United States District Court, E.D. North Carolina, Western Division
LOUISE W. FLANAGAN, District Judge.
This matter comes before the court upon defendant's motion to stay (DE 19), plaintiff's motion for partial judgment on the pleadings (DE 17), and plaintiff's motion for hearing (DE 34). These motions have been fully briefed and are ripe for adjudication. For the reasons that follow, the court grants defendant's motion to stay, denies without prejudice plaintiff's motion for partial judgment on the pleadings, and denies plaintiff's motion for hearing.
On August 7, 2013, plaintiff filed a complaint against defendant in state court, which defendant removed to this court on August 26, 2013. Plaintiff is an electric utility that owns utility poles for purposes of distributing electricity to its customers. Defendant is an incumbent local exchange carrier ("ILEC") that owns utility poles for purposes of distributing telephone and other services to its customers.
Plaintiff seeks to recover over $2.97 million that defendant allegedly owes pursuant to two agreements, executed in 1978 and 1981, by the parties' predecessors ("Joint Use Agreements"), which authorize each party to attach its cables that are used in the transmission of the party's retail services, to poles owned by the other party. Under the terms of the Joint Use Agreements, the parties agreed to pay annual rent to each other, calculated pursuant to a rate methodology contained in the Joint Use Agreements, as consideration for the right to use the other party's poles.
According to the complaint, in 1995 and 1996, the parties unsuccessfully attempted to negotiate a new joint use agreement with a new rate methodology. From 1996 through 2009, plaintiff invoiced defendant by using the Handy-Whitman Index, a widely-used cost index in the utility industry, not the rate methodology in the Joint Use Agreements. From 2010 through 2012, however, plaintiff returned to invoicing defendant using the rate methodology in the Joint Use Agreements.
Plaintiff seeks to recover from defendant for underpayments made on annual rental invoices for the years 2010, 2011, and 2012. In particular, plaintiff seeks to recover on (1) 2010 annual rentals, based upon invoices sent in December 2010 and February 2011; (2) 2011 annual rentals, based upon invoices sent in December 2011; (3) 2011 inventory, based upon invoices sent December 2012 and January 2013; and (4) 2012 annual rentals, based upon invoices sent in December 2012. According to the complaint, on July 8, 2011, defendant provided plaintiff one year's written notice of defendant's intent to terminate the Joint Use Agreements, effective July 8, 2012.
Plaintiff asserts four claims premised upon breach of the Joint Use Agreements. In particular, plaintiff seeks a (1) declaration that the Joint Use Agreements continue to control the methodology by which the annual pole rental payments due to each party is calculated; (2) breach of contract recovery of over $2.97 million, excluding interest, for failure to pay full amount due for rental for 2010-2012 rental invoices and the 2011 inventory invoices; (3) in the alternative, breach of contract recovery of $816, 255.48, excluding interest, using the Handy-Whitman index to measure damages should the court determine the parties mutually agreed to adopt the Handy-Whitman index for 2011-2012 annual rental invoices and 2011 inventory invoices; and (4) in the alternative, recovery in an unspecified amount based upon unjust enrichment should the court determine that no express rental rate existed for 2010 through 2012.
Defendant filed its answer to the complaint on October 9, 2013. Following submission of a joint report and plan pursuant to Federal Rule of Civil Procedure 26(f), the court entered an order on November 25, 2013, noting that plaintiff sought to move forward in discovery while defendant sought a stay of discovery, pending resolution of an anticipated motion to stay on the basis that the Federal Communications Commission ("FCC") has primary jurisdiction over certain aspects of the dispute. The court directed defendant to file a motion to stay on or before December 9, 2013, and stayed discovery pending resolution of the motion.
On December 9, 2013, defendant filed its motion to stay, in which it argues that plaintiff's claims for rentals dated after July 12, 2011, fall within the FCC's primary jurisdiction, based upon an FCC order regarding pole attachments, effective July 12, 2011. See Implementation of Section 224 of the Act; A National Broadband Plan for Our Future, 26 FCC Rcd. 5240, 5328-33, 2011 WL 1341351 (2011) ("Pole Attachment Order"); id., 76 Fed. Reg. 40817 (2011) (establishing effective date). Defendant attaches to the motion a complaint it filed that same date with the FCC's enforcement bureau (the "FCC complaint"), seeking to have FCC set rates that plaintiff may charge for all periods in dispute after July 12, 2011. Defendant seeks a stay pending FCC's resolution of its FCC complaint.
Also on December 9, 2013, plaintiff filed a motion for partial judgment on the pleadings, pursuant to Federal Rules of Civil Procedure 12(c) and (h)(2)(B), seeking to strike the following three defenses contained in defendant's answer:
[FIRST FURTHER DEFENSE:] Under 47 U.S.C. § 224, [defendant] is entitled to just and reasonable rates, terms, and conditions for its attachments on [plaintiff's] poles.
[SECOND FURTHER DEFENSE:] The FCC has primary jurisdiction over this matter. The subject matter of this case involves the rates, terms and conditions of agreements for [defendant's] use of [plaintiff's] utility poles, over which the FCC has primary jurisdiction. This Court, accordingly, should defer to the FCC's primary jurisdiction.
[THIRD FURTHER DEFENSE:] Given that the subject matter of this case involves the rates, terms and conditions of joint use agreements, a matter which is related to the primary jurisdiction of the FCC, [plaintiff] has ...