At & T Com. of South Cent. States v. Bellsouth

• Decision Date: 29 March 1999
• Docket Number: Civil Action No. 97-1137-A.,Civil Action No. 97-1136-A.,Civil Action No. 98-105-A.
• Citation: 43 F.Supp.2d 593
• Court: U.S. District Court — Middle District of Louisiana
• Parties: AT & T COMMUNICATIONS OF THE SOUTH CENTRAL STATES, INC. v. BELLSOUTH TELECOMMUNICATIONS, INC., et al. AT & T Communications of the South Central States, Inc. v. BellSouth Telecommunications, Inc., et al. American Communication Services of Louisiana, Inc., et al. v. BellSouth Telecommunications, Inc., et al.

43 F.Supp.2d 593

AT & T COMMUNICATIONS OF THE SOUTH CENTRAL STATES, INC. v. BELLSOUTH TELECOMMUNICATIONS, INC., et al.

AT & T Communications of the South Central States, Inc. v. BellSouth Telecommunications, Inc., et al.

American Communication Services of Louisiana, Inc., et al. v. BellSouth Telecommunications, Inc., et al.

Civil Action No. 97-1136-A.

Civil Action No. 97-1137-A.

Civil Action No. 98-105-A.

United States District Court, M.D. Louisiana.

March 29, 1999.

David L. Guerry, Michael A. Patterson, Jennifer J. Vosburg, Long Law Firm, Baton Rouge, Louisiana, Michael D. Warden, David L. Lawson, Sidley & Austin, Washington, DC, for AT & T Communications.

R. Patrick Vance, Edward H. Bergin, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, Louisiana, Michael K. Kellogg, Sean A. Lev, Kellogg, Huber, Hansen, Todd & Evans, PLLC, Washington, DC, for BellSouth Telecommunications, Inc. Neil T. Erwin, Wiener, Weiss & Madison, APC, Shreveport, Louisiana, Brian Andrew Eddington, McCollister & McCleary, Baton Rouge, Louisiana, for Louisiana Public Service, Service Commission, Don Owen, Irma Muse Dixon, Dale Sittig, James M. Field, Jack A. Blossman.

Alicia Reggie Freysinger, New Orleans, Louisiana, for American Communication Services of Louisiana, Inc., American Communication Services of Baton Rouge, Inc., and American Communication Services of Shreveport, Inc.

John Anthony Dunlap, Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, New Orleans, LA, John B. Dunlap, III, Simoneaux, Ryan, Carleton & Dunlap, Baton Rouge, LA, for Sprint Communications Company, L.P.

RULING ON SUBJECT MATTER JURISDICTION

PARKER, District Judge.

This consolidated matter is before the court, sua sponte, to consider whether the State of Louisiana through the Public Service Commission is entitled to Eleventh Amendment immunity. All parties have been directed to brief the issue. The defendants, the Louisiana Public Service Commission ("Public Service Commission") and its members, argue that they are immune from suit under the Eleventh Amendment and this court is without jurisdiction to hear this case. The remaining defendant, BellSouth Central States, Inc., ("BellSouth") and the consolidated plaintiffs, AT & T Communications of the South Central State, Inc., ("AT & T"), American Communications Services of Louisiana, Inc., American Communications Services of Baton Rouge, Inc., and American Communications Services of Shreveport, Inc. (presently known as e.spire) ("e.spire") have filed memoranda in opposition.¹ Jurisdiction is allegedly based on 28 U.S.C. § 1331, as it relates to the Telecommunications Act of 1996, Pub.L. No. 104-104, 110 Stat. 56, (codified in scattered sections of 47 U.S.C.A (West Supp.1997)).

I. BACKGROUND

A. The Telecommunications Act

In 1996, the Congress enacted the Telecommunications Act ("the 1996 Act"). The 1996 Act was intended to dissolve monopolies granted by the states to local telephone companies and open the market for competition.² Prior to the 1996 Act, the existing local telephone companies (referred to by the parties as "local exchange carriers") were regulated by the states. Louisiana regulated its local exchange carrier through the Public Service Commission.

The Congress recognized that simply removing regulatory restrictions on competition would not eliminate the economic barriers which blocked entry into the telephone markets. Therefore, in order for the 1996 Act to fulfill its purpose and to ensure that new telephone companies entered the market quickly, the Congress required all local exchange carriers to share their networks with competitors.³ Entrants could either interconnect with the local exchange carriers' network, lease elements of existing local networks at reasonable rates, or purchase the local exchange carriers' services at wholesale rates and sell them to customers.⁴

To ensure that local exchange carriers would be fairly compensated, the Congress required that the new companies and the local exchange carriers reach a reasonable and fair interconnection agreement. The process, which is set out in 47 U.S.C. § 252, requires that new companies and local exchange carriers first try to reach voluntary interconnection agreements.⁵ During negotiations, either party may request that the appropriate state commission act as a mediator.⁶ If the parties are unable to negotiate, 47 U.S.C. § 252(b) requires that the parties submit the issues to compulsory arbitration. Section 252 and the Federal Communications Commission regulations set forth certain standards that must be followed by the state commission during these arbitration proceedings.

Without regard to whether the agreement was negotiated or arbitrated, the 1996 Act requires that the agreement be approved by the state commission. Subsection 252(e) provides guidelines for the acceptance or rejection of an interconnection agreement. If the parties submit to mediation or arbitration and the "state fails to act", the FCC is given the power under the act to preempt the commission's jurisdiction and to assume the state commission's responsibilities.⁷ However, if a state fails to approve or reject an agreement within a reasonable time, then the agreement is deemed approved.⁸ Finally, and this is the problem, 47 U.S.C. § 252(e)(6) states that "any party aggrieved by [a state commission's] determination may bring an action in an appropriate Federal district court to determine whether the agreement or statement meets the requirements of section 251 and this section".

In addition to the negotiation of an interconnection agreement, a local exchange carrier that is a Bell Operating Company, such as BellSouth, is required to submit to the state commission for approval a Statement of Generally Available Terms ("Statement").⁹ The statement must contain "terms and conditions that such company generally offers within that State to comply with the requirement of section 251 of [the Act] and the regulations thereunder and standards applicable under [Section 252]".¹⁰

B. Procedural History

The plaintiffs in this consolidated matter, AT & T and e.spire, are trying to enter the telephone market in which BellSouth is the incumbent local exchange carrier. In compliance with the procedures set forth under the 1996 Act, the plaintiffs attempted to negotiate a voluntary interconnection agreement with BellSouth. After negotiations were unsuccessful, plaintiffs petitioned the Public Service Commission for compulsory arbitration. After arbitration was conducted, the agreement was submitted to the Public Service Commission for approval. Additionally, on October 22, 1997, the Public Service Commission approved BellSouth's Statement of Generally Available Terms ("BellSouth's Statement").

Both AT & T and e.spire contend that certain terms of BellSouth's Statement and their respective interconnection agreements with BellSouth do not meet the requirements of the 1996 Act. Pursuant to Section 252(e)(6), AT & T and e.spire have brought these actions seeking judicial review of both the statement and their respective agreements.

After suits were filed in this court, they were consolidated and the magistrate judge, pursuant to a scheduling order, directed that the parties submit the case on briefs. After briefs had been submitted by the parties, this court noticed that although the Public Service Commission had been named as a party, none of the parties discussed the Public Service Commission's immunity from suit in federal court under the Eleventh Amendment. Therefore, by notice to counsel, the court directed the parties to brief the issue.

II. THE ELEVENTH AMENDMENT

The court has carefully considered all briefs submitted by the parties on this jurisdictional issue and, for reasons which follow, ultimately concludes that the Congress lacks the constitutional power to waive the immunity of the State of Louisiana from suit in federal court by private parties, which immunity is bestowed upon the states by the Eleventh Amendment. Accordingly, the court concludes that the attempted waiver of such sovereign immunity by the Telecommunications Act of 1996 is invalid and that the court lacks jurisdiction.

The Eleventh Amendment to the Constitution states:

"The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State."¹¹

Note that the Amendment does not simply read that states are immune from suit; it declares that the judicial power of the United States "shall not be construed to extend" to any such suit. Neither does the Amendment contain any grant of authority to the Congress to waive its provisions or to apply federal judicial power to the states. Thus, we begin with a clear understanding that if the Congress possesses such power it must be found elsewhere than the Eleventh Amendment.

State immunity under the Eleventh Amendment extends to state agencies such as the Public Service Commission.¹²

While text of the Eleventh Amendment speaks only of suits by citizens of other states, it has been consistently construed to apply to suits against a state by its own citizens and suits against a state based upon federal questions¹³. Eleventh Amendment immunity has not been absolute; the Supreme Court has held that a state's Eleventh Amendment protection can be circumvented if the Congress properly abrogates immunity¹⁴ or if a state waives its immunity and consents to suit in federal court.¹⁵ A third route for a party to obtain relief against a state agency in federal court is the so-called Ex Parte Young¹⁶ "exception" to the Eleventh Amendment, although in nominal form the rule is not an "exception" because the citizen's suit is not against the state itself, but rather it is a suit against a state official.¹⁷

In 1996, the Supreme Court rendered its decision in Seminole Tribe of...