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Frontier Communications of Carolinas LLC v. Duke Energy Carolinas, LLC

United States District Court, E.D. North Carolina, Western Division

August 15, 2014

FRONTIER COMMUNICATIONS OF THE CAROLINAS LLC, Plaintiff,
v.
DUKE ENERGY CAROLINAS, LLC, Defendant.

ORDER

LOUISE W. FLANAGAN, District Judge.

This matter comes before the court upon defendant's motion to dismiss and compel arbitration, or, in the alternative, to stay and compel arbitration (DE 9), together with plaintiff's motion to stay ruling on defendant's motion (DE 18). The issues raised are ripe for ruling. For the reasons that follow, the court will grant defendant's motion and deny plaintiff's motion.

BACKGROUND

The court draws from the record the following uncontested facts and briefly summarizes here the respective arguments of the parties. Plaintiff is an incumbent local exchange carrier, which is a local exchange carrier that meets the requirements of 47 U.S.C. § 251(h). A local exchange carrier is "any person that is engaged in the provision of telephone exchange service or exchange access." 47 U.S.C. § 153(32). Defendant is a utility company that distributes electricity to retail customers in North Carolina and South Carolina.

Three agreements between the parties ("Joint Use Agreements"), executed between 1983 and 1985, authorize each party to attach its cables, which are used in the transmission of the party's retail services, to poles owned by the other party.[1] Plaintiff's decision to terminate the Joint Use Agreements effective as of August 8, 2012, was recognized by defendant related to new or additional pole attachments. The underlying dispute between the sides appears related to a reduction of rates demanded by plaintiff at or around the same time for existing attachments.

The Joint Use Agreements, referenced in the complaint and submitted as exhibits to defendant's motion, each contain a mandatory arbitration provision which provides as follows:

Should disputes arise between the parties concerning matters pertaining to this agreement, and such differences cannot be amicably settled by the parties hereto, the matters in dispute shall be submitted to arbitration as follows:
1. Either party desiring arbitration shall give written notice thereof to the other party setting forth the matter to be arbitrated. Within ten (10) days after receipt of such notice each party shall name their own arbitrator to serve on an Arbitration Panel.
2. The two arbitrators thus named shall within ten (10) days after their appointment, jointly request the Regional Director of the American Arbitration Association, Charlotte, N.C. to submit a list of five qualified arbitrators, residents of North Carolina, South Carolina, Virginia, or Georgia. The impartial arbitrator shall be selected by alternate striking of the names therein with the party requesting arbitration striking first.
3. The Arbitration Panel as herein provided for in this article, shall promptly act on any question or questions in controversy, and shall within 30 days after the close of the evidence render its majority decision in writing. Such decision shall be final and binding on both parties.
4. Each party shall bear all expenses of its own representatives and the compensation and expenses of the impartial arbitrator shall be borne equally by the parties hereto.

(Compl. DE 1, ¶ 12; Exh. 1, Mem. in Support of Mot. to Dismiss, DE 10-1).

Defendant sought to put the disputed issues of or relating to claims under the Joint Use Agreements for breach of contract and unjust enrichment, before an arbitration panel. In its October 15, 2013, arbitration demand ("Arbitration Demand"), defendant asserts unpaid pole rent for 2012 and unpaid inventory settlement amounts totaling $1, 042, 126.66. The following month, on November 12, 2013, plaintiff filed the instant declaratory judgment action against defendant.

Plaintiff seeks a declaratory judgment that the Federal Communications Commission ("FCC") has primary jurisdiction over issues raised in the Arbitration Demand, regarding rates, terms, and conditions that defendant may charge plaintiff for attachments to defendant's utility poles.[2] Because the FCC has primary jurisdiction over the dispute raised in the Arbitration Demand, plaintiff urges, the dispute is outside the scope of the arbitration provision. Plaintiff also seeks a declaration that the Arbitration Demand is null, void, and of no effect.

In response, on December 5, 2013, defendant filed the instant motion to dismiss and compel arbitration, or, in the alternative, to stay and compel arbitration pursuant to Federal Rule of Civil Procedure 12(b)(1) and the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1 et seq.[3] Plaintiff responded in opposition to the motion to compel arbitration on January 21, 2014, on which date it also filed the motion to stay. Four days prior thereto, on January 17, 2014, plaintiff filed a pole attachment complaint before ...


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