Valdez v. State

• Citation: 54 P.3d 71,132 N.M. 667,2002 NMSC 28
• Decision Date: 04 September 2002
• Docket Number: No. 26,830.,26,830.
• Parties: Felicita VALDEZ, Sadie Moya, and Reber Boult, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. STATE of New Mexico; Robert Perry, Bernalillo County; Chaves County; Colfax County; Curry County; Grant County; Guadalupe County; Lea County; Los Alamos County; Luna County; Otero County; Quay County; Rio Arriba County; Roosevelt County; San Juan County; San Miguel County; Sandoval County; Taos County; City of Espanola; US West, Inc.; PCS America, Inc.; Evercom Systems, Inc.; Gateway Technologies, Inc.; Public Communications Services, Inc.; Silverado Communications, Inc.; Security Telecom Corporation; T-Netix, Inc.; Ameritel Communications, Inc.; Invision Telecom, Inc.; McLeod Usa Telecommunications Services, Inc.; and John Does I-X, Defendants-Appellees.
• Court: Supreme Court of New Mexico

54 P.3d 71

132 N.M. 667

2002 NMSC 28

Felicita VALDEZ, Sadie Moya, and Reber Boult, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. STATE of New Mexico; Robert Perry, Bernalillo County; Chaves County; Colfax County; Curry County; Grant County; Guadalupe County; Lea County; Los Alamos County; Luna County; Otero County; Quay County; Rio Arriba County; Roosevelt County; San Juan County; San Miguel County; Sandoval County; Taos County; City of Espanola; US West, Inc.; PCS America, Inc.; Evercom Systems, Inc.; Gateway Technologies, Inc.; Public Communications Services, Inc.; Silverado Communications, Inc.; Security Telecom Corporation; T-Netix, Inc.; Ameritel Communications, Inc.; Invision Telecom, Inc.; McLeod Usa Telecommunications Services, Inc.; and John Does I-X, Defendants-Appellees.

No. 26,830.

Supreme Court of New Mexico.

September 4, 2002.

Rothstein, Donatelli, Hughes, Dahlstrom, Schoenburg & Enfield, L.L.P., Robert R. Rothstein, Mark H. Donatelli, John L. Sullivan, Comeau, Maldegen, Templeman & Indall, L.L.P., Michael R. Comeau, W. Grey Handy, William P. Templeman, Santa Fe, NM, for Appellants.

Hinkle, Hensley, Shanor & Martin, L.L.P., Ellen S. Casey, David B. Lawrenz, Santa Fe, NM, for Appellees State and Robert Perry.

Cuddy, Kennedy, Hetherington, Albetta & Ives, L.L.P., Patricia Salazar Ives, Santa Fe, NM, Stutzman & Bromberg, P.C., Jay M. Vogelson, Van J. Hooker, Dallas, TX, for Appellees Telephone Service Providers.

Beall & Biehler, P.A., Gregory L. Biehler, Albuquerque, NM, for Appellees City of Espanola and Rio Arriba County.

OPINION

FRANCHINI, Justice.

{1} Plaintiff-Appellants (Plaintiffs), recipients of collect telephone calls from relatives incarcerated in several state and county correctional facilities throughout the state, brought a suit for damages and injunctive relief against governmental and telephone service company Defendants-Appellees (Defendants). Plaintiffs' complaint alleged nine counts against Defendants. The district court, under Rule 1-012(B)(6) NMRA 2002, dismissed Plaintiffs' claims for failure to state a claim. Plaintiffs appealed the district court's decision to the Court of Appeals which certified the matter to the New Mexico Supreme Court. See NMSA 1978, § 34-5-14(C) (1972) and Rule 12-606 (2002). We accepted certification of the appeal and affirm the district court.

I. Facts and Procedure

{2} Plaintiffs alleged in their complaint that Defendants entered into illegal agreements in which the telephone service companies were granted exclusive rights to provide collect telephone service at a higher rate than rates provided to the public. Plaintiffs argue that in return for entering into these agreements, the government correctional facilities received a commission paid by the telephone service providers that was calculated on the amount billed to the service provider from collect calls placed by inmates in their facilities. Plaintiffs' complaint sought damages and injunctive relief under the New Mexico Unfair Practices Act, NMSA 1978, §§ 57-12-1 to -22 (1967, as amended through 1999) (NMUPA) (Count I); the New Mexico Antitrust Act, NMSA 1978, §§ 57-1-1 to -17 (1979, as amended through 1996) (Count II); and for unjust enrichment (Count III); economic compulsion (Count IV); constructive fraud (count V); illegality (Count VI); violation of separation of powers by unlawful taxation (Count VII); unlawful special tax (Count VIII); and unlawful taking (Count IX).

{3} The following motions to dismiss were filed: 1) State and Robert Perry's (Secretary of the New Mexico Department of Corrections) motion to dismiss for lack of subject matter jurisdiction and failure to state a claim under Rules 1-012(B)(1) and (6); 2) City of Espanola and County of Rio Arriba's motion to dismiss under Rules 1-012(B)(1) and (6); and 3) U.S. West, Inc.; At & T Communications, Inc.; Evercom Systems, Inc.; Gateway Technologies, Inc.; Public Communications Services, Inc.; and the Security Telecom Corporation's motion to dismiss under Rule 1-012(B)(6). The district court granted the motions for failure to state a claim and dismissed Plaintiffs' claims under the filed rate doctrine, the primary jurisdiction doctrine, and sovereign immunity.

II. Discussion

A. Standard of Review

{4} A district court's decision to dismiss a case for failure to state a claim under Rule 1-012(B)(6) is reviewed de novo. Wallis v. Smith, 2001-NMCA-017, ¶ 6, 130 N.M. 214, 22 P.3d 682, cert. denied, 130 N.M. 254, 23 P.3d 929 (2001). "A Rule 12(b)(6) motion is only proper when it appears that plaintiff can neither recover nor obtain relief under any state of facts provable under the claim." Envtl. Improvement Div. v. Aguayo, 99 N.M. 497, 499, 660 P.2d 587, 589 (1983). In reviewing a district court's decision to dismiss for failure to state a claim, we accept all well-pleaded factual allegations in the complaint as true and resolve all doubts in favor of sufficiency of the complaint. Id.; Wallis, 2001-NMCA-017, ¶ 6, 130 N.M. 214, 22 P.3d 682.

B. Dismissed Claims Against Governmental and Telephone Service Provider Defendants

1. Filed Rate Doctrine

{5} The district court held that Plaintiffs' claims against governmental and telephone service provider Defendants for damages, restitution, or imposition of a constructive trust were barred by the filed rate doctrine. The filed rate doctrine was first established by the United States Supreme Court in Keogh v. Chicago & N.W. Ry. Co., 260 U.S. 156, 163-4, 43 S.Ct. 47, 67 L.Ed. 183 (1922), when the Court barred plaintiff's antitrust claim based on price fixing because a regulatory agency had approved defendant's rates which happened to be higher than the competitive market. The filed rate doctrine is a doctrine that allows for "any `filed rate' — that is, one approved by the governing regulatory agency — [to be] per se reasonable and unassailable in judicial proceedings brought by ratepayers." Miranda v. Michigan, 141 F.Supp.2d 747, 757 (E.D.Mich.2001) (quoting Wegoland Ltd. v. NYNEX Corp., 27 F.3d 17, 18 (2d Cir.1994)). As the district court noted in its ruling, "[t]he heart of the filed rate doctrine is not that the rate mirrors a competitive market, nor that the rate is reasonable or thoroughly researched, it is that the filed rate is the only legal rate." Daleure v. Kentucky, 119 F.Supp.2d 683, 689 (W.D.Ky.2000). The policy behind the filed rate doctrine is to prevent price discrimination and to preserve the role of agencies in approving rates and to keep courts out of the rate-making process. Arsberry v. Illinois, 117 F.Supp.2d 743, 744 (N.D.Ill.2000). Since its inception, the filed rate doctrine has not been changed or qualified by the Supreme Court. See Daleure, 119 F.Supp.2d at 689. In light of the history behind the filed rate doctrine, we believe that this Court "should think deeply before avoiding its application without good reason." Id. In New Mexico, the New Mexico Public Regulation Commission (NMPRC) regulates intrastate calls. NMSA 1978, § 63-9A-8(A) (1987). The NMPRC has exempted inmate telephone services from several of its regulations and has authorized the rates at issue. We hold that under the filed rate doctrine these rates are legal and that Plaintiffs' claims for damages, restitution, or imposition of a constructive trust were properly dismissed by the district court.

2. Primary Jurisdiction Doctrine

{6} The district court concluded that Plaintiffs' claims for injunctive or future relief against governmental and telephone service provider Defendants were barred by the primary jurisdiction doctrine. The primary jurisdiction doctrine is a doctrine by which courts that have jurisdiction defer to the expertise of an administrative body. See Norvell v. Ariz. Pub. Serv. Co., 85 N.M. 165, 170, 510 P.2d 98, 103 (1973). The doctrine is concerned with preserving the relationship between courts and administrative agencies. Id. Under this doctrine, "the judicial process is suspended pending referral of such issues to the administrative body for its views." Id. In New Mexico, we have recognized that "this Court is not a ratemaking body and [w]e recognize the expertise of the commission in public utility management." Comm'n Investigation v. State Corp. Comm'n, 1999-NMSC-016, ¶ 15, 127 N.M. 254, 980 P.2d 37 (quoted material and quotation marks omitted). In the present matter, the NMPRC has the expertise to determine whether the collect call telephone rates provided at the correctional facilities are reasonable. Under the primary jurisdiction doctrine, we conclude that it was proper for the district court to defer to the expertise of NMPRC. Therefore, we affirm the district court's decision to dismiss Plaintiffs' claims for injunctive or future relief under the primary jurisdiction doctrine.

{7} Any injunctive or future relief claims are also moot under recent legislation passed by the New Mexico legislature. This recent legislation requires any contract entered into by the telephone service providers and private or public correctional facilities to provide inmates with telephone services at the lowest rate. See 2001 NM Laws, ch. 33, 115. It also prohibits telephone service providers from paying a correctional facility a "commission or other payment" based upon these contracts. Id. In light of this recent legislation, we hold that any claims for injunctive or future relief in the present case are moot.

3. New Mexico Unfair Practices Act (Count I) and New Mexico Antitrust Act (Count II)

{8} The district court concluded that the City of Espanola, Rio Arriba County, and the telephone service provider Defendants could not be liable under the NMUPA and the New Mexico Antitrust Act.¹ The district court held that under NMSA 1978, § 57-12-7 (1999) of the NMUPA, any laws administered by a regulatory body are expressly permitted. Section 57-12-7 states that "[n]othing in the Unfair Practices Act shall apply to actions or transactions...