Corr Wireless Commc'ns, L.L.C. v. AT & T, Inc., Civil Action No. 3:12CV036–SA.

893 F.Supp.2d 789

CORR WIRELESS COMMUNICATIONS, L.L.C., Cellular South, Inc., and Cellular South Licenses, LLC, Plaintiffs

v.AT & T, INC., AT & T Mobility LLC, Motorola Solutions, Inc., Motorola Mobility, Inc., Qualcomm Incorporated, and John Does 1–10, Defendants.

Civil Action No. 3:12CV036–SA.

United States District Court,

N.D. Mississippi,

Western Division.

Aug. 31, 2012.

Alan Walter Perry, Daniel J. Mulholland, Walter H. Boone, Forman, Perry, Watkins, Krutz & Tardy, PLLC, Brian Craig Kimball, Charles Louis McBride, Jr., Joseph Anthony Sclafani, Martin Patrick McDowell, Katie L. Wallace, Brunini, Grantham, Grower & Hewes, Walter T. Johnson, Watkins & Eager, Jackson, MS, for Plaintiffs.

Aaron M. Panner, Kenneth M. Fetterman, Michael K. Kellogg, William J. Rinner, Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC, Washington State, DC, David Walker Upchurch, Holland Ray Upchurch & Hillen, L.F. Sams, Jr., Margaret Sams Gratz, Otis R. Tims, Mitchell, McNutt & Sams, Tupelo, MS, Chahira Solh, John S. Gibson, Crowell & Moring LLP, Irvine, CA, Jason C. Murray, Crowell & Moring LLP, Los Angeles, CA, Jim Ming Greenlee, James D. Johnson, Holcomb Dunbar, Oxford, MS, Carrie R. Bierman, Roger G. Brooks, Yonatan Even, Cravath Swaine & Moore, LLP, New York, NY, for Defendants.

MEMORANDUM OPINION

SHARION AYCOCK, District Judge.

Before the Court are numerous motions filed by the party Defendants to the lawsuit, AT & T, Inc., AT & T Mobility, LLC, Motorola Solutions, Inc., Motorola Mobility, Inc., and Qualcomm Incorporated, brought by Plaintiffs, Corr Wireless Communications, LLC, Cellular South, Inc., and Cellular South Licenses, LLC, for violations of federal antitrust laws.¹ Plaintiffs' 146–page complaint revolves around the development of standards governing wireless spectrum utilized by providers of commercial wireless services. On April 12, 2012—ten days after Plaintiffs filed their complaint—Plaintiffs filed a Motion to Expedite Scheduling and Case Management Conference and for Other Relief [10]. After considering the arguments made by all parties on the motion to expedite, the Court deferred ruling on the motion until the Defendants had an opportunity to file motions to dismiss, specifically motions to dismiss under Federal Rule 12(b)(6). All parties agreed on a scheduling order for such motions, and the Court accepted the same.

The motions now currently pending and ripe for judicial review are as follows: (1) a Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(2) [61] filed by AT & T, Inc.; (2) Motion to Dismiss for Failure to State a Claim or, in the alternative, Pursuant to the Doctrine of Primary Jurisdiction by AT & T Mobility LLC [65]; (3) a Motion to Dismiss for Failure to State a Claim or, in the alternative, Pursuant to the Doctrine of Primary Jurisdiction [67] by Qualcomm Incorporated; (4) Motion Request for Judicial Notice [69] filed by Qualcomm Incorporated; (5) Motion to Dismiss for Failure to State a Claim [70] filed by Motorola Solutions, Inc.; and (6) Supplemental Motion for Request for Judicial Notice [90] filed by Qualcomm Incorporated. On July 17, 2012, the Court entertained oral arguments on all of the aforementioned motions.

After marshaling through the motion-to-dismiss record, carefully considering the arguments articulated in the hearing, and reviewing the pertinent authority,² the Court finds that Plaintiffs' complaint fails to state a claim and, for this reason, Defendants' motions brought pursuant to Rule 12(b)(6) shall be granted. As the Supreme Court explained in Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), “[t]he need at the pleading stage for allegations plausibly suggesting (not merely consistent with) agreement reflects Rule 8(a)(2)'s threshold requirement that the ‘plain statement’ possess enough heft to ‘sho[w] that the pleader is entitled to relief.’ ” Here, Plaintiffs have simply “not nudged their claims across the line from conceivable to plausible[; thus], their complaint must be dismissed.” Id.

Relevant Background Facts

Spectrum

The antitrust allegations in this case concern electromagnetic spectrum, which at a basic level, essentially refers to wireless capacity. Since the mid–1990s, the Federal Communications Commission (“FCC”) has conducted auctions of licenses for such electromagnetic spectrum. That is, the FCC makes available, through auctions and a competitive bidding process, new spectrum for mobile telephony and/or broadband. The spectrum at issue in Plaintiffs' complaint is the 700 MHz band, which is comprised of 70 megahertz of commercial, non-guard band spectrum, 4 megahertz of guard band spectrum, 24 megahertz of public safety spectrum, and 10 megahertz of spectrum that will be reallocated for public safety use pursuant to congressional mandate.

The FCC recently launched proceedings to “free up” the 700 MHz band for commercial mobile services, as this spectrum was once occupied by analog television broadcasters in TV channels 52–69. Commercial licenses for this spectrum were assigned through several FCC auction proceedings. The FCC auctioned licenses for the guard bands in the Upper 700 MHz band in 2000, and it initially auctioned licenses in the Lower C and D Blocks in 2002. In 2008, the FCC auctioned licenses in the Lower 700 MHz band A, B, and E Blocks, as well as the Upper 700 MHz band C Block.

3GPP and Long–Term Evolution Wireless Broadband Technology

The service at issue here is the fourth-generation (“4G”) ³ Long–Term Evolution (“LTE”) service, which Plaintiffs refer to as the “gold standard” of wireless technology. The Plaintiffs state that “[a]lthough 4G–LTE is not required to be deployed on 700 MHz spectrum, it is described in the industry as ‘beachfront spectrum.’ ” Industry standards for such LTE wireless broadband technology to be deployed on 700 MHz spectrum are developed by a non-profit standard setting organization called Third Generation Partnership Project (“3GPP”).⁴ 3GPP is a consensus-driven international partnership of industry-based telecommunications standards bodies. 3GPP, established in 1998, is an industry-based group and it is not associated with any governmental agency.

As noted, the FCC held an auction to sell and repurpose licenses in the 700 MHz spectrum in 2008. The complaint filed in this action focuses on three blocks of spectrum in the Lower 700 MHz band: the A, B, and C Blocks. AT & T purchased licenses in the Lower B and C Block. Cellular South purchased spectrum in the Lower A Blocks.

In this Lower 700 MHz band, there are currently two different operating bands:

• Band Class 12, which covers operations in the Lower A, B, and C Blocks; and

• Band Class 17, which covers operations in the Lower B and C Blocks only.

Band Class 17 was created through the 3GPP process after “Auction 73,” and the creation of Band Class 17 is the focal point of Plaintiffs' claims of conspiracy, as Band Class 17 does not include the Lower A Block that was purchased by Cellular South.⁵ The entities involved in the creation of Band Class 17 during 3GPP proceedings, which include the Defendants named in this action, assert that it was necessary to create a separate band class for Lower 700 MHz B and C Block licenses in order to avoid interference issues from DTV in Channel 51 and high power operations in the E Block. Due to the creation of this separate band class, certain Lower MHz A Block licensees, including Cellular South, filed a petition for rulemaking with the FCC in late 2009.

FCC Petition for Rulemaking

In 2009, Cellular South Licenses, Inc., Cavalier Wireless, LLC, Continuum 700, LLC, and King Street Wireless, L.P.—all holders of Lower 700 MHz A Block licenses—filed a petition for rulemaking, asking the FCC to assure that consumers will have access to all paired 700 MHz spectrum that the FCC licenses. The FCC was also requested to put an immediate freeze on the authorization of mobile equipment that is not capable of operation on all paired commercial 700 MHz frequencies. The Wireless Telecommunications Bureau sought comment on the petition in 2010, and the FCC received comments and reply comments. In order to update the record and gather additional information, the Wireless Telecommunications Bureau held a workshop on the status and availability of interoperable mobile user equipment across commercial spectrum blocks in the 700 MHz band. Thereafter, the FCC issued a notice of proposed rulemaking to address the issues raised by the petition for rulemaking, seeking comment, data, and evidence on the argument that an interoperability requirement in the 700 MHz band is necessary to obtain affordable, advanced mobile devices to deploy service to consumers in smaller, regional, and rural service areas. This notice of proposed rulemaking was issued in March 2012, and less than two weeks before Plaintiffs filed the instant action. All of the Defendants named in this action maintain that the FCC has “primary jurisdiction” ⁶ over this dispute.

Allegations in Plaintiffs' ComplaintA. 3GPP Process

Plaintiffs filed their complaint on April 2, 2012, filed an amended complaint on June 8, 2012, and provide a “summary of the allegations in the complaint” in their response in opposition to the Defendants' motion to dismiss. Plaintiffs essentially contend that AT & T, Motorola, and Qualcomm maintained a conspiracy that manipulated the 3GPP standard setting process. The antitrust allegations began in 2008, shortly after “Auction 73.” ⁷ In May of 2008, Motorola proposed that a separate band—now known as Band Class 17—be created to include the Lower B and C Block 700 MHz spectrum ( i.e., the spectrum purchased by AT & T), yet exclude the Lower A Block 700 MHz spectrum licenses ( i.e., the spectrum purchased by Cellular South and others, including Verizon Wireless). Plaintiffs maintain that “Motorola, as a current and prospective wireless device supplier to AT & T, would have never made...