Greene v. Sprint Communications Co.
| Decision Date | 25 August 2003 |
| Docket Number | No. 02-56339.,02-56339. |
| Citation | 340 F.3d 1047 |
| Parties | Zane GREENE; DL Communications, a California Partnership; Nate Brogin; Bay Distribution Services Inc., a California Corporation; C & M Telecommunications Inc., a California Corporation; C/B Tel Inc., a Washington Corporation; Carol Palumbo; Mahnoosh Afrashteh; Robert A. Cook; Covenany Development Inc., a Washington S-Corporation; Darrell Cheney, Easy Coin Vending Corporation, a New York S-Corporation; Expense Management Inc., a California Corporation; General Communication Services LLC, a California limited liability Company; Global Payphone Systems LLC, a Michigan limited liability company; Hanford Joint Union High School, a California Corporation; Heidi Miller; Dong Ju Lee; Roy Lange; Jon Adams; Jack O'Neal; Joe Lisha; Jo Ann Mogensen; Steve Littlejohn; Metrophone Telecommunications Inc., a Washington Corporation; Mike Golden; Charles Parsons; P & P Phones, a California Partnership; Pac Western, a California Partnership; Paycom Inc., a Washington Corporation; Paytel Communications Inc., a Washington Corporation; Paytel West Inc., a Washington Corporation; PC1 LLC, a California limited liability Company; Great Victoria Inc., a California Corporation; PBS Telecom, a California S-Corporation; Dudley Herndon Company, a California Corporation; Pinnacle Public Services LLC, an Oregon limited liability Company; Professional Communications, a Montana partnership; Royce Tawney; Richard Boren; Nevada Telephones Inc., a Nevada Corporation; Tom Schweikert; Jon S. Holler; Sandra J. Greenland; Western Communication Systems Inc., a California S-Corporation; Gregory J. Wolfe, d/b/a Western Payphone Systems; Western Telephone Inc., a Nevada Corporation; Jeffrey M. White; William H. Ball, Plaintiffs-Appellants, v. SPRINT COMMUNICATIONS COMPANY, a Delaware limited liability Company; The First Group Inc., a New Jersey Corporation; Network Enhanced Technologies Inc., a California Corporation; Jenkintown LTD., a Pennsylvania Corporation; Williams Communications LLC, a Delaware limited liability Company; Cooperative Communications, a New Jersey Corporation, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Floyd A. Jensen, Ray, Quinney & Nebeker, Salt Lake City, Utah, and Joel F. Tamraz, Los Angeles, California, for the plaintiffs-appellants.
No appearance for defendants-appellees.
Albert H. Kramer, Dickstein Shapiro Morin & Oshinsky, Washington, D.C., for amici curiae American Public Communications Council, Inc., and APCC Services, Inc. Andrea Sheridan Ordin, Morgan, Lewis & Bockius, Los Angeles, California, for amicus curiae Qwest Communications Corporation.
Appeal from the United States District Court for the Central District of California; Lourdes G. Baird, District Judge, Presiding. D.C. No. CV-02-03841-LGB.
Before: Alex Kozinski, Ferdinand F. Fernandez, and Pamela Ann Rymer, Circuit Judges.
Is there a private right of action to recover damages for violating regulations promulgated by the Federal Communications Commission (FCC) pursuant to § 276 of the Telecommunications Act of 1996 that require interexchange carriers to compensate payphone service providers for "dial-around" telephone calls made from their payphones? The district court held that there was not, and we agree. We therefore affirm dismissal of an action by Zane Greene and other payphone service providers against Sprint Communications Company, a long-distance telecommunications carrier, and several of its facilities-based resellers (collectively, Sprint).
Payphone service providers (PSPs) own payphones made available to the public. Sometimes they are paid directly by the caller, as when coins are deposited into the payphone; other times, they receive commission payments from the carrier to which 0+ calls are automatically routed by a presubscription agreement. However, access code calls and toll free calls are coinless calls. These calls are initiated over a PSP payphone and are routed over telecommunications networks and facilities such as those maintained by Sprint. The interexchange carrier (IXC) is paid for coinless calls through calling cards, credit cards, and the like. PSPs allege that Sprint was obliged by FCC regulation to compensate them for these "dial-around" calls.
Their theory is that Congress, in § 276(b)(1)(A) of the Telecommunications Act of 1996 (the Act), 47 U.S.C. § 276(b)(1)(A), directed the FCC to prescribe regulations that (except for certain emergencies) "establish a per call compensation plan to ensure that all payphone service providers are fairly compensated for each and every completed intrastate and interstate call using their payphone." Pursuant to this mandate the FCC promulgated regulations that require carriers, including Sprint and its facilities-based resellers, to compensate PSPs for all completed coinless calls where the caller uses a carrier other than the payphone's presubscribed carrier. 47 C.F.R. §§ 64.1300, 64.1301. Regulations also require each carrier to track or arrange for tracking of each compensable coinless call carried over its network. 47 C.F.R. § 64.1310. The complaint avers that this can be done with a high degree of accuracy and that, based on the data collected, Sprint is obliged to remit payment of payphone compensation to PSPs on a quarterly basis. PSPs and carriers may contract for a rate at which PSPs will be paid, or else PSPs must be paid at the default per call compensation rate established by the FCC. 47 C.F.R. § 64.1300. Sprint allegedly failed to pay the full amount of payphone compensation owed in violation of § 276 and the regulations, for which PSPs seek compensatory and punitive damages as well as attorney's fees under federal law, an accounting, and a recovery based on an account stated and quantum meruit under state law.
PSPs' complaint was filed in the district court. Before Sprint was served, the court sua sponte dismissed the action without prejudice for lack of subject matter jurisdiction. It held that there is no private right of action for violation of § 276 and the FCC payphone regulations.
PSPs appeal.1
PSPs contend that an express private right of action can be found in §§ 206 and 207 of the Act, that this private right of action is applicable to § 276, and that this necessarily implies a private right of action to enforce regulations adopted pursuant to — and within the scope of — § 276. Their fallback position is that a private right of action under § 276 and the regulations must be implied to carry out Congressional intent that PSPs be fairly compensated for use of their payphones.
It is axiomatic that private rights of action must be created by Congress. As Alexander v. Sandoval, 532 U.S. 275, 288, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001), instructs, we start with the statute itself. Section 276(b)(1)(A) provides:
In order to promote competition among payphone service providers and promote the widespread deployment of payphone services to the benefit of the general public, within 9 months after February 8, 1996, the [FCC] shall take all actions necessary (including any reconsideration) to prescribe regulations that —
(A) establish a per call compensation plan to ensure that all payphone service providers are fairly compensated for each and every completed intrastate and interstate call using their payphone, except that emergency calls and telecommunications relay service calls for hearing disabled individuals shall not be subject to such compensation.
47 U.S.C. § 276(b)(1)(A). There is no question that § 276 itself does not create a private right of action. However, § 206 makes a common carrier such as Sprint who does anything prohibited, or fails to do anything required, by "this chapter" liable for damages. "[T]his chapter" includes § 276. Section 207, in turn, allows any person claiming to be damaged to make complaint to the FCC, or to bring suit for the recovery of damages in any district court.2 Thus, if § 276 creates a right to compensation, and if it were violated, §§ 206 and 207 supply the right to sue.
Section 276 directs the FCC to come up with a plan for compensation, which the Commission did. But it does not establish a right to compensation, or to compensation by IXCs. The statute does not say "PSPs shall be entitled to fair compensation," or "IXCs shall pay PSPs." Because the private right of action created by §§ 206 and 207 extends only to violations of "this chapter," and § 276 does not require IXCs to compensate PSPs, there is no "violation" of § 276 for which a private explicitly lies for payphone compensation.
PSPs argue that a private right of action is nevertheless implicit in the structure of the statute because the FCC is only authorized to regulate common carriers; § 276 specifically directs the FCC to provide for fair compensation to PSPs; therefore, Congress must have intended for the FCC to impose a payment obligation on all common carriers and to afford a private right of action through §§ 206 and 207 to enforce the compensation requirements. The difficulty is that Congress did not say that IXC s have to pay,3 or that private persons may sue for violation of the regulations. It could easily have done so, as indeed it did elsewhere in the Act. Section 227, for example, authorizes an action for violation of the section "or the regulations prescribed under this subsection." 47 U.S.C. § 227(b)(3)(A). We decline to attribute a similar intent to the regulations prescribed by § 276 given that Congress knew how to create a private action for violating a regulation when it wanted to, yet did not include an action for violating the regulations contemplated by § 276 in the text of § 276, § 206, or § 207.
PSPs urge us to heed the observation in Sandoval that ...
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