XChange Telecom Corp. v. Sprint Spectrum L.P. et al

Filing 76

DECISION & ORDER that pltf's 69 motion to stay a ruling on the issue of whether "insertion of an intermediate carrier between a cellular company and a terminating or originating local exchange carrier, affects application of the FCC's intra-MTA rule[,]" Dkt. No. 69-1, is DENIED, without prejudice to renew. Signed by Magistrate Judge Christian F. Hummel on 11/6/2015. (see)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
---------------------------------------------------------------XCHANGE TELECOM CORP.,
Plaintiff,
1:14-CV-54
(GLS/CFH)

v.
SPRINT SPECTRUM L.P.,
Defendants.
------------------------------------------------------------------APPEARANCES:
Herzog Law Firm
7 Southwoods Blvd.
Albany, New York 12211
Attorneys for Plaintiff

KEITH J. ROLAND, ESQ.

Xchange Telecom Corp.
3611 14th Ave., Ste. 215
Brooklyn, New York 11218
Attorneys for Plaintiff

MORDECHAI GROSS, ESQ.

Armstrong, Teasdale LLP
4636 South Ulster St., Ste. 800
Denver, Colorado 80237
Attorneys for Defendants

CHARLES W. STEESE, ESQ.
SANDRA POTTER, ESQ.

Lippes Mathias Wexler Friedman LLP
54 State St., Ste. 1001
Albany, New York 12207
Attorneys for Defendants

LAWRENCE H. SCHAEFER, ESQ.
WILLIAM R. HANSEN, ESQ.

CHRISTIAN F. HUMMEL
U.S. Magistrate Judge

DECISION AND ORDER
Presently pending before the Court is plaintiff Xchange Telecom Corp.’s motion

for a partial stay. Dkt. No. 69.1 Defendants Sprint Spectrum L.P.; Nextel of New York,
Inc.; Nextel Partners of Upstate New York, Inc.; and Sprint Communications Company
L.P. (collectively, “defendants”), opposed. Dkt. No. 71. Plaintiff filed a reply. Dkt. No.
72. For the following reasons, plaintiff’s motion is denied without prejudice.

I. Background2
Plaintiff moves to stay a determination by this Court3 “whether insertion of an
intermediate carrier between a cellular company and a terminating or originating local
exchange carrier, affects application of the FCC’s intra-MTA rule.” Dkt. No. 69-1 at 6.
Plaintiff provides that “interpretation of that rule is . . . pending before two separate
forums in which large numbers of telecommunications carriers, on both sides of the
issue, are involved.” Id. Plaintiff opines that, the decision from the Multi District
Litigation (“MDL”) court “on this legal issue will undoubtedly be binding on all pending
and future cases in which this issue is raised, including before this Court.” Id. at 7.
Plaintiff also states that the MDL court may forward the matter to the FCC for a
determination; thus, “the intra-MTA issue in this case will be determined, either in the
MDL Court or by the FCC.” Id. at 8. Further, plaintiff argues that the doctrine of primary

1

The undersigned considers the motion to stay to be a non-dispositive issue. See Pierre v.
Prospect Mortgage, LLC, 1:13-CV-453 (NAM/RFT), 2013 WL 5876151, at 1 n.1 (N.D.N.Y. Oct. 31, 2013)
(“Courts within this Circuit have split as to whether a motion to stay is dispositive or non-dispositive.
Within the Northern District of New York, the judges have consistently treated motions to stay as
nondispostive.”).
2

For a more detailed recitation of the facts underlying this action, reference is made to the
parties’ submissions on this motion.
3

Currently, there are no dispositive motions pending before the Court in this action.

2

jurisdiction dictates that the FCC 4 – should the MDL court decline to reach the issue or
refer the matter there – should be the venue to determine that issue. Id. at 14. Plaintiff
does not seek a stay regarding the other pending issues in this matter, including
discovery regarding “the amount at issue in this case (in both claims and counterclaims)
related to the intraMTA issue.”5 Id. at 8.
Defendants object, contending that a stay of the “intra MTA rule” issue is
premature, “[g]iven that substantive motions are not due until March 4, 2016, there is
plenty of time to let the MDL court act before considering a motion to stay.” Dkt. No. 71
at 3. In fact, defendants “agree[] that this Court should let the MDL Court issue its
decision on the pending motions to dismiss, however, that decision is expected . . .
before the substantive motions in this case are due . . .” Id. at 5. “Even if the MDL
ruling is delayed beyond the dispositive motion deadline,” defendants propose that “the
Court would not need to stay the case; it could just extend the remaining schedule and
give the parties more time to conduct discovery.” Id. at 8. Defendants further note that
oral argument in the MDL court was scheduled for September 18, 2015 and “a decision
is expected shortly thereafter.”6 Id.

II. Legal Standard

4

Plaintiff does not request that the Court forward this matter to the FCC, as a request for a
_______ decision is “already there.” Dkt. No. 69-1 at 7, 16 n.9.
5

Plaintiff provides that, if this Court grants a stay as it requests, “[d]iscovery here will proceed to
determine the dollar value of claims (on both sides) which depend on the resolution of the intraMTA
issue.” Dkt. No. 69-1 at 12.
6

The Court is unaware if that oral argument took place as scheduled.

3

“The Court has authority to stay proceedings pending disposition of another case
that could affect the outcome.” Nuccio v. Duve, 13-CV-1556 (MAD/TWD), 2015 WL
1189617, at *5 (N.D.N.Y. Mar. 16, 2015) (citing Goldstein v. Time Warner Cable Grp., 3
F. Supp. 2d 423, 437-38 (S.D.N.Y. 1998). “On a motion to stay, it is the moving party’s
burden to establish ‘a clear case of hardship or inequity in being required to go
forward.’” In re HSBC Bank, USA, NA, Debit Card Overdraft Fee Litig., __ F. Supp. 3d
___, 2015 WL 1611966, at *23 (E.D.N.Y. Apr. 9, 2015) (quoting Trikona Advisors Ltd. v.
Kai-Ling Chuang, No. 12-CV-3886 (JW), 2013 WL 1182960, at *2 (E.D.N.Y. Mar. 20,
2013); see Clinton v. Jones, 520 U.S. 681, 708 (1997) (“The proponent of a stay bears
the burden of establishing its need.”) (citation omitted). “Conservation of judicial
resources is a ‘fundamental goal[ ] of multidistrict litigation practice,’ and stays are
appropriate when they serve judicial economy.” Pierre v. Prospect Mort. LLC, 1:13-CV453 (NAM/RFT), 2013 WL 5876151, at *4 (N.D.N.Y. Oct. 31, 2013) (quoting Royal Park
Inv. SA/NV v. Bank of Am. Corp., 2013 WL 1509854, at *6 (S.D.N.Y. Apr. 12, 2013).
Factors this Court considers in determining whether to grant a stay include
(1) the private interests of the plaintiffs in proceeding
expeditiously with the civil litigation as balanced against the
prejudice to the plaintiffs if delayed; (2) the private interests
of and burden on the defendants; (3) the interests of the
courts; (4) the interests of persons not parties to the civil
litigation; and (5) the public interest.
Nuccio, 2015 WL 1189617, at *5 (quoting Finn v. Barney, 08-CV-2975, 2008 WL
5215699, at *2 (S.D.N.Y. Dec. 8, 2008). “In balancing these factors, ‘the basic goal is
to avoid prejudice’ to either party.” In re HSBC Bank, 2015 WL 191196, at *23 (citation
omitted). “Where it is efficient for a trial court’s docket and the fairest course for the
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parties, a stay may be proper even when the issues in the independent proceeding are
not necessarily controlling of the action before the court.” In re Literary Works in Elec.
Databases Copyright Litig., 2001 WL 204212, at *2 (S.D.N.Y. Mar. 1, 2001) (citing
Goldstein, 3 F. Supp. 2d at 439) and Leyva v. Certified Grocers of California, Ltd., 593
F.2d 857, 863-64 (9 th Cir. 1979) (noting that granting a stay “does not require that the
issues in such proceedings are necessarily controlling of the action before the court.”),
cert. denied, 444 U.S. 827 (1979).
The primary jurisdiction doctrine “is a judicially-created ‘prudential doctrine under
which courts may, under appropriate circumstances, determine that the initial
decisionmaking responsibility should be performed by the relevant agency rather than
the courts.’” In re Methyl Tertiary Butyl Ether (MTBE), 2007 WL 700819, at *1 n.5
(quoting Syntek Semiconductor Co. v. Microchip Tech., Inc., 207 F.3d 775, 780 (9 th Cir.
2002). It “allows a federal court to refer a matter extending beyond the ‘conventional
experiences of judges,’ or ‘falling within the realm of administrative discretion’ to an
administrative agency with more specialized experience, expertise, and insight.’” Id. at
*1 n.7 (quoting National Commc’ns Ass’n, Inc. v. AT&T Co., 46 F.3d 220, 222-23 (2d
Cir. 1995).

III. Analysis
In arguing that the factors lean in favor of granting the stay, plaintiff cites, inter
alia, Pierre v. Prospect Mort., LLC, 2013 WL 5876151, at *4. In Pierre, this Court
granted the defendant’s motion for a stay pending a decision on the transfer of the
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underlying case to a judicial panel on multi district litigation. 2013 WL 5876151, at *1.
The Court acknowledged that, although the cases could be individually handled by the
district courts, separate discovery for 243 plaintiffs would be “unquestionably
burdensome and expensive[,]” and responding to the discovery demands would be
“undeniably duplicative.” Id. at *3. Similarly, litigating “thirty-seven . . . cases
simultaneously would be toilsome and costly,” and could result in inconsistent rulings.
Id.
Although plaintiff, through its reply, suggests there is no difference between “the
application of the Court’s five criteria for considering a stay” pending a transfer versus
pending a decision in an independent MDL court on a com mon issue, Dkt. No. 72 at 3,
the relevant question is not whether the application of the factors differ, rather how each
factor balances in favor or against the granting of a stay. Courts within this Circuit
frequently stay a case where there is a motion to transfer to a multi district litigation
court pending before that court. See,e.g., Krieger v. Merk & Co., Inc., 05-CV-6338L,
2005 WL 2921640, at *2 (Nov. 4, 2005) (noting that the Second Circuit’s general rule is
to defer a ruling on a pending motion to remand in a multi district litigation matter until
after the MDL court transfers the case to the MDL panel) (internal citation omitted).
However, unlike in Pierre and similar cases where the parties sought a stay pending a
determination whether the case would be transferred to the MDL court, the matter
pending in the MDL court will not result in a transfer and does not involve plaintiffs who
are currently parties to that litigation. Thus, not present here is the possibility that the
MDL court’s determination will remove the matter from this Court’s jurisdiction.
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There are cases within this Circuit where the courts have granted a stay pending
the result of a case where an identical issue was pending. In Nuccio, this Court
granted the motion to stay the proceedings after assessing that a “similar lawsuit”
involving the plaintiff pending in a different district “present[ed] identical issues to those
presented in this action[.]” 2015 W L 1189617, at *1-*2, *5. Considering the
enumerated factors, the Court noted that the stay would save judicial resources and
minimize conflicts between the courts. Id. In Nuccio, the plaintiff argued that he would
be prejudiced by a stay, as it would delay resolution of the action and because he would
not obtain full relief from resolution of the other action. Id. at *6. The Court, balancing
the interests, noted that it was likely that there would be a resolution in the other action
– where discovery had been completed and the parties were awaiting a ruling on a
dispositive motion – before the plaintiff’s case, which was in the pre-answer stage; thus,
the plaintiff was unlikely to be prejudiced. Id. The Court notes that, in Nuccio, the
plaintiff was a party to both cases.
In In re Literary Works, the Southern District of New York granted a stay of its
proceedings – a multi district litigation – to await the outcome of a Second Circuit case
that had been granted certiorari by the Supreme Court of the United States. 2001 W L
204212, at *1. The plaintiffs in the Southern District case were not parties to the case
before the Supreme Court, but the matter on which the Court granted certiorari was the
same as one the of questions pending before the Southern District. The Southern
District held that the Supreme Court’s review of the related Second Circuit case “is
likely to have significant, if not dispositive, impact on the cases here,” thus, proceeding
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with the matter before the Southern District would waste the parties’ and court’s
resources. Id. at *3.
Upon consideration of the appropriate factors for a stay, the Court determines
that a stay is not warranted at this time. The first factor, whether the plaintiff would be
prejudiced, is not present – plaintiff does not contend it will be prejudiced and is the
party requesting the stay. Should the MDL court fail to issue a decision before the
March 2016 dispositive motion deadline approaches, plaintiff argues it would be
prejudiced because it would need to “brief an extremely complicated legal issue which
is already being done by participants in the telecommunications marketplace with great
expertise in the area.” Dkt. No. 69-1 at 12. Further, plaintif f contends that the MDL
court may not issue a decision as quickly as defendants anticipate, there may be an
appeal, or the court may refer the matter to the FCC, resulting in delays that may
extend past this Court’s dispositive motion deadline. Although plaintiff urges that it
would be prejudiced should this Court deny a stay, assuming the MDL court decision
proceeds expeditiously, prejudice is unlikely. Although the Court recognizes that
plaintiff may be prejudiced insofar as it may need to brief the matter for this Court
should the MDL court not decide the issue soon, it is unknow n to the Court whether this
stay will be necessary, as the dispositive motion deadline is still several months away,
and plaintiff will have the opportunity to renew its motion to stay if the MDL court has
not reached a determination at that time.
Assessing the second factor, whether defendants, the nonmoving party, would
be prejudiced by the stay, defendants do not contend that they would be prejudiced nor
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does it appear that such would be the case. If the MDL court proceeds as predicted by
defendants, a stay may not significantly delay the issues pending in this Court. To the
extent plaintiff requests that, should the MDL court refer the matter to the FCC or
should the FCC reach an independent determ ination on the petition filed in November
2014 (Dkt. No. 69-1 at 7), the Court stay the matter pending a determination before that
agency, defendants could indeed be prejudiced. A tim e line for that ruling, should it
happen at all, is entirely uncertain.
As to the final factors – the interests of the courts, persons not parties to this
litigation, and the public, Nuccio, 2015 W L 1189167, at *5 – because it is not clear
when the MDL court will issue its decision and the extent to which this Court will find its
reasoning persuasive or determinative, it cannot be said that a stay will benefit the
interests of these parties. Certainly, the Court is in favor of preserving judicial
resources; however, this assessment is fairly speculative at this time. It is not at this
time known whether the stay will preserve such resources, as the MDL court case may
be decided before motions are due in this action. Further, although a ruling from the
MDL court may be helpful and persuasive in providing this Court with guidance on the
intraMTA issue in this case, as plaintiff is not a party to this case nor is this matter
pending within the Northern District, it does not appear that the determ ination would be
“binding,” as plaintiff proposes. See generally, LAWRENCE B. SOLUM, 18-134 MOORE’S
FEDERAL PRACTICE - CIVIL § 134.02 (1)(d)(noting that “[a] decision of a federal district
court judge is not binding precedent in either a different judicial district, the same
judicial district, or even upon the same judge in a different case.”). Thus, the Court may
9

still need extensive briefing from the parties. Although, as discussed, the independent
case need not be controlling in order for a Court to grant a stay pending the outcome of
that proceeding, Leyva, 593 F.2d at 863-64, how controlling that decision may be it is a
factor this Court finds relevant to consider in determining whether awaiting the outcome
of the MDL court’s decision would preserve the parties and this Court’s resources.
Here, unlike in Nuccio, 2015 WL 1189617, this Court is not awaiting a decision on a
transfer to the MDL court, and, unlike in In re Literary Works, 2001 WL 204212, the
matter is not being decided by the Supreme Court, the result of which may be far more
clearly authoritative than a decision from the MDL court.
Ultimately, as review of many of these factors is, at this stage, speculative, the
undersigned does not see it wise to issue a stay at this time. It is unlikely that either
party will file dispositive motions too soon before the March 2016 deadline; thus, the
parties need not expend resources to begin researching and drafting these dispositive
motions at this time. As plaintiff intends to continue with discovery on the intraMTA
issue even if this Court were to grant the motion to stay, declining to grant the stay at
this time but allowing for a renewal, will not result in a waste of the plaintiff’s resources.
At this time, plaintiff has not made out “a clear case of hardship or inequity in being
required to go forward.” In re HSBC Bank, 2015 WL 1611966, at *23.
Insofar as plaintiff sets forth arguments regarding the primary jurisdiction
doctrine, the Court need not assess whether the doctrine of primary jurisdiction applies,
as such an assessment is premature. The Court does not doubt that the FCC “knows
best what its own rule requires, and how that rule should be applied[,]” however, at this
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time, it is unclear whether that issue will even be decided by the FCC. Thus, it is not
necessary for the Court to assess plaintiff’s primary jurisdiction argument at this time.
Accordingly, the Court denies the motion to stay, without prejudice. Plaintiff is
free to renew at some future point its motion to stay, should events warrant.

IV. Conclusion
WHEREFORE, it is hereby
ORDERED that plaintiff’s motion to stay a ruling on the issue of whether
“insertion of an intermediate carrier between a cellular company and a terminating or
originating local exchange carrier, affects application of the FCC’s intra-MTA rule[,]”
Dkt. No. 69-1 at 6, is DENIED, without prejudice to renew; and it is further
ORDERED that the Clerk of the Court serve a copy of this Decision and Order
on the parties in accordance with Local Rules.
IT IS SO ORDERED.

Dated: November 6, 2015
Albany, New York

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