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Foley Secures Victory for CenturyLink in Dispute with Sprint

27 June 2017 Media Contact: Jill S. Chanen
Foley & Lardner LLP secured a complete victory in the United States Court of Appeals for the Fifth Circuit on behalf of 62 subsidiaries of CenturyLink Inc., ending an eight-year dispute with Sprint Communications Company, L.P. The amount of the judgment in favor of CenturyLink that the Fifth Circuit affirmed totals $13.7 million, plus post-judgment interest.

The case concerns a dispute over the proper form of compensation between telephone carriers. Every day, Sprint delivers telephone calls to CenturyLink,’ which, in turn, route those calls to CenturyLink’s end subscribers. Sprint is required to compensate CenturyLink in return for this service and, for years, Sprint did so without dispute. In 2009, however, Sprint disputed any obligation to pay CenturyLink for the delivery of calls that originated in Voice over Internet Protocol with cable company subscribers. Sprint based its position on a new interpretation of telecommunications regulations – an interpretation with which CenturyLink disagreed.

In May 2016, following a bench trial, U.S. District Judge Robert G. James of the Western District of Louisiana ruled in favor of CenturyLink, holding that CenturyLink’s interpretation of the telecommunications regulations was correct. Judge James also held that Sprint’s actions in lodging these disputes were unjust and unreasonable, and therefore awarded CenturyLink more than $900,000 in attorneys’ fees. In September 2016, Sprint appealed to the Fifth Circuit.

In their ruling, Fifth Circuit Judges Rhesa Barksdale and James Graves Jr. affirmed the District Court’s order that Sprint was obligated to pay CenturyLink its full tariffed rates for delivering the calls in question to CenturyLink. The Fifth Circuit also affirmed the District Court’s award of CenturyLink’s attorneys’ fees.

“We are pleased with the Fifth Circuit’s decision, and we think the Court got the analysis just right,” said Michael J. Lockerby, the lead attorney for CenturyLink. The Fifth Circuit’s decision is the first appellate decision concerned the compensation owed for interstate Voice over Internet Protocol calls, an issue that the telecommunications industry has debated for years.

CenturyLink is represented by Foley partner Michael J. Lockerby, senior counsel Benjamin R. Dryden and associate Jarren N. Ginsburg, and by Jones Walker LLP partners Edward H. Bergin and Mark A. Mintz.