Opinion for the Court filed by Circuit Judge HARRY T. EDWARDS.
AT&T Corporation (“AT&T”) and Sprint Spectrum L.P. (“Sprint PCS” or “Sprint”), along with Célico Partnership, petition this court for review of a declaratory ruling of the Federal Communications Commission (“FCC” or “Commission”) responding to a primary jurisdiction referral from the United States District Court for the Western District of Missouri. The referral arose during the course of litigation between AT&T and Sprint in Missouri in which Sprint sought compensation from AT&T for its use of Sprint’s wireless network. AT&T removed the case from state court to the federal district court, which then referred specific questions to the FCC under the doctrine of primary jurisdiction. In its referral order, the district court inquired of the FCC (1) whether Sprint may charge access fees to AT&T for access to the Sprint PCS wireless network and, if so, (2) the reasonableness of Sprint’s charges.
After receiving petitions for declaratory rulings from both AT&T and Sprint, along with public comments, the Commission held that Sprint is entitled to collect access charges from AT&T only to the extent that a contract between the parties imposes a payment obligation on AT&T. The FCC declined to determine the reasonableness of any rate until after the district court determined whether the parties are bound by a contract. Both AT&T and Sprint raise numerous challenges to the Commission’s ruling, none of which are properly before this court for review. Accordingly, we dismiss the petitions for review.
I. Background
The facts underlying this case are largely undisputed. Because this information is adequately set forth in the Commission’s ruling that is the subject of review here,
see In the Matter of Petitions of Sprint PCS and AT&T Corp. for Declaratory Ruling Regarding CMRS Access Charges,
17 F.C.C.R. 13,192, at 13,193-13,195,
In 1998, petitioner Sprint PCS, a commercial mobile telephone service (“CMRS”) provider, started billing AT&T for the costs of terminating interexchange traffic bound for its customers. AT&T refused to pay the Sprint invoices.
Declaratory Ruling,
17 F.C.C.R. at 13,193. On August 8, 2000, Sprint sought to enforce payment by filing suit in state court in Missouri seeking a monetary judgment against AT&T on three causes of action: breach of contract,
quantum meruit,
and action on account.
Id.
AT&T then removed the case to federal district court in the Western District of Missouri. Sprint moved to remand the case back to state court, which AT&T opposed. Sprint denied the existence of diversity between the parties and claimed that its state-law claims in no way raised any federal question. Plaintiffs Motion to Remand at 1-2,
Sprint Spectrum L.P. v. AT&T Corp.,
The district court denied Sprint’s motion to remand, holding that it had jurisdiction based upon the diversity of the parties without addressing whether or not Sprint’s action raised federal claims.
Sprint Spectrum L.P. v. AT&T Communications, Inc.,
No. 00-0973-CV-W-5 (W.D.Mo. Feb. 8, 2001) (order denying Sprint’s motion to remand),
reprinted in
J.A. 169. AT&T then asked the district court to refer the case to the Commission under the doctrine of primary jurisdiction.
See Sprint Spectrum L.P. v. AT&T Corp.,
On July 24, 2001, the district court referred two issues to the Commission under the doctrine of primary jurisdiction. Id. at 1096. The court was very precise in setting forth the terms of its referral:
ORDERED that Defendant AT&T Corporation’s Motion for Referral of Issues to the FCC Under the Doctrine of Primary Jurisdiction and for Dismissal or a Stay Proceedings Pending the Referral is GRANTED. The questions of whether Sprint may charge access fees to AT&T for access to the Sprint PCS wireless network and, if so, the reasonableness of Sprint’s charges for such services are referred to the FCC for further consideration. It is further
ORDERED that Defendant AT&T Corporation is directed to prepare and submit the appropriate filings to bring these issues before the FCC by Friday, August 24, 2001.
Id. at 1102.
On October 22, 2001, AT&T and Sprint filed separate petitions seeking declaratory rulings from the FCC. The Commission described these filings, as follows:
In its petition, Sprint PCS asks the Commission to find that there is no federal law or Commission policy that bars Sprint PCS from recovering its call termination costs from AT&T. Sprint PCS also asks [the Commission] to find that AT&T’s refusal to pay access charges to Sprint PCS is unreasonably discriminatory under section 202(a) of the Communications Act of 1934, as amended (the Act), and unjust and unreasonable under section 201(b) of the Act. In its petition, *697 AT&T asks the Commission to find that CMRS carriers should continue to recover their costs from their end users, not by imposing access charges on IXCs. If CMRS carriers are permitted to impose access charges, AT&T asks that those charges be capped at the reciprocal compensation rate for local traffic and assessed only prospectively.
Declaratory Ruling, 17 F.C.C.R. at 13,193-94.
Because the parties’ petitions for declaratory rulings were much wider in scope than the district court’s referral order, the FCC’s Declaratory Ruling is somewhat free-wheeling in its discourse. As a consequence, there are numerous observations in the Declaratory Ruling that do not purport to respond to the district court’s referral order or to otherwise pass judgment on any issue. Cut to its core, however, the FCC Declaratory Ruling is fairly precise in responding to the referral order. The principal terms of the Declaratory Ruling are as follows:
7. Sprint PCS is correct that neither the Communications Act nor any Commission rule prohibits a CMRS carrier from attempting to collect access charges from an interexchange carrier.
Id. at 13,195.
8. That Sprint PCS may seek to collect access charges from AT&T does not, however, resolve the question whether Sprint PCS may unilaterally impose such charges on AT&T.
Id. at 13,196.
9. We find that there is no Commission rule that enables Sprint PCS unilaterally to impose access charges on AT&T.
Id. at 13,196.
12. There being no authority under the Commission’s rules or a tariff for Sprint PCS unilaterally to impose access charges on AT&T, Sprint PCS is entitled to collect access charges in this case only to the extent that a contract imposes a payment obligation on AT&T. While it is preferable for carriers to memorialize such contracts in a written agreement, the parties here agree that there is no written agreement or any express contract between AT&T and Sprint PCS. Nevertheless, the law recognizes - as has the Commission - that an agreement may exist even absent an express contract.
13. Turning to the question whether there was such an agreement here, we believe that it is an issue that should be resolved by the Court. We interpret the Court’s primary jurisdiction referral as seeking our input on the federal communications law questions related to this dispute. Because the existence of a contract is a matter to be decided under state law, we defer to the court to answer this question. 40
Id. at 13,198.
Paragraph 18 of the Declaratory Ruling rejects Sprint’s claims under §§ 201(b) and 202(a) as premature:
*698 18. We need not address Sprint PCS’s claims under sections 201(b) and 202(a) at this time. Until the court determines the respective obligations of the parties, in particular whether AT&T has any obligation to pay Sprint PCS under a contract, the Commission has no basis on which to assess whether AT&T is subject to sections 201(b) or 202(a) in these circumstances and, if so, whether its actions violate those statutory provisions.
Id. at 13,200. The Commission also declined to entertain issues relating “either to the prospective treatment of CMRS-IXC interconnection or to issues beyond the scope of those presented for Commission resolution in the primary jurisdiction referral.” Id. Rather, the Commission firmly stated that the Declaratory Ruling merely “clarifies requirements under [the FCC’s] existing rules.” Id.
In its petition for review, AT&T argues that the Declaratory Ruling is contrary to law, because, in allegedly allowing a state court to determine whether it owes access charges under an implied contract or quantum meruit, the Commission departed from its precedent holding that states are preempted by 47 U.S.C. § 332(c)(3)(A) from setting rates for intercarrier compensation. Sprint contends, in its petition, that the Declaratory Ruling is arbitrary and capricious in not requiring AT&T to pay access charges. Sprint also argues that the FCC favored one set of providers and one type of communication technology over another in violation of the Communications Act. And, finally, Sprint challenges observations in the Declaratory Ruling that appear adverse to Sprint’s interests but which have no binding legal effect. We deny both petitions, because neither AT&T’s nor Sprint’s claims are ripe for consideration by this court.
II. Analysis
A. Standard of Review
In order to succeed in their challenges, AT&T and Sprint must demonstrate that the Declaratory Ruling is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” See 5 U.S.C. § 706(2)(A) (1996).
Highly deferential, [the arbitrary and capricious] standard presumes the validity of agency action, requiring us to determine whether the agency has considered the relevant factors and “articulate[d] a rational connection between the facts found and the choice made.” Motor Vehicle Mfrs. Ass’n of the United States, Inc. v. State Farm Mut. Auto. Ins. Co.,463 U.S. 29 , 43,103 S.Ct. 2856 ,77 L.Ed.2d 443 (1983) (internal quotation marks omitted). We “may reverse only if the agency’s decision is not supported by substantial evidence, or the agency has made a clear error in judgment.” Kisser v. Cisneros,14 F.3d 615 , 619 (D.C.Cir.1994).
AT&T Corp. v. FCC,
The court reviews Commission constructions of the Communications Act in accordance with
Chevron USA Inc. v. Natural Resources Defense Council, Inc.,
In applying these standards, “[t]he job of judges is to ask whether the Commission made choices reasonably within the pale of statutory possibility.”
Verizon Communications Inc. v. FCC,
B. Standing
The Commission initially argues that AT&T has suffered no actual or imminent injury as a result of the Declaratory Ruling and, therefore, lacks standing to challenge it. We reject this argument. The Declaratory Ruling holds that AT&T may be obligated to Sprint pursuant to an implied-in-fact contract and it leaves the matter to the district court to determine whether a contract exists. This portion of the Declaratory Ruling clearly causes a cognizable injury to AT&T which would be redressed with a favorable ruling from this court.
In
AT&T Corp. v. FCC,
C. Ripeness
The Commission argues, in the alternative, that AT&T’s section 332(c)(3)(A) preemption claim is unripe for review, because, first, the issue is presently unfit for decision by this court and, second, a delay in judgment will cause no hardship to AT&T. Likewise, the Commission argues that it reasonably deferred resolution of Sprint’s section 201(b) and 202(a) claims until after the district court in Missouri decides whether AT&T has a contractual obligation to pay access charges. The FCC also contends that Sprint’s remaining claims relate to matters with respect to which the agency has issued no final judgment; thus, according to the Commission, these matters surely are not subject to judicial review.
The framework for assessing ripeness was established in
Abbott Laboratories v. Gardner,
Under the “fitness of the issues” prong, the first question for a reviewing court is “whether the disputed claims raise purely legal questions and would, therefore, be presumptively suitable for judicial review.”
Better Gov’t Ass’n v. Dep’t State,
The “hardship” prong of the
Abbott Laboratories
test is not an independent requirement divorced from the consideration of the institutional interests of the court and agency.
Payne,
In applying these standards to the instant petitions for review, we agree with the Commission that the matters at hand should be dismissed as unripe.
1. AT&T’s Petition
As noted above, the Commission’s
Declaratory Ruling
responded to the two questions referred by the district court: whether Sprint may charge access fees to AT&T for access to the Sprint PCS wireless network and, if so, the reasonableness of Sprint’s charges for such services.
See Sprint Spectrum L.P.,
AT&T’s principal claim is that the FCC’s
Declaratory Ruling
implicitly suggests that a state court might properly determine that Sprint is entitled to access fees on the basis of an implied-in-fact contract with no fixed price term (which would require a state court determination of the “reasonableness” of the access charges) or on the basis of
quantum meruit
(which is an equitable claim not based on a contractual commitment). AT&T argues, in particular, that, because all of Sprint’s state-law claims would require the district court to set a “reasonable” price for Sprint PCS’s services, those claims are expressly preempted by 47 U.S.C. § 332(c)(3)(A). Therefore, according to AT&T, the failure of the
Declaratory Ruling
to hold Sprint’s state-law claims preempted is both contrary to law and arbitrary. AT&T also contends that, in failing to declare Sprint’s claims preempted, the
Declaratory Ruling
is an unexplained departure from the FCC’s ruling in
In the Matter of Wireless Consumers Alliance, Inc.,
15 F.C.C.R. 17,-021,
The problem with AT&T’s argument is that it rests on faulty premises: First, the Commission did not, as AT&T suggests, declare that the district court was free to determine the reasonableness of a prior rate. Second, the Commission did not purport to depart from its ruling in Wireless Consumers Alliance. And, third, the *701 Commission did not resolve the preemption issue, either explicitly or implicitly.
The
Declaratory Ruling
says that, “[because the existence of a contract is a matter to be decided under state law, we defer to the [district] court to answer this question.”
Declaratory Ruling,
17 F.C.C.R. at 13,198. The Commission also noted that “an agreement may exist even absent an express contract.”
Id.
On this latter point, the Commission suggested that AT&T could be liable to Sprint on “[a]n implied-in-fact contract,” which “is ‘founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a fact, from conduct of the parties showing, in light of the surrounding circumstances, their tacit understanding.’ ”
Id.
at n. 38 (quoting
Hercules, Inc. v. United States,
Notably, AT&T and the Commission agree on three important points: First, state courts may not determine the reasonableness of a prior rate or set a prospective charge for service. Second, state courts may determine whether the parties have in place a contract that fixes access charges. And, third, access charges may be established by an express contract or an implied-in-fact contract in which the price was already fixed (such that the state court would not inquire into the reasonableness of the rate). AT&T does not contest these points and nothing in the Declaratory Ruling calls these matters into question. Rather, AT&T essentially argues that the real dispute in this case concerns whether Sprint may prevail against AT&T on state-law claims based on either an implied-in-fact contract in which the price is open or on a theory of quantum meruit.
AT&T does not seriously contest the Commission’s treatment of the quantum meruit issue, for the agency left little room for confusion on this point, strongly suggesting that a claim based on quantum meruit would be preempted. See Declaratory Ruling, 17 F.C.C.R. at 13,198 n. 40. Instead, AT&T’s major complaint is over the failure of the Declaratory Ruling to hold that an open-price implied-in-fact contract is preempted. In particular, AT&T fears that the district court has already determined that Sprint may pursue an implied-in-faet claim that, under Missouri law, will require the court to determine the reasonableness of the rates for Sprint’s services. See Petitioner AT&T’s Reply Br. at 3. AT&T thus concludes that the FCC’s failure to decide the preemption issue is arbitrary. We disagree.
The district court’s referral order
asks
the Commission “whether Sprint may charge access fees to AT&T for access to the Sprint PCS wireless network and, if so, the reasonableness of Sprint’s charges for such services.”
See Sprint Spectrum L.P.,
Wireless Consumers Alliance makes it clear that a state court would “overstep its authority under Section 332 if, in determining damages, it does enter into a regulatory type of analysis that purports to determine the reasonableness of a prior rate or it sets a prospective charge for services.” Wireless Consumers Alliance, 15 F.C.C.R. at 17,041. However, Wireless Consumers Alliance also holds that § 332 does not generally preempt state courts from awarding monetary damages for breach of contract. Id. at 17,040. Rather, the Commission stated that “whether a specific damage award or damage calculation is prohibited by Section 332 will depend on the specific details of the award and the facts and circumstances of the case,” and noted that “a consideration of the price originally charged, for the purposes of determining the extent of the harm or injury involved, is not necessarily an inquiry into the reasonableness of the original price and therefore is permissible.” Id. at 17,041.
AT&T concedes that if the Declaratory Ruling does not abrogate the teachings of Wireless Consumers Alliance, and if it merely defers the preemption issue to the district court, and if it does not preclude AT&T from pursuing the preemption defense in district court, then the Declaratory Ruling would be a simple deferral and maintenance of the status quo and AT&T would have no viable claims at this time. See Petitioner AT&T’s Reply Br. at 2. This is a telling concession from AT&T, because the Declaratory Ruling has precisely the effect sought by AT&T. The Declaratory Ruling does not hold that the district court may avoid the preemption issue if it is raised by AT&T. In other words, if the district court were to find only an open-price implied-in-faet contract (or a claim based on quantum meruit) between Sprint and AT&T, the Declaratory Ruling in no way forecloses AT&T from raising a preemption defense. Thus, as AT&T concedes, it has no viable claims to pursue in this court at this time.
Lacking finality, the issue raised by AT&T is not fit for review. Furthermore, both the agency and the court would benefit from postponing review until the district court in Missouri determines whether there is any contract between Sprint and AT&T. Under Wireless Consumers Alliance, Sprint’s state-law claims may well be preempted if the district court finds only an open-price, implied-in-fact contract (or a claim based on quantum meruit) that requires it to set a reasonable rate. The Commission reasonably declined to decide that question until it had taken on a more definite form.
Finally, where, as here, there are strong interests militating in favor of postponement, we must weigh the potential hardship of delay in assessing whether to dismiss for want of ripeness. On the record in this matter, AT&T has not demonstrated hardship to overcome the FCC’s contention that the case is unripe for review. The only hardship asserted by AT&T is the “burden of fighting Sprint’s claims in district court.”
See
Petitioner AT&T’s Reply Br. at 9-10, 12. But the burden of participating in further administrative and judicial proceedings does not constitute sufficient hardship to overcome the agency’s challenge to ripeness.
See Florida Power & Light Co. v. EPA
*703 2. Sprint’s Petition
Sprint has not alleged any hardship, so we only inquire whether the issues it raises are fit for judicial review. Sprint asks this court to vacate the observations in the Declaratory Ruling that “CMRS carriers have never operated under the same calling party’s network pays (CPNP) compensation regime as wireline LECs,” that “[u]ntil 1998 ... all CMRS carriers recovered the cost of terminating long distance calls from their end users, and not from interexchange carriers,” and that “[b]ecause both carriers charge their customers for the service they provide, it does not necessarily follow that IXCs receive a windfall in situations where no compensation is paid for access service provided by a CMRS carrier.” See Petitioner Sprint’s Br. at 28 (citing Declaratory Ruling, 17 F.C.C.R. at 13,198-99). Sprint claims that these historical observations are somehow preclusive, in that they may influence the district court’s judgment on the contract claim or be cited by other IXCs who refuse to pay Sprint’s access charges.
It is clear that the passages from the
Declaratory Ruling
cited by Sprint are merely descriptive statements by the agency, not legal conclusions. The statements have no force of law, so they cannot conclusively cause the adverse collateral consequences suggested by Sprint. In short, Sprint is quibbling over FCC observations that have no binding effect whatsoever. This is never a basis for review in this court.
Cf. Panhandle E. Pipe Line Co. v. FERC,
Sprint further argues that the FCC unreasonably failed to determine that AT&T’s refusal to pay was unjust and discriminatory in violation of 47 U.S.C. §§ 201(b) and 202(a). See Petitioner Sprint’s Br. at 35-37. The Declaratory Ruling held that it need not address this question until the trial court determined whether there was a contract. Declaratory Ruling, 17 F.C.C.R. at 13,200. And during oral argument, counsel for Sprint acknowledged that the Commission has considered claims of discrimination and unreasonableness in the past through complaints filed pursuant to § 208 of the Communications Act. Therefore, the Commission was not obliged to review these discrimination claims in a declaratory ruling issued to address the two specific questions referred by the district court. Whether AT&T’s refusal to pay violates §§ 201 and 202 is beyond the scope of the referral. If the occasion arises, the parties agree that Sprint is free to file a complaint under 47 U.S.C. § 208 seeking redress for alleged unjust and discriminatory practices. Since the Commission properly deferred consideration of Sprint’s claims, there is nothing for this court to review.
Finally, Sprint argues that the FCC failed in its statutory duty to regulate interstate access charges and CMRS carriers by not requiring AT&T to pay the termination charges Sprint billed to AT&T. Petitioner Sprint’s Br. at 19-21. Sprint did not raise this argument with the Commission, so it is not properly before this court. Furthermore, the FCC’s regulation of access charges and CMRS carriers is a matter of policy that is beyond the scope of the referral questions answered by the
Declaratory Ruling.
The basic rationale for the ripeness doctrine is to prevent courts “from entangling themselves in abstract disagreements over administrative policies.”
Abbott Labs.,
III. Conclusion
For the foregoing reasons, the petitions for review are dismissed.
Notes
. Sprint PCS also has advanced a
quantum meruit
argument under Missouri law in the pending litigation.
Quantum meruit
is premised on the notion that a party receiving service would be unjustly enriched if it were not required to pay for that service. Although we defer to the court to address this state law claim, we note that an award of
quantum meruit
would require the court to establish a value (i.e., set a rate) for the service provided in the past. We note that there is a substantial question whether a court may award
quantum meruit
or other equitable relief under state law without running afoul of section 332(c)(3)(A). 47 U.S.C. § 332(c)(3)(A);
see, e.g., Bastien v. AT&T Wireless,
