Unigestion Holding, S.A. v. UPM Technology, Inc. et al

Filing 442

ORDER - The Court DENIES Defendants' Motion for Judgment as a Matter of Law-Causation and Damages (ECF 398 ). The Court GRANTS Digicel-Haiti's Motion to Stay Defendants' Counterclaims Pending Resolution of Issues Arising Under the Communications Act of 1934 (ECF 421 ). The Court STAYS all counterclaims asserted by UPM pending resolution by the FCC of the Communications Act issues raised in UPM's Communications Act counterclaims. The Court also DENIES WITHOUT PREJUDI CE both UPM's Motion for Summary Judgment-Communications Act (ECF 386 ) and UPM's Motions in Limine (ECF 438 ), with leave to renew after the FCC proceedings have been completed. The parties are directed to file a joint status report prom ptly after a decision by the FCC that materially affects these issues or by April 5, 2023, whichever occurs first. Digicel-Haiti's fraud claim based solely on active concealment by using HBS remains set for trial on November 14, 2022. The Daubert hearing to consider Digicel-Haiti's expert damages testimony remains set for October 27, 2022, at 11:00 a.m. Signed on 10/4/2022 by Judge Michael H. Simon. (mja)

Case 3:15-cv-00185-SI

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

UNIGESTION HOLDINGS, S.A., d/b/a
DIGICEL HAITI,

Case No. 3:15-cv-185-SI
ORDER

Plaintiff,
v.
UPM TECHNOLOGY, INC., et al.,
Defendants.
Michael H. Simon, District Judge.
Before the Court are several motions. First, Defendants and Counterclaim-Plaintiffs UPM
Technology, Inc. and Duy “Bruce” Tran (collectively, UPM) argue that Plaintiff and
Counterclaim-Defendant Unigestion Holdings, S.A., doing business as Digicel-Haiti (DigicelHaiti), has not produced evidence showing that Digicel-Haiti was harmed by UPM’s conduct or
has suffered awardable damages. ECF 398. Second, UPM seeks summary judgment on its
counterclaims alleging that Digicel-Haiti violated the Communications Act of 19341 under
regulations issued by the Federal Communications Commission (FCC). ECF 386. Third, DigicelHaiti has moved to stay UPM’s counterclaims, pending the FCC’s resolution of certain issues

1

47 U.S.C. §§ 151, et seq.

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under the Communications Act. ECF 421. Fourth, UPM has moved in limine, seeking
evidentiary rulings related only to its Communications Act counterclaims. ECF 438.
A. Fraud Claim
One of the elements a plaintiff must show to prove a claim for fraud under Oregon
common law is damage causally linked to the alleged fraudulent conduct. Strawn v. Farmers Ins.
Co., 350 Or. 336, 351-52 (2011). UPM makes several arguments challenging Digicel-Haiti’s
proof of damages and causation. First, UPM asserts that Digicel-Haiti failed to present evidence
showing that customers who made calls from the United States to Haiti through UPM’s less
expensive bypass service would have otherwise placed those calls through Digicel-Haiti’s more
expensive international routing. On this point, UPM argues that other bypass services likely
would have prevented Digicel-Haiti from connecting those calls through its more expensive
routing. Second, UPM asserts that Digicel-Haiti could have mitigated losses by charging more
for calls that it identified as bypass, which the record shows it can do. Third, UPM argues that
Digicel-Haiti has not provided evidence showing that UPM’s alleged use of “Human Behavior
Software” (HBS) succeeded in evading Digicel-Haiti’s proprietary bypass-identifying system.2
Fourth, UPM asserts that Digicel-Haiti’s calculation of damages is too speculative to present a
genuine dispute over whether Digicel-Haiti suffered harm from UPM’s bypass activities. UPM
points to Digicel-Haiti’s lack of business records for the relevant period and its damages expert
report, which was not yet been substantively updated after the Court limited the issues in this
case to Digicel-Haiti’s claim of fraud by active concealment through the use of HBS.

2

UPM denies that it used HBS but makes this argument on the assumption, at least for
purposes of its pending motion, that it did.

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During oral argument, the Court scheduled a Daubert3 hearing for October 27, 2022 to
consider UPM’s objections to Digicel-Haiti’s damages expert. ECF 423, at 105 (Tr. at 105:2021). Counsel for Digicel-Haiti also stated that he had not filed an amended expert report on
damages because of a misunderstanding of the Court’s case management civil trial order.
ECF 423 at 111 (Tr. at 111:10-21); see also ECF 383 (case management order); ECF 384, at 1920 (Opinion and Order establishing additional case management scheduling). The Court then
allowed Digicel-Haiti to file an updated expert report by October 4, 2022. ECF 423, at 112 (Tr.
at 112:2-4); see generally ECF 423, at 111-23 (Tr. at 111-23) (discussing extension of amended
expert report deadline). The Court also clarified that UPM may challenge Digicel-Haiti’s expert
during the scheduled Daubert hearing to avoid the expense of deposing that expert a second
time. ECF 423, at 122-23 (Tr. at 122:22-25, 123:1-6).
Based on the upcoming Daubert hearing and the possible receipt of an amended expert
report from Digicel-Haiti, the Court denies UPM’s motion on causation and damages. These
issues may be revisited at or after the Daubert hearing or at trial.
B. Communications Act Counterclaim
UPM countersued Digicel-Haiti, alleging that it violated the Communications Act with
respect to its “Roam Like You’re Home” (RLYH) service. UPM argues at summary judgment
that Digicel-Haiti is a “common carrier” within the meaning of the Communications Act, and
thus Digicel-Haiti violated the FCC’s ban on resale restrictions by canceling (or deactivating)
UPM’s SIM cards that it used for bypassing Digicel-Haiti’s international routing. Digicel-Haiti
responds that it is a “foreign carrier” under United States law, not a “common carrier,” and thus
the FCC’s resale ban does not apply to the facts alleged in this case. In the alternative, Digicel-

3

Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993).

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Haiti requests that the Court stay the counterclaims so that the parties may request resolution of
these questions by the FCC.
UPM’s Communications Act counterclaims raise questions the answers to which carry
implications beyond the boundaries of this case. For example, a foreign carrier is one who
engages with the United States’ telecommunications infrastructure “solely through physical
connection with the facilities of another carrier.” 47 U.S.C. § 152(b)(2) (emphasis added). The
parties dispute whether Digicel-Haiti marketed its RLYH service to United States-based
customers and, if it did, whether that marketing activity qualifies Digicel-Haiti as a common
carrier. Case law and FCC guidance on this topic is sparse and difficult to analogize.4 Similarly,
it is unclear how the FCC would apply its fifty-year-old ban on common carriers restricting the
resale of their telecommunications services to the circumstances here.5
The primary jurisdiction doctrine exists for precisely these situations, where “a claim is
cognizable in federal court but requires resolution of an issue of first impression, or of a
particularly complicated issue that Congress has committed to a regulatory agency.” Syntek
Semiconductor Co. v. Microchip Tech. Inc., 307 F.3d 775, 780 (9th Cir. 2002) (quotation marks
omitted). This doctrine ensures “a workable relationship between the courts and administrative
4

See, e.g., Comtronics, Inc. v. P.R. Tel. Co., 553 F.2d 701, 706-07 (1st Cir. 1977)
(“Congress in 1934 perceived ‘connecting’ carriers as weak rural exchanges” but “[i]n the four
decades since the Communications Act was passed, ‘connecting’ carriers have come to include
[large enterprises]. . . . It is for Congress, however, and not for this Court, to rewrite the statute to
reflect changed circumstances.”).
5

Long ago the FCC stated its position that common carriers of telecommunications
services may not ban the resale of those services. Resale & Shared Use of Common Carrier
Servs. & Facilities, 60 F.C.C. 2d 261 (1976) (Resale Rules). Four years after the FCC
promulgated the Resale Rules, it issued a notice of proposed rulemaking regarding the resale of
international communication services. Reg. Policies Concerning Resale & Shared Use of
Common Carrier Int’l Commc’ns Serv’s, Notice of Proposed Rulemaking, 77 F.C.C. 2d 831
(1980). The proposed rulemaking, however, never came to fruition. See Comprehensive
Examination of U.S. Reg. of Int’l Telecomm. Serv’s, 58 F.R. 4846, 4850-51 (1993).

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agencies” when the former lacks the expertise and policymaking directives of the latter. See MCI
Telecomm. Corp. v. Teleconcepts, Inc., 71 F.3d 1086, 1105 (3d Cir. 1995). It is a “prudential
doctrine” up to the Court to invoke, heeding the parties’ arguments but not relying on them.
Astiana v. Hain Celestial Grp., 783 F.3d 753, 760-62 (9th Cir. 2015).
There is no “fixed formula” for deciding whether or when to invoke primary jurisdiction,
but courts in the Ninth Circuit consider four factors: “(1) the need to resolve an issue that (2) has
been placed by Congress within the jurisdiction of an administrative body having regulatory
authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive
regulatory authority that (4) requires expertise or uniformity in administration.” Syntek, 307 F.3d,
at 781. The first, second, and third factors support invoking primary jurisdiction. Resolving
UPM’s counterclaim requires analyzing what the FCC means by “foreign carrier” and whether
the Resale Rules apply to Digicel-Haiti’s conduct. The FCC is an agency with broad authority
over several industries. Judicial interpretation could introduce confusion or discord into the
FCC’s regulatory scheme.
Considering the fourth factor, the issues raised in UPM’s Communications Act
counterclaims are technically complex and likely applicable to all international providers who
offer roaming programs in the United States. The FCC has expertise and the ability to apply that
expertise uniformly. UPM argues that the FCC’s expertise is not “required.” The fourth factor,
however, asks if the “comprehensive regulatory authority” established by the agency demands
expertise and uniformity, not whether the issue before the Court requires that expertise. See
Verizon Nw., Inc. v. Portland Gen. Elec. Co., 2004 WL 97615, at *5-6 (D. Or. Jan. 13, 2004). In
any event, the Court disagrees with UPM’s assertion that this case involves only straightforward
statutory interpretation and clear analogues to precedent.

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In weighing these factors against UPM’s need for prompt resolution, the Court concludes
that it is appropriate to invoke primary jurisdiction. “Efficiency is the deciding factor in whether
to invoke primary jurisdiction.” Astiana, 753 F.3d, at 760 (quotation marks omitted). Efficiency
counsels against “undue delay.” Robles v. Domino’s Pizza, LLC, 913 F.3d 898, 910 (9th Cir.
2019). Delay is warranted, however, when the Court risks misjudging how an agency would
decide a fundamental question. Whether providers like Digicel-Haiti are common carriers with
respect to their international roaming services rises to that level.
In response to Digicel-Haiti’s motion to stay, UPM also argues that the FCC’s resolution
of its Communications Act counterclaims may “moot” Digicel-Haiti’s fraud claim. UPM asks
that the Court therefore also stay the fraud claim if it invokes primary jurisdiction and stays
UPM’s counterclaims. The Court previously sua sponte bifurcated UPM’s counterclaims from
Digicel-Haiti’s fraud claim on January 18, 2022. The Court also stayed trial on UPM’s
counterclaims until the conclusion of trial on Digicel-Haiti’s fraud claim. ECF 294, at 37-39
(Opinion and Order). UPM did not object. Id.
UPM’s arguments do not persuade the Court that invoking primary jurisdiction imposes
any new or undue hardship on UPM.6 Indeed, receiving a decision from the jury on whether
UPM has committed fraud against Digicel-Haiti by engaging in active concealment through the
use of HBS may inform the questions that the FCC will address in considering the
Communications Act issues raised in UPM’s counterclaims.

6

If UPM is wary of suffering economic injury from the outcome of the trial on DigicelHaiti’s fraud claims before the FCC resolves UPM’s Communications Act counterclaims, the
Court notes that Digicel-Haiti may not execute on a jury verdict alone. The Court will hear from
both sides before deciding whether to enter a partial judgment under Rule 54(b) of the Federal
Rules of Civil Procedure or to await a ruling from the FCC before entering a complete and final
judgment in this case.

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CONCLUSION
The Court DENIES Defendants’ Motion for Judgment as a Matter of Law–Causation and
Damages (ECF 398). The Court GRANTS Digicel-Haiti’s Motion to Stay Defendants’
Counterclaims Pending Resolution of Issues Arising Under the Communications Act of 1934
(ECF 421). The Court STAYS all counterclaims asserts by UPM pending resolution by the FCC
of the Communications Act issues raised in UPM’s Communications Act counterclaims. The
Court also DENIES WITHOUT PREJUDICE both UPM’s Motion for Summary Judgment–
Communications Act (ECF 386) and UPM’s Motions in Limine (ECF 438), with leave to renew
after the FCC proceedings have been completed. The parties are directed to file a joint status
report promptly after a decision by the FCC that materially affects these issues or by April 5,
2023, whichever occurs first. Trial on Digicel-Haiti’s fraud claim based solely on active
concealment by using HBS remains set for trial on November 14, 2022. The Daubert hearing to
consider Digicel-Haiti’s expert damages testimony remains set for October 27, 2022,
at 11:00 a.m.
IT IS SO ORDERED.
DATED this 4th day of October, 2022.
/s/ Michael H. Simon
Michael H. Simon
United States District Judge

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