Digitel v. MCI Worldcom

• Decision Date: 01 August 2000
• Docket Number: Docket No. 00-7800
• Citation: 239 F.3d 187
• Parties: (2nd Cir. 2001) DIGITEL, INC., Plaintiff-Appellant, v. MCI WORLDCOM, INC., Defendant-Appellee
• Court: U.S. Court of Appeals — Second Circuit

Page 187

239 F.3d 187 (2nd Cir. 2001)

DIGITEL, INC., Plaintiff-Appellant, v. MCI WORLDCOM, INC., Defendant-Appellee.

Docket No. 00-7800

August Term, 2000

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Argued: January 10, 2001

Decided: February 02, 2001

Appeal from a decision of the United States District Court for the Southern District of New York (Owen, Judge) holding that plaintiff had elected to pursue remedies before the Federal Communications Commission and that, therefore, the district court lacked subject matter jurisdiction over the complaint.

AFFIRMED.

DAVID J. ARONSTAM, New York, NY, for Plaintiff-Appellant.

PATRICK C. DUNICAN, JR., Gibbons, Del Deo, Dolan, Griffinger & Vecchione, New York, NY (Jeannie Yim,Worldcom, Inc., Washington, D.C., on the brief), for Defendant-Appellee.

Before: VAN GRAAFEILAND and CALABRESI, Circuit Judges, and PATTERSON,^* District Judge.

PER CURIAM:

Plaintiff-appellant Digitel, Inc., a provider of telecommunications services, brought suit in the United States District Court for the Southern District of New York (Owen, Judge) alleging that defendant-appellee MCI Worldcom, Inc. ("WorldCom"¹) wrongfully permitted Digitel's toll-free telephone number to be transferred to another customer, thereby destroying Digitel's business. While WorldCom's motion to dismiss was pending, the district court, relying on a ground not raised in the motion, dismissed sua sponte Digitel's complaint for lack of subject matter jurisdiction. The court held that an enraged letter sent by a Digitel executive to the Federal Communications Commission ("FCC") was an "informal complaint" to the FCC, and thereby constituted a binding election by Digitel to pursue its remedies before the agency and not in federal court. We affirm.

The facts of the underlying dispute, as alleged in Digitel's complaint, could not be simpler. Beginning in October 1993, Digitel established as its toll-free number 1-800-ISDN-TO-U, a number that it disseminated widely through many media. In August 1997, Digitel and WorldCom agreed that WorldCom would become the "Responsible Organization" for the number, taking over that role from Sprint. All was well until January 2, 1998, when customers dialing 1-800-ISDN-TO-U suddenly stopped being connected to Digitel and instead found their calls directed to an unrelated entity. According to the allegations, this occurred because WorldCom failed to take appropriate steps to reserve the number's use to Digitel, thereby allowing AT&T to become the Responsible Organization for the number and to assign it to another user. Despite vigorous protests from Digitel, WorldCom failed to take prompt action to reinstate the number, leaving Digitel in limbo until March 12, 1998, when service was abruptly restored. By then, however, it was too late, and the disruption in service had ruined Digitel's business. Digitel alleges that WorldCom's misconduct was "willful" in character.

In December 1999, Digitel brought suit in federal district court. The Amended Complaint alleges that the above-stated acts constituted violations of the Communications Act of 1934, 47 U.S.C. § 151 et seq., the tariff under which WorldCom provided the number to Digitel, and federal common law. WorldCom moved to dismiss, arguing that plaintiff failed to state a claim and that, even if it did, the district court should stay the action and refer Digitel's claims to the FCC under the primary jurisdiction doctrine, see generally National Communications Ass'n v. AT&T, 46 F.3d 220 (2d Cir. 1995). In support of its motion, defendant attached the first two pages of an October 29, 1999 letter from Marc S. Paller, Digitel's President, to the FCC's Consumer Protection Branch (the "letter" or "FCC letter"). The letter, which characterized itself as "an informal complaint," expressed outrage at the conduct of both WorldCom and the FCC, claiming that "your commission's rules and orders governing companies like MCI gave them carte blanche to destroy other companies at will" and querying, "Sure sounds like state sponsored economic terrorism, doesn't it??????"

After oral argument on defendant's motion, the district court, in a one-paragraph order, ruled that the FCC letter "effects a forum selection" that precluded subject matter jurisdiction in the district court. The court also "note[d] that the FCC is proceeding." As authority for its decision, the court cited 47 U.S.C. § 207, which provides that a person claiming injury by a common carrier "may either make complaint to the Commission as hereinafter provided for, or may bring suit...in any district court of the United States...but such person shall not have the right to pursue both such remedies." It also cited a Fifth Circuit decision, Stiles v. GTE Southwest, Inc., 128 F.3d 904, 907 (5th Cir. 1997). In dismissing on this ground, the district court acted without any notice to the parties that it thought that a fundamental prerequisite to the suit was in question.² The previous briefing on the motion to dismiss had contained no citation to § 207 or to Stiles. Digitel's motion for reconsideration was denied; it now appeals.

Discussion

WorldCom argues both that Digitel's FCC letter ousted the district court of jurisdiction and that, even if it did not, dismissal was appropriate under the primary jurisdiction doctrine. We agree that, under § 207, Digitel's filing with the FCC bars it from proceeding in district court. Because we affirm on that ground, we need not address WorldCom's alternative primary jurisdiction argument.

There can be no doubt that § 207 permits an injured party to seek relief either in federal court or before the FCC, but not in both. See Stiles, 128 F.3d at 907; Cincinnati Bell Tel. Co. v. Allnet Communication Servs., Inc., 17 F.3d 921, 923 (6th Cir. 1994); RCA Global Communications, Inc. v. Western Union Tel. Co., 521 F. Supp. 998, 1005-06 (S.D.N.Y. 1981). The question here is whether the district court properly concluded that Digitel's letter was an invocation of the FCC's jurisdiction sufficient to trigger § 207's forum selection rule. We construe the district court's order as one deciding a sua sponte Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, and we review that decision de novo. See Securities Investor Protection Corp. v. BDO Seidman, LLP, 222 F.3d 63, 68 (2d Cir. 2000).

Section 207 requires a choice between litigation and a "complaint to the Commission as hereinafter provided for" (emphasis added). And the Commission has, pursuant to its authority under 47 U.S.C. § 208 (providing that any person may "apply to [the] Commission by petition" for relief), promulgated regulations establishing (and hence defining) a complaint process. See47 C.F.R. § 1.701 et seq. These regulations recognize two distinct forms of "complaint": "informal complaints" and "formal complaints," and they establish that "an informal complaint shall be in writing and should contain" the name, address, and telephone number of the complainant, the target of the complaint, a statement of the facts underlying the complaint, and the specific relief sought. 47 C.F.R. § 1.716.

We agree with the Fifth Circuit that, under these regulations, the filing of an "informal complaint" constitutes a "complaint to the Commission" for § 207 purposes, and that, therefore, a party that has filed an...