CallerID4u, Inc. v. MCI Communications Services Inc.
880 F.3d 1048
9th Cir.2018Background
- CallerID4u, a competitive local exchange carrier (CLEC), provided terminating switched-access services for AT&T and Verizon from April–September 2012 without a filed FCC tariff or a negotiated agreement. CallerID4u filed a tariff effective September 28, 2012.
- When AT&T and Verizon refused to pay for services provided before the tariff, CallerID4u sued in Washington state court seeking recovery under its tariff and, alternatively, under state equitable theories (quantum meruit, unjust enrichment) and the Washington Consumer Protection Act (WCPA).
- Defendants removed to federal court and moved to dismiss; the district court dismissed CallerID4u’s federal tariff claims (for the pre-tariff period) and dismissed all state-law equitable and WCPA claims as preempted by Section 203 of the Communications Act and the filed‑rate doctrine. CallerID4u appealed the dismissal of its state-law claims.
- The FCC’s regulatory framework (Access Reform Order) requires CLECs to either file tariffs at or below an FCC benchmark or negotiate agreements with interexchange carriers (IXCs); absent a tariff or negotiated agreement, a CLEC lacks authority under federal law to bill for interstate switched access services.
- The Ninth Circuit reviewed whether CallerID4u’s state-law equitable claims were preempted by § 203 and the filed-rate doctrine, and whether the WCPA claim survived.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CallerID4u was required to file a tariff or have a negotiated agreement under § 203 before billing IXCs | CallerID4u: Hyperion and permissive detariffing meant CLECs could be detariffed so long as rates did not exceed the benchmark; it charged at or below the benchmark and thus was not required to file or negotiate | AT&T/Verizon: Under the Access Reform Order CLECs must either file a valid tariff or have a negotiated agreement to bill; absent either, they lack authority to bill | Held: CallerID4u was subject to § 203 and required to have a tariff or negotiated agreement; the Access Reform Order supersedes permissive detariffing for CLECs |
| Whether state-law equitable remedies (quantum meruit / unjust enrichment) are preempted by § 203 / the filed-rate doctrine when CLEC provided services without a tariff or agreement | CallerID4u: In a permissively detariffed or competitive regime state remedies should be available; Ting supports state-law recovery in detariffed contexts | AT&T/Verizon: Filed-rate doctrine and § 203 preempt state recovery because allowing state equitable awards would undercut uniform federal rate‑setting and the FCC’s CLEC regime | Held: State-law equitable claims are preempted for CLECs that did not file a tariff or negotiate an agreement; allowing such claims would usurp federal rate-setting and frustrate FCC policy |
| Whether state-law equitable remedies are available for services after CallerID4u’s tariff went into effect (alternative pleading) | CallerID4u: Pleaded state claims alternatively in case tariff is invalid or did not cover services | AT&T/Verizon: Filed-rate doctrine bars recovery inconsistent with filed tariff; alternative state claims cannot evade preemption | Held: Dismissal affirmed; alternative state claims for the post-tariff period are barred by the filed-rate doctrine (and validity of tariff was not before the court) |
| Whether CallerID4u’s WCPA claim survives preemption or otherwise states a claim | CallerID4u: Refusal to pay for services constitutes an unfair or deceptive practice under WCPA | AT&T/Verizon: WCPA claim is preempted or fails because simple refusal to pay an unfiled/unagreed charge is not a public deception; WCPA also contains regulatory exemptions | Held: WCPA claim fails—no plausible allegation of an act with capacity to deceive the public; dismissal affirmed (court did not need to resolve statutory exemption) |
Key Cases Cited
- Global Crossing Telecomms., Inc. v. Metrophones Telecomms., Inc., 550 U.S. 45 (Sup. Ct. 2007) (recognizing FCC authority over interstate telephone communications)
- MCI Telecommunications Corp. v. American Tel. & Tel. Co., 512 U.S. 218 (Sup. Ct. 1994) (§ 203 establishes filed-tariff system; FCC cannot detariff absent statutory authority)
- American Tel. & Tel. Co. v. Central Office Tel., Inc., 524 U.S. 214 (Sup. Ct. 1998) (filed-rate doctrine applies to Communications Act and preempts conflicting state law)
- Keogh v. Chicago & N.W. Ry. Co., 260 U.S. 156 (Sup. Ct. 1922) (filed-rate doctrine bars recovery that would alter the filed rate)
- Arkansas La. Gas Co. v. Hall, 453 U.S. 571 (Sup. Ct. 1981) (state court damages that would set a rate different from federal filings usurp federal regulatory authority)
- Maislin Indus., U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116 (Sup. Ct. 1990) (filed tariffs are the legal rates; courts must apply filed rate even if inequitable)
- Ting v. AT&T, 319 F.3d 1126 (9th Cir. 2003) (in a completely detariffed regime, filed-rate preemption may not bar state-law claims)
- All Am. Tel. Co., Inc. v. FCC, 867 F.3d 81 (D.C. Cir. 2017) (D.C. Cir. decision limiting FCC’s ability to adjudicate merits of state-law quantum meruit claims; clarified separation of agency and court roles)
- Union Tel. Co. v. Qwest Corp., 495 F.3d 1187 (10th Cir. 2007) (unjust enrichment claims preempted where federal law requires rate-setting through regulated agreements)