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National Fire Insurance Company of Hartford, et al v. National Cable Television Cooperative

April 14, 2011

NATIONAL FIRE INSURANCE COMPANY OF HARTFORD, ET AL., PLAINTIFFS,
v.
NATIONAL CABLE TELEVISION COOPERATIVE, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Carlos Murguia United States District Judge

MEMORANDUM AND ORDER

Two insurance companies filed this declaratory judgment action against their insured, defendant National Cable Television Cooperative, Inc. ("NCTC"), and NCTC's adversary in other legal actions, defendant Lafayette City-Parish Consolidated Government of Lafayette, LA ("Lafayette"). NCTC and Lafayette are adversaries in an action pending before the Federal Communications Commission ("FCC") and, until November 2010, were adversaries in another declaratory judgment action pending before Judge Vratil in the District of Kansas. NCTC requested that the insurance companies defend it in both actions, and the insurance companies filed the instant action. The case is now before the court on the Motion to Dismiss (Doc. 14) filed by defendant Lafayette City-Parrish Consolidated Government of Lafayette, Louisiana. Defendant Lafayette claims that the court lacks personal jurisdiction over it.

FACTUAL BACKGROUND

The following facts are taken from the exhibits attached to the parties' motion and briefs, including an affidavit signed by Scott Abbott, which the court considers under the doctrine of judicial notice, as it was filed in Judge Vratil's case. The facts are viewed in the light most favorable to the non-moving party.

Defendant Lafayette, a political subdivision of Louisiana, is a publicly-owned multichannel video programming distributor. Defendant NCTC operates as a Kansas not-for-profit corporation that has member companies. Its headquarters and principal place of business are in Lenexa, Kansas. Companies must apply to join NCTC's group. For its members, NCTC operates as a programming and hardware purchasing organization and negotiates master agreements and coordinates payments between its members and programming networks, generating discounts for its members.

Through a consultant, Lafayette learned of NCTC. On August 3, 2004, a representative of Lafayette, Steve Creeden,*fn1 emailed NCTC, indicating that Lafayette would like to join NCTC's cooperative. On September 6, 2004, Mr. Creeden called Beth Eland, Manager of Membership Affairs with NCTC, to express Lafayette's interest in joining NCTC. Sometime that fall, Ms. Eland sent the consultant a number of emails containing information about NCTC. Later that year, Ms. Eland notified the consultant that NCTC was instituting a moratorium on accepting new members, which remained in place until December 2008. After NCTC lifted the moratorium, on December 10, 2008, Lafayette's agent again contacted NCTC about potential membership. Ms. Eland then contacted Lafayette's agent, Mary Jones, on the last day of December.

In January 2009, Lafayette sent a completed Qualifications Questionnaire to NCTC in Kansas. In the following months, the companies exchanged e-mails about documentation required to apply for membership. Specifically, the record identifies the following contacts:

* February 26, 2009: Heather Escott of Lafayette contacted Ms. Eland by phone and email to request an update on NCTC's consideration of Lafayette's application.

* April 27, 2009: Ms. Escott phoned Ms. Eland to request additional membership documents. Ms. Eland responded by email.

* May 12, 2009: Michael Herbert, Lafayette's counsel, called Ms. Eland and left a message regarding the documents required.

* May 26, 2009: In response to a request by Ms. Eland, Mr. Herbert sent her an email identifying Lafayette's issues regarding required documents.

* Between June and July 2009: the companies exchanged additional emails.

Lafayette ultimately submitted a membership application and a $1,500 application fee to NCTC in late July/early August 2009. The application was 356 pages, broken out as follows: (1) 12-page application; (2) 272 pages of financials; (3) 49 pages of bond information; and (4) 23 pages of supporting documents. Between September 2009 and February 2010, Ms. Escott contacted NCTC by email or phone on at least seven occasions referencing the status of Lafayette's membership application. In early February 2010, NCTC notified Lafayette that NCTC was rejecting Lafayette's membership application. Between February 2010 and June 2010, counsel for Lafayette and other representatives sent at least thirteen emails, initiated at least fifteen phone calls, and mailed at least one letter to NCTC. All of these forms of communication were directed to Kansas.

On April 21, 2010, Lafayette sent NCTC a pre-filing notice letter, indicating that Lafayette and two other municipalities intended to file a complaint with the FCC against NCTC. NCTC responded by filing a declaratory judgment action in the District of Kansas on April 30, 2010. That case has since ...


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