Opinion
Civil No. 03-2942 (ADM/AJB).
October 12, 2004
Jason D. Topp, Esq., Qwest Corporation, Minneapolis, MN, on behalf of Plaintiff.
Dan M. Lipschultz, Esq., Moss Barnett, P.A, Minneapolis, MN, on behalf of Intervenors/Defendants Crystal Communications, McLeodUSA Telecommunications, Inc., Otter Tail Telecom, LLC, Tekstar Communications, Inc., and USLink, Inc.
Gregory R. Merz, Esq., Gray, Plant, Mooty, Mooty Bennett, P.A., Minneapolis, MN, on behalf of Intervenors/Defendants MCI WorldCom Communications, Inc., MCImetro Access Transmission Services, Inc., LLC, and ATT of the Midwest States, Inc.
Thomas E. Bailey, Esq., Briggs and Morgan, P.A., Minneapolis, MN on behalf of Intervenor/Defendant Integra Telecom of Minnesota, Inc.
MEMORANDUM OPINION AND ORDER
I. INTRODUCTION
This matter is before the undersigned United States District Judge on Intervenor/Defendant McLeodUSA Telecommunications, Inc.'s ("McLeodUSA") Motion for Immediate Release of Funds Deposited Pursuant to Rule 67 [Docket No. 82]. Since McLeodUSA filed its motion, four other Intervenors/Defendants have filed similar Motions for Immediate Release of Funds, including US Link, Inc. ("US Link") [Docket No. 94], Otter Tail Telecom, LLC ("Otter Tail") [Docket No. 100], Crystal Communications ("Crystal") [Docket No. 105], and Tekstar Communications, Inc. ("Tekstar") [Docket No. 110]. As motions of these Intervenors/Defendants are identical, save for the dollar amount they seek released, the Court will, for the purpose of its analysis, consider their motions with the motion of McLeodUSA. McLeodUSA and the other Intervenors/Defendants seek to remove funds deposited with the Court under Rule 67 on October 3, 2003 [Docket No. 43], pursuant to this Court's Order of September 18, 2003 [Docket No. 42]. However, this Court has an obligation to ensure that the monies are properly dispersed to each of the 65 competitive local exchange carriers ("CLECs") who have claim to them. Therefore, absent a showing of hardship or need, it would be inappropriate to allow the release of funds to an individual CLEC at this time. Consequently, the respective motions of McLeodUSA, US Link, Otter Tail, Crystal and Tekstar are denied.
II. BACKGROUND
On October 3, 2003, Qwest Corporation ("Qwest") deposited with this Court, pursuant to Rule 67, approximately $13 million. This amount represents the amount of true-up payments Qwest avers it owes to CLECs under the Minnesota Public Utilities Commission ("MPUC") April 4, 2002 Order ("True-Up Order"). McLeodUSA, noting that this Court's September 13, 2004 Order [Docket No. 88] resolved any uncertainty surrounding MPUC's True-Up Order, seeks the immediate release of $5,154,713.94, plus corresponding net interest. McLeodUSA asserts this is the amount of true-up payments it is entitled to from Qwest. Qwest has stipulated to the release of this amount. Other Intervenors/Defendants, including ATT Communications of the Midwest States, Inc. ("ATT"), MCI WorldCom Network Services, Inc. and MCImetro Access Transmission Services, Inc., LLC ("MCI"), and Integra Telecom ("Integra"), oppose the motion on the grounds that 65 CLECs are entitled to a share of the $13 million. They contend all monies should be dispersed simultaneously, pursuant to a general accounting of all parties' respective shares, in order to avoid a flurry of piecemeal motions that may unfairly benefit the initial claimants and prematurely deplete the fund.
III. DISCUSSION
Rule 67 may be invoked at the Court's discretion where, as in the instant case, funds are in dispute. Baxter v. United Forest Products Co., 406 F.2d 1120, 1126 (8th Cir. 1969), cert. denied, 394 U.S. 1018 (1969). Once the Court accepts funds, pursuant to Rule 67, the Court must hold the deposit as trustee for the true owner or owners until the court determines how the funds should be dispersed among the parties to the suit. See id.; Manufacturers' Hanover Overseas Corp. v. Southwire Co., 589 F. Supp. 214, 221 (S.D.N.Y. 1984). As noted, 65 CLECs have some claim to the $13 million deposited with the Court. Allowing CLECs to access the deposit on an individual basis would be administratively burdensome and might prematurely deplete the fund, thereby prejudicing those CLECs who did not "race to the courthouse." Absent precedential authority or a showing by McLeodUSA of hardship or need, this Court's Rule 67 obligations are best served by dispersing the fund to all CLECs simultaneously, pursuant to one general accounting of each party's respective share. Therefore, McLeodUSA's Motion for Immediate Release of Funds Deposited Pursuant to Rule 67 is denied without prejudice.
This Court agrees, however, with the Intervenors/Defendants' sentiment that the $13 million should be released to the CLECs as soon as possible and is sensitive to their need for the expeditious receipt of the true-up payments to which they are entitled. As a result, this Court expects the CLECs to present a general accounting of all parties' respective shares of the monies, or show cause why such an accounting cannot be completed, within 90 days of this Order. Should the CLECs fail to present a general accounting by this deadline, McLeodUSA may renew its motion for release of the funds deposited pursuant to Rule 67.
For the aforementioned reasons, the respective motions of US Link, Otter Tail, Crystal and Tekstar are also denied. Likewise, each of these Intervenors/Defendants may renew its motion should the CLECs fail to present a general accounting of all parties' respective shares and petition for the release of funds deposited pursuant to Rule 67 within 90 days.
IV. CONCLUSION
Based on the foregoing, and all the files, records and proceedings herein, IT IS HEREBY ORDERED that:
1. McLeodUSA's Motion for Immediate Release of Funds Deposited Pursuant to Rule 67 [Docket No. 82] is DENIED.
2. US Link's Motion for Immediate Release of Funds Deposited Pursuant to Rule 67 [Docket No. 94] is DENIED.
3. Otter Tail's Motion for Immediate Release of Funds Deposited Pursuant to Rule 67 [Docket No. 100] is DENIED.
4. Crystal's Motion for Immediate Release of Funds Deposited Pursuant to Rule 67 [Docket No. 105] is DENIED.
5. Tekstar's Motion for Immediate Release of Funds Deposited Pursuant to Rule 67 [Docket No. 110] is DENIED.
6. Each party may renew its Motion, without prejudice, should the CLECs not provide a general accounting of all parties' respective shares and petition for the release of funds deposited pursuant to Rule 67 within 90 days.