Bryan v. Bellsouth Communications, Inc., 03-1316.

• Decision Date: 28 July 2004
• Docket Number: No. 03-1316.,03-1316.
• Citation: 377 F.3d 424
• Parties: Tomi White BRYAN, individually and on behalf of all others similarly situated, Plaintiff-Appellee, v. BELLSOUTH COMMUNICATIONS, INCORPORATED, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

377 F.3d 424

Tomi White BRYAN, individually and on behalf of all others similarly situated, Plaintiff-Appellee, v. BELLSOUTH COMMUNICATIONS, INCORPORATED, Defendant-Appellant.

No. 03-1316.

United States Court of Appeals, Fourth Circuit.

Argued: February 24, 2004.

Decided: July 28, 2004.

Appeal from the United States District Court for the Middle District of North Carolina, Frank W. Bullock, Jr. ARGUED: Ashley B. Watson, Bellsouth Corporation, Atlanta, Georgia, for Appellant.

Michael Geoffrey Wimer, Wimer & Jobe, Arden, North Carolina, for Appellee.

ON BRIEF: Richard S. Gottlieb, John B. Morris, Kilpatrick Stockton, L.L.P., Winston-Salem, North Carolina, for Appellant.

Amiel J. Rossabi, Forman, Rossabi, Black, P.A., Greensboro, North Carolina, for Appellee.

Before LUTTIG, KING, and GREGORY, Circuit Judges.

Vacated and remanded by published opinion. Judge KING wrote the opinion, in which Judge GREGORY joined. Judge LUTTIG wrote a dissenting opinion.

OPINION

KING, Circuit Judge:

Defendant BellSouth appeals from the portion of a decision of the Middle District of North Carolina denying dismissal and remanding one of plaintiff Tomi Bryan's three claims to state court. Bryan v. Bellsouth Telecomms., Inc., No. 1:02CV00228, 2003 WL 262333 (M.D.N.C. Feb.6, 2003). The court concluded that certain of Bryan's claims arose under federal law and were subject to dismissal under the "filed-rate doctrine." It declined to exercise supplemental jurisdiction and remanded to state court a single claim that it determined did not raise a federal question. BellSouth maintains that the court erred in failing to conclude that all of Bryan's claims posed federal questions and were barred by the filed-rate doctrine. For the reasons explained below, we vacate and remand.

I.

A.

BellSouth, as a provider of interstate public telecommunications services, is required by law to contribute a portion of its revenues to the federal Universal Service Fund ("USF") to ensure affordable telecommunications services to rural and low-income areas, schools, hospitals, and the like. See 47 U.S.C. § 254; 47 C.F.R. § 54.706(a). The percentage of its revenues that a carrier must contribute to the USF is established by the Federal Communications Commission ("FCC") and is adjusted on a quarterly basis to ensure sufficient funding of the USF. See 47 C.F.R. § 54.709(a).

The FCC permits telecommunications carriers such as BellSouth to recover the costs of their contributions to the USF from their customers, either through increased rates or through a separate line item on the customers' bills. See In the Matter of Federal-State Joint Board on Universal Service, 17 F.C.C.R. 24952, ¶ 42 (2002). Prior to April 1, 2003, certain carriers who recovered their USF contributions through line items would charge customers significantly more than the contribution required based on their bills. Id. ¶ 46. These carriers attributed the need for such "marking up" to "the lag between the reporting and assessment of revenues, uncollectibles, and administrative costs." Id. In an effort to "address consumer concerns regarding disparate contributor recovery practices," id. ¶ 40, the FCC forbade marking up the line-item charge, effective April 1, 2003. Id. ¶ 45.

Billing practices such as recovery of USF contributions are established in a carrier's "Schedule of Charges," see 47 U.S.C. § 203, also known as its "tariff." A carrier's tariff must be filed with the FCC and kept open for public inspection.¹ Id. § 203(a). In addition, a carrier may not charge more or less than the rates set forth in its tariff, and it may not refund or remit to a customer any of the charges contained in the tariff. Id. § 203(c).

As reflected in its tariff, BellSouth chooses to recover its USF contribution from its customers through a line item on the customers' bills, which it denotes as the "Federal Universal Service Charge" ("FUSC"). The applicable tariff establishes the portion of BellSouth's USF contribution that will be recovered from customers, and it calculates, based on the number of telephone lines and the amount sought to be recovered, that the end user of each line will be charged an FUSC of $0.53 per month.

B.

On February 22, 2002, Bryan filed suit against BellSouth in the Superior Court of Guilford County, North Carolina, seeking to represent a class of individuals who are BellSouth customers and who paid the FUSC. Bryan alleged that the FUSC was excessive and that Bell-South had failed to disclose certain information pertaining to the FUSC, in violation of North Carolina's unfair trade practices law.

On March 26, 2002, BellSouth removed the suit to the Middle District of North Carolina, pursuant to 28 U.S.C. §§ 1441 and 1446, on the basis that Bryan's claims raised federal questions by challenging BellSouth's tariff. On June 4, 2002, Bryan filed her First Amended Complaint (the "Complaint") in federal court, seeking to sue on behalf of all North Carolina BellSouth customers who paid the FUSC. The Complaint alleged that BellSouth imposes an FUSC that exceeds its required contribution to the USF, that BellSouth does not disclose how it calculates the FUSC, and that BellSouth's use of the term "Federal Universal Service Charge" is misleading.

Based on these allegations, Bryan asserted three separate causes of action. In Count A, she claimed that BellSouth committed unfair and deceptive trade practices, in violation of North Carolina General Stat-ute section 75-1.1, by failing to disclose: (1) how it calculates the FUSC; (2) that it charges customers an amount well in excess of its contribution to the USF for North Carolina services; and (3) that the FUSC includes administrative expenses, costs, and profits.² Count A further alleged that BellSouth's use of the term "Federal Universal Service Charge" is unfair or deceptive, as is its representation to customers that the FUSC is paid to the USF. In Count B, Bryan brought a claim for unjust enrichment/restitution, contending that BellSouth unjustly enriched itself by imposing an excessive and unlawful FUSC. In Count C, Bryan alleged breach of the covenant of good faith and fair dealing based on BellSouth's charging an excessive FUSC and failing to make the disclosures described in Count A. Based on these claims, the Complaint sought damages in an amount exceeding $10,000 but less than $74,999 per class member.³

On June 10, 2002, Bryan filed a motion to remand the Complaint to state court, see 28 U.S.C. § 1447, and, on July 3, 2002, BellSouth filed a motion, pursuant to Federal Rule of Civil Procedure 12(b)(6), to dismiss the Complaint for failure to state a claim upon which relief can be granted. In support of its motion to dismiss and in opposition to Bryan's motion to remand, BellSouth maintained that all of Bryan's claims were barred by the "filed-rate doctrine" in that they challenged BellSouth's filed tariff or, in the alternative, that they should be heard first by the FCC under the doctrine of primary jurisdiction.

On February 6, 2003, the court issued its Memorandum Opinion addressing the parties' contentions. Bryan, 2003 WL 262333 (the "Opinion"). On that same date, the court entered the Order from which this appeal is taken (the "Order"). In its Opinion, the court first concluded that removal was proper because Bryan presented a federal question by directly challenging the terms of a tariff in her allegations that BellSouth's FUSC was excessive. Opinion at 11. The court then turned to BellSouth's motion to dismiss, explaining that the filed-rate doctrine, also known as the "filed-tariff doctrine," prohibits suits that would have the effect of altering the rates set forth in a carrier's filed tariff. Id. at 11-12. Based on this doctrine, the court dismissed those claims that it concluded arose under federal law by challenging the tariff. Id. at 13. The court then declined to exercise supplemental jurisdiction and remanded to state court those "remaining claims" that did not challenge the tariff and thus did not present federal questions.⁴ Id. at 13-14. BellSouth appeals from the portion of the court's Order denying dismissal of Count A and remanding it to state court, maintaining that Count A, like Bryan's other two claims, challenged the tariff, arose under federal law, and should have been dismissed.

II.

We turn first to Bryan's assertion that we lack jurisdiction over this appeal. Bryan maintains that jurisdiction is lacking because the Order was "non-final," in that one of her claims was not dismissed. See generally 28 U.S.C. § 1291 ("The courts of appeals ... shall have jurisdiction of appeals from all final decisions of the district courts of the United States...."). For this proposition, Bryan relies on Federal Rule of Civil Procedure 54(b), which provides that, "[w]hen more than one claim for relief is presented in an action, ... the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment." Fed. R. Civ. P. 54(b) (emphasis added). Bryan maintains that, as the court made no such express determination, its Order was not final and is not appealable.

Bryan's assertion does not withstand scrutiny. Admittedly, 28 U.S.C. § 1447(d) provides that "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise...." However, as the Supreme Court explained in Quackenbush v. Allstate Insurance Co., 517 U.S. 706, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996), § 1447(d) refers only to those situations in which a court has directed a remand for the reasons set forth in § 1447(c); that is, a defect in removal or lack of subject matter jurisdiction. Quackenbush, 517 U.S. at 711-12, 116 S.Ct. 1712. The Court went on to explain that, where a district court has remanded a lawsuit to state court based on...