Western Radio Services Co. v. Qwest Corp.

• Decision Date: 09 July 2008
• Docket Number: No. 05-35796.,05-35796.
• Citation: 530 F.3d 1186
• Parties: WESTERN RADIO SERVICES CO., an Oregon corporation, Plaintiff-Appellant, v. QWEST CORPORATION, a Colorado corporation; The Public Utility Commission of Oregon; Lee Beyer Chairman; Ray Baum, Commissioner; John Savage, Commissioner, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

530 F.3d 1186

WESTERN RADIO SERVICES CO., an Oregon corporation, Plaintiff-Appellant, v. QWEST CORPORATION, a Colorado corporation; The Public Utility Commission of Oregon; Lee Beyer Chairman; Ray Baum, Commissioner; John Savage, Commissioner, Defendants-Appellees.

No. 05-35796.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 6, 2007.

Filed July 9, 2008.

Marianne G. Dugan (argued), Eugene, OR, for Western Radio Services Co., plaintiff-appellant.

Alex M. Duarte (argued), Portland, OR, Qwest Corporation, Gregory B. Monson, Salt Lake City, UT, and Timothy W. Snider, Portland, OR, Stoel Rives, LLP, for Qwest Corporation, defendant-appellee.

Erin C. Lagesen, Office of the Oregon Attorney General, Salem, OR, for Lee Breyer, Chairman, Public Utility Commission of Oregon, defendant-appellee.

Appeal from the United States District Court for the District of Oregon; Ann L. Aiken, U.S. District Judge, Presiding. D.C. No. CV-05-00159-ALA.

Before: EDWARD LEAVY, RAYMOND C. FISHER and MARSHA S. BERZON, Circuit Judges.

BERZON, Circuit Judge:

Under the Telecommunications Act of 1996 ("1996 Act"), Pub.L. No. 104-104, 110 Stat. 56 (1996), "incumbent" local exchange carriers are required to enter into interconnection agreements with newer local exchange carriers. If the two carriers cannot reach agreement through negotiation, either party may petition the state's public utilities commission to request arbitration of any open issues.

Western Radio Services Co. ("Western") filed a petition with the Oregon Public Utilities Commission ("PUC") requesting arbitration of its attempts to establish an interconnection agreement with Qwest Corporation ("Qwest"), an incumbent carrier. The arbitrator found for Qwest on nearly every issue and ordered the parties to submit within 30 days an interconnection agreement consistent with his decision for final approval by the PUC. Qwest drafted an interconnection agreement that it maintained accorded with the arbitrator's decision, but Western refused to sign it. Instead, Western brought this action, contending that Qwest had failed to negotiate in good faith under the 1996 Act, and that the PUC and its Commissioners had violated its constitutional rights under 42 U.S.C. § 1983. In the meantime, Qwest submitted its draft agreement to the PUC.

The district court dismissed the good faith cause of action for lack of jurisdiction and the § 1983 cause of action as unripe. Shortly after the district court's decision, the PUC approved the interconnection agreement submitted to it by Qwest, ruling that it complied with the arbitration order.

Western appeals the district court's decision. We hold that, whether or not there is a private right of action encompassing its good faith claim, Western may not sue Qwest for a failure to negotiate in good faith until the PUC has addressed Western's good faith claim. There has now, however, been a determination by the PUC approving an interconnection agreement, which may represent a decision by the agency on Western's good faith claim. We therefore remand to the district court to allow it to consider in the first instance whether the PUC's decision is sufficient to permit adjudication of Western's good faith claim in district court and, if so, to address in the first instance the availability of such an action under 47 U.S.C. § 207. We also remand the § 1983 cause of action to the district court, so that it may consider whether the PUC determination affects its conclusion that the § 1983 claim was unripe.

STATUTORY FRAMEWORK

The Telecommunications Act of 1934 ("1934 Act"), 48 Stat. 1064, "granted the [Federal Communications Commission] broad authority to regulate interstate telephone communications." Global Crossing Telecomm., Inc. v. Metrophones Telecomm., Inc., ___ U.S. ___, 127 S.Ct. 1513, 1516, 167 L.Ed.2d 422 (2007). Under the 1934 Act, carriers filed tariffs with the Federal Communications Commission ("F.C.C.") which would then approve them or, in some cases, set them aside or alter them. Id. The 1934 Act requires that "[a]ll charges, practices, classifications, and regulations for and in connection with" provision of telecommunications services be "just and reasonable," and declares unlawful any "charge, practice, classification, or regulation that is unjust or unreasonable." 47 U.S.C. § 201(b).¹

The 1934 Act also authorizes persons harmed by the actions of any "common carrier"² to recover damages:

In case any common carrier shall do, or cause or permit to be done any act, matter, or thing in this chapter prohibited or declared to be unlawful ... such common carrier shall be liable to the person or persons injured thereby for the full amount of damages sustained....

§ 206; see also § 153(32) ("The term `person' includes an individual, partnership, association, joint-stock company, trust, or corporation."). A person seeking damages under § 206 "may either make complaint to the Commission ..., or may bring suit for the recovery of damages ... in any district court of the United States." § 207.

The Telecommunications Act of 1996 ("1996 Act") introduced a competitive regime for local telecommunications services. See Verizon California, Inc. v. Peevey, 462 F.3d 1142, 1146 (9th Cir.2006). Before adoption of the 1996 Act, "local telephone service was provided primarily by a single company within each local area." Id. Under the new regime, "incumbent local exchange carriers," such as Qwest, are obligated to provide "interconnection" to newer local exchange carriers, called "requesting" carriers in the statute. § 251(c)(2).

"Interconnection allows customers of one [local exchange carrier] to call the customers of another, with the calling party's [local exchange carrier] ..., transporting the call to the connection point, where the called party's [local exchange carrier] ... takes over and transports the call to its end point." Verizon California, 462 F.3d at 1146. The 1996 Act lays out a number of substantive requirements for the quality and nature of interconnection that must be provided. These include, for example, a requirement that interconnection be provided "at any technically feasible point within the carrier's network" and that it be "at least equal in quality" to the interconnection that the incumbent carrier provides to itself. § 251(c)(2)(A)-(C).

If a carrier requests interconnection, the requesting carrier and the incumbent carrier to whom the request is made have a duty to "establish reciprocal compensation arrangements for" interconnection. § 251(b)(5). In creating such an interconnection agreement, both the incumbent carrier and the requesting carrier have a "duty to negotiate in good faith ... the particular terms and conditions" of such agreements. § 251(c)(1). The 1996 Act sets out a procedural framework for these negotiations: First, a requesting carrier must make a request for interconnection to an incumbent carrier, which "may negotiate and enter into a binding agreement with the requesting ... carrier ... without regard" to the substantive standards of § 251. § 252(a)(1). The parties to the negotiation may, if they wish, ask a state public utilities commission "to mediate any differences arising in the course of the negotiation." § 252(a)(2).

If the parties cannot reach agreement through voluntary negotiations or mediation, either may "petition a State commission to arbitrate any open issues." § 252(b)(1). In resolving the open issues through compulsory arbitration, a state commission must ensure that its resolution "meet[s] the requirements of section 251" and may "impos[e] appropriate conditions" in order to ensure, among other things, that the requirements of § 251 are met. § 252(b)(4)(C), (c)(1). If at any point during the arbitration either party refuses "to participate further in the negotiations, to cooperate with the State commission ..., or to continue to negotiate in good faith in the presence, or with the assistance, of the State commission," such action "shall be considered a failure to negotiate in good faith." § 252(b)(5). Section 252 does not specify what remedy, if any, is available for failure to negotiate in good faith.

Once an interconnection agreement has been adopted either by negotiation or after compulsory arbitration, it must "be submitted for approval" to the state commission, which must either "approve or reject the agreement." § 252(e)(1). Finally, the 1996 Act provides for judicial "[r]eview of State commission actions":

In any case in which a[PUC] makes a determination under this section, any party aggrieved by such determination may bring an action in an appropriate Federal district court to determine whether the agreement or statement meets the requirements of section 251 of this title and this section.

§ 252(e)(6).

PROCEDURAL HISTORY

In October of 2003, Western requested negotiations with Qwest to establish an interconnection agreement allowing Western access to Qwest's network in Oregon. The negotiations failed to resolve all the issues between the parties. Western thereupon filed a petition for arbitration with the Oregon PUC. Before the arbitrator, the parties submitted a stipulation of facts as to two issues, stipulated that they had resolved three other issues, submitted testimony, and filed opening and responsive briefs. The arbitrator issued a decision on September 20, 2004.

In his decision, the arbitrator ordered that Qwest's proposed language be adopted as to all but one issue. The arbitration order instructed that "[w]ithin 30 days of the date of the [PUC's] final order in this proceeding, Qwest and Western shall submit an interconnection agreement consistent with the terms of this decision." Western filed exceptions to the arbitrator's order with the PUC, but, on October 18, 2004, the PUC adopted the arbitrator's decision in its entirety.

On November 10, Qwest prepared a proposed interconnection agreement, signed it, and sent it to Western by...