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Pac-West Telecomm, Inc v. Mci Communications Services

March 22, 2011

PAC-WEST TELECOMM, INC.,
PLAINTIFF,
v.
MCI COMMUNICATIONS SERVICES, INC. D/B/A VERIZON BUSINESS SERVICES,
DEFENDANT.



The opinion of the court was delivered by: Oliver W. Wanger United States District Judge

MEMORANDUM DECISION AND ORDER RE PLAINTIFF‟S MOTION FOR PRIMARY JURISDICTION REFERRAL AND STAY PENDING FCC RULING. (DOC. 32)

I.INTRODUCTION

Before the court is Plaintiff Pac-West Telecomm, Inc.‟s ("Plaintiff") Motion for Primary Jurisdiction Referral and Stay Pending FCC Ruling. Doc. 32. Defendant MCI Communications Services, Inc. d/b/a Verizon Business Services ("Defendant") filed an Opposition (Doc. 45), to which Plaintiff replied (Doc. 46).

II.FACTUAL BACKGROUND

Plaintiff is a competitive local exchange carrier that provides (1) interstate and intrastate exchange access service, and (2) local, long-distance and enhanced services on a wholesale basis to communication service providers. Doc. 17, ¶ 4. Defendant is an interexchange carrier, i.e., a long-distance carrier, that provides interstate and intrastate interexchange services. Doc. 8, ¶ 74.

Plaintiff filed a Complaint against Defendant June 10, 2010 (Doc. 1) and a First Amended Complaint ("FAC") on July 27, 2010 asserting five claims for relief: (1) collection action pursuant to federal tariff, (2) 47 U.S.C. § 206 - violation of 47 U.S.C. § 201, (3) collection action pursuant to state tariffs, (4) quantum meruit, and (5) declaratory judgment. Doc. 17. Plaintiff alleges that it provides interstate exchange access under federal tariffs that are valid, fully compliant with legal requirements, and filed with the Federal Communications Commission ("FCC"). Doc. 17, ¶¶ 23-26. Plaintiff alleges that it allowed Defendant to utilize its network to originate calls, but Defendant has refused to pay Plaintiff‟s tariff rates. Doc. 17, ¶ 2.

Defendant filed an Answer to Complaint and Counterclaim on July 6, 2010 seeking relief from Plaintiff‟s alleged persistent billing and past collection of unlawful charges allegedly authorized by its tariffs. Doc. 8, ¶ 73. Defendant alleges that it does not owe Plaintiff the disputed amounts because: (1) the invoices contain a significant amount for charges associated with central offices that Plaintiff does not own (Doc. 8, ¶ 105); (2) Plaintiff‟s tariff was void on its face because, at least before the June 2010 amendment, (i) it was missing an essential element, i.e., the rate for a tariffed service, in violation of 47 C.F.R. § 61.2(a) (Doc. 8, ¶ 89), and (ii) it referenced other tariffs in violation of 47 C.F.R. § 61.74 (Doc. 8, ¶ 90); (3) Plaintiff was not permitted to charge Defendant its tariffed rates for calls initiated or received by entities, including voice over Internal protocol ("VoIP"), that are not Plaintiff‟s end-user customers (Doc. 8, ¶¶ 119-124); (4) Plaintiff regularly billed Defendant at rates exceeding the legal maximum rate (Doc. 8, ¶¶ 126-127); (5) Plaintiff billed Defendant for work not performed (Id.); and (6) Plaintiff charged Defendant intrastate rates for interstate traffic (Doc. 8, ¶ 131).

III.LEGAL STANDARD

Primary jurisdiction "is a prudential doctrine under which courts may, under appropriate circumstances, determine that the initial decision making responsibility should be performed by the relevant agency rather than the courts." Syntek Semiconductor Co., Ltd. v. Microchip Tech. Inc., 307 F.3d 775, 780 (9th Cir. 2002). The primary jurisdiction doctrine may apply where "a court determines that an otherwise cognizable claim implicates technical and policy questions that should be addressed in the first instance by the agency with regulatory authority over the relevant industry rather than by the judicial branch." Clark v. Time Warner Cable, 523 F.3d 1110, 1114 (9th Cir. 2008). "The doctrine does not require that all claims within an agency's purview be decided by the agency." Brown v. MCI Worldcom Network Servs., Inc., 277 F.3d 1166, 1172 (9th Cir. 2002). "Nor is it intended to "secure expert advice‟ for the courts from regulatory agencies every time a court is presented with an issue conceivably within the agency's ambit." Id. (quoting U.S. v. Gen. Dynamics Corp., 828 F.2d 1356, 1365 (9th Cir. 1987). It is appropriate where a case presents "(1) the need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory authority that (4) requires expertise or uniformity in administration." Syntek, 307 F.3d at 781.

IV.ANALYSIS

Prudential considerations of the primary jurisdiction doctrine applicable to this case make it appropriate to refer this case to the FCC.

First, the Ninth Circuit recognizes that "the primary jurisdiction doctrine is designed to protect agencies possessing "quasi-legislative powers‟ and that are "actively involved in the administration of regulatory statutes.‟" Clark, 523 F.3d at 1115 (quoting Gen. Dynamics, 828 F.2d at 1365). "Charged with the administration of the Telecommunications and Federal Communications Acts, the FCC is such an agency." Clark, 523 F.3d at 1115. Here, the FCC is considering the VoIP rules.

Second, the "central focus of the primary jurisdiction doctrine" is "the desirability of uniform determination and administration of federal policy embodied in the agency's orders." Davel Commc'ns, Inc. v. Qwest Corp., 460 F.3d 1075, 1089 (9th Cir. 2006). This case presents the question of whether Plaintiff is entitled to charge tariffed rates for VoIP traffic. On February 9, 2011, the FCC issued a Notice of Proposed Rulemaking that states its intent to clarify this issue:

[W]e seek comment on the appropriate intercarrier compensation framework for voice over Internet protocol (VoIP) traffic. The Commission has never addressed whether interconnected VoIP is subject to intercarrier compensation rules and, if so, the applicable rate for such traffic. There is mounting evidence that this lack of clarity has not only led to billing disputes and ...


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