Decision in Dispute Over Dial-Up Internet Traffic Access Charges

In Global NAPS, Inc. v. Verizon New England Inc., No. 09-1308, the First Circuit faced a challenge to the district court's judgment in favor of Verizon for $57,716,714 for access charges that defendant owed but failed to pay for services Verizon provided between 2003 and 2006. 

In affirming the district court's judgment, the court first resolved the jurisdictional issue by holding that 28 U.S.C. section 1367 gives federal courts supplemental jurisdiction over both compulsory and at least some permissive counterclaims, which alters the circuit's former rule, adopted before the enactment of section 1367, that required permissive counterclaims to have an independent basis for jurisdiction.

The court then went on to hold that the FCC's 2008 second remand order does not preempt or establish that the FCC's 2001 order preempted the Department of Telecommunications and Energy's authority to impose rates for inter-exchange ISP traffic.  Because section 1367 gives federal courts supplemental jurisdiction over permissive counterclaims, district court's judgment for Verizon on its counterclaims to enforce the interconnection agreements and alter ego liability and disregard of corporate form claim was proper. 

Related Resource:

• Full text of Global NAPS, Inc. v. Verizon New England Inc