Telesaurus Vpc LLC. v. Power

Citation623 F.3d 998
Decision Date08 October 2010
Docket NumberNo. 09-15446.,09-15446.
PartiesTELESAURUS VPC, LLC, a Delaware Limited Liability Company, Plaintiff-Appellant, v. Randy POWER, an individual; Patricia A. Power, an individual; Radiolink Corporation, Defendants-Appellees, v. Industrial Telecommunications Association, Inc., a Virginia corporation; EWA, Inc., a Virginia corporation, d/b/a Enterprise Wireless Alliance, Third-Party-Defendant-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

623 F.3d 998

TELESAURUS VPC, LLC, a Delaware Limited Liability Company, Plaintiff-Appellant,
v.
Randy POWER, an individual; Patricia A. Power, an individual; Radiolink Corporation, Defendants-Appellees,
v.
Industrial Telecommunications Association, Inc., a Virginia corporation; EWA, Inc., a Virginia corporation, d/b/a Enterprise Wireless Alliance, Third-Party-Defendant-Appellees.

No. 09-15446.

United States Court of Appeals,Ninth Circuit.

Argued and Submitted Feb. 11, 2010.
Filed Oct. 8, 2010.


623 F.3d 999

COPYRIGHT MATERIAL OMITTED.

623 F.3d 1000

Patrick J. Richard, Nossaman LLP, San Francisco, CA, for the appellant.

Kathi Mann Sandweiss and Roger L. Cohen, Jaburg & Wilk, P.C., Phoenix, AZ, for the appellees.

Appeal from the United States District Court for the District of Arizona, Neil V. Wake, District Judge, Presiding. D.C. No. 2:07-cv-01311-NVW.

Before: JOHN T. NOONAN, MARSHA S. BERZON and SANDRA S. IKUTA, Circuit Judges.

OPINION
IKUTA, Circuit Judge:

In this appeal, we hold that the complaint filed by Telesaurus VPC, LLC (“Telesaurus”) against Radiolink Corporation (“Radiolink”) did not allege facts sufficient to establish that Radiolink is a “common carrier” subject to suit under the Federal Communications Act of 1934 (“FCA”), 47 U.S.C. §§ 206-07. We therefore affirm the district court's dismissal of Telesaurus's FCA claims, but conclude

623 F.3d 1001

that the district court erred in denying Telesaurus leave to amend. We also hold that Telesaurus's claims under Arizona law for conversion, unjust enrichment, and intentional interference with prospective economic advantage are expressly preempted by § 332(c)(3)(A) of the FCA, which preempts state regulation of market entry. Id. § 332(c)(3)(A). We therefore affirm the dismissal of Telesaurus's state-law claims.

I

Both Telesaurus and Radiolink provide mobile radio services to customers. In 1999, Telesaurus's predecessor in interest, Warren Havens, bid in a competitive auction and obtained licenses for five VHF Public Coast radio frequencies (the “VPC Frequencies”) 1 in Phoenix, Arizona. Radiolink also participated in this auction, but lost to Havens's higher bid. Havens subsequently assigned his interest in the frequencies to Telesaurus. 2

Three months after Telesaurus obtained the VPC Frequencies, Radiolink submitted an application to the Federal Communications Commission (“FCC”) for various frequencies including the VPC Frequencies. As required by FCC rules, Radiolink's application included a report from the Industrial Telecommunications Association (“ITA”), one of the FCC's authorized frequency coordinators, which stated that the VPC Frequencies were available at no charge on a first-come, first-served basis. See generally 47 C.F.R. § 90.175. Telesaurus alleges that Radiolink knew these representations to be false.

The FCC subsequently granted a mobile service license to Radiolink to use the VPC Frequencies. The license included the notation: “Regulatory Status: PMRS,” indicating that Radiolink was operating a private land mobile radio service. Radiolink used these frequencies to operate its two-way mobile radio business, through which it provided customers with wireless communications in the greater Phoenix area. These operations continued until at least 2005.

After being informed by potential business partners that Radiolink was using the VPC Frequencies, Telesaurus reported Radiolink's use to the FCC. The FCC initiated proceedings sua sponte to consider whether it should modify Radiolink's license. In a March 4, 2004 memorandum opinion and order, the FCC concluded that it should not have granted Radiolink the VPC Frequencies, and proposed to modify Radiolink's license to remove those frequencies. The FCC noted that “a proposed modification under the circumstances presented would promote the public interest, convenience, and necessity because the subject channels were not available for assignment to Radiolink when the application was granted because they were previously assigned” to Telesaurus.

Radiolink moved for reconsideration, arguing that the coordination error resulted not from any fault on the part of Radiolink, but rather from a mistake made by the FCC and its certified frequency coordinator, ITA, which erred in selecting the frequencies for Radiolink's application. Telesaurus filed an opposition to Radiolink's motion, arguing that Radiolink's claim of innocence in the selection of the VPC Frequencies was not credible and that Radiolink was improperly pressuring

623 F.3d 1002

Telesaurus to relinquish the VPC Frequencies. Telesaurus urged the FCC to investigate these issues and impose sanctions on Radiolink.

After issuing its March 4, 2004 order, the FCC directed ITA to find replacement frequencies for Radiolink, and then on December 21, 2004 granted Radiolink a license to use replacement frequencies recommended by the ITA. On July 7, 2005, the FCC issued a final modification order deleting the VPC Frequencies from Radiolink's license. The FCC concluded that “it is in the public interest to modify Radiolink's license to delete” the VPC Frequencies, because “the frequencies were not available” for private land mobile radio licensing, and should be made available for Telesaurus's use. In addition, the FCC noted that Radiolink had already obtained replacement channels, “which will minimize the impact of this action on Radiolink's operations.” The FCC did not mention Telesaurus's request for further investigation or sanctions.

Two years later, Telesaurus filed suit in federal district court, alleging that Radiolink violated provisions of the FCA, 47 U.S.C. §§ 301, 308, 309, 312(a) and 503(b), 3 and in addition was liable for conversion, unjust enrichment, and intentional interference with prospective economic advantage under Arizona law.

Radiolink sought to dismiss the complaint for failure to state a claim. See Fed.R.Civ.P. 12(b)(6). In response to Telesaurus's federal claims, Radiolink argued that the FCA provides a private cause of action only against “common carriers,” 47 U.S.C. §§ 206-207, not against private mobile service providers such as Radiolink. Second, it argued that Telesaurus could not bring a claim for violation of §§ 301, 308, 309, 312(a) and 503(b) of the FCA, because those provisions impose duties only on the FCC, not on licensees. With respect to Telesaurus's state claims, Radiolink sought dismissal on the grounds that Telesaurus had no property right in the VPC Frequencies or, in the alternative, that the claims were either expressly or impliedly preempted by § 332(c)(3)(A) of the FCA, 47 U.S.C. § 332(c)(3)(A). 4

The district court dismissed Telesaurus's complaint with prejudice, denying Telesaurus's motion for leave to amend. Reasoning that the FCC's designation of Radiolink as a private land mobile radio service on its license was subject to deference under Chevron U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), the district court held that Radiolink was not a common

623 F.3d 1003

carrier as a matter of law. The court further held that Radiolink's state-law claims were expressly pre-empted under § 332(c)(3)(A) of the FCA. Telesaurus timely appealed.

II

We review de novo the dismissal of a complaint for failure to state a claim. Allarcom Pay Television, Ltd. v. Gen. Instrument Corp., 69 F.3d 381, 384-85 (9th Cir.1995). For purposes of our review, we begin “by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009). We disregard “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements....” Id. at 1949. After eliminating such unsupported legal conclusions, we identify “well-pleaded factual allegations,” which we assume to be true, “and then determine whether they plausibly give rise to an entitlement to relief.” Id. at 1950. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face;” that is, plaintiff must “plead[ ] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 1949 (internal quotation marks omitted); see Evanns v. AT & T Corp., 229 F.3d 837, 839 (9th Cir.2000).

We review the denial of leave to amend a complaint for abuse of discretion. Metzler Inv. GMBH v. Corinthian Colls., Inc., 540 F.3d 1049, 1072 (9th Cir.2008). A district court may deny a plaintiff leave to amend if it determines that “allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency,” Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir.1986), or if the plaintiff had several opportunities to amend its complaint and repeatedly failed to cure deficiencies, Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962).

III

We first consider whether the district court erred by dismissing Telesaurus's federal claims under §§ 206 and 207 of the FCA, which provide a cause of action against “common carriers.” As relevant here, § 206 allows a party to bring an action for damages against “common carriers” who violate provisions of the FCA by their acts or omissions. 47 U.S.C. § 206. 5 Section 207 provides that a person claiming to be damaged by a common carrier may bring a complaint either before the FCC itself or as a civil suit in district court, “but such person shall not have the right to pursue both such remedies.” Id. § 207. 6

623 F.3d 1004

Radiolink argued, and the district court agreed, that it is not a “common carrier” for purposes of §§ 206 and 207. In evaluating this argument, we begin with the language of the statute. Greyhound Corp. v. Mt. Hood Stages, Inc., 437 U.S. 322, 330, 98 S.Ct. 2370, 57 L.Ed.2d 239 (1978); see McCarthy v. Bronson, 500 U.S. 136, 139, 111...

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