Destek Group v. New Hampshire Public Util., 01-2286.

Citation318 F.3d 32
Decision Date28 January 2003
Docket NumberNo. 01-2286.,01-2286.
PartiesThe DESTEK GROUP, INC., d/b/a The Destek Networking Group, Plaintiff, Appellant, v. STATE OF NEW HAMPSHIRE PUBLIC UTILITIES COMMISSION; Douglas L. Patch, Chairman, PUC Commission; Nancy Brockway, PUC Commissioner; Susan S. Geiger, PUC Commissioner; Verizon New England, Inc., d/b/a Verizon New Hampshire, Defendants, Appellees. New England Telephone and Telegraph Company, d/b/a Bell Atlantic-New Hampshire, Defendant.
CourtUnited States Courts of Appeals. United States Court of Appeals (1st Circuit)

Eugene F. Sullivan, III, with whom Ingersoll & Sullivan, P.A. was on brief, for appellant.

Sean A. Lev, with whom Gregory M. Kennan and Thomas J. Donovan were on brief, for appellee Verizon New England.

Daniel J. Mullen, Associate Attorney, with whom Philip T. McLaughlin, Attorney General, was on brief, for appellee State of New Hampshire Public Utilities Commission, et al.

Before LYNCH, Circuit Judge, CAMPBELL and MAGILL,* Senior Circuit Judges.

MAGILL, Senior Circuit Judge.

This case concerns the subject matter jurisdiction of federal district courts pursuant to § 252(e)(6) of the Telecommunications Act of 1996 (the "Telecommunications Act" or "Act"), 47 U.S.C. § 252(e)(6) (2000), and the scope of immunity of a state commission and state commissioners from suit under 42 U.S.C. § 1983 (2000). In October 1999, The Destek Group, Inc. ("Destek"), Plaintiff-Appellant, initiated this action in the district court against the State of New Hampshire, Public Utilities Commission (the "State Commission"), Members of the Commission (the "Commissioners"),1 and Verizon New England, Inc. ("Verizon"),2 Defendants-Appellees. Destek sought judicial review pursuant to § 252(e)(6) of the Act, as well as injunctive relief and damages from the State Commission, the Commissioners, and Verizon pursuant to § 1983 for violations of the Telecommunications Act and the Due Process Clause of the Fourteenth Amendment. Ultimately, the district court granted summary judgment for the State Commission, the Commissioners, and Verizon on all claims, save the § 1983 claim for prospective injunctive relief against the Commissioners. The district court denied Destek's summary judgment motion. Destek stipulated to dismissal with prejudice of the § 1983 claim for prospective injunctive relief in order to proceed with this appeal.

I.

On March 16, 1999, Verizon executed an agreement (the "Agreement") with the University of New Hampshire in which Verizon contracted to provide asynchronous transfer mode ("ATM")3 cell relay service to the University of New Hampshire within the State of New Hampshire at a uniform statewide rate of $655.75 per interface4 per month, provided the University of New Hampshire purchase at least thirty interfaces. On June 4, 1999, Verizon submitted a petition with the State Commission seeking approval of the Agreement as a special contract pursuant to N.H.Rev.Stat. Ann. § 378:18 (2002).5 Verizon claimed that the Agreement would enable the University of New Hampshire to provide "distance learning"6 services to New Hampshire school students and libraries, as well as high speed internet access.7

On June 25, 1999, Destek8 sought to intervene in the State Commission proceedings and opposed the approval of the Agreement. Destek maintained, inter alia, that special contracts pursuant to N.H.Rev.Stat. Ann. § 378:18, such as the Agreement at issue, are discriminatory and minimize competition. Additionally, Destek noted that the University of New Hampshire had not filed with the State Commission to become a telecommunications reseller or competitive local exchange carrier ("CLEC").9

By an order dated July 7, 1999, the State Commission approved the proposed special contract, subject to two conditions: (1) the State Commission required that Verizon file a tariff, within ninety days, making ATM services available statewide with the same terms, conditions, and at the same prices as in the Agreement; and (2) the State Commission required that Verizon resubmit the Agreement to the State Commission disclosing more details regarding the ATM circuits.10 Noting the special circumstances of this Agreement, the State Commission opined that the public interest strongly favored quick approval of the contract because any delay could deny school children the benefits of ATM services.

Destek sought reconsideration of the State Commission's order,11 arguing that approval of the Agreement violated, inter alia, (1) the Telecommunications Act, and (2) the Due Process Clause of the Fourteenth Amendment. Specifically, Destek argued that (1) Congress intended the Act to promote competition and thus, special contracts, as defined by N.H.Rev.Stat. § 378:18, are preempted by the Act because they stifle competition; and (2) to the extent that special contracts are not preempted, the State Commission's approval of this special contract violates § 251(b) and § 253(a) of the Act. In an order dated November 22, 1999, the State Commission denied Destek's motion for reconsideration.

On October 18, 1999, Destek filed suit in the U.S. District Court for the District of New Hampshire. Destek's amended complaint sought declaratory relief, injunctive relief, and damages, raising three specific claims. First, Destek asserted a right to judicial review under § 252(e)(6) of the Telecommunications Act, claiming that the Agreement was an interconnection agreement12 and discriminatory and contrary to the public interest. Second, Destek sought injunctive relief and damages from the State Commission, the Commissioners, and Verizon, pursuant to 42 U.S.C. § 1983, for alleged violations of Destek's rights under the Act, citing the State Commission's approval of the Agreement without considering the federal standards for approval of interconnection agreements. Third, Destek sought injunctive relief and damages, pursuant to 42 U.S.C. § 1983, against the State Commission and the Commissioners for alleged violations of Destek's rights under the Due Process Clause of the Fourteenth Amendment by repeated denials of Destek's requests for a hearing.

All parties sought summary judgment based on the agency record developed before the State Commission. The district court (1) granted Verizon's motion for summary judgment in its entirety, (2) granted partial summary judgment for the State Commission and the Commissioners, and (3) denied Destek's motion for summary judgment. First, the district court found that Destek could not proceed under § 252(e)(6) of the Act because the State Commission had not made a "determination" under that section, a prerequisite for federal district court review. Second, the district court held that Destek's failure to demonstrate that Verizon's conduct was fairly attributable to the State precluded Destek from asserting § 1983 claims against Verizon, a private actor. Third, the district court held that the State Commission and Commissioners in their official capacities were immune from suit under § 1983. Fourth, the district court found that Destek's claims for damages against the Commissioners in their individual capacities were barred by the doctrine of "quasi-judicial" immunity. Finally, the district court denied both the Commissioners' and Destek's motions for summary judgment with respect to Destek's § 1983 claim for prospective injunctive relief, finding a potentially viable claim for seeking to compel the Commissioners to comply with the Telecommunications Act, depending on the resolution of genuine issues of material fact as to whether the Agreement was subject to the Act.

In order to allow this appeal to proceed to this court, Destek stipulated to the dismissal with prejudice of claims not resolved against it by the district court's summary judgment decision, including the § 1983 claim for prospective injunctive relief. On September 28, 2001, the district court entered final judgment based on the stipulation. This appeal follows.

II.

Destek raises four main arguments on appeal: the district court erred in concluding that (1) the State Commission had not made a § 252 "determination"; (2) Verizon was not liable under § 1983; (3) the State Commission and Commissioners acting in their official capacity were immune from the § 1983 claims; and (4) the Commissioners were immune from the § 1983 claim in their individual capacities. We disagree with Destek and for the reasons discussed below affirm the judgment of the district court.

We review the district court's grant of summary judgment de novo. R.I. Depositors Econ. Prot. Corp. v. Hayes, 64 F.3d 22, 25 (1st Cir.1995). Summary judgment is appropriate when the record reflects "no genuine issue as to any material fact and... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). We review the record in the light most favorable to the nonmoving party, and all reasonable inferences are drawn in that party's favor. Hayes, 64 F.3d at 25. "[W]e are `mindful that the party invoking the jurisdiction of a federal court carries the burden of proving its existence.'" P.R. Tel. Co. v. Telecomms. Regulatory Bd., 189 F.3d 1, 7 (1st Cir.1999) (quoting Taber Partners, I v. Merit Builders, Inc., 987 F.2d 57, 60 (1st Cir.1993)). In addition, we recognize that a party seeking immunity bears the burden of showing that immunity is justified. Bettencourt v. Bd. of Registration in Med., 904 F.2d 772, 784 n. 15 (1st Cir.1990).

A.

First, Destek argues that the district court erred in holding that Destek lacked subject matter jurisdiction because the State Commission had not made a § 252 "determination." We disagree and affirm the district court's dismissal. Ultimately, the State Commission never made a determination for the purposes of § 252(e)(6) and Destek never raised this issue before the State Commission.

A principal purpose of the Telecommunications Act is to increase competition in the market for local telephone services. See Telecommunications Act of 1996...

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