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Qwest Communications Corp. v. Free Conferencing Corp.

United States Court of Appeals, Eighth Circuit

April 12, 2019

Qwest Communications Corporation, a Delaware corporation, now known as CenturyLink Communications, LLC, doing business as CenturyLink QCC Third Party Plaintiff- Appellant
v.
Free Conferencing Corporation, a Nevada corporation Third Party Defendant-Appellee

          Submitted: October 18, 2018

          Appeal from United States District Court for the District of South Dakota - Sioux Falls

          Before SHEPHERD, KELLY, and STRAS, Circuit Judges.

          SHEPHERD, CIRCUIT JUDGE.

         Following our prior remand, Qwest Communications Corp. v. Free Conferencing Corp., 837 F.3d 889 (8th Cir. 2016), the district court[1] reconsidered Qwest Communications' (Qwest) unjust-enrichment claim against Free Conferencing (FC), which it had previously denied. The district court again denied Qwest's claim, albeit for different reasons. The district court found that, although Qwest had shown it conferred a benefit upon FC and FC accepted that benefit, it would not be inequitable for FC to retain that benefit without paying Qwest. The district court explained that FC earned that benefit because it provided conference-calling services, 24-hour customer support, and access to a website in exchange for two cents per minute for calls placed to FC's conferencing bridges at Sancom. Moreover, Qwest paid its own conference-calling vendor, Genesys, between two and four-and-a-half cents per minute. Qwest again appeals. Having jurisdiction pursuant to 28 U.S.C. § 1291, we affirm.

         I.

In reviewing a judgment after a bench trial, we review the district court's factual findings and credibility determinations for clear error, and its legal conclusions de novo. We will overturn a finding of fact only if it is not supported by substantial evidence, it is based on an erroneous view of the law, or we are left with a definite and firm conviction that an error has been made.

Qwest, 837 F.3d at 895 (internal citations and quotation marks omitted).

         Qwest argues the district court erred when it found FC was not unjustly enriched. "Unjust enrichment is an equitable remedy," id. at 899 (citing Dowling Family P'ship v. Midland Farms, 2015 S.D. 50, ¶ 10, 865 N.W.2d 854, 860), "and we review a district court's decision to deny an equitable remedy for abuse of discretion." Id. (citing Olivares v. Brentwood Indus., 822 F.3d 426, 429 (8th Cir. 2016)).[2] "A district court abuses its discretion if it fails to consider a relevant factor that should have been given significant weight, if it considers an improper or irrelevant factor, or if it 'commits a clear error of judgment in the course of weighing proper factors.'" Id. (quoting Aaron v. Target Corp., 357 F.3d 768, 774 (8th Cir. 2004)); cf. Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 572 U.S. 559, 563 n.2 (2014) ("The abuse-of-discretion standard does not preclude an appellate court's correction of a district court's legal or factual error: 'A district court would necessarily abuse its discretion if it based its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence.'" (quoting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405 (1990))).

         "To establish a claim for unjust enrichment, the plaintiff must prove (1) it conferred a benefit upon another; (2) the other accepted or acquiesced in that benefit; and (3) it would be inequitable to allow the other to retain that benefit without paying." Qwest, 837 F.3d at 899 (citing Dowling, 2015 S.D. 50, ¶ 19, 865 N.W.2d at 862). "[T]he fact that a benefit is retained, enjoyed, and profitably exploited by the recipient, all without compensation, does not necessarily mean that the recipient has been unjustly enriched." Id. (alteration in original) (internal quotation marks omitted). "Rather, the beneficiary must obtain the benefit in a manner that the law regards as unjustified." Id. (internal quotation marks omitted). "[T]he relevant inquiry is whether the circumstances are such that equitably the beneficiary should restore to the benefactor the benefit or its value." Id. (alteration in original) (quoting Hofeldt v. Mehling, 2003 S.D. 25, ¶ 18, 658 N.W.2d 783, 788); see also Mack v. Mack, 2000 S.D. 92, ¶ 27, 613 N.W.2d 64, 69 ("When unjust enrichment is found, the law implies a contract, which requires the defendant to compensate the plaintiff for the value of the benefit conferred.").

         II.

         Based on the circumstances, we find no abuse of discretion by the district court in its conclusion that it would not be inequitable for FC to retain the benefit conferred by Qwest. Ultimately, our decision is driven by the relevant standard of review. "The abuse-of-discretion standard means 'the court has a range of choice, and that its decision will not be disturbed as long as it stays within that range and is not influenced by any mistake of law.'" Novus Franchising, Inc. v. Dawson, 725 F.3d 885, 895 (8th Cir. 2013) (quoting Kern v. TXO Prod. Corp., 738 F.2d 968, 970 (8th Cir. 1984)). "The very concept of discretion presupposes a zone of choice within which the trial courts may go either way." Id. at 895-96 (quoting Kern, 738 F.2d at 971). We are also "mindful that the district courts are closer to the facts and the parties . . . ." Kern, 738 F.2d at 970.

         The district court explained that FC earned the benefit conferred by Qwest because it provided conference-calling services, 24-hour customer support, and access to a website in exchange for two cents per minute for calls placed to FC's conferencing bridges at Sancom. Moreover, Qwest paid its own conference-calling vendor, Genesys, between two and four-and-a-half cents per minute. Upon review of the record, we have not identified any relevant factors the district court failed to consider, nor any improper or irrelevant factors that it should not have considered, nor any clear error of judgment on the part of the district court. Nor is the district court's decision legally erroneous, based on our reading of South Dakota law on unjust enrichment.

         While the dissent implies FC did not legally acquire the benefit it received from Qwest because it did so "through billing practices that 'were never legal, '" Qwest, 837 F.3d at 899, and, therefore, it would be inequitable for FC to retain the benefit conferred by Qwest, the dissent also concedes that we have previously concluded that "FC was not itself acting illegally[.]" Id. at 900; cf. Commercial Trust & Sav. Bank v. Christensen, 535 N.W.2d 853, 858 (S.D. 1995) ("Unjust enrichment claims do not arise simply because the landlord benefits from the efforts of tenants; 'unjust' enrichment implies illegal or inequitable behavior by the landlord in obtaining the benefits conferred by the tenant." (emphasis added)). Moreover, FC was not "a party to the FCC proceedings" nor did "the FCC exercise[] . . . jurisdiction ...


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