Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-02-01275/USCOURTS-caDC-02-01275-0/pdf.json

Parties Involved:
AT&T Corporation
Movant
Federal Communications Commission
Respondent
Sprint Spectrum L.P.
Petitioner
United States of America
Respondent

Document Text:

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 23, 2003 Decided November 25, 2003

No. 02-1221

AT&T CORPORATION,

PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND

UNITED STATES OF AMERICA,

RESPONDENTS

QWEST COMMUNICATIONS INTERNATIONAL INC., ET AL.,

INTERVENORS

Consolidated with

Nos. 02-1240, 02-1263, 02-1275

On Petitions for Review of an Order of the

Federal Communications Commission

David W. Carpenter argued the cause for IXC and LEC

petitioner-intervenors. With him on the briefs were Peter H.

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

USCA Case #02-1275 Document #787171 Filed: 11/25/2003 Page 1 of 17
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Jacoby, Judy Sello, Daniel Meron, Jonathan F. Cohn, Robert

B. McKenna, William Single IV, and Jeffrey A. Rackow.

Andrew G. McBride argued the cause for petitioners Sprint

Spectrum L.P. and Cellco Partnership. With him on the

briefs were John T. Scott III, Luisa L. Lancetti, and R.

Michael Senkowski. Kenneth D. Patrich and Lewis A. Tollin entered appearances.

John E. Ingle, Deputy Associate General Counsel, Federal

Communications Commission, argued the cause for respondents. With him on the brief were R. Hewitt Pate, Acting

Assistant Attorney General, U.S. Department of Justice, Robert B. Nicholson and Robert J. Wiggers, Attorneys, John A.

Rogovin, General Counsel, Federal Communications Commission, and Richard K. Welch and Laurel R. Bergold, Counsel.

Luisa L. Lancetti, Caressa D. Bennet and Gregory W.

Whiteaker were on the brief for intervenors Sprint Spectrum

L.P. and Rural Telecommunications Group. Kenneth D. Patrich entered an appearance.

Peter H. Jacoby, Judy Sello, David W. Carpenter, Daniel

Meron, Robert B. McKenna, William Single IV, and Jeffrey

A. Rackow were on the brief for IXC and LEC intervenors in

Case Nos. 02-1263 and 02-1275. Jonathan F. Cohn and Mark

C. Rosenblum entered appearances.

Before: GINSBURG, Chief Judge, and EDWARDS and GARLAND,

Circuit Judges.

Opinion for the Court filed by Circuit Judge EDWARDS.

EDWARDS, Circuit Judge: AT&T Corporation (‘‘AT&T’’) and

Sprint Spectrum L.P. (‘‘Sprint PCS’’ or ‘‘Sprint’’), along with

Cellco Partnership, petition this court for review of a declaratory ruling of the Federal Communications Commission

(‘‘FCC’’ or ‘‘Commission’’) responding to a primary jurisdiction referral from the United States District Court for the

Western District of Missouri. The referral arose during the

course of litigation between AT&T and Sprint in Missouri in

USCA Case #02-1275 Document #787171 Filed: 11/25/2003 Page 2 of 17
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which Sprint sought compensation from AT&T for its use of

Sprint’s wireless network. AT&T removed the case from

state court to the federal district court, which then referred

specific questions to the FCC under the doctrine of primary

jurisdiction. In its referral order, the district court inquired

of the FCC (1) whether Sprint may charge access fees to

AT&T for access to the Sprint PCS wireless network and, if

so, (2) the reasonableness of Sprint’s charges.

After receiving petitions for declaratory rulings from both

AT&T and Sprint, along with public comments, the Commission held that Sprint is entitled to collect access charges from

AT&T only to the extent that a contract between the parties

imposes a payment obligation on AT&T. The FCC declined

to determine the reasonableness of any rate until after the

district court determined whether the parties are bound by a

contract. Both AT&T and Sprint raise numerous challenges

to the Commission’s ruling, none of which are properly before

this court for review. Accordingly, we dismiss the petitions

for review.

I. BACKGROUND

The facts underlying this case are largely undisputed.

Because this information is adequately set forth in the Commission’s ruling that is the subject of review here, see In the

Matter of Petitions of Sprint PCS and AT&T Corp. for

Declaratory Ruling Regarding CMRS Access Charges, 17

F.C.C.R. 13,192, at 13,193-95 (2002), reported at 67 Fed. Reg.

49,242 (F.C.C. 2002) (hereinafter ‘‘Declaratory Ruling’’), we

will simply summarize the most important facts to highlight

what is at issue.

In 1998, petitioner Sprint PCS, a commercial mobile telephone service (‘‘CMRS’’) provider, started billing AT&T for

the costs of terminating interexchange traffic bound for its

customers. AT&T refused to pay the Sprint invoices. Declaratory Ruling, 17 F.C.C.R. at 13,193. On August 8, 2000,

Sprint sought to enforce payment by filing suit in state court

in Missouri seeking a monetary judgment against AT&T on

three causes of action: breach of contract, quantum meruit,

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and action on account. Id. AT&T then removed the case to

federal district court in the Western District of Missouri.

Sprint moved to remand the case back to state court, which

AT&T opposed. Sprint denied the existence of diversity

between the parties and claimed that its state-law claims in

no way raised any federal question. Plaintiff’s Motion to

Remand at 1-2, Sprint Spectrum L.P. v. AT&T Communications, Inc., No. 00-0973-CV-W-5 (W.D. Mo. 2001), Joint Appendix (‘‘J.A.’’) 61-62. In its opposition, AT&T argued, inter

alia, that Sprint’s state-law claims were wholly preempted by

47 U.S.C. § 332, because they would require the court to

establish a rate for terminating access. Defendant’s Suggestions in Opposition to Plaintiff’s Motion to Remand at 4-11,

Sprint Spectrum L.P. v. AT&T Communications, Inc., No.

00-0973-CV-W-5 (W.D. Mo. 2001), J.A. 95-102.

The district court denied Sprint’s motion to remand, holding that it had jurisdiction based upon the diversity of the

parties without addressing whether or not Sprint’s action

raised federal claims. Sprint Spectrum L.P. v. AT&T Communications, Inc., No. 00-0973-CV-W-5 (W.D. Mo. Feb. 8,

2001) (order denying Sprint’s motion to remand), reprinted in

J.A. 169. AT&T then asked the district court to refer the

case to the Commission under the doctrine of primary jurisdiction. See Sprint Spectrum L.P. v. AT&T Corp., 168 F.

Supp. 2d 1095, 1096 (W.D. Mo. 2001). Sprint opposed that

motion, arguing that it was simply seeking payment for

services rendered using state-law theories that do not involve

the Communications Act or the FCC’s special expertise. Id.

at 1099.

On July 24, 2001, the district court referred two issues to

the Commission under the doctrine of primary jurisdiction.

Id. at 1096. The court was very precise in setting forth the

terms of its referral:

ORDERED that Defendant AT&T Corporation’s

Motion for Referral of Issues to the FCC Under the

Doctrine of Primary Jurisdiction and for Dismissal

or a Stay Proceedings Pending the Referral is

GRANTED. The questions of whether Sprint may

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charge access fees to AT&T for access to the Sprint

PCS wireless network and, if so, the reasonableness

of Sprint’s charges for such services are referred to

the FCC for further consideration. It is further

ORDERED that Defendant AT&T Corporation is

directed to prepare and submit the appropriate filings to bring these issues before the FCC by Friday,

August 24, 2001.

Id. at 1102.

On October 22, 2001, AT&T and Sprint filed separate

petitions seeking declaratory rulings from the FCC. The

Commission described these filings, as follows:

In its petition, Sprint PCS asks the Commission to

find that there is no federal law or Commission

policy that bars Sprint PCS from recovering its call

termination costs from AT&T. Sprint PCS also

asks [the Commission] to find that AT&T’s refusal to

pay access charges to Sprint PCS is unreasonably

discriminatory under section 202(a) of the Communications Act of 1934, as amended (the Act), and

unjust and unreasonable under section 201(b) of the

Act. In its petition, AT&T asks the Commission to

find that CMRS carriers should continue to recover

their costs from their end users, not by imposing

access charges on IXCs. If CMRS carriers are

permitted to impose access charges, AT&T asks that

those charges be capped at the reciprocal compensation rate for local traffic and assessed only prospectively.

Declaratory Ruling, 17 F.C.C.R. at 13,193-94.

Because the parties’ petitions for declaratory rulings were

much wider in scope than the district court’s referral order,

the FCC’s Declaratory Ruling is somewhat free-wheeling in

its discourse. As a consequence, there are numerous observations in the Declaratory Ruling that do not purport to

respond to the district court’s referral order or to otherwise

pass judgment on any issue. Cut to its core, however, the

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FCC Declaratory Ruling is fairly precise in responding to the

referral order. The principal terms of the Declaratory Ruling are as follows:

7. Sprint PCS is correct that neither the Communications Act nor any Commission rule prohibits a

CMRS carrier from attempting to collect access

charges from an interexchange carrier.

Id. at 13,195.

8. That Sprint PCS may seek to collect access

charges from AT&T does not, however, resolve the

question whether Sprint PCS may unilaterally impose such charges on AT&T.

Id. at 13,196.

9. We find that there is no Commission rule that

enables Sprint PCS unilaterally to impose access

charges on AT&T.

Id. at 13,196.

12. There being no authority under the Commission’s rules or a tariff for Sprint PCS unilaterally to

impose access charges on AT&T, Sprint PCS is

entitled to collect access charges in this case only to

the extent that a contract imposes a payment obligation on AT&T. While it is preferable for carriers

to memorialize such contracts in a written agreement, the parties here agree that there is no written

agreement or any express contract between AT&T

and Sprint PCS. Nevertheless, the law recognizes –

as has the Commission – that an agreement may

exist even absent an express contract.

13. Turning to the question whether there was

such an agreement here, we believe that it is an

issue that should be resolved by the Court. We

interpret the Court’s primary jurisdiction referral as

seeking our input on the federal communications law

questions related to this dispute. Because the existence of a contract is a matter to be decided under

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state law, we defer to the court to answer this

question.40

40 Sprint PCS also has advanced a quantum meruit

argument under Missouri law in the pending litigation.

Quantum meruit is premised on the notion that a party

receiving service would be unjustly enriched if it were not

required to pay for that service. Although we defer to the

court to address this state law claim, we note that an

award of quantum meruit would require the court to

establish a value (i.e., set a rate) for the service provided in

the past. We note that there is a substantial question

whether a court may award quantum meruit or other

equitable relief under state law without running afoul of

section 332(c)(3)(A). 47 U.S.C. § 332(c)(3)(A); see, e.g.,

Bastien v. AT&T Wireless, 205 F.3d 983, 986 (7th Cir.

2000) (‘‘If Bastien’s complaint in fact raises regulatory

issues preempted by Congress, then the claims would fail

as a matter of law since they are couched in terms of two

state law actions.’’); Gilmore v. Southwestern Bell Mobile

Services, 156 F. Supp. 2d 916, 925 (N.D. Ill. 2001) (state

law claim based on unjust enrichment preempted under

section 332(c)(3)(A)).

Id. at 13,198.

Paragraph 18 of the Declaratory Ruling rejects Sprint’s

claims under §§ 201(b) and 202(a) as premature:

18. We need not address Sprint PCS’s claims under sections 201(b) and 202(a) at this time. Until

the court determines the respective obligations of

the parties, in particular whether AT&T has any

obligation to pay Sprint PCS under a contract, the

Commission has no basis on which to assess whether

AT&T is subject to sections 201(b) or 202(a) in these

circumstances and, if so, whether its actions violate

those statutory provisions.

Id. at 13,200. The Commission also declined to entertain

issues relating ‘‘either to the prospective treatment of CMRSIXC interconnection or to issues beyond the scope of those

presented for Commission resolution in the primary jurisdicUSCA Case #02-1275 Document #787171 Filed: 11/25/2003 Page 7 of 17
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tion referral.’’ Id. Rather, the Commission firmly stated

that the Declaratory Ruling merely ‘‘clarifies requirements

under [the FCC’s] existing rules.’’ Id.

In its petition for review, AT&T argues that the Declaratory Ruling is contrary to law, because, in allegedly allowing a

state court to determine whether it owes access charges

under an implied contract or quantum meruit, the Commission departed from its precedent holding that states are

preempted by 47 U.S.C. § 332(c)(3)(A) from setting rates for

intercarrier compensation. Sprint contends, in its petition,

that the Declaratory Ruling is arbitrary and capricious in not

requiring AT&T to pay access charges. Sprint also argues

that the FCC favored one set of providers and one type of

communication technology over another in violation of the

Communications Act. And, finally, Sprint challenges observations in the Declaratory Ruling that appear adverse to

Sprint’s interests but which have no binding legal effect. We

deny both petitions, because neither AT&T’s nor Sprint’s

claims are ripe for consideration by this court.

II. ANALYSIS

A. Standard of Review

In order to succeed in their challenges, AT&T and Sprint

must demonstrate that the Declaratory Ruling is ‘‘arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law.’’ See 5 U.S.C. § 706(2)(A) (1996).

Highly deferential, [the arbitrary and capricious]

standard presumes the validity of agency action,

requiring us to determine whether the agency has

considered the relevant factors and ‘‘articulate[d] a

rational connection between the facts found and the

choice made.’’ Motor Vehicle Mfrs. Ass’n of the

United States, Inc. v. State Farm Mut. Auto. Ins.

Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443

(1983) (internal quotation marks omitted). We ‘‘may

reverse only if the agency’s decision is not supported

by substantial evidence, or the agency has made a

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clear error in judgment.’’ Kisser v. Cisneros, 14

F.3d 615, 619 (D.C. Cir. 1994).

AT&T Corp. v. FCC, 220 F.3d 607, 616 (D.C. Cir. 2000).

The court reviews Commission constructions of the Communications Act in accordance with Chevron USA Inc. v.

Natural Resources Defense Council, Inc., 467 U.S. 837 (1984),

and its progeny. Under Chevron, ‘‘[i]f the intent of Congress

is clear,’’ the court ‘‘must give effect to the unambiguously

expressed intent of Congress.’’ Chevron, 467 U.S. at 842-43.

If ‘‘Congress has not directly addressed the precise question

at issue,’’ the agency’s statutory interpretation is entitled to

deference, as long as it is reasonable. Id. at 843-44. Chevron

deference is due, however, only if the agency has acted

pursuant to ‘‘delegated authority’’ and the agency action has

the ‘‘force of law.’’ See Christensen v. Harris County, 529

U.S. 576, 587 (2000); United States v. Mead Corp., 533 U.S.

218, 226-27 (2001).

In applying these standards, ‘‘[t]he job of judges is to ask

whether the Commission made choices reasonably within the

pale of statutory possibility.’’ Verizon Communications Inc.

v. FCC, 535 U.S. 467, 539 (2002).

B. Standing

The Commission initially argues that AT&T has suffered no

actual or imminent injury as a result of the Declaratory

Ruling and, therefore, lacks standing to challenge it. We

reject this argument. The Declaratory Ruling holds that

AT&T may be obligated to Sprint pursuant to an implied-infact contract and it leaves the matter to the district court to

determine whether a contract exists. This portion of the

Declaratory Ruling clearly causes a cognizable injury to

AT&T which would be redressed with a favorable ruling from

this court.

In AT&T Corp. v. FCC, 317 F.3d 227, 238 (D.C. Cir. 2003),

we held that AT&T had standing to challenge an FCC order

determining that AT&T was liable for access charges to a

local exchange carrier, even though the order did not require

payment, because the order exposed AT&T to liability in

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pending litigation. Similarly, AT&T has standing in this case

because the Declaratory Ruling exposes it to liability for

access charges in its pending litigation with Sprint.

C. Ripeness

The Commission argues, in the alternative, that AT&T’s

section 332(c)(3)(A) preemption claim is unripe for review,

because, first, the issue is presently unfit for decision by this

court and, second, a delay in judgment will cause no hardship

to AT&T. Likewise, the Commission argues that it reasonably deferred resolution of Sprint’s section 201(b) and 202(a)

claims until after the district court in Missouri decides whether AT&T has a contractual obligation to pay access charges.

The FCC also contends that Sprint’s remaining claims relate

to matters with respect to which the agency has issued no

final judgment; thus, according to the Commission, these

matters surely are not subject to judicial review.

The framework for assessing ripeness was established in

Abbott Laboratories v. Gardner, 387 U.S. 136, 149 (1967), in

which the Supreme Court provided a two-pronged test that

requires a reviewing court to evaluate ‘‘both the fitness of the

issue for judicial decision and the hardship to the parties of

withholding court consideration.’’ As we noted in City of

Houston v. Department of Housing & Urban Development,

24 F.3d 1421, 1430-31 (D.C. Cir. 1994), ‘‘the ‘primary focus’ of

the ripeness doctrine is to balance ‘the petitioner’s interest in

prompt consideration of allegedly unlawful agency action

against the agency’s interest in crystallizing its policy before

that policy is subject to review and the court’s interest in

avoiding unnecessary adjudication and in deciding issues in a

concrete setting.’ ’’ Id. at 1430 (citing Eagle-Picher Industries v. EPA, 759 F.2d 905, 915 (D.C.Cir.1985)).

Under the ‘‘fitness of the issues’’ prong, the first question

for a reviewing court is ‘‘whether the disputed claims raise

purely legal questions and would, therefore, be presumptively

suitable for judicial review.’’ Better Gov’t Ass’n v. Dep’t

State, 780 F.2d 86, 92 (D.C. Cir. 1986); see also Payne

Enters., Inc. v. United States, 837 F.2d 486, 492 (D.C. Cir.

1988); Eagle-Picher, 759 F.2d at 915. We next consider

USCA Case #02-1275 Document #787171 Filed: 11/25/2003 Page 10 of 17
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whether the court or the agency would benefit from postponing review until the policy in question has sufficiently ‘‘crystallized’’ by taking on a more definite form. See Better Gov’t,

780 F.2d at 92.

The ‘‘hardship’’ prong of the Abbott Laboratories test is not

an independent requirement divorced from the consideration

of the institutional interests of the court and agency. Payne,

837 F.2d at 493. Thus, where there are no institutional

interests favoring postponement of review, a petitioner need

not satisfy the hardship prong. See, e.g., Consol. Rail Corp.

v. United States, 896 F.2d 574, 577 (D.C.Cir.1990). However,

where there are strong interests militating in favor of postponement, we must weigh the potential hardship of delay on

the appellant. City of Houston, 24 F.3d at 1430-31 & n.9.

Under the ‘‘hardship’’ prong, we consider a claimant’s ‘‘interest in immediate review.’’ Better Gov’t, 780 F.2d at 92. If

‘‘[t]he only hardship [a claimant] will endure as a result of

delaying consideration of [the disputed] issue is the burden of

having to [engage in] another suit,’’ this will not suffice to

overcome an agency’s challenge to ripeness. City of Houston, 24 F.3d at 1431-32.

In applying these standards to the instant petitions for

review, we agree with the Commission that the matters at

hand should be dismissed as unripe.

1. AT&T’s Petition

As noted above, the Commission’s Declaratory Ruling responded to the two questions referred by the district court:

whether Sprint may charge access fees to AT&T for access to

the Sprint PCS wireless network and, if so, the reasonableness of Sprint’s charges for such services. See Sprint Spectrum L.P., 168 F. Supp. 2d at 1102. As to the first question,

the Commission held that AT&T was not required to pay

such charges absent a contractual obligation to do so. As to

the second question, the Commission responded, ‘‘until the

Court decides whether there was a contract, it is premature

to address the court’s second question regarding the reasonableness of any rate charged.’’ Declaratory Ruling, 17

F.C.C.R. at 13,192.

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AT&T’s principal claim is that the FCC’s Declaratory

Ruling implicitly suggests that a state court might properly

determine that Sprint is entitled to access fees on the basis of

an implied-in-fact contract with no fixed price term (which

would require a state court determination of the ‘‘reasonableness’’ of the access charges) or on the basis of quantum

meruit (which is an equitable claim not based on a contractual

commitment). AT&T argues, in particular, that, because all

of Sprint’s state-law claims would require the district court to

set a ‘‘reasonable’’ price for Sprint PCS’s services, those

claims are expressly preempted by 47 U.S.C. § 332(c)(3)(A).

Therefore, according to AT&T, the failure of the Declaratory

Ruling to hold Sprint’s state-law claims preempted is both

contrary to law and arbitrary. AT&T also contends that, in

failing to declare Sprint’s claims preempted, the Declaratory

Ruling is an unexplained departure from the FCC’s ruling in

In the Matter of Wireless Consumers Alliance, Inc., 15

F.C.C.R. 17,021 (2000) (also cited as ‘‘CMRS Preemption

Order’’) (interpreting § 332(c)(3)(A) to preempt state courts

from ‘‘determin[ing] the reasonableness of a prior rate’’).

The problem with AT&T’s argument is that it rests on

faulty premises: First, the Commission did not, as AT&T

suggests, declare that the district court was free to determine

the reasonableness of a prior rate. Second, the Commission

did not purport to depart from its ruling in Wireless Consumers Alliance. And, third, the Commission did not resolve the

preemption issue, either explicitly or implicitly.

The Declaratory Ruling says that, ‘‘[b]ecause the existence

of a contract is a matter to be decided under state law, we

defer to the [district] court to answer this question.’’ Declaratory Ruling, 17 F.C.C.R. at 13,198. The Commission also

noted that ‘‘an agreement may exist even absent an express

contract.’’ Id. On this latter point, the Commission suggested that AT&T could be liable to Sprint on ‘‘[a]n implied-infact contract,’’ which ‘‘is ‘founded upon a meeting of minds,

which, although not embodied in an express contract, is

inferred, as a fact, from conduct of the parties showing, in

light of the surrounding circumstances, their tacit understanding.’ ’’ Id. at n.38 (quoting Hercules, Inc. v. United

USCA Case #02-1275 Document #787171 Filed: 11/25/2003 Page 12 of 17
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States, 516 U.S. 417, 424 (1996)). These determinations are

neither surprising, nor are they adverse to AT&T’s position.

Notably, AT&T and the Commission agree on three important points: First, state courts may not determine the reasonableness of a prior rate or set a prospective charge for

service. Second, state courts may determine whether the

parties have in place a contract that fixes access charges.

And, third, access charges may be established by an express

contract or an implied-in-fact contract in which the price was

already fixed (such that the state court would not inquire into

the reasonableness of the rate). AT&T does not contest

these points and nothing in the Declaratory Ruling calls

these matters into question. Rather, AT&T essentially argues that the real dispute in this case concerns whether

Sprint may prevail against AT&T on state-law claims based

on either an implied-in-fact contract in which the price is open

or on a theory of quantum meruit.

AT&T does not seriously contest the Commission’s treatment of the quantum meruit issue, for the agency left little

room for confusion on this point, strongly suggesting that a

claim based on quantum meruit would be preempted. See

Declaratory Ruling, 17 F.C.C.R. at 13,198 n.40. Instead,

AT&T’s major complaint is over the failure of the Declaratory Ruling to hold that an open-price implied-in-fact contract

is preempted. In particular, AT&T fears that the district

court has already determined that Sprint may pursue an

implied-in-fact claim that, under Missouri law, will require the

court to determine the reasonableness of the rates for

Sprint’s services. See Petitioner AT&T’s Reply Br. at 3.

AT&T thus concludes that the FCC’s failure to decide the

preemption issue is arbitrary. We disagree.

The district court’s referral order asks the Commission

‘‘whether Sprint may charge access fees to AT&T for access

to the Sprint PCS wireless network and, if so, the reasonableness of Sprint’s charges for such services.’’ See Sprint

Spectrum L.P., 168 F. Supp. 2d at 1102. Plainly, the referral

order does not assume the answers to the questions that are

being asked. And, in answer to these questions, the DeclaraUSCA Case #02-1275 Document #787171 Filed: 11/25/2003 Page 13 of 17
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tory Ruling merely ‘‘clarifies requirements under [the FCC’s]

existing rules.’’ Declaratory Ruling, 17 F.C.C.R. at 13,200.

In other words, in giving guidance to the district court, the

Commission merely recounted the established legal rules that

were in place during the time periods covering the dispute

between Sprint and AT&T. Id. at n.51. Therefore, AT&T’s

claim that the Declaratory Ruling is an arbitrary and capricious departure from the existing legal regime as defined by

Wireless Consumers Alliance is simply mistaken. Indeed,

during oral argument, FCC counsel acknowledged that Wireless Consumers Alliance accurately reflects the legal landscape that was in place during the periods for which Sprint

seeks access fees from AT&T. Nothing in the Declaratory

Ruling counters this.

Wireless Consumers Alliance makes it clear that a state

court would ‘‘overstep its authority under Section 332 if, in

determining damages, it does enter into a regulatory type of

analysis that purports to determine the reasonableness of a

prior rate or it sets a prospective charge for services.’’

Wireless Consumers Alliance, 15 F.C.C.R. at 17,041. However, Wireless Consumers Alliance also holds that § 332 does

not generally preempt state courts from awarding monetary

damages for breach of contract. Id. at 17,040. Rather, the

Commission stated that ‘‘whether a specific damage award or

damage calculation is prohibited by Section 332 will depend

on the specific details of the award and the facts and circumstances of the case,’’ and noted that ‘‘a consideration of the

price originally charged, for the purposes of determining the

extent of the harm or injury involved, is not necessarily an

inquiry into the reasonableness of the original price and

therefore is permissible.’’ Id. at 17,041.

AT&T concedes that if the Declaratory Ruling does not

abrogate the teachings of Wireless Consumers Alliance, and

if it merely defers the preemption issue to the district court,

and if it does not preclude AT&T from pursuing the preemption defense in district court, then the Declaratory Ruling

would be a simple deferral and maintenance of the status quo

and AT&T would have no viable claims at this time. See

Petitioner AT&T’s Reply Br. at 2. This is a telling concesUSCA Case #02-1275 Document #787171 Filed: 11/25/2003 Page 14 of 17
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sion from AT&T, because the Declaratory Ruling has precisely the effect sought by AT&T. The Declaratory Ruling

does not hold that the district court may avoid the preemption issue if it is raised by AT&T. In other words, if the

district court were to find only an open-price implied-in-fact

contract (or a claim based on quantum meruit) between

Sprint and AT&T, the Declaratory Ruling in no way forecloses AT&T from raising a preemption defense. Thus, as

AT&T concedes, it has no viable claims to pursue in this court

at this time.

Lacking finality, the issue raised by AT&T is not fit for

review. Furthermore, both the agency and the court would

benefit from postponing review until the district court in

Missouri determines whether there is any contract between

Sprint and AT&T. Under Wireless Consumers Alliance,

Sprint’s state-law claims may well be preempted if the district

court finds only an open-price, implied-in-fact contract (or a

claim based on quantum meruit) that requires it to set a

reasonable rate. The Commission reasonably declined to

decide that question until it had taken on a more definite

form.

Finally, where, as here, there are strong interests militating in favor of postponement, we must weigh the potential

hardship of delay in assessing whether to dismiss for want of

ripeness. On the record in this matter, AT&T has not

demonstrated hardship to overcome the FCC’s contention

that the case is unripe for review. The only hardship asserted by AT&T is the ‘‘burden of fighting Sprint’s claims in

district court.’’ See Petitioner AT&T’s Reply Br. at 9-10, 12.

But the burden of participating in further administrative and

judicial proceedings does not constitute sufficient hardship to

overcome the agency’s challenge to ripeness. See Florida

Power & Light Co. v. EPA, 145 F.3d 1414, 1421 (D.C. Cir.

1998); see also Clean Air Implementation Project v. EPA,

150 F.3d 1200, 1205-06 (D.C. Cir. 1998). Since the preemption issue raised by AT&T before this court satisfies neither

the fitness nor the hardship requirements for ripeness, we

dismiss AT&T’s claims for want of ripeness.

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2. Sprint’s Petition

Sprint has not alleged any hardship, so we only inquire

whether the issues it raises are fit for judicial review. Sprint

asks this court to vacate the observations in the Declaratory

Ruling that ‘‘CMRS carriers have never operated under the

same calling party’s network pays (CPNP) compensation

regime as wireline LECs,’’ that ‘‘[u]ntil 1998 TTT all CMRS

carriers recovered the cost of terminating long distance calls

from their end users, and not from interexchange carriers,’’

and that ‘‘[b]ecause both carriers charge their customers for

the service they provide, it does not necessarily follow that

IXCs receive a windfall in situations where no compensation

is paid for access service provided by a CMRS carrier.’’ See

Petitioner Sprint’s Br. at 28 (citing Declaratory Ruling, 17

F.C.C.R. at 13,198-99). Sprint claims that these historical

observations are somehow preclusive, in that they may influence the district court’s judgment on the contract claim or be

cited by other IXCs who refuse to pay Sprint’s access

charges.

It is clear that the passages from the Declaratory Ruling

cited by Sprint are merely descriptive statements by the

agency, not legal conclusions. The statements have no force

of law, so they cannot conclusively cause the adverse collateral consequences suggested by Sprint. In short, Sprint is

quibbling over FCC observations that have no binding effect

whatsoever. This is never a basis for review in this court.

Cf. Panhandle E. Pipe Line Co. v. FERC, 198 F.3d 266 (D.C.

Cir. 1999) (holding that there is nothing for a court to review

when an agency has never issued a final and binding judgment that has the force of law).

Sprint further argues that the FCC unreasonably failed to

determine that AT&T’s refusal to pay was unjust and discriminatory in violation of 47 U.S.C. §§ 201(b) and 202(a).

See Petitioner Sprint’s Br. at 35-37. The Declaratory Ruling

held that it need not address this question until the trial court

determined whether there was a contract. Declaratory Ruling, 17 F.C.C.R. at 13,200. And during oral argument,

counsel for Sprint acknowledged that the Commission has

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considered claims of discrimination and unreasonableness in

the past through complaints filed pursuant to § 208 of the

Communications Act. Therefore, the Commission was not

obliged to review these discrimination claims in a declaratory

ruling issued to address the two specific questions referred by

the district court. Whether AT&T’s refusal to pay violates

§§ 201 and 202 is beyond the scope of the referral. If the

occasion arises, the parties agree that Sprint is free to file a

complaint under 47 U.S.C. § 208 seeking redress for alleged

unjust and discriminatory practices. Since the Commission

properly deferred consideration of Sprint’s claims, there is

nothing for this court to review.

Finally, Sprint argues that the FCC failed in its statutory

duty to regulate interstate access charges and CMRS carriers

by not requiring AT&T to pay the termination charges Sprint

billed to AT&T. Petitioner Sprint’s Br. at 19-21. Sprint did

not raise this argument with the Commission, so it is not

properly before this court. Furthermore, the FCC’s regulation of access charges and CMRS carriers is a matter of

policy that is beyond the scope of the referral questions

answered by the Declaratory Ruling. The basic rationale for

the ripeness doctrine is to prevent courts ‘‘from entangling

themselves in abstract disagreements over administrative policies.’’ Abbott Labs., 387 U.S. at 148. The regulation of

access charges for CMRS providers and other carriers is

currently the subject of proposed rulemaking. See In the

Matter of Developing a Unified Intercarrier Compensation

Regime, Notice of Proposed Rulemaking, 16 F.C.C.R. 9610

(2001), reported at 66 Fed. Reg. 28,410 (F.C.C. 2001). We

decline to interfere with those proceedings.

III. CONCLUSION

For the foregoing reasons, the petitions for review are

dismissed.

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