Crystal Clear Communications v. Southwestern Bell

• Decision Date: 19 July 2005
• Docket Number: No. 03-6219.,03-6219.
• Citation: 415 F.3d 1171
• Parties: CRYSTAL CLEAR COMMUNICATIONS, INC., an Oklahoma corporation; KKW Gold Exchange, Inc., an Oklahoma corporation; doing business as Southwestern Payphones; Rouven Irom, doing business as Sooner Payphones; Teletrust, Inc., a Texas corporation, Plaintiffs-Appellants, v. SOUTHWESTERN BELL TELEPHONE COMPANY, a Missouri corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

415 F.3d 1171

CRYSTAL CLEAR COMMUNICATIONS, INC., an Oklahoma corporation; KKW Gold Exchange, Inc., an Oklahoma corporation; doing business as Southwestern Payphones; Rouven Irom, doing business as Sooner Payphones; Teletrust, Inc., a Texas corporation, Plaintiffs-Appellants, v. SOUTHWESTERN BELL TELEPHONE COMPANY, a Missouri corporation, Defendant-Appellee.

No. 03-6219.

United States Court of Appeals, Tenth Circuit.

July 19, 2005.

COPYRIGHT MATERIAL OMITTED

Jon W. Laasch (J. David Jacobson, with him on the briefs), Jacobson & Laasch, Edmond, OK, for Plaintiffs-Appellants.

Donald L. Flexner, Boies, Schiller & Flexner, LLP, New York, N.Y. (David A. Barrett, Boies, Schiller & Flexner, LLP, New York, NY, Scott E. Gant, Boies, Schiller & Flexner, LLP, Washington, DC, with him on the brief), for Defendant-Appellee.

Before BRISCOE, ANDERSON, and MURPHY, Circuit Judges.

MURPHY, Circuit Judge.

I. INTRODUCTION

Plaintiffs, several independent payphone providers doing business in Oklahoma, filed suit against Southwestern Bell Telephone Company in United States District Court for the Western District of Oklahoma, claiming that Southwestern Bell engaged in anticompetitive conduct in violation of federal and state antitrust laws. The district court concluded that primary jurisdiction for the issues raised in plaintiffs' complaint lies with the Federal Communications Commission ("FCC") and the Oklahoma Corporation Commission ("OCC"). The court therefore ordered the case stayed pending decisions by those agencies. Plaintiffs appeal from the court's order. Because the district court's decision to stay the case was not a final or immediately appealable decision, this court has no jurisdiction to hear plaintiffs' appeal. Accordingly, the appeal is dismissed.

II. BACKGROUND¹

Southwestern Bell is a local exchange carrier offering telephone services in Oklahoma. Prior to 1996, it was also the sole provider of payphones in its operating area. The Telecommunications Act of 1996, however, authorized independent payphone providers to operate competing payphone businesses within Southwestern Bell's territory. Plaintiffs are independent payphone providers that subsequently began operating in competition with Southwestern Bell.

Payphone providers typically enter into contracts with property owners in order to obtain locations at which to install their payphones. To obtain service for the phones, independent payphone providers then contract with local exchange carriers such as Southwestern Bell. The Telecommunications Act regulates the manner in which local exchange carriers interconnect with competing independent payphone providers. See 47 U.S.C. § 276. In particular, the Act prohibits local exchange carriers from discriminating against independent payphone providers in the provision of telephone services. See id. § 276(a).

Plaintiffs claim that Southwestern Bell engaged in a variety of anticompetitive conduct in an attempt to retain its payphone monopoly after deregulation, in violation of the Sherman Act, 15 U.S.C. § 2, and the Oklahoma Antitrust Reform Act, Okla. Stat. Ann. tit. 79, § 203. Among the allegations in plaintiffs' complaint are assertions that Southwestern Bell abused its control of telephone access lines to discriminate against plaintiffs, and that it entered into long-term restrictive contracts with property owners in an effort to lock up the market and prevent competitors from gaining a foothold. As a result of these anticompetitive actions, plaintiffs allege that Southwestern Bell was able to unfairly retain its monopoly in the Oklahoma payphone market.

Southwestern Bell moved in the district court for a judgment on the pleadings, or in the alternative a stay pending referral of certain issues to the FCC and OCC. Southwestern Bell argued that the subject matter of the complaint was pervasively regulated by FCC rules promulgated under the authority of the Telecommunications Act and that the FCC had procedures in place to provide relief for the issues raised in the complaint. It further argued that the OCC had primary jurisdiction over the issue of restrictive long-term contracts. The district court agreed with Southwestern Bell that "Plaintiffs and Defendant operate in a field that has been extensively regulated at both the federal and state levels," and therefore that the doctrine of primary jurisdiction required the case to be "stayed pending resolution of Plaintiffs' claims by the [FCC] and/or the [OCC], as may be appropriate."² The court ordered the proceeding "administratively close[d]" and required that any party wishing to proceed following final disposition by the administrative agencies must move to reopen the matter with thirty days of that final disposition.

Recognizing that resolution of plaintiffs' claims before the FCC "may involve a lengthy process," the district court certified its order for immediate appeal pursuant to 28 U.S.C. § 1292(b), which authorizes this court to permit an appeal from an interlocutory order certified under that section as long as application is made by the appealing party within ten days after entry of the order. See 28 U.S.C. § 1292(b). Rather than petitioning this court for review within ten days as required by § 1292(b), however, plaintiffs filed a notice of appeal in the district court twenty days after entry of the district court's order. This court tolled briefing and ordered the parties to submit memoranda on the question whether the district court had entered a final or immediately appealable decision. After receiving memoranda from both parties, briefing on the merits was ordered to resume.

III. DISCUSSION

Plaintiffs argue on appeal that the district court abused its discretion in staying the case pending submission of their claims to the FCC and OCC. Before reaching that question, however, this court must first satisfy itself that it has jurisdiction to hear the appeal.

Although the district court certified its stay order for immediate appeal pursuant to 28 U.S.C. § 1292(b), plaintiffs did not comply with the requirements for an interlocutory appeal under that section. This court may permit an appeal of an order certified under § 1292(b) only if an application for permission to appeal is filed with the clerk of this court within ten days after entry of the order. 28 U.S.C. § 1292(b); Fed. R.App. P. 5(a)(1); Hellerstein v. Mr. Steak, Inc., 531 F.2d 470, 471 (10th Cir.1976). Instead of petitioning this court as required by § 1292(b), plaintiffs filed a notice of appeal in the district court. Because plaintiffs failed to comply with the jurisdictional requirements of § 1292(b), this court lacks jurisdiction to hear an appeal under that section. Hellerstein, 531 F.2d at 471-72.

Plaintiffs nevertheless argue two alternative bases for jurisdiction. First, they contend that the district court's stay order was a final decision over which this court has jurisdiction pursuant to 28 U.S.C. § 1291. Second, they argue that the district court's order was an appealable collateral order under the Supreme Court's decision in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949).

A. 28 U.S.C. § 1291

Section 1291 grants this court jurisdiction over "appeals from all final decisions of the district courts of the United States." 28 U.S.C. § 1291. A decision of the district court is considered final under this section when it "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Gray v. Baker, 399 F.3d 1241, 1244 (10th Cir.2005) (quotation omitted).

In Moses H. Cone Memorial Hospital v. Mercury Construction Corp., the Supreme Court noted that a district court's decision to stay litigation "is not ordinarily a final decision for purposes of § 1291." 460 U.S. 1, 10 n. 11, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). The Court also recognized an exception to this general rule, however, for cases in which the stay order operates to put a party "effectively out of court." Id. at 10, 103 S.Ct. 927. The plaintiff in Moses H. Cone brought suit under the United States Arbitration Act to compel arbitration of a contract dispute. Id. at 7, 103 S.Ct. 927. The district court stayed proceedings pending resolution of a prior state-court action in which the defendants in the federal action sought a declaratory judgment that the plaintiff had no right to arbitration. Id. Because the arbitrability of the contract was the only substantive issue in the federal proceeding, the Supreme Court noted that resolution of the state-court suit would render the federal proceeding res judicata and would therefore effectively end litigation in federal court. Id. at 10, 103 S.Ct. 927. For this reason, the Court concluded that the stay order amounted to a dismissal of the case. Id.

As the Supreme Court recognized in Moses H. Cone, most stay orders do not operate to put the plaintiff effectively out of federal court. Id. at 10 n. 11, 103 S.Ct. 927. If a stay merely delays litigation and does not effectively terminate proceedings, it is not considered a final decision. See, e.g., United States v. Section 17 Township 23 N., Range 22 E. of the IBM, Del. County, Okla., 40 F.3d 320, 322 (10th Cir.1994) (holding that a stay order that merely postponed consideration of a civil forfeiture action pending adjudication of related state criminal charges did not constitute a final order); Pioneer Props., Inc. v. Martin, 776 F.2d 888, 890-91 (10th Cir.1985) (holding that a stay pending arbitration was not a final order because the plaintiff could return to federal court following the arbitrator's decision). In In re Kozeny, for example, a two-judge panel of this court examined a decision of the District of Colorado staying proceedings pending resolution of a related lawsuit in London, England. 236 F.3d 615, 617 (10th Cir.2000).³ The panel noted that even though the English court would resolve a central issue in the case, the parties...