Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_03-cv-02838/USCOURTS-cand-3_03-cv-02838-5/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1343 Violation of Civil Rights

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United States District Court

For the Northern District of California

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The letter erroneously states that the decision was issued on March 20, 2005. The

decision is dated March 15, 2006, but was not published until March 20, 2006. See

http://www.cpuc.ca.gov/published/final_decision/54579.htm.

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

VERIZON CALIFORNIA INC.,

Plaintiff,

v.

MICHAEL R. PEEVEY, et al.,

Defendants.

NO. C03-2838 TEH 

ORDER REQUESTING

SUPPLEMENTAL BRIEFING

AND CONTINUING HEARING

ON PLAINTIFF’S MOTION FOR

RECONSIDERATION

Currently pending before the Court is a motion for reconsideration brought by

Plaintiff Verizon California Inc. (“Verizon”). On December 5, 2005, this Court granted in

part and denied in part Verizon’s motion for partial summary adjudication. As a remedy, the

Court vacated the interim unbundled network element (“UNE”) rates set for Verizon by the

California Public Utilities Commission (“CPUC”) in 2003 and reinstated the UNE rates set in

1997. Verizon now asks the Court to remove from its December 5, 2005 order the provision

that the reinstated 1997 rates “shall be subject to true-up once permanent UNE rates are

established.”

In a letter dated March 23, 2006, counsel for Defendants informed the Court that the

CPUC issued Decision 06-03-025, which set permanent UNE rates for Verizon, on

March 20, 2006.1

 In that decision, the CPUC also ordered that:

As set forth in D.03-03-033, Verizon must adjust, or “true-up”

the interim rates it has charged since March 2003 for loops and

switching to the new rates adopted in this order. In other words,

Verizon must calculate whether its interim rates are higher or

lower than today’s newly adopted rates, and whether it has over

or under-collected the appropriate revenues for any UNEs it sold

at interim rates. 

. . .

Case 3:03-cv-02838-TEH Document 99 Filed 03/29/06 Page 1 of 3
United States District Court

For the Northern District of California

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On December 5, 2005, the U.S. District Court vacated interim

rates established by D.03-03-033 and reinstated UNE rates

originally adopted for Verizon in D.97-01-022. . . . Thus, any

billing adjustments must also consider the effect of this court

action on UNE rates.

Within 90 days of the date of this order, Verizon should calculate

any billing adjustments owed to or by interconnecting carriers

based on the modification of interim rates set in D.03-03-033,

and revised in D.05-01-057, and the court’s decision vacating

interim rates. For the same reasons noted in the SBC UNE order,

we will stay the effective date of any true-up until its amount can

be calculated and further proceedings held to determine payment

options or consider other mitigations to minimize negative

financial effects of the true-up on competitive carriers. The ALJ

will issue a ruling within 30 days of this order setting a

prehearing conference to initiate the true-up phase of this

proceeding.

CPUC Decision 06-03-025 at 134. Because this decision was not issued until after Verizon

filed its reply brief, Verizon has not yet had an opportunity to address the effect of the

adoption of permanent rates and the CPUC’s ordering of a true-up on Verizon’s motion for

reconsideration. In its letter, the CPUC contends that the permanent rate order “renders moot

many, if not all, of the arguments raised by Verizon in its Motion for Reconsideration.” 

Mar. 23, 2006 letter from K. Lippi to the Court at 2. In a letter dated March 27, 2006,

Verizon’s counsel requested an opportunity to provide further briefing if the Court were

inclined to entertain the CPUC’s suggestion that Verizon’s motion might now be moot.

Upon initial review, the CPUC’s position appears to have merit. The Court makes no

determination on the merits of Verizon’s motion at this time; however, even if the Court were

to grant Verizon’s motion, that would not appear to preclude the CPUC from considering on

remand whether to make the interim rates subject to true-up. Notably, Verizon failed to

oppose the CPUC’s suggestion that the Court’s December 5, 2005 order “does not . . .

prevent the Commission from making a determination that the rates should be trued-up.” 

Opp’n at 8. Given the above language in the permanent rate order, it seems reasonably clear

that, if this Court were to remand the true-up issue to the CPUC, the CPUC would order the

result already dictated by the permanent rate order – i.e., that the 1997 rates would be subject

to true-up as of the date of the 2003 interim rate order. Consequently, it therefore appears

Case 3:03-cv-02838-TEH Document 99 Filed 03/29/06 Page 2 of 3
United States District Court

For the Northern District of California

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Verizon may be able to challenge the CPUC’s decision to make the reinstated 1997

rates subject to true-up, but that would need to be the subject of a subsequent lawsuit. 

Whether the CPUC had the authority to order the 1997 rates to be subject to true-up in 2003

is not before the Court in this case. Verizon only notes in a footnote in its motion for

reconsideration that it does not concede that a stand-alone true-up provision – i.e., a true-up

using existing rates, as opposed to at true-up based on newly imposed interim rates – would

be a proper exercise of the CPUC’s authority, but the company has never directly challenged

the CPUC’s authority to order such a provision. Similarly, this case does not concern

whether the CPUC has the authority to order a true-up of interim rates that is retroactive to an

earlier date.

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that Verizon’s request for this Court to remove the “subject to true-up” provision from its

December 5, 2005 order is now moot.2

However, the Court does not now definitively decide this issue because Verizon has

had no opportunity to respond to the CPUC’s suggestion that the permanent rate order moots

Verizon’s motion for reconsideration. Accordingly, with good cause appearing, IT IS

HEREBY ORDERED that:

1. The hearing on Verizon’s motion for reconsideration is continued from Monday,

April 3, 2006, to Monday, May 8, 2006, at 10:00 AM.

2. The parties shall file simultaneous opening briefs on the mootness issue on or

before Wednesday, April 12, 2006, and simultaneous reply briefs on or before Monday,

April 24, 2006. Each brief shall be no longer than five pages.

IT IS SO ORDERED.

Dated: 03/29/06 

 THELTON E. HENDERSON, JUDGE

 UNITED STATES DISTRICT COURT

Case 3:03-cv-02838-TEH Document 99 Filed 03/29/06 Page 3 of 3