Legal Document

524 U.S. 214118 S.Ct. 1956141 L.Ed.2d 222 AMERICAN TELEPHONE & TELEGRAPH CO.(97-679)108 F.3d 981, reversed. SUPREME COURT OF THE UNITED STATES118 No. 97 679 AND COMPANY, PETITIONER v. CENTRAL OFFICE TELEPHONE, INC. ON WRIT CERTIORARI TO STATES APPEALS FOR NINTH CIRCUIT [June 15, 1998] Justice Scalia delivered the opinion of Court. 1 Respondent Central Office Telephone, Inc. (COT), a reseller long-distance communications services, sued petitioner AT&T, provider under state law for breach contract and tortious interference with contract. Petitioner is regulated as common carrier Communications Act 1934, 48 Stat. 1064, amended, 47 U.S.C. § 151 et seq. The issue before us whether federal filed-tariff requirements pre-empt respondent's state-law claims. 2 * purchases "bulk" services volume-discounted designed large customers from providers, resells them to smaller customers. Like many other resellers in telecommunications industry, respondent does not own or operate facilities its own; it known "switchless reseller," which industry nomenclature arbitrageur. Of course passes along only portion bulk-purchase discount aggregated customers, retains remaining profit. 3 provides and, Act, §153(h), must observe certain substantive imposed by that law. Section 203 requires carriers file "schedules" (also "tariffs") containing all their "charges" interstate "classifications, practices regulations affecting such charges." §203(a). Federal Commission (FCC), agency responsible enforcing sell same rates, terms, conditions apply 4 Prior 1989, had developed type service Software Defined Network (SDN), meet needs companies offices multiple locations. SDN established "virtual private network" allowed employees different locations communicate easily. For example, an employee Washington could call co-worker Denver simply dialing four-digit extension. exchange commitment purchase volumes communication time, received this at rate much below what would otherwise cost. 5 Several changes 1989 made extremely attractive resellers, respondent, who aggregate capability allow use ordinary ("switched access") telephone lines connect networks. Previously, be connected over special "dedicated access" lines, are direct location's system petitioner's network, bypassing switches local carrier. Dedicated access involves fixed costs, so cost-effective when location originates volume calls. Switched access, contrast, entail additional high better suited small users hence resellers. also instituted two pricing promotions 1989: discounts basic rates making usage duration commitments, waiver installation charges multiyear commitments (subject penalties early termination). added new billing option. In addition network billing, whereby prepares single bill applies tariffed locations, started offer multilocation (MLB), allows apportioned between customer individual on proportion being chosen customer. Under option, sends bills directly customer's (which, case means reseller's customers) but (or reseller) remains payments. tariff provides, however, allocation charges. See AT&T Tariff FCC 1, §6.2.4 (1986), App. Brief 24a. 6 Attracted these changes, October approached regarding possible SDN. LaDonna Kisor, sales representative Portland, Oregon office, described gave literature She predicted establish initial four five months, thereafter add within 30 days receiving order. subscribed switched-access plan up-front waived receive 17 20% off 4-year million minutes annually. requested MLB. confirmed order, stating obtain " 'pursuant terms AT&T's [FCC No.1],' provisions tariff, 'including limitations liabilities, shall govern your obligations liabilities respect options you have selected.' 14. accepted writing 30, 1989. 7 By February 1990, become apparent demand exceeded expectations largely because switchless attracted service. fill orders rapidly dedicated orders, quickly personnel predicted. Accordingly, Ms. Kisor notified take up 90 after was established. suggested placing another service, Multilocation Calling Plan (MLCP), until they placed agreed this, ordered MLCP. Again, signed letter confirming MLCP 'is provided stated F. C. Nos. 2.' Appellant 94 36116, 36156 (CA9), p. 15. 8 informed functioning April 1990. At point, elected increase larger order qualify discount. form 'WILL BE GOVERNED BY RATES TERMS CONDITIONS IN APPROPRIATE TARIFFS.' 14 then began reselling required treat if were corporate 9 Almost outset, experienced problems including delays provisioning (the filling orders) billing. An problem especially damaging respondent: reflecting 100% instead 50% selected. These continued, led switch Although continued resell SDN, ultimately unable first period applicable. September 1992, terminating effective 18 months 10 Meanwhile, November 27, 1991, filed suit against United States District Court Oregon. complaint contained variety claims, none arose claims went trial: (1) (including implied covenant good faith fair dealing); (2) contractual relations (viz., contracts customers). Respondent's rested allegation limited included understandings president derived reading brochures talking representatives. According promised various provisioning, those set forth tariff. claimed violated duty dealing taking actions undermined purpose resale claim derivative claim. asserted that, benefits competing any intentional violation duties constituted relationship since conduct willful, consequential damages available counterclaim recover $200,000 unpaid termination did pay 1992. 11 Throughout proceedings Court, argued tort pre-empted §203 Act. Magistrate Judge rejected argument instructed jury consider written subscription agreements, statements documents furnished parties agreements 'if find intended materials part agreements.' 18. unless found engaged willful misconduct. He declined instruct punitive tortious-interference counterclaim, awarded $13 lost profits. reduced judgment $1.154 million, represented profits during canceled 1992; he there no competent evidence date. Appeals, dissent Brunetti, affirmed reversed Judge's failure remanded trial aspect case. 108 981 (CA9 1997). We granted certiorari determine filed-rate 520 U. S ___ (1997). II 12 203(a) every "schedules," i.e., tariffs, "showing charges" classifications, practices, 203(a). 203(c) makes unlawful "extend person privileges communication, employ enforce regulations, charges, except specified schedule." §203(c). modeled similar Interstate Commerce (ICA) share goal preventing unreasonable discriminatory MCI Telecommunications Corp. American Telephone Telegraph Co., 512 218, 229 230 (1994). century-old "filed-rate doctrine" associated ICA well. id., 331; Arkansas Louisiana Gas Co. Hall, 453 571, 577 (1981); cf. Nav. Cunard S. 284 474, 481 (1932). Louisville Nashville R. Maxwell, 237 94, (1915), we contours doctrine ICA: 13 "Under duly lawful charge. Deviation permitted upon pretext. Shippers travelers charged notice it, well abide unreasonable. Ignorance misquotation excuse paying charging either less more than filed. This rule undeniably strict obviously may work hardship some cases, embodies policy has been adopted Congress regulation commerce prevent unjust discrimination." Thus, even intentionally misrepresents relies misrepresentation, cannot held conflicts published Kansas City Southern Carl, 227 639, 653 (1913). 15 While seem harsh circumstances, see, e.g., Maislin Industries, U.S., Primary Steel, Inc., 497 116, 130 131 (1990), application necessary "prevent 'misquoting' shippers offering rebates discounts," very evil filing requirement seeks prevent. Id., 127. Regardless carrier's motive benefit harm particular nondiscriminatory similarly situated services. It anti-discriminatory lies "the heart common-carrier section Act." supra, 229. 16 Ninth Circuit thought inapplicable "[b]ecause involve ratesetting, rather billing." F.3d, 990. Rates, do exist isolation. They meaning one knows attached. Any excessive can couched inadequate vice versa. "If 'discrimination charges' include non-price features, defeat broad statute simple expedient providing . charges,' is, come lower price equivalent enhanced price." Competitive Assn. FCC, 998 F.2d 1058, 1062 (CADC 1993). recognizes show "charges," charges," 203(a); Unsurprisingly, cases decided make clear "privileges" guises, discounted rates. "[A] preference rebate result [the analog §203(c) ICA] where renders pays covered prescribed tariffs." Wabash 321 403, 412 413 (1944). Chicago Alton Kirby, 225 155 (1912), shipper's breach-of-contract railroad ship carload race horses particularly fast train. invalid matter tariffs "did provide expedited nor transportation train" therefore shipper "an undue advantage open others situation." 163, 165. Similarly, Davis Cornwell, 264 560 (1924), invalidated agreement number cars day; advantage, said, "is illegal, tariff." 562. 653; Wight States, 167 512, 517 518 (1897); I. Lake, Discrimination Railroads Other Public Utilities 310 315 (1947). III distinguished Court's involving ground "should all" expected higher rate" 989, n. 9. But precisely here. Indeed, guarantees entitled virtue Kisor's representations viz., faster through matters relating deposits, calling cards, support, see 987 988 pertain subjects specifically addressed §2.5.10 (provisioning orders); (allocation charges); §2.5.6 (deposits); §2.5.12.B (calling cards); §6.2.5 (service supports). 19 applied. are, relevant sense, "covered" whereas asks guarantee provisioned days, leaves "establis[h] confir[m]" due date merely "every reasonable effort" date, fails gives recourse "cancel without penalty payment nonrecurring §2.5.10(B). Faster, guaranteed certainly privilege doctrine. Cf. 163 (refusing promise faster, tariff). As pursuant MLB allocate accurately among "will way Customer §6.2.4. assurance responsibility task flat contradiction Chesapeake Ohio Westinghouse, Church, Kerr 270 260, 266 (1926). 20 our respect: according "special services" sought petitioner, charge, Even so, still To extent asserting treatment, remedy bring §202 Act.1 claiming really get preferences, "that tend practice [with regard to] well." Because barred IV 21 Our analysis equal force wholly contended based "AT&T's refusal [respondent] types service" agreed, noting 'the case, claim, stem alleged comply relationship.' "2 33. preferences cloak "The rights defined varied enlarged carrier." Keogh Northwestern 260 156, (1922); Maislin, 126. 22 saving clause §414, contrary dictate result. 414 copies ICA, long latter preserves inconsistent statutory requirements. Adams Express Croninger, 226 491, 507 A constitute conflict basis both here "saved" §414. "Th[e saving] reason construed continuing [customers] right, existence absolutely act. words, act destroy itself." Texas Pacific Abilene Cotton Oil 204 426, 446 (1907). 23 Finally, reject exclusively governs parties' relationship, relief consistent §2.3.1 "liability, any, misconduct reasons misconduct, verdict 2.3.1, power do. removes liability unenforceable. exempt broken unintentional. (In fact, perversely enough, displays greater, belated, attempt law.) 24 25 doctrine, reverse Circuit. 26 ordered. 27 O'Connor took consideration decision Notes 28 1. Eight close discovery (and 2-year §415), leave second amended denied request. appeal ruling. 29 2. argues jury's supported beyond, differed nature from, claim," post, asserts remand judgment. non-contract neither question presented review ("Whether improperly honor side give called tariff") raised alternative support Nor ever need remand, though Petition Certiorari reversal, summary reversal. brief merits, protected There hint action, acts sufficed below. point disputed finding Circuit's description fact "because COT COT's customers." (CA Contrary dissent's assertion, obligation search record nonjurisdictional presented, disposition (remand reversal) side. Rehnquist, J., concurring 31 32 33 Chief concurring. 34 concludes "wholly claim" accepts effect, ante, 12, I agree: amount manner 35 write separately note conclusion proceed. majority correctly states, exists protect "antidiscriminatory Act.' Ante, 8. antidiscriminatory notion purchasers will rate. furthers dis- allowing suits brought pro- vide listed ensures 36 crucial note, governs. serve purpose, therefore, seek alter how applied past. entered into Springfield, Illinois New York via train." 163. ruled arrangement proceed: 37 "An accorded affects value cost should contract, denied, allowance publication illegal 38 (1922), separate enforced, antitrust challenging respondents not: 39 legal measured Unless suspended aside, made, purposes, rate, shipper. (emphasis added). 40 arrangements petitioner. contends above clear, bars entirely correct concluding 41 govern, entirety affect whatever might impose refrain interfering relationships failing unenforceable engaging slander libel, satisfy obligations. doctrine's ensure exclusive source shield understanding join opinion. Stevens, dissenting 42 43 44 45 dissenting. 46 Everyone agrees services." (majority opinion); (Rehnquist, concurring). Moreover, true award law, characterized "stem[ming] relationship." Tr. 2207. my opinion, If effort appropriate each sent statement expressly characterizing unethical, profit-hungry middleman, think defense conduct. indicates obtained mailing disclosed markup premised testimony used telemarketer contact authorization, convert 557 558. rejecting motion directed recognized "slamming" "easily interference" necessarily 2166 2167. Slamming clearly slamming complaint;1 counsel "a big case," 2170, said closing 2921; nothing instructions remotely proof promises easily fits definition charge: 49 "COT interfered business future end prevail prove preponderance evidence, one, probability economic benefit. Two, aware expectation benefits. Three, relations. Four, improper using means. And, five, suffered injury interference." 71. 50 disclosures consequence negligence deliberate developed, concluded otherwise. acted willfully ibid.2 That doubly significant. 51 First, acknowledges, 13, precludes purport limit liability. Second, greater importance, determines most egregious violations. Enforcement right free somehow (presumably return fee rate); effect generally applicable required, others, non-customers alike. least occurred independently customer-carrier actionable never AT&T. 52 states bar little connection to, upon, governed challenges 156 sort (1924). More akin Nader Allegheny Airlines, 426 290, 300 (1976), common-law action fraudulent misrepresentation federally-regulated air "coexist" Aviation degree here, Nader, "any impact imposition avoid incidental." Ibid. Act's savings clause3 anything, remedies facts these. 53 Appeals considered purposes courts mistakenly believed On record, pre-empted. ordering outright AT&T.4 54 holds broadly totally barred, declines survive petition respondent. irrelevant, scope presented. decide pre-empts "state-law Pet. Cert. i. answers question, decides additional, factual one: "based on" "failure agreement," thus derivative" resolving issue, rely bald taken out context, derivative"; study proper 55 respectfully dissent. 56 "[D]espite repeated requests failed rectify incidents unauthorized designated ('slamming') 28. 57 award, differentiate 58 3. "Nothing chapter abridge now existing statute, remedies." 414. 59 4. Beyond slamming, misappropriated information confidential database. remedy, sufficient appear

Classification Label: 9