United States District Court, E.D. Tennessee, Chattanooga
BLOUNT COUNTY EMERGENCY COMMUNICATIONS DISTRICT, ET AL., Plaintiffs,
AT&T CORP., Defendant. BLOUNT COUNTY EMERGENCY COMMUNICATIONS DISTRICT, ET AL., Plaintiffs,
TELEPORT COMMUNICATIONS AMERICA, LLC, Defendant. BEDFORD COUNTY EMERGENCY COMMUNICATIONS DISTRICT, ET AL., Plaintiffs,
LEVEL 3 COMMUNICATIONS, LLC, Defendant.
L. COLLIER UNITED STATES DISTRICT JUDGE.
the Court are a joint motion to dismiss filed by Defendants
AT&T Corporation (“AT&T”) (Doc. 29 in
Case 370) and Teleport Communications America, LLC
(“Teleport”) (Doc. 28 in Case 371), and a motion
to dismiss filed by Defendant Level 3 Communications, LLC
(“Level 3”) (Doc. 21 in Case 376). The Plaintiff
emergency communications districts for various Tennessee
counties (the “Districts”) filed a joint response
in opposition to AT&T's and Teleport's motion
(Doc. 32 in Case 370; Doc. 31 in Case 371) and a response in
opposition to Level 3's motion (Doc. 23 in Case 376).
AT&T and Teleport filed a joint reply (Doc. 33 in Case
370; Doc. 32 in Case 371), and Level 3 filed a reply (Doc. 24
in Case 376). Plaintiffs filed a joint supplemental brief in
all three cases (Doc. 62 in Case 370; Doc. 61 in Case 371;
Doc. 74 in Case 376), and Defendants responded jointly (Doc.
63 in Case 370; Doc. 62 in Case 371; Doc. 75 in Case 376).
The Court will GRANT IN PART AND DENY IN
PART Defendant's motions (Doc. 29 in Case 370;
Doc. 28 in Case 371; Doc. 21 in Case 376).
1984, Tennessee passed the Emergency Communications District
Law, Tenn. Code Ann. §§ 7-86-101, et seq.
(the “911 Law”), to formally establish 911 as the
primary emergency telephone number for all Tennessee
residents. The 911 Law created the Districts,
municipal corporations which run the 911 call centers in each
county and route calls to the proper emergency service. To
support these functions, the 911 Law allows the Districts to
levy a charge (the “911 charge”) on telephone
lines. Telephone “service suppliers,
” such as Defendants, are required to bill
and collect these 911 charges from their “service
users, ” or customers. Id. Service suppliers
must then report and remit the 911 charges to the Districts
at least every two months. Id.
Districts brought these actions to recover 911 charges they
believe Defendants wrongfully failed to bill to
Defendants' respective customers. Each First Amended
Complaint asserts causes of action for violation of the
Tennessee False Claims Act, Tenn. Code Ann. §§
4-18-101 et seq. (the “TFCA”), violation
of the 911 Law, breach of fiduciary duty, fraudulent
misrepresentation, fraudulent concealment, and negligent
misrepresentation. (Doc. 24 in Case 370; Doc. 23 in Case 371;
Doc. 18 in Case 376 (collectively, the
STANDARD OF REVIEW
may move to dismiss a claim for failure to state a claim upon
which relief can be granted. Fed.R.Civ.P. 12(b)(6). In ruling
on such a motion, a court must accept all of the factual
allegations in the complaint as true and construe the
complaint in the light most favorable to the plaintiff.
Gunasekera v. Irwin, 551 F.3d 461, 466 (6th Cir.
2009) (quoting Hill v. Blue Cross & Blue
Shield of Mich., 49 F.3d 710, 716 (6th Cir. 2005)). The
court is not, however, bound to accept as true bare
assertions of legal conclusions. Papasan v. Allain,
478 U.S. 265, 286 (1986).
deciding a motion to dismiss under Rule 12(b)(6), a court
must determine whether the complaint contains “enough
facts to state a claim to relief that is plausible on its
face.” Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007). Although a complaint need only contain
a “short and plain statement of the claim showing that
the pleader is entitled to relief, ” Ashcroft v.
Iqbal, 556 U.S. 662, 677-78 (2009) (quoting Fed.R.Civ.P.
8(a)(2)), this statement must nevertheless contain
“factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged, ” id. at 678. Plausibility
as explained by the Court “is not akin to a
‘probability requirement,' but it asks for more
than a sheer possibility that a defendant has acted
unlawfully.” Id. (quoting Twombly,
550 U.S. at 556). “[W]here the well-pleaded facts do
not permit the court to infer more than the mere possibility
of misconduct, the complaint has alleged-but it has not
‘show[n]'-'that the pleader is entitled to
relief.'” Id. at 679 (quoting Fed.R.Civ.P.
8(a)(2)). “Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do
not suffice.” Id. at 678. “Determining
whether a complaint states a plausible claim for relief [is]
a context-specific task.” Id. at 679.
party presents matters outside the pleadings in connection
with the motion, the court must either exclude those matters
from consideration or treat the motion as one for summary
judgment. Fed.R.Civ.P. 12(d).
move to dismiss all six counts of the Complaints on the
ground that they fail to plead factual matter sufficient to
state a claim under Twombly, 550 U.S. 544, and
Iqbal, 556 U.S. 662. In the alternative, Defendants
move to dismiss the fraud-related claims, Counts I, IV, V,
and VI, for failure to plead fraud with sufficient
particularity as required by Rule 9(b) of the Federal Rules
of Civil Procedure. Also in the alternative, Defendants move
to dismiss all of the Districts' common-law claims,
Counts III-VI,  on the grounds that the 911 Law
establishes the exclusive remedy for the Districts.
Sufficient Factual Matter
and Teleport do not make individualized arguments under
Twombly and Iqbal about the adequacy of
pleading of the Districts' causes of action or their
respective elements. Rather, they assert that all of the
Districts' causes of action hinge on the allegation that
Defendants underbilled 911 charges, but that the Complaints
do not include enough factual allegations to provide
plausible support for those “conclusory allegations of
underbilling.” (AT&T Doc. 30 at 9.) Level 3 takes
the same approach, criticizing the Districts' failure to
allege how the underbillings occurred, such as by identifying
specific illegal practices that led to the underbillings.
(Level 3 Doc. 22 at 7, 16-17.) The Court accordingly turns
first to the general sufficiency of the Districts'
allegations about underbilling.
Complaint includes the following allegations about
Defendants' duties to bill, collect, and remit 911
Charges to the Districts, the reports Defendants made to the
Districts, and Defendants' alleged failure to collect and
accurately report on enough charges:
. The 911 Law required Defendants to bill,
collect, and remit 911 charges to the appropriate District
“for each line capable of transmitting a voice call to
a 911 emergency communications district.” (AT&T
Compl. ¶ 30; Teleport Compl. ¶ 30; Level 3 Compl.
¶ 40 (each citing Tenn. Code Ann. §§ 7-86-103,
. Defendants provided reports to the
Districts, annually and either monthly or bi-monthly,
regarding the 911 charges they collected and remitted to the
Districts (the “Reports”). (AT&T Compl.
¶¶ 37-38; Teleport Compl. at 10 ¶¶
37-38; Level 3 Compl. ¶¶ 47-48.)
. Defendants “intentionally billed,
collected, reported, and remitted 911 Charges on only a
fraction of the lines provided to [their] customers.”
(AT&T Compl. ¶ 42; Level 3 Compl. ¶ 53
(emphasis omitted); see also Teleport Compl. at 11
¶ 39 (“Defendant intentionally billed, collected,
reported, and remitted 911 Charges on only a small fraction
of the voice lines or pathways supplied in the counties
served by the Districts”).
. Defendants “knowingly submitted
Reports to each District that contained false records and
statements of the number of voice lines that Defendant[s]
supplied to customers through multiplexed circuits . . . and
single circuit lines in those Districts.” (AT&T
Compl. ¶ 46; Level 3 Compl. ¶ 57; see also
Teleport Compl. ¶ 55 (“Defendant knowingly
submitted Reports to the Districts that contained false
records and statements of the number of voice lines or
pathways that Defendant supplied to customers through
multiplexed circuits . . . and single circuit lines in those
. “The false records and statements
contained in the Reports had the effect of concealing,
avoiding, or decreasing an existing legal obligation by
Defendant[s] to pay or transmit monies in the form of
applicable 911 Charges to each District [or “the
Districts”].” (AT&T Compl. ¶ 54;
Teleport Compl. ¶ 50; Level 3 Compl. ¶ 65.)
Complaints also contain specific allegations about the extent
of underbilling during certain months, as well as how the
Districts know what they think they know about the
underbillings: discrepancies between the numbers of lines
Defendants included in the Reports and the numbers of lines
Defendants included in two other types of reports.
AT&T and Teleport Complaints compare the Reports to an
Automatic Location Information (“ALI”) Database.
For each line Defendants have in service, Defendants provide
telephone number and address information that is collected in
the ALI Database. The Districts use the information in the
ALI Database to route 911 calls to the appropriate District
and to dispatch emergency services to the correct address.
(AT&T Compl. ¶¶ 31-32; Teleport Compl.
¶¶ 31-32.) The Districts allege that “[t]he
ALI Database includes information about the
lines that can be used to call 911
Centers, such as those operated by the Districts.”
(AT&T Compl. ¶ 33; Teleport Compl. ¶¶
31-32 (emphasis in original).) The Districts allege that the
number of lines listed in the ALI Database for given months
exceeded the number of lines on which AT&T and Teleport