Central Office Telephone, Inc. v. American Telephone & Telegraph Co.

SAMUEL P. KING, District Judge. American Telephone & Telegraph Company (“AT&T”) appeals the judgment of the magistrate judge, following a three-week jury trial, awarding Central Office Telephone, Inc. (“COT”) $1,154 million in damages, and denying AT&T’s claim for over $1 million in unpaid federally tariffed charges for long distance services, under the Federal Communications Act of 1934, (“Communications Act” or “Act”) 47 U.S.C. § 153(h). COT’s action against AT&T alleged breach of contract, breach of implied covenant of good faith and fair dealing, and tortious interference with contract. COT cross-appeals the magistrate judge’s decision not to allow the jury to consider an award of punitive damages, as well as the magistrate judge’s post-trial order reducing the original jury verdict of $13 million in compensatory damages in favor of COT. COT, a reseller of long distance services, entered into a contract with AT&T for Software Defined Network (“SDN”) services, which COT later resold to its customers. AT&T is a provider of long distance services and is classified as a common carrier under the Communications Act, 47 U.S.C. § 153(h), and therefore, its long distance services are subject to the requirements of § 203 of the Act, which contains statutory filed tariff requirements.1 47 U.S.C. § 203. The tariffs filed with the Federal Communications Commission (“FCC”) by AT&T set forth the rates for each of its long distance services. One of the services provided by AT&T is SDN, a long distance service which provides a physically separate long distance network for a customer’s long distance service. In addition to describing rates for the service, the SDN tariff limits AT&T’s liability for all but wilful misconduct. SDN customers make large volume commitments, and therefore, SDN rates are lower than rates for other AT&T services. Because the set-up of an SDN network is complex, the tariff provides for an up-front installation charge to the customer. Once SDN is set up, the customer may add new locations or drop old ones from the network. SDN has several characteristics attractive to switchless resellers2 such as COT. It accommodates switched access, allowing resellers to offer the service to its customers who are generally small businesses or residences. Furthermore, Multiloeation Billing (“MLB”),3 added by AT&T in 1989, allows volume discounts to be apportioned between an SDN customer and individual locations on its network, in a proportion chosen by the customer. Under this option, AT&T sends bills directly to the reseller’s customers, however, the reseller remains responsible for all payments. Another billing option offered is the Location Account Billing Option (“LABO”), under which AT&T sends bills to each location at the discount rate, and each location is responsible for payment. AT&T also instituted two tariffed pricing promotions in 1989 which are attractive to resellers. Expanded Volume Pricing plans (“EVPs”), offering additional discounts from — 987 — the basic SDN rates for customers making large usage and duration commitments, and another promotion which waived the installation charges and per-location installation charges for customers making multi-year commitments, subject to penalties for early termination. Following the 1989 changes in SDN service, orders from resellers increased, and AT&T experienced delays in provisioning SDN, especially switched access service. Billing problems also occurred, most notably, “suppressed billing”4 which resulted in customers not receiving bills for calls for up to one year after the calls were made.5 In light of the problems with SDN, AT&T limited the number of new SDN customers. AT&T also transferred servicing of all reseller customers to the Channel Development and Operations Center (“CDOC”).6 The CDOC was the successor to the Carrier Service Center, which had previously done business with AT&T’s reseller customers. COT placed orders for SDN, after COT’s president became aware of SDN in 1989, and contacted AT&T’s Portland office regarding the service. On October 80, 1989, COT signed an agreement for SDN service, and selected Multi Location Billing. AT&T represented to COT that the service would be provisioned in four to five months, and thereafter, additional orders within 30 days. In February, AT&T advised COT that new orders would take 45 to 90 days due to provisioning problems, and informed COT that another AT&T service, Multi Location Calling Plan (“MLCP”) would serve COT’s customers until they were provisioned onto SDN. COT began reselling SDN services in April 1990, and immediately experienced problems with the network including provisioning delays and suppressed billing. COT also experienced an additional billing problem; COT’s customers received 100% of the discount instead of the 50% COT had selected, because COT was billed under the LABO billing option rather than the MLB billing COT had selected. COT continued to experience problems with provisioning and billing, and in October 1990 COT switched from MLB billing to Network Billing, under which AT&T sent COT a single bill which COT was responsible for paying. COT then sent individual bills to its customers. Although COT continued to sell SDN, it was ultimately unable to meet its usage commitment for the first period in which it was applicable. In addition, AT&T claimed that COT had failed to pay nearly $200,000 in bills from the period in which COT was under MLB billing. On September 21,1992, COT’s president informed AT&T that COT was terminating its contract as of September 30, 1992, with lj¿ years remaining in the contract. COT filed suit on November 27, 1991. COT ultimately pursued three state law claims at trial: breach of contract, breach of implied covenant of good faith and fair dealing, and tortious interference with contract.7 COT’s state law claims were based on COT’s allegation that the contracts entered into with AT&T did not constitute the ordering of long distance pursuant to the requirements of AT&T’s tariff, but rather constituted voluntary contracts in which COT agreed to purchase, and AT&T agreed to provide long distance services. COT also claimed that the contracts encompassed more than the written orders, and included all the understandings that COT’s president had from reading service brochures and from talking with AT&T representatives. COT argued that AT&T’s failure to provision SDN orders in a reasonable manner, — 988 — failure to properly allocate discounts between COT and its customers under Multilocation Billing, failure to offer SDN and MLCP services which were functional for COT, failure to initially credit MLCP usage to SDN, failure to provide timely call detail to COT and its customers, and failure to afford COT international calling capability at a reasonable completion rate, as well as a requirement that COT post a deposit, and AT&T’s provisioning of calling card capabilities under Network Remote Features rather than an SDN calling card bearing both COT’s and AT&T’s logo, constituted breach of contract. COT also claimed that AT&T breached its state law implied duty of good faith and fair dealing by taking actions that undermined the purpose of the contract, which was to obtain services and resell them at a profit. COT’s tortious interference with contract claim alleged that because COT had promised certain benefits of SDN to its customers, and because AT&T provided competing services, any violation of AT&T’s contractual duties constituted tortious interference with COT’s relationship with its customers. Furthermore, COT alleged that AT&T’s conduct was wilful and therefore consequential damages could be awarded under the terms of its tariff. COT claimed the wilful conduct consisted of running a promotion for SDN when AT&T did not have the capability to provision COT and other resellers to the CDOC. COT also argued that improper purpose could be inferred from certain internal AT&T documents discussing proposed SDN changes. At three stages of the proceedings below,8 AT&T asserted that COT’s state law contract and tort claims were preempted by the filed tariff doctrine of § 203 of the Communications Act. The magistrate judge rejected this claim and denied AT&T’s Motion for Summary Judgment as to its counterclaim and' all of COT’s claims, excepting COT’s negligent misrepresentation claim. Central Office Tel. Co., Inc. v. AT&T, Civ. No. 91-1236-JE (E.D.Or.1991). In denying AT&T’s motion for summary judgment on its counterclaim and on COT’s claim for breach of contract, the magistrate judge found AT&T’s reading of the filed-rate doctrine too broad. The magistrate judge also found that because COT was not disputing the filed-rate’s reasonableness or validity, or that of the tariff in general, but rather was complaining about the manner in which AT&T provided the services for which COT contracted, the filed-rate doctrine did not apply. Id. at 16. The magistrate judge also rejected AT&T’s argument that there was no substantial evidence that any of its challenged conduct constituted wilful misconduct within the meaning of its tariff. In addition, AT&T moved to exclude a lost profits study prepared by COT’s damage expert, which motion was denied. COT requested that it be allowed to present evidence of AT&T’s financial condition in support of its claim for punitive damages, however, the court also denied this request. The jury returned a verdict of $13 million in favor of COT on its breach of contract and intentional interference claims, and also in favor of COT on AT&T’s counter-claim for unpaid tariff charges. Judgment was entered on July 1,1994. AT&T then moved for judgment as a matter of law, for a new trial or for remittitur. The court denied AT&T’s motions for new trial and remittitur, and ruled as a matter of law that the filed-rate doctrine did not preempt COT’s claims. The magistrate judge also granted AT&T partial judgment as a matter of law and cut-off — 989 — COT’s damages for the period after September 1992, finding there was no competent evidence for this period. The magistrate judge then entered an amended judgment awarding COT $1,154,000. COT moved, pursuant to Fed.R.Civ.P. 59(e), to alter the amended judgment on the grounds that the court had relied on the wrong exhibit when it calculated pre-September damages.' The court denied the motion. On appeal, AT&T reiterates its contention that COT’s state law claims are preempted by the Communications Act. COT counters that AT&T failed to provide untariffed services and engaged in wilful misconduct, and therefore, the filed-rate doctrine does not apply and its claims are not preempted. Therefore, it must initially be determined whether the magistrate judge was correct in holding as a matter of law that the filed-rate doctrine did not apply to COT’s claims. We review a district court’s decision regarding motions for judgment as a matter of law pursuant to Fed.R.Civ.P. 50 de novo. Montiel v. City of Los Angeles, 2 F.3d 335, 342 (9th Cir.1993). AT&T argues that statutory filed tariff requirements preempt any state law claims that a carrier has expressly or impliedly agreed to provide a customer with services that are better or different from that required by the carrier’s filed tariffs. Under 47 U.S.C. § 203(a), communications common carriers must file tariffs with the FCC. The tariff-filing requirements were taken from the Interstate Commerce Act (“ICA”), and the Supreme Court has stated that, like rate-filing under the ICA, tariff-filing under the Communications Act is “Congress’s chosen means of preventing unreasonableness and discrimination in charges; ... the tariff-filing requirement is the heart of the common-carrier section of the Communications Act.” MCI v. AT&T, 512 U.S. 218, 230, 114 S.Ct. 2223, 2231, 129 L.Ed.2d 182 (1994). The filed tariff doctrine (or filed-rate doctrine) forbids a regulated _ entity from charging rates for its services other than those filed with the appropriate regulatory authority. Arkansas Louisiana Gas, Co. v. Hall, 453 U.S. 571, 577, 101 S.Ct. 2925, 2930, 69 L.Ed.2d 856 (1981). The filed-rate of the carrier is the only lawful rate a carrier may charge, and it is strictly construed. Maislin Indus., U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116, 127, 110 S.Ct. 2759, 2766, 111 L.Ed.2d 94 (1990) (interpreting the filed-rate provisions of the ICA); MCI, 512 U.S. at 229-30, 114 S.Ct. at 2231. Furthermore, “the filed-rate governs the legal relationship between the shipper and the carrier.” Maislin, 497 U.S. at 126, 110 S.Ct. at 2765. AT&T argues that a long line of Supreme Court Cases establish that the filed-rate doctrine precludes a carrier from entering into “side-deals” which give preference to certain customers and are not defined in the filed-rates.9 COT argues that AT&T’s cases establish that a carrier may not provide special or extra services to certain customers that are not defined in the tariffs, such that the customer actually pays a lower rate. Furthermore, COT argues that it paid the same rates as AT&T’s corporate customers and that its claims do not involve the tariff rates. The filed-rate doctrine has two purposes: (1) to preserve the regulating agen990 ay’s authority to determine the reasonableness of rates; and (2) to insure that the regulated entities charge only those rates that the agency has approved or been made aware of as the law may require. H.J., Inc. v. Northwestern Bell Telephone Co., 954 F.2d 485, 488 (8th Cir.), cert. denied, 504 U.S. 957, 112 S.Ct. 2306, 119 L.Ed.2d 228 (1992). Because this case does not involve rates or rate-setting, but rather involves the provisioning of services and billing under several contracts, the ffled-rate doctrine does not apply.10 However, assuming arguendo, that COT’s claims are covered by the ffled-rate doctrine, the ffled-rate doctrine could not apply to any of COT’s claims with regard to billing or provisioning. As noted by the ■magistrate judge, Multi Location Billing, the option originally chosen by COT, was not covered by the tariff. AT&T’s tariff expert testified at trial that billing procedures were not covered by AT&T’s tariffs. In addition, the mutually agreed upon facts given in the jury instructions state that COT chose MLB, and that it was not covered by the tariff. Furthermore, AT&T’s tariff expert also testified at trial that the provisioning of SDN services was not covered by the tariff. Therefore, the ffled-rate doctrine could not apply to any of COT’s claims with regard to billing or provisioning,' even if the doctrine could apply to other aspects of the SDN service.11 Having determined that COT’s claims are not preempted, by the ffled-rate doctrine, it follows that the magistrate judge was -not in error, as AT&T asserts, by failing to instruct the jury that the only issue was whether AT&T violated its tariff through wilful misconduct. Likewise, the magistrate judge did not err in denying AT&T’s motion for judgment as a matter of law for unpaid tariff charges owed by COT. AT&T maintains that the same errors of law which applied to its argument that COT’s state law and contract claims were preempted by the filed-tariff doctrine require the reversal of the denial of its counterclaim. Previously, AT&T had argued that the ffled-rate doctrine barred the application of equitable defenses against the collection of debts incurred pursuant to a tariff filed with the appropriate agency. Maislin, 497 U.S. 116, 110 S.Ct. 2759, 111 L.Ed.2d 94 (1990). The magistrate judge, however, found that COT was not disputing the validity of the rates charged under the tariff, but rather, the accuracy of AT&T’s calculations and AT&T’s right to collect for services for which COT’s customers were not accurately billed. Once again, AT&T bases its argument on the assumption that all rights between AT&T and COT are governed by the tariff. As already discussed, this is not the case. COT argues that AT&T failed to provide the services it was promised, including correct billing.12 COT also argues that the jury rejected the counterclaim based bn the evidence it presented, including testimony that — 991 — COT paid all amounts owed for SDN service, as reflected in COT’s records, that approximately $130,000 of alleged unpaid tolls resulted from incorrect AT&T billings and another $68,000-69,000 from unexplained charges, and evidence that AT&T’s billing was flawed and showed wild fluctuations. Given that AT&T cannot rely on its flled-rate tariff argument to shield itself from COT’s claims and that the evidence presented by COT suggests that AT&T did not properly bill COT, it was not error for the magistrate judge to deny AT&T’s motion for judgment as a matter of law on its counterclaim. In addition, AT&T maintains, as it did both during and after trial, that COT’s failure to produce any competent evidence of damages is independent ground for reversal of the amended judgment, and that because the testimony of COT’s damage expert should not have been admitted, the $1,164 million award should be reversed and judgment entered for AT&T. Evidentiary rulings are reviewed for an abuse of discretion, and should not be reversed absent some prejudice. City of Long Beach v. Standard Oil Co., 46 F.3d 929, 936 (9th Cir.1995); The Monotype Corp. v. Int’l Typeface Corp., 43 F.3d 443, 448 (9th Cir.1994).13 Initially, the parties disagree over whether state or federal law should apply when determining whether the evidence supports a claim for lost profits. AT&T argues that federal law should apply citing a Fifth Circuit case for this proposition. University Computing Co. v. Management Science, 810 F.2d 1395 (5th Cir.1987). However, in University Computing, the court found that federal law determined the sufficiency of the evidence with reference to state substantive law on lost profits. Id. at 1396. In Milgard Tempering, Inc. v. Selas Corp. of America, 902 F.2d 703 (9th Cir.1990), the defendant challenged damage awards as speculative and unsupported by the evidence. Id. at 710. This Court stated that the determination of damages was a question of fact which will not be disturbed unless it is clearly unsupported by the evidence. Id. The Court then laid out the test for lost profits under Washington State Law. Id. Oregon law states that the essential ingredient of proof of lost profits to a reasonable certainty is supporting data. Hardwick v. Dravo Equip. Co., 279 Or. 619, 569 P.2d 588, 591 (1977). Expert testimony alone can provide a sufficient factual basis for an award of lost profits. Milgard, 902 F.2d at 711. After reviewing in detail the method used by COT’s expert to calculate lost profits, the magistrate judge, in his order denying in part and granting in part AT&T’s motion for judgment as a matter of law, found that COT was not entitled to recover damages for the period following the termination of its contract with AT&T. However, he found that COT’s damage expert’s study was “sufficiently grounded in objectively verifiable facts and reasonable assumptions to support the jury’s award of lost past profits up to COT termination of its SDN sales in September 1992.” Thus referring to the standard for lost profits enunciated by the Oregon Supreme Court, the magistrate judge did not abuse his discretion by allowing the testimony to go to the jury. Additionally, COT makes several arguments concerning the errors made by the magistrate judge in limiting its damage award. First COT argues that under Oregon Law, lost profits may be recovered for tort as well as contract actions, and therefore, the magistrate judge erred in limiting the damages to the contract period. The magistrate judge, however, limitéd the damage award to the contract period because he found that determining damages beyond that period was too speculative, not because he found that damages should only encompass the term of the contract. In reviewing the size óf jury verdicts, the proper role of trial — 992 — and appellate courts in the federal system is a matter of federal law. Donovan v. Penn Shipping Co., 429 U.S. 648, 649, 97 S.Ct. 835, 836, 51 L.Ed.2d 112 (1977) (per curiam). The district court determines whether the jury’s verdict is within the confines of state law. Browning-Ferris Indus. of Vt., Inc. v. Kelco Disp., Inc., 492 U.S. 257, 279, 109 S.Ct. 2909, 2922, 106 L.Ed.2d 219 (1989). Under Oregon law lost profits damages must be proven to a reasonable certainty. Welch v. Bancorp Realty and Mortgage Trust, 286 Or. 673, 596 P.2d 947, 964 (1979); Hardwick v. Dravo Equip. Co., 279 Or. 619, 569 P.2d 588, 591 (1977). An essential ingredient of proof of lost profits to a reasonable certainty is supporting data. Hardwick, 569 P.2d at 591. COT contends that the magistrate judge improperly applied an absolute certainty test when he determined that COT’s expert’s testimony was insufficient because he did not know the number of salespeople COT employed after 1990, and because he based his projections on 10 salespeople when in fact COT employed only four. Although the magistrate judge found no evidence to support this opinion, COT argues that it was supported by COT’s president who testified that he intended to hire two more salespeople and to open additional offices. However, COT points to no evidence which indicates these plans would have come to fruition had COT not terminated its contract with AT&T.14 Therefore, it cannot be said that the magistrate judge applied an absolute certainty standard by finding that experts must have some verifiable basis for their opinion. COT also maintains that the magistrate judge impermissibly reweighed the evidence when he found fault with the expert’s failure to make specific allowance for bad debts and failure to account for the effect of technological changes. Although it is true that the court should not re-weigh the evidence, Garvin v. Greenbank, 856 F.2d 1392, 1396 (9th cir.1988), the court must still view the evidence in the light most favorable to the non-moving party to determine if the verdict is supported by substantial evidence. Jeanery, Inc. v. James Jeans, Inc., 849 F.2d 1148, 1151 (9th Cir.1988). As to both of these factors, the magistrate judge could find no basis for the expert’s opinions other than the expert’s own assumptions.15 Other problems identified by the magistrate judge included, the expert’s failure to account for the fact that COT intended to do its own billing in the future, the expert’s assumptions that the discount levels would remain constant through the year 2000, his failure to talk to any customers or provide for possible competition, and his failure to research similar services provided by other companies before declaring SDN to be a unique product. This latter point, the magistrate judge stated, was very significant because a reseller can recover profits lost by a supplier’s failure to deliver if no substitute can be found.16 Relatedly, the magistrate judge found that the expert had considered all profits that COT might have realized through selling SDN as lost, without accounting for increased effort and sales of services provided by AT&T competitors. Finally, the magistrate judge found that COT’s expert failed to take into account that the problems COT encountered with AT&T’s SDN services would have continued throughout the contract period and into the future. The magistrate judge therefore held that the expert testimony was not sufficient to support seven years of lost profits recovery. — 993 — Given the myriad of flaws identified by the magistrate judge, it does not appear that, even viewing the evidence in the light most favorable to COT, AT&T was not entitled to judgment as a matter of law on the post-contract claim. In the alternative, COT argues that if this Court finds that the jury verdict was not supported by substantial evidence, the district court must nevertheless be reversed because the magistrate judge improperly reduced the jury award in violation of the Seventh Amendment. The • Seventh Amendment controls the allocation of authority to review verdicts in federal courts. Gasperini v. Center for Humanities, Inc., - U.S. -, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996). The Supreme Court has held that the re-examination clause of the amendment does not inhibit the power of the trial judge to grant new trials or to order remittitur. Gasperini, - U.S. at -, 116 S.Ct. at 2222. Upon motion for a new trial, a trial court, finding a verdict excessive may either order a new trial or deny the motion conditional on the party accepting a remittitur. Fenner v. Dependable Trucking Co., Inc., 716 F.2d 598, 603 (9th Cir.1983). COT argues that it should have been given this option before the jury’s award was reduced. However, the magistrate judge did not reduce the award upon AT&T’s motion for a new trial, but rather upon their motion for judgment as a matter of law. Rule 50 of the Federal Rules of Civil Procedure allows a court to set aside the verdict of the jury and enter judgment as a matter of law, and has been held to be constitutionally compatible with the Seventh Amendment. Gasperini — U.S. at-n. 20, 116 S.Ct. at 2224 n. 20; Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure, § 2522 pp. 241-42 (2d ed. 1995). The magistrate judge’s action under Rule 50 does not appear to be in conflict with the Seventh Amendment. Furthermore, COT also argues that the magistrate judge improperly granted judgment as a matter of law based on a truncated trial record. COT asserts that it is reversible error for a district court to admit an expert’s lost profit evidence at trial then, after eliminating the expert’s evidence post-trial, and to grant judgment as a matter of law. See Midcontinent Broadcasting Co. v. North Central Airlines, Inc., 471 F.2d 357, 358-59 (8th Cir.1973) (holding same). Although it is true, as COT states, that a trial judge must consider all the evidence submitted in ruling on a motion for judgment as a matter of law, contrary to COT’s position, the magistrate judge did not only consider a portion of the evidence submitted to the jury. Instead, the magistrate judge considered the entirety of the testimony of COT’s expert, found that he should not have allowed the post-contract period evidence to be submitted, then reduced the jury’s damage award. Therefore, COT’s argument on this issue is misplaced. The final issue on appeal concerns COT’s punitive damage request. COT argues that, under Oregon law, when a plaintiff establishes a prima facie ease of intentional interference with business relations, the plaintiff is entitled to present evidence of the defendant’s financial condition in support of its claim for punitive damages. Or.Rev.Stat. 41.315. COT asserts that it presented a prima facie ease of intentional interference with business relationships, survived AT&T’s motion for judgment as a matter of law and convinced the jury that AT&T was an intentional tortfeasor, and therefore the magistrate judge erred in withholding its punitive damage claim from the jury. Whether to award punitive damages is a question of state law and is, therefore, reviewed de novo. Mapes v. United States, 15 F.3d 138, 140 (9th Cir.1994). This Court must apply Oregon’s law as the Oregon Supreme Court would apply it. Intel Corp. v. Hartford Accident & Idem. Co., 952 F.2d 1551, 1556 (9th Cir.1991). Under Oregon Law,, punitive damages are available when there is evidence of malicious or wanton conduct.17 Van Lom v. Schneiderman, — 994 — 187 Or. 89, 210 P.2d 461 (1949). When punitive damages are sought, the judge determines whether there is evidence of malice as a matter of law, and if he decides there is, the assessment of damages is committed to the jury’s discretion. Van Lom, 210 P.2d at 469. This court has determined that punitive damages may be awarded under Oregon State law for the tort of tortious interference with an economic relationship, Kraus v. Santa Fe Southern Poc. Corp., 878 F.2d 1193 (9th Cir.1989), cert. dismissed, 493 U.S. 1051, 110 S.Ct. 1329, 107 L.Ed.2d 850 (1990), and Oregon courts have held that punitive damages may be awarded for tortious interference with a business relationship if actual damages are awarded on the same claim. Employers’ Fire Ins. Co. v. Love It Ice Cream Co., 64 Or.App. 784, 670 P.2d 160 (1983) (citing Belleville v. Davis, 262 Or. 387, 498 P.2d 744 (1972)). COT argues that, having prevailed on its claim for tortious interference with contract, the magistrate judge erred in not instructing the jury on punitive damages. In denying COT’s instruction on punitive damages and not allowing COT to introduce evidence of AT&T’s financial condition, the magistrate, judge noted his concerns over prejudicing the jury. However, because this Court conducts de novo review on this issue, and in light of the jury verdict in this case, it appears that the punitive damage instruction should have been given. The Oregon Supreme Court has held that when an error affects only the availability and amount of punitive damages, it is appropriate to remand that case for trial on those issues. Honeywell v. Sterling Furniture Co., 310 Or. 206, 797 P.2d 1019, 1023 (1990). Therefore, it is appropriate to remand the case for a new trial on the issue of punitive damages. For the foregoing reasons, the magistrate judge’s post-trial judgments are affirmed. However, his decision not to submit punitive damages evidence to the jury is reversed, and the case remanded on the issue of punitive damages. • AFFIRMED IN PART; REVERSED IN PART AND REMANDED. Footnotes [1] Among these are § 203(a)’s requirement that all common carriers (except connecting carriers) file a tariff showing all charges for itself and its connecting carriers’ services, and the classifications, practices and regulations affecting such charges with the FCC, and § 203(c)'s prohibitions against charging different rates for services than those named in the filed schedules, and against "extend[ing] to any person any privileges or facilities, ... or employing] or enforcing] any classifications, regulations, or practices affecting such charges, except as specified in the schedule." 47 U.S.C. § 203(c). [2] Switchless resellers are firms that purchase "bulk” long distance services from carriers and resell them to their own customers. They qualify for volume discount plans by aggregating the business of multiple customers who would not individually qualify for volume discounts. The reseller is the customer of AT&T and the end users are the customers of the reseller. [3] AT&T contends that MLB is a tariffed service. However, in ruling on AT&T’s motion for judgment as a matter of law, the magistrate judge held that “[MLB], a subject of considerable contention in this dispute, is an untariffed service that is subject to a separate agreement between the parties.” [4] Suppressed billing occurs when a location is ' on the SDN network but does not have a “billing guide” in place to match its phone usage billing record. The billing system therefore has nowhere to register the call and the calls are lumped into an "unbilled” toll group until the billing guide is set up. Once the guide is set up, the customer is billed for past unbilled calls. [5] COT was still experiencing billing problems in 1992 when it filed suit. [6] The CDOC has two locations, one in Pleasan-ton, California, the other in Piscataway, New Jersey. [7] Because the magistrate judge treated the first two claims as one breach of contract claim, COT states that only two claims were before the jury. [8] Before trial, AT&T moved for partial summary judgment on its counter-claim for unpaid tariffed charges, and for summary judgment on the then remaining seven state law claims made by COT in its Amended and Supplemental Complaint. COT disputes that AT&T specifically raised the issue of preemption. However, AT&T did argue that "the filed tariff doctrine requires entry of judgment in favor of a carrier, even though its customer has state law claims related to the reasonableness of the tariff rates or charges.” Def.Mot. in Snpp. of Mot. for SummJmt. at 22. After trial, AT&T moved for a directed verdict on COT’s breach of contract and breach of implied covenant claims, arguing, inter alia, that COT's state law contract claims were barred by the filed tariff doctrine and preempted by the Communications Act. AT&T’s Mem. in Supp. of Mot. for Directed Verdict. AT&T reiterated this argument in its Motion For Judgment as a Matter of Law following the jury verdict. [9] AT&T cites several cases in support of this argument including: Chicago & Alton R.R. v. Kirby, 225 U.S. 155, 32 S.Ct. 648, 56 L.Ed. 1033 (1912) (holding a contract between a carrier and a shipper, under which the shipper guaranteed racehorses would be shipped on certain train, invalid because it was not published in the tariffs and gave one shipper an advantage not available to all), Davis v. Cornwell, 264 U.S. 560, 44 S.Ct. 410, 68 L.Ed. 848 (1924) (holding agreement to provide a shipper a number of railroad cars on a specified day invalid because the tariff did not provide for specification of shipping date); Atchison, T. & S.F. Ry. v. Robinson, 233 U.S. 173, 34 S.Ct. 556, 58 L.Ed. 901 (1914) (holding an agreement to provide expedited shipping not enforceable because it was not contained in carrier’s tariff). As pointed out by COT and stated explicitly in Chicago, the agreements cited in these cases were for special expedited shipping services for which the customer would have been expected to pay a higher rate. The Court thus found that the special service should have been included in the tariff and made available to all. 255 U.S. at 165. COT contends that AT&T provided special services to others, but denied them to COT. There is no allegation by either AT&T or COT that COT did not pay the same rates as others who sought the same services from AT&T, nor does AT&T contend that COT should have paid higher rates than those in the tariffs. [10] In Wegoland Ltd. v. NYNEX Cotp., 27 F.3d 17, 19 (2d Cir.1994), the Second Circuit noted that there are two corresponding interests involved with the filed-rate doctrine which have turned up in Supreme Court decisions: the justiciability of determining reasonable rates, and the potential discrimination in rates between ratepayers. Both of these interests involve the payment of rates and do not refer to contractual obligations to provide services as AT&T contends. AT&T argues that the filed-rate doctrine does not only apply to rates, citing Western Union Telegraph Co. v. Esteve Bros. & Co., 256 U.S. 566, 571-72, 41 S.Ct. 584, 586-87, 65 L.Ed. 1094 (1921). This case in fact involved two classes of rates. Messages sent at the lower rate were sent only once and provided for limited liability for messages not received. The other, was more expensive and provided that messages would be repeated. The court found that the limitation of liability was part of the rate because the customer accepted the risk of the message being wrongly transmitted by choosing the cheaper rate and having the message sent only once. The Court further found that allowing recovery of damages to those who chose a lower rate would create a preference over those who paid the higher rate to insure their message was transmitted correctly. Id. [11] In addition, AT&T’s expert testified that the provisions of the tariffs do not apply to the relationship of AT&T to the reseller, but rather, only apply to the relationship between AT&T and the end user. [12] The parties do not dispute that COT paid all charges owed after it took over billing for itself, following AT&T’s inability to correctly bill COT’s customers as promised. [13] AT&T asserts that the proper standard is de novo review, citing Daubert v. Merrell Dow Pharm., Inc., 43 F.3d 1311 (9th Cir.), cert. denied, - U.S.-, 116 S.Ct. 189, 133 L.Ed.2d 126 (1995). However, the de novo standard enunciated in Daubert applies to scientific evidence under Fed.R.Evid. 702 and there is no indication that the standard is meant to apply to all expert testimony. [14] COT points to Hardwick for the proposition that lost profits calculations which project additional employees for the damages period meet the substantial certainty test. 569 P.2d at 591. However, in Hardwick, the additional projected employees were based on the number of people that plaintiff would have needed if the log loader at issue in the breach of contract case had not been defective. [15] COT argues that AT&T’s own witness testified that COT would remain viable until 1998. However, although this testimony may have been offered to the jury, the future technological status of SDN was not included by the expert in his forecast of lost profits, and is a different issue entirely. [16] For this proposition, the magistrate judge cited Calbag Metals Co. v. Atkinson Co., 95 Or.App. 514, 770 P.2d 600, 602-03 (1989); United Engine Parts, Inc., v. Ried, 283 Or. 421, 584 P.2d 275 (1978); Consolidated Data Terminals v. Applied Digital Data Sys., 708 F.2d 385, 394-95 (9th Cir.1983). [17] The Oregon Supreme Court has sanctioned the award of punitive damages "whenever there was evidence of a wrongful act done intentionally, with knowledge that it would cause harm to a particular person or persons.” McElwain v. — 994 — Georgia-Pacific Co., 245 Or. 247, 421 P.2d 957 (1966).