United States District Court, N.D. Iowa, Central Division
MEMORANDUM OPINION AND ORDER REGARDING DEFENDANTS' MOTION TO DISMISS OR STAY
MARK W. BENNETT, District Judge.
In this action, plaintiff Sprint Communications Company, L.P., an interexchange carrier or IXC, seeks a refund of, and declaratory bar to, allegedly improper switched access charges by defendant local exchange carriers (LECs), from their intrastate and interstate switched access tariffs, for exchange of wireless communications between Commercial Mobile Radio Service (CMRS) carriers and the LECs that originate and terminate in the same "Major Trading Area" (intraMTA calls) where Sprint acts as an intermediary carrier. Sprint alleges that it should not have been billed access charges, applicable to "long distance calls, " for these calls, because these calls are "local calls" subject to reciprocal compensation, pursuant to longstanding Federal Communications Commission (FCC) rules and federal appellate court decisions.
This case is now before me on the defendant LECs' July 14, 2014, Motion To Dismiss Or Stay And Refer Issues To The Federal Communications Commission (docket no. 8). After an extension of time to do so, Sprint filed its Resistance (docket no. 17) on August 21, 2014, and the LECs filed a Reply (docket no. 25) in further support of their motion on September 15, 2014.
The LECs requested oral arguments on their Motion To Dismiss, because they contend that this case involves complex technical and policy issues in telecommunications regulation and the interpretation and application of orders, rules, and regulations promulgated by the FCC over the past 18 years, and, as such, that oral arguments will allow the court an opportunity to question counsel, which should assist the court. I do not find oral arguments to be necessary in this case, nor has my crowded schedule permitted the timely hearing of such oral arguments. Therefore, I will consider the LECs' Motion To Dismiss fully submitted on the parties' written submissions.
II. LEGAL ANALYSIS
A. Grounds For Dismissal Or Stay
The LECs first assert that Sprint's Complaint should be dismissed for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, because Sprint's claims are barred by application of the "filed rate doctrine" and "the voluntary payment doctrine." In the alternative, the LECs argue that Sprint's Complaint should be dismissed without prejudice, or that this action should be stayed, and the claims referred to the FCC, because the FCC has "primary jurisdiction" over Sprint's claims. Sprint disputes each of the LECs' grounds for dismissal or stay.
I conclude that I must consider, first, the LECs' alternative arguments for dismissal or stay in light of the FCC's "primary jurisdiction." If, indeed, the FCC has "primary jurisdiction, " and the issues presented are properly referred to the FCC, it would be improper for me to circumvent the FCC's "primary jurisdiction" by considering whether Sprint's Complaint states claims upon which relief can be granted, and the FCC's determination on issues within its "primary jurisdiction" may be dispositive of the other grounds for dismissal asserted by the LECs. If, on the other hand, I need not defer to the FCC's "primary jurisdiction, " then I would be free to consider whether dismissal of Sprint's Complaint pursuant to Rule 12(b)(6) is appropriate.
B. Primary Jurisdiction
1. Arguments of the parties
The LECs argue that application of the "primary jurisdiction doctrine" warrants dismissal of Sprint's Complaint, because referral to the FCC would have the following beneficial effects: (1) it would ensure national uniformity and consistency in deciding the legal issues that are at the heart of the more than 30 (and counting) complaints that Sprint has filed in various federal and state courts; and (2) it would allow the FCC to address the applicability of the LECs' switched access tariffs, to determine the effects of the FCC's own orders on those tariffs (including its 1996 Local Competition Order and its 2011 Connect America Fund Order ), to determine the impact of Sprint's unjustifiable delay in asserting its claims, and to address the prospective relief that Sprint is seeking, which are all legal issues that require an exercise of the FCC's expertise and experience. The LECs argue that Sprint will not be unfairly disadvantaged by dismissal of its Complaint, because any subsequent legal action will likely involve an appeal from the FCC's decision, not the present claims, even if the present claims become time-barred during the pending of administrative proceedings. Nevertheless, the LECs concede that, if I conclude that there would be some unfair disadvantage to Sprint, I could and should stay Sprint's action pending disposition of claims referred to the FCC.
In response, Sprint argues, in essence, that the FCC and the federal courts have already addressed the issues that the LECs want referred to the agency so that all that remains is for this court to apply those prior determinations. Indeed, Sprint argues that the impropriety of billing switched access charges for intraMTA calls has been apparent since the FCC's 1996 Local Competition Order and that the FCC clarified the impact of that order in its 2011 Connect America Fund Order by stating, categorically, that intraMTA calls are local traffic subject to reciprocal compensation, not long distance traffic subject to switched access charges. Sprint asserts that the federal appellate courts to consider the question are all in agreement, citing Alma Communications Co. v. Missouri Public Service Comm'n, 490 F.3d 619 (8th Cir. 2007); Iowa Network Services, Inc. v. Qwest Corp., 466 F.3d 1091 (8th Cir. 2006); and Atlas TelephoneCo. v. Oklahoma Corp. Commission, 400 F.3d 1256 (10th Cir. 2005).
In reply, the LECs argue that Sprint ignores the federal law that controls the compensation arrangements between LECs, like themselves, and IXCs, such as Sprint. They point out that Sprint cites to cases and quotes parts of FCC orders related to compensation arrangements between LECs and cellular service (CMRS) providers, but does not address the law that governs compensation between LECs and IXCs. They point out that the FCC's 1996 Local Competition Order, on which Sprint relies, expressly states that (i) the FCC's existing rules for compensation arrangements between LECs and IXCs would continue to apply to IXCs that routed intraMTA traffic over switched access service arrangements that the IXCs purchased from the LECs' tariffs, and (ii) those IXCs would continue to be required to pay the LECs' tariffed access charges applicable to those services. They argue that the FCC's 2011 Connect America Fund Order also does not apply to compensation arrangements between a LEC and an IXC, but between a CMRS provider and a LEC. Likewise, they argue, the decisions of the Circuit Courts of Appeals on which Sprint relies do not relate ...