Sancom, Inc v. Sprint Communications Company Limited Partnership
ORDER dismissing plaintiff's complaint, defendant's counterclaim, and defendant's third-party complaint; order denying as moot defendant's motion for judgment on the pleadings on counts number two and three of plaintiff's complaint. Signed by Chief Judge Karen E. Schreier on 06/27/2012. (KC)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SANCOM, INC., a South Dakota
COMPANY LIMITED PARTNERSHIP,
a Delaware partnership,
CORPORATION OF AMERICA, a
Nevada corporation, and
TELEJUNCTIONS LLC, a California
limited liability company,
Plaintiff, Sancom, Inc., brought suit against defendant, Sprint
Communcations Co., alleging claims for breach of contract, breach of implied
contract, and unjust enrichment after Sprint refused to pay Sancom’s invoices.
Docket 1. Sprint answered the complaint and asserted a counterclaim against
Sancom. Docket 5. Sprint brought a third-party complaint against Free
Conferencing Corporation of America and Telejunctions, LLC, alleging unjust
enrichment and civil conspiracy claims. Docket 7. Sprint alleged that “Sancom
and Third-Party Defendants have devised a scheme artificially to inflate call
volumes . . . in order to bill Sprint inflated rates for what Sancom wrongly
characterized as tariffed ‘terminating access’ services.” Docket 7 ¶ 17. Sancom
and Sprint later reached a confidential settlement and jointly moved to dismiss
Sancom’s complaint and Sprint’s counterclaim with prejudice, but they did not
state whether Sprint’s third-party complaint should be dismissed. Docket 123.
The court entered an order stating that it was “inclined to dismiss the thirdparty complaint,” but allowed Sprint to file a brief stating “why the third-party
complaint should not be dismissed.” Docket 125 at 2.
Sprint filed a brief stating that the third-party complaint could be
dismissed with prejudice. Docket 126 at 2. Third-party defendants sought leave
to file a response to Sprint’s brief, which the court granted. Third-party
defendants contend that they are entitled to attorney’s fees under the Federal
Communications Act (FCA), which Sprint contests.
Pursuant to Federal Rule of Civil Procedure 41(a)(2), third-party
defendants request that the court make dismissal of Sprint’s third-party complaint
contingent upon Sprint paying third-party defendants’ attorney’s fees and costs.
Docket 131 at 8-9. Third-party defendants argue that they are entitled to
attorney’s fees under 47 U.S.C. § 206 (“Carriers’ liability for damages”), which
allows for the recovery of attorney’s fees in certain situations:
In case any common carrier shall do, or cause or permit to be done,
any act, matter, or thing in this chapter prohibited or declared to be
unlawful, or shall omit to do any act, matter, or thing in this chapter
required to be done, such common carrier shall be liable to the
person or persons injured thereby for the full amount of damages
sustained in consequence of any such violation of the provisions of
this chapter, together with a reasonable counsel or attorney’s fee, to
be fixed by the court in every case of recovery, which attorney’s fee
shall be taxed and collected as part of the costs in the case.
47 U.S.C. § 206.
Attorney’s fees, however, are not available under § 206 for the dismissal of
Sprint’s third-party complaint because no damages will be awarded as a result of
the dismissal. The district court for the Southern District of New York has
reasoned that attorney’s fees are only recoverable under § 206 if damages are
[T]his is not a “case of recovery” because no damages have been
awarded. . . . The requirement that a party have been awarded
damages is also suggested both by the title of § 206 (“Carriers’ liability
for damages”) and by its language, which provides for “damages . . .
together with a reasonable counsel or attorney’s fee.” This language
links the recovery of attorney's fees to the recovery of damages.
AT&T Co. v. United Artists Payphone Corp., 852 F. Supp. 221, 224-25 (S.D.N.Y.),
aff’d 39 F.3d 411 (2d Cir. 1994). Other courts have similarly held. See, e.g.,
Conboy v. AT&T Corp., 241 F.3d 242, 250-51 (2d Cir. 2001); Swain v. AT&T Corp.,
No. 3:94-cv-1088-D, 1997 WL 573464, at *1-2 (N.D. Tex. Sept. 9, 1997).
There is no right to attorney’s fees under § 206 if there has “been no
independent recovery of damages.” Swain, 1997 WL 573464, at *1 (reasoning that
“[s]everal courts have held that the plain language of § 206 . . . precludes an award
of attorney’s fees where there has been no independent recovery of damages.”
(citations omitted)). The Second Circuit has noted that the FCA “does not permit
the recovery of presumed damages.” Conboy, 241 F.3d at 250 (citing In re
Commcn’s Satellite Corp., 97 F.C.C. 2d 82, 90 (1984)).
Because third-party defendants have not alleged any claims against Sprint
and will not recover any damages if Sprint’s third-party complaint is dismissed,
third-party defendants are not entitled to an award of attorney’s fees under § 206.
See United Artists, 852 F. Supp. at 224 (reasoning that a party can be the
“prevailing party” in an action and still have “not ‘recovered’ anything.”). The court
has reviewed third-party defendants’ other arguments on why they are entitled to
attorney’s fees and finds them to be without merit. Accordingly, it is
ORDERED that plaintiff’s complaint (Docket 1), defendant’s counterclaim
(Docket 5), and defendant’s third-party complaint (Docket 7) are dismissed on the
merits with prejudice without costs and without notice to any party.
IT IS FURTHER ORDERED that defendant’s motion for judgment on the
pleadings on counts number two and three of plaintiff’s complaint (Docket 74) is
denied as moot.
Dated June 27, 2012.
BY THE COURT:
/s/ Karen E. Schreier
KAREN E. SCHREIER
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