TOMI WHITE BRYAN, individually and on behalf of all others similarly situated, Plaintiff-Appellee, v. BELLSOUTH COMMUNICATIONS, INCORPORATED, Defendant-Appellant.
No. 03-1316
United States Court of Appeals for the Fourth Circuit
Decided: July 28, 2004
PUBLISHED. Argued: February 24, 2004. (CA-02-228-1). Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. Frank W. Bullock, Jr., District Judge.
Before LUTTIG, KING, and GREGORY, Circuit Judges.
COUNSEL
ARGUED: Ashley B. Watson, BELLSOUTH CORPORATION, Atlanta, Georgia, for Appellant. Michael Geoffrey Wimer, WIMER & JOBE, Arden, North Carolina, for Appellee. ON BRIEF: Richard
OPINION
KING, Circuit Judge:
Defendant BellSouth appeals from the portion of a decision of the Middle District of North Carolina denying dismissal and remanding one of plaintiff Tomi Bryan‘s three claims to state court. Bryan v. BellSouth Telecomms., Inc., No. 1:02CV00228, 2003 WL 262333 (M.D.N.C. Feb. 6, 2003). The court concluded that certain of Bryan‘s claims arose under federal law and were subject to dismissal under the “filed-rate doctrine.” It declined to exercise supplemental jurisdiction and remanded to state court a single claim that it determined did not raise a federal question. BellSouth maintains that the court erred in failing to conclude that all of Bryan‘s claims posed federal questions and were barred by the filed-rate doctrine. For the reasons explained below, we vacate and remand.
I.
A.
BellSouth, as a provider of interstate public telecommunications services, is required by law to contribute a portion of its revenues to the federal Universal Service Fund (“USF“) to ensure affordable telecommunications services to rural and low-income areas, schools, hospitals, and the like. See
The FCC permits telecommunications carriers such as BellSouth to recover the costs of their contributions to the USF from their custom-
Billing practices such as recovery of USF contributions are established in a carrier‘s “Schedule of Charges,” see
As reflected in its tariff, BellSouth chooses to recover its USF contribution from its customers through a line item on the customers’ bills, which it denotes as the “Federal Universal Service Charge” (“FUSC“). The applicable tariff establishes the portion of BellSouth‘s USF contribution that will be recovered from customers, and it calculates, based on the number of telephone lines and the amount sought to be recovered, that the end user of each line will be charged an FUSC of $0.53 per month.
B.
On February 22, 2002, Bryan filed suit against BellSouth in the Superior Court of Guilford County, North Carolina, seeking to repre-
On March 26, 2002, BellSouth removed the suit to the Middle District of North Carolina, pursuant to
Based on these allegations, Bryan asserted three separate causes of action. In Count A, she claimed that BellSouth committed unfair and deceptive trade practices, in violation of North Carolina General Statute section 75-1.1, by failing to disclose: (1) how it calculates the FUSC; (2) that it charges customers an amount well in excess of its contribution to the USF for North Carolina services; and (3) that the FUSC includes administrative expenses, costs, and profits.2 Count A further alleged that BellSouth‘s use of the term “Federal Universal Service Charge” is unfair or deceptive, as is its representation to customers that the FUSC is paid to the USF. In Count B, Bryan brought a claim for unjust enrichment/restitution, contending that BellSouth unjustly enriched itself by imposing an excessive and unlawful FUSC. In Count C, Bryan alleged breach of the covenant of good faith and fair dealing based on BellSouth‘s charging an excessive FUSC and failing to make the disclosures described in Count A. Based on these claims, the Complaint sought damages in an amount exceeding $10,000 but less than $74,999 per class member.3
On February 6, 2003, the court issued its Memorandum Opinion addressing the parties’ contentions. Bryan, 2003 WL 262333 (the “Opinion“). On that same date, the court entered the Order from which this appeal is taken (the “Order“). In its Opinion, the court first concluded that removal was proper because Bryan presented a federal question by directly challenging the terms of a tariff in her allegations that BellSouth‘s FUSC was excessive. Opinion at 11. The court then turned to BellSouth‘s motion to dismiss, explaining that the filed-rate doctrine, also known as the “filed-tariff doctrine,” prohibits suits that would have the effect of altering the rates set forth in a carrier‘s filed tariff. Id. at 11-12. Based on this doctrine, the court dismissed those claims that it concluded arose under federal law by challenging the tariff. Id. at 13. The court then declined to exercise supplemental jurisdiction and remanded to state court those “remaining claims” that did not challenge the tariff and thus did not present federal questions.4 Id. at 13-14. BellSouth appeals from the portion of the court‘s Order denying dismissal of Count A and remanding it to state court, maintaining that Count A, like Bryan‘s other two claims, challenged the tariff, arose under federal law, and should have been dismissed.
II.
We turn first to Bryan‘s assertion that we lack jurisdiction over this appeal. Bryan maintains that jurisdiction is lacking because the Order was “non-final,” in that one of her claims was not dismissed. See generally
Bryan‘s assertion does not withstand scrutiny. Admittedly,
In this situation, the district court explicitly based its remand of Count A on abstention principles, relying on
III.
In this matter, the district court remanded Count A to state court because it determined that Count A did not give rise to federal question jurisdiction, and the court declined to exercise supplemental jurisdiction. A district court‘s determination that it lacks subject matter jurisdiction is a question of law that we review de novo. Yarnevic v. Brink‘s, Inc., 102 F.3d 753, 754 (4th Cir. 1996).
IV.
Turning to the issues on appeal, our task is twofold. First, we must determine whether Bryan‘s North Carolina unfair trade practices claim arises under federal law, in which event the court erred in remanding it. See Battle, 288 F.3d at 609 (concluding that “the district court erred when it remanded the Remaining Claims . . . based upon its mistaken belief that it had otherwise dismissed all claims over which it had ‘original jurisdiction’“). And if remand was error, we must determine whether Count A is barred by the filed-rate doctrine.
A.
First, with respect to the existence of federal jurisdiction, we recognize that when, as here, state law creates the plaintiff‘s cause of action, the lower federal courts possess jurisdiction to hear “only those cases in which a well-pleaded complaint establishes . . . that the plaintiff‘s right to relief necessarily depends on resolution of a substantial question of federal law.” Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 27-28 (1983); see also Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994).5
And we are further cognizant that a filed tariff carries the force of federal law. See MCI Telecomms. Corp. v. Garden State Inv. Corp., 981 F.2d 385, 387 (8th Cir. 1992) (observing that “federal tariffs are the law, not mere contracts“). As one of our sister circuits has explained, “[a] tariff filed with a federal agency is the equivalent of a federal regulation, and so a suit to enforce it, and even more clearly a suit to invalidate it as unreasonable under federal law . . . arise[s] under federal law.” Cahnmann v. Sprint Corp., 133 F.3d 484, 488 (7th Cir. 1998) (internal citations omitted).6 A claim that seeks to alter the terms of the relationship between carrier and consumer set forth in a filed tariff therefore presents a federal question. See Fax Telecommunicaciones Inc. v. AT&T, 138 F.3d 479, 488 (2d Cir. 1998) (explaining that a claim “seeking to enforce the filed tariff provides a basis for federal question jurisdiction“).
Additionally, the filed-rate doctrine mandates that “the rate of the carrier duly filed is the only lawful charge.” AT&T v. Cent. Office Tel., Inc., 524 U.S. 214, 222 (1998) (quoting Louisville & Nashville R.R. v. Maxwell, 237 U.S. 94, 97 (1915)). The doctrine‘s purpose is twofold: to prevent discrimination among consumers and to preserve the rate-making authority of federal agencies.7 See Hill v. BellSouth
B.
Against this backdrop, we now assess whether Count A of the Complaint effectively challenges the reasonableness of BellSouth‘s filed rate, giving rise to federal question jurisdiction and requiring dismissal pursuant to the filed-rate doctrine. Because only the FCC may decide what charge is lawful, it is beyond dispute that the court was correct to exercise jurisdiction and dismiss Bryan‘s claims complaining that the FUSC was excessive. The parties disagree, however, as to whether Count A also presents a forbidden challenge to BellSouth‘s tariff. BellSouth maintains that it does, asserting that, because Count A seeks damages, the court, were Bryan successful, would be put in the position of effectively refunding a portion of the FUSC to Bryan. In the circumstances presented, we are constrained to agree.
In Count A, Bryan alleges that BellSouth‘s charging and collecting of the USF and its failure to make certain disclosures in connection therewith constitute unfair or deceptive acts or practices under North Carolina General Statute section 75-1.1. In Part V of her Complaint, titled “DAMAGES,” Bryan alleges, “BellSouth‘s actions and omissions have been an actual, producing, direct and proximate cause of damages to Plaintiff and to BellSouth‘s other North Carolina customers in an amount exceeding $10,000.” Complaint ¶ 31. Bryan‘s prayer for damages draws no distinction between her separate counts. With no indication to the contrary, we must view Part V as seeking monetary damages for the acts alleged in Count A.
BellSouth asserts that the monetary remedy Bryan seeks is “a refund of that portion of the FUSC that she considers she was wrongfully induced to pay” and that, in seeking such a remedy, Bryan runs afoul of the filed-rate doctrine. In actuality, Bryan does not specify the nature of her damages in Count A. Nonetheless, BellSouth maintains that any award of damages flowing from BellSouth to Bryan, no matter how calculated, would violate the filed-rate doctrine by refunding a portion of the FUSC to some consumers but not to others and by requiring the court to determine a reasonable rate. Certainly, this proposition finds support in the decisions of our sister circuits. See, e.g., Hill, 364 F.3d at 1317 (“Hill‘s two remaining claims implicate the filed rate doctrine because she seeks purely monetary damages as relief.“); Marcus, 138 F.3d at 60-62 (barring claim for compensatory
In our view, the Complaint — read in the light most favorable to the plaintiff — nowhere purports to seek any form of damages other than a refund of some portion of the FUSC. And it pleads no facts that would put BellSouth on notice that Bryan intends to seek damages resulting from any injury other than paying the FUSC. In the “FACTS” section of the Complaint, Bryan alleges only that she is a BellSouth customer who was charged and paid the FUSC, that BellSouth charged an FUSC that was excessive, that it failed to disclose how the FUSC was calculated, and that its use of the term “FUSC” was misleading. Complaint ¶¶ 4-8.9
At argument, Bryan asserted that one could envision an award of damages that would not challenge the filed tariff. She posited that if BellSouth had fully disclosed all information pertaining to its FUSC, she might have chosen a different carrier that would have charged a lower FUSC, and therefore she would have been damaged in the amount of the difference between the two carriers’ FUSCs. Such an award of damages, Bryan maintained, would not require the court to determine the reasonableness of BellSouth‘s FUSC and therefore would neither present a federal question nor be barred by the filed-rate doctrine. This example is purely hypothetical, however, and nothing in the Complaint suggests such an injury.10
In sum, we conclude that the only plausible reading of the Complaint is that Count A, like the other counts, seeks a refund of a portion of the FUSC.11 Because the amount of the FUSC is determinatively set forth in BellSouth‘s tariff, which carries the force of federal law, an action seeking to alter that rate presents a federal question. The district court therefore erred in remanding Count A to state court. And because Count A would require the court to determine a reasonable rate for the FUSC, that claim must be dismissed pursuant to the filed-rate doctrine.
V.
Pursuant to the foregoing, we vacate the district court‘s Order with respect to Count A and remand for that count to be dismissed.
VACATED AND REMANDED
The majority holds that the plaintiff‘s state law cause of action against BellSouth for violation of the North Carolina Unfair Trade Practices Act,
A state law claim “arises under” federal law within the meaning of
a vital feature of complete preemption is the existence of a federal cause of action that replaced the preempted state cause of action. Where no discernable federal cause of action exists on a plaintiff‘s claim, there is no complete preemption, for in such cases there no federal cause of action that Congress intended to be the exclusive remedy for the alleged wrong.
King, 337 F.3d at 425 (emphasis added). In light of this direction, the absence of a federal cause of action analogous to the plaintiff‘s state law NCUTPA claim is fatal to any argument for complete preemption. As the Second Circuit has concluded, “while the FCA does provide some causes of action for customers, it provides none for deceptive advertising and billing.” Marcus, at 54; compare, e.g.,
Furthermore, even if the FCA did provide a cause of action for deceptive and misleading billing, complete preemption would still be lacking, because Congress clearly intended for there not to be complete federal preemption of plaintiff‘s state law causes of action. Indeed, the FCA contains a savings clause that provides that “nothing in the [FCA] shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this chapter are in addition to such remedies.”
Accordingly, if the district court possesses subject matter jurisdiction over the plaintiff‘s remaining state law claim, it must be on the more narrow ground that the plaintiff‘s right to relief, as set forth in her complaint, “necessarily depends on resolution of a substantial question of federal law.” Franchise Tax Bd., 463 U.S. at 13; Interstate Petroleum Corp. v. Morgan, 249 F.3d 215, 220 (4th Cir. 2001)(en banc).
The majority refuses even to apply this established standard for determining federal jurisdiction and adopts instead the different standard of whether a complaint “effectively challenges” a filed rate, see ante at 10 (emphasis added) (inquiring “whether Count A of the Complaint effectively challenges the reasonableness of BellSouth‘s filed rate“), a standard derived from cases that considered the applicability of the filed-rate doctrine as a defense to a particular claim, see, e.g., Brown v. MCI Worldcom Network Servs., Inc., 277 F.3d 1166, 1170 (9th Cir. 2002) (noting that “the filed-rate doctrine also bars suits challenging services, billing, or other practices when such challenges, if successful, would have the effect of changing the filed tariff“); Fax Telecommunicaciones Inc. v. AT&T, 138 F.3d 479, 489 (2d Cir. 1998) (noting that “[i]f this court were to enforce the promised rate and
This is error plain and simple. Notwithstanding the majority‘s obvious belief (as well as its disclaimer that it so believes), the filed-rate doctrine is not coterminous with the scope of federal question jurisdiction under section 1331; it is significantly broader. See Fax Telecommunicaciones, 138 F.3d at 487-90 (holding that the plaintiff‘s breach of contract claim did not “arise under” federal law for the purposes of removal but that it was barred by the filed-rate doctrine). It is one thing to provide that “arising under” jurisdiction exists in that narrow class of cases where the plaintiff‘s right to relief necessarily depends on the resolution of a substantial federal question or Congress has preempted state court jurisdiction. It is quite another to provide that jurisdiction is present so long as the plaintiff‘s request for relief constitutes an “effective challenge” to the rate set by federal law. Indeed, as this case demonstrates, a claim can easily be characterized as an “effective challenge” to rates set in a tariff filed with a federal agency, even though the adjudication of the claim itself would require the court to decide no federal issues whatsoever. Of course, that a federal court may not have jurisdiction over a claim that would be barred by the filed-rate doctrine is not problematic in the least; the filed-rate doctrine may be raised as a federal defense to a state law claim before a state court just as easily as before a federal court. See Fax Telecommunicaciones, 138 F.3d at 486; see also Merrell Dow, 478 U.S. at 808 (“A defense that raises a federal question is inadequate to confer federal jurisdiction.“) (citing Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149 (1908)).
It is clear that the plaintiff‘s claim does not meet the standard that we must apply, and have consistently applied, in such cases: whether
The majority maintains that the plaintiff‘s claim presents a federal question because “the only plausible reading of the Complaint is that [the count alleging a violation of the NCUTPA] . . . seeks a refund of a portion of the FUSC” and such a refund would require the court to “alter th[e] rate” set forth in the tariff. Ante at 12. This contention is simply wrong, for two reasons. First, even if the Complaint were so read, it would not present a federal question. Second, the court is not necessarily required to impose a different rate or to refund a portion of the rate in order to award damages to the plaintiff, as there are other viable theories of damages under the plaintiff‘s Complaint.
As to the first, the determination of a damage award with reference to the tariff rate charged by BellSouth does not pose a federal question. The tariffs BellSouth has filed with the FCC represent a judgment by the government that the FUSC rates included therein are reasonable. For that reason, claims requiring the court to second-guess the reasonableness of this determination are properly said to require the court to resolve a substantial federal question. However, the calculation of damages for the injury caused to the plaintiff by BellSouth‘s violation of the NCUTPA does not require the court to make any determination about the reasonableness of the rate charged in the tariff. Compare Fax Telecommunicaciones, 138 F.3d at 487
As to the second reason, even if a claim by the plaintiff that she was entitled to a “refund of a portion of the FUSC” would require a federal court to reconsider the reasonableness of a filed rate and thus would pose a federal question, it is incorrect to say that the plaintiff‘s claim necessarily depends on awarding a “refund of a portion of the USF.” See Dixon, 369 F.3d at 816 (“A plaintiff‘s right to relief for a given claim necessarily depends on a question of federal law only when every legal theory supporting the claim requires the resolution of a federal issue.“). The majority maintains that the Complaint must be read to request a refund because “the Complaint — read in the light most favorable to the plaintiff — nowhere purports to seek any form of damages other than a refund of some form of the FUSC” and otherwise fails to put BellSouth on notice of the plaintiff‘s intent to do so. Ante at 11. However, the plaintiff‘s Complaint cannot plausibly be read to set forth any theory of damages,2 let alone a single exclusive request for “a refund of some portion of the FUSC.” Ante at 11.
Thus, because the plaintiff could prove damages under at least one theory that does not require resort to any concept of federal law, her claim does not “arise under” federal law within the meaning of section 1331. Dixon, 369 F.3d at 817 (“[I]f the plaintiff can support [her] claim with even one theory that does not call for an interpretation of federal law, [her] claim does not ‘arise under’ federal law for purposes of § 1331.“).
The majority argues that Dixon is inapposite because in it and the cases on which it relies, “the courts found alternative theories of recovery on the face of the complaint itself,” rather than “conjur[ing] out of whole cloth an alternative theory of liability without some support in the allegations of the complaint.” Ante at 11-12 n.10. The theory of liability proposed by plaintiff‘s counsel, however, no more lacks support in the allegations of the complaint than does the majority‘s “refund” theory. Plaintiff‘s Complaint, which complains of omissions and misrepresentations, see Complaint ¶¶ 19-24, would clearly support a theory that those actions led the plaintiff to purchase a service she would not have otherwise purchased. If anything, that theory is more clearly supported in the allegations of the Complaint than the theory that plaintiff seeks a refund of the portion of the rate that is unreasonable, a theory that has little if any direct connection to the allegations in the Complaint.
It is not only the case, then, that pursuing a refund of a portion of the rate would not necessarily depend on resolution of a federal ques-
In sum, the majority‘s analysis of the district court‘s subject matter jurisdiction under