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Birmingham Emergency Communications District v. Bandwith.Com Inc.

United States District Court, N.D. Alabama, Southern Division

December 5, 2017

BIRMINGHAM EMERGENCY COMMUNICATIONS DISTRICT, Plaintiff,
v.
BANDWIDTH.COM, INC., et al., Defendants.

          MEMORANDUM OPINION

          R. DAVID PROCTOR UNITED STATES DISTRICT JUDGE.

         This matter is before the court on Defendants' Partial Motion to Dismiss Count I of Plaintiff's Complaint. (Doc. # 11). The Motion is fully briefed. (Docs. # 11, 15, 16). For the reasons explained below, the Motion is due to be granted.

         I. Background[1]

         The Emergency Telephone Services Act (“ETSA”), [2] Ala. Code § 11-98-1 et seq., established 911 as the statewide emergency telephone number and created Emergency Communication Districts (“ECDs”) in order to form local emergency telephone services (“911 services”). (Docs. # 1 at ¶ 11; 11 at p. 2). Prior to October 1, 2013, the ETSA authorized municipalities and counties to assess charges on exchange access lines and Voice over Internet Protocol (“VoIP”) telephone services (“911 charges”) in order to fund the ECDs' 911 services. (Docs. # 1 at ¶ 2, 11; 11 at p. 2). Birmingham Emergency Communication District (the “District”) is an ECD that provides 911 services throughout Birmingham, Alabama. (Doc. # 1 at ¶ 1). Defendants Bandwidth.com, Inc. and Bandwidth.com CLEC, LLC (collectively “Defendants” or “Bandwidth”) sell both wholesale and retail telecommunication services and provide business telephone services through VoIP services. (Docs. # 1 at ¶ 3; 11 at p. 1).

         The District filed this action against Bandwidth on March 13, 2017, alleging (1) violation of the ETSA, (2) negligence / negligence per se / gross negligence / recklessness, (3) breach of fiduciary duty, (4) wantonness, and (5) misrepresentation / fraud. (Doc. # 1). Specifically, Plaintiff alleges that Bandwidth failed to bill, collect, and remit 911 charges in accordance with the ETSA, causing Plaintiff to suffer substantial financial loss. (Id. at ¶ 16-17, 26-27). On May 31, 2017, Bandwidth moved to dismiss Count I (violation of the ETSA) to the extent that the District seeks to impose liability on Bandwidth as a wholesaler and not in connection with Bandwidth's retail business. (Doc. # 11).

         Plaintiff has filed similar actions in this district against other telecommunications providers and in those actions has asserted similar claims. See Birmingham Emergency Commc'ns Dist. v. TW Telecom Holdings, Inc., et al., 2:15-cv-00245-AKK; Birmingham Emergency Commc'ns Dist. v. Level 3 Commc'ns, LLC, et al., 2:15-cv-01088-AKK. On March 3, 2017, Judge Kallon of the Northern District of Alabama analyzed the merits of a motion to dismiss that involved the District's allegation that Level 3 Communications, LLC and Level 3 Communications, Inc. (collectively “Level 3”) violated the ETSA. See Doc. # 25, Birmingham Emergency Commc'ns Dist. v. Level 3 Commc'ns, LLC, et al., 2:15-cv-01088-AKK. In its motion to dismiss, Level 3 argued that the District's ETSA claim was due to be dismissed because Level 3 provided wholesale services. See Id. at p. 5. However, the issue was deemed moot for the following reason:

Level 3 first asserts that the District's claims for violations of the ETSA based on Level 3's provision of wholesale services fails as a matter of law, because the ETSA “imposes the obligation to bill, collect, and remit on the service supplier that provides the service to the end-user, thereby making it inapplicable to wholesale service suppliers that have no relationship with end-users.” Doc. 14 at 4-5. As it relates to the wholesale service suppliers, the District does not challenge Level 3's contention, and concedes that “[it] is not alleging that the Defendants had a duty to bill, collect, and remit 911 charges on telephone numbers or lines that the Defendants provided, on a wholesale basis, to resellers.” Doc. 16 at 6 (emphasis by plaintiff). Therefore, because the District has clarified that it is only pursuing claims related to Level 3's failure to remit 911 Charges for the retail services Level 3 provides directly to service users, Level 3's motion, as it relates to the provision of wholesale services, is moot.

See Id. at p. 5-6. Defendants allege that Plaintiff has already conceded that no ETSA liability attaches to the provision of wholesale telecommunications services. (Doc. # 11 at p. 5-6). Plaintiff counters that this case is distinguishable from the District's case against Level 3 because the Complaint against Bandwidth “contains an allegation that does not appear in the Level 3 case, namely that ‘during the relevant time period, the Defendant did not contractually require its reseller customers to pay 911 charges directly to the District and other 911 districts.'” (Doc. # 15 at p. 5 (citing Doc. # 1 ¶ 19)).

         II. Standard of Review

         The Federal Rules of Civil Procedure require only that the complaint provide “a short and plain statement of the claim showing that the pleaser is entitled to relief.” Fed.R.Civ.P. 8(a)(2). However, the complaint must include enough facts “to raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Pleadings that contain nothing more than “a formulaic recitation of the elements of a cause of action” do not meet Rule 8 standards, nor do pleadings suffice that are based merely upon “labels and conclusions” or “naked assertion[s]” without supporting factual allegations. Twombly, 550 U.S. at 555, 557. In deciding a Rule 12(b)(6) motion to dismiss, courts view the allegations in the complaint in the light most favorable to the non-moving party. Watts v. Fla. Int'l. Univ., 495 F.3d 1289, 1295 (11th Cir. 2007).

         To survive a motion to dismiss, a complaint must “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “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). Although “[t]he plausibility standard is not akin to a ‘probability requirement, '” the complaint must demonstrate “more than a sheer possibility that a defendant has acted unlawfully.” Id. A plausible claim for relief requires “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence” to support the claim. Twombly, 550 U.S. at 556.

         In considering a motion to dismiss, a court should “1) eliminate any allegations in the complaint that are merely legal conclusions; and 2) where there are well-pleaded factual allegations, ‘assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.'” Kivisto v. Miller, Candield, Paddock & Stone, PLC, 413 Fed. App'x 136, 138 (11th Cir. 2011) (quoting Am. Dental Assn. v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010)). That task is context specific and, to survive the motion, the allegations must permit the court based on its “judicial experience and common sense . . . to infer more than the mere possibility of misconduct.” Twombly, 550 U.S. at 556. Further, “courts may infer from the factual allegations in the complaint ‘obvious alternative explanation[s], ' which suggest lawful conduct rather than the unlawful conduct the plaintiff would ask the court to infer.” Am. Dental, 605 F.3d at 1290 (quoting Iqbal, 556 U.S. at 682). If the court determines that well-pleaded facts, accepted as true, do not state a claim that is plausible, the claims are due to be dismissed. Twombly, 550 U.S. at 556.

         III. Analysis

         Ultimately, the parties' disagreement centers on whether the ETSA imposed a duty on telecommunication wholesalers prior to October 1, 2013. To answer this question, the court first examines the language of the ETSA. See Hallstrom v. Tillamook Cty., 493 U.S. 20, 25 (1989) (“‘[T]he starting point for interpreting a statute is the language of the statute itself.'”). If the statutory scheme of the ETSA is coherent and consistent, there is “no need for a court to inquire beyond the plain language” of the ETSA. United States v. Ron Pair Enters., Inc., 489 U.S. 235, 240 (1989). Furthermore, “[s]tatutory definitions such as the one found in § 11-98-1 must be scrupulously followed, ...


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