Alpine PCS, Inc. v. United States

• Decision Date: 02 January 2018
• Docket Number: 2017-1029
• Citation: 878 F.3d 1086
• Parties: ALPINE PCS, INC., Plaintiff–Appellant v. UNITED STATES, Defendant–Appellee
• Court: U.S. Court of Appeals — Federal Circuit

878 F.3d 1086

ALPINE PCS, INC., Plaintiff–Appellant

v.UNITED STATES, Defendant–Appellee

2017-1029

United States Court of Appeals, Federal Circuit.

Decided: January 2, 2018

Norman Pattis, The Pattis Law Firm, LLC, Bethany, CT, argued for plaintiff-appellant.

Patricia M. McCarthy, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee. Also represented by Chad A. Readler, Robert E. Kirschman, Jr.

Before Moore, Reyna, and Taranto, Circuit Judges.

Taranto, Circuit Judge.

In 1996, the Federal Communications Commission (FCC) awarded spectrum licenses to Alpine PCS, Inc., for use in the provision of wireless telecommunications services. Alpine’s failure to make required payments for those licenses in 2002 triggered automatic cancellation of the licenses under FCC regulations. In addition to taking other steps in response, Alpine sought relief from the FCC and, on review under the Communications Act, 47 U.S.C. § 402(b)(5), from the United States Court of Appeals for the District of Columbia Circuit. Eventually, in 2016, Alpine filed this action against the United States under the Tucker Act, 28 U.S.C. § 1491(a)(1), in the United States Court of Federal Claims. Alpine alleged that the FCC breached contractual obligations in canceling the licenses and that the cancellation was a taking for which Alpine was entitled to just compensation under the Takings Clause of the Fifth Amendment to the U.S. Constitution. The Court of Federal Claims dismissed both of Alpine’s claims for lack of jurisdiction under the Tucker Act. We affirm, concluding that the Communications Act provides a comprehensive statutory scheme through which Alpine could raise its contract claims and could challenge the alleged taking and receive a remedy that could have provided just compensation in this case, foreclosing jurisdiction under the Tucker Act.

I

A

In May 1996, Alpine submitted bids in an FCC spectrum-license auction and won two 10–year "personal communication services" licenses. Alpine bid approximately $8.9 million for one license and approximately $17.3 million for the other.

As a small business, Alpine was eligible to pay its bid amounts in installments over the term of the licenses. See 47 C.F.R. § 1.2110(e) (1995) ; 59 Fed. Reg. 44,272, 44,298 –99 (Aug. 26, 1994), amended by 60 Fed. Reg. 52,865, 52,865 (Oct. 11, 1995). In September 1996, Alpine issued promissory notes to the FCC, providing for quarterly payments from December 1996 through September 2006. Alpine also executed security agreements designating the licenses as collateral to secure the payment obligation.

The notes contain two provisions highlighted by the parties. One describes the process of default:

A default under this Note ("Event of Default") shall occur upon ... non-payment by [Alpine] of any Principal or Interest on the due date as specified hereinabove if [Alpine] remains delinquent for more than 90 days and

(1) [Alpine] has not submitted a request, in writing, for a grace period or extension of payments, if any such grace period or extension of payments is provided for in the then-applicable orders and regulations of the Commission; or

(2) [Alpine] has submitted a request, in writing, for a grace period or extension of payments, if any such grace period or extension of payments is provided for in the then-applicable orders and regulations of the Commission, and following the expiration of the grant of such grace period or extension or upon denial of such a request for a grace period or extension, [Alpine] has not resumed payments ... in accordance with the terms of this Note ....

J.A. 21–22; J.A. 29–30. A second provision states that the "Note[s] shall be governed by and construed in accordance with the Communications Act of 1934, as amended, the then-applicable orders and regulations of the Commission, and federal law ..., and nothing in th[ese] Note[s] shall be deemed to release [Alpine] from compliance therewith." J.A. 25; J.A. 33.

The security agreements incorporate the notes’ provisions regarding the process of default and identify automatic cancellation of the licenses as one of the FCC’s remedies upon default. The security agreements also state that they "shall be governed by and construed in accordance with [the] Communications Act of 1934, as amended, then-applicable Commission orders and regulations, as amended, and federal law." J.A. 42; J.A. 50.

The regulations in effect in September 1996 provided that a licensee "making installment payments ... shall be in default" if a payment "is more than ninety (90) days delinquent," but could "request that the [FCC] permit a three to six month grace period, during which no installment payments need be made." 47 C.F.R. § 1.2110(e)(4)(i)–(ii) (1995). The FCC could "consider[ ] whether to grant a request for a grace period" or "approve[ ] a restructured payment schedule." Id. § 1.2110(e)(4)(ii). If the request was denied or the grace period expired without payment, the licenses would automatically cancel and the licensee would be subject to debt collection. Id. § 1.2110(e)(4)(iii).

The FCC then amended the regulations, the amendments taking effect in 1998. See In re Amendment of Part 1 of the Commission’s Rules—Competitive Bidding Procedures , 13 FCC Rcd. 374 (F.C.C. 1997) ; Celtronix Telemetry, Inc. v. FCC , 272 F.3d 585, 586 (D.C. Cir. 2001). The 1998 regulations, instead of requiring a request for a grace period upon default, provided for a 90–day non-delinquency period and a subsequent 90–day grace period—effectively, two 3–month grace periods—as a matter of course. 47 C.F.R. § 1.2110(f)(4)(ii) (1998) ("If any licensee fails to make the required payment at the close of the 90–day period set forth in paragraph (i) of this section, the licensee will automatically be provided with a subsequent 90–day grace period," and "[l]icensees shall not be required to submit any form of request in order to take advantage of the initial 90–day non-delinquency period and subsequent automatic 90–day grace period."); see also 63 Fed. Reg. 2,315, 2,346 (Jan. 15, 1998), corrected by 63 Fed. Reg. 12,658, 12,659 (Mar. 16, 1998). But if the licensee did not pay the installment, plus late fees, after the second grace period, the licensee would be declared in default, have its licenses "automatically cancel[ed]," and be subject to debt collection. 47 C.F.R. § 1.2110(f)(4)(iii)–(iv) (1998).

In January 2002, Alpine failed to make its quarterly payment. Under the regulations in effect at that time, Alpine received two 3–month grace periods as a matter of course, and its new payment deadline was July 31, 2002. See 47 C.F.R. § 1.2110(g)(4)(i)–(ii) (2000).¹ Unless Alpine paid the full amount, plus late fees, by that date, it would be declared in default, have its licenses "automatically cancel[ed]," and be subject to debt collection. Id. § 1.2110(g)(4)(iii)–(iv).

On July 24, 2002, a week before the deadline, Alpine asked the FCC to restructure the payment plan, invoking 31 C.F.R. § 902.2. The FCC acknowledged receipt of that request on July 30, 2002. On July 31, 2002 (the payment deadline), Alpine asked the FCC to waive the automatic cancellation provision of the regulations. In re Alpine PCS, Inc. , 22 FCC Rcd. 1492, 1495 (W.T.B. Jan. 29, 2007).

In October 2002, a few months after the expiration of the grace periods, the FCC changed its public database to show that the licenses had reverted to the FCC. According to Alpine’s allegations in this case, however, the FCC assured Alpine that the database change was a clerical error, and the FCC continued to discuss possible payment restructuring with Alpine.

The FCC ultimately denied both the payment-restructuring and waiver-of-cancellation requests. On January 16, 2004, the FCC told Alpine that Alpine was in default and "advised Alpine that the Restructuring Request was being returned to Alpine ‘without action.’ " J.A. 14; see also In re Alpine PCS, Inc. , 25 FCC Rcd. 469, 474 (F.C.C. Jan. 5, 2010). Three years later, on January 29, 2007, the FCC’s Wireless Telecommunications Bureau issued an order denying Alpine’s waiver and restructuring requests. In re Alpine , 22 FCC Rcd. at 1503 & n.2. Alpine timely filed a petition for reconsideration of the Bureau’s decision, which the FCC denied on January 5, 2010. In re Alpine , 25 FCC Rcd. at 509 (citing 47 U.S.C. § 155(c)(5) ; 47 C.F.R. § 1.106 ). Alpine appealed that decision to the D.C. Circuit under 47 U.S.C. § 402(b). The D.C. Circuit summarily affirmed the FCC’s decision. Alpine PCS, Inc. v. FCC , 404 Fed.Appx. 508 (D.C. Cir. 2010).

B

Several other events and proceedings are relevant here. On April 4, 2008, while Alpine’s petition for reconsideration regarding waiver and restructuring was pending before the FCC, the FCC announced a new auction of the licenses, to be held on August 13, 2008. In re Alpine PCS, Inc. , 23 FCC Rcd. 10,485, 10,486 & n.1 (F.C.C. July 7, 2008). On April 18, 2008, Alpine asked the FCC to stay the auction until the FCC ruled on the reconsideration petition, but the FCC refused. Id. at 10,486, 10,488 –92.

In August 2008, Alpine filed for bankruptcy and moved for an automatic stay of the FCC auction. Debtor’s Emergency Mot. to Enforce Automatic Stay, In re Alpine PCS, Inc. , No. 08–00543 (Bankr. D.D.C. Aug. 18, 2008). The bankruptcy court denied the stay motion, determining that the licenses were not part of the bankruptcy estate. In re Alpine PCS, Inc. , No. 08-00543, 2008 WL 5076983, at *4 (Bankr. D.D.C. Oct. 10, 2008), aff’d , 404 Fed.Appx. 504 (D.C. Cir. 2010). The FCC re-auctioned the licenses in 2008.

In January 2013, Alpine sued the FCC in the U.S. District Court for the District of Columbia, alleging breach of contract, unjust enrichment, fraud in the inducement, and breach of fiduciary duty, and seeking declaratory judgments of no default and no debt. Compl., Alpine PCS, Inc. v. FCC , No. 1:13–cv–000006, at 8–11 (D.D.C. Jan. 3, 2013). Alpine argued that the case was...