Opinion ID: 752071
Heading Depth: 5
Heading Rank: 2

Heading: courts lack the competence to set utility rates; and

Text: 70 (3) the interference of courts in the rate-making process would subvert the authority of rate-setting bodies and undermine the regulatory regime. 71 45 F.3d at 62 (citing Wegoland, 27 F.3d at 21). The FCC has approved AT & T's filed tariff whereby customers are billed in whole-minute increments. This tariff is by definition reasonable unless and until the FCC, as the legislatively appointed regulatory bod[y] [with] institutional competence, says otherwise. Sun City, 45 F.3d at 62. Yet the plaintiff class asks us to excuse them from paying this tariff. But plainly, such an order would subvert the authority of [the FCC] and undermine the regulatory regime. Id. In sum, we cannot award damages in this case without undermining the authority of the FCC, and therefore, the principle of nonjusticiability. 72 The Marcus appellants argue that the filed rate doctrine nonetheless should not bar their claims. First, they claim that the nondiscrimination strand of the filed rate doctrine is not implicated because their action is brought on behalf of all deceived consumers as a class. See Marcus Appellants' Brief at 35-36. We agree that the concerns for discrimination are substantially alleviated in [a] putative class action. Wegoland, 27 F.3d at 22. However, the Supreme Court has rejected the suggestion that the development of class actions, which might alleviate the ... concern about [nondiscrimination,] made the nondiscrimination principle inapplicable to a putative class action suit. Square D, 476 U.S. at 423, 106 S.Ct. at 1930. We may not depart from this precedent. Until the Supreme Court says otherwise, it seems that nondiscrimination concerns remain viable even in the context of a class action lawsuit. Cf. Wegoland, 27 F.3d at 21-22 (although class action mechanism alleviates concern for price discrimination, it does not address other concerns underlying filed rate doctrine including the important concerns of agency authority, justiciability, and institutional competence); Sun City, 45 F.3d at 62 (the filed rate doctrine applies whether or not the plaintiffs are suing for a class, and regardless of the plaintiff's motivations in maintaining the litigation) (internal citations and quotations omitted). 73 The Marcus appellants next urge us to modify the filed rate doctrine to allow nondisclosure claims, arguing that the doctrine is no longer necessary to avoid price discrimination in light of the increasing competition among long-distance service carriers. The Marcus appellants claim that while strict adherence to the filed rate may have prevented price discrimination and unfair practices while AT & T maintained a monopoly over long distance services, it frustrates those same goals now that there is greater competition in the market. See Marcus Appellants' Brief at 36-37. 74 In rejecting a similar argument to modify the filed rate doctrine in light of changed circumstances, the Supreme Court explained that while it had considerable sympathy to such arguments,  'such considerations address themselves to Congress, not to the courts.'  MCI v. AT & T, 512 U.S. at 234, 114 S.Ct. at 2233 (quoting Armour Packing, 209 U.S. at 82, 28 S.Ct. at 435); see also Square D, 476 U.S. at 424, 106 S.Ct. at 1930 ([T]he developments in the six decades since Keogh was decided are insufficient to overcome the strong presumption of continued validity that adheres in the judicial interpretation of a statute.). Like the Supreme Court, we too are sympathetic to the argument that, at least in the telecommunications industry, strict adherence to the filed rate doctrine is no longer required. But absent Congressional authorization or direction from the Supreme Court, we are in no position to modify the doctrine. 75 For the foregoing reasons, we affirm the district court's dismissal of the Marcus appellants' fraud claims to the extent that they seek compensatory damages and other monetary relief. We add that the filed rate doctrine likewise bars all of the remaining state law claims for damages brought by the Marcus appellants, because any award of damages would, for identical reasons, implicate the nondiscrimination and nonjusticiability strands of the filed rate doctrine. B. Appellants' Claims for Injunctive Relief 76 We next examine the Marcus and Moss appellants' claims for injunctive relief based on the fraud purportedly committed by AT & T. Again, we must consider whether an award of injunctive relief would implicate the nondiscrimination or the nonjusticiability strand of the filed rate doctrine. If so, then the plaintiffs' claims are barred by the filed rate doctrine. 77 First, it appears that the injunctive relief requested by the appellants would not result in price discrimination since the plaintiffs would still pay the filed rate. The injunction, should plaintiffs establish the merits of their claims, would only require AT & T to publicly disclose its rounding-up practice beyond its disclosure in its filed rate; the filed rate would remain unchanged and no individual ratepayer would be excused from paying the filed rate. Thus, while a suit for damages is unavailable because it implicates the interest in preventing price discrimination, a suit for injunctive relief appears not to interfere with the nondiscrimination policy underlying the filed rate doctrine. See Gelb v. American Tel. & Tel. Co., 813 F.Supp. 1022, 1033 (S.D.N.Y.1993) (claim of fraud against consumer for failure to disclose initial call fee on calling cards is not barred where plaintiff sought injunctive relief). 78 Second, in contrast to the Marcus appellants' claims for damages, allowing the appellants' claims for injunctive relief in this case would neither enmesh the court in the rate-making process nor undermine the regulatory authority of the FCC. Cf. Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 304-05, 96 S.Ct. 1978, 1987, 48 L.Ed.2d 643 (1976) (federal court need not await determination by federal regulatory agency as to whether failure to disclose was deceptive practice under federal tariff, reasoning that plaintiff makes no challenge to any provision in the tariff, and indeed there is no tariff provision ... applicable to disclosure practices and [t]he standards to be applied in an action for fraudulent misrepresentation are within the conventional competence of the courts); In re Long Distance Telecommunications Litig., 831 F.2d 627, 633 (6th Cir.1987) (state law fraud claims arising from carrier's failure to disclose its policy of charging for uncompleted calls do not require agency expertise for their treatment and are within the conventional experience of judges) (internal quotations omitted); Kellerman v. MCI Telecomms. Corp., 112 Ill.2d 428, 98 Ill.Dec. 24, 32, 493 N.E.2d 1045, 1053 (1986) (state law fraudulent and deceptive advertising claims against carrier do not concern reasonableness of rates). An injunction would require only that AT & T publicize the tariff which it has already filed with the FCC, including its policy of rounding up to the next minute. The reasonableness of the rounding-up policy would remain a question for the regulating agency to resolve. 79 Thus, it appears that, if the appellants can establish the substance of their state and federal common law fraud claims, the filed rate doctrine would not bar them. However, we need not finally resolve that question because the appellants cannot prove the claim of fraud upon which their request for injunctive relief is premised. 80 In order to state a claim for fraud under federal or New York state common law a plaintiff must allege that the defendant made a material false representation, that the defendant knew of the falsity (scienter), that the defendant acted with intent to defraud, that the plaintiff reasonably relied on the false representation, and damages. See Pence v. United States, 316 U.S. 332, 338, 62 S.Ct. 1080, 1083-84, 86 L.Ed. 1510 (1942) (federal common law); Turtur v. Rothschild Registry Int'l., Inc., 26 F.3d 304, 310 (2d Cir.1994) (New York common law); Gershon v. Hertz Corp., 215 A.D.2d 202, 626 N.Y.S.2d 80, 81-82 (1995) (New York common law). 81 The appellants cannot demonstrate that they reasonably relied on any misrepresentations by AT & T. As a matter of law, it would not be reasonable for a consumer to harbor a belief about AT & T's billing practices that is inconsistent with the tariff AT & T has filed with the FCC. Central to the filed rate doctrine is the presumed knowledge doctrine. Under that doctrine, [t]he [customer's] knowledge of the lawful rate is conclusively presumed. Carl, 227 U.S. at 653, 33 S.Ct. at 395. Accord Maxwell, 237 U.S. at 97-98, 35 S.Ct. at 495-96; Marco Supply, 875 F.2d at 436. Unless knowledge of the filed rate were presumed as a matter of law, carriers could undermine the filed rate doctrine by intentionally quoting lower rates to favored customers. See Maislin, 497 U.S. at 127-28, 110 S.Ct. at 2766-67. Because the appellants are held to know the filed rate and thus AT & T's practice of rounding up, it would be unreasonable for them to rely on any price quotes to the contrary. 82 In all likelihood, the presumed knowledge doctrine is little more than legal myth when applied to today's long-distance telephone customers. However accurate the presumption may have been when applied to shippers and railway carriers in the earliest decades of this century, we doubt that it reflects current reality. We can easily imagine what results would be yielded by a survey that asked AT & T long-distance customers: When was the last time you checked the tariffs your long distance carrier has filed with the FCC? 4 However, the presumed knowledge doctrine is an integral part of the filed rate doctrine and, absent its reconsideration by Congress or the Supreme Court, we are bound by eighty years of caselaw to reaffirm it. See MCI v. AT & T, 512 U.S. at 234, 114 S.Ct. at 2233. Therefore, the district court properly dismissed the appellants' claims for injunctive relied based upon fraud. 83