Halo Wireless, Inc. v. Alenco Communications, Inc. (In Re Halo Wireless, Inc.)
684 F.3d 581
| 5th Cir. | 2012Background
- Halo Wireless provides wireless CMRS under an FCC license and disputes with privately-owned local telco companies over interconnection, access charges, and regulation; the actions were brought in state PUCs across multiple jurisdictions.
- Halo filed Chapter 11 bankruptcy after the PUC actions were filed; the bankruptcy court exempted PUC proceedings from the automatic stay under § 362(b)(4).
- Appellees urged continued stay protection for private actions; the bankruptcy court held the PUC actions are exempt because they are ongoing state regulatory proceedings.
- The court applied pecuniary purpose and public policy tests to determine whether the police/regulatory power exception applies.
- On appeal, the Fifth Circuit affirmed the bankruptcy court, concluding the PUC actions are being continued by governmental units and pursued to enforce police/regulatory powers, not merely private pecuniary interests.
- Procedural rulings included granting AT&T’s judicial-notice motion and striking the Missouri Public Service Commission’s amicus brief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PUC proceedings are continued by a governmental unit | Halo: actions were private pleadings, not continued by government | Appellees: actions are continued by governmental units across jurisdictions | Yes; PUC actions are continued by government under § 362(b)(4) |
| Whether PUC proceedings enforce the police/regulatory power test | Halo: proceedings primarily private contracts not public regulation | Appellees: proceedings enforce state regulatory/police powers to protect public interest | Yes; proceedings satisfy both pecuniary purpose and public policy tests |
| Whether the Missouri Public Service Commission could be considered an amicus or party | Halo: MoPSC not a party; brief should be struck | MoPSC seeks to participate to present regulator perspective | MoPSC brief stricken; not treated as amicus or party |
| Whether AT&T's request to take judicial notice should be granted | Halo opposed; extrarecord materials not helpful | AT&T sought to supplement the record | Granted; judicial notice continued with caution that materials aren’t decisive |
Key Cases Cited
- Commonwealth Oil Refining Co., Inc., 805 F.2d 1175 (5th Cir. 1986) (purpose of stay and public-policy considerations emphasized)
- Nortel Networks, Inc., 669 F.3d 128 (3d Cir. 2011) (two tests: pecuniary purpose and public policy)
- McMullen, 386 F.3d 320 (1st Cir. 2004) (police/policy test applied to regulatory proceedings)
- Brennan, 230 F.3d 65 (2d Cir. 2000) (entry of money judgments permissible when enforcement aligns with public policy)
- Alpern v. Lieb, 11 F.3d 689 (7th Cir. 1993) (sanctions by government-like enforcement can fall outside the stay)