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AT & T COMMUNICATIONS OF CALIF., INC. v. PACIFIC BELL

June 24, 1999

AT & T COMMUNICATIONS OF CALIFORNIA, INC., A CALIFORNIA CORPORATION, PLAINTIFF,
v.
PACIFIC BELL, A CALIFORNIA CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Legge, District Judge.

                        ORDER: DEFENDANT'S MOTION TO
                       DISMISS AND PLAINTIFF'S MOTION
                        TO CONFIRM ARBITRATION AWARD

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.

I.

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 disputes.

AT & T alleges that Pacific Bell has been imposing "access charges"*fn1 for local calls carried over AT & T's network that originated and ended on Pacific Bell's facilities within the area which the agreement defines as "local" traffic. AT & T protested the access charges, arguing that the agreement precludes Pacific Bell from imposing them.

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,

  Pacific shall abide by the `bill and keep' system for
  all local calls as the agreement requires. AT & T is
  not required to pay access charges for its use of
  switched access services to terminate its local
  calls. Pacific shall refund all of the improper access
  charges it has received since December 19, 1996. The
  amount of the refund is subject to proof by AT & T in
  further proceedings before this Arbitrator in the
  event the parties are unable to agree on the amount.

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.

II.

AT & T moves to confirm the arbitration award under the federal Arbitration Act, 9 U.S.C. ยง 9. And plaintiffs request to return the question of damages to the arbitrator also invokes Section 4 of that Act. Pacific Bell ...


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