Global Crossing Bandwidth, Inc. v. Locus Telecommunication, Inc. (632 F. Supp. 2d 224, 2009)

DECISION AND ORDER

DAVID G. LARIMER, District Judge.

Plaintiff, Global Crossing Bandwidth, Inc. (“Global”), brings this diversity action against Locus Telecommunications, Inc. (“Locus”), seeking damages occasioned by Locus’s alleged breach of a contract for telecommunications services between Global and Locus. Locus in turn has asserted several counterclaims against Global.

Both Global and Locus have moved for summary judgment. See Dkt. # 40, # 47. For the reasons that follow, Global’s motion is granted in part and denied in part, and Locus’s motion is granted in part and denied in part.

FACTUAL BACKGROUND

Global is a California corporation with its principal place of business in New York. Locus is a Delaware corporation with its principal place of business in New Jersey.

On May 26, 2000, Global and Locus entered into a carrier service agreement (“Agreement”), by which Global agreed to provide, and Locus agreed to purchase, network transport and other telecommunications services for one year. Complaint Ex. A. The Agreement was amended and extended several times, and was eventually continued on a month-to-month basis. Id.

At various times during the parties’ contractual relationship, disputes arose about certain matters, the particulars of which will be addressed later in this decision. At least in part because of those disputes, on October 6, 2005, Nelson Gomez, Locus’s Senior Director of Risk Management, sent Global a letter informing Global of Locus’s intention to terminate the Agreement effective January 5, 2006. Gomez added that “Locus will continue to abide by its obligations under the Agreement until the Termination Date.” Dkt. # 48-3 ¶ 29 and at 26.

On November 29, 2005, Global sent Locus a letter which stated, in part, “This letter serves as a notice of default for Locus Telecommunications, Inc.” Id. ¶ 20 and at 19. The letter stated that there was a past-due balance on Locus’s account of over $1.6 million, which Global said “must be paid within 48 hours.” The letter also stated that if Locus did not “cure this breach” by paying that amount in full by 5:00 p.m. on Thursday, December 1, 2005, Global “may pursue its remedies” under the Agreement. Global added that those remedies “may include service termination” and that “[sjhould termination result, Global Crossing will immediately terminate services as of 5:00 PM EDT Thursday, December 1....” Id.

In a second letter dated the next day, November 30, 2005, however, Global informed Locus that “Global Crossing hereby revokes the Notice of Default served upon Locus Telecommunications, Inc. on November 29, 2005 and serves this notice in its place.” Id. ¶ 22 and at 21. That letter stated that “[a]though [Locus’s] account ... has a total past due balance greater than $915,140.14, this is the amount that must be paid by 5:00 PM EST Monday, December 5, 2005.” Except for the change of date from December 1 to December 5, the letter contained language identical to that in the November 29 letter concerning the possibility that Global might pursue its available remedies, including immediate termination of its services.

It appears that the parties may have made some attempt to resolve their disputes, but those efforts were not successful, and the Agreement, and Global’s services under the Agreement, were terminated.

Global commenced this action on February 6, 2006. The complaint asserts four causes of action, the first three of which seek $1.9 million in damages. The first cause of action asserts a claim for breach of contract, alleging that Locus failed to pay for services rendered by Global under the Agreement. The second cause of action is premised on theories of quantum meruit, unjust enrichment, and constructive trust, and alleges that Locus has received benefits under the contract for which it has not compensated Global. The third cause of action asserts an account-stated claim based upon Global’s invoices to Locus.

The fourth cause of action, captioned “Enforcement of Security Interest,” alleges that on August 20, 2001, Global and Locus entered into a security agreement by which Locus gave Global a security interest in Locus’s existing and future accounts receivable, contract rights, and other assets, as security for Locus’s obligations under the Agreement. See, Complaint Ex. C (Dkt. # 1-4). Global alleges that because Locus has breached the Agreement, Global is entitled to enforce the security agreement and take possession of the collateral.

In its answer, Locus has asserted a three-count counterclaim, alleging that Global has improperly or erroneously imposed and sought to collect various charges against Locus. Locus asserts claims for breach of contract, violation of the Federal Communications Act (“FCA” or “Act”), and for attorney’s fees under the Act. Locus seeks damages in an amount to be determined at trial.

PARTIES’ MOTIONS

Global contends, first, that Locus’s counterclaims are barred by certain events that occurred in the course of Global’s bankruptcy proceedings. The relevant facts are described in more detail below, but in short, Global filed for Chapter 11 protection in January 2002, and its bankruptcy plan became effective in December 2003. Global now asserts that the bankruptcy court’s confirmation of Global’s plan, as well as a certain “cure order” issued by the bankruptcy court during the bankruptcy proceedings, bar all of Locus’s counterclaims in this action.

Second, Global asserts that Locus failed to dispute Global’s invoices in accordance with the procedures prescribed by the Agreement. Under the terms of the Agreement, Global argues, Locus has thereby waived its right to contest those invoices, and the invoices are binding on Locus.

Global also raises several arguments pertaining to the individual charges in dispute. For instance, Global seeks summary judgment dismissing one of Locus’s counterclaims, which is sometimes referred to as the “inbound minutes” claim, in which Locus alleges that Global improperly billed Locus for calls delivered to Locus’s switch, even if the calls were never completed to the party being called. Global contends that this counterclaim is flatly refuted by the terms of the Agreement, which, according to Global, provided that Global was entitled to bill Locus for such calls.

Similarly, Global seeks summary judgment on a claim concerning outbound calls to the United Kingdom (“UK”), in which Locus alleges that Global improperly billed it at wireless rates, which were higher than the rates applicable to landline calls. Global contends that this claim is defeated by the undisputed evidence showing that the calls in question did terminate at wireless phones in England. Global also advances other arguments relating to particular components of the claims at issue, which will be addressed below.

In its cross-motion, Locus contends that its counterclaims are not barred by Global’s bankruptcy proceedings, because the counterclaims are based on a theory of recoupment. Locus contends that both relevant case law and Global’s bankruptcy plan itself permit the survival of claims sounding in recoupment against a party in bankruptcy.

In addition, Locus argues that Global, through its course of dealing with Locus, effectively modified the Agreement, by never seeking to enforce the dispute procedures that Global now claims Locus failed to follow. Locus contends that Global has, therefore, implicitly waived any claims or defenses it might have had based upon Locus’s alleged failure to comply with the dispute procedures called for by the Agreement.

Locus further contends that: Global’s own breaches of the Agreement preclude it from recovering on its breach of contract claim; none of the charges for which Global seeks recovery are valid; Global’s claim for unjust enrichment is precluded by Global’s claim for breach of contract; Global has failed to establish the elements of an account-stated claim; all of Global’s claims for charges due on or before February 5, 2004 are time-barred under the FCA; Global’s calculations of its alleged damages are erroneous; and the minimum monthly usage charges imposed by Global are unenforceable.

DISCUSSION

I. Effect of Global’s Bankruptcy Proceedings

On January 28, 2002, Global’s parent corporation, Global Crossing Ltd., and fifty-four of its subsidiaries, including Global, filed a voluntary Chapter 11 petition in the United States Bankruptcy Court for the Southern District of New York. An automatic stay of all claims against Global and the other debtors in that action took effect on that date pursuant to 11 U.S.C. § 862.

The debtors’ Plan of Reorganization (“Plan”) became effective on December 9, 2003. The Plan provided, in part, that upon its effective date, all entities holding claims against the debtors as of that date would be permanently enjoined from commencing or continuing any action or proceeding to collect any property from the debtors on account of such claims. Dkt. # 41-14 ¶ 9.5(a). The Plan further stated that “[i]n no event shall the [debtors, following their reorganization pursuant to the Plan] have any liability or obligation for any Claim against ... the Debtors arising prior to the Effective Date, other than the Assumed Liabilities.” Id.

In addition, on December 13, 2002, the bankruptcy court issued an order (“cure order”) authorizing the debtors to assume certain executory contracts, and fixing the “cure cost” with respect to each of those contracts, ie., the amount that had to be paid in order to cure any defaults under the contracts. The order provided that the cure costs listed in the order “are final and binding for all purposes and constitute a final determination of total cure required to be paid in connection with assumption of each such executory contract,” and that they “shall not be subject to further dispute or audit....” Dkt. #41-11 ¶¶ 5, 6. Global’s Agreement with Locus was among the contracts listed in the cure order, and the stated cure “cost” of that contract was zero dollars. Id. at 8.

Prior to the entry of the cure order, notice of the proposed cure costs was sent to all interested parties, including Locus. The notice stated, inter alia, that “if you have a contract ... with the debtors, your contract ... may be subject to assumption and any cure costs associated with assumption fixed without further notice in accordance with the procedures described herein.” Dkt. # 41 Ex. 10 ¶ 3 (emphasis omitted). The notice also stated that any objections to the proposed cure costs had to be filed no later than December 6, 2002, and that if no timely objections were received, “the Cure Costs shall be fixed in the amount listed.Id. ¶ 6. Locus did not file any objections to the proposed zero-dollar cure cost with respect to its contract with Global.

Global contends that the cure order, the Plan, and Locus’s failure to object to the Plan or cure order, or to seek some relief in Global’s bankruptcy proceedings, render the issues before the Court in the ease at bar simple and straightforward. According to Global, the cure order and the Plan bar both Locus’s counterclaims and its defenses to Global’s claims in this action. Global also asserts that the terms of the Agreement make clear that Global is entitled to collect the amounts that it seeks in this action. In response, Locus argues that its counterclaims are not barred by Global’s bankruptcy proceedings because they are based on a theory of recoupment or setoff.

“While the Bankruptcy Code does not mention recoupment explicitly, bankruptcy law does recognize the recoupment doctrine.” In re McMahon, 129 F.3d 93, 95-96 (2d Cir.1997). As the Supreme Court has explained:

It is well settled ... that a bankruptcy defendant can meet a plaintiff-debtor’s claim with a counterclaim arising out of the same transaction, at least to the extent that the defendant merely seeks recoupment. Recoupment permits a determination of the just and proper liability, on the main issue and involves no element of preference.

Reiter v. Cooper, 507 U.S. 258, 265 n. 2, 113 S.Ct. 1213, 122 L.Ed.2d 604 (1993) (internal citations and quotation marks omitted). See also In re De Laurentiis Entertainment Group Inc., 963 F.2d 1269, 1276-77 (9th Cir.) (right of setoff survives even if claimant fails to file an objection prior to plan confirmation), cert. denied, 506 U.S. 918, 113 S.Ct. 330, 121 L.Ed.2d 249 (1992); In re Davidovich, 901 F.2d 1533, 1539 (10th Cir.1990) (“the right to assert a setoff against a mutual, prepetition debt owed the bankrupt estate survives even the Bankruptcy Court’s discharge of the bankrupt’s debts”); In re A and C Elec. Co., 211 B.R. 268, 273 (Bankr.N.D.Ill.1997) (“The right of recoupment is unaffected by a discharge in bankruptcy”) (citing In re Flagstaff Realty Associates, Inc., 60 F.3d 1031, 1035-36 (3d Cir.1995)).

Though recognizing the recoupment doctrine, the Second Circuit has also characterized it as “a limited one [that] should be narrowly construed.” McMahon, 129 F.3d at 97. In particular, the court has stated that for the recoupment doctrine to apply, “the claim and counterclaim must arise out of the same transaction or set of transactions.” In re Malinowski, 156 F.3d 131, 133 (2d Cir.1998). That principle is in keeping with the rationale for the doctrine, which is that where a claim and counterclaim concern the same transaction, the court should strive “to do justice viewing [that] transaction as a whole.” Id.

In Westinghouse Credit Corp. v. D’Urso, 278 F.3d 138 (2d Cir.2002), for example, the Court of Appeals held that “it would be inequitable ... to apply recoupment” to the facts before it, even though the case “concern[ed] a single integrated transaction, because the obligations to which [the respondent] wishes to apply recoupment arise from discrete and independent units within that transaction.... ” Id. at 146. The court made clear that it is not enough that a counterclaim arise out of the same transaction for the doctrine to apply; the circumstances must also be such that “it would be inequitable for the debtor to enjoy the benefits of that transaction without also meeting its obligations.” Id. at 147 (quoting Malinowski, 156 F.3d at 133).

Applying these principles to the case at bar, I conclude that Counts II and III of Locus’s counterclaim are barred by the Plan, but that Count I sounds in recoupment, and accordingly is not barred. Count II alleges that “Global Crossing’s course of dealing with Locus ... constitute^] unjust and unreasonable practices that are unlawful in violation of [the FCA].” Dkt. #4 ¶ 73. That claim is not so directly related to the Agreement, and to the alleged breach of the Agreement as set forth in Global’s complaint, for the recoupment doctrine to apply. The counterclaim may relate to the same contractual relationship as Global’s claims against Locus, but the basis for liability asserted in these two counts of the counterclaim is separate from and independent of the parties’ obligations under, or any breach of, the Agreement. Although the counterclaim alleges that Global’s “failure to abide by the Agreement ]” in certain respects also constitutes a violation of the Act, Dkt. #4 ¶ 73, the liability asserted in Count II arises not from the Agreement itself, but from a federal statute.

Count II may be related to the Agreement, then, but — particularly in light of the Second Circuit’s admonition that the recoupment doctrine is to be narrowly construed — I do not believe that the doctrine can properly be stretched to cover this claim. See United States v. Hollis, No. SA-08-CV-0362, 2008 WL 4179474, at *1 (W.D.Tex. Sept. 7, 2008) (“Assuming such [counterclaims arise out of the same transaction as the one sued upon, Hollis’s [counter]claims do not sound in recoupment or offset,” but were instead based upon alleged violations of federal and state statutes and regulations). As stated, the recoupment doctrine is based upon the idea that when faced with obligations arising out of a single integrated transaction, the court should seek to give effect to the mutual obligations arising out of that transaction. D’Urso, 278 F.3d at 147. Penalties or obligations arising out of a statute, independent of the transaction itself, are therefore outside the scope of that doctrine. See Malinowski, 156 F.3d at 133 (“since recoupment is an equitable, non-statutory exception to the automatic stay, it should be limited in bankruptcy to cases in which ‘both debts ... arise out of a single integrated transaction so that it would be inequitable for the debtor to enjoy the benefits of that transaction without also meeting its obligations’ ”) (quoting In re University Med. Ctr., 973 F.2d 1065, 1081 (3d Cir.1992)). Count II is therefore barred.

Count III of Locus’s counterclaim asserts a claim for attorney’s fees under the FCA. Section 206 of the Act provides that a common carrier who violates the Act is liable “for the full amount of damages sustained in consequence of any such violation ... together with a reasonable counsel or attorney’s fee.” 47 U.S.C. § 206. Since Locus’s substantive FCA claim is not cognizable in this action, however, its claim for attorney’s fees under the Act is barred as well.

I reach a different result as to Count I of Locus’s counterclaim, however. In Count I, Locus alleges that Global breached the Agreement in several ways, generally involving Global’s imposition of certain charges that Locus contends were not justified, either factually or under the terms of the Agreement. For example, Locus alleges that it was improperly billed for certain calls to the UK, based on Global’s use of the wrong numerical code for those calls. Locus also alleges that certain charges, or at least the amount of certain charges or the manner in which Global sought to collect them, contravened the express terms of the Agreement.

That claim arises directly out of the transactions that form the basis for Global’s claims against Locus, and therefore the recoupment doctrine applies to this counterclaim. Resolution of Global’s claims and of Count I of Locus’s counterclaim would both require the factfinder to determine which, if any, charges at issue here were properly billed, and it would be difficult if not impossible to separate Global’s claims from Locus’s counterclaim.

Global contends that Count I should be dismissed in any event because it could only be used as a defense, in the form of a setoff, to Global’s claims, rather than as a counterclaim asserting an independent claim for “recoupment” against Global. There is authority, however, “that ‘both set-offs and recoupments are to be pleaded as counterclaims rather than affirmative defenses.’ ” Canadian St. Regis Band of Mohawk Indians ex rel. Francis v. New York, 278 F.Supp.2d 313, 353 (N.D.N.Y.2003) (quoting Middletown Plaza Associates v. Dora Dale of Middletown, Inc., 621 F.Supp. 1163, 1165 (D.Conn.1985)). See also 3 James W. Moore et al., Moore’s Federal Practice §§ 13.11, 13.31 (3d ed. 2008) (stating that “Recoupment claims— the setting off against asserted liability of a counterclaim arising out of the same transaction as the initial claim — are by definition compulsory counterclaims,” and that “Rlaims for setoff arise from a transaction separate from the subject matter of the opposing party’s claim,” and “are permissive counterclaims”). Furthermore, even if Locus had misdesignated its claim in this regard, that would have little impact here as a practical matter. See Reiter, 507 U.S. at 263, 113 S.Ct. 1213 (“it makes no difference that petitioners may have mistakenly designated their counterclaims as defenses, since Federal Rule of Civil Procedure 8(c) provides that ‘the court on terms, if justice so requires, shall treat the pleading as if there had been a proper designation’ ”).

For the same reason, I also reject Global’s argument that the counterclaim asserted in Count I is barred by the doctrine of res judicata. In general, “the confirmation of a Chapter 11 plan operates to discharge the debtor of debts incurred prior to confirmation.” In re Layo, 460 F.3d 289, 294 (2d Cir.2006) (internal quotation marks omitted). See also In re Flushing Hosp. and Med. Center, 395 B.R. 229, 244 (Bankr.E.D.N.Y.2008) (“Confirmation orders are given res judicata effect, and may not be subject to collateral attack”); In re Cross Media Marketing Corp., 367 B.R. 435, 447 (Bankr.S.D.N.Y.2007) (“It is well settled that a bankruptcy court’s order confirming a chapter 11 plan is treated as a final judgment on the merits with full res judicata effect”).

That rule only applies, however, to claims that were not preserved by the plan itself. See In re I. Appel Corp., 300 B.R. 564, 567 (S.D.N.Y.2003) (“the confirmation of a plan of reorganization prevents the subsequent assertion of any claim not preserved in the plan”), aff'd, 104 Fed.Appx. 199 (2d Cir.2004); In re BOUSA Inc., No. 89-B-13380, 2006 WL 2864964, at *5 (Bankr.S.D.N.Y. Sept. 29, 2006) (“The Second Circuit typically affords confirmation of a plan res judicata effect, preventing the assertion of claims not preserved in the plan”) (citing Silverman v. Tracar, S.A., 255 F.3d 87, 92 (2d Cir.2001)).

The Plan here does expressly provide for some recoupment rights: it enjoins entities with claims against the debtors from asserting any right of setoff, “except for recoupment” against any obligation due to the debtors. Dkt. # 41 Ex. 12 ¶ 9.5(a). Count I of the counterclaim is therefore not barred by res judicata.

II. Locus’s Alleged Failure to Comply with the Dispute Procedures

Global contends that under the Agreement, Locus was permitted to withhold payment of an invoice only if the invoice was disputed within thirty days of its receipt from Global. With respect to the invoices at issue in this case, Global further contends that Locus withheld payment notwithstanding its failure to file a dispute within the thirty-day period. Having failed to file a timely dispute, Global contends, Locus lost any right it may have had to withhold payment, and Global’s invoices are therefore binding on Locus. In response, Locus contends that Global unilaterally modified the Agreement with respect to the dispute procedures, by not insisting upon compliance with, or in any way attempting to enforce, the provisions setting forth those procedures.

In support of its position, Global cites Frontier Communications of the West, Inc. v. North American Long Distance Corp., No. 99-CV-0868, 2001 WL 1397856 (W.D.N.Y. Oct. 24, 2001). That case involved a dispute between a telecommunications provider (“Frontier”) and another telecommunications company (“NALD Canada”), who had entered into a contract similar to that between Global and Locus.

The court in Frontier granted summary judgment for Frontier on its contract claim against NALD Canada, in part based on NALD Canada’s breach of the dispute provisions in the parties’ agreement. In so ruling, the court stated:

even assuming that NALD Canada had properly disputed each and every unpaid invoice, according to the terms of the Agreement plaintiff is still entitled to summary judgment. Pursuant to the clear and explicit terms of the Agreement, NALD Canada was required to pay the invoices — including the disputed portions — in full and then dispute them in writing, with supporting documentation, within sixty days. It is undisputed that NALD Canada did not pay the disputed invoices — as it was required to do and as it had agreed to do pursuant to paragraph 4 of the Agreement — ; accordingly NALD Canada breached the Agreement. Furthermore, because the Agreement required NALD Canada to pay the invoices timely and in full and then dispute any contested charges in writing, with supporting documentation, within 60 days of the invoice date and because this time frame has long since expired, NALD Canada has lost its right to avail itself of the dispute resolution mechanism provided for in the Agreement. Accordingly, summary judgment will be entered in favor of Frontier against NALD Canada.

2001 WL 1397856, at *4. Global argues that the same reasoning applies to the case at bar.

The contractual provisions concerning the dispute procedure in the case at bar are similar, but not identical, to those in Frontier. In Frontier, the parties’ agreement provided in part that NALD Canada “ha[d] the affirmative obligation of providing written notice and supporting documentation for any good-faith dispute with an invoice' (‘Dispute’) within 60 Business Days after [its] receipt” of the invoice, and that if NALD Canada “d[id] not report a Dispute within the 60 Business Day period, [NALD Canada would be deemed to] have irrevocably waived its dispute rights for that invoice.” The agreement further provided that NALD Canada would “pay disputed amounts, subject to resolution of the Dispute.” Id. at *1 n. 4.

In the case at bar, § 4 of the Agreement provides that Locus “shall have the affirmative obligation of providing written notice of any dispute with an invoice within 90 days after receipt of the invoice by Locus,” and that “Locus may withhold payment only on amounts so disputed within 30 Business Days after Locus’s receipt of the Invoice. Locus may not withhold payment of amounts disputed after such 30 Business Day period.” Dkt. # 41-3 at 8. The Agreement also states that “[i]f Locus does not report a dispute with respect to an invoice within the 90 day period, Locus is deemed to have irrevocably waived its dispute rights for that Invoice and to have agreed to pay the same.” Id.

In addition, § 3.5 of the Agreement states that “[a]ny Invoice not properly disputed under Section 4 hereof and not paid by the Due Date shall bear late payment fees at the rate of 1-1/2% per month.... ” Id. at 6. That section further provides that Global may immediately suspend its services to Locus “if any invoice not properly disputed under Section 4 hereof is not paid” within thirty days after the date of the invoice. Id.

Locus contends, however, that Global has never rejected or denied any of Locus’s disputes based on Locus’s failure to follow proper dispute procedures. Locus asserts that Global thereby unilaterally modified the Agreement, to dispense with at least some of the procedural dispute requirements, set forth in the Agreement, and that Locus relied on that modification when it disputed various charges. Locus argues that Global is therefore precluded from now seeking to enforce strict compliance with the written dispute procedures.

There is authority in New York that “[m]odifications of written contracts may be proved circumstantially by the conduct of the parties subsequent to the agreement.” Chase v. Skoy, 146 A.D.2d 563, 564, 536 N.Y.S.2d 512 (2d Dep’t 1989). See also Allied Chem. Corp. v. Alpha Portland Indus., Inc., 58 A.D.2d 975, 976, 397 N.Y.S.2d 480 (4th Dep’t 1977) (“Defendant may ... rely upon extrinsic evidence to establish that the parties have modified the agreement”). “[T]he parties’ conduct plays a central role in contract formation and, by extension, contract modification.” Deutsche Asset Mgmt., Inc. v. Callaghan, No. 01 Civ. 4426, 2004 WL 758303, at *16 (S.D.N.Y. Apr. 7, 2004).

“The guiding principle behind all of these inquiries into contract formation [or modification] is that they are for the fact-finder.” Deutsche Asset Mgmt, 2004 WL 758303, at *16 (material issues of fact, concerning whether parties expressly or impliedly modified their agreement, rendered summary judgment inappropriate). See, e.g., Hartford Fire Ins. Co. v. Orient Overseas Containers Lines (UK) Ltd., 230 F.3d 549, 559 n. 12 (2d Cir.2000) (stating that whether parties’ prior conduct modified terms of contract presented “a factual issue to be explored by the District Court on remand”); Chase, 146 A.D.2d at 564, 536 N.Y.S.2d 512 (“the conflicting statements made by the parties in their affidavits [concerning whether parties intended to modify agreement] clearly give rise to issues of fact which preclude summary judgment”); Allied Chem., 58 A.D.2d at 976, 397 N.Y.S.2d 480 (“defendant has raised questions of fact sufficient to defeat plaintiffs motion for summary judgment. Accordingly, the trial court will be obliged to examine the conduct of the parties under the agreement to determine whether the contract has been modified”).

In the case at bar, Global contends that it “has rejected disputes submitted by Locus on the grounds that Locus did not follow the proper dispute procedure,” Dkt. # 66 at 5, but the evidence before me certainly does not establish that as a matter of law. The only example given by Global relates to a dispute submitted by Locus in June 2005, in the amount of $27,354.09, based on an alleged “inbound minute discrepancy.” See Dkt. # 66-7. The evidence concerning that dispute, however, does not show that Global rejected that dispute on procedural grounds.

In a letter to Karilyn Castro at Locus dated June 7, 2005, Global Customer Support Manager Jeff Costa stated that Global was “declining [the] dispute, as there [wa]s insufficient supporting documentation and contractual language to support any credit.” Id. at 3. He said nothing about any failure to follow proper dispute procedures.

In an email to Castro that same day, Costa referred her to “the attached denial letter which provides notification as to reason Global Crossing has taken this action.” Id. at 2. Costa added that if Locus had “any supporting documentation that ha[d] not been received by Global Crossing,” Locus should submit it to Global “within the next 10 business days,” and that the “dispute w[ould] be closed after that time has elapsed if no ... valid reason exists to warrant further investigation.” Id. A month later, Costa sent another email to Castro stating that “this dispute is now closed” and that Locus had not “received any supporting documentation to warrant any further investigation of this dispute.” Id.

I fail to see how this evidence supports Global’s assertion that it rejected the June 2005 dispute because “Locus failed to comply with the agreed-upon dispute procedure.” Global’s Supplemental Brief (Dkt. # 66) at 5. Clearly, Global rejected the dispute because, in its view, Locus had failed to submit sufficient proof to establish its entitlement to a credit. If Locus did fail in some way to follow the prescribed procedures, then this evidence shows that Global overlooked that noncompliance, and considered the merits of Locus’s dispute, notwithstanding any procedural irregularities or defects on Locus’s part.

Locus also contends that Global routinely failed to insist upon strict adherence to the letter of the Agreement with respect to dispute procedures and other matters. In that regard, there is evidence in the record that on several occasions, Global waived late-payment charges against Locus, including charges on payments that Locus had withheld because the underlying charges were in dispute. See Dkt. #48 Ex. J. In part, Global waived those late-payment charges because Locus was considered “a top 20 account.” Id.

Although some of this evidence does support Locus’s allegations concerning contract modification, the evidence is not so one-sided as to establish as a matter of law that the parties’ course of conduct effectively modified the Agreement. For one thing, as Global notes, § 11 of the Agreement provides that “[n]o failure or delay by either Party in exercising any right, power or remedy will operate as a waiver of any such right, power or remedy,” and that “[t]he waiver by either Party of any of the covenants, conditions or agreements to be performed by the other or any breach thereof shall not operate or be construed as a waiver of any subsequent breach of any such covenant, condition or agreement.” That tends to undercut, though it does not necessarily disprove, Locus’s contention that the parties simply disregarded the written dispute procedures entirely.

On each party’s motion for summary judgment, the Court must construe the evidence in the light most favorable to the party opposing the motion, and draw all reasonable inferences in that party’s favor. Tidewater Inc. v. United States, 565 F.3d 299, 302 (5th Cir.2009); White River Amusement Pub, Inc. v. Town of Hartford, 481 F.3d 163, 167 (2d Cir.2007). Applying that rule here, I conclude that there are issues of fact concerning whether the Agreement was modified with respect to the dispute procedures. If in fact it was the parties’ practice and understanding that Locus would be permitted to withhold payment of amounts in dispute, without penalty, and without regard to whether Locus had followed the contractual dispute procedures, then a factfinder might reasonably be able to conclude that the Agreement was modified in that regard.

In addition, although the Agreement provided that Locus would be deemed to have “irrevocably waived its dispute rights” as to any invoice that it did not dispute within ninety days, “and to have agreed to pay” such invoice, the Agreement did not state what the effect would be of Locus’s failure to comply with other aspects of the dispute procedures. It did not state, for example, what would happen if Locus withheld payment of an amount that it disputed more than thirty, but less than ninety, business days after receipt of the relevant invoice. Since the Agreement is silent on that issue, the parties’ intent and understanding in that regard also presents an issue of fact.

This result finds support in an unreported decision of this Court in another case that has been addressed by both the parties here, Global Crossing Bandwidth, Inc. v. Centrix Telecom, L.L.C. (“Centrix”). In that ease, Global sought summary judgment on its claim for over $4 million in damages from the defendant, Centrix, arising out of Centrix’s alleged breach of a telecommunications contract. The agreement in Centrix provided that Centrix was required to file a written objection to any-disputed charge within ninety days from Centrix’s receipt of the invoice in question, and that if Centrix failed to do so, it would be deemed to have waived its right to dispute the invoice. The contract also provided that Centrix was not permitted to withhold the disputed amount pending resolution of its objection, and that the contract could not be modified other than in writing.

Centrix alleged that it disputed a number of invoices, and that when it did so, Global informed Centrix not to file any written disputes, but to contact Global’s account representatives directly, for a quicker, informal resolution of the dispute. Based on Centrix’s allegations, United States District Judge Michael A. Telesca held that “a material question of fact [wa]s presented as to whether the billing correction procedure authorized by Global Crossing’s account representatives became a modification of the contract which was relied upon by Centrix.” 03-CV-6665, Dkt. # 57 at 4-5 (Dec. 8, 2005) (citing John Street Leasehold LLC v. FDIC, 196 F.3d 379, 382 (2d Cir.1999)). Judge Telesca therefore denied Global’s motion for summary judgment.

The same reasoning applies here. Locus contends that Global consistently failed to follow, or insist upon compliance with, the dispute procedures set forth in the Agreement, and that Global routinely waived late-payment charges for amounts that Locus withheld during a dispute. Based on that evidence, a factfinder might well conclude that Global induced Locus, to believe that it was not required to follow the prescribed grievance procedures to the letter, and that the parties thus effectively modified the Agreement. Since that presents an issue of fact, summary judgment is inappropriate with respect to Global’s assertion that Locus is barred from contesting the validity of Global’s invoices because of Locus’s failure to follow the dispute procedures.

III. “Partial” Summary Judgment with Respect to Locus’s Counterclaims under Rule 56(d)

In addition to the issues concerning Locus’s compliance with the contractual dispute procedures, there are also issues in this case concerning the merits of Locus’s counterclaims, relating to whether certain charges imposed by Global were valid. Global contends that even if Locus did comply with the applicable dispute procedures (or if Locus’s noncompliance is found not to bar its counterclaims), Global is still entitled to summary judgment dismissing Locus’s counterclaims on the merits.

Having found that there are issues of fact with respect to the dispute-procedure issue, the Court could simply deny both parties’ motions for summary judgment and leave it at that, with that procedural issue going to trial. If, however, Locus’s counterclaims are substantively meritless, it would be a waste of time and effort to try that procedural issue, since the counterclaims would ultimately fail, regardless of whether Locus had followed the correct dispute procedures.

On the other hand, if. the undisputed facts demonstrate that — leaving the procedural issue aside — Locus is correct that some of Global’s charges were invalid as a matter of law, then it makes sense to address that contention now, with the matters having been fully briefed and ripe for adjudication. Such a ruling now could help narrow the issues for trial, and avoid unnecessary or redundant proceedings later.

The Federal Rules of Civil Procedure expressly provide for such a ruling. Rule 56(d)(1) states that

[i]f summary judgment is not rendered on the whole action, the court should, to the extent practicable, determine what material facts are not genuinely at issue. The court should so determine by examining the pleadings and evidence before it and by interrogating the attorneys. It should then issue an order specifying what facts — including items of damages or other relief — are not genuinely at issue. The facts so specified must be treated as established in the action.

In addition, Rule 56(d)(2) provides that “[a]n interlocutory summary judgment may be rendered on liability alone, even if there is a genuine issue on the amount of damages.”

Although Rule 56(d)(1) speaks in terms of determining what facts “are not genuinely at issue,” that does not mean that the parties themselves have to expressly agree on those facts, any more than they have to agree on what material facts are undisputed on a motion for summary judgment under Rule 56(c). The standards under both parts of the rule are the same. See Doyle v. Huntress, Inc., 301 F.Supp.2d 135, 141 (D.R.I.2004) (“motions for partial summary judgment under Rule 56(d) are subject to the same standard of review as their counterparts under Rule 56(c)”); Melvin v. Patterson, 965 F.Supp. 1212, 1214 (S.D.Ind.1997) (“In making a partial summary judgment ruling [under Rule 56(d) ], courts employ the normal standard for summary judgment under Rule 56(c)”); see also 11 James W. Moore et al., Moore’s Federal Practice, § 56.40[2] (3d ed. 2008) (“Courts employ the normal summary judgment standard in making partial summary judgment rulings resolving a claim or establishing facts”).

As indicated, if the Court is able to rule now on the merits of the parties’ claims concerning the propriety of Global’s charges, then I believe it would be advisable to do so, even though factual issues concerning the dispute procedures might preclude the Court from entering summary judgment on any of those claims in their entirety. Depending on the Court’s rulings, such “partial” summary judgment might render it unnecessary to try those remaining issues at all, or at the very least, might take certain issues out of the case, so that the eventual trial could be conducted more efficiently, with the focus on those areas that remain genuinely in dispute. See 11 James W. Moore et al, Moore’s Federal Practice, § 56.40[2] (3d ed. 2008) (“In availing itself of the ability granted by Rule 56 to issue orders which resolve significant questions, a court can focus the litigation on the true matters in controversy”); see, e.g., Dexia Credit Local v. Rogan, No. 02 C 8288, 2009 WL 855638, at *1 (N.D.Ill. Mar. 30, 2009) (“The Court agrees with Dexia that it is appropriate to make findings under Rule 56(d)(1) identifying the facts that are not genuinely at issue, to simplify the issues and evidence at trial”); Priyanto v. M/S Amsterdam, No. CV 07-3811, 2009 WL 650734, at *1 (C.D.Cal. Mar. 11, 2009) (“the Court is not limited to disposing of entire claims on a summary judgment motions,” since “ ‘one of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses’ ”) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).

IV. Disputed Charges

The disputed charges here can be broken down into two broad categories: charges for inbound minutes (“inbound-minutes charges”), and charges for certain outbound calls to the UK (“UK charges”). These claims will be addressed in turn. Since it is Locus that is contesting the validity of these charges, the charges will be discussed primarily in the context of Locus’s counterclaims.

A. Inbound-Minutes Charges

Locus alleges that Global billed it for an excessive number of minutes for certain inbound calls. In its counterclaim concerning these charges, Locus alleges that Global “charged Locus for all calls delivered to Locus’ switch whether they became ‘completed’ calls or not,” and that Locus eventually “determined that it was being invoiced for at least six percent (6%) more call records than were delivered to Locus’ switch.” Dkt. # 4 ¶¶ 16,17.

The parties seem to agree that minutes for these calls were billed according to a certain formula, involving the difference between a “request for service event” and a “call disconnect event.” See Complaint Ex. B; Sam Lee Aff. (Dkt. # 48-2) ¶ 62. Locus contends, however, that this formula was misapplied by Global, with the result that Locus ended up being billed for more minutes than it should have been.

Global responds that this counterclaim is flatly barred by the terms of the Agreement itself. Specifically, Global notes a provision in the Agreement by which “Locus acknowledge^] and agree[d] that call records detail (CDR) [sic] for Toll-Free Carrier Transport it receives from Global Crossing may not match billable CDR’s from Locus’ switch as Global Crossing bills Locus for all calls completed to their switch ..., (regardless of whether the call is completed to the called party).” Dkt. #41 Ex. 2 at4, ¶4.

Locus does not deny that it agreed to this provision, but contends that this provision is irrelevant to the dispute over inbound minutes. Locus states that it is not alleging that Global improperly billed un completed calls, but that Global improperly continued to assess charges for completed calls after the calls were terminated and disconnected.

That does not appear to be the position that Locus took prior to the termination of the Agreement, however. In an email to Global on November 16, 2005, Gomez stated that “[t]he Inbound disputes relates [sic] to significant difference in total calls rather than minutes. We have documentation available to show that calls never reached our switch,” in other words, that the calls never should have been billed in the first place. Dkt. # 48-3.

Gomez’s statement in that regard is consistent with the dispute forms that Locus submitted to Global. In an email to Global dated January 22, 2004, Estee Choi of Locus stated, “Please find attached dispute for (certain time periods). It’s Inbound-minute discrepancies.” Dkt. #41 Ex. 6. That dispute (which was rejected by Global on the ground that there was “insufficient supporting documentation and contractual language to support any credit,” id. at 17), was accompanied by records indicating that there was a discrepancy between the charges invoiced by Global and what charges were warranted according to Locus’s records. The records for the period December 7, 2003 through January 6, 2004, for example, indicated that Global had invoiced $518,914.32 in toll-free domestic calls (which appear to be the primary, if not sole focus of this claim), based on 42,398,801.36 minutes of usage. Id. at 9. Locus’s records reflected its belief that the totals should have been $504,006.20 and 42,057,538.2 respectively. Id.

That document also shows, however, that the invoiced charges and minutes were also attributable to 6,207,493 telephone calls, whereas Locus’s records indicated that only 5,961,972 billable calls were made during that period. Id. Under the heading, “Difference,” the form submitted by Locus indicated that Global’s invoices exceeded what was shown in Locus’s records by 351,497.46 minutes, 248,583 calls, and $16,217.93 in total charges for the period in question. M

It appears, then, that when Locus disputed the inbound-minutes charges, it asserted that Global had charged it for too many calls, not that the calls that were made were billed for an excessive number of minutes. Again to use the time period discussed above as an example, dividing the number of minutes that Locus claimed should have been billed (42,057,538.2) by the number of calls that Locus claimed was correct (5,961,972) yields an average of just over 7 minutes per call. Carrying out the same computation using the differential between Global’s and Locus’s figures (ie., 351,497.46 minutes divided by 248,583 calls) results in an average of about 1.4 minutes per call. In other words, if the “excess” calls were billed, on average, for just 1.4 minutes each, that alone would account for all of the “excess” minutes. Those numbers do not suggest that there must have been some other reason for the number of minutes invoiced by Global, such as individual calls being charged for more minutes than they should have been.

Locus’s assertion now, in this litigation, that this dispute is really about Global continuing to bill minutes for calls after the calls had been terminated appears to be a post hoc attempt to avoid the clear language of the Agreement, which flatly bars Locus from disputing charges for calls on the ground that Locus had no record of those calls having been made. I conclude, therefore, that Global is entitled to summary judgment on this counterclaim.

B. UK Charges

Count I of Locus’s counterclaim also alleges that Global “levied inflated rates for land-line calls to the United Kingdom (‘UK’).” Dkt. # 4 ¶ 20. According to Locus, Global’s invoices indicated that Global was applying wireless termination rates (which were much higher than landline rates) to landline calls to the UK. Locus claims that this was due to Global’s use of the wrong dialing code for such calls.

In response, and in support of its claim for recovery of the amount of these charges, Global contends that Locus has already admitted that these calls (which are sometimes referred to as “4407 calls,” based on the dialing code that was used for the calls) terminated at wireless (ie., cellular) phones in the UK. Global notes that when asked in an interrogatory from Global, “Do you contend that calls completed using the 44-07 dialing code did not terminate to a cellular phone?,” Locus answered, “No.”

Locus does not appear to dispute that these calls did terminate to wireless telephones, but Locus contends that they should never have been completed in the first place. Locus asserts that the fact that these calls did terminate at wireless phones was entirely due to Global’s configuration of its network, and that Global never gave Locus any advance notice either that its system had been so configured, or that these calls would be billed at wireless rates.

The evidence indicates that this dispute stemmed from customers’ entering the code “4407” when calling the UK. The first two digits represent the UK’s country code, 44. In other words, if a caller entered “44” at the correct point in the numerical calling sequence, the call would be directed to the UK.

For calls to the UK, Global had designated “7” as a destination code for cellular telephones. See Dkt. # 67 at 3. That means that if a person calling the UK entered the sequence “447” at a certain point, the call would be directed to a cellular telephone in the UK.

Global’s list of country and destination codes said nothing about the sequence “07” for calls to the UK. Apparently, however, Global had configured its system in such a way that if the caller entered the sequence “4407,” the call would automatically be routed to a wireless phone in the UK. See Kim Aff. (Dkt. # 98-5) ¶ 16.

In early January 2004, Locus received its invoice from Global for the monthly billing cycle ending on January 6, 2004. Locus states that by January 19, 2004, it had discovered that its charges for calls to the UK had gone from about $34,000 for the previous month’s billing cycle to nearly $300,000, an increase of over 800%.

Shortly thereafter, Locus learned that at least some of that spike was due to 4407 calls being billed at wireless rates. Apparently Locus learned this from an examination of the call detail records that were provided to Locus each month by Global. Global confirmed that the calls were being billed as cellular in an email to Locus on February 10, 2004.

In an email to Global dated February 12, 2004, Dillon Kim of Locus, referring to a list of country and destination codes that Global had previously provided to Locus, contended that the listings were confusing or misleading as to which codes were mobile-phone codes. Kim stated that with respect to Italy, for example, the country code was listed as 39, and “calls 03 and 3 as mobile.... ” Kim pointed out, however, that “many other destinations, including UK, does not [sic] include both Ox & x as mobile.” Dkt. # 48-5 at 10. Kim stated that Locus should not be forced to “make assumptions as to what should or shouldn’t be included” in the mobile-phone codes. Id.

Global denied Locus’s dispute regarding this issue. In an email to Kim dated March 11, 2004, Global’s Carol Doll stated that Global’s “investigation has confirmed that this [4407] dialing sequence ultimately terminated to cellular numbers, therefore, the calls were correctly rated based on the intended designation.” Dkt. # 48-5 at 16. Doll also stated, however, that although Global had concluded that these calls were properly billed at wireless rates, “[t]he dialing sequence of 44-0 is not a format to be used when originating outside the UK. Going forward, Global Crossing will be making a provision on our Network to block these calls, in support of our Carrier Customers.” Id.

In a followup email to Kim dated May 14, 2004, Doll stated, “Given that 44 07 is an invalid dialing sequence, Global Crossing has taken the necessary steps to block this dialing pattern in its network going forward. Further, we have updated our Dial Plan Code list to include the codes in the event the invalid sequence is used and calls are terminated to mobile numbers.” Dkt. # 48-5 at 19.

There is also evidence in the record concerning some internal discussions within Global about this matter. In an email to several other Global employees dated February 20, 2004, Raymond Brzezinski of Global stated that: “[t]he dialing sequence of 44-0 is used ... for calls that are originating in the UK and terminating to a destination in the UK”; it was “standard practice” for callers to “drop the zero” when making calls to the UK from outside the UK; and “[c]alls that originate outside of the UK and are meant to terminate to the UK that are delivered with 44-0 are being delivered in an invalid format and should not complete.” Dkt. # 48-2 at 20.

Brzezinski also stated that at some point, Global’s switches had been programmed to automatically convert the “440” sequence to “44,” so that when a caller entered “4407,” that sequence would automatically be converted to “447,” with the result that the call would be delivered to a cellular telephone in the UK. Brzezinski said that such calls were correctly “rated as cellular ... based on the intended destination,” but that Global had nevertheless asked its routing teams to block all international calls to the UK that were “delivered in the 44-0 format.” He added that “[w]e are working with contracts to see if we have legal coverage in the contract to support the fact that the customers are delivering the digits in an invalid format, hopefully we are covered because morally we are correct,” and that “[a]t this point we are leaning towards the denial of all credits related to these disputed [sic] because we are handling the calls correctly despite the fact that the customer is sending an invalid format.” Dkt. # 48-2 at 20.

Based on the undisputed facts before me, I conclude that these charges were improper. First, with respect to Global’s argument that “Locus admitted that all 44-07 calls terminated at wireless phones in England,” Dkt. # 54 at 15 (emphasis in original), that is beside the point. Locus’s counterclaim does not appear to be based on whether these calls terminated at a wireless phone in the UK, but on why they did so. Locus alleges that it was only because of Global’s configuration of its system that 4407 calls were routed to cellular phones in the UK, and that Global failed to disclose that fact to Locus until after Locus had been invoiced for, and disputed the charges for those calls.

Admittedly, there does appear to be some inconsistency or confusion in the record about whether Locus has alleged that the 4407 calls terminated at wireless, or wireline (ie. “conventional”) telephones. Locus’s counterclaim alleges that Global “was assessing wireless termination rates to landline calls” to the UK, Dkt. # 4 ¶ 21. In addition, Dillon Kim from Locus has stated in an affidavit dated April 2, 2007 that the 4407 code “applies to calls completed to cellular or wireless phones in the UK,” and that Global overcharged Locus by “applying the wrong ‘44-07’ code to the wireline calls to the UK....” Dkt. # 48-5 ¶¶ 16, 18. In its August 2006 answers to Global’s interrogatories, however, Locus responded, “No,” when asked whether it “contended] that calls completed using the 44-07 dialing code did not terminate to a cellular phone[.]” Dkt. # 41 at 8.

Any inconsistency in this regard is minor and immaterial, however, and I disagree with Global’s assertion that Locus is attempting to “change[ ] its tune” concerning this matter. Throughout this litigation, it has been Locus’s contention that Global wrongly charged Locus wireless rates for 4407 calls, because of Global’s configuration or “manipulation” of its internal system, and that Locus was unaware that this had occurred until it received invoices from Global for vastly higher charges for calls to the UK than Locus had expected.

Although at times in this case Locus may have framed this issue in terms of applying wireless rates to landline calls, the bottom line has always been that, according to Locus: (1) Global improperly charged Locus for calls to the UK that were made using the 4407 code; (2) this was due to Global’s configuration of its system; and (3) Global failed to give Locus any advance notice of how such calls would be handled or billed. Discovery may have clarified precisely what occurred, and sharpened Locus’s position accordingly, but those basic contentions have always been the crux of this dispute.

As stated, I also find as a matter of law that the UK charges were not valid, based on the undisputed facts before me. As Dillon Kim’s February 12, 2004 email to Global pointed out, Global had provided Locus with a list of country and destination codes effective January 30, 2004. With respect to Italy, for which the country code is 39, destination codes “3” and “03” were both listed under the column “Destination Name” as “Italy (Cellular).” Dkt. #67 at 3. Other similar pairs of destination codes were assigned to various destinations; for example, “2” and “02” were both listed as “Italy — Milan,” “21” and “021” were listed as “Luxembourg (Cellular),” and so on.

For the UK, “207” and “208” were both listed under the destination “London.” The code “7” was listed as “United Kingdom (Cellular).” There was no listing for destination code “07.” Thus, there was no explicit indication that “07” calls would be treated as wireless calls to the UK, and in fact the other listings suggested that “07” was simply not a valid code at all. By indicating, for example, that “3” and “03” were both valid destination codes for calls to cellular phones in Italy, Global’s listing of only one code — “7”—for wireless UK calls implied that there was no corresponding “07” code for such calls.

Global also seems to have recognized that “4407” was not a valid sequence, and that calls made using that sequence should not have gone through. Doll stated in her March 11, 2004 email to Kim that “[t]he dialing sequence of 44-0 is not a format to be used when originating outside the UK,” and that “[g]oing forward, Global Crossing will be making a provision on our Network to block these calls, in support of our Carrier Customers.” Three days later, she again stated in another email to Kim that “44 07 is an invalid dialing sequence,” and that Global had therefore “taken the necessary steps to block this dialing pattern in its network going forward,” and “updated [its] Dial Plan Code list to include the codes in the event the invalid sequence is used and calls are terminated to mobile numbers.”

Similarly, in his internal Global email dated February 20, 2004, Brzezinski stated that “[c]alls that originate outside of the UK and are meant to terminate to the UK that are delivered with 44-0 are being delivered in an invalid format and should not complete.” He explicitly recognized that this was due not to any conduct on Locus’s part, but to Global’s programming of its own switches. Although Brzezinski opined that Global was “morally ... correct” and that Global was “handling the calls correctly” (apparently based on the premise that Global was effectuating the callers’ intent to call wireless phones in the UK), he too noted that, going forward, Global was nevertheless going to block all calls to the UK containing the “4407” sequence.

The record establishes, then, that these charges should not have been imposed. They were generated by callers’ use of a numerical sequence that, by Global’s admission, was invalid, and the fact that they were completed to wireless phones in the UK is attributable to Global’s own configuration of its switches, apparently based on its unilateral decision about effectuating the callers’ intent. Moreover, Global did not inform Locus in advance that such calls were going to be treated in that manner, and in fact the information that Global had given to Locus was positively misleading with respect to the 4407 code.

As stated, however, my finding on this matter does not entitle Locus to summary judgment. Factual issues remain to be decided regarding whether Locus has waived its right to contest these charges by not following the prescribed dispute procedures,

C. Minimum Monthly Usage Charges

Locus contends that the roughly $192,000 in minimum monthly usage charges (“MMUCs”) imposed by Global are an invalid penalty and unenforceable as a matter of law. In support of that assertion, Locus relies on the arguments made by the defendants in another case brought by Global in this Court, Global Crossing Bandwith, Inc. v. OLS, Inc., 05-CV-6423. The defendants in OLS, who were represented by the same counsel as Locus in the case at bar, contended that the MMUCs were unenforceable under both New York and federal law.

On July 8, 2008, however, this Court issued a Decision and Order in OLS finding that “the MMUCs are not a penalty, and that the contractual clauses providing for the MMUCs are enforceable.” 566 F.Supp.2d 196, 203 (W.D.N.Y.2008). In addition, on March 19, 2009, I issued a Decision and Order (Dkt. # 107) in OLS that, inter alia, denied the defendants’ motion for a stay of the action pending a decision by the Federal Communications Commission on