2007 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

5-9-2007

Core Comm Inc v. Verizon PA Inc

Precedential or Non-Precedential: Precedential

Docket No. 06-2419

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*

The Honorable Gustave Diamond, United States District

Judge for the Western District of Pennsylvania, sitting by

designation.

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

 

No. 06-2419

 

CORE COMMUNICATIONS, INC.,

 Appellant

 v.

VERIZON PENNSYLVANIA, INC.

 

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. No. 04-cv-04513)

District Judge: Honorable Timothy J. Savage

 

Argued February 13, 2007

Before: SMITH and FISHER, Circuit Judges,

and DIAMOND,* District Judge.
2

(Filed May 9, 2007 )

Barry W. Krengel

Dolchin, Slotkin & Todd

2005 Market Street, 24th Floor

Philadelphia, PA 19103

Deborah J. Israel

Louis J. Rouleau

Michael B. Hazzard (Argued)

Womble, Carlyle, Sandridge & Rice

1401 Eye Street, N.W., 7th Floor

Washington, DC 20005

Attorneys for Appellant

Thomas A. Leonard

Richard P. Limburg

H. David Seidman

Obermayer, Rebmann, Maxwell & Hippel

1617 John F. Kennedy Boulevard

One Penn Center, 19th Floor

Philadelphia, PA 19103

Austin C. Schlick (Argued)

Kellogg, Huber, Hansen, Todd, Evans & Figel

1615 M Street, N.W., Suite 400

Washington, DC 20036
3

Joseph M. Ruggiero

Verizon Communications

1515 North Courthouse Road, Suite 500

Arlington, VA 22201

Cynthia L. Randall

Verizon Communications

1717 Arch Street, 10th Floor

Philadelphia, PA 19103

Attorneys for Appellee

 

OPINION OF THE COURT

 

FISHER, Circuit Judge.

This appeal involves the question of whether a federal

district court, in the first instance, may hear disputes concerning

the breach of an interconnection agreement formed and

approved pursuant to the Federal Telecommunications Act of

1996, Pub. L. No. 104-404, 110 Stat. 56 (1996)

(“Telecommunications Act” or “Act”). The United States

District Court for the Eastern District of Pennsylvania held that

the Act prevents parties from taking such claims to federal court

until they have been litigated before a state commission. Core

Communications, Inc. (“Core”), argues that the District Court

erred by misapplying Chevron deference to graft onto the Act an

exhaustion requirement for enforcement actions when Congress

did not provide for one. For the reasons that follow, we will
4

affirm the judgment of the District Court dismissing Count III

of Core’s complaint without prejudice, vacate the dismissal of

the remaining counts, and remand for further proceedings

consistent with this opinion.

I.

The dispute in this case centers on the duties an

incumbent provider of telecommunications services owes with

respect to new entrants who wish to compete with the incumbent

in a particular local market, and how those duties are enforced.

Such questions are governed by the Telecommunications Act of

1996, which was enacted “to promote competition and reduce

regulation in order to secure lower prices and higher quality

service for American telecommunications consumers and

encourage the rapid deployment of new telecommunications

technologies.” Preamble, Telecommunications Act of 1996,

Pub. L. No. 104-404, 110 Stat. 56 (1996). “As the legislative

history explains, the Act creates ‘a pro-competitive,

de-regulatory national policy framework designed to accelerate

rapidly private sector deployment of advanced

telecommunications and information technologies and services

to all Americans by opening all telecommunications markets to

competition.’” Puerto Rico Tel. Co. v. Telecomms. Regulatory

Bd., 189 F.3d 1, 7-8 (1st Cir. 1999) (quoting H.R. Conf. Rep.

No. 104-458, at 113 (1996)).

To achieve these goals, the Act provides that various

responsibilities are to be divided between the state and federal

governments, making it “an exercise in what has been termed

cooperative federalism.” Id. at 8. That is, “Congress enlisted
5

the aid of state public utility commissions to ensure that local

competition was implemented fairly and with due regard to the

local conditions and the particular historical circumstances of

local regulation under the prior regime.” Global Naps, Inc. v.

Mass. Dept. of Telecomm. and Energy, 427 F.3d 34, 46 (1st Cir.

2005) (quoting Peter W. Huber et al., Federal

Telecommunications Law § 3.3.4 (2d ed. 1999)) (internal

quotation marks omitted). The “intended effect” of such a

regime was to “leav[e] state commissions free, where warranted,

to reflect the policy choices made by their states.” Id.

There are two sections of the Act that are at issue in this

case: §§ 251 and 252. Section 251 requires companies that

traditionally provide local phone service – known as incumbent

local exchange carriers (“ILECs”) – to interconnect their

networks with the networks of competitors – known as

competing local exchange carriers (“CLECs”). 47 U.S.C.

§ 251(c)(2). Specifically, the Act charges ILECs with:

The duty to provide, for the facilities and

equipment of any requesting telecommunications

carrier, interconnection with the local exchange

carrier’s network--

(A) for the transmission and routing of telephone

exchange service and exchange access;

(B) at any technically feasible point within the

carrier’s network;
6

(C) that is at least equal in quality to that provided

by the local exchange carrier to itself or to any

subsidiary, affiliate, or any other party to which

the carrier provides interconnection; and

(D) on rates, terms, and conditions that are just,

reasonable, and nondiscriminatory, in accordance

with the terms and conditions of the agreement

and the requirements of this section and section

252 of this title.

Id. § 251(c)(2). It also requires ILECs to lease portions of their

existing networks to their competitors and to permit the

“physical collocation of [CLEC] equipment necessary for

interconnection or access to unbundled network elements” at the

ILEC’s premises. Id. § 251(c)(3), (6). Without these

requirements, new entrants could not afford to build the large

and expensive communications grids that incumbents have

developed through years in the market.

To implement these new duties, the Act relies on a

system of private negotiations, followed by arbitration, if

necessary, both under the supervision of state commissions. All

of these steps to attain an interconnection agreement may be

followed by federal court review, if it is sought by the parties.

The process commences when an ILEC receives a “request for

interconnection” from another telecommunications company.

Id. § 252(a)(1). The Act then requires the ILEC to “negotiate in

good faith in accordance with section 252 . . . the particular

terms and conditions of agreements to fulfill” its substantive

duties under the Act. Id. § 252(c)(1). A requesting carrier may
7

also choose to adopt all of the terms and conditions of an

existing state commission-approved agreement that the

incumbent has with another carrier. Id. § 252(i).

To deal with problems that may arise during the

negotiation period, the Act provides that, if the parties are

unable to agree, either party may petition the state commission

to arbitrate “open issues.” Id. § 252(b)(1). As a final procedural

safeguard, all interconnection agreements must be submitted to

the state commission for approval. Id. § 252(e)(1). The

commission’s “determinations” with respect to the agreements

are subject to review in federal court. Id. § 252(e)(6).

Pursuant to the Act, Core entered into an interconnection

agreement with Verizon Pennsylvania, Inc.’s (“Verizon”)

predecessor in interest on March 31, 2000. Rather than

negotiating from scratch, Core opted into the existing agreement

between Verizon’s predecessor (Bell Atlantic-Pennsylvania,

Inc.) and MCImetro Access Transmission Services, Inc.

Between the fall of 2000 and October 2002, Core

requested interconnection to various markets in Pennsylvania.

Core alleges that Verizon deliberately and unjustifiably refused

to interconnect with Core at technically feasible points in a

timely manner. Rather than using existing facilities with spare

capacity to interconnect, Verizon cited its internal policy of

requiring the construction of new, dedicated facilities to

interconnect with Core. No technical or business justification

was given explaining the need for this requirement. Core claims

that Verizon intentionally took these steps in order to maintain
8

its competitive advantage in Pennsylvania markets and to

intimidate and financially harm Core.

On September 24, 2004, Core filed the complaint

underlying this action in the United States District Court for the

Eastern District of Pennsylvania. It alleged that Verizon’s

conduct violated the Telecommunications Act, as amended,

including §§ 201 and 202 (Count I), and § 251 (Count II),

constituted a material breach of the interconnection agreement

(Count III), and was tortious under Pennsylvania’s common law

for intentional non-disclosure and fraudulent concealment

(Count IV).

On November 4, 2004, Verizon filed a motion to dismiss,

seeking the dismissal of Counts I, II, and IV for failure to state

a claim upon which relief can be granted under Federal Rule of

Civil Procedure 12(b)(6), and Count III for lack of jurisdiction

under Federal Rule of Civil Procedure 12(b)(1). On March 21,

2006, the District Court dismissed Core’s complaint in its

entirety without prejudice. It reasoned that, although it had

federal question and diversity jurisdiction over the action under

28 U.S.C. §§ 1331 and 1332, Chevron deference required that

it adhere to the FCC’s ruling in In re Starpower

Communications, LLC, 15 F.C.C.R. 11277 (2000). Under that

decision, the District Court concluded that § 252 of the Act

imposed “an intermediate step before getting to federal court,

not unlike an exhaustion of remedies requirement,” with respect

to interconnection agreement-related claims. See Core

Commc’ns, Inc. v. Verizon Pa., Inc., 423 F. Supp. 2d 493, 500

(E.D. Pa. 2006). That is, it concluded that Core must seek

review by the Pennsylvania Public Utility Commission (“PA
9

PUC”) of its claim that the approved interconnection agreement

had been breached before resorting to the federal courts.

On April 5, 2006, Core filed a motion for reconsideration

or amended judgment. Following this motion, Core and Verizon

entered into a tolling agreement that tolled the statute of

limitations on Core’s claims until forty-five days after the entry

of an order resolving or otherwise disposing of an appeal to this

Court from the District Court’s decision. In accordance with

that agreement, Core filed a praecipe to withdraw its motion for

reconsideration or amended judgment on April 19, 2006. In the

wake of this agreement, Core filed a notice of appeal on

April 20, 2006. On April 26, 2006, this Court issued a stay

pending the District Court’s disposition of Core’s motion for

reconsideration, which was dismissed as moot on May 3, 2006.

This appeal followed.

II.

Before moving to any of the claims raised by Core, we

must first determine whether or not we have jurisdiction to hear

this case. Verizon argues that there is no appellate jurisdiction

under 28 U.S.C. § 1291 because a district court’s dismissal

without prejudice is not ordinarily a final order unless the

applicable statute of limitations would not permit the re-filing of

the claims. Core, on the other hand, contends that we do have

appellate jurisdiction because the District Court did not take an

action equivalent to a stay, but rather dismissed this case from

its docket. It also disputes Verizon’s claim that there are no

statute of limitations issues.
1

During oral argument, counsel for Verizon agreed that

it would interpret the tolling agreement as extending through the

proceedings before the PA PUC. However, we will not premise

a refusal to exercise jurisdiction on the representations of one

attorney when the intent of the parties is so clearly expressed in

the agreement, and both parties had all of the relevant

10

“A party generally may not take an appeal under § 1291

until there has been a decision by the District Court that ‘ends

litigation on the merits and leaves nothing for the court to do but

execute the judgment.’” Richman Bros. Records, Inc. v. U.S.

Sprint Comm’ns Co., 953 F.2d 1431, 1441 (3d Cir. 1991)

(quoting Van Cauwenberge v. Baird, 486 U.S. 517, 521-22

(1988)). Ordinarily, an order dismissing a complaint without

prejudice is not a final order unless the applicable statute of

limitations would not permit the re-filing of the claims. Ahmed

v. Dragovich, 297 F.3d 201, 207 (3d Cir. 2002).

Under this standard, Verizon argues that because the

applicable statute of limitations for each claim is tolled pursuant

to an agreement of the parties, Core retains the right to re-plead

its claims, and thus the District Court’s order is not final under

§ 1291. However, Core argues that the agreement does not in

fact cure prospective statute of limitations problems. Verizon

agreed only to toll the applicable statutes of limitations through

this appeal. Under the agreement, it appears that the statutory

periods would resume running forty-five days after we enter a

judgment. They would not continue to toll during the PA PUC

proceeding. In addition, Verizon specifically reserved the right

in the agreement to assert a limitations defense against Core

based on lapses occurring after this appeal.1
information before them when the agreement was made. That

is, both Core and Verizon were aware of the possibility of a PA

PUC proceeding, and chose not to toll the applicable statutes of

limitations for that event.

11

Thus, it is far from clear that Core could simply re-plead

its claims. To the contrary, it seems certain that at least some of

the claims will be time barred if Core is forced to litigate its

claim for breach of the interconnection agreement before the PA

PUC. Count I of the complaint, for example, contains a

limitations period of two years that began to run in October

2002, when Verizon failed to interconnect in Wilkes-Barre. See

47 U.S.C. § 415. Core filed its original complaint on

September 24, 2004. It would be essentially impossible for the

time lapse from the end of this appeal to the re-filing of the

complaint, including time for the PA PUC to make its

determination, to be less than one month. Similarly, Core’s

claim advanced in Count II was based on Verizon’s failure to

interconnect in Philadelphia in November 2000 and in

Pittsburgh in May 2001. As such, there are eight months

remaining in the applicable limitations period. See 28 U.S.C.

§ 1658. In this case, since “the plaintiff cannot cure the

deficiency, an order dismissing a complaint without prejudice is

a final and appealable order.” Ahmed, 297 F.3d at 207 (citing

Newark Branch, NAACP v. Harrison, N.J., 907 F.2d 1408, 1416

(3d Cir. 1990)). Because the statutes of limitations controlling

the claims that Core was not instructed to present to the PA PUC

will certainly limit its ability to re-file, we will treat that order

as final for the purpose of this appeal.

III.
12

Moving to the merits, the essence of Core’s argument is

that it was not required to litigate its claim for breach of the

interconnection agreement in front of the PA PUC as an

intermediate step before the District Court could hear the case.

The District Court held, and Verizon argues, that the statutory

scheme under the Telecommunications Act requires that Core

first present this claim to the state commission before

proceeding in a federal district court. It reached this conclusion

by applying Chevron deference to the FCC’s decision in In re

Starpower Communications. We exercise plenary review over

such claims, which implicate the District Court’s conclusions of

law. See, e.g., Epstein Family P’ship v. Kmart Corp., 13 F.3d

762, 766 (3d Cir. 1994).

Under Chevron U.S.A., Inc. v. Natural Resources Defense

Council, 467 U.S. 837 (1984), federal courts must defer to an

implementing agency’s interpretation of a statute within its

jurisdiction if (1) “the statute is silent or ambiguous with respect

to the specific issue” at hand, and (2) “the agency’s answer is

based on a permissible construction of the statute.” Id. at 843.

As the Supreme Court explained, “[a] court may not substitute

its own construction of a statutory provision for a reasonable

interpretation made by the administrator of an agency.” Id. at

844. “Chevron requires a federal court to accept the agency’s

construction of the statute, even if the agency’s reading differs

from what the court believes is the best statutory interpretation.”

Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545

U.S. 967, 980 (2005). The Supreme Court has emphasized that

“[s]uch deference is justified because ‘[t]he responsibilities for

assessing the wisdom of such policy choices and resolving the

struggle between competing views of the public interest are not
13

judicial ones,’ and because of the agency’s greater familiarity

with the ever-changing facts and circumstances surrounding the

subjects regulated.” FDA v. Brown & Williamson Tobacco

Corp., 529 U.S. 120, 132 (2000) (quoting Chevron, 467 U.S. at

866) (internal citations omitted).

A.

Under this framework, the first question we must answer

is “whether Congress has directly spoken to the precise question

at issue.” Chevron, 467 U.S. at 842. In making this

determination, the Supreme Court has instructed that “a

reviewing court should not confine itself to examining a

particular statutory provision in isolation.” Brown &

Williamson Tobacco Corp., 529 U.S. at 133. Instead, we must

interpret the statute “‘as a symmetrical and coherent regulatory

scheme,’ and ‘fit, if possible, all parts into an harmonious

whole.’” Id. (quoting Gustafson v. Alloyd Co., 513 U.S. 561,

569 (1995); FTC v. Mandel Brothers, Inc., 359 U.S. 385, 389

(1959)). “In addition, we must be guided to a degree by

common sense as to the manner in which Congress is likely to

delegate a policy decision of such economic and political

magnitude to an administrative agency.” Id.

In this case, the “precise question at issue” involves the

proper procedure for the interpretation and enforcement of

previously approved interconnection agreements. Specifically,

we must determine whether a party may proceed directly to

federal court to litigate such claims, or if it must first present

them to the state commission that originally approved the
2

Paragraph (5) provides that

[i]f a State commission fails to act to carry out its

responsibility under this section in any proceeding

or other matter under this section, then the

Commission shall issue an order preempting the

State commission’s jurisdiction of that proceeding

14

agreement. We turn to the Telecommunications Act to

determine whether or not Congress has spoken on this question.

The “[p]rocedures for negotiation, arbitration, and

approval of [interconnection] agreements” are discussed in

§ 252 of the Act. Subsection (e), titled “Approval by state

commission,” explains the role of state commissions like the PA

PUC. It provides that “[a]ny interconnection agreement adopted

by negotiation or arbitration shall be submitted for approval to

the State commission. A State commission to which an

agreement is submitted shall approve or reject the agreement,

with written findings as to any deficiencies.” 47 U.S.C.

§ 252(e)(1). Subsections (e)(2) through (e)(5) list the grounds

for rejecting an interconnection agreement submitted to the

commission, preserve state authority to establish or enforce

requirements of state law in reviewing agreements, set a

calendar for state commission decisions, and give the FCC

authority to act if the state commission fails to carry out its

responsibilities. Finally, § 252(e)(6) describes the extent of

judicial review relating to actions under § 252:

In a case in which a State fails to act as described

in paragraph (5),[2] the proceeding by the
or matter within 90 days after being notified (or

taking notice) of such failure, and shall assume

the responsibility of the State commission under

this section with respect to the proceeding or

matter and act for the State commission.

47 U.S.C. § 252(e)(5).

15

Commission under such paragraph and any

judicial review of the Commission’s actions shall

be the exclusive remedies for a State

commission’s failure to act. In any case in which

a State commission makes a determination under

this section, any party aggrieved by such

determination may bring an action in an

appropriate Federal district court to determine

whether the agreement or statement meets the

requirements of section 251 of this title and this

section.

Id. § 252(e)(6). Beyond this, there is no real indication of what

role the state commissions are to play, and the Act is simply

silent as to the procedure for post-formation disputes.

Core, however, argues that Act provides a procedure for

post-formation disputes in §§ 206 and 207. Section 206 is

entitled “Carriers’ liability for damages” and provides that

[i]n case any common carrier shall do, or cause or

permit to be done, any act, matter, or thing in this

chapter prohibited or declared to be unlawful, or
16

shall omit to do any act, matter, or thing in this

chapter required to be done, such common carrier

shall be liable to the person or persons injured

thereby for the full amount of damages sustained

in consequence of any such violation of the

provisions of this chapter, together with a

reasonable counsel or attorney’s fee, to be fixed

by the court in every case of recovery, which

attorney’s fee shall be taxed and collected as part

of the costs in the case.

47 U.S.C. § 206. Section 207 is the “recovery of damages”

provision related to § 206. It provides that

[a]ny person claiming to be damaged by any

common carrier subject to the provisions of this

chapter may either make complaint to the

Commission as hereinafter provided for, or may

bring suit for the recovery of the damages for

which such common carrier may be liable under

the provisions of this chapter, in any district court

of the United States of competent jurisdiction; but

such person shall not have the right to pursue both

such remedies.

Id. § 207. Core argues that these two provisions allow it to

bring a suit for damages against Verizon in federal court,

notwithstanding any authority that may be vested with the state

commissions.
3

The Act defines “telecommunications” as “the

transmission, between or among points specified by the user, of

information of the user’s choosing, without change in the form

or content of the information as sent and received.” 47 U.S.C.

§ 153(43).

4

Although, as Core points out, the FCC has reached a

different conclusion about whether providing interconnection

services is included in the definition of telecommunications

services under the Act, see TSR Wireless, LLC v. US West

17

However, as Verizon points out, these sections do not

apply to the current dispute because it does not involve the

provision of “telecommunications services.” Both § 206 and

§ 207 apply explicitly to claims against “common carriers.”

When Congress amended the Act in 1996, it amended the

definition of “common carrier” to provide that “[a]

telecommunications carrier shall be treated as a common carrier

under this chapter only to the extent that it is engaged in

providing telecommunications services.” 47 U.S.C. § 153(44)

(emphasis added). According to the Act, “[t]he term

‘telecommunications service’ means the offering of

telecommunications[3] for a fee directly to the public, or to such

classes of users as to be effectively available directly to the

public, regardless of the facilities used.” Id. § 153(46). We

agree with Verizon that in providing – or failing to provide –

interconnection, which is defined under § 251(c)(2) of the Act

as “the physical linking of two networks for the mutual

exchange of traffic,” to another telecommunications carrier it

was not providing telecommunications for a fee directly to the

public.4

 See, e.g., Global Naps, Inc. v. Bell Atl. - N.J., Inc., 287
Communications, Inc., 15 F.C.C.R. 11166, 11172 (2000), we

need not defer to an agency’s interpretation of a statute that

confers jurisdiction on the federal courts. See Murphy

Exploration & Prod. Co. v. U.S. Dep’t of the Interior, 252 F.3d

473, 478 (D.C. Cir. 2001) (“[W]hen Congress has ‘established

an enforcement scheme’ that gives a party ‘direct recourse to

federal court,’ it is ‘inappropriate to consult executive

interpretations of [the jurisdiction-conferring statute] to resolve

ambiguities surrounding the scope of [the party’s] judicially

enforceable remedy.’” (quoting Adams Fruit Co., Inc. v. Barrett,

494 U.S. 638, 650 (1990))).

18

F. Supp. 2d 532, 546-47 (D.N.J. 2003); FTC v. Verity Int’l,

124 F. Supp. 2d 193, 201-02 (S.D.N.Y. 2000) (“The

Telecommunications Act of 1996 likewise distinguishes

between telecommunications services and information services,

stating that ‘a telecommunications carrier shall be treated as a

common carrier under this chapter only to the extent that it is

engaged in providing telecommunications services.’” (quoting

47 U.S.C. § 153(44))). Sections 206 and 207 are thus

inapplicable to the case before us. Accordingly, given the lack

of any guidance as to the proper interpretation and enforcement
5

We emphasize that our conclusion that the Act is silent

on the question at issue here is based on our view of the unusual

nature of the statutory scheme. Had we limited ourselves to

considering portions of the statutory text in isolation, we could

conclude that Congress meant its statement that “[a]ny

interconnection agreement adopted by negotiation or arbitration

shall be submitted for approval to the State commission,” 47

U.S.C. § 252(e)(1), to also imply the contrapositive: that state

commissions do not have authority over any issue other than

whether to approve or reject interconnection agreements.

However, viewing the statute “as a symmetrical and coherent

regulatory scheme,” Brown & Williamson Tobacco Corp., 529

U.S. at 133 (quoting Gustafson, 513 U.S. at 569), we are

reluctant to conclude that Congress would have preserved state

authority to such an extent and then cut it off without a more

explicit statement.

19

procedure in this case,5

 we conclude that Congress has not

spoken on the precise question at issue here.

B.

Faced with a gap in the relevant statutory scheme, we

turn to step two of Chevron, which instructs that “if Congress

has not specifically addressed the question, a reviewing court

must respect the agency’s construction of the statute so long as

it is permissible.” Brown & Williamson Tobacco Corp., 529

U.S. at 132. In this case, both the District Court and Verizon

looked to the FCC’s decision in In re Starpower
6

Neither party in this case challenges the FCC’s position

as the agency charged with implementing the

Telecommunications Act. See Nat’l Cable & Telecomms. Ass’n,

545 U.S. at 980-81 (“Congress has delegated to the Commission

the authority to ‘execute and enforce’ the Communications Act,

§ 151, and to ‘prescribe such rules and regulations as may be

necessary in the public interest to carry out the provisions’ of the

Act, § 201(b).” (citing AT&T Corp. v. Iowa Utils. Bd., 525 U.S.

366, 377-378 (1999))).

7

Section 252(e)(5) requires the FCC to preempt the

jurisdiction of a state commission in any proceeding or matter

in which the state commission “fails to act to carry out its

responsibility” under § 252. See 47 U.S.C. § 252(e)(5).

20

Communications.

6

 That case involved a dispute between

Starpower Communications and Bell Atlantic Virginia and GTE

South about whether calls to Internet Service Providers were

“local calls” under an approved interconnection agreement. See

15 F.C.C.R. at 11278. Starpower had asked the Virginia State

Corporation Commission, the relevant state commission in that

case, to issue a declaratory ruling on this point and to order GTE

to pay reciprocal compensation, but the commission refused. Id.

Starpower then asked the FCC to step in and hold that such

determinations were ones that the state commission was required

to make under § 252(e)(5).7

 Id. at 11277-78. Thus, the FCC

explained that it must “determine whether a dispute arising from

interconnection agreements and seeking interpretation and

enforcement of those agreements is within the states’

‘responsibility’ under section 252.” Id. at 11279. After posing
8

Indeed, every federal appellate court to consider the

issue has determined or assumed that state commissions have

the authority to hear interpretation and enforcement actions

regarding approved interconnection agreements, despite the

Act’s silence on that point. See P.R. Tel. Co. v. Telecomms.

Regulatory Bd., 189 F.3d 1, 10-13 (1st Cir. 1999); Bell Atl. Md.,

Inc. v. MCI WorldCom, 240 F.3d 279, 304 (4th Cir. 2001),

vacated on other grounds in Verizon Md., Inc. v. Pub. Serv.

Comm’n of Md., 535 U.S. 635 (2002); Sw. Bell Tel. Co. v. Pub.

Util. Comm’n of Tx., 208 F.3d 475, 479-80 (5th Cir. 2000); Ill.

Bell Tel. Co. v. Worldcom Techs., Inc., 179 F.3d 566, 573 (7th

Cir. 1999); Iowa Utils. Bd. v. FCC, 120 F.3d 753, 804 (8th Cir.

1997), reversed in part on other grounds, Iowa Utils. Bd., 525

U.S. at 385; Sw. Bell Tel. Co. v. Brooks Fiber Commc’ns of

Okla., Inc., 235 F.3d 493, 497 (10th Cir. 2000); BellSouth

Telecomms., Inc. v. MCIMetro Access Transmission Servs., Inc.,

317 F.3d 1270, 1278 (11th Cir. 2003) (en banc).

21

this question, the FCC provided the answer: “We conclude that

it is.” Id.

Arguing that the District Court’s deference to the FCC’s

determination in Starpower was an error, Core first contends

that the decision is irrelevant to the current case. Although the

FCC’s decision is susceptible to both narrow and broad

readings, under either view it is clearly relevant to the question

we must answer here. Under the narrowest interpretation,

Starpower stands for the proposition that state commissions

have, at a minimum, the non-exclusive authority to hear postformation disputes involving approved interconnection

agreements, despite the Act’s silence on the issue.8

 That is,
22

because the case came to the FCC after Starpower had

voluntarily attempted to litigate its claim before the Virginia

commission, id. at 11278, the FCC’s decision did not actually

force a party to bring its post-formation dispute to a state

commission before proceeding in federal court.

However, given the FCC’s behavior and the structure of

the statutory scheme as a whole, we believe that more can be

drawn from the FCC’s conclusion “that dispute[s] arising from

interconnection agreements and seeking interpretation and

enforcement of those agreements [are] within the states’

‘responsibility’ under section 252.” Id. at 11279. As an initial

matter, the FCC’s language – calling interpretation and

enforcement disputes part of the states’ “responsibility” under

§ 252 – suggests that there is not a shared role for the federal

courts in the first instance. To be fair, the FCC was echoing the

language in § 252(e)(5), but in reaching its conclusion it did not

rely at all on the fact that Starpower had chosen to litigate before

the state commission. Rather, it concluded that such a

delegation of responsibility best fit the statutory scheme created

by Congress. In addition, we can find no indication in other

FCC decisions that the state commissions’ jurisdiction over

post-formation disputes is shared with the federal courts. To the

contrary, every indication is that “the FCC plainly expects state

commissions to decide intermediation and enforcement disputes

that arise after the approval procedures are complete.” Sw. Bell

Tel. Co. v. Pub. Util. Comm’n of Tx., 208 F.3d 475, 480 (5th Cir.

2000) (citing In re Implementation of the Local Competition

Provisions in the Telecommunications Act of 1996, 14 F.C.C.R.

3689, 3703-04 (1999), vacated on other grounds in Bell Atl. Tel.

Cos. v. FCC, 206 F.3d 1 (D.C. Cir. 2000) (noting that parties are
23

bound by their interconnection agreements “as interpreted and

enforced by the state commissions,” and discussing factors state

commissions should consider when “construing the parties’

agreements”).

In following this broader reading of Starpower, we are

mindful of the Supreme Court’s admonition that we must

interpret the statute “‘as a symmetrical and coherent regulatory

scheme,’ and ‘fit, if possible, all parts into an harmonious

whole.’” Brown & Williamson Tobacco Corp., 529 U.S. at 133

(quoting Gustafson, 513 U.S. at 569; Mandel Brothers, Inc., 359

U.S. at 389). In the context of the Telecommunications Act, we

believe that a “symmetrical and coherent regulatory scheme” is

one where the bodies that considered formation problems also

resolve interpretation difficulties. As with formation problems,

federal court jurisdiction over state commission interpretation

and enforcement decisions should be limited to appellate review.

See 47 U.S.C. § 252(e)(6) (granting district courts authority to

review “determinations” made by the state commissions under

§ 252). As the United States Court of Appeals for the Eleventh

Circuit has emphasized,

[a] state commission’s authority to approve or

reject an interconnection agreement would itself

be undermined if it lacked authority to determine

in the first instance the meaning of an agreement

that it has approved. A court might ascribe to the

agreement a meaning that differs from what the

state commission believed it was approving –

indeed, the agreement as interpreted by the court

may be one the state commission would never
24

have approved in the first place. To deprive the

state commission of authority to interpret the

agreement that it has approved would thus subvert

the role that Congress prescribed for state

commissions.

BellSouth Telecomms., Inc. v. MCIMetro Access Transmission

Servs., Inc., 317 F.3d 1270, 1278 n.9 (11th Cir. 2003) (en banc).

Indeed, as the Eleventh Circuit recognized, to allow parties to

circumvent the state commissions in post-formation disputes

would undermine the Act’s sense of cooperative federalism,

under which the states were given primary responsibility over

interconnection agreements. “Rather than placing the entire

scope of regulatory authority in the federal government,

‘Congress enlisted the aid of state public utility commissions to

ensure that local competition was implemented fairly and with

due regard to the local conditions and the particular historical

circumstances of local regulation under the prior regime.’”

Global Naps, Inc., 427 F.3d at 46 (quoting Peter W. Huber et al.,

Federal Telecommunications Law § 3.3.4 (2d ed. 1999)). The

FCC’s interpretation wisely recognizes this fact to fill the gap

left by Congress.

Notwithstanding this analysis, Core argues that

Starpower is not entitled to Chevron deference because

Congress merely delegated authority to the FCC to preempt

affirmative refusals by state commissions to carry out their

responsibilities under § 252 of the Act, not to “mandate an

‘interim step’ to federal district court review.” This argument

misses the point. Chevron deference is premised on the idea

that where Congress has left a gap or ambiguity in a statute
25

within an agency’s jurisdiction, that agency has the power to fill

in or clarify the relevant provisions. Chevron, 467 U.S. at 843-

44. As we explained above, the Telecommunications Act is

silent on the procedure for post-formation disputes. Under

Chevron, this silence coupled with a permissible interpretation

from the Act’s implementing agency is all that is needed for

deference. Id. at 843 (“[I]f the statute is silent or ambiguous

with respect to the specific issue, the question for the court is

whether the agency’s answer is based on a permissible

construction of the statute.”). Chevron does not require that the

Act explicitly delegate the authority to the FCC. Rather, it is the

Act’s silence that is the source of the delegation in this context.

Core’s next argument is that Starpower is not owed

deference because the FCC’s decision was guided by two

“instructive” federal appellate court cases, rather than by the

agency’s expertise. However, a primary source of an agency’s

power under Chevron deference is delegation, not simply

expertise. By not speaking on the subject, Chevron instructs

that Congress was implicitly delegating responsibility to the

FCC to determine the procedure for post-formation disputes.

See Chevron, 467 U.S. at 843-44. Facing the same objection in

BellSouth, Judge Black of the United States Court of Appeals

for the Eleventh Circuit explained,

By virtue of that Congressional delegation, an

administrative agency need not cite any cases in

reaching its interpretation; its interpretation is

authoritative because it has been posited by the

agency. Of course, the agency’s interpretation

cannot be “procedurally defective, arbitrary or
26

capricious in substance, or manifestly contrary to

the statute,” [United States v.] Mead Corp., 533

U.S. [218,] 227 [(2001)], and legal errors in the

agency’s decision might transgress these limits.

Within these boundaries, however, an agency is

entitled to deference simply because it has acted.

317 F.3d at 1284 (Black, J., concurring). In addition, it is not

clear that the FCC was making its decision based only on the

cases it cited. It also noted in its analysis that “due to its role in

the approval process, a state commission is well-suited to

address disputes arising from interconnection agreements.”

Starpower, 15 F.C.C.R. at 11280. Thus, the force of Starpower

is not undermined by any reliance on federal cases.

Finally, Core invokes the United States Court of Appeals

for the District of Columbia Circuit’s decision in Murphy

Exploration & Production Co. v. U.S. Department of the

Interior, 252 F.3d 473 (D.C. Cir. 2001), to argue that Starpower

is not entitled to Chevron deference because an agency is owed

no deference when limiting federal jurisdiction. However, this

argument misconstrues the holding in Murphy. There, the court

concluded that “Chevron does not apply to statutes that . . .

confer jurisdiction on the federal courts.” Id. at 478 (emphasis

added). As it explained, “when Congress has ‘established an

enforcement scheme’ that gives a party ‘direct recourse to

federal court,’ it is ‘inappropriate to consult executive

interpretations of [the jurisdiction-conferring statute] to resolve

ambiguities surrounding the scope of [the party’s] judicially

enforceable remedy.’” Id. (quoting Adams Fruit Co., Inc. v.

Barrett, 494 U.S. 638, 650 (1990)). We are not faced with such
27

a situation in this case. The FCC in Starpower did not interpret

a statute that conferred jurisdiction on the federal courts, but

rather one that defined the procedures related to the formation

of interconnection agreements, and the very reason Chevron

deference is an issue in this case is the Act’s silence regarding

an enforcement scheme. Thus, we see no reason why Chevron

deference would be inappropriate here.

Accordingly, we conclude that the FCC has offered a

reasonable solution to fill a gap that currently exists in the

Telecommunications Act. Pursuant to the FCC’s guidance, we

hold that interpretation and enforcement actions that arise after

a state commission has approved an interconnection agreement

must be litigated in the first instance before the relevant state

commission. A party may then proceed to federal court to seek

review of the commission’s decision or move on to the

appropriate trial court to seek damages for a breach, if the

commission finds one.

C.

Having concluded that Core’s claim for breach of the

interconnection agreement must be presented to the PA PUC in

the first instance, we now turn to the remainder of its claims.

Without discussing anything other than Core’s breach of

contract claim, the District Court dismissed Core’s entire

complaint without prejudice. Given our conclusion that the

relevant statutes of limitations will certainly limit Core’s ability

to refile these claims after the PA PUC proceeding, see supra

Section II, we must consider whether such a step was proper.

We conclude that it was not.
28

The District Court did not find, and Verizon does not

argue, that any of Core’s other claims must be presented to the

PA PUC, or that the PA PUC even has the authority to hear

them. In addition, no party argues that these claims must be

presented together. As such, the District Court’s action was

tantamount to dismissing viable claims without any justification.

Cf. Ahmed, 297 F.3d at 207 (“[I]f the plaintiff cannot cure the

deficiency, an order dismissing a complaint without prejudice is

a final and appealable order.”). We conclude that this was an

error. Certainly, as Verizon points out, Core’s claims are all

related, and judicial efficiency would be served by hearing them

at the same time. To that end, the District Court is free to

consider on remand whether or not a stay would be appropriate

here. But given the record before us, we conclude that the

District Court erred by dismissing Core’s claims other than its

action for breach of the interconnection agreement.

IV.

“It would be gross understatement to say that the

[Telecommunications] Act is not a model of clarity. It is in

many important respects a model of ambiguity or indeed even

self-contradiction.” AT&T Corp. v. Iowa Utils. Bd., 525 U.S.

366, 397 (1999). Nevertheless, we are charged with piecing

together what Congress and the FCC have given us. Until we

have more guidance on the matter, the most sensible

harmonization of the Act’s structure and the FCC’s declarations

is a solution under which the bodies that are responsible for

overseeing the formation of interconnection agreements are

given the first crack at interpreting and enforcing them. The

imperfections of this procedure are not lost on us, but it appears
29

to be the solution most faithful to the FCC’s gap-filling

authority and the Act’s assignment to the state commissions of

responsibilities related to interconnection agreements.

Accordingly, we will affirm the judgment of the District Court

dismissing Count III of Core’s complaint without prejudice,

vacate the dismissal of the remaining counts, and remand for

further proceedings consistent with this opinion.