Opinion
No. 00-cv-4517 (WK)
September 6, 2002
ORDER
Plaintiff KyTEL International Group, Inc. ("KyTEL"), a telephone long distance service provider, originally brought suit in New York State Supreme Court against Rent-A-Center, Inc. ("RAC"), a corporation which rents office and store spaces, and Isak Davitashvili ("Davitashvili") (collectively "Defendants"), who manages one of RAC's local stores, seeking $18 million in damages. Plaintiff claims that RAC has not paid for telephone services Plaintiff provided Defendant pursuant to a Telecommunications Services Agreement ("TSA") between KyTEL and RAC and executed by Davitashvili. Defendants removed to federal court on the basis of federal question jurisdiction. Plaintiff moved to remand the case back to state court on the grounds that there was no federal question at stake. We denied this motion. KyTEL International Group, Inc., v. Rent-A-Center, Inc. and Davitshvili, (S.D.N.Y. Mar. 8, 2001) No. 00-cv-4517, 2001 WL 228128, *1.
Subsequently, Defendants moved to dismiss the complaint, or, in the alternative, to stay the complaint pending resolution of a claim filed in Texas state court prior to the filing of the action in New York. We granted Defendants' motion based on the "first filed rule." KyTEL International Group, Inc., v. Rent-A-Center, Inc. and Davitshvili, (S.D.N.Y. Oct. 24, 2001), No. 00-cv-4517, 2001 WL 1287015.
Plaintiff appealed from both rulings. The Second Circuit vacated our decision denying Plaintiff's motion for remand to state court on the grounds that the decision was without support in the record. KyTEL International Group, Inc. v. Rent-A-Center, Inc. and Isak Davitashvili, (2nd Cir. Aug. 5, 2002), No. 01-9354, 2002 WL 1791149. The Second Circuit also held that it was error for the District Court to dismiss on the basis of the first filed rule because the first filed rule applies only when both suits are pending in federal courts. Id. Because the Texas suit was pending in state court, dismissal was improper. The Second Circuit also found that no "`exceptional circumstances'" existed which might justify "surrender of federal jurisdiction" in this case. Id. at *1 (citations omitted).
On remand, we must determine whether a federal question does indeed exist, giving us subject matter jurisdiction over the action. Of KyTEL's five causes of action, only the fifth may provide a basis for removal based on federal question. KyTEL, 2002 WL 1791149, *2. KyTEL's fifth cause of action seeks recovery based on telecommunications services provided from April 11, 2000 to April 24, 2000. In order to decide whether a federal question exists, we must determine the basis upon which KyTEL seeks recovery for these services. If KyTEL seeks to recover for rates and services it provided based on tariffs filed with the FCC, then the suit arises under federal law and removal is proper. See Fax Telecommunicaciones Inc. v. AT T, (2d Cir. 1998), 138 F.3d 479, 488; Marcus v. AT T Corp., (2d Cir. 1998), 138 F.3d 46, 52.
We direct Defendants to submit a memoranda of law and supporting exhibits addressing whether the rates under which Plaintiff sought to charge Defendants for telecommunications services provided from April 11, 2000 to April 24, 2000 were filed with the FCC pursuant to 47 U.S.C. § 203 (a). This memoranda must be submitted by October 7, 2002 and is limited to twenty-five (25) pages. Plaintiff may then file an opposition brief and supporting exhibits, which similarly addresses whether or not the rates they charged Defendants were filed with the FCC pursuant to 47 U.S.C. § 203 (a). Plaintiff's opposition brief must be submitted by November 7, 2002 and is limited to twenty-five (25) pages. Defendants may then submit a reply brief by November 27, 2002, which is limited to ten (10) pages.
SO ORDERED.