The opinion of the court was delivered by: Susan Illston, United States District Judge.
ORDER GRANTING DEFENDANTS'
MOTION TO DISMISS PLAINTIFF'S
SECOND CLAIM FOR RELIEF
On November 9, 2001, the Court heard argument on defendants' motion to
dismiss plaintiffs second claim for relief Having carefully considered
the arguments of the parties and the papers Submitted, the Court hereby
GRANTS defendants' motion to dismiss for the reasons set forth below.
Plaintiff Qwest Communications Corporation ("Qwest") is a telephone
company defined as a public utility under California Public Utilities
Code § 216. First Amended Complaint ("FAC") ¶ 4. The California
Public Utilities Commission ("PUC") has granted Qwest certificates of
public convenience and necessity ("CPCN") to provide interexehange, or
long distance, telecommunication services. Id. Qwest provides broadband
Internet-based data, voice and image connectivity to businesses,
consumers and other communications service providers. Id. at ¶ 28.
In December 1999, Qwest won a competitive bidding process and entered
into a government contract to provide faster and expanded
telecommunications capacity to the Lawrence Berkeley National Laboratory
("LBN Laboratory"). Id. at ¶ 30. LBN Laboratory is the technical
administrator and central hub of a program operated by the United States
Department of Energy ("DOE") known as the Energy Sciences Network
("ESNET"). Richeson Decl. ¶ 7. The ESNET is a high-speed
communication network that allows Department of Energy researchers and
collaborators throughout the nation access to a community of research
facilities, resources and information. FAC at ¶¶ 3-5.
On December 22, 2000, Berkeley enacted Ordinance No. 6608-N.S.
(codified at Berkeley Municipal Code §§ 16.10 et seq.) (the
"Ordinance"), effective January 21, 2001. Id. at ¶ 46. On January
23, 2001, the City passed a Fee Schedule to accompany the Ordinance. Id.
at ¶ 48. The City's new Ordinance created a comprehensive scheme
intended "to more specifically regulate Teleconirnuni| cations carriers
providing telecommunications services using public rights of ways and
other public property." Ordinance § 16.10.0 10 (attached at FAC, Ex.
The Ordinance applied to all telecommunications carriers seeking to
encroach upon Berkeley's public rights-of-way to provide
telecommunication services. Ordinance § 16.10.030. All carriers were
required first to obtain registration and pay related registration fees,
which must be updated annually. Id. at § 16.10.040; aegnho Fee
Schedule 2-3 (attached at FAC, Ex. C). All carriers were also required to
obtain a Special Telecommunications Permit pursuant to § 16.10.050 of
the Ordinance and pay additional fees. Sggaho Fee Schedule 3-4. Unless a
carrier claimed exemption under § 16.10.070, and the City
affirmatively determined that an exemption indeed applied, all carriers
were subject to a franchise fee to provide telecommunications services
using the City's public rights-of-way. See also, id. 5-7.
Qwest filed this lawsuit against the City of Berkeley on February 13,
2001, seeking primarily to invalidate the new Ordinance and Fee Schedule
pursuant to the Supremacy Clause of the United States Constitution, U.S.
Const. art. VI, cl. 2, and the "conflict with general laws" provision of
the California Constitution. Cal. Const. art. XI, § 7. According to
Qwest, Berkeley's Ordinance is preempted by the Federal
Telecommunications Act of 1996 ("FTA"), 47 U.S.C. § 253 (a) and (c),
the California Public Utilities Code §§ 7901 and 7901.1, and the
California Government Code § 50030. Qwest also asserts a claim of
intentional interference with contractual relationship.
On May 23, 2001, this Court enjoined Berkeley from enforcing the
Telecommunications Carriers Ordinance, Berkeley Municipal Code §
16.10 et seq., and its accompanying Fee Schedule, pending resolution of
this lawsuit. Qwest Communications Corp. v. City of Berkeley,
146 F. Supp.2d 1081 (N.D. Cal. 2001). Soon afterwards, Berkeley passed
Resolution No. 61,102-N.S., adopting Ordinance No. 6630-N.S. and its
accompanying Fee Schedule to regulate telecommunications companics
"pcnding resolution of the legality of the City's current
telecommunication ordinance." FAC, Ex. D. ("Interim Ordinance"). Qwest
finds fault with a number of provisions of this Interim Ordinance and Fee
Schedule, and maintains that, like its predecessor, it imposes an
unlawful "third tier" of regulation that is prohibited by both the FTA
and the California Public Utilities Code. See Pl.'s Opp'n 2: 23-25.
In its brief in opposition to the first motion to dismiss, Qwest
indicated that it was not attempting to state a claim directly under
section 253 of the FTA. Instead, Qwest explained that it was stating a
claim under the Supremacy Clause, alleging that Berkeley's Ordinance was
preempted by the FTA. Sine Pl's Opp'n to Mot. to Dismiss, 7:3-6. The Court
denied defendants' motion to dismiss the federal preemption claim based
in large part upon the Ninth Circuit's recent holding in City of Auburn
v. Qwest Corporation, 260 F.3d 1160 (9th Cir. 2001), which clarified that
the Supremacy Clause provides an independent basis for challenging local
ordinances that purportedly violate the FTA. See Quest Communications
Corp., 146 F. Supp.2d 1081. On August 7, 2001, Quest filed a First
Amended Complaint asserting new challenges to the Interim Ordinance and
Fee Schedule and adding new claims. Among them was the new second claim
which attempts to state a claim directly under FTA §§ 253(a) and
(c). Before the Court is Berkeley's motion to dismiss that second claim.
Berkeley contends that there is no private right of action under §§
253(a) or (c).*fn1
Berkeley seeks dismissal of the second claim for relief under § 253
of the FTA pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure. Rule 12(b)(6) requires that a district court must
dismiss a complaint if it fails to state a claim upon which relief can be
granted. The question presented by a motion to dismiss is not whether the
plaintiff will prevail in the action, but whether the plaintiff is
entitled to offer evidence in support of the claim. Scheuer v. Rhodes,
416 U.S. 232,236 (1974), overruled on other grounds by Davis v. Scherer,
468 U.S. 183,104 S.Ct. 3012 (1984).
In answering this question, the Court must assume that the plaintiffs
allegations are true and must draw all reasonable inferences in the
plaintiffs favor. Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th
Cir. 1987). Even if the face of the pleadings suggests that the chance of
recovery is remote, the Court must allow the plaintiff to develop the
case at this stage of the proceedings. United States v. City of Redwood
City, 640 F.2d 963,966 (9th Cir. 1981).
If the Court dismisses the complaint, it must then decide whether to
grant leave to amend. The Ninth Circuit has "repeatedly held that a
district court should grant leave to amend even if no request to amend
the pleading was made, unless it determines that the pleading could not
possibly be cured by the allegation of other facts." Lopez v. Smith,
203 F.3d 1122,1130 (9th Cir. 2000) (citations and internal quotation
Qwest's second claim for relief attempts to state a claim directly
under 47 U.S.C. § 253. Section provides as follows, in pertinent
(a) In general: No State or local statute or
regulation, or other State or local legal
requirement, may prohibit or have the effect of
prohibiting the ability of any entity to provide any