UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
December 17, 2003
APCC SERVICES, INC., ET AL., PLAINTIFFS,
SPRINT COMMUNICATIONS COMPANY, L.P., DEFENDANT.
The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge
Plaintiffs in this case, as well as in several others before the Court, seek payment from common carriers of "dial-around compensation" on behalf of payphone service providers ("PSPs") for certain long distance phone calls originating from their payphones.*fn1 They claim that the carriers have violated section 276(b)(1)(A) of the Communications Act of 1934, as amended, 47 U.S.C. § 276, and its implementing regulations, codified at 47 C.F.R. § 64.1300. Plaintiffs base their claims on sections 206 and 207 that provide for the recovery of damages for violations of the Act.
All of the cases before this Court present an initial question as to whether section 276 and its implementing regulations confer a private right of action to sue for a common carrier's alleged failure to pay adequate dial-around compensation. On September 4, 2003, the Court, upon motion to dismiss by Cable & Wireless, found that plaintiffs have a right of action and can base their claims on section 276. APCC Serv., Inc. v. Cable & Wireless, Inc., 281 F. Supp. 2d 52 (D.D.C. 2003) (" C&W "). Consistent with that ruling, the Court also allowed plaintiffs to amend their complaint to add additional grounds under sections 201(b), 416(c) and 407 of the Communications Act.*fn2 Id. at 57-59. Sprint has requested that the Court reconsider its rulings and dismiss the amended complaint, or alternatively, certify the question for interlocutory appeal, basing its motion in large part upon the Ninth Circuit's recent holding in Greene v. Sprint Communications Co., 340 F.3d 1047 (9th Cir. 2003).*fn3
Four of these actions also present a question as to whether plaintiffs have Article III standing as assignees of the claims of numerous PSPs.*fn4 The Court initially dismissed one of these cases on March 28, 2003, finding that plaintiffs lacked standing ( see APCC Serv., Inc. v. AT&T Corp., 254 F. Supp. 2d 135 (D.D.C. 2003) (" AT&T I ")), but upon reconsideration, it concluded that the assignments executed by the PSPs bestowed upon the aggregator-plaintiffs standing sufficient to survive an Article III challenge. See APCC Serv., Inc. v. AT&T Corp., 281 F. Supp. 2d 41 (D.D.C. 2003) (" AT&T II "). AT&T has moved for reconsideration of the Court's second decision on the standing issue, or in the alternative, for certification of an interlocutory appeal.*fn5
Whether the Act confers a private right of action to collect dial-around compensation from carriers is a controlling question of law, for it is dispositive as to all cases before the Court.*fn6 To the extent that a private right of action is found to exist, the issue of whether the assignees have standing to sue is also controlling, and is dispositive as to three of the five pending actions.*fn7 An immediate appeal to the Circuit Court of these issues will prevent potentially unnecessary and protracted litigation while definitively resolving these disputed jurisdictional issues. Thus, although the Court is unwilling to reconsider its prior opinions in C&W and AT&T II, it will grant the carriers' motions for certification of an interlocutory appeal of both decisions.
Whether to allow an interlocutory appeal of a non-final order is left to the discretion of the district court. Swint v. Chambers County Comm'n, 514 U.S. 35, 47 (1995). The court may certify such an appeal if (1) the order involves a controlling question of law; (2) a substantial ground for difference of opinion concerning the ruling exists; and (3) an immediate appeal would materially advance the litigation. See 28 U.S.C. § 1292(b); Walsh v. Ford Motor Co., 807 F.2d 1000, 1002 n.2 (D.C. Cir. 1986); In re Korean Air Lines Disaster, 935 F. Supp. 10, 16 (D.D.C. 1996). The party seeking interlocutory review has the burden of persuading the Court that the "circumstances justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment." In re Vitamins Antitrust Litig., No. 99-197, 2000 WL 33142129, at *1 (D.D.C. 2000) (citing First Am. Corp. v. Al-Nahyan, 948 F. Supp. 1107, 1116 (D.D.C. 1996)).
In deciding whether to grant interlocutory appeal, the Court of Appeals in this Circuit follows the collateral order doctrine, see Jungquist v. Sheikh Sultan Bin Khalifa Al Nahyan, 115 F.3d 1020, 1026 (D.C. Cir. 1997), which allows for appeal if it "(1) conclusively determines the disputed question, (2) resolves an important issue completely separate from the merits of the action, and (3) would be effectively unreviewable on appeal from a final judgment." United States v. Rostenkowski, 59 F.3d 1291, 1296 (D.C. Cir. 1995) (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 (1978)).
I. Controlling Question of Law
Under § 1292(b), a "controlling question of law is one that would require reversal if decided incorrectly or that could materially affect the course of litigation with resulting savings of the court's or the parties' resources." Judicial Watch, Inc. v. Nat'l Energy Policy Dev. Group, 233 F. Supp. 2d 16, 19 (D.D.C. 2002). Controlling questions of law include issues that would terminate an action if the district court's order were reversed. See Klinghoffer v. S.N.C. Achille Lauro, 921 F.2d 21, 24 (2d Cir. 1990) (a question of law is controlling if it involves issues of personal or subject matter jurisdiction); United States ex rel. Wis. v. Dean, 729 F.2d 1100, 1103 (7th Cir. 1984) (decision finding subject matter jurisdiction involves a controlling question of law); Katz v. Carte Blanche Corp., 496 F.2d 747, 755 (3d Cir. 1974) (a question is "controlling" if error in its resolution would warrant dismissal).
The resolution of an issue need not necessarily terminate an action in order to be "controlling," Klinghoffer, 921 F.2d at 24, but instead may involve a procedural determination that may significantly impact the action. See In re The Duplan Corp., 591 F.2d 139, 148 n.11 (2d Cir. 1978) (a "controlling question of law" includes procedural determination affecting the conduct of an action); Judicial Watch, 233 F. Supp. 2d at 19 (citing Johnson v. Burken, 930 F.2d 1202, 1206 (7th Cir. 1991) (a question of law can be controlling if it determines the outcome "or even the future course of the litigation")); see also 16 Wright & Miller, Federal Practice & Procedure, § 3930 at 426 (1996) ("A steadily growing number of decisions... have accepted the better view that a question is controlling... if interlocutory reversal might save time for the district court, and time and expense for the litigants."). The impact that the appeal will have on other cases is also a factor supporting a conclusion that the question is controlling. See Klinghoffer, 921 F.2d at 24 (citing Brown v. Bullock, 294 F.2d 415, 417 (2d Cir. 1961) (leave to appeal granted in part because the "determination was likely to have precedential value for a large number of other suits")); Genentech, Inc. v. Novo Nordisk A/S, 907 F. Supp. 97, 99 (S.D.N.Y. 1995) (a question is "controlling" if it affects a large number of cases).
Whether the Communications Act provides a private right of action to collect dial-around compensation is a controlling and dispositive question in each of the five cases, as reversal of the Court's finding would definitively terminate these actions. See Masri v. Wakefield, 602 F. Supp. 404, 406 (D. Colo. 1983) (certifying question as to statutory private right of action). Similarly, if a private right of action is found to exist, the second jurisdictional issue of whether the assignee-plaintiffs have standing is also a controlling question of law. See Klapper v. Commonwealth Realty Trust, 662 F. Supp 235, 236 (D. Del. 1987).*fn8 Although claims by individual PSPs, which are limited in number, may survive the assignees' dismissal for lack of standing, assignee standing is a procedural determination that will significantly impact the form and conduct of these actions. Moreover, because the Court should not speak to any matter over which it lacks jurisdiction, the issue is controlling. See In re Sealed Case, 131 F.3d 208, 210 (D.C. Cir. 1997) ("If we are without subject-matter jurisdiction over the case ostensibly before us, then any pronouncement on any issue... becomes a violation of our Article III limitations.").
It is also significant that in addition to the five cases here, PSPs and aggregators have filed numerous suits throughout the country against common carriers based on a claim of a private right of action under the Communications Act, as well as an assertion of standing based on assignments executed by the PSPs.*fn9 Despite the rash of these cases countrywide, the parties in the cases in this jurisdiction are the major players in almost all the litigation countrywide, and the assignee-plaintiffs represent more than 400,000 of the 500,000 to 600,000 payphone lines in the United States. Moreover, the FCC, a frequent party before the D.C. Circuit, has dealt with cases similar to these*fn10 and has litigated issues relevant to this matter before the D.C. Circuit.*fn11
Therefore, it too would presumably have a significant interest in the resolution of these jurisdictional issues. The industry as a whole would thus benefit from a ruling from the Court of Appeals, for not only will the resolution of these issues be dispositive of the cases before this Court, but it will provide persuasive authority for courts in other jurisdictions, as well as for the FCC.
II. Substantial Ground for Difference of Opinion
A substantial ground for difference of opinion is often established by a dearth of precedent within the controlling jurisdiction and conflicting decisions in other circuits. See City Stores Co. v. Lerner Shops, 410 F.2d 1010, 1011 (D.C. Cir. 1969); see also In re Bridgestone/Firestone, Inc. Tires Prods. Liab. Litig., 212 F. Supp. 2d 903, 909-10 (S.D. Ind. 2002) (certification is appropriate where other courts have adopted conflicting positions regarding the issue of law proposed for certification). A substantial ground for dispute also exists where a court's challenged decision conflicts with decisions of several other courts. See Pub. Interest Research Group v. Hercules, Inc., 830 F. Supp. 1549, 1556 (D.N.J. 1993).
"The mere fact that a substantially greater number of judges have resolved the issue one way rather than another does not, of itself, tend to show that there is no ground for difference of opinion." Vitamins, 2000 WL 33142129, at *2 (citing Daetwyler Corp. v. R. Meyer, 575 F. Supp. 280, 283 (E.D. Pa. 1983)). Instead, a court faced with a motion for certification must analyze the strength of the arguments in opposition to the challenged ruling to decide whether the issue is truly one on which there is a substantial ground for dispute. Id. Where "proceedings that threaten to endure for several years depend on an initial question of jurisdiction... or the like," certification may be justified even if there is a relatively low level of uncertainty. 16 Wright & Miller, Federal Practice & Procedure, § 3930 at 422 (1996); see also Atl. City Elec. Co. v. Gen. Elec. Co., 207 F. Supp. 613, 620 (S.D.N.Y. 1962) (when there are reasons to conclusively and expeditiously determine an issue, a narrow approach is unjustified in determining whether there is a substantial ground for difference of opinion).
Although this Court believes that its prior decisions relating to the existence of a private right of action under the Communications Act and the standing of the plaintiffs-assignees are correct,*fn12 it also recognizes the arguments in support of contrary conclusions are not insubstantial. With respect to the private right of action, the Ninth Circuit in Greene found that since § 276 does not establish a right to compensation from common carriers, the complaint must be dismissed. 340 F.3d at 1052.*fn13 In so holding, the Ninth Circuit found that there was no basis for finding either an explicit or implied private right of action under sections 206, 207 or 276. In rendering its decision, the Court relied on the Supreme Court's decision in Alexander v. Sandoval, 532 U.S. 275 (2001), as did this Court ( see 281 F. Supp. 2d at 55), but its more restrictive analysis of Sandoval led it to find no private right of action. Moreover, its ruling explicitly rejected the reasoning of the one case upon which this Court relied ( see C&W, 281 F. Supp. 2d at 56) – Precision Pay Phones v. Qwest Communications Corp., 210 F. Supp. 2d 1106, 1115 (N.D. Cal. 2002) – on the grounds that the California district court had incorrectly found a statutory right to fair compensation. See Greene, 340 F.3d at 1051 n.4. Given the absence of any authority in this jurisdiction regarding this issue,*fn14 and an unanimous decision from an appellate court in another circuit on the same issue, a finding of a substantial difference of opinion as to whether the Communications Act provides for a private right of action is warranted.*fn15
Similarly, with respect to the issue of Article III standing, there is substantial ground for difference of opinion as reflected by this Court's conflicting rulings in AT&T I and AT&T II, a recent decision by the Central District of California that found, without opinion, that plaintiffs lacked standing ( In re Qwest Communications Corp. Payphone Serv. Providers Compensation Litig, No. 02-ML-1483 (TJH) (C.D. Cal. August 15, 2003)), and the lack of any case law squarely on point.*fn16 To the extent that there is a private right of action under the Act, the issue of standing based on an assignment of rights presents a novel issue of whether the assignees can satisfy Article III's requirement of injury-in-fact. ( See AT&T Mot. at 8 (citing Raines v. Byrd, 521 U.S. 811, 819 (1997) (the injury must affect the plaintiff in a personal and individual way).) Defendants also argue, with some persuasiveness, that this Court's ruling would allow parties to evade the requirements for class action certification set forth in Fed. R. Civ. P. 23 and for associational standing established in Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 343 (1977). ( See AT&T's Mot. at 14-15.)
Given these arguments, as well as the lack of any binding precedent, the Court must agree that, to the extent that a private right of action is found to exist, certification of the issue of standing is also warranted.
III. Material Advancement of the Disposition of the Litigation
Plaintiffs filed the first of these cases against AT&T in early 1999. On May 18, 2001, the Court appointed a special master to assist in overseeing the complicated discovery issues that were presented by that case. To date, the docket in the AT&T case contains more than 110 entries, representing a course of protracted litigation that is currently bogged down in discovery and will no doubt consume a significant amount of the parties' resources in the months and years to come. While the four related matters were not filed until 2001 and 2002, they too will undoubtedly present similarly daunting discovery issues.
For instance, as argued by AT&T, the cost of discovery related to the telephone calls alone will exceed any possible damages award, because "there are likely over one billion separate calls to argue about here."*fn17 (AT&T's Mot. at 15.) In fact, the parties have already expended a substantial amount of resources attempting to design acceptable protocols to analyze a selected 2000 phone calls and have spent more than $1 million relating to document discovery. ( See AT&T's Mot. at 19; AT&T's Reply at 11 n.5.) And, although significant efforts have been made to gather discovery, AT&T claims that because of the sheer volume of information involved, neither plaintiffs nor the carriers have any rational basis upon which to evaluate possible settlement – more than four years after the filing of the suit. ( See AT&T's Mot. at 16.) An immediate appeal would conserve judicial resources and spare the parties from possibly needless expense if it should turn out that this Court's rulings are reversed. See Lemery v. Ford Motor Co., 244 F. Supp. 2d 720, 728 (S.D. Tex. 2002) ("It would pain the Court to see both attorneys... [and parties] proceed to judgment after considerable expense and delay, only to discover that the judgment must be overturned on appeal because the federal judiciary lacks subject matter jurisdiction."). Resolution of this question would also assist many other courts in resolving similar disputes. See Vitamins, 2000 WL 33142129, at *2. Moreover, although plaintiffs argue correctly that they will be prejudiced by further delays, in the event that it is ultimately found that this Court lacks jurisdiction to litigate these cases, it would be far better for all concerned, including plaintiffs, to have these matters resolved now, as opposed to sometime in the distant future.
Finally, the Court is confident that appellate review of the jurisdictional issues presented satisfies the collateral order doctrine, as it would conclusively resolve important legal issues that are completely separate from the merits of the actions, and these issues will, as a practical matter, be effectively unreviewable following trial because of the enormous expense and time involved.*fn18 See GTE New Media Serv. Inc. v. Ameritech Corp., 44 F. Supp. 2d 313, 316 (D.D.C. 1999) ("All indications thus far indicate that to reach final judgment the parties will probably undergo voluminous and burdensome discovery and possibly months of trial. To learn after that point, on appeal, that the parties should not have proceeded so far, and at such expense, would make the issue effectively unreviewable on appeal from final judgment.")
Interlocutory review is warranted here because the interest in avoiding excessively burdensome and expensive litigation is "significant relative to the efficiency interests sought to be advanced by adherence to the final judgment rule." United States v. Philip Morris Inc., 314 F.3d 612, 617 (D.C. Cir. 2003). Although the Court recognizes that the collateral order doctrine should be sparingly invoked, these cases more than qualify for certification under 28 U.S.C. § 1292(b). Moreover, given the need for certification, the Court will grant defendants' request to stay discovery pending appeal, but it expects the parties to seek expedited review in the Court of Appeals.
The Court therefore grants the defendants' request for certification and a stay of discovery pending resolution of the appeal. A separate Order accompanies this Memorandum Opinion.
This matter is before the Court on defendant Sprint's Motion to Dismiss Plaintiffs' Second Amended Complaint [ ], or in the alternative, to certify an interlocutory appeal. Based on the pleadings, the record, and relevant case law, and for the reasons discussed in the Court's accompanying Memorandum Opinion, it is hereby
ORDERED that defendant's motion to dismiss is DENIED; it is FURTHER ORDERED that defendant's motion for certification of interlocutory appeal is GRANTED; and it is
FURTHER ORDERED that APCC Serv., Inc. v. Cable & Wireless, Inc., 281 F. Supp. 2d 52 (D.D.C. 2003) and APCC Serv., Inc. v. AT&T Corp., 281 F. Supp. 2d 41 (D.D.C. 2003) are certified for immediate appeal pursuant to 28 U.S.C. § 1292(b) as they involve controlling questions of law as to which there is a substantial ground for difference of opinion, and an immediate appeal therefrom may materially advance the ultimate termination of this litigation; and it is
FURTHER ORDERED that discovery in the case is stayed pending action by the Court of Appeals.