Southwestern Bell Corporation v. Federal Communications Commission, and United States of America, United States Telephone Association, Intervenors

trial. Even without the result impact on evidence, AMM A the DL &

consideration meet its evidence to provided substantial

& S legiti- regarding its production

burden non-discriminatory for Neu-

mate, reasons dismissal, provided insuffi- and Neuren

ren’s of estab- meet her burden

cient evidence preponderance

lishing pretext

evidence.

III. CONCLUSION although we conclude

Consequently, at trial was error the evidence

admission of court, convinced we are

by the district decision of harmless. The error is thus court

district

Affirmed. BELL

SOUTHWESTERN

CORPORATION, et

al., Petitioners, COM-

FEDERAL COMMUNICATIONS

MISSION, and United States

America, Respondents, Association, Telephone States

United al., Intervenors.

et 93-1568, 93-

Nos. and 93-1624. Appeals, Court of

United States of Columbia Circuit.

District

Argued Oct. 20, 1995.

Decided Jan. Council,

American Public Communications Morelli, Alexandria, VA, Genevieve for inter- Competitive venor Telecommunications Ass’n, Lipman Andrew D. and Jonathan E. Cams, DC, Washington, for intervenor MFS Co., Inc., Barry Communications E. Bretsch- neider, DC, Washington, for intervenor Pil- Inc., grim Telephone, Leon M. Kestenbaum DC, Fingerhut, Washington, and Michael B. Sprint Co., for intervenor L.P., Hunter, DC, Washington, Charles C. for intervenor Telecommunications Resellers Evans, DC, Washington, argued Mark L. Ass’n, Senkowski, R. Michael Robert J. But- cause, petitioner for Southwestern Bell ler, DeSoto, DC, Washington, and Kurt E. Corp. On the briefs were Martin E. Gram- for intervenor Personal Communications In- bow, DC, Ellis, Washington, James D. Paula Ass’n, dustry Miller, Joseph W. John C. Fulks, Antonio, TX, Lynch, J. San Robert M. Gammie, Tulsa, OK, Rohrbach, Peter A. Louis, MO, Hartgrove, Richard C. St. Leitch, DC, David Washington, G. for inter- Pajda, Richardson, Thomas A. TX. Wiltel, McCue, venor Inc. Martin T. Wash- DC, ington, appearance, entered an for inter- IL, Carpenter, Chicago, argued David W. venor Telephone U.S. Ass’n. James Lee cause, petitioners for American Tel. and Wurtz, DC, Washington, Whitting John Co., Telephone Companies, Tel. Bell Atlantic Bogy, Tuthill, Francisco, and James P. San Co., England New Tel. and Tel. and New CA, appearance entered an for intervenors Telephone York him Co. With on the briefs Pacific Bell and Nevada Bell. William Tru- Katz, VA, Arlington, were Lawrence W. E. man Roger Lake and Wollenberg, J. Wash- Bruce, Jr., Long, Edward Robert A. Wash- DC, ington, appearance, entered an for inter- DC, Wholl, Plains, ington, Edward R. White venor Intern. Business Corp. Machines NY, Keisler, Rosenblum, Peter D. Mark C. McKenna, Jr., Denver, CO, Robert B. en- NJ, Roy Hoffinger, Basking Ridge, E. appearance, tered an for intervenor U.S. Thorne, VA, Arlington, ap- John entered on Communications, West Inc. Mitchell Freed pearance, petitioner for Bell Atlantic Tele- Whittaker, Hertz and Alfred Winehell Wash- phone Companies. DC, ington, appearance, entered an for inter- Ingle, Deputy John E. Associate Gen. venor Ameritech Operating Companies. Counsel, F.C.C., cause, argued the for re- Sutherland, Atlanta, GA, Matthew R. entered spondents. With him on the brief were Wil- appearance, an for intervenor BellSouth Kennard, Counsel, F.C.C., liam E. Gen. Dan- Telecommunications, Inc. iel Armstrong, Counsel, M. Associate Gen. F.C.C., Bingaman, Gen., Anne K. Atty. Asst. EDWARDS, Before: Judge, Chief Justice, Dept, Robert B. Nicholson GINSBURG, SILBERMAN and Circuit Wiggers, Attys., Robert J. Dept, Judges. Justice, Washington, DC. VerriUi, Jr., DC, Washington, Donald B. Opinion for the by Judge Court filed Chief cause, argued the for intervenors. With him EDWARDS. Kamin, on Chicago, the brief were Chester T.

IL, Concurring opinion Salsbury, Morris, Jr., Judge Michael H. B. Circuit John SILBERMAN. Krogh, Elardo, Frank W. and Donald J. DC,

Washington, for intervenor MCI Tele- EDWARDS, HARRY T. Judge: Chief Corp., communications James S. Blaszak and Whittle, DC, Patrick Washington, J. in- for presents yet This case chapter another tervenor Ad Hoe Telecommunications Users the Federal Communications Commission’s Committee, (“FCC” “Commission”) Albert H. Kramer and Robert F. attempts series of Aldrich, DC, Washington, intervenor to relax tariff-filing requirements 203(b)(2) (1988 1993). Supp. & V After initial- U.S.C. carriers. common nondominant persuaded by arguments. nondominant We are not these permitting ly adopting rules tariffs, to avoid carriers common Court’s recent We find forbidding fil- adopted rules later FCC Corp. Telecommunications decision MCI un- attempts both struck down ing. Courts AT & T, U.S. -, 2223, 129 Congress’s mandate the that der the view (1994) (“MCI T”), v. AT & Act rate-filing section of the Communications Congress granted that the Com which held (“Communications “Act”), Act” or of 1934 very authority modification mission modest ... shall ... “[e]very common carrier 203(b), largely disposes of under section 203(a) § U.S.C. file” tariffs with argument. respect FCC’s With to second (1988), Despite the prevented such rules. argument, the Commission’s first we find rationales, courts found policy Commission’s Range Order violates Tariff authority change to had no the FCC 203(a), every clear mandate of section Congress’s clear command. showing file all common carrier “schedules case, attempted again has In this FCC 203(a). § charges.” 47 Because the U.S.C. filing requirements for nondomi- to relax the disregarded Congress’s mandate Commission carriers, only it has this time nant common overstepped and the limited section permitting non- adopt policy a proposed to authority that it retains under modification range of common carriers to file a dominant 203(b), Range vacate the we Tariff showing a opposed to fixed rates rates as Order. Filing Require charges. schedule Tariff Carriers, Nondominant Common ments for Background I. (1993) (“Range Or 8 F.C.C.R. Tariff der"). proposal, Congress recent non- Under this most A and competitive given are dominant carriers Act con- Title II of the Communications carriers. advantage over dominant common Congress established to tains the scheme Telephone and Tele- Petitioners American industry. regulate the telecommunications (“AT T”) Company & and three Bell graph 1993). (1988 Supp. §§ V 201-228 & U.S.C. (“BOCs”), Companies dominant Operating regulate The Act authorizes the FCC rules, carriers under the FCC’s common charged for communication services rates Order, alleging challenge Range Tariff they are reasonable and non- ensure that 203(a) of the Commu- that it violates section 203(a), discriminatory. the rate-fil- Section Act, car- requires all common nications which that, “[e]very com- ing provision, commands showing charges.” all file “schedules riers to ... ... file ... schedules mon carrier shall 203(a). § 47 U.S.C. showing showing charges ... classifications, regulations af- practices, principal two The Commission offers 203(a). charges.” § fecting Id. disputed Range arguments supporting the 203(c) charge only the that carriers First, mandates contends that the FCC Order. rate, ... 203(a)’s mandate, stating, “no carrier shall that common carri or different charge greater ... or less charges,” does showing all ers file “schedules specified charges compensation ... than the range the use of a preclude 203(e). provi- § Other Id. Act does in the schedule.” charges. Because the particular rate- premised II on the “schedules,” in title ar sions the Commission not define example, if common For filing provision. reasonably conclude that the gues, it could charge their filed range carriers do not filing of a of rates. Act allows the Commission, upon com- that, by its own motion Second, if even sec the FCC contends hearings and declare unlaw- plaint, may hold reasonably interpreted cannot tion 204, and under section ful rate increases carriers to file some common to allow charges under section tariffs, adopt prescribe reasonable could the Commission 203(b) grants 203(b), §§ 205. Section 205. Id. under section Order any “modify authority to the Commission grants the which par- either ... of this section requirement any of the section. “modify requirement” by general applica- Corporation order MCI Telecommunications

ticular instances (“MCI”) challenged Report or conditions.” special circumstances Sixth ble to 203(b)(2). required Order which MCI and other non- Id. only stop dominant carriers not tar- Congress enacted the when Com- future, iffs with the Commission but to and created the AT & munications Act panel their A cancel tariffs then on file. monopoly T over the Nation’s held a virtual Report this court struck down the Sixth regulatory telephone service. scheme obligatory detariffing policy, holding Order’s respond in title II meant to devised 203(a)’s “[e]very that section command that situation, competition to ensure common ... carrier shall file” tariffs was among interstate common carriers and rea- mandatory, and that the modification author- 1970s, rates for consumers. sonable 203(b) ity “suggested] under Section circum- technological, competitors allowed advances not, scribed as the FCC now alterations — long-distance-service to enter the market. it, would have wholesale abandonment or Commission, recognizing feasibility FCC, requirement.” elimination of a v.MCI greater competition, passed regulations to of (D.C.Cir.1985). 765 F.2d 1192 competitive entry. In facilitate negotiating MCI continued rates for some established, long-distance-service competition filing services and not tariffs with the FCC tariff-filing to the FCC decided reexamine pursuant permissive detariffing policy to the requirements fearing they only that served Order, Report of the Fourth and in and entrants, impose unnecessary on costs new complaint AT T alleging & filed a rulemakings, and initiated a series of collec- (c). unfiled rates violated Section and tively Competitive pro- known as the Carrier years Two-and-one-half later the Commission ceedings. complaint dismissed AT & T’s and stated that it would address AT & T’s contention Competitive B. The and the Commission proposed the rule was ultra vires in a Proceedings Carrier rulemaking. AT T& Communications v. Competitive proceedings, In the Carrier MCI, (1992); 7 F.C.C.R. 807 see also Tariff gradual the Commission moved toward de- Filing Requirements Interstate Common regulation of nondominant common carri- Carriers, Proposed Rulemaking, Notice 7 industry. in telephone ers the interstate In (1992). petitioned F.C.C.R. 804 AT T& this Order, Report its First 85 and F.C.C.2d review, court for panel and a found (1980), distinguished 20-24 between FCC wrongly FCC declined to address its authori carriers, dominant possessing those market ty promulgate permissive a detariffing carriers, power, and nondominant those not policy and decided that Report the Fourth dominant, found to relaxed and some of by and Order was rendered indefensible filing procedures for nondominant carri- v.MCI FCC decision. AT & T v. 978 long-distance ers. In Id. at 30-49. mar- (D.C.Cir.1992), F.2d 733-34 cert. de ket, this to a amounted between distinction nied, -, BOCs, carriers, AT & T and the dominant (1993). that, The court stated everyone and else. “[wjhether detariffing mandatory, is made as in Report, simply permissive, Sixth or Order, Report the Second and Report, are, in the Fourth in carriers either (1982), adopted F.C.C.2d 59 the Commission event, obligation relieved of the to file tariffs policy permissive detariffing, optional 203(a). step under section That exceeds the filing, carriers, for some nondominant authority granted limited the Commission in permissive detariffing extended that to other 203(b) ‘modify’requirements Report nondominant in the Fourth carriers (footnote omitted). Act.” Id. at 736 Order, (1983). F.C.C.2d 554 its Order, Report Sixth decision, F.C.C.2d 1020 Less than two weeks after that (1985), mandatory the Commission made completed the Commission rulemaking its detariffing policy, prohibiting nondominant proceeding response commenced to AT & carriers from complaint, releasing tariffs. report T’s and order (1981)). 456, 471, 479 The FCC found that essentially permissive detar- affirmed supported Act its deci- of its modification iffing policy as a valid use 203(b). satisfy Filing sion: tariffs would authority under section “discern, public because the could Carri Interstate Common Requirements for (1992), examining filing, ers, stayed pending the tariff the reasonable 7 F.C.C.R. notice, AT & zone of rates within which the customers 7 F.C.C.R. 7989 further 203(b) charged” summary reversal with and section allowed T a motion for would.be modify panel granted the motion the Commission “to con- court and a this order, stating requirements per curiam tent tariffs.” unpublished an Order, that, T at 6759. [AT of this court & F.C.C.R. decision “[t]he conclusively determined ] v. FCC II. Discussion permissive detariffing FCC’s authorization 203(a) of the Communications violates section primarily This on ease turns one funda- T v. No. Act.” AT & mental notion: enacted the Com- curiam). (June 1993) (per WL the mandates of the Act munications granted certiorari and Supreme Court open change by order, finding appeals’s affirmed the court If the courts. the Commission believes those modification the Commission’s inadequate regulat- task mandates certainly very and it did not limited ing industry fight the telecommunications disregard Congress’s man allow the FCC circumstances, changed of the Commission Act. MCI v. in the Communications dates Congress. must take its case to The Com- — at -, AT & T, 114 at 2231- U.S. S.Ct. instead, not, ignore congression- mission 33. it al directives because believes “traditional regulation” “unnecessary” and “coun- tariff Range Proceedings Tariff C. The terproductive.” Justice made this Scalia recently AT T: point most in MCI v. & year Supreme one before the More than estimations, and the Commission’s [0]ur decision, yet initiated anoth Court’s FCC estimations, policy cannot alter of desirable again rulemaking proceeding to consider er meaning the Federal Communica- of rate-filing requirements for how to relax the worse, For better or tions Act of 1934. Fil common carriers. nondominant rate-regulation, filed-tar- Act establishes ing Nondominant Com Requirements for system communica- iff for common-carrier Carriers, Proposed Rulemak mon Notice of tions, “to ‘in- and the Commission’s desire receiving After ing, 8 F.C.C.R. 1396 competition’ provide cannot au- [it] crease commentary parties, from the FCC several thority the well-established statu- order, to alter opinion a memorandum released tory requirements,”.... “[S]uch filed rate adopting permitted nondominant a rule considerations address themselves Con- range of rates” carriers to file a “reasonable gress, to the courts.” not rather than “a fixed rate.” Order, at The — 8 F.C.C.R. 6752. Commission (citations at -, 114 S.Ct. at 2233 U.S. reasoned, previous it had in its efforts omitted). quotations and internal tariff-filing requirement for non- relax the spent great effort parties in this case carriers, that dominant imperfect debating “good policy,” economic regulation of nondominant traditional tariff markets, imperfect perfect versus versus only unnecessary to ensure carriers is not See, e.g., for Re- perfect knowledge. Brief actually just but is and reasonable (suggesting that the FCC spondents at 23 price counterproductive since it can inhibit nondiscriminatory provi- can still enforce the innovation, entry into competition, service power market sions because carriers without market, ability carriers to and the of rationally charge excessive rates cannot respond quickly to market trends. customers); among Tr. of Oral discriminate Order, Supreme Argument at 14-17. (citing Report and 91 Id. Second T, 65, 71; arguments in MCI v. AT & heard similar Further Notice F.C.C.2d at 445, 453, noting is considerable ‘debate that “there Proposed Rulemaking, 84 F.C.C.2d charges” permit showing does not about the wisdom of the forums other doctrine,’ and, broadly, carriers to file a about FCC to allow some common more First, charges. regulation of the tele the clear defi continued the value of — at -, language rate-filing provision industry.” nite of the does communications Servs., encompass concept ranges. (quoting Security not Sec at S.Ct. — U.S. -, -, ond, Supreme and this court’s Corp., Court’s Inc. v. Kmart (1994)). provisions interpretations parallel in the S.Ct. L.Ed.2d (“ICA”) suggest arguments these make Interstate Commerce While certain pro policy, they rate-filing that the Communication Act’s matter economic sense as a vision does not allow common carriers to file ultimately irrelevant.1 Third, ranges of rates. Court’s fact, and dismissed the we entertained T, opinion in v. AT & while recent MCI arguments same economic primarily focused on the FCC’s limited modi Report that the Sixth contended 203(b), sup fication under section Order, all nondominant carri- requiring ports only Congress, our conclusion that from tariffs with the ers to refrain Commission, may change require FCC, regulatory a rational reduction ments of the Communications Act. See marketplace “competitive forces because at 2229-33. to assure all cases will be sufficient almost just rates.” MCI v. and reasonable Language 1. The of Section Respondents (quoting at 1194 Brief F.2d 51). case, panel explained that at In that analysis by begin examining our given any Congress had not the FCC new language of the statute. See MCI v. instructions. (“[T]he starting point 765 F.2d enacting 203-05 of the Com- interpreting language Sections a statute is the Act, itself.”) spe- intended a

munications (quoting statute Consumer Prod. Inc., revi- Safety cific scheme for carrier initiated rate Sylvania, Comm’n v. 447 GTE 102, 108, 2051, 2056, A achieved after a sions. balance was U.S. 100 S.Ct. 64 (1980)). 203(a) compromise. The careful L.Ed.2d 766 Section of the ignore that not free to circumvent or bal- provides: Communications Act may Nor the Commission effect ance. (a) Filing; public display. statutory scheme on the basis rewrite this carrier, Every except connecting common conception equities of own of the of a carriers, shall, within such reasonable time particular situation. designate, as the Commission shall file (quoting Id. at 1195 AT &T v. 487 F.2d print keep with the Commission and and (2d Cir.1973)). concluded, panel The open public inspection for schedules show- “[hjowever reasonable the Commission’s as ..., ing charges charges all whether such sessment, liberty not at the we are release joint separate, showing the agency from the tie that binds it to the text classifications, practices, regulations Congress at 1194. enacted.” Id. We reach affecting charges.... such the conclusion here: we find the Com same 203(a) added). (emphasis 47 U.S.C. Congress mission is still bound to the text 203(a) “filing; for chosen title section — enacted. public display” suggests Congress — 203(a) A. Section they wanted the rates be filed such that 203(a)’s public. Congress hold that section mandate known to the did every concepts common carrier file “schedules filing have include the of both Supreme suggested sym- likely price 1. The that it had nant carriers are most to be leaders. — pathy argu- T, with the Commission's economic MCI v. AT & U.S. 114 S.Ct. at filing specifically, costs now Regardless convincing of how the Com ments— raise artificial barriers to entry and that be, policy mission’s rationales Commis publication parallel pricing of rates facilitates congressional sion is without to alter price competition' though and stifles the Court — mandates. doubted the rationales made sense because domi- filing adopted in the joint appear- measures display, but their public sig- Order. ance, provision, to describe offered carriers Congress intended common nals that argues that The FCC this court range inspection. A public to file rates agency’s uphold should an reasonable inter public not cater to knowl- simply does pretation a statute when it does not con public cannot discern edge because the unambiguously expressed tain the intent charged by non- proposed to be actual rate question Congress precise on the at issue. dominant carriers. Passenger Corp. R.R. v. See National Boston — puts language provision itself —, -, Corp., Maine & part of lingering (find to rest. The first (1992) doubts 1394, 1401, 118 S.Ct. L.Ed.2d 203(a), stating “[ejvery common ing ambiguous “if the statute is silent or file,” suggests ... that the issue, carrier shall respect specific question car- filing requirement applies to all common agency’s the court is whether answer is mandatory. requirement is riers and that the permissible based on a construction of the Supreme statute”) in MCI v. As we noted (quoting Chevron U.S.A. Inc. v. “[sjhall” language to be Council, Inc., Court has found “the Natural Resources Defense (quoting of command.” 765 F.2d at 1191 S.Ct. Zerbst, (1984)). 295 U.S. Escoe v. L.Ed.2d 694 The Commission con (1935)). 818, 819, 79 L.Ed. 1566 has not tends defined “sched 203(a) filing lays then out what kind of anywhere in ules” and therefore this showing requires: all statute “schedules court should defer to the FCC’s reasonable language a charges.” This connotes permit ranges decision to carriers to file rates; it does not admit However, list of discernable rates. as the Court stat provision concept ranges. T, also agency’s interpre AT “an ed MCI v. & requires common carriers to file schedules tation of a is not entitled to deference statute classifications, practices, “showing the beyond meaning goes when it affecting charges,” regulations which -, statute can bear.” U.S. at underscores the level of definition (citing Group at 2231 Pittston Coal S.Ct. pos- requires. Simply put, range Sebben, 105, 113, 109 488 U.S. showing (1988)). Here, “schedule[] sible rates and the Com appear mutually charges” would to be exclu- the word “schedules”3 out mission has taken concepts, is zero. Fi- sive unless the requires of context. Section 203(c)2 nally, also language the of section showing charges,” of “schedules which 203(c) finding. supports something our Section forbids clearly suggests more definite and charge other than “the ranges. common carriers to The FCC con than schedule,” Act, Congress in charges specified the the en- in the tends elsewhere depends entirely ranges. employed concept of which on rates the The Com forcement 205(a) (the short, language that under section being discernable. mission notes may provision which the Commission not allow the relaxed tariff under section does 203(c) charges, except practices affecting 2. reads: specified in such schedule. carrier, provided No unless otherwise or 203(c) (1988). § 47 U.S.C. chapter, engage under of this shall or participate in such communication unless dictionary definitions of "schedules” 3. Several published in schedules have been filed employ concept of a statement of details. provisions chapter accordance of this with Dictionary thereunder; English e.g. See, regulations made of the and with the Random House (“a (2d 1987) print- or ed. written demand, (1) charge, Language and no carrier shall col- details”); Webster's ed lect, statement greater or less or different or receive Third New (1976) ("an append- Dictionary compensation ... for such communication International usu[ally] supplementary details ed statement of charges specified in the schedule then than the document”); effect, (2) accompanying legal ... by any refund or remit means in or Black's (6th 1990) ("[a] Dictionary ed. sheet of any portion charges speci- or device of the so Law instrument, fied, exhibiting (3) paper person any privileges a[n] annexed to any or extend to communication, employ referred to in in detail the matters mentioned or facilities in such or or classifications, document”). any regulations, principal or or enforce First, violators), points in this case. the FCC we find instructive charges for prescribe ranges rate-filing provi- rates or of rates the courts reason fixed set either Second, minimum, or sion is central to the ICA. by “the maximum defined minimum, duty charge charges.” explain courts that the FCC has a maximum and (1988). 205(a) deviating agency prohibit fails carriers from from those 47 U.S.C. rates, carri- Congress’s expressed allow- which would be frustrated were to realize that 205(a) permitted escape tariff-filing re- charges in section ers range of ance of a quirements. had it envisioned shows that 203(a), it would ranges policy involved an Maislin Industries ICC language. Section have included such negotiate permitting carriers to rates differ stated, example, “schedules might have 10762,the rate- ent from those filed. Section maximum and mini- charges or showing all ICA, however, filing provision requires of the Instead, Congress required charges.” mum motor common carriers to file their rates charges in showing all schedules ICC, prohibits with the and section 203(a). has find that deviating carriers from from those rates. 49 congressional clear man- again misread the 10761, 10762. §§ U.S.C. 203(a). date in section Negotiated found that the ICC’s Rates deci misinterpreted rate-filing provision sions of the ICA 2. Filed Rate Provisions ICC, Although of the ICA. like the FCC bar, argued policy interpretation of section of the the ease had Our judicial support requirement did not in section “abolis[h] Act finds Communications parallel provisions charge 10761 that carriers must continue to interpretations of Act, rate,” 49 U.S.C. the tariff id. 497 U.S. at 110 S.Ct. Commerce Interstate 36a), (quoting App. §§ Because the Com- at 2769 to Pet. for Cert. 10761-10762 responded policy, by that “the Act and the Interstate Com- the Court munications ancestor, sanctioning un a common adherence to unfiled merce Act share Act, Act,” courts dermines the basic structure of the id. original Interstate Commerce interpretations Compliance rate-filing provision, of one of the with it have considered “ found, judicial ‘utterly instructive con- central’ to the adminis modern statutes FCC, (quoting Regular AT & T v. tration of the Act.” Id. struction of the other. See Carrier, 379). 12; n. MCI v. 917 F.2d Common 793 F.2d at 978 F.2d at 736 (D.C.Cir.1990) subject (finding Communica- Court reasoned: the rates are “[i]f by special agreement upon ICA and therefore that secret alteration then tions Act based ICA); conjunction purpose it read in the statute will fail of its to establish must be Co., all, duly Broadcasting published, Inc. v. 643 a rate known to and from American (D.C.Cir.1980) (finding shipper that which nor carrier F.2d 820-21 neither de Act, part.” (quoting Id. at at 2768 to understand States, Packing to ICA from which Commu- Armour Co. v. United courts must look language pur- nications Act borrowed its 52 L.Ed. 681 (1908)). Industries, cases, pose). Supreme suggested Maislin also Two ICA Court Steel, Inc., U.S., Primary duty prohibit v. 497 U.S. that the ICC’s to carriers from Inc. 2759, (1990), 116, deviating 111 L.Ed.2d 94 from their filed rates be frus 110 S.Ct. stated, duty Regular and Carrier trated. It to “[t]he Common file Conference States, (D.C.Cir.1986), Commission, 10762, § United 793 F.2d 376 with the see and the interpretation rate-filing obligation charge only of the to those buttress our see 10761, always § provision. striking In down the Interstate have been considered essen (“ICC”) price attempts preventing to tial to discrimination and Commerce Commission’s 126, deregulate tariff-filing requirements stabilizing at rates.”4 Id. at 110 S.Ct. context, opinions dwell on two 2766. the ICA decision, Supreme undercharges,” citing subsequent

4. to dustries, Maislin In- In a collect "[tjrustees bankruptcy they underchar- held that and debtors “but not collect for filed, void, Security possession may rely ges doctrine based on but rates.” on the filed rate

1523 Carrier, question can be no Regular this court There tariffs are Common rule, Average Rates allow- considered an ICC essential to the entire administrative unpub- provide services at ing carriers They Act. scheme serve as a kind by averaging prior rates determined lished “tripwire” enabling the Commission to statutory shippers. The charges to those subject monitor the activities of carriers pro- provision provided that carriers “shall jurisdiction thereby its and to insure that only if ... con- ... service the rate vide charges, practices, classifications, and tariff,” 10761(a), in a 49 U.S.C. tained regulations just, of those carriers are rea- “utterly then-judge found cen- which Scalia sonable, nondiscriminatory.... and to the Act.” 793 F.2d at 379. tral “Without importance requirement of tariffs and the it,” reasoned, “it be monu- the court would that common carriers —all common carri- mentally requirement difficult to enforce ers —must offer all of their communica- that rates be reasonable and nondiscrimina- public through pub- tions services to the tory virtually impossible pub- for the lished tariffs is well established. See Arm- right challenge lic the lawful- to assert States, Packing our Co. v. United (ci- existing proposed Id. ness of rates.” 56, 428, L.Ed. 681 omitted). tations (quoting 765 F.2d at 1192-93 Western Union Negotiated Average Rates and Like the (1980) Co., Telegraph F.C.C.2d ICC, policies Range Rates of the omitted)). (emphasis In MCI v. this allows some common carriers to avoid Order duty court noted that the FCC has a readily filing ascertainable rates with the provisions” “execute and enforce the of the rate-filing provision Like the Commission. under section ICA, compo- is a central (1988), § 151 and that the Act U.S.C. re Congress’s regulatory nent of scheme for quires “that carriers file their tariffs with the Negotiated common carriers. As the Rates 203(a) and FCC” under section “that rates Average policies of the made Rates ICC fair, practices just, reasonable and nondiscriminatory provi- enforcement of the 201(b) nondiscriminatory,” under sections difficult, too, sions of the ICA more so would 202(a). (quoting 765 F.2d at 1192 AT & Order frustrate the en- (2d Cir.), T v. 572 F.2d cert. provisions forcement of the Communications denied, 439 U.S. Act.5 (1978) omitted)). (emphasis Un fact, employed reasoning this court sim- here, proposed der the scheme at issue en ilar to the ICA cases in our 1985MCI v. FCC suring that rates are reasonable and nondis- decision, finding utterly that rate eriminatory im prove would difficult if not regulatory central to title II’s scheme and possible without definite rates filed. that the FCC would find it difficult to enforce nondiscriminatory the reasonable and Interpretation Supreme Court’s readily provisions without discemable rates. that, noted least before opinion recent While the Court’s judicial perception of Commission shared the primarily in MCI v. AT & T focused on the statutory tariff-filing requirement modification under section Shortly after FCC’s common carriers. the Commis- 203(b), expound upon did the two proceed- initiated the the Court sion Common Carrier ings, points made in its decisions that are it stated: ICA Servs., - U.S. at -, among Corp., from of rates or Inc. v. Kmart or discount “applicable S.Ct. at 1710. The Court’s decision in Kmart tariff discounts" contained in the importance does not of the rate- undermine the containing objec- specific shipment” "an each or See, Kmart, - filing provisions e.g., the ICA. determining tive means for the rate." 49 U.S.C. at -, (citing S.Ct. at favor U.S. ably 1706-08 10762(i) 1993); (Supp. § V see notes 8-9 infra Industries). findings the in Maislin Thus, accompanying text. it is not clear rate-filing scheme is still com- whether the ICA's recognize 5. We that has since modified parable rate-filing Act’s to the Communications rate-filing provision of the ICA to allow for scheme. “identify "range tariffs” which rate 202(a). First, locality.” § persons, class of or Id. the Court found this ease.

relevant to initiative, of the Upon complaint is at the center or on its own that section and, second, provisions hearings may carrier hold and declare common agency’s detarifSng or- that the proposed found increases under sec- Court unlawful 203(a) and would finding undermined upon ders that common tion proceedings. complaint frustrate therefore proposed charges are in carrier’s actual or crucial a third and also added The Court may provisions, prescribe of the violation discussion, acknowledging that point to its “just charge” and reasonable or a other means to achieve while there §§ charges pursuant to section 205. Id. 204- ends, present Congress chose the the same give persons dam- 205. Sections 206 and 207 Congress changes the until system. And aged by of the a common carrier’s violation statute, agency and the courts must 206-207, right damages, §§ statute a to id. by it. abide right gives persons and section Commission, complaint to file a with the id. importance described Justice Scalia 203(a), 203(a): rate-filing provi- § tariff-filing requirement 208. Section “The sion, provision is the on which these other of the common-carrier sec is ... the heart v. provisions depend. Compliance Act.” MCI with section tion of the Communications at -, AT & T, at 2231. U.S. S.Ct. is crucial to the effective enforcement con quoted Maislin Industries’s nondiseriminatory pro- The Court of the reasonable and rate-filing compliance with the clusion visions. ‘utterly central’ to the adminis provision “is to While there be other methods (quoting Act.” Id. Maislin tration of the that common carriers meet the com ensure

Industries, at at 110 S.Ct. 497 U.S. II, recognized mands of title the Court Carrier, 793 F.2d (quoting Regular Common Congress’s “rate chosen means 379)). “[m]uch The Court found at preventing and discrimina unreasonableness subchap- the rest of the Communications —T, charges.” tion MCI v. AT & Carriers, to see 47 applicable ter Common at -, Undermining at 2231. S.Ct. the Act’s §§ Procedural U.S.C. rate-filing provisions by allowing some com Provisions, 47 U.S.C. and Administrative ranges mon carriers to file of rates would 401^416, premised upon the tariff- §§ complaint proceedings, con frustrate the as §of 203.” Id. A brief filing requirement say Congress. ceived Id. This is not to of title II of the Act look at the structure would Order frustrate centrality rate-filing of the illustrates purposes the broader of the Act. As the provision.6 Supreme Court made clear in v. AT & MCI requires carriers to common Section T, upon rea- “furnish ... communication service Court, simply say, as did the Maislin request therefor” and mandates sonable eliminating tariff-filing require- classifications, practices, “charges, their complaint proceed- ment would frustrate “just regulations” be and reasonable.” (b). ings; eliminating require- 201(a), not that those §§ 202 forbids U.S.C. ments, eliminating or even the com- unjust indeed any or unreasonable carriers to “make proceedings, plaint would frustrate the ul- charges, practices, discrimination classifi- cations, facilities, purposes Perhaps, timate regulations, Act. services asserts, not; prefer- perhaps the dissent it would give any undue or unreasonable any person, eliminating advantage particular even the FCC would not do so. ence or -T, (quoting the ICA deci- 114 S.Ct. at 2231 6. The referenced Industries, explaining importance of the rate- sions 497 U.S. at Maislin ability filing provision 2766; Atchison, Commission’s Grocery see also Co. v. Arizona duty provisions. the other "The to file enforce Co., 370, 384, Ry. Topeka & Santa Fe 284 U.S. Commission, analog [the with the (1932) (filing 76 L.Ed. 348 re 203(a)], obligation charge only and the certain, quirements "render rates definite and ], 203(c) always analog §to have [the those prevent and ... discrimination and other abus preventing price dis- been considered essential to es”)). stabilizing MCI v. AT & crimination and rates.” 10762(i) FCC) 1993). (and bound, § only (Supp. not U.S.C. V This But we purposes has by the ultimate expressly subsection allows tariffs based on a selected, by the it has deemed but means “range of rates or specific discounts for prescribed, pur- for the appropriate, and shipments” classes and establishes purposes. of those suit matters must be identified in tariffs .filed 4, 114 Id. at --- n. at 2231-32 to the enactment.8 Id. Should the pursuant Congress is free to select the remedial n. 4. FCC wish to achieve a similar result appropriate; it decided to tools it deems nondominant common carriers under require common carriers to file “schedules Act, the Commission must charges” ranges of rates. showing all not congressional seek action to amend the com- legislative cannot abandon the The FCC mon carrier section of the Communications it it has a scheme because thinks better Act.9 It given would be ironic indeed — idea.7 historically parallel lines of enforcement un- only by Con- opinion Our is underscored der the ICA and the Communications Act— Negotiated gress’s enactment of the recent by agency for the FCC to achieve rule that amending the ICA. Rates Act (codified which the except ICC could not achieve 107 Stat. No. Pub.L. 10701-11901) 1993). (Supp. §§ at V through congressional U.S.C. action. primarily proce- establishes While the great have not said a deal that is new. unfiled, involving resolving claims dures for previous clearly Our decisions indicate that rates, transportation it also in- negotiated “Range change this court is not forum in provision cludes a entitled Tariffs.” which to disposes "undercharge bankrupt opinion this of Southwest- crisis”—trustees of 7. Our case ("Southwestern") Corporation's pursuing Bell claim ern carriers were filed rates when the carri- reconsider the domi- payment negotiated the FCC should ers had received under distinction, carrier because its rates—and chairman Edward nanl/nondominant invited then-ICC hinges misperception presently 1,000 claim on testify. Philbin See 136 Rec. SI Cong. statutory authority adopt has 1990) (statement the FCC (daily July ed. of Sen. Any subsequent agency Range Order. rules Exon). hearing testimony The convinced the attempt apply this dominant/nondominant legislation committee to conclude that was nec- may give distinction rise to Southwestern's claim essary perceived to eliminate what it to be an provide appropriate context in a more Legislation inequitable situation. Id. intro- consider it. which to by essentially duced Senator Exon allowed the equities ICC to consider the associated with ne- provision provides: 8. That unfiled, id.; gotiated, but tariff rates. See see Range tariff a motor carri- Tariffs.—No S2933, Cong., also 101st 2d Sess. before, on, property er of with the approved by bill was the Commerce Committee date of this sub- or after the of the enactment but was not cleared for floor action before the solely be held invalid on the basis Congress adjourned. 101st See 138 Cong. Rec. specific that the tariff does not show a rate or S15,796 30, 1992) (statement (daily Sept. ed. shipment specific discount for a if tariff Kasten). year following Sen. the House range based on of rates or discounts again prior adjourn- failed to consider bill specific shipments. transporta- classes of For S58,572 (daily July ment. See 139 ed. Cong. Rec. day performed the 180th fol- tion on or after (statement 1993) Hollings). of Sen. enactment, range lowing such date of such identify tariff must rate or discount 1993, the was introduced in both bill houses among range from rates or discounts provisions, including with new range applica- tariff which is contained S16,185, S16,186 provision. See Cong. Rec. specific shipment must contain ble to each 18, 1993) (statement (daily ed. of Sen. Nov. Holl- determining objective the rate. an means for H9595, ings); (daily H9602 ed. Cong. Rec. U.S.C. 10762®. (statement Mineta) 1993) Rep. (provi- Nov. "clarifly] legality sions in effort to and future Negotiated Rates Act of enacted on requirements regard to certain other fare December was first introduced in rates, practices range as contract largely response to the result in the —such practices coded rates —so that these are not decision. See Court's 1990 Maislin Industries 1,000 1990) allowed to fester as an source of con- (daily July enormous ed. Rec. SI Cong. have”). Exon); negotiated Perhaps (statement Con- tention of Sen. see also 139 Cong. Rec S16,186 18, 1993) (statement gress (daily will realize a need for tariffs in the ed. Nov. role, fact, howev- Hollings). Communications Act. It is our Sen. less than a month after action; er, decision, simply congressional Transportation to forecast we the Surface the Court’s interpret later the statute before us. Subcommittee considered what it termed FCC, says modify’ ‘to means to are aware of that In MCI v. we mandates. congressional fashion.”) (cit moderately in change or minor is to have concluded, the Commission “if Dictionaey ing common carriers of the En authority to command RandoM House Language glish (2d 1987); ed. must come tariffs, authorization Web file not Dictionary court or from ster’s from this Congress, not ThiRD New International from English Dictionary (1976); 9 conception of how the own Oxford the Commission’s Dictionary (2d 1989); ed. light in of rewritten Law be Black’s should statute (6th 1990)). ed. F.2d at 1195. 1004 changed circumstances.” an assessment of later, also based its decision on AT & T v. we in years Seven direction, provision importance the Commis stat- in the same FCC pointed the filings sought modify. sion to Because will have to obtain ing, Commission “[t]he characteristics of rate- policy its are “the essential desired sanction congressional reasoned, regulated industry,” “[i]t the Court Again, we find F.2d at 736. course.” unlikely highly Congress would leave must Congress the Commission it is industry the determination of whether an will this court. persuade, not entirely, substantially, rate-regu be or even 203(b) B. even more agency lated to discretion —and through unlikely that it would achieve that by the Com- similarly unpersuaded areWe ‘modify permission a subtle to device as argument, that its modi- alternative mission’s — at -, rate-filing requirements.” 203(b) of the authority under section fication Range 114 S.Ct. at 2232. We find change it to Act allows clearly goes beyond kinds of Order 203(b) Tariff section. Section requirements of that modest modifications Commission provides: 203(b)(2). Range make under section may, in its discretion The Commission effectively introduces a different Order Tariff shown, modify any require- good cause ranges regime regulation based on —one authority by under the or ment made opposed rates as to discernable rates —which particular instances either this section may may regime, or but is better special applicable to by general order not the one that established. except that the or conditions circumstances require may not the notice (1) III. Conclusion paragraph to be period specified twenty days. hundred and than one more Range We find that the Commission’s 203(b)(2). we found 47 U.S.C. requirement clear Order violates the allowing the Commission language, that this “[ejvery of section common carri particular instances or “modify ... to showing ... ... er shall file schedules all special circum- general applicable to order charges.” We further find the Commis stances,” altera- suggests “circumscribed authority sion does not have the under sec “wholesale abandonment instead of tions” 203(b) modify requirements tion requirement.” MCI ... of a 203(a), allowing nondominant common find that the FCC’s au- at 1192. We F.2d Accordingly, ranges carriers to file of rates. modify allow it abandon thority does not grant petition we for review and vacate 203(a)’s requirement that all common Order. showing charges.” carriers file “schedules So ordered. Supreme Court’s recent decision largely disposes of the AT T FCC’s MCI v. & RMAN, Judge, concurring: SILBE Circuit point. The Court inter argument on this 203(b) completely agree majority’s I to confer on the Com with the preted section modify. analysis join opinion. I very limited am never mission a any partially based on theless dubitante not because of concern The Court’s decision “modify,” connoting reasoning reading of MCI the word its meaning Corp. 114 Telecommunications v. American Tel. change by increment. Co., - U.S. -, 2223, 129 (“Virtually every dictionary we & Tel. (1994), power attorney I carrier’s tariffs. If a but rather because had lapsed, tariff became ineffective even square the Court’s treatment simply cannot though entirely the technical defect went un in statutory provisions filed rate MCI and of filing lapse. noticed at the time of Industries, Steel, Primary v. U.S. Maislin upheld tariffs, this invalidation of filed 2759, 111 L.Ed.2d 94 497 110 S.Ct. U.S. describing “laek[ing] the filed rates as an (1990) Corp., Security Servs. v. Kmart with — sup essential element” and insufficient “to -, 128 L.Ed.2d U.S. port charges.” a reliable calculation of See (1994). Maislin, 121, 110 497 433 See U.S. — Kmart, at -, U.S. 114 S.Ct. at that a at 2763. It is rather obvious S.Ct. 1710. justices of are not comfortable with number Maislin, requiring adher logic the hard of interpretation That of the Commission’s invalidating regulation ence to filed rates and inconsis application and its to tariffs rates; negotiated thought by shippers Justice both tent Stevens carriers and to be was, persistent disapproval in of that effective as both Justice Thomas and rather his — out, Kmart, at -, Ginsburg pointed Justice in contraven opinion, see U.S. prior opinion, tion of the Court’s (Stevens, ICC v. concurring). at 1710 And S.Ct. J. Assoc., 354, 104 Trucking American 467 U.S. along in the dissenters with Justice Stevens (1984). S.Ct. that apparently apply reasoning MCI wish case the Court had held that the Commission flexibly of Maislin to the telecommunications part could not under most circumstances as industry, relaxing the filed rate doctrine statutory authority “reject” of its agency pursuit free of desirable allow tariffs reach back and “invalidate tariffs — MCI, at -, policy goals. See U.S. accepted objection.” it had without S.Ct. at 2234. ICC, Express Overland v. 996 F.2d however, majori difficulty, The real is the — (D.C.Cir.1993), remanded, vacated and ty opinion quite agree in Kmart. I with -, U.S. S.Ct. 128 L.Ed.2d 658 Ginsburg Justice is difficult to re “[i]t Kmart, however, majority in gard approach, and the Commissioner’s really stated that the Commission had not it, approval anything Court’s of as other than “retroactively,” in acted as it had American an end-run around the filed rate doctrine so Trucking the tariff because became invalid recently firmly upheld in Maislin.” only attorney power lapsed after the of — Kmart, at -, at 1717 S.Ct. pre-existing nonpartici- accordance with the ICC, (Ginsburg, dissenting). The obvious J. Kmart, pation rule. See ly permitted distressed with Maislin —which Trucking at 1709. Yet American bankrupt a trustee of a carrier to insist on rulemaking did not bar retroactive or deal recovering against shipper filed rate sense, retroactivity in its see with classic negotiated if even the carrier had a lower Bowen, Georgetown University Hosp. shipper up gim with —came (D.C.Cir.1988) II). (Georgetown It F.2d 323 get mick to around that case. The Commis prevented the from Commission second- fortuitously sion discovered that over 40% of guessing validity existing of tariff an as Mileage carriers whose tariffs referred shipping charges long after it the basis published by a Household Car Guides Goods published except had been under limited cir- (HGCB) neglected keep riers’ Bureau had (la, cumstances of a furtherance attorney” “power a current on file with the mandate). statutory See American Truck- pay Bureau or had failed to a nominal fee to 362-64, 367, ing, 467 U.S. at 104 S.Ct. at void for the Bureau. Commission’s Trucking American “non-participation” regulation stated published invalidated a tariff be- “[ajbsent powers effective concurrences thought product cause it was to be the attorneys, tariffs are void as a matter of activity. The Court unauthorized collusive 1312.4(d) (1993). law.” Accord 49 C.F.R. action under this examined Commission’s ingly, (and, the Commission held that a carrier incidentally, approved it strict standard position longer ease), according logic no had an “effective” in that but to the Kmart, though just easily tariff on file even there could be no the Commission could stemming mileage that a tariff from such a real doubt as to the rate or have held ab initio and there- was ineffective process the filed rate doctrine implicate

fore did retroactivity.

or notions analogized Kmart the Com

The Court non-partic interpretation of

mission’s parallel supposed

ipation regulation with expiration on a tariff. date of an treatment Kmart, 114 S.Ct. at

See respect, analogy due

1709. allWith puts an When a carrier tenuous.

rather tariff, indicates on his he

expiration date charge longer no clearly that he will

quite date, expiration

that rate after fact. certainly take notice of that

shipper will application difficulty the ICC’s regulation is that non-participation procedural a latent relied on typically would have been over

defect that entirely published invalidate

looked to

tariff, avoiding consequences thus

Maislin. opinion reasoning of the Kmart

Since I am inclined to believe unpersuasive,

sois Ginsburg’s explanation regard-

that Justice

ing circumvention of Maislin is the Court’s Therefore I lack confidence

correct. logic of Maislin and

Court will adhere to the consequences again faced with

MCI when post. undesirable ex appear CORPORATION, RAIL

CONSOLIDATED

Petitioner, COMMERCE COM-

INTERSTATE

MISSION; United States

America, Respondents, Railway & Hudson

Delaware

Company, Intervenor.

No. 93-1390. Appeals, States Court of

United

District Columbia Circuit.

Argued Oct. 20, 1995.

Decided Jan.

Case Details

Case Name: Southwestern Bell Corporation v. Federal Communications Commission, and United States of America, United States Telephone Association, Intervenors

Court Name: Court of Appeals for the D.C. Circuit

Date Published: Jan 20, 1995

Citation: 43 F.3d 1515

Docket Number: 93-1562, 93-1568, 93-1590 and 93-1624

Court Abbreviation: D.C. Cir.