II. Background
At the time the complaint was filed, Westcom was a certificated nondominant IEC authorized by the Commission to provide inter local access and transportation area (LATA) message toll services.4 On July 23, 1992, Westcom filed its initial complaint. An amendment and amended complaints were filed by Westcom on October 5, 1992, December 21, 1992, January 15, 1993, December 7, 1994, December 28, 1994, March 17, 1995, and June 23, 1995.5 Westcom's president was added as a complainant when the fourth amended complaint was filed on December 28, 1994. But in the sixth amended complaint that was submitted for filing on June 23, 1995, the references to Sunde as a complainant were removed from the amended complaint.6
The complainants allege that Pacific is authorized to sell and provide switched access services, commonly referred to in the industry as Feature Group A (FGA), Feature Group B (FGB), and Feature Group D (FGD), to IECs for their use in providing interexchange services to their customers. The complainants allege that Pacific is not authorized to provide local business lines and Centrex lines to the IECs for their use in providing interexchange services to their customers. The complainants allege that the IEC defendants are using business lines and Centrex lines provided by Pacific to carry the interexchange traffic of their customers, instead of purchasing switched access services. The complainants allege that the IEC defendants' activities are in violation of Commission orders.
The complainants allege that by allowing the defendant IECs to illegally use local business lines and Centrex lines to carry interexchange traffic, the IEC defendants incur lower costs and can charge customers lower prices than non-participating IECs because the defendant IECs are not using and paying for higher priced switched access services.7
The complainants also allege that Pacific's ratepayers have been harmed because the IEC defendants have been able to illegally use business lines to carry interexchange traffic instead of paying for higher priced access services. The complainants estimate the loss in access service revenues at $216 million per year.
As a result of Pacific's alleged failure to force the defendants to subscribe to access services instead of business lines, the complainants allege that Pacific has "undermined and subverted the purpose and intent of incentive based rate of return regulation" by allowing Pacific to retain a larger portion of its earnings. (Sixth Amended Complaint, p. 17.)
The complaint also alleges that Pacific is engaging in unfair competition, is discriminating against similarly situated customers, and is engaging in restraint of trade for allowing the other defendants to use business lines to carry interexchange traffic and for refusing to bill the defendants for switched access charges. The complainants also allege that Pacific may be allowing the IEC defendants to illegally use business lines at this point in time, but that Pacific will later attempt to take action against these IECs when intraLATA competition is allowed so as to gain a market advantage over potential competitors.
The complaint requests a variety of relief. Among other things, the complainants sought a temporary restraining order and a preliminary injunction, as well as reparations. In D.94-04-082 (54 CPUC2d 244), Westcom's request for a temporary restraining order and a preliminary injunction was denied. With respect to Westcom's request for reparations for itself, D.94-04-082 concluded that the Commission lacked jurisdiction to award damages, and that it would not entertain any attempt by Westcom to prove that it lost customers and suffered financial hardship as a result of the defendants' alleged activities. (54 CPUC2d at 252.)
The complainants also request a permanent injunction and an order requiring Pacific to locate, identify, and disconnect all business lines that are being used by IECs to illegally transport interexchange traffic. The complainants further request that Pacific be ordered to backbill for all past switched access charges that have allegedly been avoided because of the illegal use of business lines to carry interexchange traffic. The complainants also request that the authorizations granted to the IEC defendants be revoked and that Pacific be directed to refund to its ratepayers all sums recovered as a result of the complaint.
On January 9, 1995, Call America filed a motion to dismiss the complaint and all of the amendments to the complaint. Call America's motion to dismiss is based upon the alleged unlawful invasion of privacy and unlawful interception of wire communications of third parties by Westcom and Sunde.8 On January 10, 1995, a similar motion to dismiss was jointly filed by Execuline et al.
On January 20, 1995 and January 24, 1995, the complainants filed their responses in opposition to Call America's motion to dismiss and to Execuline et al.'s motion to dismiss, respectively. Pacific filed a response in support of the two motions to dismiss on January 24, 1995.
In an Administrative Law Judge's (ALJ) ruling dated February 2, 1995, leave was granted to the moving defendants to file replies to the complainants' responses. Those replies were filed on February 10, 1995.
On March 9, 1995, the complainants filed a motion to amend their response to the motion to dismiss filed by Execuline et al. The complainants had failed to include the original affidavit of Mark Edwards with their January 24, 1995 response and then moved to amend the response to include the Edwards' affidavit. A similar affidavit by Edwards was attached to the January 20, 1995 response to Call America's motion to dismiss. No opposition to this motion was received.
On June 2, 1995, Pacific filed its motion to dismiss. The complainants filed their response in opposition to Pacific's motion on June 13, 1995. Call America and Execuline et al. filed responses in support of Pacific's motion on June 19, 1995.
On July 31, 1995, Call America, Execuline, Pac-West and Express Tel filed a motion "to supplement the record with newly discovered information" in support of Pacific's motion to dismiss for abuse of process. No one filed any response to this motion.
Today's decision, as indicated in the ALJ ruling of March 24, 1995, will also address the May 3, 1994 motion by Execuline and Pac-West to compel Westcom to comply with Pub. Util. Code § 1706. Westcom filed an opposition to that motion on May 12, 1994. The Division of Ratepayer Advocates (DRA) and the Commission's Public Advisor filed a joint opposition to the motion on May 18, 1994. Call America filed a response in support of the motion on May 17, 1994. In an ALJ ruling dated June 20, 1994, Execuline and Pac-West were given permission to file a reply. That reply was filed on June 29, 1994. Permission was also given to William R. Daly to file a late response on June 24, 1994 in opposition to the motion to compel of Execuline and Pac-West.9
A number of other motions have been filed by the complainants and the various defendants. Those motions are described later in this decision.
4 In D.00-09-071, the Commission placed certain conditions on Westcom's operating authority due to the imposition of a suspended penalty in the amount of $11,000. (D.00-09-071, Ordering Paragraph (OP) 4, pp. 199-200.) Westcom's certificate of public convenience and necessity (CPCN) was revoked by the Commission in Resolution T-16529 on June 14, 2001. In addition, according to the web site of the California Secretary of State, Westcom's status as a corporate entity authorized to do business in California has been "forfeited."
5 Westcom labeled both the January 15, 1993 and December 7, 1994 amended complaints as the "Third Amended Complaint For Temporary Restraining Order, Cease And Desist Order, Preliminary And Permanent Injunction." This resulted in the naming of the December 28, 1994, March 17, 1995, and June 23, 1995 as the fourth, fifth, and sixth amended complaints, respectively. This decision adopts the complainants' nomenclature for what has been labeled as the fourth, fifth and sixth amended complaints.
6 The issue of whether the filing of the sixth amended complaint effectively removed Sunde as a complainant is discussed later in this decision. Thus, our reference to "complainants" throughout this decision refers to both Westcom and Sunde.
7 Originally, Westcom had alleged in its complaint and the amended complaints that the IEC defendants were charging lower prices than Westcom, and that Westcom had lost customers and revenue as a result. However, at page 1 of the complainants' fifth amended complaint, the complainants allege: "The Fifth Amended Complaint clarifies that this case has evolved from one asserting claims of harm and damage to Westcom, to one asserting claims of harm and damage to California consumers, subscribers and ratepayers."
8 Call America contends that these grounds for dismissal were not raised in its first motion to dismiss, which was denied in D.94-04-082, because it was not aware of the complainants' actions at the time the first motion to dismiss was filed.
9 Daly has appeared before the Commission in various proceedings as a non-attorney representative of different parties.
