Qwest v. Free Conferencing Corp., No. 15-2406 (8th Cir. 2016)
Annotate this CaseThe district court found third-party plaintiff Qwest failed to prove its claims for intentional interference with a business relationship, unfair competition, and unjust enrichment against third-party defendant FC. The court agreed with the district court that FC did not act with an improper purpose when it contracted with Sancom, a local exchange carrier (LEC), because FC was simply attempting to take advantage of the uncertain regulatory scheme at the time; FC had a legitimate argument that it could be considered an “end user,” and thus Sancom could bill Qwest under its tariff for calls delivered to FC’s call bridges; and thus the district court did not err in finding for FC on Qwest's claim for intentional interference with a business relationship. The court predicted that the South Dakota Supreme Court would not recognize a tort of unfair competition under these circumstances, and found that the district court properly rejected this new tort. The court concluded, however, that the district court incorrectly found FC’s conduct was “neither illegal nor inequitable” because it was simply taking advantage of a loophole until the loophole closed, and the district court improperly considered Sancom’s settlement payments to Qwest when it found FC was not unjustly enriched. Therefore, the court reversed and remanded for reconsideration of whether FC was unjustly enriched.
Court Description: Bright, Author, with Murphy and Shepherd, Circuit Judges] Civil case - Telecommunications. The district court did not err in finding for defendant on Qwest's claim for intentional interference with a business relationship between Qwest and a local exchange carrier (LEC) because defendant did not act with an improper purpose or motive when it contracted with the LEC, and it had a legitimate argument that their arrangement was consistent with the FCC regulatory scheme and applicable law; nor did the court err in finding for defendant on Qwest's claim for the tort of unfair competition as the Court predicts the South Dakota Supreme Court would not recognize a tort of unfair competition under these circumstances; the district court erred in rejecting Qwest's claim for unjust enrichment as the contract between defendant the LEC was not legal at the time it was formed and defendant benefited from the LEC's tariff violation; the district court also erred in focusing on the amount Qwest had recovered from the LEC rather than the amount defendant received; remanded for further proceedings as to whether the defendant was unjustly enriched. Judge Murphy, concurring in part and dissenting in part.
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