Elawyers Elawyers
Ohio| Change

Martha Self v. BellSouth Mobility, Inc., 11-13998 (2012)

Court: Court of Appeals for the Eleventh Circuit Number: 11-13998 Visitors: 72
Filed: Oct. 30, 2012
Latest Update: Feb. 12, 2020
Summary: Case: 11-13998 Date Filed: 10/30/2012 Page: 1 of 25 [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ No. 11-13998 _ D.C. Docket No. 2:98-cv-02581-JEO MARTHA SELF, an Individual,llllllllllll llllllllllllllllllllllllllllllll Plaintiff - Appellant, versus BELLSOUTH MOBILITY, INC., a Corporation, AMERICAN CELLULAR COMMUNICATIONS CORPORATION, CINGULAR WIRELESS, LLC, llllllll Defendants - llllllll Third Party Plaintiffs - llllllll Appellees, GTE WIRELESS INCORPORATED, a Corpo
More
                   Case: 11-13998         Date Filed: 10/30/2012   Page: 1 of 25

                                                                                   [PUBLISH]

                      IN THE UNITED STATES COURT OF APPEALS

                                    FOR THE ELEVENTH CIRCUIT
                                     ________________________

                                            No. 11-13998
                                      ________________________

                                   D.C. Docket No. 2:98-cv-02581-JEO



MARTHA SELF,
an Individual,llllllllllll

llllllllllllllllllllllllllllllll                             Plaintiff - Appellant,

                                           versus

BELLSOUTH MOBILITY, INC.,
a Corporation,
AMERICAN CELLULAR COMMUNICATIONS CORPORATION,
CINGULAR WIRELESS, LLC,

llllllll                                                     Defendants -
llllllll                                                     Third Party Plaintiffs -
llllllll                                                     Appellees,

GTE WIRELESS INCORPORATED,
a Corporation, et al.,

llllllll                                                     Defendants,

AT & T MOBILITY, LLC,

llllllll                                                     Defendant - Appellee,
                  Case: 11-13998    Date Filed: 10/30/2012   Page: 2 of 25

FEDERAL COMMUNICATIONS COMMISSION, et al.,

llllllll                                                 Third Party Defendants.

                               ________________________

                        Appeal from the United States District Court
                           for the Northern District of Alabama
                               ________________________

                                    (October 30, 2012)

Before TJOFLAT, CARNES, and JORDAN, Circuit Judges.

CARNES, Circuit Judge:

           Spurred on by Congress, the Federal Communications Commission issued

an order requiring telecommunications carriers to make payments into a Universal

Service Fund for subsidizing services for certain categories of consumers. The

carriers’ mandatory payments into the fund were calculated based on their

interstate and intrastate revenues. The FCC allowed the carriers to recover the

amount of their payments by charging their customers a monthly fee.

           After the order went into effect and the carriers made payments into the

fund and collected fees from their customers, a federal appeals court held that the

FCC had exceeded its authority by including intrastate revenues in the calculation

of the payments the carriers were required to make. The court did not decide what

should be done about the money the carriers had already paid into the fund or


                                             2
               Case: 11-13998       Date Filed: 10/30/2012     Page: 3 of 25

about the fees the customers had already paid to the carriers. The FCC, however,

issued orders determining that the court decision would not be applied

retroactively and that there would be no refunds of the payments that the carriers

had made. The question remains what should happen to the intrastate portion of

the fees that the customers paid to reimburse the carriers for the payments they

made to the fund. Are the customers entitled to a refund of any portion of the fees

they paid the carriers even though the FCC has denied the carriers a refund of any

portion of the payments the carriers made to the fund?

       That is the motivating issue in this case, but it is not the specific question

presented by this appeal. Instead, the question we have is whether the district

court has subject matter jurisdiction to decide that issue. In answering that

question, we are reminded of Justice Holmes’ view about the comparative

difficulty of deciding cases. He said that “when you walk up to the lion and lay

hold the hide comes off and the same old donkey of a question of law is

underneath.”1 In our experience that view is not always accurate, but it is here.

The best way for us to get the hide off the lion in this case is to summarize the




       1
         Letter from Oliver Wendell Holmes, Jr. to Frederick Pollock (Dec. 11, 1909), in
1 Holmes – Pollock Letters: The Correspondence of Mr. Justice Holmes and Sir Frederick
Pollock 1874–1932 156 (Mark DeWolfe Howe ed., 2nd ed. 1941).

                                              3
              Case: 11-13998     Date Filed: 10/30/2012    Page: 4 of 25

applicable law, including the relevant FCC orders, before setting out the

procedural history and facts. Be forewarned that there is a lot of hide.

                                           I.

      Congress passed the Telecommunications Act of 1996, Pub. L. No. 104-

104, 110 Stat. 56, to ensure that all Americans have access to a baseline level of

affordable telecommunications services. To help achieve that goal, the Act directs

the FCC to create “specific, predictable and sufficient Federal and State

mechanisms to preserve and advance universal service.” 47 U.S.C. § 254(b)(5).

The Act also lists several “[u]niversal service principles” that the FCC must follow

when creating those federal and state mechanisms. 
Id. § 254(b). One
principle is

that telecommunications services should be available to consumers “in all regions

of the Nation, including low-income consumers and those in rural, insular, and

high cost areas.” 
Id. § 254(b)(3). Another
principle is that “schools and

classrooms, health care providers, and libraries should have access to advanced

telecommunications services.” 
Id. § 254(b)(6). The
Act does not allocate any funds to finance the FCC’s creation and

administration of the “universal service support mechanisms.” 
Id. § 254(a)(1); see
also 
id. § 254(d). Instead,
it provides that all interstate telecommunications

carriers “shall contribute, on an equitable and nondiscriminatory basis, to the . . .

                                           4
              Case: 11-13998    Date Filed: 10/30/2012   Page: 5 of 25

mechanisms established by the [FCC] to preserve and advance universal service.”

Id. § 254(d). In
other words, carriers must fund any universal service support

mechanisms that the FCC creates under its § 254(b) authority.

      The FCC implemented the Act’s universal service requirements by issuing a

“Universal Service Order” in May 1997. In re Fed.-State Joint Bd. on Universal

Serv., 12 FCC Rcd. 8776 (1997) [hereinafter “Universal Service Order”], aff’d in

part and rev’d in part by Tex. Office of Pub. Util. Counsel v. FCC, 
183 F.3d 393
(5th Cir. 1999). That order created “universal service support mechanisms” for

four different categories of need: high-cost areas, low-income consumers, rural

healthcare providers, and schools and libraries. 
Id. at 8787, 8792–97.
All four

categories of support were financed through a Universal Service Fund (“USF”),

which was in turn funded by mandatory contributions from interstate

telecommunications carriers. 
Id. at 8797; see
also 
id. at 8780–81. The
contributions used to finance the high-cost and the low-income support

mechanisms were based solely on the carriers’ interstate revenues. 
Id. at 9201; see
also 
id. at 9198. The
contributions used to support schools, libraries, and rural

healthcare providers, however, were based in part on the carriers’ intrastate

revenues. 
Id. at 9203–05; cf.
id. at 9192 (“[T]he 
Commission has jurisdiction to

assess contributions for the universal service support mechanisms from intrastate

                                          5
               Case: 11-13998      Date Filed: 10/30/2012   Page: 6 of 25

as well as interstate revenues . . . .”).

       The Universal Service Order authorized carriers to recover their mandatory

USF contributions from certain customers. 
Id. at 9198–99. Specifically,
the order

stated that “carriers will be permitted, but not required, to pass through their

contributions to their interstate access and interexchange customers.” 
Id. at 9199 (emphasis
added). It seems odd to describe the carriers as “pass[ing] through their

contributions” by requiring customers to pay them, but such is FCC-speak. The

Universal Service Order did not specify how the carriers should pass through their

USF contributions if they chose to do so (which, of course, they did). The order

did provide that any passing through had to be done “in an equitable and

nondiscriminatory fashion.” 
Id. at 9209; see
also 
id. at 9199. Carriers
started

making their mandatory USF contributions and passing them through to customers

on January 1, 1998. 
Id. at 8813. In
later orders, the FCC appointed the Universal Service Administrative

Company to administer all universal service program activities. See, e.g., In re

Changes to the Bd. of Directors of the Nat’l Exch. Carrier Assoc., Inc., 12 FCC

Rcd. 18400, 18407, 18415 (1997); see also 47 C.F.R. § 54.701(a). That company

is responsible for, among other things, “billing [carriers], collecting contributions

to the universal service support mechanisms, and disbursing universal service

                                            6
              Case: 11-13998     Date Filed: 10/30/2012   Page: 7 of 25

support funds.” 47 C.F.R. § 54.702(b).

      After the FCC issued the Universal Service Order, several carriers

challenged it by filing petitions for review in various federal courts of appeals.

See generally 28 U.S.C. § 2344 (“Any party aggrieved by [a] final order [of the

FCC] may, within 60 days after its entry, file a petition to review the order in the

court of appeals wherein venue lies.”). The Judicial Panel on Multidistrict

Litigation consolidated those challenges in the Fifth Circuit, which resolved all of

them in Texas Office of Public Utility Counsel v. FCC, 
183 F.3d 393
(5th Cir.

1999).

      The Texas Office decision resolved a number of issues about the legality of

different parts of the Universal Service Order, but only one of the rulings is

relevant here. The Fifth Circuit decided that the FCC had “exceeded its

jurisdictional authority when it assessed contributions . . . based on the combined

intrastate and interstate revenues of interstate telecommunications providers.” 
Id. at 409. The
Court reasoned that, because the FCC has no jurisdiction to regulate

intrastate telecommunications matters, it could not calculate carriers’ USF

contributions based on a percentage of their intrastate revenues. See 
id. at 447–48. For
that reason, the Court “reverse[d] that portion of the [Universal Service] Order

that includes intrastate revenues in the calculation of universal service

                                          7
              Case: 11-13998     Date Filed: 10/30/2012   Page: 8 of 25

contributions.” 
Id. at 448; see
also 
id. at 449 (“[We]
deny the FCC jurisdiction

over . . . universal service contributions based on intrastate revenues.”).

      That is what the Fifth Circuit decided in Texas Office, but equally important

for our purposes is what the Court did not decide in that case. The Court did not

decide the legality of those parts of the Universal Service Order that allowed

carriers to pass through their USF contributions to customers. Nor did the Court

decide whether the Universal Service Administrative Company must refund the

intrastate-revenue-based USF contributions it had already collected from carriers.

Neither of those issues was before the Court.

      The Fifth Circuit released its Texas Office decision on July 30, 1999, with

the mandate scheduled to issue on September 20, 1999. See In re Fed.-State Joint

Bd. on Universal Serv., 15 FCC Rcd. 1679, 1685 (1999) [hereinafter “Fifth Circuit

Remand Order”]. Before the mandate issued, the FCC moved for a stay of

proceedings, which the Court granted in part by ordering that its mandate would

issue on November 1, 1999. 
Id. Until that date,
the FCC, via the Universal

Service Administrative Company, continued to collect some of the USF

contributions from carriers based on a percentage of their intrastate and interstate

revenues.

      During the period between January 1, 1998 (when the FCC’s Universal

                                           8
              Case: 11-13998     Date Filed: 10/30/2012    Page: 9 of 25

Service Order became effective), and November 1, 1999 (when the Texas Office

mandate issued), the Universal Service Administrative Company collected from

carriers about $1.6 billion in USF contributions that were based on the carriers’

intrastate revenues. See In re Fed.-State Joint Bd. on Universal Serv. Access

Charge Reform Univ. Serv. Contribution Methodology, 23 FCC Rcd. 6221, 6227

(2008). Many carriers passed through their USF contributions to customers by

charging them a monthly USF fee. One of those carriers was AT&T, the

defendant in this case, and one of its customers was Martha Self, the plaintiff.

      After the Fifth Circuit issued the Texas Office decision but before the

mandate issued on November 1, 1999, the FCC released what it has titled a “Fifth

Circuit Remand Order.” See 15 FCC Rcd. 1679. That order acknowledged that

the Texas Office decision had held “that the Commission had exceeded its

jurisdictional authority by assessing contributions . . . based, in part, on the

intrastate revenues of universal service contributors.” 
Id. at 1684. To
cure that

defect, the FCC’s Fifth Circuit Remand Order “eliminated intrastate revenues from

the contribution base[s]” of the schools and libraries support mechanism and also

from the rural healthcare providers support mechanism (the only two that were

funded using USF contributions based in part on intrastate revenues). 
Id. at 1685. The
FCC replaced those contribution formulas with a new one that calculated the

                                           9
             Case: 11-13998     Date Filed: 10/30/2012    Page: 10 of 25

carriers’ USF contributions by using a percentage of their interstate and

international revenues. 
Id. at 1685–86. Most
importantly for present purposes,

the Fifth Circuit Remand Order specified that the changes to the USF contribution

bases would apply prospectively and would become effective on the same day that

the mandate issued for the Texas Office decision, November 1, 1999. 
Id. at 1685; see
also 
id. at 1679. That
order did not mention the possibility of any refund.

      On December 6, 1999, AT&T filed with the FCC a petition for

reconsideration and clarification of its Fifth Circuit Remand Order. See In re

Fed.-State Joint Bd. on Universal Serv. Access Charge Reform, 20 FCC Rcd.

13779, 13780 (2005) [hereinafter “2005 Bureau Order”]. The petition asked the

FCC to “reconsider its decision to implement the Fifth Circuit’s decision on a

prospective basis.” 
Id. at 13780–81. The
petition also asked the FCC “to provide

retroactive refunds for [AT&T’s] contributions based on intrastate revenues for

the period from January 1, 1998 through October 31, 1999.” 
Id. at 13781. AT&T
states in its brief to this Court that it represented to the FCC that any refunds from

the USF “would be passed on to its customers.” Appellee Br. 3–4.

      The FCC did not respond to AT&T’s petition for more than five years. In

August 2005, the FCC’s Wireline Competition Bureau issued an order addressing,

but not resolving, the petition. This “2005 Bureau Order” “clarif[ied] the

                                          10
               Case: 11-13998       Date Filed: 10/30/2012       Page: 11 of 25

Commission’s decision in the [FCC’s 1999] Fifth Circuit Remand Order to apply

the Fifth Circuit decision prospectively,” which meant that the changes to the USF

contribution formulas “became effective on a prospective basis, beginning

November 1, 1999.” 20 FCC Rcd. at 13783 (2005) (emphasis omitted). The 2005

Bureau Order also reiterated the view that the Texas Office decision did not affect

those parts of the Universal Service Order that authorized carriers to pass through

their USF contributions to customers. See 
id. at 13779, 13781.
The order did not

address AT&T’s request for a refund.2

       A few years later, on April 11, 2008, the FCC finally issued an order

denying AT&T’s 1999 petition for reconsideration and a refund. See In re Fed.-

State Joint Bd. on Universal Serv. Access Charge Reform Universal Serv.

Contribution Methodology, 23 FCC Rcd. 6221 (2008) [hereinafter “2008 Order”].

This 2008 Order again clarified that carriers “may recover their [USF]

contributions from customers through rates charged for all services,” 
id. at 6224, and
it confirmed that the Texas Office decision applies only “prospectively,” 
id. at 2 It
is not clear whether an order issued by the FCC’s Wireline Competition Bureau is a
“final order[] of the Federal Communications Commission” within the meaning of 28 U.S.C. §
2342. We do not resolve that issue here because it does not affect the outcome of this case. We
do note, however, that the FCC has treated the 2005 Bureau Order as if it were issued by the full
Commission. See, e.g., In re Fed.-State Joint Bd. on Universal Serv. Access Charge Reform
Universal Serv. Contribution Methodology, 23 FCC Rcd. 6221, 6224 (2008) (describing the
2005 Bureau Order as one in which “we clarified” the impact of the Fifth Circuit’s Texas
Office decision).

                                               11
              Case: 11-13998    Date Filed: 10/30/2012   Page: 12 of 25

6226. Because the court decision does not apply retroactively, the FCC

concluded, AT&T is not entitled to a refund of the intrastate-revenue-based USF

contributions, which AT&T paid to the Universal Service Administrative

Company before the Texas Office mandate issued on November 1, 1999. 
Id. at 6222. The
FCC’s 2008 Order justified its prospective treatment of the Texas

Office decision and its denial of a refund to carriers by reasoning that “retroactive

application” of that decision “would work a manifest injustice” on current

customers and on the universal service support mechanisms. 
Id. at 6227. According
to the FCC, “a decision to compel refunds would require [the Universal

Service Administrative Company] to refund to the contributing carriers more than

one billion dollars in monies already disbursed to thousands of schools, libraries

and rural health care providers.” 
Id. Recouping that already-distributed
money

and sending it back to carriers “would be a bit like unscrambling eggs.” 
Id. at 6228 (quotation
marks omitted).

        The FCC also reasoned that, because it was not feasible to get the money

back from schools, libraries, and rural healthcare providers, the Universal Service

Administrative Company would have to raise the revenue for a refund by raising

the USF assessments on current carriers. 
Id. at 6227. Those
current carriers

                                          12
             Case: 11-13998    Date Filed: 10/30/2012   Page: 13 of 25

would, in turn, likely pass through the higher USF assessments to their current

customers. 
Id. at 6227–28. The
FCC explained:

       The net effect of any such refund would be that 2008 consumers
       subsidize charges that should have been paid by consumers in 1998
       and 1999 had the Commission assessed only interstate and
       international revenue (and excluded intrastate revenue). In our view,
       such an outcome—higher USF charges to today’s customers—would
       be fundamentally at odds with our Section 254 mandate to preserve
       and advance universal service. Today’s consumers would have to
       shoulder the burden of the refunds while having no responsibility for
       causing the underlying problem. The harms to today’s end-users and
       to the universal service system itself would be undeniable should
       retroactive effect be given to the Fifth Circuit decision.

Id. at 6227 (footnotes
omitted).

      On top of all that, the FCC continued, there would be large administrative

costs and burdens of issuing a refund. 
Id. at 6228. Carriers
would have to spend

an “enormous” amount of time to track down customers from the 1990s just to

give them a small refund. 
Id. The cost of
locating those former customers could

potentially “overwhelm the amounts available for distribution as refunds.” 
Id. at 6228–29. For
those reasons, the FCC’s 2008 Order refused to apply the Texas

Office decision retroactively and denied AT&T’s request for a refund of the

intrastate-revenue-based USF contributions, which AT&T had paid to the

Universal Service Administrative Company between January 1, 1998 and October

31, 1999. See 
id. at 6222. 13
             Case: 11-13998    Date Filed: 10/30/2012   Page: 14 of 25

                                        II.

      We now turn to the facts of this case, which are undisputed. In February

1995, before Congress passed the Telecommunications Act of 1996, Martha Self

entered into a contract with AT&T for interstate cellular phone service. A few

years later, AT&T notified her that, beginning with the January 1998 billing cycle,

it was going to start charging her a “per-line Universal Service Support charge.”

That charge was AT&T’s pass through of the USF contributions it was required to

make under the FCC’s Universal Service Order. Cf. 47 C.F.R. § 69.131

(authorizing telecommunications carriers to recover their USF contributions from

customers on a “per-line basis”); In re Telecomms. Relay Serv., N. Am.

Numbering Plan, 17 FCC Rcd. 24952, 24975–76 (2002) (explaining that carriers

may recover their USF contributions as a “separate universal service line-item

charge”).

      Unhappy about the new charge on her cell phone bill, Self filed a putative

class action against AT&T in Alabama state court in September 1998. Her

complaint asserted a number of state law claims, including breach of contract and

unjust enrichment. AT&T timely removed the case to federal district court.

      Not much happened in the case for several years after it was removed

because AT&T and other telecommunications carriers were busy challenging the

                                        14
             Case: 11-13998     Date Filed: 10/30/2012    Page: 15 of 25

FCC’s Universal Service Order in the Fifth Circuit’s Texas Office proceedings. In

March 2000, which was four months after the mandate had issued in the Texas

Office case, the district court stayed proceedings in this case pending the outcome

of AT&T’s petition to the FCC for reconsideration of the 1999 Fifth Circuit

Remand Order. The case sat still for four more years.

      In October 2004, Self filed a fifth amended complaint, which is the relevant

one for this appeal, re-alleging her state law claims of breach of contract and

unjust enrichment. She also added two federal claims under the Federal

Communications Act, 47 U.S.C. § 151 et seq. The first of those FCA claims

alleged that AT&T had violated § 201(b), which provides that “[a]ll charges,

practices, classifications, and regulations for and in connection with . . .

communication service, shall be just and reasonable.” Self’s second FCA claim

alleged that AT&T had violated § 202(a), which makes it unlawful “for any

common carrier to make any unjust or unreasonable discrimination in charges,

practices, . . . or services.” See generally 47 U.S.C. § 206 (authorizing actions

against carriers for violations of the FCA).

      Self’s theory of recovery for the claims in her fifth amended complaint is

that between January 1, 1998 and October 31, 1999, AT&T passed through to its

customers a USF support charge that was based, in part, on intrastate revenues.

                                          15
              Case: 11-13998    Date Filed: 10/30/2012    Page: 16 of 25

Because the Texas Office decision declared that those intrastate-revenue-based

USF contributions were unlawfully assessed on carriers, it follows that AT&T had

charged Self and customers like her unlawful fees to reimburse itself for

contributions that had been unlawfully assessed. Thus AT&T charged Self and

other customers unlawfully calculated fees. Charging customers those fees, Self

claims, was a breach of the cell phone service contract, an unlawful taking, and an

“unjust or unreasonable” charge in violation of 47 U.S.C. § 201(b) and § 202(a).

As a remedy for AT&T’s alleged misconduct, Self and her putative class members

seek a refund of the intrastate-revenue-based USF fees that AT&T charged its

customers between January 1, 1998 and October 31, 1999.

      After Self filed her fifth amended complaint, the district court lifted its stay

of proceedings and the case started moving again. Self and AT&T eventually filed

cross motions for summary judgment. AT&T’s motion contended that all of

Self’s claims should be dismissed for lack of subject matter jurisdiction because

they are improper collateral attacks in the district court on final orders of the FCC.

Self’s motion asked the district court to declare that it does have jurisdiction over

her claims.

      The district court withheld a ruling on the parties’ cross motions for

summary judgment until the FCC released its 2008 Order. Less than two weeks

                                          16
               Case: 11-13998        Date Filed: 10/30/2012        Page: 17 of 25

after that FCC order issued, the district court entered its own order resolving the

parties’ motions. The court made a number of rulings, but only one of them is at

issue in this appeal. The court ruled that it lacks jurisdiction to decide Self’s FCA

claims, her state law breach of contract claim, and her state law unjust enrichment

claim “to the extent that they seek retroactive application of the Texas Office

holding.”3

                                              III.

       At first blush, it would seem that the district court has jurisdiction over all

of Self’s claims based on a variety of statutes, including those creating federal

question jurisdiction, 28 U.S.C. § 1331, diversity jurisdiction, 
id. § 1332, and
supplemental jurisdiction, 
id. § 1367(a). And
beyond those more general grants of


       3
          The district court did not dismiss all of Self’s claims for lack of jurisdiction. It
concluded, for example, that “[t]o the extent that the plaintiff asserts claims of unjust and
unreasonable charges under [47 U.S.C.] § 201(b) (e.g., collecting more than was authorized,
using a greater factor than allowed by the FCC), the court does have jurisdiction to entertain the
same.” Self and AT&T continued to litigate that and other claims after the district court ruled on
the parties’ cross motions for summary judgment. AT&T later filed a renewed motion for
summary judgment on all of Self’s remaining claims (those that the court had not already
dismissed for lack of jurisdiction), and the court granted in full AT&T’s renewed motion. It was
then that Self filed her notice of appeal.

         Self does not challenge the court’s grant of summary judgment to AT&T on all of her
claims that the court concluded it did have jurisdiction to hear. She has raised only the issue of
whether the court “erred in holding that it was without jurisdiction to hear Self’s federal and state
law claims for a refund of universal service fees.” Appellant Br. 1. Accordingly, when we refer
to “Self’s claims” and “Self’s claims for a refund,” we are referring to the claims that are relevant
to this appeal—those that the district court dismissed for lack of jurisdiction when it ruled on the
parties’ initial cross motions for summary judgment.

                                                 17
              Case: 11-13998     Date Filed: 10/30/2012    Page: 18 of 25

jurisdiction, the Federal Communications Act gives district courts jurisdiction

over any claims brought under that statute. See 47 U.S.C. § 207 (“Any person

claiming to be damaged by any common carrier subject to the provisions of this

chapter may . . . bring suit for the recovery of the damages for which such

common carrier may be liable under the provisions of this chapter, in any district

court of the United States of competent jurisdiction.”).

      But things are not always as they seem. There is another statute in the mix,

and it provides that: “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 . . . all final orders of

the Federal Communications Commission made reviewable by section 402(a) of

title 47 . . . .” 28 U.S.C. § 2342 (emphasis added). Section 402(a) states that

“[a]ny proceeding to enjoin, set aside, annul, or suspend any order of the

Commission under this chapter . . . shall be brought as provided by and in the

manner prescribed in [28 U.S.C. § 2342].” 47 U.S.C. § 402(a).

      Because the courts of appeals have exclusive jurisdiction over claims to

enjoin, suspend, or invalidate a final order of the FCC, the district courts do not

have it. See FCC v. ITT World Commc’ns, Inc., 
466 U.S. 463
, 468, 
104 S. Ct. 1936
, 1939 (1984) (“Exclusive jurisdiction for review of final FCC orders . . . lies

                                           18
             Case: 11-13998     Date Filed: 10/30/2012    Page: 19 of 25

in the Court of Appeals.”). That means district courts cannot determine the

validity of FCC orders. See Nat’l Ass’n of State Util. Consumer Advocates v.

FCC, 
457 F.3d 1238
, 1247 (11th Cir. 2006) (explaining that 28 U.S.C. § 2342

“vests exclusive jurisdiction in the courts of appeals to determine the validity of all

final orders of the Commission” (alterations omitted)).

      The district court reasoned that 28 U.S.C. § 2342 deprived it of jurisdiction

to hear Self’s claims for a refund because “in order to adjudicate [her] claims it is

necessary to determine, in part, the validity of certain actions of the FCC.” The

court acknowledged that the Texas Office decision had held that the FCC could

not assess intrastate revenues of service providers in calculating USF

contributions. It went on to note that the FCC’s Fifth Circuit Remand Order and

its 2008 Order determined that Texas Office did not apply retroactively to events

occurring before the mandate for that decision issued on November 1, 1999. Self,

however, is seeking a refund of fees that she paid before that date—namely, the

USF fees that AT&T charged her between January 1, 1998 and October 31, 1999.

According to the district court, in order to rule that those USF fees were

unlawfully assessed it would have to decide that the Texas Office decision should

be applied retroactively to the fees Self paid before November 1, 1999, which

would contradict the prospective-only determinations in the two FCC orders. For

                                          19
              Case: 11-13998     Date Filed: 10/30/2012   Page: 20 of 25

that reason, the district court concluded that Self’s claims against AT&T

challenged the validity of the two FCC orders, and under 28 U.S.C. § 2342 it

lacked jurisdiction to decide such challenges. That is why the court dismissed

Self’s claims for lack of jurisdiction. Self disagrees with that reasoning and result.

                                         IV.

      With the hide off, this case does reduce to what Justice Holmes would call a

donkey of a question of law: Do Self’s claims necessarily conflict with final

orders of the FCC and thereby depend on the district court being able to

collaterally review the correctness or validity of those orders? We agree with the

district court that the answer is yes.

      In order to establish that she was unlawfully charged a portion of AT&T’s

intrastate-revenue-based USF contributions, Self relies on the Fifth Circuit’s

Texas Office decision. That decision does not help her unless it applies to fees

that were charged between January 1, 1998 and October 31, 1999, which is the

only period during which Self was charged fees based on AT&T’s intrastate

revenues. If, as the FCC orders in question determined, the Texas Office decision

does not apply to any fees charged before the mandate issued in that case on

November 1, 1999, then Self loses. It follows that Self’s claims necessarily

depend on her establishing that at least parts of the FCC’s Fifth Circuit Remand

                                          20
                Case: 11-13998   Date Filed: 10/30/2012   Page: 21 of 25

Order and its 2008 Order are wrong as a matter of law or are otherwise invalid.

She may seek review of the relevant parts of those orders and attempt to establish

the invalidity of them in the court of appeals, after seeking reconsideration in the

FCC, see 28 U.S.C. § 2344, but she may not seek collateral review of them by

filing claims in the district court, see 
id. § 2342; ITT
World 
Commc’ns, 466 U.S. at 468
, 104 S.Ct. at 1939–40.

       Self tries to disguise the donkey by arguing that her claims do not attack the

validity of a final FCC order because “there is no order of the FCC that required

[AT&T] to extract USF charges from its customers.” Appellant Br. 45. She

insists that because there is no FCC order compelling carriers to pass through their

intrastate-revenue-based USF contributions, her position that AT&T wrongfully

charged her those fees does not conflict with any FCC order. We are convinced

that it does.

       Although no FCC order compels carriers like AT&T to recover their USF

contributions from customers, at least three FCC orders expressly permit carriers

to do so. The Universal Service Order states that carriers are “permitted . . . to

pass through their contributions,” 12 FCC Rcd. at 9199, the Fifth Circuit Remand

Order reiterates that carriers may “recover[] their universal service contributions

[through] an end-user charge,” 15 FCC Rcd. at 1693, and the 2008 Order

                                          21
             Case: 11-13998      Date Filed: 10/30/2012    Page: 22 of 25

“reconfirm[s] that [carriers] may recover their universal service contributions

through rates charged for all of their services,” 23 FCC Rcd. at 6222. To prevail

on her claims, Self must establish that carriers are not permitted to pass through to

their customers the cost of their contributions, which would mean that the FCC

orders are wrong or invalid. The district court correctly concluded that it lacks

jurisdiction to review those orders.

      Self also contends the district court erred in ruling that her claims for a

refund conflict with the FCC’s 2008 Order, which is the one that denied AT&T’s

request for a refund from the Universal Service Administrative Company. She

argues that the 2008 Order applies only to “carriers seeking refunds of USF fees

that carriers were required to pay,” and points out that she is not a carrier but is

instead a customer seeking a refund from a carrier. Appellant Reply Br. 2. She

asserts that the order is “silent as to the retroactive application of Texas Office to

refund requests by customers,” Appellant Reply Br. 4, and because the 2008 Order

does not address whether Texas Office applies retroactively to refund requests by

customers, the district court would not have to review and invalidate that order to

decide that Texas Office applies retroactively to her claims.

      We disagree with Self about the scope of the 2008 Order. It did not decide

only that carriers are not entitled to a refund. In the petition leading to that order,

                                           22
             Case: 11-13998     Date Filed: 10/30/2012   Page: 23 of 25

AT&T sought reconsideration of the Fifth Circuit Remand Order and asked the

FCC to do two things: (1) determine that the Texas Office decision applied

retroactively, and (2) order that refunds be given to carriers “for contributions

based on intrastate revenues for the period from January 1, 1998 through October

31, 1999.” 2005 Bureau Order, 20 FCC Rcd. at 13780–81. The FCC’s 2008

Order denied both requests, reconfirming the agency’s view that Texas Office

applies only prospectively. See 2008 Order, 23 FCC Rcd. at 6226–27. The FCC

denied AT&T a refund in the 2008 Order because the Commission adhered to its

earlier decision that Texas Office did not apply retroactively. 
Id. at 6222. Self’s
argument is based on the false premise that the FCC’s 2008 Order did not decide

that the Texas Office decision applies prospectively only—from November 1,

1999 forward. It did decide that, and so did the FCC’s earlier Fifth Circuit

Remand Order.

      Finally, Self contends that her claims for a refund do not seek to invalidate

any FCC order because the Universal Service Order is “void ab initio” as a result

of the Texas Office decision. Appellant Br. 39. She cites to decisions holding that

agency actions that exceed the agency’s jurisdictional authority are “a mere

nullity,” Dixon v. United States, 
381 U.S. 68
, 74, 
85 S. Ct. 1301
, 1305 (1965), and

she argues that because the FCC acted beyond its authority in imposing on carriers

                                          23
             Case: 11-13998      Date Filed: 10/30/2012    Page: 24 of 25

a USF contribution based on their intrastate revenues, we should treat the

Universal Service Order as if it never existed. And if the order never existed, she

continues, then there was no FCC order between January 1, 1998 and October 31,

1999 that authorized AT&T to charge its customers intrastate-revenue-based USF

fees. If so, then AT&T had no legal authority to charge her those fees.

      This argument puts the cart before the donkey. For the district court to

decide that the Universal Service Order is void ab initio, it would have to first

decide that the Texas Office decision applies retroactively to invalidate that order

from the beginning, that is, from the date the order became effective on January 1,

1998. In order to do that, the district court would have to decide that the Universal

Service Order and the FCC orders determining that Texas Office does not apply

retroactively are invalid because they exceed the agency’s jurisdictional authority.

As we have already stated several times, that is something that the district court

lacks jurisdiction to decide. Because the district court lacks jurisdiction to review

the FCC’s orders at all, it lacks jurisdiction to decide whether the orders are

invalid because they are outside the jurisdictional authority of the agency. Cf.

King v. Cessna Aircraft Co., 
505 F.3d 1160
, 1165 (11th Cir. 2007) (explaining

that an appellate court that lacks jurisdiction to review a trial court’s decision also

lacks jurisdiction to review whether the trial court had jurisdiction over the case);

                                          24
              Case: 11-13998     Date Filed: 10/30/2012   Page: 25 of 25

Main Drug, Inc. v. Aetna U.S. Healthcare, Inc., 
475 F.3d 1228
, 1229–30 (11th Cir.

2007) (same). To pin the tail on the donkey: a court without jurisdiction to

review agency actions lacks jurisdiction to decide whether the agency had

jurisdiction to act as it did.

       The district court correctly decided that it lacked jurisdiction to decide

Self’s claims.

       AFFIRMED.




                                          25

Source:  CourtListener

Can't find what you're looking for?

Post a free question on our public forum.
Ask a Question
Search for lawyers by practice areas.
Find a Lawyer