Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/524bv.pdf
Page Number: 265

524US1

Unit: $U84

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AMERICAN TELEPHONE & TELEGRAPH CO.
v. CENTRAL OFFICE TELEPHONE, INC.
Opinion of the Court

ing. Although respondent continued to resell SDN, it was
ultimately unable to meet its usage commitment for the ﬁrst
period in which it was applicable.
In September 1992, re-
spondent notiﬁed petitioner that it was terminating its SDN
service effective September 30, 1992, with 18 months remain-
ing on its contract.

Meanwhile, on November 27, 1991, respondent had ﬁled
suit against petitioner in the United States District Court
for the District of Oregon. The complaint contained a vari-
ety of claims, none of which arose under the Communications
Act, and ultimately two state-law claims went to trial: (1)
breach of contract (including breach of an implied covenant
of good faith and fair dealing); and (2) tortious interference
with contractual relations (viz., respondent’s contracts with
its customers). Respondent’s state-law claims rested on the
allegation that its contracts with petitioner were not limited
by petitioner’s tariff but also included certain understand-
ings respondent’s president derived from reading petitioner’s
brochures and talking with its representatives. According
to respondent, petitioner promised various service, provi-
sioning, and billing options in addition to those set forth in
the tariff. Respondent also claimed that petitioner violated
its state-law implied duty of good faith and fair dealing by
taking actions that undermined the purpose of the contract
for respondent, which was to purchase SDN services for
resale at a proﬁt. The tortious-interference claim was de-
rivative of the contract claim. Respondent asserted that,
because respondent promised certain beneﬁts of SDN to its
customers, and because petitioner provided competing serv-
ices, any intentional violation of petitioner’s contractual du-
ties constituted tortious-interference with respondent’s rela-
tionship with its customers. Respondent also asserted that,
since petitioner’s conduct was willful, consequential damages
were available under the terms of the tariff. Petitioner ﬁled
a counterclaim to recover $200,000 in unpaid tariffed charges