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

Filing 226

ORDER overruling 209 OBJECTION to 208 Magistrate Judge Order by Native American Telecom, LLC. filed by Native American Telecom, LLC. Signed by U.S. District Judge Karen E. Schreier on 3/19/2015. (KC)

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

4:10-CV-04110-KES

Plaintiff,
ORDER OVERRULING OBJECTIONS
TO MAGISTRATE JUDGE’S ORDER

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

NATURE AND PROCEDURE OF CASE
Defendant Native American Telecom, LLC (NAT) moved for an order directing
plaintiff, Sprint Communications Company, L.P., to complete a discovery
conference pursuant to Fed. R. Civ. P. 26(f) and for this court to issue scheduling
order under Fed. R. Civ. P. 16. Docket 201. The motion was referred to the
magistrate judge for resolution under 28 U.S.C. § 636(b)(1)(A). Docket 204.1 The
magistrate judge issued an order denying NAT’s motion. See Docket 208. NAT
objects to the magistrate judge’s decision. Docket 209.

Two other motions were also referred to the magistrate judge, namely
Sprint’s motion to compel (Docket 183) and Sprint’s motion to conduct limited
discovery (Docket 199). The magistrate judge denied Sprint’s motion to compel but
granted Sprint’s motion to conduct limited discovery. See Docket 208 at 20-21.
Because the disposition of those motions was not objected to, those portions of the
magistrate judge’s order will not be disturbed.
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LEGAL STANDARD
This court’s review of a magistrate judge’s order is governed by 28 U.S.C.
§ 636 and Rule 72 of the Federal Rules of Civil Procedure. A district court may set
aside the magistrate judge’s order on any pretrial matter if it is shown to be clearly
erroneous or contrary to law. 28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a); see
also Ferguson v. United States, 484 F.3d 1068, 1076 (8th Cir. 2007). This standard
affords deference to the magistrate judge, and the order will not be set aside
unless the court is “left with the definite and firm conviction that a mistake has
been committed.” Reko v. Creative Promotions, Inc., 70 F. Supp. 2d 1005, 1007 (D.
Minn. 1999) (citing Chakales v. Comm’r of Internal Revenue, 79 F.3d 726, 728 (8th
Cir. 1996).
FACTS
This case is now more than four years old. The facts have been well
developed, and are more fully set forth in the magistrate judge’s order and in the
prior rulings from this court. Docket 208 at 2-11; see also Dockets 62, 101, 118,
and 141.
Briefly stated, the FCC released its Connect America Fund final rule on
November 29, 2011, which addresses the practice known as “access stimulation”
or “traffic pumping.” See Connect America Fund; A National Broadband Plan for Our
Future; Establishing Just and Reasonable Rates for Local Exchange Carriers; HighCost Universal Service Support, 76 Fed. Reg. 73830 (Nov. 29, 2011). The FCC also
created a transitional framework for VoIP intercarrier compensation. Id. at 73833.
On December 27, 2011, this court issued an order directing the parties to discuss
what effect, if any, the FCC’s Connect America Fund final rule had on the issues
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presented in this case. Docket 128. Then, on February 22, 2012, the court issued
an order discussing the final rule and determined that it did not apply
retroactively. Docket 141 at 9-11 (“Thus, the final rule is inapplicable to the time
period before the final rule became effective.”). As part of the same order, the court
granted Sprint’s then-pending motion to stay this proceeding and referred three
issues to the FCC for resolution. Id. at 25. The court also directed the parties to
issue periodic updates describing the status of the FCC proceeding. The court
received these updates over the next two years, which documented that the status
of the FCC referral remained unchanged since November 2012. Compare Docket
154 with Docket 163. A telephonic status conference was then held on July 23,
2014, to discuss the limited progress of the FCC proceeding. See Docket 164.
The parties stated that they were engaged in litigation before the South
Dakota Public Utilities Commission (SDPUC). Docket 169 at 5. As part of that
dispute, the parties engaged in discovery. NAT was ultimately granted a certificate
of authority by the SDPUC to provide certain telecommunications services in
South Dakota. Based on the SDPUC litigation and action taken by the FCC during
the period of the stay, the parties discussed whether some of the disputes in this
case remained viable. Id. at 8-10. The court proposed entering an order that lifted
the stay, withdrew the issues that had been referred to the FCC, and set deadlines
for the parties to amend the complaint, counterclaims, and file any motions to
dismiss. Id. at 12. The court also stated that it would rule on any motions to
dismiss based on a statute of limitations defense and that a new referral of issues
to the FCC could then be discussed. Id. With the parties in agreement, a formal
order was issued that same day. See Docket 168.
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Sprint did not amend its complaint. NAT did, however, amend its
counterclaim. Docket 172. Several motions have since been filed. Relevant to this
discussion is NAT’s motion for a Rule 26(f) discovery conference and Rule 16
scheduling order. Docket 201. This motion was referred to the magistrate judge for
resolution. The magistrate judge denied NAT’s motion. NAT objected to the
magistrate judge’s order. Docket 209. Thus, the issue before the court is whether
the magistrate judge’s denial of NAT’s motion was clearly erroneous or contrary to
law.
DISCUSSION
In its motion, NAT contended that “[t]he only claims Sprint has elected to
pursue raise issues that have now been addressed by the [Connect America Fund
final rule] and the [SDPUC] in a contested proceeding.” Docket 202 at 3. Although
this court determined that the final rule was not retroactive, NAT asserts that it
nonetheless “confirmed the validity of the tariff NAT had filed at the time of the
FCC’s release of the” final rule. Id. at 7. And because the SDPUC found in NAT’s
favor, NAT contends that Sprint can no longer “re-litigate” issues in its unamended
complaint that were considered and rejected by the SDPUC. Id. at 11. Thus, NAT
asserts that the parties should now complete the Rule 26(f) process and that this
court should issue a Rule 16 scheduling order.
The magistrate judge noted that granting NAT’s request would involve
reaching the merits of several dispositive matters pending before this court. Docket
208 at 17. As part of NAT’s amended complaint, for example, NAT contends that
Sprint is estopped from raising issues that were discussed and litigated in the
SDPUC proceeding. Docket 172 at 19-20. And the magistrate judge observed that
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granting NAT’s request to broadly engage in discovery would be inappropriate if
this case was again stayed and had issues referred to the FCC for resolution. Id. at
18.
NAT’s objection to the magistrate judge’s order is based on the same
grounds it asserted in its motion. For example, NAT reiterates that Sprint has not
amended its complaint or requested that any new issues be referred to the FCC.
Docket 209 at 2. In NAT’s view, “it is now clear that [Sprint’s] claims have no merit
because of the [final rule] and the findings of the SD PUC.” Id. at 4. NAT thus
requests “at least written and document discovery immediately–unless and until
Sprint can identify issues that require a primary jurisdiction referral.” Id. at 6.
First, the July 2014 status conference contemplated that another referral to
the FCC may be appropriate after the parties presented arguments about the
effects, if any, that recent developments with the FCC and the SDPUC have had on
the present dispute. Docket 169 at 11. At the end of the hearing, the court
explained that the parties should reconvene “to discuss what the issues should be
for referral” after the court ruled on any motions to dismiss that the parties might
file. Id. at 13. And while Sprint was given permission to amend its complaint, it
was not compelled to do so.
Second, as the magistrate judge found, accepting NAT’s characterization of
the dispute would require the court to reach the merits of several issues that
either have not or cannot yet be determined. For example, NAT recently filed a
motion for summary judgment asserting, in part, that Sprint is collaterally
estopped from arguing that NAT is a “sham” entity because the SDPUC concluded
otherwise. See Docket 213 at 11. Until briefing is completed, the court cannot
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resolve that dispute or similar assertions that NAT has advanced regarding the
viability of Sprint’s claims. Sprint has likewise filed its own motion for partial
summary judgment and a motion to dismiss that must be resolved and that may
also affect whether a second referral to the FCC is warranted. Thus, the magistrate
judge’s decision to deny NAT’s motion was not clearly erroneous or contrary to law.
CONCLUSION
NAT has not shown that the magistrate judge’s decision to deny its motion
requesting that the parties complete a Rule 26(f) discovery conference and for the
court to issue a Rule 16 scheduling order was clearly erroneous or contrary to law.
Thus, the objections to the magistrate judge’s order are overruled. Accordingly, it
is
ORDERED that the objections to the magistrate judge’s order (Docket 209)
are overruled.
Dated March 19, 2015.
BY THE COURT:
/s/ Karen E. Schreier
KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE

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