Opinion ID: 2994161
Heading Depth: 2
Heading Rank: 1

Heading: Preemption and the Savings Clause

Text: This case asks us to resolve an ambiguity between two statutory clauses. First, the preemption clause states that no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating the other terms and conditions of commercial mobile services. 47 U.S.C. sec. 332(c)(3)(A). Second, Congress passed a savings clause to the Federal Communications Act which provided, Nothing in this chapter contained shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this chapter are in addition to such remedies. 47 U.S.C. sec. 414. At first blush, the savings clause appears to encompass most actions, but it is well established that such cannot be true. To read the clause expansively would abrogate the very federal regulation of mobile telephone providers that the act intended to create. See AT&T Co. v. Central Office Telephone, Inc., 524 U.S. 214, 228 (1998) ([T]he act cannot be held to destroy itself.) (citation omitted); Cahnmann v. Sprint Corp., 133 F.3d 484, 488 (7th Cir. 1998). Therefore, we have read the savings clause narrowly to avoid swallowing the rule, but not so narrowly as to render it a dead letter. Although most complaints will involve rates or other issues specially reserved to federal control, we have recognized before that some claims do not and may be addressed in state court. See Cahnmann, 133 F.3d at 488 (citing In re Long Distance Telecommunications Litig., 831 F.2d 627, 633-34 (6th Cir. 1987) [hereinafter Long Distance Litigation]). The two clauses read together create separate spheres of responsibility, one exclusively federal and the other allowing concurrent state and federal regulation. Cases that involve the entry of or the rates charged by any commercial mobile service or any private mobile service are the province of federal regulators and courts. 47 U.S.C. sec. 332(c)(3)(A). The states remain free to regulate other terms and conditions of mobile telephone service. Id. The district court aptly characterized the phrase other terms and conditions as somewhat enigmatic, and we agree, but the court’s review of the legislative history regarding the meaning of this phrase was unnecessary and not particularly authoritative since it reflected only the views of one chamber of Congress. See Board of Trade v. SEC, 187 F.3d 713, 720 (7th Cir. 1999) (Legislative history is problematic under the best circumstances, and even so reliable a source as the Conference Committee Report may be used only when there is a genuine ambiguity in the statute.). Furthermore, this case does not demand so nuanced a study of the phrase other terms and conditions because the meaning of entry of or the rates charged by any commercial mobile service adequately resolves the issue here. In practice, most consumer complaints will involve the rates charged by telephone companies or their quality of service. See Central Office Telephone, 524 U.S. at 223 (Any claim for excessive rates can be couched as a claim for inadequate services and vice versa.). As the Supreme Court recognized in Central Office Telephone, a complaint that service quality is poor is really an attack on the rates charged for the service and may be treated as a federal case regardless of whether the issue was framed in terms of state law. Id. In addition to rates and service, federal regulations expressly dictate the terms under which a provider may enter a new market. The act makes the FCC responsible for determining the number, placement and operation of the cellular towers and other infrastructure. See, e.g., 47 C.F.R. sec.sec. 24.103 (geographic and population coverage requirements), 24.132 (narrowband antenna power and height requirements), 24.232 (broadband antenna power and height requirements). Congress has expressed its decision that these areas be reserved exclusively for federal adjudication, a point that Bastien does not contest. A review of two cases addressing the divide between the state and federal spheres will illustrate the point. First, in Cahnmann, this court held that a putative breach of contract claim filed against long-distance carrier Sprint Corp. belonged in federal court because the effect of the challenge would be to invalidate a tariff approved by the FCC. Cahnmann, 133 F.3d at 489. In the world of telephone regulation, a tariff is a proposal filed by the carrier with the FCC setting out the rates and conditions at which it intends to offer service to the public. Once approved by the FCC, the carrier may not depart from its terms. Sprint, the defendant in Cahnmann, had initially filed a tariff offering customers Fridays Free long-distance service. Id. at 486. The tariff was approved, and Sprint marketed the deal to small business customers. For a variety of reasons, Sprint filed a second, amended tariff a few months later, changing the terms of the first tariff. The FCC approved the amended tariff, and shortly afterward, a consumer class action was filed alleging that Sprint breached its contract with customers who signed up under the first tariff. Although the claim intended to sound in state contract law, we held that a direct challenge to the legitimacy of an approved tariff must be litigated through the federal system. See Cahnmann, 133 F.3d at 490-91. We refused to read the savings clause to nullify the provisions of the Communications Act, despite the clause’s admittedly expansive wording. See id. at 488; see also Central Office Telephone, 524 U.S. at 228. While instructive, Cahnmann addressed a different type of claim than the one at issue here. The plaintiffs in Cahnmann wielded state law weapons in a facial attack on an approved tariff. The plaintiff here, Bastien, does not dispute AT&T Wireless’s compliance with the FCC rules or the validity of those rules, but attempts to use state law as a means of attacking wrongs that he believes are not covered by the preemption clause. If that were true, it would fall within the ambit of the savings clause. A similar situation arose in the Long Distance Litigation, 831 F.2d at 633-34, which we noted in Cahnmann, 133 F.3d at 488. In that Sixth Circuit case, the plaintiffs accused the long-distance companies of state law fraud and deceit for failing to tell customers of their practice of charging for uncompleted calls. Long Distance Litigation, 831 F.2d at 633. The court reasoned that the purpose of the preemption clause to achieve nationwide uniformity in telecommunications regulation was not at issue in a case challenging fraudulent and deceitful statements by the telephone service providers. Id. Because the claims for fraud and deceit would not have affected the federal regulation of the carriers at all, the court held that Congress could not have intended to preempt the claims.