FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

TELESAURUS VPC, LLC, a 

Delaware Limited Liability

Company,

Plaintiff-Appellant,

v.

RANDY POWER, an individual; No. 09-15446

PATRICIA A. POWER, an individual; D.C. No. RADIOLINK CORPORATION,

 2:07-cv-01311- Defendants-Appellees, NVW

v. OPINION

INDUSTRIAL TELECOMMUNICATIONS

ASSOCIATION, INC., a Virginia

corporation; EWA, INC., a

Virginia corporation, d/b/a

Enterprise Wireless Alliance,

Third-Party-Defendant-Appellees. 

Appeal from the United States District Court

for the District of Arizona

Neil V. Wake, District Judge, Presiding

Argued and Submitted

February 11, 2010—San Francisco, California

Filed October 8, 2010

Before: John T. Noonan, Marsha S. Berzon and

Sandra S. Ikuta, Circuit Judges.

Opinion by Judge Ikuta

17003
COUNSEL

Patrick J. Richard, Nossaman LLP, San Francisco, California,

for the appellant.

Kathi Mann Sandweiss and Roger L. Cohen, Jaburg & Wilk,

P.C., Phoenix, Arizona, for the appellees.

OPINION

IKUTA, Circuit Judge:

In this appeal, we hold that the complaint filed by Telesaurus VPC, LLC (“Telesaurus”) against Radiolink Corporation (“Radiolink”) did not allege facts sufficient to establish

that Radiolink is a “common carrier” subject to suit under the

Federal Communications Act of 1934 (“FCA”), 47 U.S.C.

§§ 206-07. We therefore affirm the district court’s dismissal

TELESAURUS v. POWER 17007
of Telesaurus’s FCA claims, but conclude that the district

court erred in denying Telesaurus leave to amend. We also

hold that Telesaurus’s claims under Arizona law for conversion, unjust enrichment, and intentional interference with prospective economic advantage are expressly preempted by

§ 332(c)(3)(A) of the FCA, which preempts state regulation of

market entry. Id. § 332(c)(3)(A). We therefore affirm the dismissal of Telesaurus’s state-law claims.

I

Both Telesaurus and Radiolink provide mobile radio services to customers. In 1999, Telesaurus’s predecessor in interest, Warren Havens, bid in a competitive auction and obtained

licenses for five VHF Public Coast radio frequencies (the

“VPC Frequencies”)1 in Phoenix, Arizona. Radiolink also participated in this auction, but lost to Havens’s higher bid.

Havens subsequently assigned his interest in the frequencies

to Telesaurus.2

Three months after Telesaurus obtained the VPC Frequencies, Radiolink submitted an application to the Federal Communications Commission (“FCC”) for various frequencies

including the VPC Frequencies. As required by FCC rules,

Radiolink’s application included a report from the Industrial

Telecommunications Association (“ITA”), one of the FCC’s

authorized frequency coordinators, which stated that the VPC

Frequencies were available at no charge on a first-come, firstserved basis. See generally 47 C.F.R. § 90.175. Telesaurus

alleges that Radiolink knew these representations to be false.

The FCC subsequently granted a mobile service license to

1VHF Public Coast frequencies, or “VPC frequencies,” are a set of radio

frequencies in the 160 MHZ range that the FCC has reserved for wireless

radio services. 

2For convenience, we refer to both Havens and Telesaurus as “Telesaurus.” 

17008 TELESAURUS v. POWER
Radiolink to use the VPC Frequencies. The license included

the notation: “Regulatory Status: PMRS,” indicating that

Radiolink was operating a private land mobile radio service.

Radiolink used these frequencies to operate its two-way

mobile radio business, through which it provided customers

with wireless communications in the greater Phoenix area.

These operations continued until at least 2005. 

After being informed by potential business partners that

Radiolink was using the VPC Frequencies, Telesaurus

reported Radiolink’s use to the FCC. The FCC initiated proceedings sua sponte to consider whether it should modify

Radiolink’s license. In a March 4, 2004 memorandum opinion

and order, the FCC concluded that it should not have granted

Radiolink the VPC Frequencies, and proposed to modify

Radiolink’s license to remove those frequencies. The FCC

noted that “a proposed modification under the circumstances

presented would promote the public interest, convenience,

and necessity because the subject channels were not available

for assignment to Radiolink when the application was granted

because they were previously assigned” to Telesaurus. 

Radiolink moved for reconsideration, arguing that the coordination error resulted not from any fault on the part of

Radiolink, but rather from a mistake made by the FCC and its

certified frequency coordinator, ITA, which erred in selecting

the frequencies for Radiolink’s application. Telesaurus filed

an opposition to Radiolink’s motion, arguing that Radiolink’s

claim of innocence in the selection of the VPC Frequencies

was not credible and that Radiolink was improperly pressuring Telesaurus to relinquish the VPC Frequencies. Telesaurus

urged the FCC to investigate these issues and impose sanctions on Radiolink.

After issuing its March 4, 2004 order, the FCC directed

ITA to find replacement frequencies for Radiolink, and then

on December 21, 2004 granted Radiolink a license to use

replacement frequencies recommended by the ITA. On July 7,

TELESAURUS v. POWER 17009
2005, the FCC issued a final modification order deleting the

VPC Frequencies from Radiolink’s license. The FCC concluded that “it is in the public interest to modify Radiolink’s

license to delete” the VPC Frequencies, because “the frequencies were not available” for private land mobile radio licensing, and should be made available for Telesaurus’s use. In

addition, the FCC noted that Radiolink had already obtained

replacement channels, “which will minimize the impact of

this action on Radiolink’s operations.” The FCC did not mention Telesaurus’s request for further investigation or sanctions. 

Two years later, Telesaurus filed suit in federal district

court, alleging that Radiolink violated provisions of the FCA,

47 U.S.C. §§ 301, 308, 309, 312(a) and 503(b),3 and in addition was liable for conversion, unjust enrichment, and intentional interference with prospective economic advantage

under Arizona law. 

Radiolink sought to dismiss the complaint for failure to

state a claim. See FED. R. CIV. P. 12(b)(6). In response to

Telesaurus’s federal claims, Radiolink argued that the FCA

provides a private cause of action only against “common carriers,” 47 U.S.C. §§ 206-207, not against private mobile service providers such as Radiolink. Second, it argued that

Telesaurus could not bring a claim for violation of §§ 301,

308, 309, 312(a) and 503(b) of the FCA, because those provisions impose duties only on the FCC, not on licensees. With

respect to Telesaurus’s state claims, Radiolink sought dismissal on the grounds that Telesaurus had no property right

in the VPC Frequencies or, in the alternative, that the claims

3

In brief, 47 U.S.C. § 301 prohibits radio transmission without a license;

47 U.S.C. § 308 sets forth the requirements for obtaining a license; 47

U.S.C. § 309 describes the FCC’s procedure for granting a license; 47

U.S.C. § 312(a) outlines administrative sanctions and procedures for the

revocation of a license; and 47 U.S.C. § 503(b) sets forth penalties for violations of the conditions of a license or provisions of the FCA. 

17010 TELESAURUS v. POWER
were either expressly or impliedly preempted by

§ 332(c)(3)(A) of the FCA, 47 U.S.C. § 332(c)(3)(A).4

The district court dismissed Telesaurus’s complaint with

prejudice, denying Telesaurus’s motion for leave to amend.

Reasoning that the FCC’s designation of Radiolink as a private land mobile radio service on its license was subject to

deference under Chevron U.S.A., Inc. v. NRDC, Inc., 467 U.S.

837, 842-43 (1984), the district court held that Radiolink was

not a common carrier as a matter of law. The court further

held that Radiolink’s state-law claims were expressly preempted under § 332(c)(3)(A) of the FCA. Telesaurus timely

appealed.

II

We review de novo the dismissal of a complaint for failure

to state a claim. Alarco Pay Television, Ltd. v. Gen. Instrument Corp., 69 F.3d 381, 384-85 (9th Cir. 1995). For purposes of our review, we begin “by identifying pleadings that,

because they are no more than conclusions, are not entitled to

the assumption of truth.” Ashcroft v. Iqbal, 129 S. Ct. 1937,

1950 (2009). We disregard “[t]hreadbare recitals of the ele4

In relevant part, § 332(c)(3)(A) states: 

Notwithstanding sections 152(b) and 221(b) of this title, no State

or local government shall have any authority to regulate the entry

of or the rates charged by any commercial mobile service or any

private mobile service, except that this paragraph shall not prohibit a State from regulating the other terms and conditions of

commercial mobile services. Nothing in this subparagraph shall

exempt providers of commercial mobile services (where such services are a substitute for land line telephone exchange service for

a substantial portion of the communications within such State)

from requirements imposed by a State commission on all providers of telecommunications services necessary to ensure the universal availability of telecommunications service at affordable

rates. 

Id. § 332(c)(3)(A). 

TELESAURUS v. POWER 17011
ments of a cause of action, supported by mere conclusory

statements . . . .” Id. at 1949. After eliminating such unsupported legal conclusions, we identify “well-pleaded factual

allegations,” which we assume to be true, “and then determine

whether they plausibly give rise to an entitlement to relief.”

Id. at 1950. “To survive a motion to dismiss, a complaint must

contain sufficient factual matter, accepted as true, to state a

claim to relief that is plausible on its face;” that is, plaintiff

must “plead[ ] factual content that allows the court to draw

the reasonable inference that the defendant is liable for the

misconduct alleged.” Id. at 1949 (internal quotation marks

omitted); see Evanns v. AT&T Corp., 229 F.3d 837, 839 (9th

Cir. 2000). 

We review the denial of leave to amend a complaint for

abuse of discretion. Metzler Inv. GMBH v. Corinthian Colls.,

Inc., 540 F.3d 1049, 1072 (9th Cir. 2008). A district court

may deny a plaintiff leave to amend if it determines that “allegation of other facts consistent with the challenged pleading

could not possibly cure the deficiency,” Schreiber Distrib.

Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir.

1986), or if the plaintiff had several opportunities to amend its

complaint and repeatedly failed to cure deficiencies, Foman

v. Davis, 371 U.S. 178, 182 (1962).

III

We first consider whether the district court erred by dismissing Telesaurus’s federal claims under §§ 206 and 207 of

the FCA, which provide a cause of action against “common

carriers.” As relevant here, § 206 allows a party to bring an

action for damages against “common carriers” who violate

provisions of the FCA by their acts or omissions. 47 U.S.C.

§ 206.5 Section 207 provides that a person claiming to be

5Section 206 provides, in pertinent part: 

In case any common carrier shall do, or cause or permit to be

done, any act, matter, or thing in this chapter prohibited or

17012 TELESAURUS v. POWER
damaged by a common carrier may bring a complaint either

before the FCC itself or as a civil suit in district court, “but

such person shall not have the right to pursue both such remedies.” Id. § 207.6

[1] Radiolink argued, and the district court agreed, that it

is not a “common carrier” for purposes of §§ 206 and 207. In

evaluating this argument, we begin with the language of the

statute. Greyhound Corp. v. Mt. Hood Stages, Inc., 437 U.S.

322, 330 (1978); see McCarthy v. Bronson, 500 U.S. 136, 139

(1991). The FCA’s general definition of “common carrier”

appears in § 153(10), which defines the term as: “any person

engaged as a common carrier for hire, in interstate or foreign

communication by wire or radio or interstate or foreign radio

transmission of energy . . . .” 47 U.S.C. § 153(10). Despite

this general definition, a mobile service such as Radiolink is

a common carrier only if it meets the more specific definition

of “common carrier” set forth in § 332(c)(1). This section provides that “[a] person engaged in the provision of a service

that is a commercial mobile service shall, insofar as such person is so engaged, be treated as a common carrier” for purposes of the FCA. Id. § 332(c)(1)(A). Any mobile service

declared to be unlawful, or 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 . . . . 

Id. § 206 

6Section 207 provides: 

Any 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. 

TELESAURUS v. POWER 17013
“that is not a commercial mobile service or the functional

equivalent of a commercial mobile service” is defined as a

“private mobile service,” and therefore not a common carrier

for purposes of the FCA.7Id. §§ 332(c)(2), (d)(3); see In re

Implementation of Sections 3(N) and 332 of the Communications Act Regulatory Treatment of Mobile Services: Second

Report and Order, 9 F.C.C.R. 1411, 1425-1454 (Mar. 7,

1994) (FCC regulations further defining these terms). The

FCA defines “commercial mobile service” as “any mobile

service . . . that is provided for profit and makes interconnected service available (A) to the public or (B) to such

classes of eligible users as to be effectively available to a substantial portion of the public, as specified by regulation by the

Commission . . . .” 47 U.S.C. § 332(d)(1). “Interconnected

service,” in turn, is defined as “service that is interconnected

with the public switched network . . . or service for which a

request for interconnection is pending . . . .” 47 U.S.C.

§ 332(d)(2). In sum, a mobile service provider such as

Radiolink qualifies as a “common carrier” under the FCA

only to the extent it is “engaged in the provision of a service”

that is: (1) for profit; (2) interconnected (or pending interconnection) with the public switched network; and (3) available

to the public or other specified users. Id. §§ 332(d)(1)-(2).

We thus consider whether Telesaurus’s complaint alleges

facts sufficient to establish that Radiolink is a common carrier. The complaint alleges: “Radiolink as a common carrier,

knowingly violated 47 U.S.C. §§ 308 and 309, and other section[s of] the Communications Act”; that Radiolink “used the

Converted Frequencies for commercial, common-carrier (as

defined by the FCC) two-way radio service involving charg7Section 332(d)(3) provides: 

the term “private mobile service” means any mobile service (as

defined in section 153 of this title) that is not a commercial

mobile service or the functional equivalent of a commercial

mobile service, as specified by regulation by the Commission. 

47 U.S.C. § 332(d)(3). 

17014 TELESAURUS v. POWER
ing various customers for use of mountain-top and other high

radio repeater sites to provide wireless communications in the

greater Phoenix region”; and that Radiolink “carried on this

for-profit common carrier[ ] wireless service” for many years.

[2] We do not assume the truth of the complaint’s bare

legal conclusion that Radiolink is a common carrier, Iqbal,

129 S. Ct. at 1950, but instead consider whether the complaint’s well-pleaded facts are sufficient to state a claim. Telesaurus’s complaint plausibly alleges that Radiolink is a forprofit endeavor, thus satisfying one of the elements required

to meet the definition of a common carrier. See 47 U.S.C.

§ 332(d)(1)-(2). But the complaint does not adequately allege

that Radiolink’s service is interconnected or pending interconnection, as defined in § 332(d)(2), or that it is provided to the

public or the other users specified in § 332(d)(1). Id. As such,

we lack “sufficient factual matter, accepted as true” to establish that Radiolink is a common carrier. Iqbal, 129 S.Ct. at

1949. 

Telesaurus argues that Radiolink must be deemed to be a

common carrier because it was using the VPC Frequencies,

which the FCC designated for use only by commercial mobile

services. We reject this tautology. As explained above, the

definition of “commercial mobile services” does not turn on

the nature of the frequencies being used, but rather on

whether the service being provided meets certain criteria. See

47 U.S.C. § 332(d)(1)-(2); see also S.W. Bell Tel. Co. v. FCC,

19 F.3d 1475, 1481 (D.C. Cir. 1994) (“Whether an entity in

a given case is to be considered a common carrier or a private

carrier turns on the particular practice under surveillance.”).

[3] Because a private cause of action under §§ 206 and 207

may be brought only against a “common carrier,” and because

Telesaurus has failed to make a plausible allegation that

Radiolink is such a carrier, we agree with the district court

that Telesaurus has failed to state a claim under the FCA. 47

U.S.C. §§ 206-07.

TELESAURUS v. POWER 17015
Given this conclusion, we turn to Telesaurus’s argument

that the district court erred in denying it leave to amend its

complaint. As noted above, the district court concluded that

the “Regulatory Status: PMRS” notation on Radiolink’s

license was a determination by the FCC, entitled to deference

under Chevron, 467 U.S. at 843, that Radiolink was not a

common carrier for purposes of Telesaurus’s suit. Under

Chevron, we defer to an agency’s construction of the statute

it administers if “the statute is silent or ambiguous with

respect to the specific issue,” and the agency’s interpretation

“is based on a permissible construction of the statute.” See id.

Moreover, even if an agency’s decision does not qualify for

Chevron deference, we still give “considerable weight” to the

“well-reasoned views of the agencies implementing a statute,”

in proportion to “the degree of the agency’s care, its consistency, formality, and relative expertness, and to the persuasiveness of the agency’s position.” United States v. Mead

Corp., 533 U.S. 218, 227-28, 234-235 (2001) (citing Skidmore v. Swift & Co., 323 U.S. 134, 139-40 (1944)) (footnotes

and internal quotation marks omitted). 

[4] In this case, however, the parties have not identified,

and we are not aware of, any authority indicating that the

FCC’s notation on Radiolink’s license constitutes an interpretation entitled to Chevron deference. And, given the absence

of any reasoned analysis by the FCC explaining the “PMRS”

notation, we cannot give it significant weight under Mead and

Skidmore. See Mead, 533 U.S. at 228; Skidmore, 323 U.S. at

140. Indeed, it is far from clear that the bare notation “PMRS”

on Radiolink’s license, without more, even represents the

FCC’s considered judgment that Radiolink is a “private

mobile service” for purposes of Telesaurus’s suit. See 47

U.S.C. § 332(c)(2), (d)(3). Furthermore, “common carrier”

status depends upon the services Radiolink is providing to its

customers, an inquiry not necessarily identical to the question

of regulatory status noted on a license. Id. § 332(d)(1)-(2); see

S.W. Bell, 19 F.3d at 1481. In light of these considerations,

the notation on Radiolink’s license lacks any “ ‘power to per17016 TELESAURUS v. POWER
suade,’ ” Mead, 533 U.S. at 229 (quoting Skidmore, 323 U.S.

at 140), and therefore is not entitled to deference. 

[5] The district court thus erred in holding that the

“PMRS” notation on Radiolink’s license compelled the conclusion that, as a matter of law, Radiolink was not a common

carrier for purposes of Telesaurus’s suit. Because the district

court’s basis for denying leave to amend was incorrect, and

Radiolink has not identified any other reason that amendment

would be futile, we conclude that the district court abused its

discretion by denying Telesaurus leave to amend. See Schreiber, 806 F.2d at 1402; Bonanno v. Thomas, 309 F.2d 320, 322

(9th Cir. 1962).8

IV

Telesaurus also appeals from the dismissal of its state tort

claims for conversion, unjust enrichment, and intentional

interference with prospective economic advantage. Telesaurus

alleges that Radiolink knew that Telesaurus alone was rightfully licensed to use the VPC Frequencies, but submitted a

license application to the FCC that falsely characterized the

frequencies as available. According to Telesaurus, Radiolink

subsequently used the VPC Frequencies wrongfully and in

violation of Telesaurus’s rights. As a result, Telesaurus

alleges that it lost specific economic opportunities and

incurred damages. Telesaurus argues that the district court

erred in holding that the FCA expressly or implicitly preempts

these claims.

8Because we affirm the dismissal of Telesaurus’s complaint on this

ground, we do not reach Radiolink’s argument that no private right of

action under 47 U.S.C. §§ 206 and 207 is available for breach of 47 U.S.C.

§§ 301, 308, 309, 312(a) and 503(c)(1). The district court will have the

opportunity to address Radiolink’s argument on this issue if Telesaurus is

able to amend its pleadings to make a plausible allegation that Radiolink

is a common carrier. 

TELESAURUS v. POWER 17017
A

“The purpose of Congress is the ultimate touchstone of preemption analysis.” Cipollone v. Liggett Group, Inc., 505 U.S.

504, 516 (1992) (plurality opinion) (internal quotation marks

omitted). Because “Congress may indicate pre-emptive intent

through a statute’s express language or through its structure

and purpose,” Altria Group, Inc. v. Good, 129 S.Ct. 538, 543

(2008), we first look to the text of the FCA to determine

whether Congress explicitly preempted Radiolink’s common

law claims. See generally Metrophones Telecom., Inc. v.

Global Crossing Telecom., Inc., 423 F.3d 1056, 1071-72 (9th

Cir. 2005). 

[6] The express preemption provision of the FCA relevant

to mobile services, § 332(c)(3)(A), states in relevant part that

“no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial

mobile service or any private mobile service, except that this

paragraph shall not prohibit a State from regulating the other

terms and conditions of commercial mobile services.” 47

U.S.C. § 332(c)(3)(A). Under this section, a state enactment

may be preempted either because: (1) the enactment regulates

the rates charged by a mobile service; or (2) because the

enactment regulates the market entry of any such service.

The FCC has interpreted the scope of this preemption provision in In re Wireless Consumers Alliance, Inc., 15 F.C.C.R.

17021, 17026-35 (2000), an interpretation that we adopted in

Shroyer v. New Cingular Wireless Services, Inc. See 606 F.3d

658, 662 & n.2, 663 (9th Cir. 2010).9 In In re Wireless, the

9

In the course of discussing In re Wireless’s determination that certain

state tort claims were not preempted by § 332(c)(3), Shroyer noted that

“[b]ecause the FCC is authorized to issue binding legal rules, an order

issued under that authority is entitled to Chevron deference.” See Shroyer,

606 F.3d at 662 n.2. Shroyer did not address the Supreme Court’s recent

statement that it does not give Chevron deference to “an agency’s conclu17018 TELESAURUS v. POWER
FCC considered a petition seeking a declaratory ruling that

§ 332(c)(3)(A) precluded state courts from awarding monetary relief against commercial mobile radio service providers

for a range of state tort and contract actions. 15 F.C.C.R. at

17021. Commenters argued that such actions were preempted

because the adjudication of monetary damage claims would

per se “require[ ] the [state] court to regulate rates” in contravention of § 332(c)(3)(1). Id. at 17024-25.

In a thorough and well-reasoned opinion, the FCC rejected

this per se approach, adopting instead a case-by-case analysis

for preemption of state tort actions under § 332(c)(3)(1). Id.

at 17022. First, the FCC determined that “judicial action can

constitute state regulatory action for purposes of Section

332,” and thus may be expressly preempted under that provision. See 15 F.C.C.R. at 17027 (emphasis added). The FCC

explained that “[t]his conclusion comports with the Supreme

Court’s determination that a judicial decision can constitute

state action, as well as with the determinations of the Supreme

Court and other courts that, like legislative or administrative

action, judicial action constitutes a form of state regulation.”

Id. at 17027 & nn.39-40 (citing, inter alia, Shelley v. Kraemer,

334 U.S. 1 (1948) and BMW of N. Am., Inc. v. Gore, 517 U.S.

559, 572 n.17 (1996)). 

Second, the FCC determined that although “[s]ection 332

does not generally preempt the award of monetary damages

by state courts based on state tort and contract claims,” it

sion that state law is pre-empted,” but rather accords weight to the “agency’s explanation of state law’s impact on the federal scheme” based on “its

thoroughness, consistency, and persuasiveness.” Wyeth v. Levine, 129

S.Ct. 1187, 1201 (2009) (citing Mead, 533 U.S. at 234-35; Skidmore, 323

U.S. at 140). In considering In re Wireless’s interpretation of § 332(c)(3),

however, application of either the Skidmore factors or Chevron deference

would yield the same result. Therefore, we need not address the question

whether some or all of the FCC’s analysis in In re Wireless is entitled to

Skidmore rather than Chevron deference. 

TELESAURUS v. POWER 17019
“bars state regulation of, and thus lawsuits regulating, the

entry of or the rates or rate structures of [mobile service] providers.” Id. at 17026, 17028. As relevant to the rate preemption alleged in In re Wireless, the FCC held that if “the award

of monetary damages [is] necessarily equivalent to rate regulation,” or required a court to “rule on the reasonableness of

[a] . . . carrier’s charges,” it is preempted. Id. at 17028, 17035.

The FCC emphasized that “whether a specific [claim] is prohibited by Section 332 will depend on the specific details of

the award and the facts and circumstances of a particular

case.” Id. at 17040.

Shroyer adopted In re Wireless’s interpretation of § 332(c)

along with its analytical framework. See 606 F.3d at 662-63.

In Shroyer, a plaintiff filed a class action against a wireless

service provider, alleging that his cell-phone service had been

“severely degraded” following the merger of his service provider with another. Id. at 661. The plaintiff sought a declaratory judgment as well as damages for alleged breach of

contract, fraud, and unfair competition. Id. The service provider argued that the plaintiff’s claims were preempted by

§ 332(c)(3)(A) because the claims “challenge[d] the quality

and rates of service, and those areas are reserved exclusively

to the FCC.” Id. (citing 47 U.S.C. § 332(c)(3)(A)).

In considering the parties’ preemption arguments, we first

followed the FCC’s conclusion that § 332(c)(3)’s preemption

of state regulation applies to judicial action. See id. at 662;

Peck v. Cingular Wireless, LLC, 535 F.3d 1053, 1058 (9th

Cir. 2008) (applying express preemption analysis under

§ 332(c)(3)(A) to a class action complaint alleging violation

of a Washington statute); see also Pinney v. Nokia Inc., 402

F.3d 430, 455-56 (4th Cir. 2005); Bastien v. AT&T Wireless

Servs., Inc., 205 F.3d 983, 989 (7th Cir. 2000), distinguished

on other grounds by Shroyer, 606 F.3d at 662-63. Second, we

adopted In re Wireless’s holding that not all common law

damages actions will fall within the express scope of

§ 332(c)(3)(A). Shroyer, 606 F.3d at 662-63. As in In re

17020 TELESAURUS v. POWER
Wireless, we reasoned that § 332(c)(3)(A) preempts damage

claims only if the court, in adjudicating the plaintiff’s claim,

would have to engage in a regulatory analysis of the “reasonableness” of a particular rate, id.; see AT&T Corp. v. FCC,

349 F.3d 692, 702 (D.C. Cir. 2003), or, said otherwise, would

be “called upon to substitute its judgment for the agency’s on

the reasonableness of a rate,” Nader v. Allegheny Airlines,

Inc., 426 U.S. 290, 299 (1976). Because plaintiff’s contract

and misrepresentation claims in Shroyer did not “ask[ ] the

court to rule on the reasonableness of a particular rate,” we

concluded that the claims were not preempted. Shroyer, 606

F.3d at 661. Contrariwise, we held that “[e]lements of

Shroyer’s unfair competition claim” were preempted because

they “depend[ed] on the assessment of the public benefit of

the merger.” Id. at 663; see id. at 666. We concluded that

§ 332(c)(3)(A) precluded any reexamination of the merger

issue, a regulatory determination already made by the FCC.

Id. at 663. 

[7] Neither Shroyer nor In re Wireless articulated a corresponding test for preemption under the “market entry” prong

of § 332(c)(3)(A). However, the logic of these cases provides

substantial guidance. See Shroyer, 606 F.3d at 662-63; In re

Wireless, 15 F.C.C.R. at 17034. Just as § 332(c)(3)(A) preempts claims that require a court to substitute its judgment for

the agency’s with respect to the reasonableness of a particular

rate, § 332(c)(3)(A) also preempts claims that require a court

to substitute its judgment for the agency’s with regard to a

market-entry decision. Cf. Shroyer, 606 F.3d at 661-63; In re

Wireless, 15 F.C.C.R. at 17035; see also Pinney, 402 F.3d at

456. In other words, § 332(c)(3)(A) preempts a state tort

action that would require a court to engage in an assessment

or reexamination of the FCC’s regulatory determination

regarding a mobile service’s entry into the market. 

[8] Licensing has long been recognized as the FCC’s core

tool in the regulation of market entry. See generally 47 U.S.C.

§ 301; Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 376,

TELESAURUS v. POWER 17021
379-80 (1969). Accordingly, section 332 of the FCA outlines

the FCC’s duty to manage the spectrum available to mobile

services through a licensing system. 47 U.S.C. § 332. Such

licensing directly involves agency determinations of public

interest, safety, efficiency, and adequate competition, all

inquiries specially within the expertise of the FCC. Id.

§ 332(a)(1)-(4); see id. § 301 (noting the express purpose of

the FCA: “to maintain the control of the United States over

all the channels of radio transmission; and to provide for the

use of such channels, but not the ownership thereof, by persons for limited periods of time, under licenses granted by

Federal authority . . . .”). Accordingly, § 332(c)(3)(A) preempts state tort actions that require a court “to substitute its

judgment for the agency’s” with regard to a licensing decision. Nader, 426 U.S. at 299.

B

We apply these principles to Radiolink’s contention that

Telesaurus’s common law claims for conversion, unjust

enrichment, and intentional interference with prospective economic advantage are preempted under either the “rates” or

“market entry” prongs of § 332(c)(3)(A).

Under Arizona law, conversion “is an intentional exercise

of dominion or control over a chattel which so seriously interferes with the right of another to control it that the actor may

justly be required to pay the other the full value of the chattel.” Miller v. Hehlen, 104 P.3d 193, 203 (Ariz. App. 2005)

(internal quotation marks omitted). The elements of unjust

enrichment are “(1) an enrichment; (2) an impoverishment;

(3) a connection between the enrichment and the impoverishment; (4) absence of justification for the enrichment and the

impoverishment[;] and (5) an absence of a remedy provided

by law.” Cmty. Guardian Bank v. Hamlin, 898 P.2d 1005,

1008 (Ariz. App. 1995). Finally, to establish a claim for tortious interference with prospective economic advantage, Telesaurus must prove “the existence of a valid contractual

17022 TELESAURUS v. POWER
relationship or business expectancy; the interferer’s knowledge of the relationship or expectancy; intentional interference inducing or causing a breach or termination of the

relationship or expectancy; and resultant damage to the party

whose relationship or expectancy has been disrupted.” Wallace v. Casa Grande Union High Sch. Dist. No. 82 Bd. of

Governors, 909 P.2d 486, 494 (Ariz. App. 1995). To state a

claim, Telesaurus must establish that the interference was

improper, as determined under a seven-factor test that Arizona courts have adopted from the Restatement of Torts. Bar

J Bar Cattle Co. v. Pace, 763 P.2d 545, 547-48 (Ariz. App.

1988). 

[9] Turning first to § 332(c)(3)(A)’s preemption of state

authority to regulate rates, Radiolink argues that Telesaurus’s

claims are preempted because they “implicitly seek to set a

value on the frequencies at issue, using state-law principles to

usurp the rate setting function that is the exclusive province

of the FCC.” We disagree. This case involves a suit brought

by one mobile-service provider against another, alleging damages to its business interests from allegedly improper use of

certain frequencies. Although a court adjudicating Telesaurus’s state-law claims would have to determine whether

Telesaurus was damaged by Radiolink’s use of the VPC Frequencies, and the extent of any such damage, this determination would not require the court to pass judgment on the

reasonableness of Radiolink’s charges in order to provide

compensation for Telesaurus’s alleged injury. In re Wireless,

15 F.C.C.R. at 17035. At most, it might be “appropriate for

[the court] to take the [rate] into consideration in calculating

damages.” Id. Such consideration of a rate as a fact informing

damages calculations does not infringe on the FCC’s area of

exclusive authority to regulate the rates applicable to mobile

service providers. Because a court considering Telesaurus’s

state tort actions would not have to engage in a regulatory

analysis of the reasonableness of a particular rate, or to “substitute its judgment for the agency’s on the reasonableness of

a rate,” Nader, 426 U.S. at 299, we conclude that Telesaurus’s

TELESAURUS v. POWER 17023
damages claims are not expressly preempted as attempts to

regulate a rate. 47 U.S.C. § 332(c)(3)(A).

[10] Turning next to § 332(c)(3)(A)’s preemption of state

authority to regulate market entry, Radiolink argues that

because Telesaurus’s state tort claims rest on the allegation

that Radiolink’s FCC-licensed operation of certain frequencies was “wrongful” or “unlawful,” they are expressly preempted under the market entry prong of § 332(c)(3)(A). We

agree. Each of Telesaurus’s state-law claims requires adjudication of whether Radiolink’s use of the VPC Frequencies

was improper, and, if so, whether Telesaurus suffered damage

from such allegedly wrongful use. Under the facts of this

case, such allegations would require the court to substitute its

judgment for the FCC’s with regard to a licensing decision,

a core determination regarding market entry. 

[11] Although Telesaurus alleges that Radiolink’s operation of the VPC Frequencies was wrongful, at all times relevant to Telesaurus’s complaint Radiolink operated under a

valid FCC license granting it the authority to use those frequencies. Although the FCC subsequently modified the

license to delete the VPC Frequencies, Telesaurus’s tort

claims amount to a collateral challenge to the validity of the

license initially granted to Radiolink by the FCC. As we

stated in Shroyer, state tort law may not be used to reexamine

or reassess the FCC’s determinations. See Shroyer, 606 F.3d

at 663. Indeed, here, there is an irreconcilable conflict

between the FCC’s exclusive licensing authority, i.e. its

power to regulate market entry, and Telesaurus’s allegations

that Radiolink “wrongfully” or “unlawfully” operated under

its FCC license. See Nader, 426 U.S. at 299; 47 U.S.C.

§ 332(c)(3)(A). Because an adjudication of Telesaurus’s tort

claims would be necessarily equivalent to second-guessing

the FCC’s issuance of a license, they are expressly preempted

under the market entry prong of § 332(c)(3)(A). 47 U.S.C.

§ 332(c)(3)(A). 

17024 TELESAURUS v. POWER
[12] Telesaurus argues that even if a court’s adjudication

of its tort claims would require reconsideration of the FCC’s

licensing determination, its state tort claims are saved from

preemption under 47 U.S.C. § 414, the FCA’s savings clause.

This section provides that nothing in the FCA’s provisions

governing wire or radio communication “shall in any way

abridge or alter the remedies now existing at common law or

by statute,” but rather “are in addition to such remedies.” Id.

§ 414.10 The FCC addressed and rejected a substantially identical claim in In re Wireless, reasoning that “[u]nder accepted

principles of statutory construction . . . the savings clause cannot preserve state law causes of action or remedies that contravene express provisions of the Telecommunications Act.”

15 F.C.C.R. at 17040. We agree. As the Supreme Court has

explained, the savings clause of the Communications Act,

§ 414, preserves only those rights that are “not inconsistent”

with statutory requirements elsewhere in the FCA. Am. Tel. &

Tel. Co. v. Cent. Office Tel., Inc., 524 U.S. 214, 227-28

(1998). Accordingly, the Supreme Court concluded that the

savings clause could not be construed to preserve “a common

law right, the continued existence of which would be absolutely inconsistent with the provisions of the act. In other

words, the act cannot be held to destroy itself.” Id. at 228

(internal modifications omitted) (citing Tex. & Pac. R. Co. v.

Abilene Cotton Oil Co., 204 U.S. 426, 446 (1907)). Indeed, to

read § 414 expansively would “abrogate the very federal regulation of mobile telephone providers that the [FCA] intended

to create.” Bastien, 205 F.3d at 987. Section 332(c)(3)(A)

does not as a general matter preempt state tort and contract

actions, thus ensuring that § 414 has effect. See In re NOS

Commc’s, 495 F.3d 1052, 1058 (9th Cir. 2007) (“[S]ection

414 evidences Congressional intent to allow some state law

claims to proceed.”) (discussing Marcus v. AT&T Corp., 138

10Section § 414 provides: 

Nothing in this chapter contained shall in any way abridge or

alter the remedies now existing at common law or by statute, but

the provisions of this chapter are in addition to such remedies. 

TELESAURUS v. POWER 17025
F.3d 46, 54 (2d Cir. 1998)). Nevertheless, actions that have

the effect of regulating rates and market entry are expressly

preempted by § 332(c)(3)(A) and thus beyond the scope of

§ 414. 

[13] Telesaurus’s state-law claims, in effect, call upon the

court to deem “wrongful” actions that the FCC, under its

licensing authority, expressly authorized. Section

332(c)(3)(A) prohibits us from substituting our judgement for

that of the agency’s under the guise of a state-law tort claim.

See Shroyer, 606 F.3d at 662-63. We therefore conclude that

Telesaurus’s claims are expressly preempted, and affirm their

dismissal.

V

We conclude that the district court properly dismissed Telesarus’s claims under the FCA, but erred in denying leave to

amend. See 47 U.S.C. §§ 206-07. We affirm the dismissal of

Telesaurus’s claims under Arizona law for conversion, unjust

enrichment, and intentional interference with prospective economic advantage, because such claims are expressly preempted by section § 332(c)(3)(A) of the FCA. Id.

§ 332(c)(3)(A).

AFFIRMED IN PART & REVERSED IN PART;

REMANDED.

17026 TELESAURUS v. POWER