Us West Communications v. At & T Communications

• Decision Date: 03 May 1999
• Docket Number: No. Civ. 97-1575-JE.,Civ. 97-1575-JE.
• Parties: US WEST COMMUNICATIONS, INC., Plaintiff, v. AT & T COMMUNICATIONS OF THE PACIFIC NORTHWEST, INC.; MCIMetro Access Transmission Services, Inc.; Sprint Communications Company, L.P., a limited partnership; The Public Utility Commission of Oregon and Roger Hamilton, Ron Eachus and Joan H. Smith, as members of the Public Utility Commission in their Official Capacity, Defendants.
• Court: U.S. District Court — District of Oregon

46 F.Supp.2d 1068

US WEST COMMUNICATIONS, INC., Plaintiff, v. AT & T COMMUNICATIONS OF THE PACIFIC NORTHWEST, INC.; MCIMetro Access Transmission Services, Inc.; Sprint Communications Company, L.P., a limited partnership; The Public Utility Commission of Oregon and Roger Hamilton, Ron Eachus and Joan H. Smith, as members of the Public Utility Commission in their Official Capacity, Defendants.

No. Civ. 97-1575-JE.

United States District Court, D. Oregon.

May 3, 1999.

Lawrence H. Reichman, Chin See Ming, Perkins Coie, Portland, OR, Sherilyn C. Peterson, Kirstin S. Dodge, Perkins Coie, Bellevue, WA, Norton Cutler, U.S. West Communications, Inc., Denver, CO, for plaintiff U.S. West Communications.

John F. McGrory, Mark P. Trinchero, Keith L. Kutler, Davis Wright Tremaine, Portland, OR, Daniel M. Waggoner, Kraig L.M. Baker, Davis Wright Tremaine, Seattle, WA, Maria Arias-Chapleau, Rebecca B. DeCook, AT & T Communications of the Pacific Northwest, Inc, Denver, CO, for defendant AT & T Communications.

Lisa F. Rackner, Roy Pulvers, Lindsay Hart Neil & Weigler, Portland, OR, Mark B. Ehrlich, Thomas F. O'Neil, III, William Single, IV, MCI WorldCom Inc, Washington, DC, Maureen F. Del Duca, Donald B. Verrilli, D. Scott Barash, Douglas H. Hsiao, Jenner & Block, Washington, DC, for defendant MCImetro Access.

Eric R. Todderud, Heller Ehrman White & McAuliffe, Portland, OR, David P. Murray, A. Renee Callahan, Wilkie Farr & Gallagher, Washington, DC, for defendant Sprint Communications.

Michael T. Weirich, W. Benny Won, Department of Justice, General Counsel, Salem, OR, for Roger Hamilton, Ron Eachus, Joan H. Smith, and Oregon Public Utility Commission.

Philip D. Barz, Emily M. Sweeney, Theodore C. Hirt, Leslie V. Batchelor, U.S. Department of Justice, Civil Division, Washington, DC, Herbert C. Sundby, U.S. Attorneys Office, Portland, OR, for amicus curiae Federal Communications Commission.

OPINION AND ORDER

JELDERKS, United States Magistrate Judge.

Plaintiff U.S. West Communications, Inc. ("US West") brings this action against AT & T Communications of the Pacific Northwest, Inc. ("AT & T"), MCImetro Access Transmission Services, Inc. ("MCI"), Sprint Communications Company ("Sprint"), the Oregon Public Utility Commission ("PUC"), and PUC Commissioners Roger Hamilton, Ron Eachus, and Joan Smith. The Federal Communications Commission ("FCC") has participated in this proceeding as amicus curiae.

The dispute concerns interconnection agreements between U.S. West and AT & T, MCI, and Sprint, respectively. Since the agreements with AT & T and MCI are almost identical, and were considered together by the arbitrator and PUC, they will collectively be referred to as "the AT & T/MCI Agreement" except where necessary to differentiate between them.

This court previously ruled on the parties' cross-motions for summary judgment. US West Communications, Inc. v. AT & T Communications of the Pacific Northwest, Inc., 31 F.Supp.2d 839 (D.Or.1998). However, before entry of final judgment, the Supreme Court decided AT & T Corp. v. Iowa Util. Bd., ___ U.S. ___, 119 S.Ct. 721, 142 L.Ed.2d 835 (1999). This court then requested supplemental briefing to determine the effect, if any, upon this case of the Supreme Court's decision.

1. Effect of the Recent Supreme Court Decision

At issue in AT & T was the validity of numerous regulations that the Federal Communications Commission ("FCC") promulgated in 1996 to implement the Act. The regulations were to take effect on September 30, 1996. See 61 Fed.Reg. 45,476 (1996). On September 27, 1996, the Eighth Circuit temporarily stayed "the effective date" of all of the regulations. Iowa Util. Bd. v. Federal Communications Comm'n, 96 F.3d 1116, 1118 (8th Cir.1996). On October 15, 1996, the Eighth Circuit allowed some of the regulations to go into effect, but continued to stay the FCC's pricing regulations (47 C.F.R. §§ 51.501-51.515, 51.601-51.611, 51.701-51.717) and the "pick-and-choose rule" (§ 51.809).¹ Iowa Utilities Bd. v. FCC, 109 F.3d 418, 427 (8th Cir.1996). The Supreme Court rejected several requests (from the FCC and others) to vacate the stay.²

On July 18, 1997, the Eighth Circuit vacated many of the stayed FCC regulations on the ground that the FCC lacked jurisdiction to issue them. Iowa Util. Bd. v. FCC, 120 F.3d 753 (8th Cir.1997). The Eighth Circuit also vacated several other regulations on the merits (including at least one that had not been stayed), while affirming still others. Id. The stay expired once that order became effective. Id. at 820.

Meanwhile, the Agreements at issue here were approved by the PUC, and signed by the parties, after various disputes were resolved through arbitration. The arbitrator issued his decision regarding the Sprint Agreement on January 15, 1997, and the PUC affirmed that decision, with minor modifications, on February 14, 1997. US West's petition for reconsideration was denied on May 30, 1997. On June 13, 1997, the PUC approved the executed Sprint Agreement. All of these events occurred after the FCC regulations had been stayed, but before the Eighth Circuit issued its decision on the merits. The PUC treated the stayed regulations as persuasive, but not binding, authority.

The AT & T/MCI Agreement followed a similar path. The arbitrator issued his decision on December 6, 1996, and the PUC affirmed that decision, with minor modifications, on January 6, 1997. US West's petition for reconsideration was denied on April 23, 1997. Approval of the final, signed contract was delayed for several months because of a dispute over the wording. On August 25, 1997, the parties filed executed Agreements, which the PUC approved on or about September 9, 1997. As with the Sprint Agreement, the PUC treated the stayed FCC regulations as persuasive authority that the PUC could, but was not required to, follow.

On October 14, 1997, the Eighth Circuit clarified its prior decision and order in response to a petition for rehearing. Iowa Utilities, 120 F.3d 753.

On November 4, 1997, U.S. West, MCI, and AT & T each asked this court to review certain disputed portions of the Agreement.³ On January 26, 1998, the Supreme Court granted certiorari to review portions of the Eighth Circuit's decision. On December 10, 1998, this court ruled on the motions for summary judgment.

On January 25, 1999, the Supreme Court issued its decision in AT & T, ___ U.S. ___, 119 S.Ct. 721, 142 L.Ed.2d 835. The Supreme Court reversed the Eighth Circuit's decision regarding jurisdiction and held that the FCC did have jurisdiction to promulgate the regulations in question. It remanded that case to the Eighth Circuit to consider various challenges to the merits of those regulations. The Supreme Court affirmed several other regulations on the merits, while vacating at least one (and probably two) additional regulations. This court must now determine how the Supreme Court's decision affects the instant case and, in particular, how it affects these interconnection agreements which were approved by the PUC and signed by the parties more than a year before the Supreme Court issued its decision.

To the extent that the Supreme Court simply explained what the Act or the FCC's implementing regulations mean, this court must apply that interpretation when reviewing the challenged provisions of these interconnection agreements. When a federal court interprets a law— whether it be a statute, a regulation, the common law, or the Constitution itself— the court is not creating new law but merely declaring what that law has always meant, even if this interpretation had not previously been acknowledged or conflicts with an earlier interpretation. See Rivers v. Roadway Express, Inc., 511 U.S. 298, 312-13, 114 S.Ct. 1510, 128 L.Ed.2d 274 (1994) ("A judicial construction of a statute is an authoritative statement of what the statute meant before as well as after the decision of the case giving rise to that construction"); Harper v. Virginia Dept. of Taxation, 509 U.S. 86, 107, 113 S.Ct. 2510, 125 L.Ed.2d 74 (1993) (Scalia, J., concurring) (when overruling prior precedent a judge does "not pretend to make a new law, but to vindicate the old one from misrepresentation").

The regulations that had been vacated by the Eighth Circuit are a different matter, however. The Eighth Circuit stayed those regulations (with limited exceptions) before they ever went into effect, postponing their effective date. See Iowa Utilities, 96 F.3d at 1118 (staying "effective date"). See also 5 U.S.C. § 705 (expressly authorizing reviewing court to "postpone the effective date of an agency action ... pending conclusion of the review proceedings"). Ultimately, the Eighth Circuit vacated the regulations. The term "vacate" means "to annul; to cancel or rescind; to declare, to make, or to render, void; to defeat; to deprive of force; to make of no authority or validity; to set aside." Action on Smoking & Health v. Civil Aeronautics Board, 713 F.2d 795, 797 (D.C.Cir.1983).

As the PUC acknowledges, "[t]he upshot is that [these] regulations were not effective at the time the interconnection agreement at issue was crafted." The FCC concurs. See Supplemental Brief of the FCC as Amicus Curiae in CV 97-857-JE, at 6 ("Of course, the FCC's pricing rules were not in effect as a binding mandate when the state commission issued its decision here.") As of this writing, it is unclear whether the Eighth Circuit will stay those regulations anew while it considers various challenges to the merits of those rules.

Even if the Eighth Circuit does not extend the stay, MCI and AT & T nevertheless are asking this court to overturn portions of these interconnection Agreements on the ground that the PUC failed to apply substantive regulations that were not in effect when these Agreements were approved by the PUC and signed by the parties. The court declines that invitation.

The FCC regulations in question go beyond merely interpreting the statute. They create new...