# Verizon Select Services, INC. v. Berkshire Telephone Corporation

> United States Bankruptcy Court, District of Columbia · March 12, 2020

URL: https://www.frixlaw.com/law-library/cases/10455796

## Case

- **Court:** United States Bankruptcy Court, District of Columbia
- **Decided:** March 12, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10455796

## How later opinions describe it (automated extraction)

- applying the filed rate doctrine to section 203 of the Communications Act, 47 U.S.C.

## Opinion text

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S. Martin Teel, Jr.
United States Bankruptcy Judge
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA

In re )
)
CORE COMMUNICATIONS INC., ) Case No. 17-00258
) (Chapter 11)
Debtor. )
eee )
)
MCI COMMUNICATIONS SERVICES, )
INC., et al., )
)
Plaintiffs, )
)
Vv. ) Adversary Proceeding
) No. 19-10003
BERKSHIRE TELEPHONE )
CORPORATION, et al., ) Not for publication in West’s
) Bankruptcy Reporter.
Defendants. )
MEMORANDUM DECISION AND ORDER
RE MOTION TO DISMISS AMENDED COUNTERCLAIMS
MCI Communications Services, Inc. and Verizon Select
Services Inc., the plaintiffs and counterclaim-defendants in this
adversary proceeding, have filed a motion to dismiss the amended
counterclaims of Core Communications, Inc. (“Core”), the
defendant and counterclaim-plaintiff in this adversary proceeding
and the debtor in the main bankruptcy case. The pertinent facts
regarding each of the two plaintiffs are the same, and I will

refer to them collectively as “Verizon” and treat them as though
they are a single entity.
In its Amended Counterclaims (Dkt. No. 38), Core, a local
exchange carrier (“LEC”) asserts counterclaims against Verizon,
an interexchange carrier (“IXC”), to collect amounts that it
billed for switched access services that Core allegedly provided
to Verizon under its filed tariffs. Counts I and II of the
Amended Counterclaims allege that Verizon breached the express
terms of Core’s federal (Count I) and state (Count II) tariffs by
failing to pay the tariffed rates that Core billed for those
services. Count III alleges a breach of contract arising from
Verizon’s alleged failure to pay for access services offered by
Core, which Verizon has accepted and continued to use. Count IV
alleges that Verizon breached implied contracts with Core by
failing to pay Core’s invoices, and Court V alleges that Verizon
was unjustly enriched by retaining the unpaid amounts. Finally,
Count VI seeks declaratory relief as to Verizon’s continuing

failure to make payments under any of the legal theories raised
in Counts I-V with respect to Verizon’s past conduct.
Verizon has moved to dismiss all of the Amended
Counterclaims. I will grant Verizon’s Motion to Dismiss as to
Counts III, IV, and V, and as to Count VI to the extent it seeks
declaratory relief as to ongoing injuries of a nature similar to
Counts III, IV, and V, but will deny the motion as to Counts I
2
and II and as to Count VI to the extent it seeks declaratory
relief as to ongoing breaches of tariff claims.
I
LEGAL STANDARD
The Federal Rules of Civil Procedure require that a
plaintiff “give the defendant fair notice of what the plaintiff’s
claim is and the grounds on which it rests.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 545 (2007) (quoting Conley v. Gibson, 355
U.S. 41, 47 (1957)). A complaint survives a motion to dismiss if
it contains enough factual allegations “to state a claim to
relief that is plausible on its face.” Id. at 570. The factual
allegations in a complaint “must be enough to raise a right to
relief above the speculative level.” Id. “A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
In addition, “[i]n addressing a motion to dismiss, the court
accepts the complaint’s factual allegations as true.” Browning
v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). However, the
court is not bound to accept an inference drawn by the plaintiff
if the inference is not supported by the facts in the complaint.
See Iqbal, 556 U.S. at 679 (“While legal conclusions can provide
the framework of a complaint, they must be supported by factual
3
allegations.”). The court may consider “any documents either
attached to or incorporated in the complaint and matters of which
[the court] may take judicial notice.” In re Wube, Case No.
12-00577, 2013 WL 2109315, at *1 (Bankr. D.D.C. May 15, 2013)
(quoting Equal Emp’t Opportunity Comm’n v. St. Francis Xavier
Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997)).
II
FEDERAL AND STATE TARIFF CLAIMS (COUNTS I AND II)
In Counts I and II of the Amended Counterclaims, Core pleads
claims for breach of its federal and state tariffs. The elements
of a breach of tariff claim are: (1) that the LEC operated under
a filed tariff; (2) that the LEC provided services to a customer
under that tariff; and (3) that the LEC billed the customer for
services provided under its tariffs at rates listed in those same

tariffs. See Advamtel, LLC v. AT&T Corp., 118 F. Supp. 2d 680,
683-84 (E.D. Va. 2000). Verizon contends that Counts I and II
must be dismissed because:
Core seeks to recover charges for switched access
services allegedly provided under Core’s federal and
state tariffs, but fails to allege that it provided any
tariffed service to Verizon, and still less which
services, or at what rate. Core alleges only that it
provided “access services” and “switched access” to
Verizon, but those are not tariffed services that Core
actually could provide or for which Verizon could be
required to pay.
In its opposition to the Motion to Dismiss (Dkt. No. 41), Core
contends that because a “[c]omplaint need only contain a ‘short
4
and plain statement of the claim showing that the pleader is
entitled to relief,’” Kingman Park Civic Ass’n v. Williams, 348
F.3d 1033, 1040 (D.C. Cir. 2003) (citing Fed. R. Civ. P. 8(a)),
the allegations in its Amended Counterclaims are sufficient to
survive a motion to dismiss. In response, Verizon maintains that
after Twombly and Iqbal, such a “short and plain statement” is no
longer sufficient.
It is correct that Twombly and Iqbal “are universally
recognized as having modified the basic pleading standard in all
federal civil cases,” American Fed’n of State, Cty. & Mun. Emps.
Local 2401 v. District of Columbia, 796 F. Supp. 2d 136, 139
(D.D.C. 2011), and that “whether a particular complaint
sufficiently alleges a clearly established violation of law

cannot be decided in isolation from the facts pleaded.” Iqbal,
556 U.S. at 673. However, Verizon goes too far. Shortly after
Twombly, the Supreme Court reiterated in Erickson v. Pardus, 551
U.S. 89, 93 (2007), that “[s]pecific facts are not necessary; the
statement need only give the defendant fair notice of what the
... claim is and the grounds upon which it rests.” (Ellipsis in
original) (quoting Twombly, 550 U.S. at 555). And after Iqbal,
several circuits, including the D.C. Circuit, have continued to
view Erickson as good law. See Atherton v. District of Columbia
Office of Mayor, 567 F.3d 672, 681 (D.C. Cir. 2009) (citing
Erickson); Mirkin v. XOOM Energy, LLC, 931 F.3d 173, 176-77 (2d
5
Cir. 2019) (same); United States v. $579,475.00 in U.S. Currency,
917 F.3d 1047, 1049 (8th Cir. 2019) (same); Foster v. Principal
Life Ins. Co., 806 F.3d 967 (7th Cir. 2015) (same); Burnett v.
Mortgage Electronic Registration Systems, Inc., 706 F.3d 1231,
1235 (10th Cir. 2013) (same). Accordingly, taking the factual
allegations in the Amended Counterclaims as true, I conclude that
the factual allegations in Counts I and II are sufficient to
state a claim for relief. Core’s Amended Counterclaims allege:
(1) that Core provides access services, operating under filed
tariffs (¶¶ 21, 24-28); (2) that Core provided access services to
Verizon under those tariffs (¶¶ 29-30); and (3) that Core billed
Verizon for services provided under its tariffs at rates listed
in those same tariffs (¶¶ 39-41). While Core’s Exhibit C is only

a summary of the invoices it allegedly provided to Verizon, the
Amended Counterclaims (¶ 41) specifically aver that the invoices
in question “set forth the volume of call traffic underlying each
invoice calculation, along with all of the interstate and
intrastate rate elements that apply to those volumes for purposes
of calculating the final invoice amount.” These allegations
contain sufficent “factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged” as required by Twombly and Iqbal. Because
“courts are not licensed to impose heightened pleading
requirements in certain classes of cases simply to avoid the risk
6
that unsubstantiated claims will burden the courts and opposing
parties,” $579,475.00 in U.S. Currency, 917 F.3d at 1049 (citing
Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512, 514-15 (2002)),
Core’s Amended Counterclaims suffice to put Verizon on notice of
the counterclaims that Core advances. Dismissal of these counts
for failure to state a claim is therefore inappropriate.
III
EQUITABLE RELIEF (COUNTS III, IV, AND V)
Verizon’s Motion to Dismiss requests dismissal of Counts
III, IV, and V with prejudice, arguing that Core’s claims are
barred as a matter of law by the filed rate doctrine. See Am.
Tel. & Tel. Co. v. Cent. Office Tel., Inc., 524 U.S. 214, 222
(1998) (applying the filed rate doctrine to section 203 of the

Communications Act, 47 U.S.C.). “When the filed rate doctrine
applies, it generally precludes a regulated party from obtaining
any compensation under other principles of federal or state law
that is different than the filed rate.” CallerID4u, Inc. v. MCI
Commc’ns Servs., Inc., 880 F.3d 1048, 1053 (9th Cir. 2018)
(citing Keogh v. Chicago & N.W. Ry. Co., 260 U.S. 156, 163
(1922)). The FCC’s current permissive de-tariffing policy
provides two means by which a “competitive local exchange
carrier” (LECs other than certain incumbent LECs) can provide an
IXC with and charge for interstate access services: the filed
tariff or a privately negotiated contract. See All Am. Tel. Co.
7
v. AT&T Corp., 328 F. Supp. 3d 342, 349 (S.D.N.Y. 2018). Verizon
thus argues that Count III, which merely attempts to construe
Verizon’s “acceptance” of its “offer” of services, which were
subject to existing tariff rates, as a contract, and Counts IV
and V, which seek equitable remedies, are preempted by the filed
rate doctrine.
In response to Verizon’s request to dismiss Counts III, IV,
and V, Core states that these counts “were alleged in the
alternative and in the event that Counts I or II were not
viable,” and that it does not oppose the dismissal of these
counts “provided that the dismissal of these Counts is without
prejudice.” The court may consider as conceded Verizon’s
arguments in support of dismissal, under Fed. R. Civ. P.
12(b)(6), of Counts III, IV, and V. See Texas v. United States,
798 F.3d 1108, 1110 (D.C. Cir. 2015); Jacobson v. Hofgard, 168 F.

Supp. 3d 187, 208 (D.D.C. 2016); Toms v. Office of the Architect
of the Capitol, 650 F. Supp. 2d 11, 18 (D.D.C. 2009). See also
Gates v. United States, 928 F. Supp. 2d 63, 69-70 (D.D.C. 2013)
(dismissing negligence claim with prejudice when the plaintiff’s
opposition did not address the arguments in the defendant’s
motion to dismiss). Dismissal of Counts III, IV, and V is thus
warranted.
Verizon requests that Counts III, IV, and V be dismissed
with prejudice. “A dismissal with prejudice is warranted only
8
when a trial court determines that the allegation of other facts
consistent with the challenged pleading could not possibly cure
the deficiency.” Firestone v. Firestone, 76 F.3d 1205, 1209
(D.C. Cir. 1996) (internal quotation marks and citations
omitted). In its opposition to the Motion to Dismiss, Core
offered no rebuttal of Verizon’s argument that these claims fail
as a matter of law and provided no explanation as to how
amendment of these counts would make them viable.
In opposing Verizon’s request for dismissal with prejudice,
Core requests that the dismissal be without prejudice and that it
be granted leave to amend its Amended Counterclaims. Pursuant to
Fed. R. Civ. P. 15(a)(2), a court may grant leave to amend a
pleading and “should freely give leave when justice so requires.”
However, Core has not set forth reasons why justice requires that
it be allowed to amend Counts IV, V, and VI.
Under LBR 7015-1, incorporating DCt.LCvR 15.1, a motion for
leave to file an amended pleading must be accompanied by an

original of the proposed pleading as amended. If Core’s
opposition to the motion to dismiss is treated as a motion for
leave to amend, Core did not comply with that obligation. Core
implicitly has conceded that Counts IV, V, and VI, as currently
written, must be dismissed, and has not explained what amendments
it would make to cure the deficiencies in Counts IV, V, and VI
identified by Verizon if allowed to amend those counts, and why
9
such amendments would not be a futile attempt to state valid
claims.1 A district court may deny a motion to amend ‘if the
proposed amendment fails to cure the deficiencies in the original
pleading, or could not survive a second motion to dismiss.’”
Arlin-Golf, LLC v. Village of Arlington Heights, 631 F.3d 818,
823 (7th Cir. 2011) (quoting Foster v. DeLuca, 545 F.3d 582, 584
(7th Cir. 2008). Accordingly, I will deny the request for leave
to amend Counts IV, V, and VI, and will dismiss those counts.
However, I will not make that dismissal a final and
appealable order under Fed. R. Civ. P. 54(b): that would
potentially result in unwarranted piecemeal appeals. Under Rule
54(b), as a non-final order, the order dismissing Counts IV, V,
and VI “does not end the action as to any of the claims or
parties and may be revised at any time before the entry of a
judgment adjudicating all the claims and all the parties’ rights

and liabilities.” In other words, the dismissal will become a
dismissal with prejudice once, and only once, all claims are
1 That stands in contrast to how Core responded, in part VI
of its memorandum in support of its opposition to Verizon’s
motion to dismiss, to the request for dismissal of Counts I and
II with prejudice. Core had already argued that the Amended
Counterclaims’ Exhibit C was intended to be a summary of the
invoices for which payment is due, and that it was not required
to append all of the invoices to its pleading. If the court
concluded that Exhibit C did not provide sufficient detail, an
amendment to provide further adequate detail regarding Counts I
and II would obviously not be futile. Core thus noted as to
Counts I and II that Verizon does not “contend (because it
cannot) that Core’s further amendment of its Counterclaims would
be futile, in bad faith, or prejudicial to Verizon[.]”
10
adjudicated in this adversary proceeding. It is not necessary to
recite at this juncture, as requested by Verizon, that the
dismissal is with prejudice. Theoretically, Core might file a
motion in which it shows (based on, for example, a change in the
law or facts not yet disclosed) that justice requires that it be
allowed to amend Counts IV, V, and VI.
IV
DECLARATORY RELIEF (COUNT VI)
Finally, Count VI seeks declaratory relief pursuant to the
Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202, with
respect to Verizon’s “refusal to pay the charges under Core’s
Tariffs for the use of Core’s access services.” Verizon argues
that Count VI must dismissed for three reasons: (1) the court
lacks jurisdiction if the court dismisses Count I (the only claim
based on federal law); (2) Count VI is duplicative of other
counts and must be dismissed on the same bases as those counts or
is superfluous with respect to those counts that are not
dismissed; and (3) Court VI seeks a remedy only for past acts,
but “the Declaratory Judgment Act does not authorize remedies for

past injuries alone.” Hodgkins v. Holder, 677 F. Supp. 2d 202,
203 (D.D.C. 2010). In its opposition to the Motion to Dismiss,
Core concedes that declaratory relief is unavailable as to
ongoing injuries premised on claims that the court dismisses.
The Declaratory Judgment Act provides in § 2201(a) that in
11
“a case of actual controversy within its jurisdiction,” any court
of the United States “may declare the rights and other legal
relations of any interested party seeking such a declaration,
whether or not further relief is or could be sought.” The
District Court has subject matter jurisdiction over this
adversary proceeding pursuant to 28 U.S.C. § 1334(b) regardless
of whether the claims asserted arise under federal or state law,
and thus has authority under § 2201(a) to grant a declaratory
judgment as both the federal and state law claims.2 In turn,
that jurisdiction is exercised by this court as a unit of the
District Court under 28 U.S.C. § 151 by way of referral under 28

2 Section 2201(a) specifically addresses the issue of
declaratory judgments in “a proceeding under section 505 or 1146
of title 11,” thus evidencing that the District Court has subject
matter jurisdiction to grant declaratory judgment relief in
proceedings such as this under other provisions of title 11
brought to enhance the estate. “The corollary to the
specification [in the] Declaratory Judgment Act of two title 11
provisions is that other Bankruptcy Code issues are within the
ambit of the Declaratory Judgment Act. See 12 JAMES WM. MOORE ET
AL., MOORE’S FEDERAL PRACTICE § 57.25[1][b] (2018).” Dragnea v.
Dragnea (In re Dragnea), 609 B.R. 239, 257 (Bankr. E.D. Cal.
2019) (footnote omitted).
12
U.S.C. § 157.3 Whatever surviving counts Count VI relates to,
the court has subject matter jurisdiction over Count VI.
I am not dismissing Counts I and II, and the court retains
jurisdiction as to Count VI to the extent it is premised on
Counts I and II. However, the court agrees with Verizon that
Count VI must be dismissed to the extent that Core seeks
declaratory relief thereunder on bases set forth in Counts III,
IV, and V.
The only remaining question is whether Count VI properly
alleges “ongoing and repeated” injuries which are consequently
not duplicative of the past injuries alleged in Counts I and II.
Verizon highlights Core’s use of the present perfect tense in
¶ 109 (“Core has lawfully charged MCI and Verizon . . .”) and
¶ 110 (“MCI and Verizon have violated . . .”) and argues that
Core alleges only past failures to pay, which are not a basis for
relief under the Declaratory Judgment Act. I reject this
argument:

3 The District Court is a court of the United States.
Although the bankruptcy court is not listed in 28 U.S.C. § 451 as
a court of the United States, it exercises the jurisdiction of
the District Court. See In re Schaefer Salt Recovery, Inc., 542
F.3d 90, 105 (3d Cir. 2008) (the bankruptcy court “is a unit of
the district court, which is a ‘court of the United States,’ and
thus the bankruptcy court comes within the scope of § 451.”);
Beneficial Trust Deeds v. Franklin (In re Franklin), 802 F.2d
324, 326 (9th Cir. 1986) (cases falling within district court's
jurisdiction under § 1334(b) are delegated to the bankruptcy
court which thus has jurisdiction over any declaratory judgment
request coming within § 1334(b)); In re McGuirl, No. 90-00141,
2001 WL 1798478, at *1 (Bankr. D.D.C. Nov. 30, 2001) (same).
13
The present perfect tense—“has been”—“denotes an act,
state, or condition that is now completed or continues up
to the present.” Chicago Manual of Style § 5.132 (17th
ed. 2017); see also Bryan A. Garner, Modern American
Usage 802–03 (3d ed. 2009); McManus v. McManus Fin.
Consultants, Inc., No. 10-cv-0281, 2010 WL 4290866, at *3
(D.Nev. Oct. 20, 2010) (“The perfect tense in the English
language indicates a completed action, regardless of the
continuing vitality of the action. For example, ‘I have
been to London’ says nothing of whether I am still in
London today.”).
Colon v. Ashby, 314 F. Supp. 3d 116, 121 (D.D.C. 2018).
Moreover, other paragraphs of the Amended Counterclaims “render[]
this question purely academic,” U.S. v. Louisiana, Civil Action
No. 11-470-JJB, 2011 WL 6012992, at *2 (M.D.La. Dec. 1, 2011),
because the Amended Counterclaims allege “[a] present,
actionable, and justiciable controversy” and “ongoing and
repeated practices” (¶¶ 104 and 105). Specifically, ¶ 111 of the
Amended Counterclaims explicitly seeks a declaratory judgment
that Verizon is “obligated to make timely payment of all of these
charges, which includes all the charges for access services Core
rendered to MCI and Verizon along with late payment changes, as
they become due” (emphasis added). It is therefore inappropriate
to interpret the present perfect tense in ¶¶ 109-110 as limited
to past injuries. In seeking a declaratory judgment regarding
ongoing and repeated practices, Count VI is not duplicative of
the claims to recover damages in Counts I and II. Accordingly,
the court will not dismiss Count VI insofar as it seeks
declaratory relief with respect to Verizon’s alleged ongoing
14
failure to pay charges arising from Core’s filed tariffs as
asserted in Counts I and II.
V
CONCLUSION
For the foregoing reasons, I will grant the Motion to
Dismiss as to Counts III, IV, and V, and as to Count VI to the
extent that Core seeks declaratory relief in Count VI on bases
set forth in Counts III, IV, and V. These dismissals are without
leave to amend at this juncture. I will deny the Motion to
Dismiss as to Counts I and II, and as to Count VI (to the extent
that Core seeks declaratory relief as to ongoing injuries arising
from Verizon’s alleged failure to pay charges under Core’s filed
tariffs). It is thus
ORDERED that Verizon’s Motion to Dismiss Amended

Counterclaims (Dkt. No. 40) is granted in part as follows. It is
further
ORDERED that Counts III, IV, and V of the Amended
Counterclaims are dismissed; and that Count VI is dismissed as to
any request for declaratory relief other than for injuries
arising from Verizon’s alleged breach of Core’s tariffs. It is
further
ORDERED that the Motion to Dismiss Amended Counterclaims to
dismiss is otherwise DENIED.
[Signed and dated above.]
15
Copies to: All counsel of record; e-recipients.

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R:\Common\TeelSM\KLP\Core 19-10003\MCI v. Berkshire (In re Core Communications, Inc.) Order re MTD Counterclaims v6.wpd

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10455796. Public record. Not legal advice.