Opinion ID: 493663
Heading Depth: 2
Heading Rank: 1

Heading: JURISDICTION UNDER 47 U.S.C. Sec. 401(b)

Text: 11 Questions of subject matter jurisdiction and statutory interpretation are reviewed in this court de novo. Carpenters Southern California Admin. Corp. v. Majestic Housing, 743 F.2d 1341, 1343 (9th Cir.1984); Southeast Alaska Conservation Council, Inc. v. Watson, 697 F.2d 1305, 1309 (9th Cir.1983). 47 U.S.C. Sec. 401(b) states: 12 If any person fails or neglects to obey any order of the [FCC] other than for the payment of money, while the same is in effect, the [FCC] or any party injured thereby ... may apply to the appropriate district court of the United States for the enforcement of such order. If, after hearing, that court determines that the order was regularly made and duly served, and that the person is in disobedience of the same, the court shall enforce obedience to such order by a writ of injunction or other proper process, mandatory or otherwise, to restrain such person or the officers, agents, or representatives of such person, from further disobedience of such order, or to enjoin upon it or them obedience to the same. 13 The threshold questions in this case are whether a state utility regulatory body is a person and whether, as a rulemaking or nonadjudicatory order, FCC Order 81-312 is an order regularly made within the meaning of Section 401(b). 14
15 The definitional section of the Communications Act, 47 U.S.C. Sec. 153, provides that: [U]nless the context otherwise requires.... 'Person' includes an individual, partnership, association, joint-stock company, trust, or corporation. Id. Sec. 153(i). The Act defines state commission as the commission, board, or official (by whatever name designated) which under the laws of any State has regulatory jurisdiction with respect to intrastate operations of carriers. Id. Sec. 153(t). 16 In support of their contention that the district court lacked subject matter jurisdiction to grant injunctive relief because the PUC is not a person for purposes of Sec. 401(b), appellants principally rely on the Vermont district court's decision in New England Telephone & Telegraph Company v. Public Service Board of Vermont, 576 F.Supp. 490 (D.Vt.1983), vacated as moot, 794 F.2d 677 (2d Cir.1984). 6 In that case, the district court held that because the definition of person in Sec. 153(i) includes a series of specific categories that do not encompass state utility commissions, the term person should not be interpreted to include such commissions. New England Tel. & Tel., 576 F.Supp. at 493-95. 17 We disagree with appellants' argument and the district court's analysis in New England Tel. & Tel. The design of the statute leads us to conclude that the PUC itself is a person for purposes of Sec. 401(b) 7 . Section 153(i) does not specify the meaning of person in the Communications Act, but instead lists several categories of entities that the term includes. 8 Thus, the definition of person is open-ended and not restricted to the examples enumerated in the statute. 9 Furthermore, Sec. 153 expressly gives courts leeway to interpret terms in the Act [as] the context ... requires. 47 U.S.C. Sec. 153. 18 The purposes of Sec. 401(b) and the structure of the Act strongly suggest that the PUC can be enjoined under Sec. 401(b). 10 Section 401(b) is the sole mechanism Congress provided for the FCC, the federal government, or private parties to obtain enforcement of FCC orders against noncarriers. 11 Under appellants' interpretation, state regulatory commissions would be exempt from this statutory scheme. Rather than being required to challenge FCC orders under Sec. 402, 12 state commissions would be free to violate FCC orders with impunity. They would be equally immune to private enforcement actions and to enforcement actions brought by the FCC and the federal government. 19 State commissions have the same opportunity as others to seek review of FCC orders under Sec. 402. See, e.g., State Corporation Commission v. FCC, 787 F.2d 1421 (10th Cir.1986); New York State Commission on Cable TV v. FCC, 669 F.2d 58, 62 n. 8 (2d Cir.1982); North Carolina Utilities Commission v. FCC, 552 F.2d 1036 (4th Cir.), cert. denied, 434 U.S. 874, 98 S.Ct. 222, 54 L.Ed.2d 154 (1977). No logical ground supports excluding state commissions from the group of persons against whom enforcement of orders may be sought. New England Telephone & Telegraph Company v. Public Utilities Commission, 570 F.Supp. 1558, 1569 (D.Me.1983), rev'd on other grounds, 742 F.2d 1 (1st Cir.1984), cert. denied, --- U.S. ----, 106 S.Ct. 2902, 90 L.Ed.2d 988 (1986). Moreover, since Sec. 401(a), which authorizes district courts to enjoin violations of the Act itself, also contains the term person, state commissions would be immune from enforcement of the Act in general. 13 It is unlikely that Congress could have intended this result. 20 We hold that the PUC is a person for purposes of Sec. 401(b). 14 We also note that, even if the PUC does not itself constitute a person subject to a Sec. 401(b) enforcement action, the individual Commissioners clearly are individuals under Sec. 153(i). 15 Because the Commissioners qualify as persons for purposes of Sec. 401(b) injunctions, the district court would not lack subject matter jurisdiction even if the PUC were not a person. 21
22 The next question is whether FCC Order 81-312 constitutes an order of the Commission within the meaning of Sec. 401(b). 16 Appellants maintain that it does not because the Order resulted from a rulemaking as opposed to an adjudicatory proceeding. The gist of appellants' argument has been accepted by the First Circuit. New England Telephone & Telegraph Co. v. Public Utilities Commission of Maine, 742 F.2d 1 (1st Cir.1984), cert. denied, --- U.S. ----, 106 S.Ct. 2902, 90 L.Ed.2d 988 (1986) [hereafter New England Telephone v. Maine ]. In contrast, the Seventh Circuit has affirmed the grant of an injunction under Sec. 401(b) to enforce a nonadjudicatory order. Illinois Bell Telephone Company v. Illinois Commerce Commission, 740 F.2d 566, 571 (7th Cir.1984). 23 In New England Telephone v. Maine, the First Circuit based its decision primarily on two grounds. First, the court adopted the distinction between rules and orders that appears in the Administrative Procedure Act 17 . Second, it concluded that the central role of the FCC in enforcing the Communications Act, and its sole power to seek injunctions under Sec. 401(a), suggested that the scope for private enforcement under Sec. 401(b) should be narrow. 18 The court therefore concluded that an FCC directive that it considered to be the product of a rulemaking proceeding, and that was not specifically directed at the parties against whom enforcement was sought, was not enforceable under Sec. 401(b). 24 Like several other circuit courts, 19 we disagree with the First Circuit's reasoning. So did the FCC. See New England Telephone v. Maine, 742 F.2d at 10-11. 25 To begin with, we find no authority supporting the proposition that the APA's rule-order distinction should be imported into the Communications Act. See 5 U.S.C. Sec. 551 (use of APA's definitions is mandatory only when APA itself is applicable). In fact, the Communications Act's legislative history indicates that Sec. 401(b) was modeled in part after Sec. 16(12) of the Interstate Commerce Act, 49 U.S.C. Sec. 16(12) (repealed). The wording of the two provisions is virtually identical, see S.Rep. No. 781, 73d Cong., 2d Sess. 9 (1934). In Pacific Fruit Express Company v. Akron, Canton & Youngstown Railroad, 524 F.2d 1025, 1028-31 (9th Cir.1975), cert. denied, 424 U.S. 911, 96 S.Ct. 1107, 47 L.Ed.2d 315 (1976), we held that Sec. 16(12) authorizes private in junctive actions to enforce ICC rules. The same result would seem to follow for FCC rules under Sec. 401(b). 26 Second, the language of other sections of the Communications Act shows that Congress did not intend to limit Sec. 401(b) exclusively to adjudicatory orders as the APA defines them. When Congress intended the APA's definition of a given term to be incorporated into the Communications Act, it said so. E.g., 47 U.S.C. Secs. 409(a)-(c) (incorporating APA's definition of adjudication). Congress never provided that the APA's definition of order should extend to Sec. 401(b). 20 27 We do not believe that our interpretation of Sec. 401(b) displaces the FCC from its central role in the enforcement of the Act. The FCC has broad discretion to act through either case-by-case adjudication or the rulemaking process. See United States v. Southwestern Cable Company, 392 U.S. 157, 180-81, 88 S.Ct. 1994, 2006-07, 20 L.Ed.2d 1001 (1968); see also SEC v. Chenery Corporation, 332 U.S. 194, 202-03, 67 S.Ct. 1575, 1580-81, 91 L.Ed. 1995 (1947) (citing CBS, Inc. v. United States, 316 U.S. 407, 421, 62 S.Ct. 1194, 1202, 86 L.Ed. 1563 (1942)). Thus, the FCC can tailor directives to the needs of particular circumstances. Moreover, the FCC can intervene or file amicus briefs in Sec. 401(b) actions or even invoke the doctrine of primary jurisdiction. See, e.g., United States v. Yellow Freight System, Inc., 762 F.2d 737, 739 (9th Cir.1985) (primary jurisdiction doctrine authorizes suspension of district court proceedings to allow agency to express views on pending issues within agency's special competence); but see New England Telephone v. Maine, 742 F.2d at 11 (noting that primary jurisdiction doctrine lacks needed clarity and efficiency). These mechanisms help to prevent substantially inconsistent application of FCC rules and serious judicial encroachment on FCC responsibilities. 28 We need not decide today whether every rule, order, or regulation promulgated by the FCC is an enforceable order under Sec. 401(b), however. The language of the particular order in question, and the proceedings leading up to it, demonstrate that the FCC intended Order 81-312 to require particular actions be taken by the PUC and private carriers providing service to Hawaii. 21 Appellant PUC conceded that it must abide by those FCC-mandated separations procedures. Under the circumstances, we conclude that FCC Order 81-312 was appropriately interpreted as an order for enforcement by injunction in the district court. 29
30 Appellants' final challenge to jurisdiction under Sec. 401(b) seizes upon that section's requirement that an order be regularly made by the FCC. They contend that a substantive determination must be made that the FCC had authority to make Order 81-312. Appellants argue that the Commission was without authority to mandate a specific separations method for intrastate ratemaking. 31 We think that regularly made in Sec. 401(b) simply refers to procedural regularity. The substantive validity of FCC orders can be challenged only through actions under Sec. 402(a). ITT World Communications, Inc., 466 U.S. at 468 & n. 5, 104 S.Ct. at 1939 & n. 5 (also noting in dicta that challenges to validity of past agency conduct should be brought through actions for FCC declaratory rulings under doctrine of primary jurisdiction, not in district courts). It would defeat the purpose of Sec. 402(a) to interpret Sec. 401(b) to require a threshold finding of the FCC's authority to make particular rules. Appellants identify, and we have found, no procedural problems with the promulgation of Order 81-312. Consequently, the district court had subject matter jurisdiction under Sec. 401(b) to issue the injunction.II. THE JOHNSON ACT 32 As their final jurisdictional challenge, appellants argue that the Johnson Act, 28 U.S.C. Sec. 1342, bars HawTel's action. The four conditions in the Johnson Act are conjunctive; therefore, all four conditions must be present to deprive the district court of jurisdiction. 22 DeKalb County v. Southern Bell Telephone & Telegraph Company, 358 F.Supp. 498, 504 (N.D.Ga.1972), aff'd, 478 F.2d 700 (5th Cir.1973); United States v. Public Utilities Commission, 141 F.Supp. 168, 188 (N.D.Cal.1956), aff'd, 355 U.S. 534, 78 S.Ct. 446, 2 L.Ed.2d 470 (1958). 33 HawTel does not dispute that the final three conditions are met. 23 Instead, HawTel argues, and the district court found, that the Johnson Act is inapplicable because HawTel's action is not based solely on a claim of repugnance of the order to the Federal Constitution. See 28 U.S.C. Sec. 1342(1). Although appellee's action is based expressly on 47 U.S.C. Sec. 401(b) and FCC Order 81-312, appellants contend that it is in essence a preemption claim under the Supremacy Clause. 34 We have construed the term solely in Sec. 1342(1) narrowly. The Johnson Act applies only when [a challenge to a rate order] rests exclusively on 'repugnance of the order to the Federal Constitution.'  International Brotherhood of Electrical Workers v. Public Service Commission, 614 F.2d 206, 210-11 (9th Cir.1980) (quoting 28 U.S.C. Sec. 1342(1)) (emphasis supplied) (upholding federal jurisdiction because the union's action depended in part on an interpretation of National Labor Relations Act). A claim of preemption does not meet this test. Id. at 211. The district court was correct in holding that the Johnson Act did not bar appellee's action.