Verizon Litigation

 By Jay Lewis

Part III

 

After finding that Verizon had met all the four factors, the Court turned to the Defendants’ arguments:

  1. Mootness of Injunctive Relief
  2. Dormant Commerce Clause
  3. Primary Jurisdiction Doctrine
  4. Unclean Hands

The Court found that each of the Defendants’ arguments failed.  The Defendants argued that the injunctive relief was moot because Verizon already shut them out of the network therefore an injunction was irrelevant.  However, the Defendants had been shut out once before but were again on the network violating the MMA Best Practices.  The Court held that if Defendants were not enjoined, they could legally attempt to regain access again and again.

The Dormant Commerce Clause invalidates state regulation if it excessively burdens interstate commerce.  The Court found the Defendants did not make a showing that the ACFA discriminates against out-of-state commerce or that the burdens imposed by the ACFA are excessive in light of the local benefits.

Under the primary jurisdiction doctrine, the Defendants argued that the Court could not decide the standards to apply in this case as the industry is regulated by the Federal Communications Commission and the Federal Trade Commission.  The Court countered by stating the MMA Best Practices applied because the Defendants contractually agreed to those standards.

The defense of unclean hands is an equitable remedy whereby the asserting party must prove inequitable conduct by the opposing party.  Defendants alleged that Verizon misrepresented Defendants’ web pages to the Court, released false press releases, misrepresented business practices to the Texas Attorney General, and alleged that the Defendants’ corporate structure was rife with criminal conspiracy while Verizon maintained a complicated corporate structure.  The Court found Verizon’s conduct did not rise to the level of fraud nor was its conduct false or misleading.

The Court granted Verizon’s request for preliminary injunction effective upon payment of a relatively token $25,000 bond.

 

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