Worldcom v. Conn. Dept. of Public Util. Cont.

• Decision Date: 25 September 2002
• Docket Number: No. CIV.3:00CV1919 CFD.,CIV.3:00CV1919 CFD.
• Citation: 229 F.Supp.2d 109
• Court: U.S. District Court — District of Connecticut
• Parties: WORLDCOM, INC., et al., Plaintiffs, v. CONNECTICUT DEPARTMENT OF PUBLIC UTILITY CONTROL, et al. Defendants.

229 F.Supp.2d 109

WORLDCOM, INC., et al., Plaintiffs, v. CONNECTICUT DEPARTMENT OF PUBLIC UTILITY CONTROL, et al. Defendants.

No. CIV.3:00CV1919 CFD.

United States District Court, D. Connecticut.

September 25, 2002.

Moyahoena N. Ogilvie, Cummings & Lockwood, Hartford, CT, Robert J. Sickinger, Cummings & Sickinger, Stamford, CT, Robert P. Dolian, Cummings & Lockwood, Stamford, CT, Maureen F. Del Duca, Michael B. DeSanctis, Jenner & Block, Washington, DC, for Plaintiffs.

Robert S. Golden, Jr., Tatiana D. Eirmann, Attorney General's Office Public Utility Control, New Britain, CT, for Defendants.

Ralph G. Elliot, Tyler, Cooper & Alcorn, Hrtford, CT, for Defendant.

RULING ON STATE DEFENDANTS' MOTION TO DISMISS

DRONEY, District Judge.

I. Introduction

Plaintiffs WorldCom, Inc., Brooks Fiber Communications of Connecticut, Inc., MCI WorldCom Communications, Inc., and MCIMetro Access Transmission Services, LLC (collectively, "WorldCom") bring this action under the Telecommunications Act of 1996, 47 U.S.C. §§ 251-61 (the "Act" or "1996 Act") and its implementing regulations against defendants Connecticut Department of Public Utility Control ("DPUC"), Donald W. Downes, Glenn Arthur, Jack R. Goldberg, Linda J. Kelly Arnold, and John W. Betkowski (collectively, the "Commissioners"), and Southern New England Telephone Company ("SNET").¹ In short, WorldCom seeks review of a DPUC order issued pursuant to the Act. The state defendants have moved to dismiss the action [Doc. # 22] for lack of subject matter jurisdiction. For the foregoing reasons, their motion is denied.

II. Standard

As stated above, the state defendants move to dismiss this action for lack of subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure. Such motions may be characterized either as factual or facial; the latter "challenges the sufficiency of the jurisdictional facts alleged, not the facts themselves." Poodry v. Tonawanda Band of Seneca Indians, 85 F.3d 874, 887 n. 15 (2d Cir.1996). Invocation of the Eleventh Amendment in this context constitutes a facial challenge to the complaint. Bell Atlantic-Pa., Inc. v. Pennsylvania Pub. Util. Comm'n, 107 F.Supp.2d 653, 659 (E.D.Pa. 2000). Accordingly, the Court will accept WorldCom's allegations as true and construe them liberally. Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir.1994). Once challenged, the party asserting jurisdiction-WorldCom-has the burden of proving its existence. Board of Educ. of the Mt. Sinai Union Free School Dist. v. New York State Teachers Sys., 60 F.3d 106, 109 (2d Cir.1995); Robinson, 21 F.3d at 507. Because the Court will rely solely on the pleadings and supporting affidavits, WorldCom must make only a prima facie showing of jurisdiction. Robinson, 21 F.3d at 507.

III. Background

A. The 1996 Act

Until the 1990's, local telephone service was essentially a monopoly. "States typically granted an exclusive franchise in each local service area to a local exchange carrier ("LEC"), which owned, among other things, the local loops (wires connecting telephones to switches), the switches (equipment directing calls to their destinations), and the transport trunks (wires carrying calls between switches) that constitute a local exchange network." AT & T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 371, 119 S.Ct. 721, 142 L.Ed.2d 835 (1999). The 1996 Act fundamentally altered this regime. "States may no longer enforce laws that impede competition, and incumbent LECs are subject to a host of duties intended to facilitate market entry." Id. One of the principal responsibilities of the incumbent LEC is to allow its competitors to share its network; this sharing is termed "interconnection" in the Act. 47 U.S.C. § 251(c)(2). It also has the duty to provide to "any requesting telecommunications carrier for the provision of telecommunications service, non-discriminatory access to network elements on an unbundled basis at any technically feasible points on rates, terms and conditions that are just, reasonable, and nondiscriminatory in accordance with the terms and conditions of the agreement and the requirements of section 252 of this title."² Id. § 251(c)(3).

When it receives a request for interconnection from a competing telecommunications carrier, the incumbent LEC may negotiate and enter into a binding agreement with the competitor. Id. § 252(a). The agreement must contain itemized charges for each service or network element covered by the agreement. Id. When negotiating interconnection agreements with its competitors, the incumbent LEC has a duty to act in good faith. Id. § 251(c)(1). However, if differences arise, either the incumbent LEC or the competitor may ask the state commission that regulates local service to become involved in the negotiations as a mediator or may petition the state commission to arbitrate any remaining open issues. Id. §§ 252(a)(2), (b)(1). Each interconnection agreement, whether adopted by negotiation or arbitration, must be approved by the state commission. Id. § 252(e)(1). The state commission has limited grounds on which it may base a rejection of an agreement. Id. § 252(e)(2). For example, it may reject an arbitrated agreement if it finds that it does not meet the requirements of § 251 such as the requirement that the incumbent LEC's rates, terms and conditions for interconnection and unbundled network elements must be "just, reasonable, and nondiscriminatory." Id. § 251(c)(2), (3). After the state commission acts,³ "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." Id. § 252(e)(6).

B. The parties

Plaintiff WorldCom, Inc. offers telephone service in Connecticut through its wholly owned indirect subsidiaries and fellow plaintiffs Brooks Fiber Communications of Connecticut, Inc., MCI WorldCom Communications, Inc., and MCIMetro Access Transmission Services, LLC. Each of the subsidiaries is a telecommunications provider.

Defendant SNET is an incumbent LEC under the meaning of § 252(h)(1) of the Act. Defendant DPUC is a State commission under the Act which has regulatory jurisdiction with respect to intrastate operations of carriers. Id. § 153(41). The remaining defendants are commissioners of the DPUC and they are sued only in their official capacities.

C. The dispute

In 1996, SNET, an incumbent LEC, and WorldCom, a requesting telecommunications carrier, engaged in negotiations regarding a proposed interconnection agreement. Following a period of negotiations in which the parties were unable to resolve certain issues, WorldCom filed a petition with the DPUC for compulsory arbitration as provided for under the Act. On April 23, 1997, the DPUC issued a final order approving an interconnection agreement between the parties. See Compl. Ex. B. Under its terms, the prices of certain unbundled network elements ("UNE") were to be incorporated into the agreement when they were updated, approved and filed in other DPUC proceedings. See Ex. C.

While the negotiation and compulsory arbitration of the interconnection agreement between SNET and WorldCom were ongoing, the DPUC was conducting proceedings whereby it would establish a tariff pursuant to which SNET would offer UNEs to telecommunications carriers such as WorldCom. The DPUC issued its final decision on this matter on May 20, 1998. See Ex. D. In that decision, the DPUC approved SNET's proposed studies as the basis for setting interim rates for UNEs that SNET provided to competitive local exchange carriers, but it also requested that SNET file additional studies by September 1, 1998.

On August 5, 1997, WorldCom filed a complaint in the United States District Court for the District of Connecticut in which it challenged the interconnection agreement. It later withdrew without prejudice that complaint on February 3, 2000.

In June 1999, however, the Connecticut legislature enacted Public Act 99-222, codified at Conn. Gen.Stat. § 16-247b(b), which provided that "the rates for interconnection and unbundled network elements and any combination thereof shall be based on their respective forward looking long-run incremental costs, and shall be consistent with the provisions of 47 U.S.C. § 252(d)." On January 3, 2000, SNET submitted cost studies to fulfill the requirements of this statute, which led to hearings in which WorldCom participated.

The DPUC's final decision on the pricing issue was issued on June 29, 2000. See Ex. F. It approved most of SNET's proposals, but in WorldCom's view, did not address certain of its objections. WorldCom filed a motion for reconsideration, but that motion was denied. Following the DPUC decision, SNET filed a tariff containing the rates consistent with DPUC's order, which was effective July 1, 2000.

In this action, WorldCom argues that the interconnection agreement with SNET as approved by the DPUC violates the 1996 Act and its implementing regulations because it incorporates the new tariff rates for UNEs set by the DPUC in its June 29, 2000 decision.

IV Discussion

The state defendants argue that this action should be dismissed because the Court lacks subject matter jurisdiction.⁴ Their arguments are twofold. First, they maintain that this action violates the State of Connecticut's immunity under the Eleventh Amendment, as the DPUC is a state agency and thus is immune from suit. Second, they contend that the Commissioners are not subject to suit based upon the principle set forth in Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908) because WorldCom is not seeking prospective relief. In response, WorldCom argues that the Eleventh Amendment does not bar this action because the state has voluntarily and unequivocally waived its immunity from suit. It also maintains that Ex parte Young permits this action against the Commissioners, who are sued in...