefit on the defendant; 2) the
defendant has knowledge of the benefit; 3) the
defendant has accepted or retained the benefit
conferred; and 4) the circumstances are such that
it would be inequitable for the defendant to retain
the benefit without paying fair value for it.
At this juncture, the Court is not certain as to whether
Verizon Florida LLC is a wholly owned subsidiary. If it is
wholly owned by Verizon Communications, the intra-corporate
conspiracy doctrine cannot be overcome. However, if is a not
a wholly owned subsidiary, AstroTel may be able to plead
factors showing “separateness of [the] subsidiary from its
parent company” in order to overcome the doctrine. Copperweld,
467 U.S. at 772, at n. 18.
Baptista v. JP Morgan Chase Bank, N.A., 640 F.3d 1194, 1198 at
sufficient to meet the first element of unjust enrichment.
The Amended Complaint contains no allegation of a benefit
conferred from AstroTel to Verizon but instead, business
profits obtained from customers “unjustly appropriated” from
AstroTel. (Doc. # 9 at ¶¶ 125-27). AstroTel has not conferred
a benefit on Verizon under these facts.
In addition, it should be noted that “Liability in unjust
enrichment has nothing to do with fault.” Tilton v. Playboy
Entm’t Grp., Inc., 8:05-cv-692-T-30TGW, 2007 WL 80858, at *3
(M.D. Fla. Jan. 8, 2007) (citations omitted). Indeed, an
unjust enrichment claim “should be premised on circumstances
under which it would be inequitable for the defendant to
retain the benefit without paying for it.” Id.
[t]he law of unjust enrichment is concerned solely
with enrichments that are unjust independently of
wrongs and contracts. When the plaintiff relies on
a breach of a contract to supply the “unjustness”
of the defendant’s holdings, the right on which he
or she relies arises from the breach of the
analogously, when the plaintiff relies on a wrong
to supply the “unjust factor,” the causative event
is a wrongful enrichment rather than an unjust
Flint v. ABB, Inc., 337 F.3d 1326, 1330 n.2 (11th Cir. 2003).
“The paradigm examples of unjust enrichment are mistaken
transfers.” Guyana Tel. & Tel. Co., Ltd. v. Melbourne Intern.
Commc’ns, Ltd., 329 F.3d 1241, 1245 n.3 (11th Cir. 2003).
“Where a plaintiff predicates their unjust enrichment claim on
wrongful conduct of a defendant, then the plaintiff’s right of
recovery, if any, arises from the wrong of the alleged tort
rather than unjust enrichment.” Tilton, 2007 WL 80858, at *3.
Here, AstroTel’s unjust enrichment claim is not based on
AstroTel’s property and should be required to return it.
Rather, AstroTel’s claim is based upon Verizon’s alleged
In essence, AstroTel has not “conferred”
any benefit on Verizon, but instead has had a benefit taken
away from it by Verizon’s alleged wrongful conduct.
as a claimant relies on a wrong to supply the unjust factor,
the right on which he relies arises from that wrong, not from
Guyana, 329 F.3d at 1245 n.3.
AstroTel’s right of recovery, if any, for the alleged wrongful
conduct of Verizon arises in tort or statutory law, which, if
proven, might entitle AstroTel to damages, rather than unjust
Since the law of unjust enrichment is concerned
solely with enrichments that are unjust independent of alleged
wrongs, AstroTel’s unjust enrichment claim must be dismissed.
Accordingly, the Court dismisses Count 12 of the Amended
Complaint without prejudice and with leave to amend.
13. Count 13 - Equitable Accounting
AstroTel requests an equitable accounting of “the charges
overcharges by Verizon, or individualized charges pertaining
to particular network facilities.” (Doc. # 9 at ¶ 130).
successfully plead a claim for equitable accounting under
Florida law, a plaintiff must allege that (1) a fiduciary
relationship or complex transaction exists, and (2) a remedy
at law would be inadequate.
Zaki Kulaibee Establishment v.
McFlicker, 788 F. Supp. 2d 1363, 1370 (S.D. Fla. 2011).
AstroTel failed to plead the existence of a fiduciary
A fiduciary relationship may be either express or
implied. Express fiduciary relationships are
created by contract, such as principal/agent, or
can be created by legal proceedings in the case of
a guardian/ward. A fiduciary relationship which is
implied in law is based on the circumstances
surrounding the transaction and the relationship of
the parties and may be found when "confidence is
reposed by one party and a trust accepted by the
Maxwell v. First United Bank, 782 So. 2d 931, 932 (Fla. 4th
DCA 2001)(internal citations omitted).
The Amended Complaint
does not describe such a relationship. In addition, while the
transaction at issue may be sufficiently complex to warrant an
equitable accounting, AstroTel has not demonstrated that a
remedy at law would be inadequate. Count 13 of the Amended
Complaint, for equitable accounting, is accordingly dismissed
without prejudice and with leave to amend.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
The Motion to Dismiss is GRANTED without prejudice with
respect to Counts 4-6, 8, and 11-13 of the Amended
Complaint. The Motion to Dismiss is otherwise denied.
AstroTel may file a Second Amended Complaint by May 15,
DONE and ORDERED in Chambers in Tampa, Florida, this 4th
day of May 2012.
All Counsel of Record
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?