Legal Document

476 U.S. 355 106 S.Ct. 1890 90 L.Ed.2d 369 LOUISIANA PUBLIC SERVICE COMMISSION, Appellant,v.FEDERAL COMMUNICATIONS COMMISSION et al. CALIFORNIA and Public Utilities Commission of California, al., Petitioners, v. FEDERAL United States. UTILITIES OF OHIO, Petitioner, FLORIDA Nos. 84-871, 84-889, 84-1054 84-1069. Argued Jan. 13, 1986. Decided May 27, Syllabus The Communications Act 1934 (Act) grants to the Federal (FCC) broad authority develop regulate "interstate foreign commerce in wire radio communication," 47 U.S.C. § 151, but also provides that "nothing this chapter shall be construed apply or give jurisdiction with respect (1) charges, classifications, practices, services, facilities, regulations for connection intrastate communication service," 152(b). In 1980 1981, FCC issued orders changing its prior rules concerning practices depreciating telephone plant equipment. Subsequently, upon petition private companies, ruled 220 Act, which expressly directs prescribe depreciation operated pre-empt inconsistent state ratemaking purposes, that, as an alternative ground, federal displacement regulation was justified being necessary avoid frustration validly adopted policies. Court Appeals affirmed. Held: Section 152(b) bars pre-emption over dual property purposes. Pp. 368-379. (a) Sections 151 are naturally reconciled define a national goal creation rapid efficient service, enact regulatory system achieve goal. P. 370. (b) Neither legislative history nor Act's structure supports view words "charges," "classifications," "practices," used 152(b), were intended refer only "customer charges" specific services not charges. Those terms art interpreted by reference trade they apply, thus embrace depreciation. 371-373. (c) There is no merit argument does control because involved interchangeably provide both interstate 152(b)'s reservation commissions should confined matters do substantially affect communication. Although will generally displaced extent it stands obstacle accomplishment full purposes objectives Congress, agency may law when if acting within scope congressionally delegated authority. Here, constitutes congressional denial power require follow take "pre-emptive" action merely thinks such best effectuate policy. Moreover, itself establishes process designed resolve "jurisdictional separations" matters, determined what portion asset employed produce deliver opposed 410(c). Thus possible different rates methods once correct allocation between use has been made. 373-376. (d) Nor there 220, classes charges included under operating expenses fixing rates, prohibits carriers from departing FCC-set respecting depreciation, requires automatic all meaning so unambiguous straightforward override command jurisdiction" service. 376-378. 737 F.2d 388 (CA4 1984), reversed remanded. BRENNAN, J., delivered opinion Court, WHITE, MARSHALL, REHNQUIST, STEVENS, JJ., joined. BURGER, C.J., BLACKMUN, dissented. POWELL O'CONNOR, took part consideration decision cases. 1 Lawrence G. Malone, Albany, N.Y., appellant petitioners. 2 Sol. Gen. Charles Fried, appellees respondents. 3 Michael Boudine, respondents AT & T former Bell System Operating Companies. 4 [Amicus Curiae Information page 357-358 intentionally omitted] 5 Justice BRENNAN Court. 6 these consolidated cases, we asked 26 companies States sustain holding Fourth Circuit (FCC Commission) equipment regulation. They Service Commissions 23 States, backed 30 amici curiae, who argue (Act), 48 Stat. 1064, amended, seq., denied establish insofar relate setting 7 Respondents suggest heart cases whether revolution telecommunications occasioned policy increasing competition industry thwarted regulators have yet recognize accept refuse permit employ accurate accounting reflect, part, effects competition. We told already much $26 billion worth "reserve deficiencies" on books Nation's local reserve which, insisted, represents inadequate magnitude threatens financial ability technological progress quality service passed promote. Petitioners answer clearly contend vests exclusive rate making, power, petitioners argue, includes final how calculated purpose those rates. note Due Process Clause Fourteenth Amendment necessarily check set at would amount confiscatory levels, therefore overstate danger crippling vitality phone companies. 8 deciding goes without saying assess wisdom asserted encouraging industry. consider enforce, sees fit, believes purpose. Important issues be, our task simply determine where Congress placed responsibility prescribing view, language, structure, support petitioners' position denies dictate accordingly, reverse. 9 * establishes, among other things, nature division about. terms, while denying "jurisdiction . ." However, seem divide world domestic neatly into two hemispheres—one comprised plenary authority, made up retain jurisdiction—in practice, realities technology economics belie clean parceling responsibility. This virtually conceivably authorities. same actions taken their respective domains general health carriers, hence "hemisphere." 10 ultimately sparked litigation. order changed affecting plant. Property Depreciation, 83 F.C.C.2d 267, reconsideration denied, 87 916 (1981). First, altered could group subject Because many individual items providing impossible depreciate each item individually, classified depreciated groups. permitted option grouping based estimated life (the "equal life" approach). replaced FCC's practice requiring classify according year installation "vintage year" method). change allow smaller more homogeneous groupings, concluded, result matching capital recovery consumption. 11 further sought promote improved accuracy replacing "whole "remaining method. Under remaining life, unlike treatment whole regime, estimates schedules premised prove erroneous, corrected mid-course way assures cost recovered. 12 third FCC-mandated announced 1981 order, labor material associated inside premises business residence. new rule provided so-called "inside wiring" longer treated investment time, rather "expensed" incurred. Uniform Accounts, 85 818. 13 Later National Association Regulatory Utility Commissioners (NARUC) petitioned "clarification" wiring. Specifically, NARUC declaration did restrict discretion computing revenue requirements services. 14 On April 1982, memorandum agreed wiring preclude "from using own procedures 89 1094, 1095. reaching conclusion, declared had "have any preemptive effect arise operation law," added "[n]o furthered adhere requirement." Id., 1097. then examined language sections dealing found unwilling either required prescribed Commission. Two commissioners written dissent argued had, deference especially inappropriate important policy—that nurturing "brave world" industry—was stake. 15 held deals operate automatically acted carrier. Part 31, 92 864 (1983). As ground pre-emption, justifiable "to policies." 875. Applying standard facts before it, appropriate. It noted "adequate 'make available, far possible, people rapid, efficient, Nation-wide, world-wide adequate facilities reasonable .' 151," "[s]tate prescriptions adequately competitive environment, Commission's markets capable supporting competition, frustrate preemptable Commission." F.C.C.2d, 876. 16 Virginia State Corporation Comm'n FCC, (1984).1 acknowledged "does states "reservation [of authority] read preserving states' sphere expense viable network." 392. court state-practices, statutorily entrusted issue reasonably ensure frustrated. reach operates odds ordered FCC. granted certiorari review Appeals. 472 1025, 105 3496, 628 (1985).2 II 17 Both characterize litigation one persons seek drive car, condition parties agree unsatisfactory.3 Where disagree ought controls. address contentions, appropriate divides function component utility 18 Depreciation defined loss value time. context public regulation, charging depreciable property, adjusted net salvage, accounts useful asset. Thus, significantly affect, customers pay regulated carrier entitled recover fair return through customers, contribute importantly calculation carrier's expenses. See Knoxville Water Co., 212 1, 13-14, 29 148, 152, 53 L.Ed. 371 (1909). generally, A. Priest, Principles Regulation (1969); Garfield W. Lovejoy, Economics (1964); Kahn, (1970). 19 total charge "revenue requirement," sum current expenses, including taxes "rate base." original given enters base depreciates time—as wear tear obsolescence—the reduced schedule estimate item's expected life. Each removed expense. industry, extremely intensive, constitute significant annual requirement recovered rates; somewhere 10% 15% requirement. 20 essence, plain compel section provides: 21 "[N]othing 22 maintain "terms art" denote accounting, question presented answered statute. shows level ratemaking, importance statutory design States' confer effect, write jurisdictional limitation out Act. focus respondents' principal turns insist grant exclusively Their pursuant section, precluded 220(b) states: 24 "The shall, soon practicable, properly percentages charged classifying deem proper may, deems necessary, modify prescribed. Such not, after [classes] included, than Commission, class percentage therefor No case include form expenditure elsewhere otherwise expenses." 25 assert understanding bolstered substantive provisions 220. note, example, 220(g), "forms manner keeping accounts," "unlawful keep approved Commission," subsections (e) civil criminal penalties failing 220(h) permits discretion, finds "consistent interest," "except particular requirements" "in commission relates." provision strongly suggests unless affirmatively acts waive delegate i.e., "except" impliedly cannot adopt regulations. 220(i) makes clear role essentially advisory only. That exercising "shall notify" opportunity "present [their] views" instructs "consider views recommendations." According respondents, "Congress gave present them bound resulting prescriptions." Joint Brief Listed Private (Joint Brief). sum, regime—rather multiple regimes—of establishing decisions respected until relinquishes instances. interest recognized 'views recommendations.' " Ibid. rely primarily urge independent reasoning relied Appeals, namely frustrates most forcefully must jeopardize continued viability refusing allows timely recapturing capital. argument, pressed Solicitor General, relies largely network. III 27 Supremacy Art. VI Constitution law. Pre-emption occurs enacting statute, expresses intent law, Jones Rath Packing 430 519, 97 1305, 51 604 (1977), outright actual conflict e.g., Free Bland, 663, 82 1089, 180 (1962), compliance physically impossible, Florida Lime Avocado Growers, Inc. Paul, 373 132, 1210, 248 (1963), implicit barrier Shaw Delta Air Lines, Inc., 463 85, 103 2890, 77 490 (1983), legislated comprehensively, occupying entire field leaving room supplement Rice Santa Fe Elevator Corp., 331 218, 67 1146, 91 1447 (1947), execution Congress. Hines Davidowitz, 312 52, 61 399, 581 (1941). itself; Fidelity Savings Loan Assn. De la Cuesta, 458 141, 102 3014, 73 664 (1982); Capital Cities Cable, Crisp, 467 691, 104 2694, 81 580 (1984). 28 "varieties" alleged. above, confers raising claim manifested displace addition, refusal "stands Congress." limitations coupled fact "separations" proceeding portions single 410(c), theories. critical analysis always supersede supra. declares "regulating make 151. accomplish goal, created centralize consolidate previously province Interstate Commerce Radio predecessor statutes. McKenna, Pre-Emption 37 Fed.Comm.L.J. 12-18 (1985). To degree, lending some perform ensuring nationwide barred might inclined reading express contained Again, asserts By fences off matters—indeed, with" certainly sweeping wording declaring 31 interpreting §§ guided familiar construction statute create conflict. Washington Market Co. Hoffman, Otto 112, 101 782 (1879). find conflict, disinclined favor purpose, defines formed implement 32 advance number arguments counter forbids turn. 33 well "charges" "classifications" charges," purport limit narrow noting "regulations" appear throughout contexts meant directly carriers' relationships 201-205. Reading pari materia, told, apparent concerned autonomy reveals proposed reaction Court's Shreveport Rate Case, Houston, E. W.T.R. 234 342, 34 833, 58 1341 (1914), held, increase railroad discrimination against commerce. "In words, 2(b)(1) outset protection preemption customer services." 34. reject "Charges," "practices" often accountants, regulators, courts, commentators treatment, see, Railways Electric West, 280 234, 262, 50 123, , 129, 74 390 (1930); Smith Illinois Telephone 282 133, 158, 65, 72, 75 255 Wheat, Rates, Harv.L.Rev. 846, 859 (1938); (1970), accordance technical Corning Glass Works Brennan, 417 188, 94 2223, 41 (1974), itself, very underlying litigation, mean "depreciation charges." E.g., 275. 35 Case carry load ask it. case, constitutional regulate, indeed, set, prevent traffic. true, assert, drafting supported perceived evil excessive sanctioned Case; sole concern "protection Rather, representatives fully aware stake powers including, limited to, "[t]he dominating controversy 1934." Fed.Comm.L.J., 2. Senate House bills overrule persuaded anyone's "overruling" accomplished forbade certain services; intention, hardly deny "charges, Presumably, sufficed "rates." breadth contains ("[N]othing ."), decline urged hold instead preempt B 36 Accordingly, even "certain aspects" communication, "confined 'separable affect' communication." 36. With measures severe impact communications network too slowly all, discouraged detriment Numerous Courts cited proposition applies bar pre-emptive factors present; first, matter purely second, affected pre-empt. North Carolina 537 787 (CA4), cert. 429 1027, 651, 631 (1976); 552 1036 434 874, 98 222, 54 154 (1977); Puerto Rico 553 694 (CA1 1977); New York 1059 (CA2 1980). short misrepresents scheme basis test pre-emption. While basic underpinning system, Hines, U.S., 67, S.Ct., 404, true least reasons. literally act, let alone enacted legislation sovereign State, Second, determining administrative examine agency. constitutes, explained nevertheless An itself. expand face unable do. 38 intimation—the pressed—that help joint fulfill obligation sense piece ways. service; recognizes tensions integrated system. known 221(c), separations separates costs facilitates recognition distinct spheres (1930). concede, acknowledged, F.2d, 396, made,4 Respondent GTE 36, just 75% employee's time devoted production quarter allocate employee accordingly. match revenues generated use," But degree principles, judgments, considerations underlie reflect "real facts, choices partially need improve industry's cash flow, spur investment, subsidize customer, factor. What really troubling course, sufficient revenues. deprecate concern, precludes relief sought. admonish, can rewrite C 39 specifically5 is, doubt, position, strict 220—which rely—is untenable. dispute, regarding taxing authorities Government employ, tax advised do, routine matter, "separate" connection. Were correct, violate compelled compute taxation despite nowhere allude ratemaking. word "pre-emption" used. 40 spell similarly plausible, contend, captioned "Accounts, records, memoranda," addressed kept reporting, investors picture carriers. event, decide purposes.6 Like statutes, internal inconsistencies, vague areas uncertainty. perfect puzzle pieces fit. crisp answers contentions party conclude 42 For reasons stated judgment reversed, remanded proceedings consistent opinion. 43 ordered. 44 THE CHIEF JUSTICE BLACKMUN dissent. 45 O'CONNOR Exclusive lies courts appeals. 2342(1). originally postponed No. came us appeal, certiorari. A potential arose contention appeal lie 1254(2) strike down order. 84-871. Louisiana statement writ certiorari, 1254(1) case. have, moreover, petitions 84-1054, 84-1069, customary Renton Playtime Theatres, 475 41, 43-44, n. 925, 927, (1986), dismiss 84-871 and, treating papers overreaching resulted situation person foot accelerator car another attempting steer. Tr. Oral Arg. 9, 21. evident metaphor hand belongs FCC—whether, stepped or, heavy-handedly grabbed wheel—the notion ascertain base, authority—which integrally valuation determination base—on "the hands steering wheel," id., 40, presumably, belong entities. readily distinguishable upheld separate components See, (1976), (1977) (Where subscribers telephones, prohibiting connecting phones since negate tariff). "[s]pecific prevail general," Fourco Transmirra Products 353 228, 787, 791, 786 (1957), specifically inapplicable jurisdiction, addresses correctly involving "general" other. imposes limits agency, also, stating nothing extend construction. presents instructions approach proves practices. reenacted, almost verbatim, 20(5) 49 U.S.C.App. 20(5), ICC railroads. Railroad Charges, 118 I.C.C. 295 (1926). during hearings early version testifying reenactment usurp "[a]ll regard Hearings S. Committee Commerce, 71st Cong., 2d Sess., pt. 15, p. 2243 (1930) (resolution Montana Commission). manage—initially—to persuade drafters add 220(j), rejected Conference Committee, strong evidence preserve conferred ICC. persuaded. never prohibit additional records 1982 1101, dictum suggested possessed commerce, prescription 159, And Northwestern Nebraska Railway Comm'n, 297 471, 478, 56 536, 539, 80 810 (1936), left open prescription, issued, state-proposed again, little. record Congressional indicates little supporters 220(j) believed desirable previous unsettled point At most, sure choose time." 1103, 1106.

Classification Label: 9