Opinion ID: 3012869
Heading Depth: 2
Heading Rank: 3

Heading: Whether Worldcom Could Recover Even if It Were

Text: Required to File Graphnet argues that a violation of the filing requirement precludes Worldcom from recovering anything for services it rendered and equipment it delivered to Graphnet. The district court adopted Graphnet’s position holding that Worldcom could neither recover under the contract nor for the value of services rendered under a theory of unjust enrichment or quantum meruit. Essentially, the district court held that if a party fails to file a contract under section 211, it will suffer a complete and total forfeiture. It erroneously relied on the inapposite “filed rate doctrine” in reaching this conclusion. We find nothing in either the FCA, the decisions of the Common Carrier Bureau or in the caselaw from the federal courts that would support such an extreme penalty for failing to file a contract. In fact, relevant authority is to the contrary. As an initial matter, section 211 says nothing about any penalty for failing to file a contract. Other sections of the FCA, however, specifically lay out penalties for violation of their provisions. See, e.g., 47 U.S.C. § § 202(c), 203(e) and 205(b). Yet the district court and Graphnet assume that the penalty for failing to file a contract under that section is a total forfeiture. If Congress intended the extraordinary penalty that Graphnet advocates, we would expect it to say so explicitly. “Forfeitures are not favored; they should be enforced only when within both letter and spirit of the law.” United States v. One 1936 Model Ford V-8 De Luxe Coach, 307 U.S. 219, 226 (1939). See also Farmers’ & Mechanics’ 8 Nat’l Bank v. Dearing, 91 U.S. 29, 35 (1875) (“When either of two constructions can be given to a statute, and one of them involves a forfeiture, the other is to be preferred.”) (internal citations omitted). Absent an express statutory statement to the contrary, we conclude that a violation of section 211’s filing requirement does not require that Worldcom forfeit any right to be compensated for services and equipment provided to Graphnet pursuant to an unfiled contract. Moreover, the filed rate doctrine is inapposite. Section 203 of the FCA states that all common carriers “shall” file “schedules,” i.e. tariffs, “showing all charges” and “showing the classifications, practices, and regulations affecting such charges” with the FCC. 47 U.S.C. § 203(a). Deviation from these rates “is not permitted upon any pretext.” Id. These provisions are modeled after similar provisions in the Interstate Commerce Act and embody “the century old ‘filed rate doctrine.’ ” AT&T Co. v. Central Office Telephone, Inc., 524 U.S. 214, 222 (1998). The filed rate doctrine forbids charging or collecting rates for services that vary with the rates scheduled for those services in a filed tariff. Even if a carrier intentionally misrepresents its rates and contracts with a customer who relies on those rates, the carrier cannot be held to the contracted rate if it conflicts with the filed tariff. Id. at 222. Here, however, no filed tariff appears to have covered the services provided pursuant to the contracts at issue. The doctrine is therefore inapposite because there is no filed tariff with which the contracts conflict.2 See id. at 229 (Rehnquist, C.J., concurring) (“In order for the filed rate doctrine to serve its purpose . . . it need pre-empt only those suits that seek to alter the terms and conditions provided for in the tariff.”) (emphasis added). “While the filed rate doctrine may seem harsh in some circumstances,” 2. We assume for purposes of this appeal that there is no filed tariff because there is no indication to the contrary. Nothing in this decision should be read to preclude Graphnet from later offering evidence that some or all services provided to it were pursuant to a filed tariff. The contracts would be unenforceable to the extent they conflicted with a filed tariff. 9 id. at 223, it does not result in the extraordinarily harsh result that Graphnet advocates. It may serve to give a carrier or customer an unjustified windfall but it rarely results in a total forfeiture of a party’s rights to either be compensated or provided with services. The carrier is still compensated, even if it is at a rate lower than the rate for which the carrier thought it bargained. The customer is still provided with services even if it has to pay a higher rate for those services than it expected. We find support for our conclusion in the decisions of the FCC and the Common Carrier Bureau. In New Valley Corp. v. Pacific Bell, 15 FCC Rcd 5128 (FCC 2000), the FCC addressed and squarely rejected an argument similar to the one made by Graphnet here. New Valley argued that it was under no obligation to pay for services rendered by Pacific Bell because there was no filed tariff covering the services it had received from Pacific Bell. Id. at ¶¶ 9-10. The FCC rejected this argument outright and upheld the finding of the Common Carrier Bureau that there was “no basis” in the filed rate doctrine “that a customer may be exempt from paying for services provided by a carrier if those services were not properly encompassed by the carrier’s tariff.” In the Matter of New Valley Corp. v. Pacific Bell, 8 FCC Rcd 8126, ¶ 8 (Com. Car. Bur. 1993). See also In the Matter of America’s Choice, Inc. v. LCI Internat’l Telecom Corp., 11 FCC Rcd 22,494, ¶ 24 (Com. Car. Bur. 1996) (“[A] purchaser of telecommunications services is not absolved from paying for services rendered solely because the services furnished were not properly tariffed.”). If Worldcom was required to file the contracts at issue, its failure to do so would not by itself preclude Worldcom from recovering under those contracts. If the contracts are not enforceable for some other reason, Worldcom could still recover the value of its services under a theory of unjust enrichment. The district court erred by concluding otherwise. If Graphnet has been damaged by the failure to file the contracts at issue or by any other possible breaches of duty by Worldcom, it may file a counterclaim under 47 U.S.C. § 207 and seek appropriate relief from the district court. 10