Sprint Communications Company L.P. v. Maule et al

Filing 208

ORDER denying Sprint's 183 Motion to Compel; granting Sprint's 199 Motion for Leave to take limited discovery; and denying Native American Telecom's 201 Motion for a Rule 26(f) conference. Signed by US Magistrate Judge Veronica L. Duffy on 01/14/15. (Duffy, Veronica)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
SPRINT COMMUNICATIONS
COMPANY L.P.,

4:10-CV-04110-KES
ORDER ON:

Plaintiff,
vs.
NATIVE AMERICAN TELECOM, LLC.,
B. J. JONES, in his capacity as Special
Judge of Tribal Court; and CROW
CREEK SIOUX TRIBAL COURT,

SPRINT’S MOTION TO COMPEL
DOCKET NO. 183;
SPRINT’S MOTION FOR LIMITED
DISCOVERY DOCKET NO. 199; &
NATIVE AMERICAN TELECOM,
LLC’S MOTION FOR RULE 26(F)
CONFERENCE DOCKET NO. 201

Defendants.
INTRODUCTION
This matter is before the court on the complaint of plaintiff Sprint
Communications Company L.P. (“Sprint”). See Docket No. 1. Sprint invokes
this court’s federal question, diversity, and supplemental jurisdiction. Id.; see
28 U.S.C. §§ 1331, 1332, and 1367. Sprint has filed a motion to compel
[Docket No. 183] and a motion for leave to take limited discovery [Docket No.
199]. Defendant Native American Telecom, LLC (“NAT”) has filed a motion
directing Sprint to complete the parties’ planning conference under Fed. R. Civ.
P. 26(f) and for a scheduling order [Docket No. 201]. All three of these motions
were referred to this magistrate judge for determination pursuant to 28 U.S.C.
§ 636(b)(1)(A) and the October 16, 2014, standing order issued by the
Honorable Karen E. Schreier. See Docket No. 204.

FACTS
A.

Initial Pleadings
This four-year old case has been much-litigated. The facts, including the

procedural history of this case, are as follows.
Sprint is a nationwide long-distance carrier known in
telecommunications lingo as an “interexchange carrier (IXC). NAT is a “local
exchange carrier” (LEC). LECs usually own the “real estate” in
telecommunications: the facilities that connect to users’ telephones within the
LEC. One of the things LECs do is provide switched access services to IXCs,
which allow IXCs to transmit long-distance phone calls to customers in the
LEC’s area, even though the IXC does not own or lease the facilities that
connect to the customers’ telephones. When a call begins in the LEC and
travels out of the LEC’s area, the LEC charges an origination access fee to the
IXC; when a call begins elsewhere and ends in the LEC’s area, the LEC charges
the IXC a termination access fee.
The Federal Communications Commission (FCC) establishes rules for the
rates that LECs can charge IXCs for these services. These rates are based on
tariffs filed with the FCC for interstate services and with the South Dakota
Public Utilities Commission (SDPUC) for intrastate services. These fees for
switched access services can be thought of as “rent”: a fee paid by the IXC
(here, Sprint) to the LEC (here, NAT) for the temporary use of the LEC’s
property—the facilities used to connect to customers’ telephones—for purposes
of connecting the IXC’s customer to a customer within the LEC.
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Where a telephone call originates and terminates within the LEC’s area,
no fees to an IXC are generated because the LEC handles the call from start to
finish. It is only where the call originates from outside the LEC and terminates
within the LEC (or vice versa) that the LEC is allowed to charge a switched
access fee to the IXC. Enter the concept of “traffic pumping.”
Traffic pumping occurs when an LEC artificially increases its longdistance telephone call volume by partnering with a service that purports to
offer free (or nearly free) calling services. Usually, the free calling service is
located outside the LEC, but it obtains a telephone number within the LEC.
Then, when calls are placed to the calling service, they are routed through the
LEC, often terminating in a place other than the LEC. Thus, sometimes the
call neither originates in the LEC nor terminates there, but it “pumps” the
LEC’s long distance traffic, allowing the LEC to charge IXCs switched access
fees. Traffic pumping schemes often involve an agreement between the LEC
and the free calling service to share the switched access fees generated paid by
the IXC.
NAT filed a tariff before the FCC on September 14, 2009. However, it
never completed the process of filing a tariff before the SDPUC. Instead, NAT
proceeded under a tariff it filed with the Crow Creek Sioux Tribal Authority.
Sprint accuses NAT of traffic pumping. NAT operates a free conference
calling system with partner Free Conferencing Corporation, which is owned by
WideVoice. NAT owns a conference call bridge in its LEC, on a South Dakota
Indian Reservation. When a party uses NAT’s conferencing system, it does not
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pay NAT for the call but instead is charged by the party’s IXC. NAT then bills
the IXC a switched access fee pursuant to its tariff. Sprint has been the
recipient of bills from NAT for these charges. Sprint alleges beginning in
December 2009, NAT began invoicing Sprint for switched access fees that were
the result of traffic pumping. Sprint initiated an action before the SDPUC to
stop the traffic pumping, but NAT refused to acknowledge SDPUC’s jurisdiction
over it. NAT then sued Sprint in Crow Creek Tribal Court, seeking punitive
damages against Sprint. Sprint ultimately brought this action in this court.
NAT filed a motion to stay these federal court proceedings in order to
allow the tribal court to determine, in the first instance, whether it had
jurisdiction over NAT’s lawsuit against Sprint there. See Docket No. 14. Sprint
then moved for a preliminary injunction, seeking to enjoin the tribal action
from going forward. See Docket No. 20. The court granted Sprint’s motion and
enjoined the tribal action and denied NAT’s motion to stay, holding that actions
on federal tariffs were required to be determined in federal court. See Docket
No. 62.
NAT then filed its own motion for a preliminary injunction, asking the
court to order Sprint to pay all switched access charges from March 1, 2010,
forward. See Docket No. 67. Before that motion had been decided, NAT also
filed a motion to amend its answer to Sprint’s complaint so that it could assert
counterclaims against Sprint for nonpayment of the switched access charges.
See Docket No. 86.

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The parties held a telephonic planning conference pursuant to FED. R.
CIV. P. 26(f) on January 26, 2011. See Docket No. 88. At that conference, the
parties agreed to expedited discovery relevant to NAT’s pending preliminary
injunction motion. Id. The report of the meeting indicated that the parties
would reconvene their Rule 26(f) meeting to address plans for additional
discovery if the court’s ruling on NAT’s motion made further discovery
necessary. Id. at p. 3.
NAT then filed a motion for a protective order, seeking to prevent Sprint
from deposing Thomas Reiman as NAT indicated that it did not intend to call
Reiman as a witness at its preliminary injunction hearing. See Docket No. 89.
Sprint, in turn, filed a motion to compel NAT to respond to a written
interrogatory. See Docket No. 92.
A hearing was held on NAT’s preliminary injunction hearing on March 3,
2011. See Docket No. 97. The court took the matter under advisement at the
conclusion of the hearing. NAT’s motion to amend its answer was orally
granted at the hearing. Id.
The court later granted in part Sprint’s motion to compel. See Docket
No. 117. The court denied NAT’s motion to avoid Reiman’s deposition. See
Docket No. 106. Still later, the court denied NAT’s motion for preliminary
injunction after receiving and taking into consideration a transcript of Reiman’s
deposition. See Docket No. 118. In responding to NAT’s motion, Sprint
indicated that it was going to amend a complaint it currently had pending
before the FCC to include a request that the FCC determine the validity of
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NAT’s tribally-filed tariff. Id. The court found it appropriate that the FCC
determine, in the first instance, the validity of NAT’s tariff because of the highly
technical nature of telecommunications tariffs and the FCC’s expertise in this
area. Id. In addition, the FCC had recently issued a notice of proposed
rulemaking to address the issue of traffic pumping and the court did not want
to issue a ruling that might conflict with that later-promulgated rule. Id.
NAT then moved to stay the proceeding pending a decision by the FCC.
See Docket No. 121. Sprint filed its own motion also asking for a stay; in
addition, Sprint asked the court to refer five issues to the FCC, to include the
validity of NAT’s tariffs. See Docket No. 124. In the interim, the FCC issued its
final rule and both parties agreed that the rule had no impact on this case.
See Docket No. 141. On February 22, 2012, the court granted Sprint’s motion
to stay and to refer the five issues to the FCC. Id.
B.

The FCC’s CAF Order
On October 27, 2011, the FCC issued a Report and Order and Further

Notice of Rulemaking in the matter entitled In re Connect America Fund, FCC
11-161 (“CAF Order”). See Docket No. 191-1 at pp. 6-28.1 In this document,
the FCC addresses the issue of traffic pumping, which it called “access
stimulation.” Id. The report first noted the crucial importance of wide-spread
availability of fixed and mobile broadband to this country’s economic growth,
global competitiveness, civil life, and education. Id. at ¶¶ 1-5. The report
The document filed is an excerpt of the FCC opinion only. The actual opinion
is 938 pages on Westlaw when one attempts to print the opinion out in dualcolumn format.
1

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noted that currently, many Americans do not have access to modern
broadband networks, especially in rural and isolated areas. Id. The purpose of
the opinion was to ensure the extension of broadband access to those
populations where “private sector economics still do not add up, and therefore
the immediate prospect for” such citizens to receive mobile broadband service
via “stand-alone private sector action is limited.” Id. at ¶ 5. The Commission
therefore proposed a “gradual reduction of intercarrier charges and [eventual]
movement to a bill-and-keep methodology” in order to “promote the nation’s
transition to IP networks.” Id.
The Commission then described the process of traffic pumping, or
“access stimulation,” which is consistent with the above description provided
herein. Id. at ¶ 656. The Commission noted that the arrangement was unfair
in that it resulted “in a jump in revenues and thus inflated profits” for the
LECs who employ the practice, thus making the “LEC’s interstate switched
access rates unjust and unreasonable” under the Telecommunications Act, 47
U.S.C. § 201(b), which requires reasonable rates to be charged to common
carriers. Id. at ¶ 657. This established a need to reform the practice of access
stimulation, which the Commission estimated had cost IXCs over $2.3 billion
in the five years preceding the opinion. Id. at ¶¶ 662, 664. The practice had
spawned a multitude of disputes in a variety of forums and was harmful to
competition. Id. at ¶¶ 664-65.
The Commission addressed this unfairness by first adopting a definition
of “access stimulation” that included two conditions. Id. at ¶ 657. If an LEC
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meets both of those conditions, the LEC is generally required to reduce its
switched access tariff rates to “the rates of the price cap LEC in the state with
the lowest rates.” Id. ¶¶ 657, 688-89. In this way, the Commission held that
the extent to which “IXC customers that do not use the stimulating services
would be forced to subsidize the customers that do use the services” would be
reduced. Id. at ¶ 657.
The definition of “access stimulation” was (1) a revenue sharing condition
[between the LEC and the free calling service] and (2) the LEC has experienced
an increase in traffic volume by either (a) having a 3-1 ratio of interstate
terminating-to-originating traffic ratio in a calendar month; or (b) has had more
than a 100 percent growth in interstate originating and/or terminating
switched access MOU in a month compared to the same month in the
preceding year. Id. at ¶ 658.
A “revenue sharing” agreement exists when a rate-of-return LEC or a
competitive LEC has an agreement with another party under which the LEC
makes payments to the other party based on the billing or collection of
switched access fees to an IXC or wireless carrier. Id. at ¶ 669. The agreement
can be express, implied, written, or oral. Id. The form of the payment from the
LEC to the other party can be in the form of a monetary payment, discount,
credit, service, feature, function, or any other item of value. Id. The other
party can be an affiliate of the LEC. Id. at ¶¶ 669, 674.
The Commission envisioned that IXCs would be able to police the
activities of LECs by monitoring the IXC’s own traffic records to keep track of
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when or if a LEC exceeded either of the traffic measures described in the
second condition above. Id. at ¶ 659. At that time, the IXC would then be
allowed to file a complaint with the Commission making an initial showing that
the second condition was met, which creates a rebuttable presumption of
revenue-sharing. Id. at ¶¶ 659, 699. The burden would then shift to the LEC
to show that it had not met either prong of the definition of access stimulation
and was not, therefore, in violation of FCC rules. Id. The Commission held
that this process would “help the Commission identify circumstances where a
LEC may be in violation of [its] rules.” Id. at ¶ 659.
The Commission stated that if an LEC meets the definition of access
stimulation, the LEC need not file an amended tariff if its tariff rates are
already below the benchmark rate. Id. at ¶¶ 679, 691.
C.

Resumption of This Litigation
On July 23, 2014, the court lifted the stay it previously issued, withdrew

the issues that had been referred to the FCC, granted Sprint until August 10 to
amend its complaint, and granted NAT until September 10 to amend its
counterclaim. See Docket No. 168. The court set a deadline of October 1,
2014, for filing motions to dismiss. Id. The telephonic hearing which formed
the basis for the court’s rulings indicated that the claims and issues framed by
the parties in their complaint and counter claims mayno longer be cogent after
certain interim rulings by the FCC. See Docket No. 169.
Also, the parties had pursued proceedings before the SDPUC, including
discovery, that may have negated certain issues with regard to NAT’s original
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tariffs. Id. Accordingly, the court proposed to allow both parties to amend
their pleadings and, if the parties wanted to file a motion to dismiss based on
statute of limitations issues as to the original tariffs, the court indicated it
would rule on that motion. Id. Thereafter, the court stated that it could refer
additional issues to the FCC. Id. at pp. 12-13.
In the wake of this ruling, Sprint declined to amend its complaint. NAT
did, however, amend its counterclaim. See Docket No. 172. In that amended
counterclaim, NAT alleges that the issue of traffic pumping was thoroughly
investigated by the FCC and the FCC issued the CAF Order, declining to hold
that the practice was illegal per se. Id. Instead, NAT alleges that the FCC
promulgated a definition which, if met, requires a LEC to “benchmark its
tariffed access rates to the rates of the price cap LEC with the lowest interstate
switched access rates in the state.” Id. In addition, NAT argues that Sprint
exhaustively litigated its traffic pumping claim in proceedings before the
SDPUC, which held that NAT’s practices were not illegal. Id. NAT alleges that
a long-time Sprint employee testified at the SDPUC proceedings that NAT was
at all times in compliance with all applicable laws and regulations. Id. NAT
argues that the doctrine of collateral estoppel prevents Sprint from continuing
to urge its traffic pumping claim and that the claim is now moot. Id. NAT
asserts claims of breach of contract and breach of an implied contract against
Sprint for unpaid switched access fees, and also a claim for unjust enrichment.
Id. NAT seeks a declaration from the court as to the rights and duties of the
parties and a ruling on its collateral estoppel argument. Id. Finally, NAT
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asserts a claim for abuse of process against Sprint, alleging that this and other
actions brought by Sprint were not based on legitimate concerns about traffic
pumping, but were instead an improper attempt to cut costs and delay
required payments to LECs. Id.
On October 1, Sprint filed a motion for summary judgment on NAT’s
counterclaims one and two, alleging that NAT had failed to follow regulatory
procedures to amend its tariffs in accord with the FCC’s CAF Order. See
Docket No. 176, 178.
On the same day, Sprint filed a motion pursuant to FED. R. CIV. P.
12(b)(6) to dismiss that portion of NAT’s contract and implied contract claims
seeking damages for invoices filed for August 11, 2012 and due by September
10, 2012. See Docket No. 181. Sprint also moves the court to dismiss in its
entirety NAT’s collateral estoppel claim because the issues for which estoppel is
urged are either irrelevant to the issues in this case or were not decided
adversely to Sprint by the SDPUC. Id. Finally, Sprint moves to dismiss the
abuse of process claims on the grounds that NAT has not pleaded a plausible
claim. Id.
D.

Currently Pending Discovery Motions
That brings us to the three pending motions referred. On October 10,

Sprint moved to compel NAT to respond to Sprint’s Request for Admission
No. 1, to which NAT objected. See Docket No. 183. At first NAT objected to the
request and neither admitted nor denied it. See Docket No. 191. One of NAT’s
objections was that the request was a compound, complex question that
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embraced multiple assertions of fact and erroneous legal assumptions. Id.
After a failed effort by the parties to attempt to resolve the discovery dispute,
including a refusal by Sprint to break the request down into multiple requests
to admit, each containing a single assertion of fact, NAT filed a supplemental
response that denied the request. Id. See also Docket No. 191-1 at pp. 75-79.
NAT also objects to the relevancy of the request. See Docket No. 191.
The gist of Sprint’s request to admit is that it wants NAT to admit that
the conference bridge it hosts terminates in Internet Protocol (“IP”), thereby
rendering the calls Voice over Internet Protocol (VoIP) traffic under the FCC’s
rules.
Sprint’s Request to Admit No. 1 reads as follows:
Attached as Exhibit A are diagrams provided by NAT to Sprint on
November 7, 2013. Each diagram shows a blue arrow, from a
Router or a switch to “NAT Voice Application Services.” Per the
legend, a blue arrow represents a “Voice over IP connection.”
Admit that, as reflected in the diagrams, all calls into Free
Conferencing bridge(s) have been “delivered to the bridge(s) in
Internet Protocol.”
See Docket No. 191-1 at p. 75.
NAT’s original response to this request, and its supplemental response,
goes on for four pages, largely articulating one objection after another. See id.
at pp. 75-79. At the end, NAT states, “Subject to these objections, and
assuming the phrase “bridge(s) in Internet Protocol” refers to “IP format” within
the meaning of the applicable regulations cited above, NAT denies that its
telecommunications traffic terminates in IP format.” Id. at p. 79. Whether

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telecommunications traffic terminates in IP format is apparently key to certain
FCC regulations. See e.g. 47 C.F.R. § 51.913.
Sprint asserts that NAT’s response is improper. It asks the court to
either deem the request to be admitted or, in the alternative, to allow the
parties to engage in limited discovery as to the issue of whether NAT’s
telecommunications traffic relative to its bridge(s) terminates in IP format. See
Docket No. 183 and 199. Specifically, Sprint requests that it be allowed to take
a deposition of NAT pursuant to Fed. R. Civ. P. 30(b)(6) in order to inquire
about (1) Call Flow Documents produced by NAT in the proceedings before the
SDPUC (which were appended to the request to admit as exhibits) and (2) the
way calls were delivered by NAT into the bridge(s) of Free Conferencing
Corporation. See Docket No. 199.
NAT generally resists Sprint’s request for limited discovery. See Docket
No. 202. Instead, NAT argues that the court should require the parties to hold
a planning conference pursuant to FED. R. CIV. P. 26(f) and, thereafter, issue a
general scheduling order, allowing full discovery. Id. See also Docket No. 174.
NAT argues that Sprint is improperly trying to relitigate issues it has already
litigated before the SDPUC and lost. Id. NAT argues that the CAF Order found
revenue-sharing and traffic pumping to be legal, thus “mooting” Sprint’s
claims. Id. Furthermore, NAT argues that the court should not refer this
matter again to the FCC because all technical matters involved in the case have
been resolved and the expertise of the FCC is no longer needed. Id.

13

Sprint responds that the only issue within the SDPUC’s jurisdiction, and
therefore, the only issue decided by the SDPUC was the issue of intrastate
access charges. Only the FCC has jurisdiction over interstate access charges.
The charges at issue in Sprint’s complaint are, Sprint maintains, interstate
charges over which the SDPUC had no jurisdiction to decide. See Docket No.
207.
DISCUSSION
A.

Meet and Confer Requirement
Rule 37(a)(1) requires the parties to meet and confer to attempt to resolve

discovery disputes prior to filing a motion to compel. See FED. R. CIV. P.
37(a)(1). In addition, this court’s local rules impose a similar requirement. See
DSD LR 37.1. The record reflects that the parties’ counsel met either in person
or telephonically and discussed this discovery dispute, and that they also
exchanged emails regarding it, to no avail. See e.g. Docket No. 185, 185-3.
The court finds that this requirement is satisfied.
B.

Sprint and NAT’s Motions
The court begins with the first motion, Sprint’s motion to compel at

Docket No. 183, and the law applicable to requests for admission. Those
requests are governed by Rule 36, which states in pertinent part as follows:
(1) Scope. A party may serve on any other party a written request
to admit, for purposes of the pending action only, the truth of any
matters within the scope of Rule 26(b)(1) relating to:
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(A) facts, the application of law to fact, or opinions about
either; and
(B) the genuineness of any described documents.
***
(4) Answer. If a matter is not admitted, the answer must
specifically deny it or state in detail why the answering party
cannot truthfully admit or deny it. A denial must fairly respond to
the substance of the matter; and when good faith requires that a
party qualify an answer or deny only a part of a matter, the answer
must specify the part admitted and qualify or deny the rest. The
answering party may assert lack of knowledge or information as a
reason for failing to admit or deny only if the party states that it
has made reasonable inquiry and that the information it knows or
can readily obtain is insufficient to enable it to admit or deny.
(5) Objections. The grounds for objecting to a request must be
stated. A party must not object solely on the ground that the
request presents a genuine issue for trial.
(6) Motion Regarding the Sufficiency of an Answer or
Objection. The requesting party may move to determine the
sufficiency of an answer or objection. Unless the court finds an
objection justified, it must order that an answer be served. On
finding that an answer does not comply with this rule, the court
may order either that the matter is deemed admitted or that an
amended answer be served. The court may defer its final decision
until a pretrial conference or a specified time before trial. Rule
37(a)(5) applies to an award of expenses.
See FED. R. CIV. P. 36(a).
Rule 37 addresses sanctions associated with requests to admit:
If a party fails to admit what is requested under Rule 36 and if the
requesting party later proves a document to be genuine or the
matter true, the requesting party may move that the party who
failed to admit pay the reasonable expenses, including attorney’s
fees, incurred in making that proof. The court must so order
unless:
(A) the request was held objectionable under Rule 36(a);
(B) the admission sought was of no substantial importance;
(C) the party failing to admit had a reasonable ground to
believe that it might prevail on the matter; or
(D) there was other good reason for the failure to admit.
See FED. R. CIV. P. 37(c)(2).
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Requests to admit require a party to make reasonable inquiry to obtain
any information which the party has or can readily obtain in order to admit or
deny the request. See FED. R. CIV. P. 36(a)(4). The purpose of requests to
admit pursuant to Rule 36 are to save parties from having to expend time and
money proving facts which are readily ascertainable by the other party and not
reasonably capable of dispute. Johnson Internat’l Co. v. Jackson Nat’l Life Ins.
Co., 812 F. Supp. 966, 987-88 (D. Neb. 1993), aff’d in part and remanded on
other grounds, 19 F.3d 431 (8th Cir. 1994). If a party unreasonably fails to
admit a matter after being requested to do so, possible sanctions include the
costs (including attorney’s fees) of the party that served the request to admit in
marshaling the evidence necessary to prove the matter. Id. See also FED. R.
CIV. P. 37(c)(2). Sanctions can be assessed against not only the party, but his,
her, or its attorney as well. Johnson Internat’l Co., 19 F.3d at 438-49.
Here, NAT was right to object to the request propounded by Sprint. The
request is so compound and complex, it is not clear in the end what is being
admitted if one responds “admit.” For example, several diagrams were
submitted with the request. See Docket No. 185-4. Each document should
have been the subject of a separate request to admit that the document is
genuine and originated with NAT. Further requests could have asked NAT to
admit what an individual feature on a single exhibit meant (e.g. the blue
arrows). Further requests could have asked NAT to admit a conclusion as to
what each exhibit showed (e.g. that the calls depicted ended in IP format).
Jumbled together as all these various elements were, Sprint’s request to admit
16

did not comply with Rule 36’s requirement that a request to admit be directed
to a fact, the application of law to fact, an opinion about either, or the
genuineness of any described document. See FED. R. CIV. P. 36(a)(1). The court
will not grant Sprint’s motion to compel. The court notes that, at the meet and
confer, the problem of the compound nature of the request was explained to
Sprint’s counsel by NAT’s counsel and Sprint had an opportunity—which it
chose not to act on—to serve NAT with revised requests to admit.
As an alternative to granting Sprint’s motion to compel, Sprint asks for
permission to conduct a Rule 30(b)(6) deposition of NAT to inquire surgically
about two issues: (1) Call Flow Documents produced by NAT in the
proceedings before the SDPUC (which were appended to the request to admit
as exhibits) and (2) the way calls were delivered by NAT into the bridge(s) of
Free Conferencing Corporation.
NAT resists Sprint’s surgical approach to discovery and asks for a fullblown Rule 26(f) meeting and for the district court to issue a Rule 16
scheduling order thereafter addressing all deadlines and discovery issues in
this case. In support of its position, NAT states that a second referral to the
FCC is not warranted. NAT further argues that many of the issues have now
been mooted by both the CAF Order and the proceedings before the SDPUC.
The court declines to determine whether NAT is correct as that would
require this court to resolve the merits of the issues that are now pending
before the district court in Sprint’s two dispositive motions. Those dispositive
motions were not referred to this magistrate judge, so they are not for this
17

court to express opinions on. For example, NAT argues that the SDPUC
proceedings operate to collaterally estop Sprint from pursuing its claims
against NAT. That argument is at the heart of NAT’s counterclaim number five,
and is the target of Sprint’s motion to dismiss. This court expresses no opinion
about whether and to what extent the SDPUC proceedings have an effect on
the issues or claims in this lawsuit.
Similarly, NAT argues that the FFC’s CAF Order held that the practice of
traffic pumping was “legal” and that IXCs like Sprint are not justified in
withholding payment of switched access fees. The court read the same opinion
and cannot come to the same conclusion as NAT about the Commission’s
holdings. Nevertheless, the application, if any, of the CAF Order to the issues
in this case are for the district court to decide in the pending dispositive
motions. Likewise, the applicability, if any, of 47 C.F.R. § 51.913 (addressing
the delivery of calls in IP format), to the issues and claims in this lawsuit is
again, a matter for the district court to determine.
Finally, the court should not grant NAT’s request for a full-blown
scheduling conference and Rule 16 scheduling order if this case is not going to
be litigated in this forum, but rather will be referred again to the FCC. Instead,
it would be more appropriate for the parties to conduct their pre-trial or prehearing proceedings before the FCC in accordance with the FCC’s rules for
such matters. The district court expressed its intention at the July 23, 2014,
status conference to issue a referral to the FCC again once the parties were
afforded the opportunity to amend their pleadings and place the statute of
18

limitations issue before the court. This court is not going to second-guess that
decision by the district court.
Sprint has appended the exhibits from the request for admission to its
dispositive motion. Compare Docket No. 180-6 with Docket No. 185-4. It
claims that NAT produced the documents in the SDPUC proceedings and that
the documents show that NAT delivered the calls depicted in the diagrams to
its bridge(s) in IP format. NAT disputes the authenticity of these documents
and claims the documents are ambiguous. See Docket No. 192. It is
appropriate to allow discovery to take place to clear up the issue as to the
significance of these documents because they most probably have a bearing on
the district court’s resolution of Sprint’s two pending dispositive motions. The
most economical way to do this is to allow Sprint to take a deposition of NAT
pursuant to Rule 30(b)(6) and the court will so order.
When a corporation or limited liability company is a party to be deposed,
the party seeking the deposition may choose either to designate a specific
individual to be deposed or, alternatively, the party may describe the subject
matter of the questions to be asked and allow the corporate party to designate
a representative to testify on behalf of the corporation. See FED. R. CIV. P. 30(a)
and (b)(6); Cadent Ltd. v. 3M Unitek Corp., 232 F.R.D. 625, 627-28 (C.D. Cal.
2005); United States v. Afram Lines Ltd., 159 F.R.D. 408, 413 (S.D.N.Y. 1994);
Sugarhill Records Ltd. v. Motown Record Corp., 105 F.R.D. 166, 169 (S.D.N.Y.
1985).

19

If the party seeking discovery chooses to designate the subject matter of
the deposition rather than name a particular deponent, as Sprint does here,
then the corporate party must designate a specific person to testify as to those
matters listed in the Rule 30(b)(6) notice. See FED. R. CIV. P. 30(b)(6). The
corporation is free to designate whomever it wishes; but the designation
imposes on the corporation a duty to prepare that person to testify as to the
matters listed in the Rule 30(b)(6) deposition notice. See Charles A. Wright,
Arthur R. Miller & Richard L. Marcus, 8A Fed. Practice & Procedure, § 2103 at
pp. 455-57 (3d ed. 2010) (hereinafter “Wright & Miller”). See also Prokosch v.
Catalina Lighting, Inc., 193 F.R.D. 633, 638 (D. Minn. 2000); Alliance for
Global Justice v. District of Columbia, 437 F. Supp. 2d 32, 37 (D.D.C. 2006).
Further, a corporation may not rely on the documents it produced in discovery
because “[p]roducing documents and responding to written discovery is not a
substitute for providing a thoroughly educated Rule 30(b)(6) deponent.” Great
American Ins. Co. of New York v. Vegas Constr. Co., 251 F.R.D. 534, 541 (D.
Nev. 2008). Refusal or failure by the corporation to prepare its designee to
testify to the matters listed in the Rule 30(b)(6) deposition notice invites courtordered sanctions. See 8A Wright & Miller § 2103 at pp. 464-66. NAT is
cautioned to take note of the above law when designating their corporate
representative for Sprint’s Rule 30(b)(6) motion.
CONCLUSION
Based on the foregoing law, facts, and analysis, it is hereby

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ORDERED that Sprint’s motion to compel [Docket No. 183] is denied in
its entirety. No sanctions will issue to either side. It is further
ORDERED that Sprint’s motion for leave to take the Rule 30(b)(6)
deposition of NAT [Docket No. 199] is granted; Sprint is ordered to conform its
deposition notice strictly to the two subjects it described in its motion; Sprint is
further forbidden from inquiring into any areas other than those two subjects
listed in its deposition notice. Both parties are ordered to complete this
deposition within 30 days from the date of this order. It is further
ORDERED that NAT’s motion for a Rule 26(f) conference and Rule 16
scheduling order [Docket No. 201] is denied in its entirety.
DATED this 14th day of January, 2015.
BY THE COURT:

VERONICA L. DUFFY
United States Magistrate Judge

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