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AT&T v. MCI COMMUNS. CORP.

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA


November 8, 1993

AMERICAN TELEPHONE AND TELEGRAPH COMPANY, Plaintiff,
v.
MCI COMMUNICATIONS CORPORATION, Defendant. AMERICAN TELEPHONE AND TELEGRAPH COMPANY, Plaintiff, v. WILLIAMS TELECOMMUNICATIONS GROUP, INC., et al., Defendants. AMERICAN TELEPHONE AND TELEGRAPH COMPANY, Plaintiff, v. SPRINT COMMUNICATIONS COMPANY, L.P., Defendant.

The opinion of the court was delivered by: STANLEY S. HARRIS

OPINION

 Before the Court are the motions of defendants MCI Communications Corporation ("MCI"), Wiltel, Inc. ("Wiltel"), and Sprint Communications Company, L.P., ("Sprint") to dismiss in these consolidated cases. Upon careful consideration of the entire record, the Court grants the motions to dismiss of defendants MCI and Sprint. The Court stays the complaint against Wiltel pending resolution of related issues by the FCC. *fn1" Although "findings of fact and conclusions of law are unnecessary on decisions of motions under Rule 12 or 56," Fed. R. Civ. P. 52(a), the Court nonetheless sets forth its reasons.

 Background

 These consolidated cases arise out of the FCC's long-standing policy of exempting certain long distance carriers from the tariff filing requirement embodied in section 203 of the Communications Act, 47 U.S.C. § 203. Pursuant to this "permissive detariffing" policy, carriers that the FCC determined to be nondominant in the inter-exchange market were permitted to choose whether to file tariffs. See Fourth Report and Order, 99 F.C.C.2d 554, 578 (1983) ("Fourth Report,. Both MCI and Wiltel, in reliance on the Fourth Report, provided interstate telecommunications services to certain customers at specially negotiated rates not set forth in any tariff filed with the FCC. Sprint consistently has filed tariffs for all of its telecommunications services. These tariffs establish maximum rates for long distance telephone service and allow discounts from those rates under certain circumstances.

 In 1992, the D.C. Circuit, in an appeal from a proceeding before the FCC brought by AT&T against MCI, held that the permissive detariffing rule of the Fourth Report violated section 203 of the Communications Act. American Tel. & Tel. Co. v. FCC, 298 U.S. App. D.C. 230, 978 F.2d 727 (D.C. Cir. 1992), cert. denied sub nom., MCI Telecommunications Corp. v. American Tel. & Tel. Co., 125 L. Ed. 2d 709, 113 S. Ct. 3020 (1993). The Court also held that AT&T was entitled to a cease and desist order against MCI. Id. However, the Court remanded the case to the FCC to reconsider AT&T's damage claim against MCI. Id. at 736-37. In response to that decision, MCI began to file tariffs containing rates with a range of discounts available as well as possible further adjustments under certain limited circumstances. *fn2"

 The issue of MCI's liability for damages for the 1987-89 period currently is pending before the FCC. Also pending before the FCC are two counterclaims filed by AT&T against Sprint alleging that certain of Sprint's tariffs violated section 203. See US Sprint Communications Co. Ltd. Partnership v. American Tel. & Tel. Co. Communications, FCC File No. E-90-113 (filed Feb. 8, 1990); US Sprint Communications Co. Ltd. Partnership v. American Tel. & Tel. Co. Communications, FCC File No. E-91-63 (filed Feb. 19, 1991). In addition, on February 22, 1993, MCI petitioned the FCC for a declaratory ruling with respect to the potential liability for damages of nondominant carriers as a result of their past compliance with the Fourth Report.

 On August 18, 1993, the FCC issued a Memorandum Opinion and Order establishing revised tariff filing requirements for nondominant common carriers. Tariff Filing Requirements for Nondominant Common Carriers, FCC Docket No. 93-36 (Aug. 18, 1993) ("Rulemaking Order"). This rulemaking became effective on August 23, 1993. See 58 Fed. Reg. 44,457 (Aug. 23, 1993) (to be codified at 47 C.F.R. §§ 43, 61) ("Final Rule"), pet. for review pending, No. 93-1590 (D.C. Cir. filed Sept. 1, 1993). The Rulemaking Order authorizes nondominant carriers to file tariffs that set forth rates "in a manner of the carrier's choosing and may include a reasonable range of rates." Rulemaking Order at 3. The FCC has found that this tariff content requirement is consistent with section 203 of the Communications Act. Id. at 20. The Rulemaking Order authorizes tariffs such as those filed by MCI in response to the AT&T v. FCC opinion. It may also sanction tariffs such as those filed by Sprint during the time-period relevant to AT&T's complaint. *fn3"

 AT&T brings these three complaints under section 207 of the Communications Act, 47 U.S.C. § 207, which allows "any person claiming to be damaged by any common carrier subject to the provisions of this chapter" to recover damages in federal district court. AT&T alleges that each of the three defendants has violated section 203 of the Communications Act by providing long distance telephone service to certain customers at secretly negotiated and unfiled rates. AT&T seeks damages for the conduct of MCI and Wiltel after February 10, 1991, and for Sprint's conduct after April 11, 1991.

 Discussion

 All three defendants have moved to dismiss. Both MCI and Sprint contend that the doctrine of primary jurisdiction requires dismissal, or a stay, of AT&T's complaint because identical issues presently are being considered by the FCC. *fn4" The Court agrees that the issues raised in AT&T's complaints are better resolved by the FCC.

 The primary jurisdiction doctrine allows a district court to dismiss, or stay, an action over which it has subject matter jurisdiction if it finds that an agency is better suited to make the initial decision on the issues in dispute. See, e.g., Far East Conference v. United States, 342 U.S. 570, 72 S. Ct. 492, 494-95, 96 L. Ed. 576 (1952); Allnet Communication Serv., Inc. v. National Exchange Carrier Ass'n, 296 U.S. App. D.C. 156, 965 F.2d 1118, 1120 (D.C. Cir. 1992). Courts apply the primary jurisdiction doctrine on a case by case basis in order to secure uniformity in outcomes and to obtain the benefit of the expertise and experience of administrative agencies. See, e.g., In re Long Distance Telecommunications Litig., 831 F.2d 627, 631 (6th Cir. 1987).

 Courts generally consider four factors in determining whether to invoke the primary jurisdiction doctrine:

 

(1) whether the question at issue is within the conventional experience of judges; (2) whether the question at issue lies peculiarly within the agency's discretion or requires the exercise of agency expertise; (3) whether there exists a danger of inconsistent rulings; and (4) whether a prior application to the agency has been made.

 Oasis Petroleum Corp. v. United States Dep't of Energy, 718 F.2d 1558, 1564 (Temp. Emer. Ct. App. 1983) (footnotes omitted). Upon consideration of these factors, the Court finds that it is appropriate to invoke the doctrine of primary jurisdiction with respect to each of the three complaints.

 The Court finds that the FCC is better suited to determine the unresolved issue of whether either Sprint's tariffs or the tariffs filed by MCI after the AT&T v. FCC decision violate section 203 of the Communications Act. It is particularly appropriate to invoke the primary jurisdiction doctrine where it is necessary to determine whether a tariff is in compliance with regulatory standards. See, e.g., Allnet v. NECA, 965 F.2d at 1120; Southwestern Bell Tel. Co. v. Allnet Communications Serv., Inc., 789 F. Supp. 302, 304 (E.D. Mo. 1992). Moreover, the issue of whether MCI's currently filed tariffs are lawful is squarely before the Court of Appeals due to AT&T's appeal of the Final Rule authorizing such tariffs. That appeal also could determine whether Sprint's tariffs violate the Communications Act. Therefore, it would be inappropriate for this Court to resolve these issues. *fn5" Accordingly, the Court dismisses AT&T's complaint against Sprint and that portion of AT&T's complaint concerning MCI's post-November 1992 tariffs. *fn6"

 The Court also finds it appropriate to invoke the doctrine of primary jurisdiction for AT&T's complaint against Wiltel, and for the portion of AT&T's complaint against MCI concerning those tariffs filed by MCI in reliance on the Fourth Report. The D.C. Circuit remanded the issue of damages for MCI's violations of the Communications Act between 1987 and 1989 to the FCC. See American Tel. & Tel. Co. v. FCC, 978 F.2d at 736-37. In order to resolve the damage issue, the FCC will need to determine whether MCI's reliance on the permissive detariffing rule provides a sufficient basis for denying damages. In addition, MCI has petitioned the FCC for a declaratory ruling with respect to the liability of nondominant carriers as a result of their past compliance with the Fourth Report. Thus, the very issues that this Court would have to resolve in order to determine the liability, if any, of MCI and Wiltel to AT&T currently are pending before the FCC. The Court finds that the resolution of these issues will require the application of policy judgments better left to the expertise of the FCC. Moreover, due to the pendency of actions before both this Court and the FCC, there is a danger of inconsistent rulings. Therefore, the Court finds that it is appropriate to dismiss AT&T's complaint against MCI. See, e.g., Far East Conference, 72 S. Ct. at 495 (1952); Allnet v. NECA, 965 F.2d at 1123. Wiltel has not raised primary jurisdiction as a grounds for dismissal. Moreover, no case directly involving Wiltel is pending before the FCC. Therefore, the Court stays AT&T's action against Wiltel pending resolution of the related matters before the FCC. *fn7"

 Conclusion

 For the foregoing reasons, the Court grants the motions of MCI and Sprint to dismiss. The Court denies Wiltel's motion to transfer as moot. The Court reserves ruling on Wiltel's motion to dismiss for lack of standing, and stays the case pending resolution of related issues before the FCC. An appropriate Order accompanies this Opinion.

 Stanley S. Harris

 United States District Judge

 Date: November 8, 1993

 ORDER - November 9, 1993, Filed

 For the reasons stated in the accompanying Opinion, it hereby is

 ORDERED, that the motion of MCI to dismiss is granted. It hereby further is

 ORDERED, that the motion of Sprint to dismiss in granted. It hereby further is

 ORDERED, that the motion of Wiltel to transfer is denied as moot. It hereby further is

 ORDERED, that AT&T's complaint against Wiltel is stayed pending resolution of related issues before the FCC.

 SO ORDERED.

 Stanley S. Harris

 United States District Judge

 Date: November 8, 1993


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