Court Opinion

ID: 3034510
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:51:11.287649+00
Date Added: 2024-06-11T11:48:31.827661
License: Public Domain

United States Court of Appeals
                         FOR THE EIGHTH CIRCUIT
                                 ___________

                                 No. 02-4060
                                 ___________

Rural Iowa Independent Telephone          *
Association,                              *
                                          *
              Plaintiff/Appellant,        *
                                          *
       v.                                 *
                                          *
Iowa Utilities Board, Utilities           *
Division, Department of Commerce,         *
sued as: Iowa Utilities Board;            *
Diane Munns, individually and in her *
official capacity as a member of the      * Appeal from the United States
Iowa Utilities Board; Mark O. Lambert, * District Court for the
individually and in his official capacity * Southern District of Iowa.
as a member of the Iowa Utilities         *
Board; Elliot Smith, individually and *
in his official capacity as a member of *
the Iowa Utilities Board,                 *
                                          *
              Defendants/Appellees,       *
                                          *
Qwest Corporation,                        *
                                          *
              Intervenor Defendant/       *
              Appellee.                   *
                                    ___________

                           Submitted: October 23, 2003

                                Filed: April 1, 2004
                                 ___________
Before BYE, HANSEN, and MELLOY, Circuit Judges.
                           ___________

BYE, Circuit Judge.

       Rural Iowa Independent Telephone Association (RIITA) brought suit in the
district court to challenge a ruling by the Iowa Utilities Board (IUB). The district
court dismissed for lack of jurisdiction believing the suit was a direct challenge to an
order of the Federal Communications Commission (FCC) and therefore within the
exclusive jurisdiction of the courts of appeals under the Hobbs Act, 28 U.S.C. § 2342.
We reverse and remand for further proceedings.

       Qwest Corporation initiated the IUB proceeding that led to the ruling RIITA
now challenges in this action. The issues involved in that proceeding are somewhat
complicated, and fortunately we need not either address or explain them at length to
resolve this appeal. It suffices to note the principal issue was whether Qwest had to
pay access charges to another entity not directly involved in this appeal, Iowa
Network Services (INS), when Qwest carried certain wireless calls – those originating
and terminating within the same major trading area (MTA), or intraMTA calls – over
its hard-wired landline networks to a point of interconnection with INS's network.
RIITA, an industry association of rural telephone carriers in Iowa, participated in the
IUB proceedings because resolution of the dispute between Qwest and INS would
affect its members.

       In the administrative proceedings, the IUB rendered a decision adverse to
RIITA in certain respects. Most notably, the IUB concluded members of RIITA must
accept the intraMTA calls at issue even if they receive no compensation for the calls.
The IUB, in a directive short of an order, strongly "encouraged" the parties involved
to resolve the dispute through negotiations conducted under 47 U.S.C. § 252(a) by
reaching an interconnection agreement permitting reciprocal compensation, and if the
negotiations proved unsuccessful, through an arbitrated agreement arranged by the

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Board pursuant to § 252(b). RIITA filed this action against the IUB challenging its
interpretation of the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat.
56 (codified in various sections of 47 U.S.C.). Specifically at issue was the IUB's
interpretation of part of an FCC ruling entitled Implementation of the Local
Competition Provisions of the Telecommunications Act of 1996, Interconnection
between Local Carriers and Commercial Mobile Radio Service Providers, First
Report and Order, 11 FCC. Rcd 15499 ¶¶ 1035-1045 (1996) (FCC 1996 Local
Competition Order), wherein the FCC deemed intraMTA wireless traffic to be local
in nature.

       RIITA's complaint alleged jurisdiction under 28 U.S.C. § 1331 (general federal
question jurisdiction) and claimed the IUB made legal errors in interpreting and
applying federal law. Alternatively, the complaint alleged jurisdiction under 47
U.S.C. § 252(e)(6) (providing for federal court review of state agency administrative
decisions approving or disapproving interconnection agreements under sections 251
& 252 of the Telecommunications Act) claiming the IUB's decision "eliminate[d] the
duty to negotiate under section 251 by requiring local land-line carriers to accept this
traffic without agreement and by prohibiting local exchange carriers from blocking
telephone traffic that is delivered without the consent of the local exchange carrier."
RIITA Complaint at ¶ 8(b), App. at 8.

       The IUB filed a motion to dismiss RIITA's action on three alternative grounds:
1) Eleventh Amendment immunity; 2) the Johnson Act, 28 U.S.C. § 1342 (prohibiting
federal district courts from "enjoin[ing], suspend[ing] or restrain[ing] the operation
of, or compliance with, any order affecting rates chargeable by a public utility and
made by a State administrative agency or a rate-making body of a State political
subdivision"); or 3) the quasi-judicial immunity of the individual members of the
IUB. The district court allowed Qwest to intervene in the action. It joined the IUB's
motion to dismiss and offered the district court a fourth ground for dismissing

                                          -3-
RIITA's suit. Qwest contended RIITA's suit was a direct challenge to an FCC ruling,
over which the courts of appeals had exclusive jurisdiction under the Hobbs Act.

       The district court agreed with Qwest's argument and dismissed the suit for lack
of jurisdiction. The district court did not address the alternative grounds raised by
the IUB. RIITA filed this timely appeal of the district court's decision.

       We review de novo the district court's determination it lacked subject matter
jurisdiction because of the Hobbs Act. See Carpenter v. Dep't of Transp., 13 F.3d
313, 314 (9th Cir. 1994).

       The Hobbs Act provides, in relevant part, that "[t]he court of appeals (other
than the United States Court of Appeals for the Federal Circuit) has exclusive
jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the
validity of . . . all final orders of the Federal Communications Commission." 28
U.S.C. § 2342(1).

       We conclude the district court erred in dismissing this action. RIITA does not
directly challenge the validity of an FCC order. Rather, RIITA challenges the IUB's
interpretation of that order. RIITA quarrels with what the IUB believes the FCC said
in its 1996 Local Competition Order, not with whether the FCC had the requisite
authority to say it. The latter quarrel would be subject to the Hobbs Act, but the
former is not because district courts have jurisdiction to determine whether a state
administrative agency correctly interprets federal law, in this case the
Telecommunications Act and the FCC regulations interpreting the Act. See Verizon
Maryland Inc. v. Public Serv. Comm'n of Maryland, 535 U.S. 635, 643-44 (2002)
(recognizing a district court's jurisdiction under 28 U.S.C. § 1331 to address an action
challenging a state administrative agency's interpretation of the Telecommunications
Act of 1996); see also Pacific Bell v. Pac-West Telecomm, Inc., 325 F.3d 1114, 1125
(9th Cir. 2003) ("The district court must dismiss a complaint if it directly attacks an

                                          -4-
FCC order or if it raises only issues that were conclusively decided by the FCC order.
Here, neither side seeks to re-adjudicate issues that already have been conclusively
determined by the FCC. At most, they merely ask the court to interpret the FCC's
rulings, to the extent that they are final and binding, and to determine whether the
[IUB's] actions here were consistent with them and with the other authoritative
sources of federal law.").

      We reverse and remand for further proceedings consistent with this opinion.
                     ______________________________

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