The opinion of the court was delivered by: Legge, District Judge.
Plaintiff AT & T Communications of California brings this action, and
makes the present motion, to confirm an arbitration award in its favor
against defendant Pacific Bell. Plaintiff asks this court to: confirm the
award on the issue of liability, compel defendant to proceed with
arbitration of damages, and enjoin defendant from proceeding before the
California Public Utilities Commission.
Defendant moves to dismiss on two grounds. First, Pacific Bell asserts
that this court lacks subject matter jurisdiction over the action.
Second, Pacific Bell asserts that the arbitration award is not final and
cannot be confirmed by this court because it is interlocutory only.
The pending motions have been briefed, argued and submitted for
decision. The court has reviewed the moving and opposing papers, the
record of the case and the applicable authorities. For the reasons
discussed below, the court denies plaintiffs motion and grants
defendant's motion to dismiss.
Plaintiff and defendant entered into an Interconnection Agreement in
December 1996, pursuant to the Telecommunications Act of 1996,
47 U.S.C. § 252. Under that Agreement, AT & T purchased certain
services from Pacific Bell, which allowed AT & T to connect to Pacific
Bell's telecommunications network, as opposed to building its own local
network. The agreement provides for commercial arbitration of certain
The parties agreed to arbitration as provided in the Interconnection
Agreement, and selected the Honorable Walter P. Capaccioli as the
arbitrator. The parties agreed to bifurcate the arbitration proceedings,
whereby the arbitrator would first determine the issue of liability. Both
parties apparently "agreed that the parties would submit only the issue of
liability to Judge Capaccioli at the arbitration hearing, since the
amount of damages would likely be readily ascertainable and the parties
could likely agree thereon after a finding as to liability."
The arbitrator ruled on the liability issue, finding that plaintiff
should not have been billed for the access charges. Specifically, the
arbitrator ruled that,
After that decision, the parties were unable to agree on damages. AT &
T then requested to refer the damages issue to the arbitrator for
resolution. The parties dispute whether Pacific Bell has declined to
return to arbitration. But Pacific Bell has filed a complaint with the
California Public Utilities Commission seeking payment
of amounts withheld by AT & T. AT & T contends that Pacific Bell is
attempting to seek resolution before the CPUC of the same issues that
were or should be decided by the arbitrator.
AT & T seeks to have this court confirm the arbitration award on the
liability issue, and seeks an order compelling Pacific Bell to submit the
damages issue to the arbitrator. AT & T further seeks an order enjoining
Pacific Bell from pursuing its complaint before the CPUC.
AT & T moves to confirm the arbitration award under the federal
Arbitration Act, 9 U.S.C. § 9. And plaintiffs request to return the
question of damages to the arbitrator also invokes Section 4 of that
Act. Pacific Bell contends that this court has no jurisdiction to do
The United States Supreme Court has held that the Arbitration Act
does not provide a separate basis for federal subject matter
jurisdiction. Rather, the Court has held that there must be other
independent grounds for federal subject matter jurisdiction in order to
invoke the Arbitration Act. Moses H. Cone Memorial Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 25 n. 32, 103 S.Ct. 927, 74 L.Ed.2d 765
(1983). The Court stated:
The Arbitration Act is something of an anomaly in the
field of federal-court jurisdiction. It creates a body
of federal substantive law establishing and regulating
the duty to honor an agreement to arbitrate, yet it
does not create any independent federal-question
jurisdiction under 28 U.S.C. § 1331 or otherwise.
The Ninth Circuit has also concluded that independent federal
question jurisdiction must exist to confirm arbitration awards under
Section 9 of the Arbitration Act. General Atomic Co. v. United Nuclear
, 969-70 (9th Cir. 1981), ("applicants who, in federal
district court, seek confirmation of an arbitration award under
9 U.S.C. § 9, must demonstrate independent grounds of federal subject
matter jurisdiction"). The burden of establishing federal subject matter
jurisdiction is on the party asserting it. Kokkonen v. Guardian Life
Ins. Co., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). AT &
T has that burden here, and it claims jurisdiction under the
The Telecommunications Act of 1996, which is codified in Title 47 of
the United States Code, is a comprehensive rewriting of the
Communications Act of 1934. The 1996 Act made several amendments,
including those codified in Sections 251 and 252, which are relevant
AT & T's complaint alleges federal subject matter jurisdiction under
47 U.S.C. § 207. According to Section 207,
47 U.S.C. § 207 (1998). However, Pacific Bell contends that Section
207 applies only if the dispute involves interstate communications.
Pacific Bell therefore argues that Section 207 has no application to this
case, since this dispute involves only local calls and not interstate
communications. This contention appears to be correct. In its briefing on
these motions AT & T seems to agree, by instead claiming jurisdiction
under 47 U.S.C. § 206 and other 1996 amendments to the Act.
Therefore, it is
necessary to determine whether there is a federal right of action under
Sections 206, 251 or 252 in order to ascertain whether this court has
According to Section 206,
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, or
shall omit to do any act, matter, or thing in this
chapter required to be done, such common carrier shall
be liable to the person or persons injured thereby for
the full amount of damages sustained in consequence of
any such violation of the provisions of this chapter.
47 U.S.C. § 206 (1998) (emphasis added). But is this liability to be
enforced in the federal courts, or before the Federal Communications
Commission, the state utilities commissions, or the state courts?
AT & T argues that the phrase "in this chapter" refers to all of
Chapter 5 of 47 U.S.C. AT & T therefore invokes other provisions of
Chapter 5, namely Sections 251 and 252, for its assertion of federal
subject matter jurisdiction. Section 251 imposes certain duties on local
exchange carriers. MCI Telecommunications Corp. v. The Southern New
England Tel. Co., 27 F. Supp.2d 326 (D.Conn. 1998). Section 252 outlines
the procedures for negotiation, arbitration, and approval of
interconnection agreements between the telecommunications carriers. Id.
AT & T argues that the jurisdictional issue under Chapter 5 does not
depend upon whether the arbitration proceeding involves local or
interstate traffic; rather, jurisdiction depends on whether the alleged
conduct is "any act, matter or thing" within Chapter 5.
However, even assuming that Section 206 does incorporate other
provisions of Chapter 5 of the Telecommunications Act, the question still
remains as to whether Section 206 itself confers a right of action in a
federal court. Clearly, there is no express federal jurisdiction stated
in Section 206. But is there an implied federal right of action
conferring jurisdiction on this court?
The United States Supreme Court has developed a four part test to
determine whether a private right of action should be implied. Cort v.
Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). (1) Whether
the plaintiff is one of the class for whose special benefit the statute
was enacted; (2) whether any explicit or implicit indication of
legislative intent exists to create or deny a remedy; (3) whether
implication of a remedy would be consistent with the underlying purposes
of the legislative scheme; and (4) whether the cause of action is one
traditionally relegated to state law, making the inference of a cause of
action solely under federal law inappropriate. Id.
Pacific Bell cites one case holding that Section 206 does not create a
right of action. See Frenkel v. Western Union Tel. Co., 327 F. Supp. 954
(D.Md. 1971). The court in Frenkel concluded that:
Section 206 is subject to the same limitation as
Section 207, that being the necessity of establishing
the violation of another provision of the chapter.
Therefore, Section 206 can not be relied on as the
provision violated in invoking the jurisdiction of a
federal court under Section 207.
Id. at 958. Neither AT & T nor the independent research of this court has
disclosed any other case directly on point. And a reading of the Act
further supports the conclusion that there is no independent right of
action provided by Section 206 itself. However, it remains necessary to
determine whether Sections 251 or 252 provide a basis for federal subject
Pacific Bell argues that because AT & T did not assert jurisdiction
under those specific statutes until AT & T's opposition to Pacific Bell's
motion to dismiss, AT & T cannot now assert these sections as grounds for
jurisdiction. Pacific Bell relies on Ninth Circuit authority in which the
court stated, "In determining federal court jurisdiction, we look to the
original, rather than to the amended complaint. Subject
matter jurisdiction must exist as of the time the action is commenced."
Morongo Band of Mission Indians v. California State Board of
Equalization, 858 F.2d 1376, 1380 (9th Cir. 1988). However, it is unclear
from that opinion whether a plaintiff must explicitly state in its
original complaint precisely which statutes it is relying upon to
On the merits, Pacific Bell argues that Sections 251 and 252 do not
create jurisdiction in a federal court. Section 251(b)(5) provides that a
telecommunications carrier has "the duty to establish reciprocal
compensation arrangements for the transport and termination of
telecommunications." 47 U.S.C. § 251(b)(5) (1999). In addition,
Section 252(a)(1) provides that "an incumbent local exchange carrier may
negotiate and enter into a binding agreement with the requesting
telecommunications carrier . . ." 47 U.S.C. § 252(a)(1) (1999). From
that language, AT & T asserts that Section 252 makes interconnection
agreements binding, and in that way acts as the enforcement provision for
Section 251. Defendant concedes that Section 251 creates an obligation on
the part of Pacific Bell to enter into an interconnection agreement, but
argues that once it did so it fulfilled its obligations under Sections
251 and 252. And Pacific Bell argues that any subsequent dispute arising
out of an interconnection agreement is simply a breach of contract
question that does not implicate the Telecommunications Act. That
argument goes too far. A party entering into an interconnection agreement
must abide by the substantive provisions of the Telecommunications Act.
However, even that does not mean that the remedy lies in a federal
Pacific Bell argues that there is simply no private right of action
created by the language of Sections 251 or 252. Similar to Section 206,
there is no express relevant right of action in a federal court stated in
Sections 251 and 252.
The 1996 Act does explicitly provide for federal court jurisdiction in
at least three sections that are not involved here: (1) Section 274,
entitled "Electronic Publishing by Bell Operating Companies."
47 U.S.C. § 274(e). (2) Section 252(3)(6) grants federal court
jurisdiction for challenges to the decisions of state commissions. And
(3) as noted above, Section 207 creates a federal court jurisdiction over
interstate communication disputes.
Those sections would lead to the conclusion that because Chapter 5 does
not expressly provide for a federal private right of action, while those
other sections do, then Congress intended none. However, Section 255,
"Access by Persons with Disabilities," explicitly denies a private right
of action: "nothing in this section shall be construed to authorize any
private right of action to enforce any requirement of this section or any
regulation thereunder." 47 U.S.C. § 255(f) (1999). That express
denial of a private right of action could also lead to the conclusion
that other provisions of the Act do create rights of action unless
Congress has expressly denied them. In total, Chapter 5 does not paint a
clear picture of Congressional intent regarding federal subject matter
jurisdiction for private actions.
Turning to the legislative history of Section 251, there is a strong
indication that Congress intended no private right of action. Congress
considered but failed to include a private cause of action in the 1996
Act for violations of an interconnection agreement. Section 257 of the
Senate Bill expressly provided for a private right of action. S.Rep. No.
104-23, 104th Cong., 1st Sess., at 104-05. However, that was not enacted
in the final legislation. AT & T argues that Congressional silence does
not necessarily indicate Congress' intent to deny a private right of
action. And it argues that if it was not a subject of comment in the
Report, any change between the Senate bill and the final Act was intended
to be a "non-substantive clerical correction," a "conforming change" or a
"minor drafting and clerical change." However, Congress' express grant of
federal rights of action in Sections 207, 247
and 252(e)(6), while deleting a similar provision from the Senate bill,
is at least some indication that Congress did not intend to create
federal court jurisdiction for other causes of action.
The case authorities are also not dispositive. The Ninth Circuit has
indicated that courts have been reluctant to find a private right of
action under the Telecommunications Act. See Maydak v. Bonded Credit
Co., Inc., 96 F.3d 1332, 1333 (9th Cir. 1996). The Ninth Circuit pointed
out that, "the Supreme Court formulated a presumption against private
actions under the Act, stating that the Federal Communications Act of
1934 `did not create new private rights' and that `private litigants have
standing only as representatives of the public interest.'" Id. (quoting
Scripps-Howard Radio, Inc. v. Federal Communications Comm'n, 316 U.S. 4,
14, 62 S.Ct. 875, 86 L.Ed. 1229 (1942)).
Another judge of this court has indicated serious doubt that Section
251 creates subject matter jurisdiction. Covad Communications Co. v.
Pacific Bell, (N.D.Cal. Nov. 18, 1998) (No.C 98-1887). In a footnote, the
court said, "While the Court has serious doubts regarding the existence
of a private right of action for Section 251 violations, this issue is
not addressed at this time because Pacific's argument under the
arbitration clause is dispositive of the current motion." Id. at 5, n.
AT & T relies on a district court opinion from the District of
Connecticut, which appears to indicate that there is a private right of
action under Sections 251 and 252. See MCI Telecommunications Corp.,
27 F. Supp.2d 326, 333-34. That court stated, "Congress has not
foreclosed private enforcement of Sections 251 and 252, either expressly
in the 1996 Act itself, or impliedly, by creating a comprehensive
enforcement scheme that is incompatible with private enforcement under
Section 1983." However, the court in MCI made this statement in the
context of a Section 1983 claim. And the court ultimately chose not to
address the issue. Therefore, that court's comment does not have much
As stated, Congress chose not to include an express federal court right
of action breach for interconnection agreements in Sections 206, 251 and
252. Further, Congress has expressed that the purpose of Chapter 5 of the
Telecommunications Act is to regulate interstate and foreign commerce and
provide safe and efficient services, to be monitored by the Federal
Communications Commission. See 47 U.S.C. § 151 (1999). That
commission, along with state commissions such as the CPUC, are generally
better able to address telecommunications issues.
Based upon the language of the Act, its legislative history, and
the limited judicial precedent, this court concludes that the provisions
of the Act that are relevant here do not create federal court subject
matter jurisdiction. The court therefore grants defendant's motion to
dismiss. And the court therefore does not address the parties' arguments
about whether the arbitration award and the arbitration clause should
otherwise be enforced under the Arbitration Act.
IT IS SO ORDERED.