RICHMAN BROTHERS RECORDS, INC.
v.
U.S. SPRINT COMMUNICATIONS COMPANY,
Richman Brothers Records, Inc., Appellant in No. 90-5607.
U.S. TELECOM, INC., a Kansas corporation, as a partner in
U.S. Sprint Communications Company; GTE Communications
Services Incorporated, a Delaware corporation, as a partner
in U.S. Sprint Communications Company; U.S. Sprint
Communications Company, a New York Partnership
v.
RICHMAN BROTHERS RECORDS, INC.,
U.S. Sprint Communications Company, Appellant in No. 90-5657.
Nos. 90-5607, 90-5657.
United States Court of Appeals,
Third Circuit.
Argued April 3, 1991.
Decided Dec. 31, 1991.
Rehearing and Rehearing In Banc Denied Feb. 3, 1992.
Glenn B. Manishin (argued), Blumenfeld & Cohen, Washington, D.C., and James Greenberg, Greenberg, Shmerelson &
Weinroth, Camden, N.J., for Richman Bros. Records, Inc.
Vincent J. Paluzzi (argued), Hannoch Weisman, Trenton, N.J., and Michael B. Fingerhut, U.S. Sprint Communications Co., Washington, D.C., for U.S. Sprint Communications Co.
Gene Kimmelman, Legislative Director, Consumer Federation of America, and F. Thomas Tuttle, Law Offices of F. Thomas Tuttle, Washington, D.C., for amicus curiae Consumer Federation of America.
Present MANSMANN and HUTCHINSON, Circuit Judges, and O'NEILL, District Judge.*
OPINION OF THE COURT
HUTCHINSON, Circuit Judge.
I.
Richman Brothers Records, Incorporated (Richman) appeals an order of the United States District Court for the District of New Jersey which it claims directs the clerk of that court "to immediately transfer" both Richman's action against U.S. Sprint Communications Company (Sprint), as well as Sprint's consolidated action against Richman, to the Secretary of the Federal Communications Commission (Commission). Sprint, a non-dominant carrier of telephone communications, has on file with the Commission a tariff that purports to limit Sprint's liability for damages from faulty service to restitution. Richman says this transfer order is a final order because its text shows the district court wholly relinquished jurisdiction over both Sprint's action for payment of its charges to Richman and Richman's claim for negligent service to the Commission or, in any event, on analogy to abstention orders, effectively put Richman out of court. Accordingly, Richman says we have appellate jurisdiction over its appeal. On the merits, Richman asks us to hold that Sprint cannot effectively limit its liability by the terms of a tariff Sprint elected to file with the Commission.
Sprint contends that we lack jurisdiction because the transfer order merely refers to the Commission a discrete issue: whether the limitation on liability in a tariff of rates that the Commission says the law permits, but does not require, a non-dominant telecommunication carrier1 to file, under the Communications Act of 1934 (Act), see 47 U.S.C.A. §§ 151-613 (West 1990), is valid, and, if so, what its effect is. Sprint says the transfer order is an interlocutory judicial deferral to an administrative agency with primary jurisdiction over an issue requiring the specialized knowledge of that agency. In a protective cross-appeal, Sprint asks us to hold that the district court erred in vacating its prior partial summary judgment order in favor of Sprint and in thereafter allowing Richman to amend its complaint to add a fraud count.
We hold that the district court intended to do no more than transfer to the Commission the question of the validity and effect of the liability limitation in Sprint's tariff and accordingly stayed the case pending a final order of the Commission that decides that question. Because transfer orders of this kind are not final, appealable orders, we hold that we lack appellate jurisdiction over Richman's appeal. Accordingly, we will dismiss Richman's appeal and Sprint's protective cross-appeal without passing on the merits of the issues they raise concerning the effect of liability limiting provisions in tariffs non-dominant telecommunication carriers elect to file under section 203(a) of the Act. As we shall see, the need to resolve these complex issues was triggered by Sprint's seemingly simple action to collect an unpaid bill and Richman's claim that it was seriously damaged by Sprint's negligence in performing Sprint's contract with Richman for the provision of telecommunication services.
II.
The parties' dispute over Sprint's performance of its contract with Richman first reached the courts on August 1, 1988, when Sprint brought an action against Richman in the United States District Court for the District of Kansas. By this action, Sprint sought to collect $57,806.77 in telephone charges it had billed Richman together with interest on that amount. On August 26, 1988, Richman took legal action by filing a claim against Sprint in the Superior Court of New Jersey, Law Division. In the New Jersey action, Richman alleged that Sprint had not only been grossly negligent when it installed Richman's long-distance phone lines but had also engaged in fraudulent and willful misconduct in connection with its contract to provide telecommunication service to Richman. Accordingly, Richman sought consequential and treble damages under the New Jersey Consumer Fraud Act, N.J.Stat.Ann. §§ 56:8-1 to 56:8-48 (West 1989), as well as punitive damages.
Sprint removed Richman's suit to the United States District Court for the District of New Jersey. Sprint's Kansas action was also transferred from the Kansas district court to the New Jersey district court on March 6, 1989. In the New Jersey district court, the two cases were consolidated for all purposes by order entered on March 28, 1989.
Sprint moved for partial summary judgment claiming that its liability was limited by a tariff that it filed with the Commission and sought dismissal of Richman's claim under the New Jersey Consumer Fraud Act. The district court granted Sprint's motion, limiting its liability for negligence to the amounts set forth in the tariff and dismissing Richman's New Jersey Consumer Fraud Act claim.
Richman filed a motion for reconsideration pursuant to Federal Rule of Civil Procedure 59(e) and alternately sought certification of the tariff issue for interlocutory appeal pursuant to 28 U.S.C.A. § 1292(b) (West Supp.1991). Richman contended, inter alia, that the district court had erroneously decided the provision in Sprint's elective tariff limiting its common law liability for negligence was valid and effective. Richman also sought leave to amend its complaint to add a claim of fraudulent inducement against Sprint.
The district court granted reconsideration with an opinion and order issued June 22, 1990. In them, the district court vacated its April 6 opinion and order, granted Richman leave to amend its complaint to include the fraudulent inducement action and directed the clerk thereafter "to immediately transfer the cases to the ... Commission."2 Appendix (App.) at 370. The district court did not grant Richman's motion to certify the tariff issue for interlocutory appeal. Richman promptly filed an amended complaint adding its claim for fraud in the inducement and, on July 11, 1990, filed this timely appeal from the order "transfer[ring]" the action to the Commission.
On July 25, 1990, the Clerk of this Court advised the parties that Sprint's appeal would "be submitted to a panel of this Court for possible dismissal due to a jurisdictional defect." Letter from Bradford A. Baldus to Counsel, July 25, 1990, at 1. Referring to our decision in Brotherhood of Maintenance of Way Employees v. Consolidated Rail Corp.,
Sprint itself challenges this Court's appellate jurisdiction and has filed a motion to have both appeals dismissed for lack of appellate jurisdiction. In support of its motion to dismiss, Sprint's main contention is that the district court's transfer order is not a final appealable order because it did not dispose of Sprint's consolidated action for payment of Sprint's telecommunication charges to Richman. In support Sprint cites Bergman v. City of Atlantic City,
Richman seeks dismissal of Sprint's cross-appeal while itself opposing Sprint's motion to dismiss Richman's appeal from the transfer order. Sprint replies that the Court must hear the appeals of both parties or neither. All these motions, along with the parties' responses to the Clerk's request that they comment on the issue of appealability as affected by Brotherhood, are now before us for disposition.III.
To understand the procedural posture of this case, a description of the statutory and regulatory background to the dispute over Sprint's contract to provide Richman with telecommunication services is needed. That background is provided by the Act as amended and the regulations and general orders the Commission has made in exercising its regulatory authority under the Act. See generally 47 U.S.C.A. §§ 151-613. Specifically, Title II of the Act governs the activities of common carriers. See id. §§ 201-26. A common carrier is defined by the Act as:
[A]ny person engaged as a common carrier for hire, in interstate or foreign communication by wire or radio or in interstate or foreign radio transmission of energy, except where reference is made to common carriers not subject to this chapter....
Id. § 153(h). It is undisputed that Sprint is a common carrier.
Under the Act, every common carrier must file with the Commission for public display a schedule of charges. Id. § 203(a). This schedule is commonly known as a tariff. See MCI Telecommunications Corp. v. FCC,
The Act provides that a common carrier's
charges, practices, classifications and regulations for and in connection with ... communication service, shall be just and reasonable, and any such charge, practice, classification or regulation that is unjust or unreasonable is ... unlawful.
Id. § 201. Unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities or services by a common carrier is unlawful. Id. § 202.
The Commission may assess civil damages against a common carrier for violations of the Act. Id. §§ 206, 209. While a complainant may pursue a remedy for violations of the Act before the Commission or in a federal district court, the complainant must elect one forum or the other. Id. § 207. The filing of a suit in federal court, however, does not deprive the Commission of its primary jurisdiction.3 See generally L. Jaffe, Judicial Control of Administrative Action 121-23 (1965) (describing the doctrine of primary jurisdiction and its operation once an action is brought in court).
Section 208 allows the Commission to conduct investigations concerning complaints that common carriers has acted in contravention of the Act. See 47 U.S.C.A. § 208. Thus, once the tariffs are in effect, specific complaints about compliance with them, as well as their validity, are subject to challenge before the Commission even though the complaint involves a part of a tariff that the Commission has already approved. International Business Mach. v. FCC,
In 1979 the Commission began rulemaking proceedings under the Act to consider whether it needed to revise its regulations concerning common carriers because of the far-reaching changes that took place in the industry during the 1970's. See In re Policy and Rules Concerning Rates for Competitive Common Carrier Services and Facilities Authorizations Therefor, First Report and Order,
[F]irms lacking market power simply cannot rationally price their services in ways which, or impose terms or conditions which, would contravene Sections 201(b) and 202(a) of the Act.... [A] non-dominant competitive firm, for example, will be incapable of violating the just and reasonable standard of [section] 201(b).
Id. at 31. The statutory authorities the Commission cited in support of its rule are sections 151 and 154 of the Act. Id. at 13. They charge the Commission generally with the duty to make available rapid, efficient communication service, 47 U.S.C.A. § 151, and give it the authority to promulgate rules to that end, id. § 154(i).
Two years after the First Report, the Commission issued In re Policy and Rules Concerning Rates for Competitive Common Carrier Services and Facilities Authorizations Therefor, Second Report and Order,
The permissive forbearance policy was expanded to include specialized non-dominant carriers in In re Policy and Rules Concerning Rates for Competitive Common Carrier Services and Facilities Authorizations Therefor, Fourth Report and Order,
Richman is a wholesale dealer and distributor of records, cassettes, compact discs and related merchandise. It communicates with most of its customers out of its office in Pennsauken, New Jersey, by telephone. Until October 1, 1987, Richman's long-distance telephone service was provided by Telesphere, Incorporated (Telesphere). In May of 1987, Harry Bogaev (Bogaev), a Sprint representative, called Richman's Vice-President Mark Small (Small) to solicit Richman's long-distance telephone service.
On June 8, 1987, Bogaev presented Small with a proposal from Sprint. Sprint claimed its proposal would save Richman twelve percent on its long-distance phone bills and at the same time provide personally tailored, quality service. Small says that Richman, in accepting Sprint's offer to switch to its long-distance service, relied on the promises of quality service Bogaev made on Sprint's behalf both in the proposal and during Bogaev's sales call. In his proposal Bogaev suggested that Richman subscribe for twelve "Dial 1 WATS" lines and six "Sprint Advanced WATS Plus" lines.
About five weeks later, Bogaev contacted Richman to confirm its acceptance of Sprint's proposal. Bogaev told Richman's Office Manager Holly Cass (Cass) that Richman would receive an additional ten percent discount for the first ten months of service by Sprint. The discount was in accord with Sprint's tariff.
On July 20, 1987, Cass executed an Advanced WATS Plus Sales Agreement. It provided for the installation of six Sprint Advanced WATS Plus lines. Cass also executed a Dial 1 WATS Sales Agreement. It provided for the installation of twelve Dial 1 WATS lines integrated with the lines of Richman's local phone company. The Dial 1 WATS agreement included a statement that not only the rates but also the conditions for service were contained in a tariff Sprint had filed with the Commission.
Contemporaneously with its execution of the sales agreement, Richman also signed, at Bogaev's behest, a "letter of agency" on Richman's stationary. Small says he was under the impression that Sprint would use the letter of agency as evidence of Sprint's authority to deal with everyone whose help would be needed to ensure a smooth changeover in Richman's long distance service from Telesphere to Sprint. Sprint, on the other hand, says that it solicited the letter for the sole purpose of helping Sprint in its dealings with Richman's supplier of telephone equipment, Langer Communications, Incorporated, concerning the six Advanced WATS Plus lines. Sprint contends that the letter had nothing to do with the twelve Dial 1 WATS lines that New Jersey Bell would have to convert.
On October 1, 1987, Sprint began providing service to Richman. The six Sprint Advanced WATS Plus lines functioned properly. The twelve Dial 1 WATS lines did not. The twelve Dial 1 WATS lines did accept incoming phone calls and Richman had no difficulty in making outgoing local calls. All twelve Dial 1 WATS lines, however, were unable to place long distance calls. Whenever Richman attempted to make an outgoing long-distance phone call through the Dial 1 WATS lines, it received the message "You've entered an invalid authorization code." App. at 147.
Cass sought Bogaev's assistance to correct the problem Cass says Bogaev told her that the Sprint lines were fine, that the problem was with New Jersey Bell and that he would work with New Jersey Bell to correct it. On Bogaev's instruction Cass called New Jersey Bell. New Jersey Bell told her that it had checked its lines into Richman and found no problem. Cass then asked Bogaev to send out a Sprint technician to look into the problem. According to Small, Bogaev rejected that request, telling Small that sending a Sprint technician out to Richman's office would be useless because the problems were in New Jersey Bell's lines. Richman tried to solve the problem through New Jersey Bell, but New Jersey Bell told Small that Richman would have to work the problem out with Sprint because the letter of agency Richman had given Sprint made Sprint, not Richman, New Jersey Bell's customer.
On December 9, 1987, Bogaev authorized an expedited order to install six additional Advanced WATS Plus lines by January 9, 1988. Sprint did not transmit this order to New Jersey Bell until January 15. According to Sprint, the delay in transmission occurred when its credit department held up the order after noting that Richman had not paid its bills.
Richman says it finally made contact with a Sprint technician in January who tentatively identified the source of the problem as "dialers" left over from Richman's prior carrier, Telesphere. Dialers are small computers with a software program that automatically patches a caller into a long-distance line. The program causes the computer to dial a pre-set authorization code when activated by an attempt to place an outgoing long-distance call. As it turned out, Telesphere had left its dialers plugged into the system and they had been programmed to work only with Richman's Telesphere customer code, a code which was invalidated when Richman terminated its relation with Telesphere. As a result, each attempt to place an outgoing long-distance call went through the dialer in a fruitless effort to access Telesphere's network, now closed to Richman, instead of the network Richmond had opened with Sprint.
When Bogaev next visited Richman, he was told about the technician's hunch and quickly located and disconnected the dialers. At once, the twelve Dial 1 WATS lines became operational for outgoing long-distance phone calls. The six additional Sprint Advanced WATS Plus lines that Sprint's credit department had held up were then not needed and so never installed. Richman refused to pay Sprint's charges and persisted in that refusal until August 1988, when Sprint terminated its relationship with Richman for non-payment. These consolidated actions followed.
V.
The United States District Court for the District of New Jersey had diversity jurisdiction over these consolidated cases pursuant to 28 U.S.C.A. § 1332 (West 1966 & Supp.1991). It also had jurisdiction over the claims under the Act brought by Sprint under 28 U.S.C.A. § 1337(a) (West Supp.1991) (providing district courts with original jurisdiction over actions arising under an Act of Congress that regulates commerce). Whether we have jurisdiction to decide this appeal on the merits has been the subject of extensive argument by the parties. There is, of course, no question that we have both the power and the duty to consider the case to the extent necessary to resolve any jurisdictional issue. See, e.g., Bender v. Williamsport Area School Dist.,
A.
Sprint's arguments against appellate jurisdiction are premised on its characterization of the district court's order as one that merely transferred the issue of the validity of the tariff to the Commission while staying the rest of the proceedings. From this premise, Sprint argues that this Court does not have jurisdiction because the district court's order is neither a final order nor an appealable interlocutory order.
Richman characterizes the district court's order differently. It construes it as a complete transfer of the case, including its state-law claims, to the Commission, effectively putting Richman out of court. Richman analogizes the district court's order to decisions to abstain that are appealable because they end the litigation in the district court.
Ordinarily we construe district court orders "by examination of just the 'four corners' of the document." Ford Motor Co. v. Summit Motor Prods., Inc.,
Here the district court's order, when read together with its opinion, is ambiguous. Accordingly, we must first decide what the district court meant when it decided to "transfer the action" to the Commission. In its order, the district court wrote:
[P]laintiff is hereby permitted to file an amended complaint alleging claims based in fraud and misrepresentation within 10 days of receipt of this Opinion and Order and defendants are permitted to file an appropriate responsive pleading within 10 days of receipt of plaintiff's amended complaint. Upon receipt of defendant's answer to the amended complaint, the Clerk of the Court is hereby ORDERED to immediately transfer this action to the Secretary of the Federal Communications Commission.
App. at 370 (emphasis added). Richman relies on the sentence we have emphasized, especially the words "transfer this action," when it argues that the court sent the case, state claims and all, to the Commission. This reading comports with the commonly accepted legal definition of the word "action." See Black's Law Dictionary 26 (5th ed. 1979) (action "in its usual legal sense means a suit brought in a court"). Richman's position also gains some support in language that the court uses at the conclusion of its opinion:
After service of the amended complaint has been effectuated upon defendant, it shall be afforded 10 days to file an appropriate responsive pleading. Immediately thereafter, the Clerk of the Court is directed to transfer the action to the Secretary of the Federal Communications Commission.
App. at 390. Here, the district court again refers to a transfer of "the action" to the Commission.
At another point in its opinion, the district court's language could be read to support the position of either Sprint or Richman. In the introduction to the opinion, the court wrote that it would:
deny the relief requested by plaintiff and instead thereof stay the proceedings and transfer the matter to the Federal Communications Commission.
App. at 372-73. Here the court wrote that it would transfer "the matter," a phrase that Richman says means the same as "the action." The court, however, also said that it would stay the proceedings while transferring "the matter" to the Commission, a procedural ruling that makes no sense if the court had decided it would never have anything more to do with the case. If "the matter" were synonymous with "the action," everything would have been sent to the Commission and there would be nothing left to stay. Black's Law Dictionary defines "matter" more narrowly than "action." Black's says "matter" has the meaning of "[s]ubstantial facts forming [the] basis of [a] claim or defense" and refers the reader to the word "issue." See Black's Law Dictionary 882 (5th ed. 1979). This cross-reference supports Sprint's interpretation of the order as transferring to the Commission just the issue of the validity of the tariff provision limiting liability that Sprint asserts as a defense.4
Elsewhere in its opinion, the district court says:
Upon analysis of the issues before it, this court concludes that the instant matter should be transferred to the FCC.
App. at 387. If the word "issues" in this sentence is limited to the issues concerning the effect of a liability limitation in a non-dominant carrier's tariff, this sentence is similar in its tenor to the quoted language from the district court's opinion that refers to a transfer of "the matter." Unlike the language in the introduction, however, the last quoted sentence is set amidst the court's discussion of the doctrine of primary jurisdiction and the issue of the tariff's validity as a limit on liability. In this context, it becomes difficult to construe the word "issues" to mean anything beyond those issues that are within the Commission's primary jurisdiction over the effect of Sprint's tariff. One other portion of the opinion supports this construction. The court states:
Because at least some of the plaintiff's claims are covered by its tariff, resolution of the issue whether tariffs apply to non-dominant carriers is necessary. For the reasons which follow, however, the proper forum to adjudicate that issue, at least initially, is the FCC.
App. at 385 (footnote omitted).
While the order, standing alone, directs the transfer of "this action" to the Secretary of the Commission and so may seem unambiguous, the order's clarity disappears in the context of the opinion, the regulatory background and the procedural posture of the case. Though the word "action" in the order is normally the equivalent of the word "case" in legal parlance, in this case that construction puts the order at war with the rulings in the opinion. The language in the opinion staying the case pending transfer of "the issue whether the tariffs apply to non-dominant carriers," app. at 385, belies the language of the order. Since the opinion, at still other times, speaks of transferring "the matter," i.e., the tariff issue, see supra at 1439 (citing Black's Law Dictionary at 882), rather than "the action," the references to a stay strongly indicate that the court intended Richman's claims to remain pending on its docket while the tariff issue was reviewed by the Commission.
Additionally, the opinion, read as a whole, is limited to consideration of whether the tariff issue should be referred to the agency. The district court never discusses transferring all of Richman's claims to the Commission. Therefore, we believe that the court's use of the language "this action" or "the action" once in its order and twice in its opinion was just an inexact use of that term. We construe the order under appeal to transfer only the tariff issue to the Commission and to stay further judicial proceedings until the Commission exercises its primary jurisdiction over the tariff issue, but with jurisdiction retained in the meantime.
B.
Since the order, as we construe it, transfers no more than the tariff issue to the Commission, we are now in a position to determine if it is appealable. According to Richman, we have appellate jurisdiction over the order transferring the tariff question to the Commission under 28 U.S.C.A. § 1291 (West Supp.1991). Section 1291 reads, in pertinent part:
The courts of appeals ... shall have jurisdiction of appeals from all final decisions of the district courts of the United States ... except where a direct review may be had in the Supreme Court.
28 U.S.C.A. § 1291. Richman argues, on analogy to abstention, that the district court's order is final, even if it merely stays its action. Since we interpret the district court's order as an order that does not effectively put Richman out of court but rather merely stays proceedings pending administrative resolution of the validity of Sprint's effort to limit its liability for negligence by tariff, we do not reach Sprint's argument that we do not have appellate jurisdiction under Bergman. Bergman held that when a final judgment is entered in one of two consolidated actions, that judgment is not appealable until a final judgment is entered in the other consolidated action. Bergman,
It is fair to say, however, that this Court, with one possible exception which we will discuss later, has never been squarely faced with or decided the question this case presents, namely: Is an appeal of an order that stays a lawsuit while referring a question to a federal administrative body under the doctrine of primary jurisdiction an appeal from a "final decision" under section 1291? Accordingly, we look to decisions of this Court that presented similar issues and reason by analogy from them. We turn therefore to Richman's argument that the present district court's stay order is final, on analogy to abstention.
In Van Cauwenberghe v. Biard,
A party generally may not take an appeal under § 1291 until there has been a decision by the District Court that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment."
Id. at 521,
In Baltimore Bank for Cooperatives v. Farmers Cheese Cooperative,
Farmers Cheese sought to dismiss the appeal on the ground that the order appealed from was not a final decision under section 1291. We disagreed, holding that when a district court has abstained in deference to a state administrative body, the decision to abstain is a final one for purposes of section 1291. Id. at 108-09. For purposes of the case now before us, though, the importance of Farmers Cheese is our contrast of the order the Bank appealed from in that case with an order staying a case under the doctrine of primary jurisdiction. We indicated the latter would not be a final appealable order under section 1291.
In Farmers Cheese, we analyzed three cases Farmers Cheese cited in support of its argument to dismiss the appeal. See id. at 107-08 (discussing Allied Air Freight, Inc. v. Pan Amer. World Airways, Inc.,
After summarizing these three primary jurisdiction cases, in each of which the appeal was dismissed, we said:
None of these cases are apposite to the instant case. In each of these cases, the district court merely stayed the proceedings in federal court until matters were determined initially by the appropriate federal agency. Such actions were appropriate applications of the doctrine of primary jurisdiction.
Id. at 108. We then contrasted the primary jurisdiction cases with abstention cases, which we held were final appealable decisions under section 1291:
In contrast, in the instant case the district [sic] did not stay the proceedings to await the determination of matters pending before federal agencies. Rather, in deference to the Pennsylvania [Milk Marketing Board], the district court, citing Burford v. Sun Oil Co.,
the comprehensive state statutory scheme should be given a "proper respect," and that matters the state desires to have determined administratively, and not in the first instance by its court system, should be determined by the state administrative system. Those matters should not by-pass that system by the fortuitous expedient of federal diversity jurisdiction.
In a Burford- type administrative abstention, the federal courts defer completely to the state courts so that:
administrative abstention does not merely postpone original federal jurisdiction, but actually displaces it, removing entirely from the original federal jurisdiction cases that fall within federal jurisdictional grants; a state court will dispose of all the issues in the case, subject to possible Supreme Court review, and whether or not such review is granted, res judicata will bar a party from having the federal court decide the issue anew.
Id. (footnote and some citations omitted) (emphasis added).
The teachings of Farmers Cheese are two-fold: administrative abstention orders, which completely relinquish federal jurisdiction by giving way to state administrative agencies, are final decisions appealable under section 1291; orders transferring discrete issues involving regulatory expertise under the doctrine of primary jurisdiction, by giving way to a federal administrative agency, are not final decisions appealable under section 1291. The difference between these two types of orders may be pointed up by a brief, but important, digression into the doctrine of abstention.
Abstention is based on "Our Federalism," Younger v. Harris,
We hold only that a stay order is final when the sole purpose and effect of the stay are precisely to surrender jurisdiction of a federal suit to a state court.
Id. at 10 n. 11,
The distinction between abstention cases and this case based on the fact that here the district court's order does not defer to any state body is not the only reason that causes us to reject Richman's analogy abstention as a basis for appellate jurisdiction. In cases involving transfer of an issue or issues to a federal regulatory agency under the doctrine of primary jurisdiction, the case is not effectively out of federal court. See Farmers Cheese,
Accordingly, Richman's reliance on Schall v. Joyce,
We reject Richman's analogy to Schall not only because of the strong dictum in Farmers Cheese, but also because we think this case is more analogous to Nemours Found. v. Manganaro Corp.,
Manganaro argues with some initial plausibility that a certification order is a species of abstention, and that therefore it is an appealable order under the precedent of Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp.,
. . . . .
Manganaro analogizes the certification to a refusal to adjudicate the merits. The analogy is not apt, however, because the certification order does not mean the effective end of the federal litigation. Further proceedings, including possibly a trial on the merits, will be held in the district court after the Delaware Supreme Court either answers the certified questions or declines to accept them. Therefore, Manganaro's argument that a certification order is a species of abstention and therefore appealable is unpersuasive.
Id. at 101 (emphasis added).
As in Nemours, but not as in Schall, the district court's order in this case is not a refusal to adjudicate the merits of the case. Also like Nemours, the possibility of a jury trial for Richman still looms on the horizon. We think the district court's transfer of an arguably controlling issue to the Commission's primary jurisdiction is more closely analogous to a certification of controlling state-law questions to a state supreme court than to a stay of federal judicial proceedings pending the conclusion of a related state case whose result is likely to control the outcome of the federal case.
Two other cases support our reasoning. In Cheyney State College Faculty v. Hufstedler,
The [district] court concluded that plaintiffs were required to exhaust administrative remedies under Title VI, and that the U.S. Department of Education had primary jurisdiction. The court stayed the suit until further order and directed defendants to report within 90 days on the progress of the administrative proceedings.
Id. at 735 (emphasis added).
We began our analysis of the appealability of the district court's order in Hufstedler by noting that stays are only appealable when they are tantamount to dismissal of the underlying suit. Id. (citing Farmers Cheese,
The stay in this case does not have the practical effect of a dismissal. Nothing in the district court's opinion or order intimates that the stay was intended to "deep six" the suit. Plaintiffs have not been put "effectively out of court."
Idlewild Liquor Corp. v. Epstein,
Id. We emphasized that "this stay is merely a temporary suspension of proceedings." Id. Finally, after noting the district court's mention of the proceedings before the Department of Education, as well as other litigation in another federal forum, we held that the stay order was not appealable. Id. at 735-36.6
Finally, the one case in which we were directly faced with the question of whether an order referring a question to a federal administrative body under the doctrine of primary jurisdiction is a final order appealable under section 1291 is Day v. Pennsylvania R.R.,
At the outset we are met with the question whether the order in question is appealable. It is conceded that the order is interlocutory....
Id. at 486 (emphasis added). We then went straight on to examine Day's argument that the order was appealable as an interlocutory order granting or refusing an injunction under 28 U.S.C.A. § 1292(1),7 rejected that argument, id. at 486-487, and dismissed the appeal, id. at 488. Given our independent duty to examine questions involving our jurisdiction, see Bender,
Even if Day is neither binding nor persuasive authority, our reasoning in Farmers Cheese, Nemours and Hufstedler is persuasive on the question of appellate jurisdiction now before us. Since the district court transferred only the tariff issue to the Commission, and the transfer will be fully reviewable after the Commission and the district court have acted, the order appealed from is not a final decision which "leaves nothing for the court to do but execute the judgment." Van Cauwenberghe,
C.
Richman makes only a limited argument that the district court's transfer order is final under the collateral-order doctrine Cohen has grafted on section 1291. See Cohen,
Nevertheless, mindful of our independent obligation to examine questions of jurisdiction, we go on to consider whether the district court's decision to put the validity of Sprint's tariff within the Commission's primary jurisdiction could, in the context of this case, be a second important issue separate and independent from the validity of the tariff itself. In that context, we consider whether the existence vel non of primary jurisdiction in the Commission is itself an important issue separate from the merits. We must also decide whether that determination is effectively unreviewable because the primary jurisdiction question may no longer be open on appeal from the final decision the district court will render on Richman's claim. See Rolo v. General Dev. Corp.,
Since the validity of Sprint's tariff limiting liability controls the merits of Richman's negligence claim, unless the district court's referral to the Commission is an issue separate from the issue of the tariff's validity, the question of the Commission's primary jurisdiction cannot be classed as an important issue separate from the merits. See Livesay,
Moreover, the Commission's resolution of the tariff issue is subject to effective judicial review and so that prerequisite to Cohen jurisdiction is also absent. Review of the Commission's final decision on the validity of Sprint's tariff is assured by 47 U.S.C.A. § 402(a), 28 U.S.C.A. § 2342(1) and 28 U.S.C.A. § 2343. These sections of the governing statutes provide for full judicial review of the Commission's decision on the merits of the tariff issue in either the United States Court of Appeals for the District of Columbia Circuit or "the judicial circuit in which the petitioner resides or has its principal office." 28 U.S.C.A. § 2343. We do not think Richman is deprived of effective judicial review merely because the governing statutes compel judicial review of the Commission's resolution of the tariff issue in a court other than the court that referred the question to the Commission for the Commission's resolution of an issue that could control final disposition of Richman's negligence claim.
At heart, the Cohen gloss on the finality doctrine is a practical one. It seems to us that it would be impractical, overly technical and destructive of the policy against piecemeal review to sever the issue of primary jurisdiction from the tariff issue and so treat the question of primary jurisdiction as an immediately appealable, independently important issue collateral to the merits. Thus, even though the district court's order may have conclusively determined the issue of whether Sprint's tariff's validity is within the Commission's primary jurisdiction, we do not think the Cohen doctrine provides us with appellate jurisdiction under section 1291.
D.
Finally, Richman says that if the district court's order is not final, under Cohen or otherwise, we should treat its appeal as a petition for mandamus and grant the writ pursuant to 28 U.S.C.A. § 1651(a) (West 1966). We reject this argument because we believe granting a writ of mandamus is not appropriate in this case. The statutory and regulatory background to Richman's claim and Sprint's tariff defense on the basis of its limitation of liability set out earlier in this opinion, see supra at 1435-1436, show that the district court did not commit any clear error of law "at least approach[ing] the magnitude of an unauthorized exercise of judicial power, or a failure to use that power when there is a duty to do so," Lusardi v. Lechner,
We are not, however, wholly unsympathetic to Richman's inability to secure prompt and cost-effective disposition of its negligence claim against Sprint. Those delays are unfortunate attendants upon the legal and technical complexities of our recently revamped national system of telecommunications. We assume, of course, that the Commission will undertake the proceedings necessary to resolve the issue the district court's order has referred to it within a reasonable time and proceed as expeditiously as possible to complete them. In the unlikely event the Commission does not do so, Richman is not barred from seeking help from the district court. Cf. Hufstedler,
VI.
The district court's order transferring the tariff issue to the Commission is not a final order under 28 U.S.C.A. § 1291, under the Cohen doctrine or otherwise, and the prerequisites for mandamus are not present. Therefore, we will dismiss these appeals for lack of appellate jurisdiction. Each party shall bear its own costs.
Notes
Hon. Thomas N. O'Neill, Jr., District Judge of the United States District Court for the Eastern District of Pennsylvania, sitting by designation
Under Commission rulings, non-dominant carriers are telecommunication carriers who lack the economic power to exercise control individually over market rates for their services. Dominant carriers are carriers who exercise near monopoly power over rates and so can set their own rates without regard, or full regard, to the forces of supply and demand that impartially control a free market. AT & T is an example of a dominant carrier. Sprint and MCI are examples of non-dominant carriers. For a more detailed discussion of the development and evolution of the Commission's policy of deregulation see infra at 1435-1436
The court allowed this amendment even though it thought that the evidence that Richman had presented so far would not be enough to allow Richman to survive on a summary judgment motion by Sprint. It further found that Sprint would not be prejudiced by this amendment
Primary jurisdiction is a doctrine that requires a court to transfer an issue within a case that involves expert administrative discretion to the federal administrative agency charged with exercising that discretion for initial decision. See Baltimore Bank for Cooperatives v. Farmers Cheese Cooperative,
The doctrine has been applied, for example, when an action otherwise within the jurisdiction of the court raises a question of the validity of a rate or practice included in a tariff filed with an agency, e.g., Danna v. Air France,
Id.
Still another passage in the opinion highlights the district court's ambivalence in using the words "action" and "matter." In footnote seven of its opinion, the court used the language "transfer this action" but, in the prior sentence wrote that it was "transferring the matter to the FCC [for] resolution of the appropriate construction to be accorded to the tariffs." App. at 383
Pullman abstention is arguably an exception to this rule because it merely postpones the exercise of federal jurisdiction pending a state decision on a disputed question of state law. See Moses H. Cone,
The rationale of Terra Nova Ins. Co. v. 900 Bar, Inc.,
This section was the predecessor to 28 U.S.C.A. § 1292(a)(1) (West Supp.1991) which grants the courts of appeals jurisdiction over appeals from interlocutory orders of the United States district courts "granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions...." 28 U.S.C.A. § 1292(a)(1)
This holding is also supported by our decision in Brotherhood of Maintenance of Way Employees v. Consolidated Rail Corp.,
Richman notes that Brotherhood involved a remand to an agency rather than a referral to an agency. Brotherhood is also arguably distinguishable because a court of appeals, and not the district court, will be reviewing the Commission's decision in this case. However, we find these distinctions unpersuasive. As we stated in Brotherhood:
Our precedent holds that when the issue on appeal is limited to the right to a procedure that once granted is not susceptible as a practical matter to subsequent review, remand orders directing such procedures are final. In contrast, when the generally applicable principle of nonfinality of remand orders is followed, there is an opportunity to review the merits of the order challenged when the hearing on remand is concluded.
Id. at 286 (emphasis added). The order transferring the tariff issue to the Commission falls within the second category of cases.
47 U.S.C. § 402(a) provides:
Any proceeding to enjoin, set aside, annul, or suspend any order of the Commission under this chapter (except those appealable under subsection (b) of this section) shall be brought as provided by and in the manner prescribed in [sections 2341-51] of Title 28.
28 U.S.C. § 2342(1) provides:
The court of appeals (other than the United States Court of Appeals for the Federal Circuit) has exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of--
(1) all final orders of the Federal Communications Commission made reviewable by section 402(a) of title 47;
28 U.S.C. § 2343 provides:
The venue of a proceeding under this chapter is in the judicial circuit in which the petitioner resides or has its principal office, or in the United States Court of Appeals for the District of Columbia Circuit.