*

The Honorable John Feikens, Unite

Eastern District of Michigan, sitting by d

1

RECOMMENDED FOR FULL-

Pursuant to Sixth Circ

ELECTRONIC CITATION: 2000 F

File Name: 00a0

UNITED STATES COU

FOR THE SIXTH 

____________

GTE NORTH, INC.,

Plaintiff-Appellant,

v.

JOHN G. STRAND, et al.,

Defendants-Appellees.

Appeal from the United St

for the Western District of M

No. 98-00038—Robert Holme

Argued: Decembe

Decided and Filed: A

Before: BOGGS and NORRI

FEIKENS, Distri

____________

COUNSE

ARGUED: Patrick F. Philbin, Washington, D.C., for Appellant. OF THE ATTORNEY GENER
2 GTE North, Inc. v. Strand, et al. No. 98-1851

DIVISION, Lansing, Michigan, for Appellees. Charles W.Scarborough, UNITED STATES DEPARTMENT OFJUSTICE, CIVIL DIVISION, Washington, D.C., forIntervenors. ON BRIEF: Patrick F. Philbin, KIRKLAND &ELLIS, Washington, D.C., for Appellant. David A. Voges,Henry J. Boynton, OFFICE OF THE ATTORNEYGENERAL, PUBLIC SERVICE DIVISION, Lansing,Michigan, for Appellees. Charles W. Scarborough, UNITEDSTATES DEPARTMENT OF JUSTICE, CIVIL DIVISION,Washington, D.C., for Intervenors. Stephen F. Smith, DavidL. Lawson, Peter D. Keisler, SIDLEY & AUSTIN,Washington, D.C., for Amici Curiae.

_________________

OPINION

_________________

BOGGS, Circuit Judge. GTE North, Inc. (GTE), an

incumbent local telecommunications carrier in Michigan,sued the defendants, members of the Michigan Public ServiceCommission (MPSC or the Commission), under the FederalTelecommunications Act of 1996 (FTA or the Act) after theCommission issued an opinion and order directing GTE to (1)publish tariffs in which GTE would offer to sell elements ofits telecommunications network at rates predetermined by theCommission, and (2) allow competitors to purchase preassembled platforms of GTE network elements. In itscomplaint, GTE alleged that the MPSC’s order conflictedwith, and was preempted by, the FTA, and that enforcementof the order infringed GTE’s statutory rights in violation of 42U.S.C. § 1983. 

GTE moved for summary judgment, and the defendants

filed a cross-motion to dismiss for lack of subject matterjurisdiction. The district court granted the defendants’ motionand dismissed the case without prejudice, holding that it didnot have jurisdiction to review the MPSC’s order under42 U.S.C. § 252(e)(6), the FTA provision limiting federaljudicial review of state commission orders approving orrejecting final interconnection agreements, because the

No. 98-1851 GTE North, where the agency rule or action giving risnot contingent upon future uncertainties Ibid. The hardship prong concerns the ethe petitioner who would be compelled to of the challenged law. See id. at 153. 

In this case, the district court mus

inquiry demands that one of GTE’s compthe tariff rate before deciding the case, orise to a justiciable claim because it impoGTE to sell network elements at predeterby affirming state commissions’ san unduly expansive interpretation permit state regulatory authoritiereview orders alleged to be contfederal law.
22 GTE North, Inc. v. Strand, et al. No. 98-1851

7To determine whether a claim is ripe for decision, the reviewing

court must consider both the “fitness of the issues for judicial decisionand the hardship to the parties of withholding court consideration.”Abbott Laboratories v. Gardner, 387 U.S. 136, 149 (1967), overruled onother grounds by Califano v. Sanders, 430 U.S. 99 (1977). A case is “fitfor judicial decision” where the issues raised are purely legal ones and

established in the February 25 order against GTE. Thechallenged order was the product not of § 252 proceedings,

but of proceedings initiated by the MPSC under Michiganlaw, and as such may be independently enforced by theMichigan courts. The district court therefore erred inconcluding that § 252(e)(6) provides an adequate opportunityfor deferred review under either Califano or Thunder Basin.

It is presumably because § 252(e)(6) does not provide GTE

with an adequate assurance of federal review that the MPSCdoes not seriously defend on appeal the district court’sconclusion that §252(e)(6) satisfies Thunder Basin because it

defers, but does not preclude, federal review. Rather, theMPSC argues that “there is neither a need nor a requirementfor the federal District Court to review [the February 25order]” because that order is fully reviewable in Michiganstate court. Although this argument may be relevant to thequestion whether the district court should abstain fromdeciding GTE’s claims at this time, see Romine v.CompuServe Corp., 160 F.3d 337, 340–41 (6th Cir. 1998), itis wholly irrelevant to the question whether the court hasjurisdiction to hear GTE’s federal preemption challenges to astate commission order entered in a non-FTA proceeding. 

In upholding jurisdiction over GTE’s claims under § 1331,

we emphasize that it is precisely because state utilitycommissions play such a critical role in administering theFTA’s regulatory framework that they must operate strictlywithin the confines of the statute. We therefore REVERSEthe district court’s ruling, uphold its jurisdiction under§ 1331, and remand the case for determination on the meritsif and when the district court finds GTE’s claims ripe forreview.7 In so doing, we hope to further the goals of the FTA

No. 98-1851 GTE North, challenged directive was merely a

42 U.S.C. § 252(e)(6) (1996). district court’s decision to this cou

Based on the language and 

§ 252(e)(6), we conclude that treview set forth in that provision do that the district court has general feunder 28 U.S.C. § 1331 to hear February order. 

I

Before addressing the basis 

jurisdiction over GTE’s claims, describe the administrative context the challenged order. In the spring attempted to negotiate an intercoGTE pursuant to § 251 of the FTAin 1996 in an effort to promote commarkets by ending regulated monoby incumbent local exchange carrBefore Congress enacted the Fcommissions regulated local telecogranting companies that incurred tlocal networks the exclusive righareas covered by their systems. In eLECs allowed the state commissiorates. The FTA altered this prunderlying problem of atelecommunications markets in twcommissions’ authority to grant obligated incumbent LECs to pnetwork access. 

Although the FTA circumscribes 

to regulate local markets, it commissions from the FTA apcontrary, it invests them with authinterconnection agreements negotiAct, which requires LECs to per
4 GTE North, Inc. v. Strand, et al. No. 98-1851

utilize the LEC’s network and facilities; (2) purchaseunbundled network elements from the LEC; and (3) purchaseat wholesale rates any telecommunications service that theLEC provides at retail to subscribers who are nottelecommunications carriers. See 47 U.S.C. §251(c)(2)-(4)(1996); see also id. § 252 (establishing procedures fornegotiation, arbitration, and approval of interconnectionagreements). To facilitate new competitors’ entry into localmarkets, the FTA outlines specific procedures that LECs andnew market entrants must follow in negotiating, arbitrating,and approving interconnection agreements. See generally id.

§252 (1996). LECs and their competitors may negotiateinterconnection agreements voluntarily, through mediation, orthrough compulsory arbitration before a state utilitycommission. See id. § 252(a)-(b) (1996). When a finalagreement is reached, the telecommunications or public utilitycommission for the state in which the LEC is located mustapprove or reject the agreement. See id. § 252(e) (1996). 

Once a state commission rules on a proposed agreement,

Section 252(e)(6), the FTA provision at issue in this case,authorizes any aggrieved party to “bring an action in anappropriate Federal district court to determine whether theagreement . . . meets the requirements of section 251.” Id.

§ 252(e)(6) (1996). If a state commission fails to approve orreject a proposed agreement within a certain time – 30 daysfrom the date of submission if the agreement resulted fromcompulsory arbitration, or 90 days from the date submitted ifthe agreement resulted from voluntary negotiation ormediation – the Federal Communications Commission (FCC)may preempt the state commission’s jurisdiction and rule onthe validity of the agreement. See id. § 252(e)(4) - (5) (1996).

In this case, AT&T and Sprint petitioned the MPSC for

compulsory arbitration under § 252 when the negotiationsthey began with GTE in 1996 did not produce an agreement.In March 1997, before a final agreement was reached, GTEfiled a complaint in federal district court alleging that an orderissued by the MPSC on January 15, 1997, concerning GTE’sinterconnection obligations to Sprint and AT&T violated the

No. 98-1851 GTE North, 

6GTE was prudent to sue the M

Ex parte Young because it is virtualcommission’s decision to accept regulacannot legitimately be construed as a valid The Supreme Court’s recent decisions in CPrepaid Postsecondary Education ExpeFlorida Prepaid Postsecondary EducaSavings Bank, 119 S. Ct. 2219 (1999), decisions holding that the Eleventh Amenstate utility commissions because such cotheir immunity from suit by participatestablished by the FTA. See, e.g., MCI 

Illinois Commerce Comm’n, 183 F.3d (granting a petition for rehearing and supplemental briefs on the impact that thAlden v. Maine, 119 S. Ct. 2240 (1999), cases had on the court’s earlier decision)

It is precisely because the waiver 

reliable basis for seeking relief againdisagreed in Michigan Bell Telephone CoF.3d 862 (6th Cir. 2000), with the Sevent

premised our conclusion that the plaintagainst the MPSC solely on Ex parte You

to prospective injunctive relief, wuntil the Commission approvincorporating the challenged termtimely and adequate remedy by presustained while the order was in e

For the foregoing reasons, abst

this case. 

IV

In holding that GTE’s claims f

§ 252(e)(6), the district court effassurance of federal review because review is wholly contingent on a stto approve or reject a final inincorporating the terms of any chalneed not occur for a competito
20 GTE North, Inc. v. Strand, et al. No. 98-1851

the rule that only exceptional circumstances justify[abstention]”). Because the MPSC’s February order cannotbe described as “judicial” in nature, Younger does not requirethis court to abstain from ruling on the merits of GTE’sclaims. See id. at 371 (holding that a “judicial inquiry

investigates, declares and enforces liabilities as they stand onpresent or past facts and under laws supposed already toexist,” and concluding that the “establishment of a rate is themaking of a rule for the future, and therefore is an actlegislative and not judicial in kind”). Indeed, Younger

abstention would be especially inappropriate in this casebecause the Michigan Court of Appeals has alreadyconsidered and rejected the merits of GTE’s challenge to theMPSC’s 1997 orders. See GTE North, Inc. v. MPSC, No.198324 (unpublished opinion, December 30, 1997) (affirmingover GTE’s objection the rates established in the MPSC’sorder in case U-10860 and affirming the MPSC’s directive toconduct the cost study proceedings that gave rise to thedispute in this case). 

Finally, the district court is not required to abstain from

deciding this case under the Johnson Act, which prohibitsfederal courts from enjoining compliance with state ordersaffecting rates charged by a public utility only when, amongother things, “[j]urisdiction is based solely on diversity ofcitizenship or repugnance of the order to the FederalConstitution.” 28 U.S.C. § 1342 (1994). The Johnson Actdoes not require abstention in this case because jurisdictionover GTE’s claims is based on alleged violations of its rightsunder the FTA. 

In addition to the fact that the requirements for abstention

established by the Supreme Court are not satisfied in thiscase, abstention is not warranted here because waiting toreview the propriety of the February 25 order until it isincorporated into a final arbitration agreement will deny GTEa timely and adequate remedy at law. GTE, whose suitagainst the MPSC is based on Ex parte Young, 209 U.S. 123(1908), cannot recover damages for injuries sustained underthe challenged order. Because Young limits GTE’s recovery

No. 98-1851 GTE North, FTA. The district court dismissed that it did not have subject matter challenged order because it was nrejecting a final interconnection agv. Strand, No. 5:97-CV-20 (W.D. M47 U.S.C. § 252(e)(6)). Then, while arbitration proceediand AT&T were still pending, the state law proceedings against GTE in order to establish terms of intlocal exchange networks generaconcerned GTE as an LEC, but nothe AT&T and Sprint arbitration. general interconnection proceedingand Ameritech, as Michigan LCommission “Total Service Lon(TSLRIC) studies for both regutelecommunications services. In adGTE to publish tariffs in which Gnetwork elements and wholesale party at rates predetermined by responded to the Commission’s orrehearing in which GTE challengunbundled loops as confiscatory in MPSC denied GTE’s petition appealed the MPSC’s order to Appeals. On December 30, 199MSPC’s order, and the MPSC proAmeritech’s TSLRIC studies to entrants’ access to bundled and unand basic local exchange services 

On February 25, 1998, in t

proceedings against GTE and Amthe order contested in this appeal. the MPSC used GTE’s TSLRIC stat which GTE would be compelled elements to its competitors. In addthe FTA requirement that GTE al
6 GTE North, Inc. v. Strand, et al. No. 98-1851

pieces, or unbundled elements, of GTE’s local network didnot preclude GTE’s competitors from requesting access topre-assembled, fully operational local service platforms.Upon receiving the order, GTE sued the MPSC in the districtcourt, alleging that the Commission, acting pursuant toMichigan law, violated the FTA when it issued the February25 order: (1) directing GTE to provide competitors withaccess to pre-assembled, fully operational service platforms;and (2) requiring GTE to publish tariffs offering to sellelements of its network at rates predetermined by theCommission. 

In its motion for summary judgment, GTE argued that the

Commission’s mandate directing GTE to provide competitorswith access to pre-assembled network platforms violated§ 251(c)(3) of the FTA because that provision requires LECsto provide competitors with access only to “unbundlednetwork elements.” 47 U.S.C. § 251(c)(3) (1996) (emphasisadded). According to GTE, Congress deliberately limitedincumbent LECs’ obligation to grant competitors networkaccess by requiring LECs to provide competitors only with“unbundled,” or separated, network elements that the newcarrier would have to assemble before it could provideservice. Ibid. In addition, GTE argued that the portion of theFebruary order directing it to offer pre-assembled platformsto all potential competitors violated the FTA because the Actspecifically states that only competitors who requestunbundled access (“requesting carriers”) are entitled tonetwork access under § 251(c)(3), and then only afternegotiating individual interconnection agreements. See ibid.

GTE made a similar argument in challenging the MPSC’ssecond directive, which, according to GTE, violates the FTAbecause it requires LECs to publish tariffs offering to sellnetwork elements to all interested competitors atpredetermined rates even though §§ 251 and 252 of the Act

No. 98-1851 GTE North, 

Pullman abstention is similar

Pullman abstention is warranted challenged and resolution by the ststate law may obviate the fedechallenged law is susceptible of a cthat would eliminate the need to rSee, e.g., Babbit v. United Farm 

442 U.S. 289, 306 (1979) (interpretto abstain pending state review oinappropriate because the dicTelecommunications Act (pursuaissued the challenged order) are already considered GTE’s objectiondenied them, and denied GTE’s re

Younger abstention is also inapp

Supreme Court held that federal cdeciding cases within their jurisdicare ongoing state court proceedininvolve important state interests; aadequate opportunity to raise constproceedings. See GTE MobileNeF.3d 469, 481 (6th Cir. 1997). Ththree conditions for Younger aemphasizes that state proceedingdespite the Michigan courts’ rebecause GTE has a right pursua§ 462.26 to seek review of the Corder (and the Commission’s Marehearing) in the Michigan Court o

That GTE has a right to appeal 

the requirement that a federal Younger only if the parties are iproceedings. The Supreme Couravailability, or even the pendency“legislative or executive action” abstention. NOPSI, 491 U.S. at 3abstention in deference to state judi“legislative or executive action” w
18 GTE North, Inc. v. Strand, et al. No. 98-1851

express an opinion on the merits of GTE’s claims, but not onthe grounds urged by the defendants. Although the Michigancourts have concurrent jurisdiction over GTE’s § 1983 andpreemption claims, we should decline to decide this case onlyif the requirements for abstention established in Burford v.Sun Oil Co., 319 U.S. 315 (1943), Younger v. Harris, 401U.S. 37 (1971), or Railroad Comm’n of Texas v. Pullman Co.,312 U.S. 496 (1941), are met, or if abstention is warrantedunder the Johnson Act, 28 U.S.C. § 1342 (1994). 

Burford abstention is appropriate where “timely and

adequate state-court review is available” and:

(1) when there are difficult questions of state law bearingon policy problems of substantial public import whoseimportance transcends the result in the case then at bar;or (2) where the exercise of federal review of the questionin a case and in similar cases would be disruptive of stateefforts to establish a coherent policy with respect to amatter of substantial public concern.

New Orleans Public Service, Inc. v. Council of the City ofNew Orleans, 491 U.S. 350, 361 (1989) (NOPSI). Although

the MPSC was arguably trying to establish a “coherentpolicy” concerning local interconnection rates, Michigan statelaw clearly authorizes the dictates in the Commission’sFebruary 25 order. Because Congress has invested the federalcourts with primary responsibility for adjudicating FTAchallenges to state telecommunications regulations, andbecause this case does not concern a disputed issue of statelaw, but rather a potential conflict between state and federaltelecommunications laws, Burford abstention is inappropriate.See, e.g., NOPSI, 491 U.S. at 361 (holding Burford abstentioninappropriate because the plaintiffs’ case did not “involve astate-law claim, nor even an assertion that the federal claimsare in any way entangled in a skein of state law that must beuntangled before the federal case can proceed”) (internalquotation marks and citation omitted). 

No. 98-1851 GTE North, 

1Although GTE claims that it will be 

are not required to negotiate individual terGTE may suffer on this score will aruniversal subsidies are due to be phased 

Corp. v. Iowa Utilities Bd., 119 S. Ct. 721rule that the plaintiffs said would “evisresale and unbundled access” and amouarbitrage” on the grounds that the rule wanoting that, because “§ 254 requires that phased out, . . . whatever possibility of temporary”).

The counter-argument is, of cour

requirement established in the February 2the Commission approved an agreement iin the tariffs, GTE could not recover dainterim, nor could it “turn back the clock negotiations that would have prevailed if operating for months under tariffing arra24-25.

specifically require competitors to of access with LECs.1 See 47 U.S

Although GTE’s claims raise in

the scope and applicability of certathe district court did not address merits because it determined that i§ 252(e)(6) to review the MPSC’s July 1998 ruling, the court dismdeclaratory and injunctive relief on precludes federal review where a stissued a final order approving or reagreement. GTE argues on appeal in dismissing the case for lack of because the district court had genU.S.C. § 1331 to hear GTE’s claimwe express no opinion on the medetermine only whether the districentertain GTE’s challenge to the F
8 GTE North, Inc. v. Strand, et al. No. 98-1851

II

This court reviews de novo the district court’s denial of

GTE’s motion for summary judgment. See Greene v. Reeves,80 F.3d 1101, 1104 (6th Cir. 1996). We also review de novothe district court’s decision to dismiss GTE’s complaint forlack of subject matter jurisdiction. See Anderson v. LibertyLobby Inc., 477 U.S. 242, 249, 252 (1986); Musson

Theatrical, Inc. v. Federal Express Corp., 89 F.3d 1244, 1248(6th Cir. 1996). Lack of subject matter jurisdiction is anaffirmative defense that a defendant may assert in a motion todismiss. See Fed. R. Civ. P. 12(b)(1); In re DeLorean Motor

Co., 991 F.2d 1236, 1240 (6th Cir. 1993) (emphasizing thatto survive a motion to dismiss, a complaint must contain“either direct or indirect allegations respecting all materialelements to sustain a recovery under some viable legaltheory”). 

The party opposing dismissal has the burden of proving

subject matter jurisdiction. See Moir v. Greater Cleveland

Reg’l Transit Auth., 895 F.2d 266, 269 (6th Cir. 1990).Specifically, the non-moving party must show that thecomplaint “alleges a claim under federal law, and that theclaim is ‘substantial.’” Musson Theatrical, Inc. v. FederalExpress Corp., 89 F.3d 1244, 1248 (6th Cir. 1996) (holdingthat a complaint is “substantial” unless “prior decisionsinescapably render [it] frivolous”). That is to say, the nonmoving party will survive the motion to dismiss by showing“any arguable basis in law” for the claims set forth in thecomplaint. Ibid. In conducting our review, we “construe thecomplaint in a light most favorable to the plaintiff, accept astrue all of plaintiff’s well-pleaded factual allegations, anddetermine whether the plaintiff can prove no set of factssupporting [his] claims that would entitle him to relief.”Ludwig v. Board of Trustees of Ferris State Univ., 123 F.3d404, 408 (6th Cir. 1997). We review for clear error anyfactual findings the district court made in deciding the motionto dismiss. See Gafford v. General Elec. Co., 997 F.2d 150,

161 (6th Cir. 1993). 

No. 98-1851 GTE North, 

5 In Iowa, the Supreme Court revers

vacating, as inconsistent with the privatFTA, the FCC’s “pick-and-choose” ruleoffer network access to any potential enjoyed by earlier competitors who negotithe incumbent. The Eighth Circuit vacaallowed late market entrants to obtacompetitors’ agreements without having initial competitors had to make in ordeaccess. See id. at 738. In reversing the Erule, the Supreme Court rejected the arincumbents’ bargaining power and conegotiation provisions of the FTA, and apromulgate the rule on the basis that it tracFTA provision (§ 252(i)) “almost exactly

In the same opinion, the Supreme C

Circuit’s decision vacating FCC Rule 315LECs from separating already combined nthem to competitors under the “unbundled The Eighth Circuit determined that the rurequired leased access to “bundled” elemThe Supreme Court disagreed, finding thincumbents to grant competitors access to competitors may then “combine” and sabotage network elements that are § 251(c)(3) “does not say, or even remoteprovided only in this fashion and never in Ct. at 737. Noting that “§ 251(c)(3) is network elements may or must be separateFCC’s rule, which effectively requires ielements to competitors under certain circeven though the rule “could allow preassembled network.” Id. at 737–38.Court in AT&T Corp. v. Iowa Ut

(1999).5

III

The MPSC argues that, even if 

GTE’s claims, it would be pruderuling on the merits of the case untFebruary 25 order are incorporateagreement approved by the Com
16 GTE North, Inc. v. Strand, et al. No. 98-1851

preemption challenges to state commission orders issued innon-FTA proceedings. 

Indeed, to hold to the contrary would have enormous

negative implications: if only certain actions (final ordersapproving interconnection agreements) by state commissionsare reviewable in federal court, and if, as the district courtheld, § 252(e)(6) is the exclusive basis for judicial review ofstate commission actions that in any way relate tointerconnection agreements, state commissions may insulateregulatory requirements that violate the FTA from federal,and possibly even state, court review. This interpretation of§ 252(e)(6) conflicts with Congress’s decision to establishfederal procedures for negotiating interconnection rights andto concentrate judicial review of interconnection agreementsin the federal courts. It is also antithetical to the principle thatparties injured by a governmental entity’s failure to adhere tothe law may seek redress in the courts. Finally, denyingreview and forcing GTE either to violate the February 25order, or to comply with the general and immediateobligations imposed by the order in the hope that the orderwould one day be incorporated into a reviewable finalagreement, would undermine both the letter and spirit of theFTA. 

Section 252(e)(6) circumscribes federal review only of

cases born of § 252 proceedings. Because the MPSC’sFebruary 25 order was not the product of § 252 arbitration,but of an independent state law proceeding, § 252(e)(6) doesnot preclude jurisdiction over GTE’s claims. We thereforehold that federal review is available under § 1331 todetermine whether state commission orders violate federallaw except in cases in which the challenged regulatory actionis clearly an interlocutory order arising out of § 252proceedings. We confine our holding to the jurisdictionalquestion because it is for the district court to determine onremand whether the directives in the February 25 order violate§ 252 of the FTA as recently interpreted by the Supreme

No. 98-1851 GTE North, 

2Section 261 of the FTA provides tha

their own rules “in fulfilling requirementare not inconsistent with the provisions o(1996). State commissions may also impLECs if such requirements “are necessaprovision of telephone exchange accrequirements are not inconsistent with Commission’s regulations to implement 

3See 47 U.S.C. §§ 251(a)(1), 251(c

their competitors to negotiate in good conditions of interconnection agreement

Jurisdiction Over the Ch

Based on the scope of the appli

and the nature of the challenged odistrict court has general jurisdict§ 1331 to hear GTE’s claims. prohibits federal review of interloccourse of FTA proceedings, plainly of the February 25 order, whindependent state law proceeAT&T–Sprint arbitration. Moreinterpret § 252(e)(6) to encompaswould frustrate Congress’s incommissions to insulate from allegedly preempted by, or othertelecommunications law. We thecourt’s order dismissing GTE’s copinion on whether the order diassembled platforms and othepredetermined rates is preempted b

express no opinion on whether the order directing GTE to sell network competitor at rates predeterminepreempted by the FTA requiremeaccess to local networks by interconnection agreements.3
10 GTE North, Inc. v. Strand, et al. No. 98-1851

To survive a motion to dismiss based on lack of federal

question jurisdiction, the non-moving party must show firstthat its claims arise under federal law and, second, that § 1331jurisdiction is not “preempted by a more specific statutoryprovision conferring exclusive jurisdiction elsewhere.”Connors v. Amax Coal Co., 858 F.2d 1226, 1229-30 (7th Cir.

1988). GTE asserts that the district court has subject matterjurisdiction over its 42 U.S.C. § 1983 and federal preemptionclaims because: (1) such claims arise under the Constitutionand laws of the United States; and (2) the MPSC’sFebruary 25 order, which the parties agree was issuedpursuant to Michigan law, deprives GTE of its rights underthe FTA, thereby creating a cause of action for prospectiveinjunctive relief against the commissioners under 42 U.S.C.§ 1983 and Ex parte Young, 209 U.S. 123 (1908). We agree.

Because GTE’s claims arise under federal law, the district

court has jurisdiction under § 1331 to decide the case unlessGTE’s claims are subject to the limitations on federal reviewset forth in § 252(e)(6), which we conclude they are not. See

47 U.S.C. § 252(e)(6) (1996); Shaw v. Delta Air Lines, Inc.,463 U.S. 85, 96 n.14 (1983) (holding that a plaintiff who“seeks injunctive relief from a state [or local] regulation onthe ground that such regulation is preempted by federal law. . . presents a federal question which the federal courts havejurisdiction under 28 U.S.C. § 1331 to resolve”). Federalquestion jurisdiction over GTE’s claims is not preempted bythe FTA because § 252(e)(6) only circumscribes federaljudicial review of interlocutory orders issued in FTA, not statelaw, proceedings. See Connors, 858 F.2d at 1229–30. 

The text and legislative history of the FTA make clear that

§ 252(e)(6) is the exclusive basis for federal judicial reviewonly of orders entered in negotiation or arbitrationproceedings under § 252 of the Act. Section 252(e)(6)provides that, “[i]n any case in which a State commissionmakes a determination under this section, any party aggrieved

by such determination may bring an action in an appropriatefederal district court to determine whether the agreement orstatement meets the requirements of section 251 of this title

No. 98-1851 GTE North, state courts to defer to the MPSC]

interested buyer need not incorFebruary 25 order into a final arbitrGTE’s obligations under the ordprovide an “adequate procedure” breview of the MPSC’s directives. Tvalidity of the February 25 order in state court enforcement proceedproblem, because leaving resolutistate courts would clearly frustrate FTA. See, e.g., MFS Intelenet, 1(concluding that review of § 252 “that “Congress has created a uniquinviting state commissions to interconnection agreements, retawithin the federal courts to ensure tfederal requirements”). 

The district court has subject 

§ 1331 to review federal preemptDean Witter Reynolds, Inc., 151 The question in this case is simdivests the district court of its preemption claims because the Fitself a product of state law proceedmight one day be incorporateagreements approved by the MPSCCongress intended § 252(e)(6), wexclusive jurisdiction to review fcommission orders approving or agreements, to preclude federal revpermit telecommunications carrprocedures prescribed in the FTA access. We recognize, of course, tchallenged order’s state law origins debate among the parties and in thabsent clear evidence that Congrecommissions to issue orders that being incorporated into final intercwill not construe § 252(e)(6) to p
14 GTE North, Inc. v. Strand, et al. No. 98-1851

agreement was so strong as to eliminate the contingency andvirtually guarantee judicial review.

We disagree, and find that in this case § 252(e)(6) cannot

be relied upon to provide adequate federal review becausethere is a chance, regardless how small, that GTE’scompetitors may obtain service from GTE on the terms setforth in the February 25 order without ever executing a finalagreement. Indeed, we think the appropriate inquiry is notwhether, in the court’s estimation, it is more likely than notthat the challenged order will be incorporated into areviewable agreement, but whether there is any possibility atall that an LEC’s competitors could enforce the terms of thechallenged order by means other than those prescribed in theFTA. If there is such a chance, § 252(e)(6) does not providethe party challenging the order with adequate review underCalifano, and the federal district courts have generaljurisdiction to review the order under 28 U.S.C. § 1331. 

Under Michigan law, a buyer interested in purchasing

network elements from GTE at the rates established in theFebruary order need not execute a final interconnectionagreement with GTE to enforce the tariff; it need only petitiona state court for an injunction enforcing the terms of the tariffagainst GTE. See, e.g., Rinaldo’s Construction Corp. v.

Michigan Bell Telephone Co., 559 N.W.2d 647, 653–54(Mich. 1997). In Rinaldo’s, the Michigan Supreme Courtheld:

[W]here a plaintiff seeks relief against a telephonecompany in a [state] court of general jurisdiction, underValentine [v. Michigan Bell, 199 N.W.2d 182 (Mich.

1972)], the court may entertain (1) a cause of action intort, or (2) a claim that the telephone company hasviolated the regulatory code or tariffs. 

Id. at 653–54 (emphasis added). As the Michigan SupremeCourt went on to explain, “[c]auses of action in tort and thosecauses of action alleging that a telephone company hasviolated the tariffs or code are not cases in which the rationaleunderlying the doctrine of primary jurisdiction [requires the

No. 98-1851 GTE North, 

4In Strand, the district court not

“determination” subject to federal review the order approves or rejects a final inStrand, 1997 WL 811422, at *2 (quoting Supp. 800, 804 (E.D. Va. 1997)).and this section.” 47 U.S.C. § 25added). Because the MPSC proceedings that resulted in the chaof the procedures prescribed in the limit federal judicial review of the MPSC’s failure, thus far, to incorpin a final decision approving or reagreement does not bar review of 

In holding that GTE’s suit wa

MPSC had yet to issue a final § 252(e)(6), the district court redecision in GTE North v. Strand, 811422 (W.D. Mich.),4 and in so dolegal significance of the February 2As the district court implicitly acBell Telephone Co. v. MFS IntelenSupp. 2d 817, 823 (W.D. Mich. 1limited proposition that federal jurisdiction to review MPSC dec§ 252 process until after [an] intercbecome final by way of commissiIbid. (citing cases) (emphasis addedistinguished Strand and upheplaintiff’s challenge to an MPSC than approving or rejecting) an agreement. See id. at 823-24; cf. MStrand, 26 F. Supp. 2d 993, 9(emphasizing the “Congressionadistrict courts in preventinTelecommunications Act flowing for other decisions inconsistent witagreements”). In this case, as in Mdid not arise “during the § 252 pro
12 GTE North, Inc. v. Strand, et al. No. 98-1851

subject to the reasoning in Strand or the many other casescited by the lower court in which district judges have refusedto review interlocutory orders issued by state commissions inthe course of § 252 arbitrations. Id. at 823.

Although the order at issue in this case is clearly

distinguishable from an interlocutory order entered in a § 252proceeding, the commissioners urge us to overlook the order’sstate law origins because the order establishes rates that theparties agree will likely be incorporated in a final agreementsubject to review under § 252(e)(6). Were we to adopt thisapproach, we would simply equate the February 25 order withan interlocutory order in a § 252 proceeding that GTE couldnot challenge in federal court until the Commission issued afinal decision approving or rejecting an agreementincorporating the terms of the order. Recharacterizing theFebruary 25 order in this manner appears consistent with theFTA if one reads § 252(e)(6) broadly to govern not onlyclaims that a state utility commission erred in approving afinal agreement negotiated under § 252, but also claims thatthe commission violated the FTA by approving an agreementthat was not the product of a § 252 proceeding. Although thisconstruction of § 252(e)(6) is superficially appealing, wecannot adopt this approach and assume that GTE wouldeventually be able to seek federal review of the challengedorder because any approach that equates a decision arising outof independent state law proceedings with an interlocutoryorder in a § 252 arbitration ignores the critical fact that theformer may be enforced against the parties even if it is never

incorporated in a final interconnection agreement. 

At first blush, § 252(e)(6) seems to guarantee adequate,

albeit deferred, judicial review of the Commission’sFebruary 25 order. See, e.g., Thunder Basin Coal v. Reich,

510 U.S. 200 (1994) (holding that a statutory provision thatplaces temporal restrictions on a party’s ability to bring anaction in federal court still provides adequate opportunity forreview and therefore satisfies due process). As the districtcourt noted in its opinion, the parties agree that the ratesestablished in the Commission’s February 25 order will likely

No. 98-1851 GTE North, be incorporated into a final arbitraalone, this admission appears to uthat the district court has jurisdic§ 1331. Indeed, when combined assertion that it has been preveagreement incorporating the challhas not made certain filings, the pguarantees that, if GTE were to exthe MPSC or the FCC would apprthe challenged order, at which poireview under § 252(e)(6). See 47 (stating that a state commission “any” interconnection agreement ba requesting carrier, whether the avoluntary negotiation or binding acommission). The problem with § 252(e)(6) does not provide fochallenged order under Califano v. (1977), or even under Thunder Basthat an interested buyer could enfoin the February order in the Micexecuting a final interconnection a

In determining whether the low

over GTE’s claims despite the limicourt must look “not only [to] language, but to the design of the [object and policy.” Crandon v. Un158 (1990). Citing the Supreme Cothe district court correctly observehas provided an adequate proceduagency determination, alternative inapplicable.” Califano, 430 U.S. noted in its opinion that confining claims to the circumstances outlitheoretically deprive GTE of “Califano because such review wouMPSC’s approval of a final agrFebruary 25 order. However, probability that the order would b