Court Opinion

ID: 2974086
Source: CourtListenerOpinion
Date Created: 2015-09-22 17:12:31.8246+00
Date Added: 2024-06-11T11:43:49.421200
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                           File Name: 06a0616n.06
                            Filed: August 22, 2006

                                          No. 05-5419

                           UNITED STATES COURT OF APPEALS
                                FOR THE SIXTH CIRCUIT

ITC^DELTACOM             COMMUNICATIONS,
INC.,

       Plaintiff-Appellant,

v.                                                     ON APPEAL FROM THE UNITED
                                                       STATES DISTRICT COURT FOR THE
BELLSOUTH TELECOMMUNICATIONS,                          MIDDLE DISTRICT OF TENNESSEE
INC., and FEDERAL COMMUNICATIONS
COMMISSION,

       Defendants-Appellees.
                                              /

BEFORE:        MOORE, CLAY, and GRIFFIN, Circuit Judges.

       CLAY, Circuit Judge. Plaintiff, ITC^DeltaCom Communications, Inc. (“ITC”), appeals

the district court’s grant of Defendants BellSouth Telecommunications, Inc. (“Bellsouth”), and the

Federal Communications Commission’s (“FCC”) motions to dismiss Plaintiff’s complaint for lack

of subject matter jurisdiction.

       For the reasons set forth below, we AFFIRM the district court’s order.

                                                  I.

       This case arises out of what the magistrate judge aptly described as “another skirmish in a

long running battle between ITC and Bellsouth over interconnecting rates for the ability of ITC to
                                           No. 05-5419

use some of Bellsouth’s existing equipment.” (J.A. at 92.) The relevant statutory and regulatory

framework and relevant background information is briefly recounted below.

               1.      Statutory and Regulatory Background

       There are a number of statutes and regulations that are important in the present case. Primary

among them is the Telecommunications Act of 1996 (“Act”), Pub. L. No. 104-104, 110 Stat. 56,

which was enacted by Congress “to promote competition in all telecommunications markets,

including the local service market.” MCI Telecomms. Corp. v. Ohio Bell Tel. Co., 376 F.3d 539, 542

(6th Cir. 2004).    The Act prescribes a general duty of all telecommunications carriers to

“interconnect directly or indirectly with facilities and equipment of other telecommunications

carriers,” 47 U.S.C. § 251(a)(1); and incumbent local exchange carriers (“ILECs”), have a duty to

negotiate interconnection agreements in good faith with competitors seeking to enter their markets.

47 U.S.C. § 251(c)(1)-(6). These competitors are known as Competitive Local Exchange Carriers

(“CLEC”).

       Under these provisions of the Act, ILECs and new entrants into the telecommunications

market are required to negotiate in good faith to reach interconnection agreements, but if the ILECs

and CLECs cannot reach an agreement, then they are subject to compulsory arbitration with the state

regulatory commission. Once an agreement is reached, it must be approved by the same state

regulatory commission. There are time limits for a state regulatory commission to act on an

interconnection agreement, and provisions that the FCC may act to approve interconnection

agreements when the state regulatory commission fails to act. 47 U.S.C. § 252(e)(2) and (4)-(5).

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                                            No. 05-5419

The state commission’s final decision is reviewable in federal district court for compliance with the

Act’s requirements. See 47 U.S.C. § 252(e)(6).

       In addition to its obligations under §251, the Act also establishes similar and sometimes

overlapping network sharing obligations for Bell Operating Companies1 (“BOCs “) seeking to

provide long-distance service within their local service areas. Under 47 U.S.C. § 271, BOCs are

required, among other things, to provide “local switching unbundled from transport, local loop

transmission, or other services.” 47 U.S.C. § 271(c)(2)(B)(vi). The rates for BOCs that satisfy this

obligation are governed by the “just and reasonable” standard set forth in 47 U.S.C. § 201(b). The

underlying dispute between ITC and Bellsouth concerns the pricing of local switching that Bellsouth

provides to ITC, pursuant to § 271 of the Act.

               2.      Dispute Between the Parties

       Plaintiff and Defendant BellSouth are two competitors in the Tennessee telecommunications

market. The two companies were negotiating over the terms of an interconnection agreement but

could not agree on local switching rates. The matter was submitted to compulsory arbitration before

the Tennessee Regulatory Authority (“TRA”). The TRA’s arbitration decision announced an interim

rate for the leasing of switching under § 271 of the Act. The TRA announced this rate as an oral

order, with a final order to follow. Neither party has informed has informed this Court of any final

order that has been issued by the TRA, and thus no appeal is presently possible of the TRA’s

decision to the district court, since parties may only seek district court review of final state agency

decisions.

       1
        These are the companies that have remained afer the breakup of AT&T in the 1980s.

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                                            No. 05-5419

       On July 1, 2004, Defendant BellSouth, being dissatisfied with the rate announced by the

TRA, filed with the FCC, pursuant to 47 C.F.R. § 1.2, an Emergency Petition for Declaratory Ruling

and Preemption of State Action, asking the FCC to declare that the TRA was exceeding its

enforcement authority under §271 of the 1996 Act.2 Both Plaintiff and the TRA opposed the

petition, arguing inter alia that the FCC does not have jurisdiction to hear the matter. The FCC has

still not issued a ruling on Defendant BellSouth’s petition.

       On July 9, 2004, Plaintiff filed the instant suit in the United States District Court for the

Eastern District of Tennessee against Defendants BellSouth, the FCC, and the TRA, pursuant to the

Federal Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202, seeking to enjoin Defendant BellSouth

from seeking FCC review of the TRA arbitration ruling. Defendants BellSouth and the FCC filed

motions to dismiss, which the district court referred to the magistrate judge for report and

recommendation.

       On November 16, 2004, the magistrate judge issued its Report and Recommendation,

recommending that the district court grant Defendants’ motions for dismissal for lack of subject

matter jurisdiction. The magistrate judge agreed with Defendants that the district court lacked

subject matter jurisdiction.    Plaintiff filed objections to the magistrate judge’s Report and

Recommendation, but the district court, after de novo review, adopted the magistrate judge’s Report

       2
         Defendant BellSouth argued that the TRA did not have jurisdiction over the issue of § 271
switching rates set at market-based prices. According to Defendant BellSouth, “there is no
jurisdiction in a 252 arbitration to consider – much less set rates from services that are not required
to be provided at UNE rates . . . Only the FCC has jurisdiction to determine whether market rates
are just and reasonable in the event of a dispute.” (J.A. at 32.)

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                                             No. 05-5419

and Recommendation, and dismissed Plaintiff’s complaint on January 18, 2005. Plaintiff filed this

timely notice of appeal on February 16, 2005.

                                                   II.

        This Court reviews de novo a district court’s decision regarding subject matter jurisdiction.

Mattis v. Massman, 355 F.3d 902, 905 (6th Cir. 2004); Dixon v. Ashcroft, 392 F.3d 212, 216 (6th

Cir. 2004).

        The magistrate judge, in deciding this matter, framed the issue as follows: “whether [the]

grant of exclusive jurisdiction to the Court of Appeals extends to situations where the FCC has not

in fact issued a final ruling.” (J.A. at 99.) The magistrate judge concluded that the answer was

“yes,” and that decision as to the propriety of BellSouth and the FCC’s actions with regard to

Defendant’s petition is exclusively within the jurisdiction of the court of appeals, and not the district

court. We agree.

        Judicial review of certain FCC orders is vested exclusively in the courts of appeal. Forty-

seven U.S.C. § 402(a) provides that “[a]ny proceeding to enjoin, set aside, annul, or suspend any

order of the Commission under this chapter (except those appealable under subsection (b) of this

section) shall be brought as provided by and in the manner prescribed in chapter 158 of Title 28.”

Chapter 158 of Title 28, (the Hobbs Act), in turn, provides:

        The 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 (1) all final orders of the Federal Communications
        Commission made reviewable by Section 402(a) of title 47 . . . .

28 U.S.C. § 2342(1). Plaintiff here argues that the instant action would not preempt court of appeals

jurisdiction over the FCC’s final decision in this matter because “there is no final order of the FCC

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                                            No. 05-5419

subject to the Hobbs Act,” (J.A. at 98), but we agree with the magistrate judge that this argument

is foreclosed by our prior decision in La Voz Radio v. FCC, 223 F.3d 313 (6th Cir. 2000).

       In La Voz, the plaintiff was an unlicensed “microbroadcaster” who had been broadcasting

from a church in Grand Rapids, Michigan. Id. at 316. The plaintiff filed an application for a radio

broadcast license, but continued broadcasting pending an FCC decision on his application, declaring

that he had a First Amendment right to broadcast. Id. The FCC ultimately denied the plaintiff’s

application, but he continued to broadcast, despite letters from the FCC warning him to cease and

desist. Id. at 316. The plaintiff later filed another license application with the FCC, but anticipating

that this application would also be denied, he filed suit in the United States District Court for the

Western District of Michigan, seeking “an injunctive order allowing [it] to broadcast [its] religious

message and enjoining the government from civilly or criminally sanctioning [it] during the

pendency of the action.” Id. at 317. The FCC filed a motion to dismiss for lack of subject matter

jurisdiction, arguing that Congress had made FCC licensing decisions reviewable only by the United

States Court of Appeals for the D.C. Circuit. Id. The district court agreed with the FCC and granted

its motion to dismiss.

       On appeal, the La Voz plaintiff argued that 47 U.S.C. § 402 (b), which grants exclusive

jurisdiction to the United States Court of Appeals for the D.C. Circuit to review FCC licensing

decisions, did not apply because the “FCC’s rejection of its application was not a ‘final order’

denying it a broadcast license.” Id. at 318. This Court rejected that argument, holding that “when

review of agency action is expressly committed to a designated court of appeals, that court of

appeals has exclusive jurisdiction over ‘any suit seeking relief that might affect’ its future statutory

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                                            No. 05-5419

power of review.” Id. (citing Telecommunications Research & Action Ctr. v. FCC, 750 F.2d 70,75

(D.C. Cir. 1984)). The Court reasoned that the plaintiff would be able to seek review of the FCC

decision in the United States Court of Appeals for the D.C. Circuit after a final administrative action

by the FCC. Id. at 319 (recognizing that “federal statutes frequently assign jurisdiction to a court

other than the federal district courts and when they do so, Congress negates district court jurisdiction

under § 1331”); see also Telecommunications Research, 750 F.2d at 75 (similarly holding that where

statute expressly grants jurisdiction to the courts of appeals to review final FCC orders, the lack of

a final order does not automatically preclude appellate court jurisdiction).

        Contrary to Plaintiff’s protestations, we believe that this case fits squarely within the La Voz

holding. Plaintiff attempts to argue that the Hobbs Act, which grants the courts of appeals exclusive

jurisdiction to review final orders of the FCC, does not apply here because the Hobbs Act only

applies to final orders and the FCC has not issued a “final order” in this case. (Plaintiff’s Reply

Brief at 3.) Realizing that this argument is foreclosed by the La Voz holding, Plaintiff makes a

related, but equally unpersuasive argument that La Voz does not control here because Plaintiff is not

requesting relief from the conduct of the FCC, but rather is seeking redress from the conduct of

BellSouth. This argument is also without merit because no matter how Plaintiff attempts to fashion

the argument, the gist of its complaint is that it is seeking to divest the FCC of jurisdiction to rule

on BellSouth’s petition, which this Court has already held cannot be done.

        Even if, as Plaintiff argues, the appropriate forum for review of the TRA interim decision

was the district court and not the FCC, the district court still does not have the jurisdiction or

authority to enjoin the FCC from taking action on BellSouth’s petition. As properly stated by the

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                                           No. 05-5419

magistrate judge, “[t]o allow a party to attempt to enjoin another party from seeking FCC relief or

to prohibit the FCC from acting on such a request for relief would summarily preempt the Court of

Appeals from its assigned jurisdiction to review FCC actions.” (J.A. at 102.) Rather, Plaintiff may

properly address its concerns about the propriety of the FCC taking action on Defendant BellSouth’s

petition to the FCC. The FCC may well decide that Plaintiff is correct and that Defendant

BellSouth’s petition is not appropriate. On the other hand, the FCC may issue a ruling on the matter,

at which point Plaintiff would have the right to appeal the FCC final order to the appropriate court

of appeals, if it finds the decision to be wrongly decided. In the meantime, Plaintiff must simply

await the FCC’s decision, inasmuch as the district court properly declined to enjoin the pending FCC

action.

                                                III.

          For the foregoing reasons, we AFFIRM the district court’s order.

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