Carter v. American Telephone and Telegraph Company, Civ. A. No. 3-1294.

Citation250 F. Supp. 188
Decision Date08 February 1966
Docket NumberCiv. A. No. 3-1294.
PartiesThomas F. CARTER and Carter Electronics Corporation, Plaintiffs, v. AMERICAN TELEPHONE AND TELEGRAPH COMPANY et al., Defendants.
CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas

Geary, Brice & Lewis, by Ray Besing, and William VanDercreek, Dallas, Tex., for plaintiffs.

Charles Ryan, New York City, Wayne Babler and Melvin R. Quinlan, James M. Shatto, St. Louis, Mo., Edgar Mayfield, James Hand and H. W. Strasburger, Dallas, Tex., Vinson, Elkins, Weems & Searls, by Leroy Jeffers, Harry M. Reasoner, and Richard P. Keeton, Houston, Tex., for American Telephone and Telegraph Co. and Southwestern Bell Telephone Co.

Burford, Ryburn & Ford, by Frank M. Ryburn, Jr., Dallas, Tex., for the General Telephone Co. of the Southwest.

ESTES, Chief Judge.

Plaintiffs, Thomas F. Carter and Carter Electronics Corporation, claim that they manufacture and sell a device called the "Carterfone," which permits a person receiving an incoming telephone call to transmit such call from the location received to another location by the use of two-way radio communication. The party receiving the incoming telephone call places the telephone receiver handset on a cradle which forms part of the Carterfone; and by process of induction, "without any electrical connection," the two-way radio communication system is activated, and the telephone caller can communicate with another person who may be located several miles away from the telephone receiver. Plaintiffs assert that defendants, American Telephone and Telegraph Company, Southwestern Bell Telephone Company and The General Telephone Company of the Southwest, using their monopoly powers over telephone communications, have conspired to and did prevent plaintiffs from selling their device by threats to prospective customers that their telephone service would be discontinued if they used plaintiffs' device, thereby substantially lessening competition between the Carterfone and defendants' mobile radio-telephone units and tending to create and further maintain defendants' monopoly over such products, all in violation of the antitrust laws, 15 U.S.C. §§ 1, 2, and 14, for which plaintiffs seek treble damages and injunctive relief.

Portions of AT&T Tariff FCC No. 132, "Message Toll Telephone Service," are attached as Exhibit "A" to plaintiffs' Complaint. Section 7 of the Tariff gives the Telephone Company the right to suspend or terminate service if an unauthorized device is "attached to or connected with the facilities furnished by the Telephone Company, whether physically, by induction or otherwise, except as provided in this Tariff."

Section 24 authorizes miscellaneous devices provided by the telephone customer "provided any such device so used would not endanger the safety of Telephone Company employees or the public; damage, require change in or alteration of, or involve direct electrical connection to, the equipment or other facilities of the Telephone Company; or interfere with the proper functioning of such equipment or facilities; or impair the operation of the telephone system or otherwise injure the public in its use of the Telephone Company's services."

In their complaint plaintiffs state that:

"* * * Although the Plaintiffs deny that such tariff is a valid tariff and that such tariff is applicable to the Carterfone, regardless of its validity and its application, the Defendants and the aforementioned non-party telephone companies have, as part of a common design and scheme, in uniformly publishing and enforcing such tariff, wrongfully used such tariff to accomplish a violation of the antitrust laws of the United States * * *."

The defendants have filed motions to dismiss on the grounds that primary jurisdiction lies with the Federal Communications Commission and that the complaint fails to state a claim upon which relief can be granted.

The Communications Act (47 U.S.C. § 151 et seq.) was enacted for the stated purpose of regulating interstate commerce in communication by wire and radio so as to make available "a rapid, efficient, Nation-wide and world-wide" communication service with adequate facilities at reasonable charges and created the Federal Communications Commission to execute and enforce the provisions of the Act. The Commission's authority and responsibility encompass "charges, practices, classifications, and regulations for and in connection with such communication service" which must be just and reasonable 47 U.S.C. § 201(b); the common carrier may not make any unjust or unreasonable discrimination in charges or practices directly or indirectly by any means or devices 47 U.S.C. § 202(a); no change may be made in such charges, classifications, regulations or practices except after thirty days' notice to the Commission and to the public 47 U.S.C. § 203(b); telephone companies may not participate in communication unless schedules have been filed and published in accordance with the provisions of the Act 47 U.S.C. § 203(c); whenever a new charge, classification, regulation or practice is filed with the Commission, the Commission may, upon complaint or upon its own initiative, "enter upon a hearing concerning the lawfulness thereof" (47 U.S.C. § 204) and prescribe the just and reasonable charges or practices (47 U.S.C. § 204); "any person * * * complaining of anything done or omitted to be done by any common carrier * * * may apply to said Commission and * * * if * * * there shall appear to be any reasonable ground for investigating said complaint, it shall be the duty of the Commission to investigate the matters complained of in such manner and by such means as it shall deem proper" (47 U.S.C. § 208); and the Commission has the power to require any telephone company "to provide itself with adequate facilities for the expeditious and efficient performance of its service as a common carrier" 47 U.S.C. § 214(d). The Federal Communications Commission administers a "pervasive regulatory scheme" for telephone companies. When the antitrust policy of free competition is placed beside so pervasive a regulatory scheme involving rates and practices of those providing telephone service to the public, some resolution is obviously necessary. The regulatory agency which is expert in,...

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12 cases
  • Essential Communications Systems, Inc. v. American Tel. & Tel. Co.
    • United States
    • U.S. Court of Appeals — Third Circuit
    • November 23, 1979
    ...by the FCC of the validity of the Bell System tariff, and the Fifth Circuit affirmed that denial. Carter v. American Tel. & Tel. Co., 250 F.Supp. 188, 192 (N.D.Tex.), Aff'd, 365 F.2d 486 (5th Cir. 1966), Cert. denied, 385 U.S. 1008, 87 S.Ct. 714, 17 L.Ed.2d 546 (1967). Then, for the first t......
  • Essential Communication Systems, Inc. v. American Tel. & Tel. Co.
    • United States
    • U.S. District Court — District of New Jersey
    • March 13, 1978
    ...The trial court referred the issue of the validity of the tariff to the FCC under the doctrine of primary jurisdiction. Carter v. ATT Co., 250 F.Supp. 188 (N.D.Tex.1966), aff'd, 365 F.2d 486 (5th Cir. 1966), cert. den., 385 U.S. 1008, 87 S.Ct. 714, 17 L.Ed.2d 546 The FCC, responding to the ......
  • Phonetele, Inc. v. American Tel. & Tel. Co.
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • December 3, 1981
    ...stayed while the case was referred to the FCC to determine the legality of the prohibition under the FCA. See Carter v. American Tel. & Tel. Co., 250 F.Supp. 188 (N.D.Tex.), aff'd, 365 F.2d 486 (5th Cir. 1966), cert. denied, 385 U.S. 1008, 87 S.Ct. 714, 17 L.Ed.2d 546 (1967). 17 In 1966 the......
  • INTERNATIONAL T. & T. CORP. v. General Tel. & Elec. Corp.
    • United States
    • U.S. District Court — District of Hawaii
    • July 14, 1972
    ...55 PX 19. 56 In re Application of General Telephone Company of California No. 498035, Brief for Applicant, pp. 36-37. 57 Carter v. AT & T Co., 250 F.Supp. 188 (N.D.Tex.), aff'd 365 F.2d 486 (5 Cir. 1966), cert. denied 385 U.S. 1008, 87 S.Ct. 714, 17 L.Ed.2d 546 58 13 FCC 2d at 424. 59 FCC o......
  • Request a trial to view additional results
1 books & journal articles
  • The Role of Antitrust in Telecommunications
    • United States
    • Antitrust Bulletin No. 40-3, September 1995
    • September 1, 1995
    ...Recording Devices, 11 FCC 1033 (1947); Jordaphone, 18 FCC644 (1954); Hush-A-Phone v. U.S., 238 F.2d 266 (D.C. Cir. 1956);Carter v. AT&T, 250 F. Supp. 188 (N.D. Tex. 1966); Carterfone, 13 FCC2d 433 (1968); and the "Part 68" testing procedure in Proposals for Newand Revised ClassesofInterstat......

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