WILLIAM J. BROWN, III, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, AND ON BEHALF OF THE GENERAL PUBLIC, PLAINTIFF-APPELLANT
v.
MCI WORLDCOM NETWORK SERVICES, INC., DEFENDANT-APPELLEE
No. 00-56171
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
Argued and Submitted December 7, 2001
Filed January 17, 2002
[Copyrighted Material Omitted]
Michael Padilla, O'Mara & Padilla, San Diego, California, for plaintiff-appellant William J. Brown.
Jeffrey A. Rosenfeld, Daniel J. Schultz, Antony E. Buchignani, Piper Marbury Rudnick & Wolfe Llp, Los Angeles, California; Thomas F. O'Neil III, David T. Smorodin, Mci WorldCom, Inc., Washington, DC, for defendant-appellee Mci WorldCom Network Services, Inc.
Appeal from the United States District Court for the Central District of California Gary A. Feess, District Judge, Presiding D.C. No. CV-99-11522-GAF
Before: Thomas G. Nelson and William A. Fletcher, Circuit Judges, and Ann L. Aiken, District Judge.*
OPINION
W. Fletcher, Circuit Judge
William Brown appeals the district court's dismissal of his class-action complaint alleging overcharging by telephone service provider MCI WorldCom, Inc. (MCI). The district court held that Brown's suit was barred by the filed-rate doctrine. The district court further held that Brown's claim must be resolved in the first instance by the Federal Communications Commission (FCC) pursuant to the doctrine of primary jurisdiction. We hold that because Brown seeks only to enforce an existing, FCC-approved tariff, he has properly stated a claim under federal law. Accordingly, we reverse and remand.
I.
In his amended complaint, Brown alleged that he entered into a two-year contract with MCI to provide telephone service to his two office locations. Each location was to have three phone lines. MCI assigned a separate "account number" to each of the six lines. MCI also assigned a "customer number" to Brown, and then assigned an additional account number to Brown's customer number at each of the two locations. Brown alleged MCI improperly charged him $10 per month for the account numbers assigned to his two customer numbers, even though there were no associated phone lines. The result, according to Brown, was that he was charged as if he had eight lines, even though he had only six.
Brown contacted MCI to complain of the overcharge to one of his two office locations. MCI told Brown the overcharge was due to a computer error, issued him a credit, and modified his account so that he would no longer be charged the $10 minimum fee on his customer number. However, Brown did not notice or complain of the overcharge to his second office location. MCI did not modify that account. It is not clear from the complaint if or when the charges on the second location's account were ever modified.
The district court dismissed Brown's amended complaint with prejudice for failure to state a claim upon which relief could be granted. See Fed. R. Civ. P. 12(b)(6). The district court did not address whether MCI's tariff permits the billing practice Brown challenges. Rather, it concluded that because Brown's claim was related to MCI's tariff, the claim was barred by the filed-rate doctrine. The court additionally held that Brown's claim was barred by the doctrine of primary jurisdiction, and stated that Brown must seek relief before the FCC. The district court denied Brown's request for a stay, refusing to "speculate" as to whether the statute of limitations might run while Brown pursued his claim with the FCC. We review de novo the district court's dismissal. See Evanns v. AT&T Corp.,
II.
Rates charged by "common carriers," including telephone service providers such as MCI, are regulated by the FCC pursuant to the Federal Communications Act of 1934 (FCA), 47 U.S.C. §§ 151 et seq. Every carrier is required to file a tariff with the FCC listing its schedule of charges. Id. §§ 203(a). Once a tariff is approved, it "bind[s] both carriers and shippers with the force of law." Lowden v. SimondsShields Lonsdale Grain Co.,
Customers alleging that a carrier has violated a filed tariff (or otherwise violated the FCA) may choose to bring their complaints to the FCC or to "any district court of the United States of competent jurisdiction." 47 U.S.C.§§ 207. However, the filed-rate doctrine (also called the filed-tariff doctrine) "bars all claims--state and federal--that attempt to challenge the terms of a tariff that a federal agency has reviewed and filed." Evanns,
The purpose of the FCA's tariff-filing requirement is to "prevent[ ] unreasonable and discriminatory charges." Central Office,
In addition to barring suits challenging filed rates and suits seeking to enforce rates that differ from the filed rates, the filed-rate doctrine also bars suits challenging services, billing, or other practices when such challenges, if successful, would have the effect of changing the filed tariff. Central Office,
The Supreme Court disagreed, explaining, "[r]ates . . . do not exist in isolation. They have meaning only when one knows the services to which they are attached. Any claim for excessive rates can be couched as a claim for inadequate services and vice versa." Id. at 223. Even though the billing option chosen by COT was not covered by the tariff, the court held that the claim seeking to enforce the option was barred.
[T]he additional services and guarantees that[COT] claims it was entitled to by virtue of [AT&T's ] representations and petitioner's sales brochures--viz., faster provisioning, the allocation of charges through multilocation billing, and various matters relating to deposits, calling cards, and service support. . .--all pertain to subjects that are specifically addressed by the filed tariff.
Id. at 224-25. As the Court explained, COT's complaint about terms and service was, at bottom, a complaint about rates. The filed-rate doctrine thus prevents suits seeking to enforce agreements outside the tariff (i.e., indirectly challenging the validity of a tariff) as well as suits directly challenging the validity of a tariff. But it "does not serve as a shield" staving off claims against a carrier based on the tariff itself. Lovejoy,
Brown does not challenge the validity of the tariff, either directly or indirectly. The portion of MCI's tariff at issue here authorizes MCI to charge a $10 minimum usage fee, providing in part:
Each customer's usage must equal or exceed $10.00 in each monthly billing period. If in any monthly period a customer's [sic] fails to equal or exceed $10.00 the customer will be billed and required to pay the difference between the customer's actual usage and the $10.00 minimum usage threshold. Monthly recurring fees and charges will not count towards satisfying the minimum usage threshold.
Brown's complaint does not allege that the $10 minimum monthly usage fee established by the tariff is unreasonable or invalid. Rather, Brown complains that MCI violated the tariff by creating extraneous "accounts" at each of Brown's office locations, and then wrongfully charging each of those accounts--which did not have associated phone lines or phone service--an unauthorized $10 monthly fee.
In finding Brown's claim barred by the filed-rate doctrine, the district court misunderstood the scope of the Central Office holding. The district court concluded,"The fees Brown challenges are charged because of the contractual relationship between him and MCI, and that contractual relationship arises out of, is governed by, and is wholly occupied by the filed tariff." While it is true that Brown's complaint must be resolved with reference to the tariff, that does not mean the district court may not hear the suit. The filed-rate doctrine precludes courts from deciding whether a tariff is reasonable, reserving the evaluation of tariffs to the FCC, but it does not preclude courts from interpreting the provisions of a tariff and enforcing that tariff. If the filed-rate doctrine were to bar a court from interpreting and enforcing the provisions of a tariff, that doctrine would render meaningless the provisions of the FCA allowing plaintiffs redress in federal court. See 47 U.S.C. §§§§ 206-07.
Brown seeks merely to enforce the tariff. He does not claim that he was promised something outside the tariff and then denied it, as in Central Office. See
III.
The district court also held that under primary jurisdiction principles Brown must present his claim to the FCC. In so holding, the district court misapprehended the primary jurisdiction doctrine. The doctrine does not require that all claims within an agency's purview be decided by the agency. Nor is it intended to "secure expert advice" for the courts from regulatory agencies every time a court is presented with an issue conceivably within the agency's ambit. See United States v. General Dynamics Corp.,
Primary jurisdiction is not implicated simply because a case presents a question, over which the FCC could have jurisdiction, regarding the interpretation of a single tariff. Rather, primary jurisdiction is properly invoked when a case presents a far-reaching question that "requires expertise or uniformity in administration." Id. See also, e.g., Allnet Communication Serv., Inc. v. National Exch. Carrier Ass'n, Inc.,
The doctrine of primary jurisdiction should not be confused with the requirement of exhaustion of administrative remedies. The FCA does not require that a plaintiff exhaust his administrative remedies before proceeding to federal court to enforce a tariff. In providing a federal court forum under the FCA, Congress made clear that it did not intend to require that suits brought to enforce tariffs first be decided by the FCC. Under 47 U.S.C. §§ 207, plaintiffs may elect to proceed either before the FCC or in district court.
It is not clear from the record so far compiled whether Brown's complaint presents the sort of complex and farreaching issues that are properly within the FCC's primary jurisdiction. If resolution of Brown's claim involves a straightforward interpretation of MCI's filed tariff, the district court will be competent to resolve the claim without resort to the FCC. However, at this stage of the proceedings, we cannot say with certainty whether the district court should eventually refer some or all of Brown's complaint to the FCC for resolution.
Primary jurisdiction "requires the court to enable a `referral' to the agency, staying further proceedings so as to give the parties reasonable opportunity to seek an administrative ruling." Reiter v. Cooper,
We REVERSE and REMAND for further proceedings consistent with this opinion.
Notes:
Notes
The Honorable Ann L. Aiken, United States District Judge for the District of Oregon, sitting by designation.