Source: https://supreme.justia.com/cases/federal/us/550/45/dissent.html
Timestamp: 2016-10-28 04:42:40
Document Index: 382397733

Matched Legal Cases: ['§201', '§206', '§3', '§227', '§227', '§227', '§227', '§276', '§201', '§551', '§201', '§201', '§201', '§201', '§201', '§276', '§206', '§407', '§205', '§201', '§205', '§201', '§205', '§201', '§201']

Global Crossing Telecommunications, Inc. v. Metrophones Telecommunications, Inc. (Dissent by Justice Scalia) :: 550 U.S. 45 (2007) :: Justia U.S. Supreme Court Center Log In
The Court coyly avoids rejecting the first proposition. But make no mistake: that proposition is utterly implausible, which is perhaps why it is nowhere to be found in the FCC’s opinion. The unjustness or unreasonableness in this case, if any, consists precisely of violating the FCC’s payphone-compensation regulation.[Footnote 1] Absent that regulation, it would be neither unjust nor unreasonable for a carrier to decline to act as collection agent for payphone companies. The person using the services of the payphone company to obtain access to the carrier’s network is not the carrier but the caller. It is absurd to suggest some natural obligation on the part of the carrier to identify payphone use, bill its customer for that use, and forward the proceeds to the payphone company. As a regulatory command, that makes sense (though the free-rider problem might have been solved in some other fashion); but, absent the Commission’s substantive regulation, it would be in no way unjust or unreasonable for the carrier to do nothing. Indeed, if a carrier’s failure to pay payphone compensation had been unjust or unreasonable in its own right, the Commission’s payphone-compensation regulation would have been unnecessary, and the payphone companies could have sued directly for violation of §201(b).
The only serious issue presented by this case relates to the second proposition: whether a practice that is not in and of itself unjust or unreasonable can be rendered such (and thus rendered in violation of the Act itself) because it violates a substantive regulation of the Commission. Today’s opinion seems to answer that question in the affirmative, at least with respect to the particular regulation at issue here. That conclusion, however, conflicts with the Communications Act’s carefully delineated remedial scheme. The Act draws a clear distinction between private actions to enforce interpretive regulations (by which I mean regulations that reasonably and authoritatively construe the statute itself) and private actions to enforce substantive regulations (by which I mean regulations promulgated pursuant to an express delegation of authority to impose freestanding legal obligations beyond those created by the statute itself). Section 206 of the Act establishes a private cause of action for violations of the Act itself—and violation of an FCC regulation authoritatively interpreting the Act is a violation of the Act itself. (As the Court explains, when it comes to regulations that “reasonabl[y] [and] authoritatively construe the statute itself,” Alexander v. Sandoval, 532 U. S. 275, 284 (2001), “it is ‘meaningless to talk about a separate cause of action to enforce the regulations apart from the statute.’ ” Ante, at 8 (quoting Sandoval, supra, at 284).) On the other hand, violation of a substantive regulation promulgated by the Commission is not a violation of the Act, and thus does not give rise to a private cause of action under §206. See, e.g., APCC Servs., Inc. v. Sprint Communications Co., 418 F. 3d 1238, 1247 (CADC 2005) (per curiam), cert. pending, No. 05–766; Greene v. Sprint Communications Co., 340 F. 3d 1047, 1052 (CA9 2003), cert. denied, 541 U. S. 988 (2004); P. Huber, M. Kellogg, & J. Thorne, Federal Telecommunications Law §3.14.3 (2d ed. 1999).[Footnote 2] That is why Congress has separately created private rights of action for violation of certain substantive regulations. See, e.g., 47 U. S. C. §227(b)(3) (violation of substantive regulations prescribed under §227(b) (2000 ed. and Supp. III)); §227(c)(5) (violation of substantive regulations prescribed under §227(c)). These do not include the payphone-compensation regulation authorized by §276(b).
The Court naively describes the question posed by this case as follows: Since “[a] practice of violating the FCC’s order to pay a fair share would seem fairly characterized in ordinary English as an ‘unjust practice,’ . . . why should the FCC not call it the same under §201(b)?” Ante, at 15. There are at least three reasons why it is not as simple as that. (1) There has been no FCC “order” in the ordinary sense, see 5 U. S. C. §551(6), but only an FCC regulation.[Footnote 3] That is to say, the FCC has never determined that petitioner is in violation of its regulation and ordered compliance. Rather, respondent has alleged such a violation and has brought that allegation directly to District Court without prior agency adjudication. (2) The “practice of violating” virtually any FCC regulation can be characterized (“in ordinary English”) as an “unjust practice”—or if not that, then an “unreasonable practice”—so that all FCC regulations become subject to private damage actions. Thus, the traditional (and textually based) distinction between private enforceability of interpretive rules, and private nonenforceability of substantive rules is effectively destroyed. And (3) it is not up to the FCC to “call it” an unjust practice or not. If it were, agency discretion might limit the regulations available for harassing litigation by telecommunications competitors. In fact, however, the practice of violating one or another substantive rule either is or is not an unjust or unreasonable practice under §201(b). The Commission is entitled to Chevron deference with respect to that determination at the margins, see Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984), but it will always remain within the power of private parties to go directly to court, asserting that a particular violation of a substantive rule is (“in ordinary English”) “unjust” or “unreasonable” and hence provides the basis for suit under §201(b).
Footnote 1 See In re the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, 18 FCC Rcd. 19975, 19990, ¶32 (2003) (“[F]ailure to pay in accordance with the Commission’s payphone rules, such as the rules expressly requiring such payment … constitutes … an unjust and unreasonable practice in violation of section 201(b)”); In re APCC Servs., Inc. v. NetworkIP, LLC, 21 FCC Rcd. 10488, 10493, ¶15 (2006) (“[F]ailure to pay payphone compensation rises to the level of being ‘unjust and unreasonable’ ” because it is “a direct violation of Commission rules”); id., at 10493, ¶15, and n. 46 (“The fact that a failure to pay payphone compensation directly violates Commission rules specifically requiring such payment distinguishes this situation from other situations where the Commission has repeatedly declined to entertain ‘collection actions’ ”).
Footnote 2 The Court asserts that “[n]one of th[ese] [cases] involved an FCC application of, or an FCC interpretation of, the relevant section, namely §201(b)[,] nor did any involve a regulation—substantive or interpretive—promulgated subsequent to the authority of §201(b).” Ante, at 16. I agree. They involved the payphone-compensation regulation, which was not promulgated pursuant to §201(b), but pursuant to §276. The relevant point is that violations of substantive regulations are not directly actionable under §206.
Footnote 3 The Court’s departure from ordinary usage is made possible by the fact that “the FCC commonly adopts rules in opinions called ‘orders.’ ” New England Tel. & Tel. Co. v. Public Util. Comm’n of Me., 742 F. 2d 1, 8–9 (CA1 1984) (Breyer, J.). If there had been violation of an FCC order in this case, a private action would have been available under §407 of the Act.
Footnote 4 The Court further asserts that the “the FCC has long set forth what we now call ‘substantive’ (or ‘legislative’) rules under §205,” “violations of [which] … have clearly been deemed violations of §201(b),” ante, at 16. The §205 orders to which the Court refers are not substantive in the relevant sense because they interpret §201(b)’s prohibition against unjust and unreasonable rates or practices. See ante, at 7 (§205 “authoriz[es] the FCC to prescribe reasonable rates and practices in order to preclude rates or practices that violate §201(b)”). The payphone-compensation regulation, by contrast, does not interpret §201(b) or any other statutory provision.