Qwest Corp. v. City of Globe, Arizona
| Decision Date | 15 August 2002 |
| Docket Number | No. CV 01-2500-PHX-JAT.,CV 01-2500-PHX-JAT. |
| Citation | 237 F.Supp.2d 1115 |
| Parties | QWEST CORPORATION, Plaintiff, v. THE CITY OF GLOBE, Arizona, a municipal corporation; the City of Miami, Arizona, a municipal corporation; the City of Nogalas, Arizona, a municipal corporation; the City of Suprise, Arizona, a municipal corporation; the City of Tucson, Arizona, a municipal corporation, Defendants. |
| Court | U.S. District Court — District of Arizona |
Paul James Mooney, Kendis K. Muscheid, Fennemore Craig, PC, Phoenix, AZ, David R. Goodnight, David M. Jacobson, Dorsey & Whitney, LLP, Seattle, WA, for QWest Corp.
Thomas K. Irvine, Lawrence J. Wulkan, Irvine Van Riper, PA, Phoenix, AZ, for City of Suprise, city of Gobe, City of Miami, City of Nogales.
Tobin Rosen, Office of Tucson City Atty., Tucson, AZ, Joseph Leonard Van Eaton, William Robert Malone, Nicholas Miller, Kenneth A. Brunetti, Miller & Van Eaton, PLLC, Washington, DC, for City of Tucson.
Pending before this Court is the City of Tucson's Motion to Dismiss (Doc. # 14). All other Defendants have joined Tucson's Motion to Dismiss (Doc. # 15).
Plaintiff, Qwest Corporation, provides communications services to residents in each of the Defendant cities. Each city charges Plaintiff for using the public right-of-ways to provide its services. Plaintiff primarily contends that the Federal Telecommunications Act of 1996, 47 U.S.C. § 151 et. seq., prevents the Defendant cities from charging for the use of the public right-of-ways. Defendants offer several reasons why either this Court does not have jurisdiction to grant Plaintiff the relief it seeks in the complaint; or, alternatively, reasons why the requested relief should be denied.
Defendants allege three reasons why the complaint in this action should be dismissed: 1) this Court lacks jurisdiction over the complaint as a result of the Tax Injunction Act ("TIA"); 2) Plaintiff can not state a claim under 42 U.S.C. § 1983; and 3) this Court does not have the authority to issue a writ of mandamus against the Defendants named in this action. Defendants' Tax Injunction Act arguments are jurisdictional, and thus fall under FED.R. CIV. PRO. 12(b)(1). Defendants' argument regarding what they classify as a request for a writ of mandamus is also a jurisdictional argument; and, thus, is a motion under FED. R. CIV. PRO. 12(b)(1). Defendants' motion to dismiss based on the fact that Plaintiff cannot state a claim 42 U.S.C. § 1983 falls under FED. R. CIV. PRO. 12(b)(6).
"Federal Rule of Civil Procedure 12(b)(1) allows litigants to seek the dismissal of an action from federal court for lack of subject matter jurisdiction." Tosco Corp. v. Communities for a Better Environment, 236 F.3d 495, 499 (9th Cir. 2001). Normally, on a 12(b)(1) motion, the court is, Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir.1987) (internal quotations and citations omitted). However, when considering a motion under 12(b)(1), if the jurisdictional issue is dependant on the resolution of factual issues relating to the merits of the case, the Court applies the 12(b)(6) standard of assuming that all of the allegations in the complaint are true. Id. Additionally, a motion to dismiss for failure to state a claim under 12(b)(6) is, "viewed with disfavor and is rarely granted." Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 248-49 (9th Cir.1997) (internal citations and quotations omitted).
As indicated above, Defendants make three arguments regarding why the complaint should be dismissed: 1) the TIA; 2) failure to state a claim under § 1983; and 3) lack of mandamus jurisdiction.
Defendants allege that the TIA, 28 U.S.C. § 1341, prevents this Court from granting Plaintiff the declaratory relief it requests in the complaint. As Defendants admit, the jurisdictional bar of the TIA would apply in this case only if the charges Plaintiff is contesting are taxes. Plaintiff disputes that the charges are taxes and instead claims that the charges are right-of-way fees. Defendants assert three reasons why the charges at issue in this case are taxes and, therefore, are covered by the TIA.1
Defendants argue that the Court of Appeals decision in U.S. West binds this Court to conclude that the charges at issue in this case are a tax. A federal court interpreting a state law is bound by decisions of the state's highest court. In re Bartoni-Corsi Produce Inc., 130 F.3d 857, 861 (9th Cir.1997). Additionally, a federal court is bound by a state appellate court's decision if there is no convincing evidence that the state's highest court would decide the issue differently. Id. In this case, however, the parties agree that the issue of whether the charges in this cases are "taxes" is a question of federal law. Doc. # 23 at 16; Doc. # 14 at 6; Wright v. Riveland, 219 F.3d 905, 911 (9th Cir.2000). Therefore, the state court's decision is not binding on this Court.
Defendants, and in particular the City of Tucson, may have an argument that under the doctrine of preclusion, Plaintiff is precluded from arguing that the charges at issue are not taxes. However, Defendants do not make this argument. Instead they argue that this Court must give preclusive effect to the state court judgment under full faith and credit applying the state's preclusion rules. Neither the Court nor the Plaintiff disagrees with Defendants' assertion that this Court must bind a party to a valid prior judgment if all the elements of the state's preclusion rules are met. However, the party seeking to assert preclusion (res judicata or collateral estoppel) bears the burden of proving it. See State Compensation Fund v. Yellow Cab Co. of Phoenix, 197 Ariz. 120, 3 P.3d 1040, 1044, ¶ 14 (Ariz.App.1999). On this record, Defendants have not attempted to show how the elements of preclusion under Arizona law apply in this case. Thus, the Court will not dismiss the complaint on the basis that Plaintiff is precluded from claiming that the charges are a fee instead of a tax because Defendants have not met their burden of proof on this issue. Nonetheless, if this is a burden of proof that Defendants believe they can ultimately carry, they may reassert this claim in the summary judgment phase of this case.
The parties agree that the test for determining whether a charge is a tax under federal law is determined by the test set forth by the Court of Appeals in Bidart Bros. v. California Apple Comm'n, 73 F.3d 925 (9th Cir.1996). In Bidart, the Court stated that this Court should consider, "three primary factors in determining whether an assessment is a tax: (1) the entity that imposes the assessment; (2) the parties upon whom the assessment is imposed; and (3) whether the assessment is expended for general public purposes, or used for the regulation or benefit of the parties upon whom the assessment is imposed." Id. at 931.
Leaving aside factor one, with respect to factor two, the parties dispute how many entities pay the charge that is at issue in this case. Plaintiff alleges that it alone pays the charge. Doc. # 23 at 13. Defendants dispute this fact. Doc. # 29 at n. 5. With respect to factor three, the parties dispute whether the spending of the funds verses the purpose behind instituting the charge is the relevant inquiry. Doc. # 23 at 14. Further, Plaintiff alleges that discovery is required to substantiate the answer to whichever inquiry is the appropriate one. Id.
On this record, and in the context of a motion to dismiss, the Court cannot determine whether the charges at issue are taxes or fees. Thus, the Court will deny Defendants' Motion to Dismiss on the grounds that the charges are a tax under federal law, without prejudice to the Defendants re-urging this argument following the conclusion of discovery.
Defendants also assert that Plaintiff is judicially estopped from arguing that the charges in this case are not taxes because Plaintiff has previously conceded that the charges are taxes. Defendants make this argument with respect to positions taken by Plaintiff in City of Auburn v. Qwest Corp., 260 F.3d 1160 (9th Cir.2001) (cert. denied 534 U.S. 1079, 122 S.Ct. 809, 151 L.Ed.2d 694 (2002)). See Doc. # 29 at n. 2. Defendants also make this argument with respect to positions taken by Plaintiff in U.S. West Communications, Inc. v. City of Tucson, 198 Ariz. 515, 11 P.3d 1054 (Ariz.App.2000). See Doc. # 14 at n. 3.
Generally, "[f]ederal law governs the application of judicial estoppel in federal court." Rissetto v. Plumbers and Steamfitters Local 343, 94 F.3d 597, 603 (9th Cir.1996). The Court may consider three factors in determining whether a party will be limited in the positions it can take by the doctrine of judicial estoppel: 1) whether a party's earlier position in clearly inconsistent with its later position; 2) whether the party has persuaded a court to accept that party's earlier position (such that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first court or the second court was misled); and 3) whether the party seeking to assert an inconsistent position would receive an unfair advantage or impose an unfair detriment on the opposing party if not estopped. Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778, 782-83 (9th Cir. 2001).
In this case, Defendants raised the issue of judicial estoppel without addressing...
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