1

RECOMMENDED FOR FULL-

Pursuant to Sixth Circ

ELECTRONIC CITATION: 2000 F

File Name: 00a0

UNITED STATES COU

FOR THE SIXTH 

____________

MICHIGAN BELL TELEPHONECOMPANY, d/b/a AmeritechMichigan,

Plaintiff-Appellee,

v.

CLIMAX TELEPHONECOMPANY,

Defendant,

JOHN G. STRAND, JOHN C.SHEA, and DAVID A.

SVANDA, Commissioners of

the Michigan Public ServiceCommission (In TheirOfficial Capacities and not asIndividuals),

Defendants-Appellants,

UNITED STATES OF AMERICA,FEDERAL COMMUNICATIONSCOMMISSION,

Intervenors.
2 Michigan Bell Telephone v. Climax

Telephone Co., et al.

No. 98-1315

Appeal from the United States District Court

for the Western District of Michigan at Grand Rapids.

No. 97-00197—Gordon J. Quist, District Judge.

Argued: April 29, 1999 

Decided and Filed: January 18, 2000

Before: JONES, BOGGS, and COLE, Circuit Judges.

_________________

COUNSEL

ARGUED: David A. Voges, OFFICE OF THE ATTORNEYGENERAL, PUBLIC SERVICE DIVISION, Lansing,Michigan, for Appellants. John E. Muench, MAYER,BROWN & PLATT, Chicago, Illinois, for Appellee. SusanPacholski, U.S. DEPARTMENT OF JUSTICE, CIVILDIVISION, APPELLATE STAFF, Washington, D.C., forIntervenors. ON BRIEF: David A. Voges, David M.Gadaleto, OFFICE OF THE ATTORNEY GENERAL,PUBLIC SERVICE DIVISION, Lansing, Michigan, forAppellants. John E. Muench, Robert M. Dow, Jr., TheodoreA. Livingston, MAYER, BROWN & PLATT, Chicago,Illinois, Jeffrey V. Stuckey, Joseph A. Fink, John M.Dempsey, Edward R. Becker, DICKINSON WRIGHT,Lansing, Michigan, for Appellee. Susan Pacholski, Mark B.Stern, U.S. DEPARTMENT OF JUSTICE, CIVILDIVISION, APPELLATE STAFF, Washington, D.C., forIntervenors. 

BOGGS, J., delivered the opinion of the court, in which

JONES, J., joined. COLE, J. (p. 13), delivered a separateopinion concurring in part and dissenting in part.
No. 98-1315 Michigan Bell 

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______________

AMENDED OP

______________

BOGGS, Circuit Judge. Clim

expanded its local exchange servicof Michigan Bell Telephone CoMichigan (“Ameritech”). Climax Public Service Commission (the “Pterms, conditions, and prices for inarrangements from Ameritech, ufederal Telecommunications Act o“Act”), 47 U.S.C. § 252, and “the [PSC’s] Order dated July 16, 199An arbitration panel rendered its parties objected. The PSC rejectethe arbitration panel’s decisiinterconnection agreement betweearbitration panel’s decision.

Ameritech sued Climax and the C

in their official capacities, seeking relief against enforcement of the inThe Commissioners moved to dismthem, citing provisions of the Actimmunity, and the Tenth and Eledistrict court denied the motionappeal its decision. We granted the Commission (“FCC”) intervenor judgment of the district court. Onis before us—the merits of the considered below.

I

Climax is an established local 

serving the Climax, Michigan areafiled an application with the PSC service in the greater Battle Creek 
4 Michigan Bell Telephone v. Climax

Telephone Co., et al.

No. 98-1315

1The terms of the agreement are not important for purposes of the case

now before us. The primary dispute in the case underlying the presentappeal involves a term of the agreement that requires Ameritech to chargeClimax local rates to terminate calls originating within Climax’s largelocal area (but outside Ameritech’s smaller local area), for whichAmeritech would otherwise charge toll rates. Ameritech argues that thisterm is contrary to §§ 251 and 252 of the Act.

area, where Ameritech is the incumbent provider. Theapplication showed that Climax intended to establish a localcalling area covering the geographical area served by fourAmeritech local calling areas. In late 1996, Climax andAmeritech began negotiating an interconnection agreementand reached resolution on all but seven issues.

On March 10, 1997, just before the end of the statutory

period for timely filing of petitions for arbitration, see 47

U.S.C. § 252(b)(1), Climax petitioned for arbitration.Pursuant to the procedures established in its opinion in casenumber U-11134, the PSC assigned the matter to anarbitration panel composed of two technical staff people andone administrative law judge. See Case No. U-11134, 1996WL 467772 (Mich. P.S.C. July 16, 1996). The paneladdressed the five open issues; on May 21, 1997, it adoptedClimax’s proposed resolution as to three issues, Ameritech’sproposed resolution as to one issue, and found that the fifthissue was not properly raised.

On June 25, 1997, the PSC adopted the decision of the

arbitration panel and ordered the parties to file theinterconnection agreement.1 One commissioner dissented.

On July 11, 1997, the parties filed the agreement. On July25, 1997, Ameritech moved for a rehearing, which the PSCdenied on August 13.

On September 12, 1997, Ameritech filed a complaint in

federal district court against Climax and the PSCCommissioners in their official capacity. Ameritech seeksdeclaratory determinations that (1) certain sections of the

No. 98-1315 Michigan Bell 

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__________________________

CONCURRING IN PART, DI

__________________________

R. GUY COLE, JR., concurring 

part. I am in complete agreemdisposition of the Commissionerclaim. I write separately because court has jurisdiction to consider tthe Commissioners’ other claims. 

The Commissioners’ Eleventh A

appealable under the collateral ordeMarie Tribe of Chippewa Indians 149 (6th Cir. 1993). However, tAmendment and § 252 claims are orders because those claims are not on appeal from a final judgment.” Livesay, 437 U.S. 463, 468-69 (claims do not fall under the doctjurisdiction because they are not with the Eleventh Amendment claAmendment claim could not be addressing the nonappealable claimDep’t of Human Servs., 145 F.3d denied, 119 S. Ct. 408 (1998). 

Accordingly, I would affirm the d

Commissioners’ motion to dismiAmendment, but dismiss the Commlack of jurisdiction.
12 Michigan Bell Telephone v. Climax

Telephone Co., et al.

No. 98-1315

the scope of a federal court’s inquiry, but it does not limit theproper parties for suit.

III

On de novo review, the Commissioners’ claims in this

interlocutory appeal lack merit as a matter of law. TheEleventh Amendment does not bar Ameritech’s suit becauseAmeritech is seeking injunctive relief against an ongoingviolation of federal law. The Tenth Amendment does not barthe suit because the federal government did not commandeerstate resources. Michigan chose to regulate interconnectionagreements. Finally, the Act does not jurisdictionally bar thesuit. Accordingly, the district court’s denial of theCommissioners’ motion to dismiss is AFFIRMED and thecase is REMANDED for trial.

No. 98-1315 Michigan Bell 

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agreement violate the Act, the impllaw, and the United States Constitujurisdiction to decide one of the issto enjoin enforcement of those sectto reform the agreement.

On November 24, 1997, the Co

dismissed as defendants, on groundlacked personal jurisdiction over failed to state a claim on which rdistrict court heard oral argument aCommissioners appeal the denial This court ordered the Commissionappeal should not be dismissed fo6th Circuit Docket, Case No. 98-1the Commissioners’ further shwithdrawn on the ground that disdismissal on Eleventh Amendmencollateral orders. See Order, Cas1998.

II

Where the district court bases 

dismiss for failure to state a clsufficiency of the plaintiff’s case, novo. See Barrett v. Harrington, 11997) (citing RMI Titanium v. We78 F.3d 1125, 1134 (6th Cir. 1996in the complaint are accepted as trCounty, 814 F.2d 277, 279 (6th Ci

“Where a trial court’s ruling on j

on the resolution of factual disputeaccept the district court’s factual clearly erroneous. However, revapplication of the law to the facts iv. Westinghouse Elec. Corp., 78 F
6 Michigan Bell Telephone v. Climax

Telephone Co., et al.

No. 98-1315

1996) (internal citations removed) (citing Ynclan v. Dep’t ofthe Air Force, 943 F.2d 1388, 1390 (5th Cir. 1991)).

Questions of statutory interpretation, like all matters of law,

are reviewed de novo. See United States v. Brown, 915 F.2d

219, 223 (6th Cir. 1990).A. The Telecommunications Act of 1996

Congress enacted the FTA to promote competition in all

telecommunications markets, including the local servicemarket. See H.R. Conf. Rep. No. 104-458, at 113 (1996),

reprinted in 1996 U.S.C.C.A.N. 124. Title I, Part II of theAct provides standards and procedures to allow startupcarriers to interconnect their networks to the incumbentcarrier’s network, to access the incumbent carrier’s networkelements piece-by-piece, to purchase the incumbent carrier’sretail services “at wholesale rates” for resale, and to accessthe incumbent carrier’s physical infrastructure and facilitiesfor connection purposes. 47 U.S.C. §§ 251(b)(4) and251(c)(6). The Act contemplates that state public utilitycommissions will assume regulatory authority overinterconnection agreements; if a state chooses not to do so “inany proceeding or other matter under this section,” the FCCwill assume regulatory authority “with respect to theproceeding or matter.” 47 U.S.C. § 252(e)(5).

The Act requires incumbent providers to negotiate in good

faith with new entrants; if the parties cannot resolve theirdifferences, either party may petition the regulatory authorityfor arbitration of the unresolved issues. See 47 U.S.C.

§§ 251(c), 252(b). The arbitration panel “shall limit itsconsideration of any petition [for arbitration] (and anyresponse thereto) to the issues set forth in the petition and inthe response, if any . . . .” 47 U.S.C. § 252(b)(4)(A). Thearbitration panel must ensure that its resolution meets therequirements of § 251 and the FCC regulations implementing§ 251, see 47 U.S.C. § 252(c)(1), and the regulatory authority

may reject an arbitrated resolution only if it does not meet

No. 98-1315 Michigan Bell 

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The Commissioners’ Tenth Am

unavailing. The Commissioners New York v. United States, 505 Uv. United States, 521 U.S. 98 (199suit as a “commandeering” of stchose to regulate interconnection It could have chosen not to participnot have arbitrated and reviewed Ameritech and Climax. Michigan review the agreement, precisely tThe state cannot have it both ways. compel its actions and, consequendoes not bar Ameritech’s suit. Seeat 167, 179 (Congress may offeregulating activity); FERC v. Miss(1982).

Finally, the Commissioners argu

parties under § 252(e)(6). They provides that “[i]n any case in wmakes a determination . . . , any determination may bring an action district court to determine whethethe requirements of section 251 [aother party to the agreement is the oThis argument misses the point. T(e)(6) is “Review of State commadded). It is the PSC’s duty, if it cother party’s, to ensure that threquirements of the Act both at tU.S.C. § 252(c), and at the tim§ 252(e)(2)(B). Furthermore, it is tother party’s, to enforce the agreeenjoin the PSC from enforcing federal courts would have little effeplaintiffs, or would subject comprospect of conflicting commandstate regulatory agencies. The lan
10 Michigan Bell Telephone v. Climax

Telephone Co., et al.

No. 98-1315

v. Arte Publico Press, 157 F. 3d 282 (5th Cir. 1998)). Accord Bell

Atlantic-Md., Inc., v. MFS Intelenet of Md., Inc., Civil Case No. S 99-2061 (D. Md. Oct. 29, 1999).

The Ex parte Young doctrine operates as an exception to the

general rule of sovereign immunity that states may only besued with their consent. Under Ex parte Young, suits againststate officials seeking equitable relief for ongoing violationsof federal law are not barred by the Eleventh Amendment. Exparte Young, 209 U.S. at 159-60. The PSC not only approvedthe interconnection agreement, it is responsible for ongoingenforcement of the agreement. Ameritech alleges that theagreement violates federal law, and is seeking equitable relief.Taking the alleged facts as true, as we are required to do whenreviewing a dismissal for failure to state a claim, Ameritechhas stated a claim against the Commissioners, and thusagainst the state of Ohio, for equitable relief from an ongoingviolation of federal law. Under Ex parte Young, Ameritechis entitled to proceed.

Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996)

and Idaho v. Coeur d’Alene Tribe, 521 U.S. 261 (1997), donot affect the application of Ex parte Young to § 252 cases.Recently, the Supreme Court once again affirmed the vitalityof Ex parte Young, even while strongly reaffirming states’rights against suit. See Alden v. Maine, ___ U.S. ___, 119 S.

Ct. 2240, 2266-68 (1999) (sovereign immunity does not barcertain actions against state officers for injunctive ordeclaratory relief) (contrasting Ex parte Young with Seminole

Tribe and Coeur d’Alene Tribe).

If Ameritech is correct in its claim that the agreement

violates federal law, the PSC’s ongoing enforcement of theinterconnection agreement constitutes an ongoing violation offederal law, against which Ameritech seeks injunctive relief.Therefore, under Ex parte Young, the Eleventh Amendment

does not bar Ameritech’s suit against the Commissioners. 

No. 98-1315 Michigan Bell 

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those requirements, see 47 U.S.C

state acts as the regulatory authorit[its] determination may bring an Federal district court to determine statement meets the requirements and this section [252].” 47 U.S.expressly deprives state courts of approval or rejection of an agreeauthorities. See 47 U.S.C. § 252(e

B. Issues Presented on Appeal

The Commissioners raise four is

proper parties in a federal court aU.S.C. § 252(e); (2) whether the Enaming the Commissioners in this in arbitrating the agreement, waive(4) whether the Tenth AmendCommissioners in this suit. Amwhether this court has jurisdiction review of the Commissioners’ “pAmendment claims.

Ameritech and the FCC both ci

cases, twenty-three altogether, eacregulatory agency’s motion to dismCircuit became the first appellate cMCI Telecommunications CorpComm’n, 168 F.3d 315 (7th Cir. the Commissioners’ Eleventh Aaffirmed the district court’s denial C. Jurisdiction to Decide the A

“Ordinarily, appellate jurisdict

appeal from an order denying a dismiss since such an order is interlCorp. Indus. v. McGraw, 125 F.3d see also Hill v. New York, 45 F.3d 6
8 Michigan Bell Telephone v. Climax

Telephone Co., et al.

No. 98-1315

denial of a motion to dismiss is ordinarily considered nonfinal, and therefore not immediately appealable”).

The Commissioners invoke the jurisdiction of this court

pursuant to 28 U.S.C. § 1291 and the collateral order doctrineof Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541,545–46 (1949). “The courts of appeals . . . shall havejurisdiction of appeals from all final decisions of the districtcourts of the United States.” 28 U.S.C. § 1291. To beappealable as a collateral order, a district court’s order must1) conclusively decide the disputed issue; 2) resolve animportant issue separate and independent from the merits ofthe action; and 3) be effectively unreviewable on appeal froma final judgment. Coopers & Lybrand v. Livesay, 437 U.S.463, 468–69 (1978). The Commissioners assert that theirTenth and Eleventh Amendment claims were conclusivelydetermined by the district court, that they are completelyseparate from Ameritech’s claim that the agreement isinconsistent with federal law, and that they would beeffectively unreviewable on appeal from a final judgment.The Commissioners also argue that the Tenth Amendmentclaim is “inextricably intertwined” with their other claims,and assert jurisdiction under the doctrine of “pendentappellate jurisdiction.” See Chambers v. Ohio Dep’t ofHuman Servs., 145 F.3d 793, 797 (6th Cir. 1998).

Ameritech concedes that this court has jurisdiction to hear

the Commissioners’ Eleventh Amendment claim. See PuertoRico Aqueduct and Sewer Authority v. Metcalf & Eddy, Inc.,506 U.S. 139, 142–48 (1993); Sault Ste. Marie Tribe ofChippewa Indians v. Michigan, 5 F.3d 147, 149 (6th Cir.1993). Ameritech argues that this court does not have

jurisdiction to hear the claim that the Commissioners are notproper parties, nor the claim that the Act violates the TenthAmendment. The district court’s order is not a propercollateral order with respect to either claim, Ameritechcontends, nor is either claim “inextricably intertwined” withthe Eleventh Amendment claim to confer jurisdiction. See

Chambers, 145 F.3d at 797 (“pendent appellate jurisdiction

No. 98-1315 Michigan Bell 

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2Similarly, the Seventh Circui

Telecommunications Corp. v. Illinois Co(7th Cir. 1999), against the Illinois Commwith the result, we do not base our decisibecause the court reached its decision by adoctrine, which has since been limited by Savings Bank v. Florida Prepaid PostsecS. Ct. 2219 (1999), and did not reach the E168 F.3d at 320-23, amended 183 F.3d 55

has subsequently granted rehearing en b567-68.

On March 29, 1999, the Middle D

became the first court to grant immunity AT&T Communications of South CTelecommunications, Inc., 43 F. Supp. court considered itself bound by Fifth Seminole Tribe as extinguishing waiver. 

. . . only may be exercised when thcannot be resolved without addrcollateral issue”). Clearly, the Elcan be resolved without resolving 

All of the Commissioners’ c

independent of the issue of wconsistent with federal law, have bbelow, and would be effectively una final judgment. We must decide claim in any event, and it woulresources not to hear the other claiCommissioners’ claims are unavaD. Discussion

Although the Commissioners di

court is a straightforward Ex parte Young, 209 U.S. 123 (1908). Moaddressed this issue have applied thand denied the state regulatory dismiss.2 We now do the same.