Filed: Jul. 10, 2007
Latest Update: Mar. 02, 2020
Summary: FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT In re: NOS COMMUNICATIONS, MDL No. 1357, OLGA FISHER, d/b/a Fisher Enterprises; HUDSON CAP PARTNERS; KIDS INTERNATIONAL, INC.; OMNIPURE FILTER COMPANY; NATIONAL FOOD DISTRIBUTORS, INC.; HONEYMOON PAPER PRODUCTS, INC.; No. 04-17040 CTA RESEARCH CORPORATION; SOUND TRAVEL, Plaintiffs-Appellants, D.C. No. CV-01-00861-LDG and OPINION PETER ENNS, Plaintiff, v. NOS COMMUNICATIONS, MDL No. 1357; AFFINITY NETWORK INCORPORATED, dba Q
Summary: FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT In re: NOS COMMUNICATIONS, MDL No. 1357, OLGA FISHER, d/b/a Fisher Enterprises; HUDSON CAP PARTNERS; KIDS INTERNATIONAL, INC.; OMNIPURE FILTER COMPANY; NATIONAL FOOD DISTRIBUTORS, INC.; HONEYMOON PAPER PRODUCTS, INC.; No. 04-17040 CTA RESEARCH CORPORATION; SOUND TRAVEL, Plaintiffs-Appellants, D.C. No. CV-01-00861-LDG and OPINION PETER ENNS, Plaintiff, v. NOS COMMUNICATIONS, MDL No. 1357; AFFINITY NETWORK INCORPORATED, dba Qu..
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: NOS COMMUNICATIONS,
MDL No. 1357,
OLGA FISHER, d/b/a Fisher
Enterprises; HUDSON CAP
PARTNERS; KIDS INTERNATIONAL,
INC.; OMNIPURE FILTER COMPANY;
NATIONAL FOOD DISTRIBUTORS, INC.;
HONEYMOON PAPER PRODUCTS, INC.;
No. 04-17040
CTA RESEARCH CORPORATION;
SOUND TRAVEL,
Plaintiffs-Appellants,
D.C. No.
CV-01-00861-LDG
and OPINION
PETER ENNS,
Plaintiff,
v.
NOS COMMUNICATIONS, MDL No.
1357; AFFINITY NETWORK
INCORPORATED, dba Quantumlink
Communications, Inc.,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Nevada
Lloyd D. George, District Judge, Presiding
Argued and Submitted
October 18, 2006—San Francisco, California
Filed July 10, 2007
8237
8238 IN RE: NOS COMMUNICATIONS
Before: J. Clifford Wallace, Andrew J. Kleinfeld, and
Jay S. Bybee, Circuit Judges.
Opinion by Judge Wallace
IN RE: NOS COMMUNICATIONS 8241
COUNSEL
Robert S. Green, Green Welling LLP, San Francisco, Califor-
nia, for the plaintiffs-appellants.
Joseph A. Boyle and Danny E. Adams, Kelley Drye & War-
ren LLP, Parsippany, New Jersey, and Vienna, Virginia, for
the defendants-appellees.
8242 IN RE: NOS COMMUNICATIONS
OPINION
WALLACE, Senior Circuit Judge:
This appeal arises from Multidistrict Litigation. Plaintiffs
are Olga Fisher; Hudson Cap Partners (Hudson); Kids Inter-
national, Inc. (Kids); Peter Enns; Omnipure Filter Company
(Omnipure); National Food Distributors, Inc. (National); Hon-
eymoon Paper Products, Inc. (Honeymoon); CTA Research
Corporation (CTA); and Sound Travel. They appeal from the
district court’s dismissal of their state law claims, claims
under the Federal Communications Act (FCA), 47 U.S.C.
§ 151 et seq., and claims under the Truth-in-Billing regula-
tions. Sound Travel also appeals from the district court’s
denial of its motion to remand to state court. We have juris-
diction under 28 U.S.C. § 1291, and we affirm in part, reverse
in part, and remand.
I.
NOS Communications, Inc. (NOS) and Affinity Network,
Inc. (Affinity) are telecommunications companies offering
interstate service. Plaintiffs were customers of and subject to
NOS’s and Affinity’s federally filed tariffs.
Fisher alleges claims for state law fraud and deceit, as well
as a claim under Nevada’s consumer fraud statute, Nevada
Revised Statute § 41.600. Damages are requested for the dif-
ference between the charges incurred at the rates billed by
NOS and the charges incurred at the rates billed by its previ-
ous carrier, statutory damages, attorney’s fees, and “other and
further relief as the [c]ourt may deem just and proper.”
National charges fraud regarding the rates and services
under NOS’s tariff. National’s prayer for relief includes com-
pensatory and punitive damages, but does not specify a
method for calculating the damages.
IN RE: NOS COMMUNICATIONS 8243
Omnipure asserts claims under the FCA, 47 U.S.C.
§§ 201(b) and 203(a), 47 C.F.R. § 61.2, and the Truth-in-
Billing regulations, 47 C.F.R. § 64.2001 et seq. Hudson, Hon-
eymoon, CTA, Kids, and Enns make essentially the same
claims. In addition, Honeymoon alleges fraud, and CTA
alleges intentional interference with contract. Kids and Enns
assert state law claims for fraud, fraudulent inducement,
breach of contract, and intentional infliction of emotional dis-
tress. The prayers for relief are varied, and include an order
that NOS cease and desist its practices, compensatory dam-
ages, attorneys fees, mandatory arbitration, exemplary dam-
ages, punitive damages, and other necessary and appropriate
damages. Honeymoon’s complaint includes a measure of
damages “no less than an amount equal to the difference
between the charges incurred at the rates billed by [its] previ-
ous long distance carriers and the charges incurred after
switching to NOS.”
Sound Travel alleges a claim under the Washington Con-
sumer Protection Act, requesting damages for economic loss
caused by NOS’s allegedly false and deceptive trade prac-
tices. It requests damages equal to economic loss caused by
NOS’s practices; attorney’s fees and litigation expenses; tre-
ble, exemplary, or punitive damages; and prejudgment inter-
est. NOS removed the action to federal district court,
contending that federal jurisdiction existed under 28 U.S.C.
§§ 1331, 1332, 1367, and 1441. The district court denied
Sound Travel’s motion to remand under 28 U.S.C. § 1447.
NOS and Affinity moved to dismiss plaintiffs’ complaints
pursuant to Federal Rule of Civil Procedure 12(b)(6). The dis-
trict court granted the motion against all plaintiffs and entered
judgment, holding that all claims brought by the plaintiffs
were barred by the filed-rate doctrine. This appeal followed.
II.
[1] In 1934, Congress enacted the FCA, which required
telecommunications carriers to file a list of tariffs with the
8244 IN RE: NOS COMMUNICATIONS
Federal Communications Commission (FCC) showing “all
charges” and “the classifications, practices, and regulations
affecting such charges.” 47 U.S.C. § 203(a). The purpose was
to “prevent[ ] unreasonableness and discrimination in
charges.” MCI Telecomms. Corp. v. AT&T Co.,
512 U.S. 218,
230 (1994). To ensure compliance with the tariff, “courts
developed the ‘filed rate doctrine,’ which prohibited a regu-
lated entity from charging rates for its services other than
those specified in its duly filed tariff.” Ting v. AT&T,
319
F.3d 1126, 1131 (9th Cir. 2003). Under the doctrine, “the
rights and liabilities defined by the tariff could not be varied
or enlarged by either contract or tort of the carrier,” and fed-
eral law preempted state law claims seeking to enforce a rate
that varied from the filed rate.
Id. (internal quotation marks &
citation omitted).
[2] The Telecommunications Act of 1996, Pub. L. No. 104-
104, 100 Stat. 56, subsequently “detariffed” the regulatory
scheme.
Id. at 1132. The new regime went into effect in July
2001, however, after each of the plaintiffs had already filed its
action. Since the filed rate doctrine was in force at the time
the plaintiffs filed their actions, we apply the law as it stood
when the doctrine was in force.
III.
Plaintiffs argue that the district court erred in dismissing
their claims under the FCA. The district court held that the
FCA claims were nonjusticiable pursuant to the filed-rate doc-
trine. We review the district court’s dismissal de novo. See
Zimmerman v. City of Oakland,
255 F.3d 734, 737 (9th Cir.
2001). A complaint should not be dismissed under Rule
12(b)(6) “unless it appears beyond a doubt that [plaintiffs] can
prove no set of facts in support of [their] claim[s] that would
entitle [them] to relief.” Evanns v. AT&T Corp.,
229 F.3d 837,
839 (9th Cir. 2000) (internal quotation marks & footnote
omitted).
IN RE: NOS COMMUNICATIONS 8245
Under the FCA, every common carrier must file tariffs
showing “all charges” and the “classifications, practices, and
regulations affecting such charges.” 47 U.S.C. § 203(a). The
filed-rate doctrine “derives from the tariff-filing requirements
of the [FCA].”
Evanns, 229 F.3d at 840. We have described
the filed-rate doctrine as follows:
[O]nce a carrier’s tariff is approved by the FCC, the
terms of the federal tariff are considered to be the
law and to therefore conclusively and exclusively
enumerate the rights and liabilities as between the
carrier and the customer. Not only is a carrier forbid-
den from charging rates other than as set out in its
filed tariff, but customers are also charged with
notice of the terms and rates set out in that filed tariff
and may not bring an action against a carrier that
would invalidate, alter or add to the terms of the
filed tariff.
Id. (internal quotation marks & footnotes omitted).
[3] Plaintiffs argue that the “charges, practices, and regula-
tions in Defendants’ tariffs are unjust or unreasonable because
their terms are not clear and do not contain explicit explana-
tory statements regarding the rates and regulations.” This
argument is foreclosed. Brown v. MCI WorldCom Network
Servs., Inc., held that “no one may bring a judicial challenge
to the validity of a filed tariff,” and that “[t]he filed-rate doc-
trine precludes courts from deciding whether a tariff is rea-
sonable, reserving the evaluation of tariffs to the FCC.”
277
F.3d 1166, 1170-71 (9th Cir. 2002); accord
Cahnmann, 133
F.3d at 487. In Brown, the plaintiff’s claims were justiciable
only because the plaintiff sought to have the court interpret
and enforce the terms of a tariff, not to challenge the filed tar-
iff
itself. 277 F.3d at 1171-72. We observed, however, that the
filed-rate doctrine precludes courts from determining whether
a tariff is reasonable.
Id. at 1171.
8246 IN RE: NOS COMMUNICATIONS
[4] Plaintiffs are not helped by their citation of Security
Services Inc. v. KMart Corporation,
511 U.S. 431 (1994).
There, the Court held that the common carrier could not
recover under the tariff because there was essentially no tariff
on file.
Id. at 440-41. That is not the case here. Defendants
had a tariff on file that had been approved by the FCC. Plain-
tiffs’ FCA claims were a direct challenge to the filed rate, and
consequently barred by the filed-rate doctrine. Thus, we
affirm the district court’s dismissal of plaintiffs’ FCA claims.
IV.
Sound Travel contends that the district court erred in deny-
ing its motion for remand. Sound Travel’s complaint alleges
only one legal claim: violation of the Washington Consumer
Protection Act. In essence, Sound Travel alleges that NOS
violated the Washington Consumer Protection Act by market-
ing false billing information and by failing to notify consum-
ers of differences between the quoted price and the actual
price. It seeks damages due to economic loss, reasonable
attorney’s fees and litigation expenses, and treble, exemplary
and/or punitive damages. We review de novo the district
court’s denial of Sound Travel’s motion to remand. See
Audette v. Int’l Longshoremen’s & Warehousemen’s Union,
195 F.3d 1107, 1111 (9th Cir. 1999).
[5] A defendant may remove an action originally filed in
state court only if the case originally could have been filed in
federal court. 28 U.S.C. § 1441(a), (b). Where, as here, no
diversity of citizenship exists, a federal question is required
for removal. See Caterpillar Inc. v. Williams,
482 U.S. 386,
392 (1987); 28 U.S.C. § 1331. “The presence or absence of
federal-question jurisdiction is governed by the ‘well-pleaded
complaint rule,’ which provides that federal jurisdiction exists
only when a federal question is presented on the face of the
plaintiff’s properly pleaded complaint.”
Caterpillar, 482 U.S.
at 392. “[I]t is now settled law that a case may not be removed
to federal court on the basis of a federal defense, including the
IN RE: NOS COMMUNICATIONS 8247
defense of pre-emption, even if the defense is anticipated in
the plaintiff’s complaint, and even if both parties concede that
the federal defense is the only question truly at issue.”
Id. at
393.
[6] A corollary to the well-pleaded complaint rule is the
“complete pre-emption” doctrine, which applies in cases in
which “the pre-emptive force of a statute is so extraordinary
that it converts an ordinary state common-law complaint into
one stating a federal claim for purposes of the well-pleaded
complaint rule.”
Id. (internal citations & quotation marks
omitted). “Once an area of state law has been completely pre-
empted, any claim purportedly based on that pre-empted state
law is considered, from its inception, a federal claim, and
therefore arises under federal law.”
Id.
We have not addressed whether federal law completely pre-
empts state law claims in the area of interstate telecommuni-
cations. Other circuits, however, have addressed the issue.
[7] In Marcus v. AT&T Corp., the Second Circuit held that
complete preemption did not apply in the field of telecommu-
nications.
138 F.3d 46, 54 (2d Cir. 1989). It reasoned that
“[t]he limited applicability of the complete preemption doc-
trine [was] evidenced by the fact that the [Supreme] Court has
only approved its use in three areas: (1) claims under the
Labor Management Relations Act by a labor union against an
employer under a collective bargaining agreement, but not
claims arising from individual employment contracts, (2)
[ERISA] suits by a beneficiary, but not suits by a state against
an ERISA plan; and (3) certain Indian land grant rights.”
Id.
(internal citations & quotation marks omitted). Marcus thus
held “that federal common law does not completely preempt
state law claims in the area of interstate telecommunications.”
Id.
In contrast, the Seventh Circuit stated that prior to detarif-
fing, “the [FCA] completely preempted state law challenges
8248 IN RE: NOS COMMUNICATIONS
to the terms and conditions contained in a filed tariff.”
Boomer v. AT&T Corp.,
309 F.3d 404, 424 (7th Cir. 2002)
(citing Cahnmann v. Sprint Corp.,
133 F.3d 484, 489-90 (7th
Cir. 1998)). Cahnmann held that plaintiff’s state law claims
for fraud, violation of state consumer protection statutes, and
tort were thus removable to federal
court. 133 F.3d at 490. It
concluded that “[i]f a claim can arise only under federal law,
because federal law has extinguished the state law basis under
which it might otherwise arise, the case is removable to fed-
eral court even if the plaintiff sedulously avoids mention of
federal law in his complaint.”
Id.
In Cahnmann, however, the Seventh Circuit confronted a
situation where state law claims against a telecommunications
provider involved a challenge to the filed rate or otherwise
depended on the rate for damage calculations.
Id. at 488-90.
The state-law breach of contract and fraud claims challenged
the “Fridays Free” portion of Sprint’s filed rate.
Id. at 486.
The court concluded that the question before it was “whether
the [FCA] extinguishes the right to bring a suit for breach of
contract under state law when the effect of the suit would be
to challenge a tariff.”
Id. at 488. In the “Fridays Free”
instance, the tariff “defines the entire contractual relation
between the parties;” therefore federal law “occupies the
whole field, displacing state law.”
Id. at 489. Determining
there was “no space between the contract and tariff,”
id., the
Seventh Circuit held that the FCA pre-empted all state law
claims. Because Cahnmann did not confront an issue of a
state law claim not touching on the tariff, we do not read the
opinion as standing for blanket federal preemption in the tele-
communications field.
[8] Moreover, there is no indication that Congress intended
every state law cause of action within the scope of the FCA
to be preempted. Congress adopted a savings provision, 47
U.S.C. § 414, which expressly states that “[n]othing in this
chapter [ ] shall in any way abridge or alter the remedies now
existing at common law or by statute.” A savings clause is
IN RE: NOS COMMUNICATIONS 8249
fundamentally incompatible with complete field preemption;
if Congress intended to preempt the entire field of telecom-
munications regulation, there would be nothing for section
414 to “save,” and the provision would be mere surplusage.
See also
Marcus, 138 F.3d at 54 (stating that section 414 evi-
dences Congressional intent to allow some state law claims to
proceed). The Second Circuit’s reasoning in Marcus is per-
suasive and we hold that complete preemption does not apply
to federal regulation under the FCA.
[9] Unlike in Cahnmann, Sound Travel’s claim under the
Washington Consumer Protection Act at issue here can be
maintained without reference to federal law. Cf.
Cahnmann,
133 F.3d at 489-90 (holding that where the effect of contract
action is to challenge tariff, the action arises under federal
law). The relief sought under Sound Travel’s claim would not
necessarily require a setting aside of the filed tariff, or a rene-
gotiation of its terms. Cf.
Cahnmann, 133 F.3d at 490 (observ-
ing that allowing the fraud claims would “allow the original
tariff to be enforced, and the amended tariff set aside, in a suit
under state law”). Thus, we hold that complete preemption
does not apply, and reverse the district court’s denial of
Sound Travel’s motion to remand to the state court.
V.
We next turn to the question of whether the district court
erred in dismissing the state law claims of six plaintiffs based
on the filed-rate doctrine: Fisher, CTA, Kids, Enns, National,
and Honeymoon (collectively: state claim plaintiffs). They
raise three arguments as to why the filed-rate doctrine is inap-
plicable, two of which can be disposed of easily.
[10] First, the state claim plaintiffs argue that the filed-rate
doctrine does not apply because they seek to maintain their
litigation as class actions. This argument implicates one of the
coordinate justifications for the doctrine: the non-
discrimination principle. This principle holds that allowing a
8250 IN RE: NOS COMMUNICATIONS
state court to bind a provider to a rate that was neither filed
nor found to be reasonable would “undermine the congressio-
nal scheme of uniform rate regulation.” Ark. La. Gas Co. v.
Hall,
453 U.S. 571, 579 (1981) (applying filed-rate doctrine
to natural gas tariffs). In Marcus, the Second Circuit observed
that “the Supreme Court has rejected the suggestion that the
development of class actions, which might alleviate the . . .
concern about nondiscrimination, made the nondiscrimination
principle [of the filed-rate doctrine] inapplicable to a putative
class
action.” 138 F.3d at 61 (internal quotation marks &
alterations omitted) (citing Square D. Co. v. Niagara Frontier
Tariff Bureau, Inc.,
476 U.S. 409, 423 (1986)). We join the
Second Circuit in rejecting the argument that the filed-rate
doctrine is inapplicable to class actions.
[11] Second, state claim plaintiffs contend that the subse-
quent “detariffing” by the FCC make the filed-rate doctrine
inapplicable here. But the detariffing occurred in July 2001,
which was well after each of the plaintiffs had filed its action.
State claim plaintiffs do not contend that their claims arose
after this date. Thus, we reject this argument.
Of more significance is state claim plaintiffs’ next conten-
tion: that the nature of their state law claims make the filed-
rate doctrine inapplicable. They argue that the district court
erred in dismissing those claims under the filed-rate doctrine
because the state law claims do not challenge the reasonable-
ness of the filed-rate. They further contend that the filed-rate
doctrine is inapplicable to the extent that they allege damages
without reference to the filed-rate.
We recognize that some state law claims are indeed pre-
empted by the filed-rate doctrine. In AT&T Co. v. Central
Office Telephone, Inc., for example, the Supreme Court held
that state law claims that were “wholly derivative of the con-
tract claim for additional and better services” were preempted
by the filed-rate doctrine.
524 U.S. 214, 226 (1998); cf. Ark.
La. Gas Co. v.
Hall, 453 U.S. at 583 n.13 (“We save for
IN RE: NOS COMMUNICATIONS 8251
another day the question whether the filed rate doctrine
applies in the face of fraudulent conduct”) (applying the filed-
rate doctrine for natural gas). In Central Office, the tort claim
at issue “stem[med] from the alleged failure of AT&T to com-
ply with its contractual
relationship.” 524 U.S. at 226 (internal
quotation marks and alterations omitted); cf. In re Long Dis-
tance Telecomms. Litig.,
831 F.2d 627, 633 (6th Cir. 1987)
(holding that state law claims for fraud and deceit were not
preempted by the FCA, where the claims “do not require
agency expertise for their treatment and are within the con-
ventional experience of judges”) (internal quotation marks
omitted).
Similarly, in Evanns, we held that the filed-rate doctrine
barred state claims that the communications carrier had a
“duty to disclose” a fee that was included in the carrier’s tar-
iff. 229 F.3d at 840-41. Evanns concluded that “the filed rate
doctrine bars all claims — state and federal — that attempt to
challenge the terms of a tariff that a federal agency has
reviewed and filed.”
Id. at 840 (quoting County of Stanislaus
v. Pac. Gas & Elec. Co.,
114 F.3d 858, 866 (9th Cir. 1997))
(internal quotation marks and alterations omitted; emphasis
added).
We have also concluded that the measure of damages
sought sometimes indicates that the filed-rate doctrine applies.
See, e.g., Verizon Del., Inc. v. Covad Commc’ns Co.,
377 F.3d
1081, 1087 (9th Cir. 2004); Transmission Agency of N. Cal.
v. Sierra Pac. Power Co.,
295 F.3d 918, 933 (9th Cir. 2002)
(as amended). In Verizon, we rejected Verizon’s state law
claims because its damages were “in effect [ ] seeking an
increased rate” than that contained in the filed
tariff. 377 F.3d
at 1087.
Similarly, in Transmission Agency, we considered whether
the filed-rate doctrine, as applied to interstate electricity, pre-
empted certain fraud
claims. 295 F.3d at 933. We were care-
ful not to suggest “that in every case . . . a plaintiff could not
8252 IN RE: NOS COMMUNICATIONS
possibly demonstrate damages from fraud committed before
the state utility commission without implicating the filed rate
doctrine.”
Id. We stated that the claim at issue failed, how-
ever, because plaintiff did not “present a model of damages
that does not [implicate the filed-rate doctrine].”
Id. Preemp-
tion generally applies where the damages are measured by
comparing the filed-rate with the rate that allegedly should
have been charged.
Id., see also Cahnmann, 133 F.3d at 486-
490 (holding that preemption applied where the “relief sought
by the fraud counts is identical to that sought by the contract
count”).
[12] We hold that the state law claims are preempted to the
extent that they attempt to challenge the terms of the filed-rate
doctrine. Further, where the measure of damages requires
comparing the rates charged under the filed-rate with the rate
that allegedly should have been charged, the state claims are
preempted. However, to the extent that state claim plaintiffs
assert claims that neither attack the rates nor require reference
to the filed-rate for a calculation of damages, we hold that the
filed-rate doctrine is inapplicable.
Applying this test, we turn to the claims before us. We hold
that the claims of intentional infliction of emotional distress,
fraud, fraudulent inducement to switch contracts, intentional
interference with contract, and claims under the Washington
Consumer Protection Act and Nevada Consumer Fraud Stat-
ute are not preempted by the filed-rate doctrines. These claims
do not necessarily require a determination of the validity or
reasonableness of the tariffs. To the extent that the state claim
plaintiffs can prove damages without attacking the filed-rate,
these claims are not preempted. For example, injunctive relief
or consequential damages flowing from lost profits might be
assessed without reference to the rates. In contrast, damages
based on the difference between what NOS and Affinity
charged, at the filed-rate, and what state claim plaintiffs’ pre-
vious carrier charged, are precluded.
IN RE: NOS COMMUNICATIONS 8253
[13] Accordingly, we hold that the district court improperly
dismissed all the state law claims asserted by Fisher, CTA,
and Honeymoon. We observe that Fisher’s measure of dam-
ages included the difference between the charges incurred at
the rates billed by NOS and the charges incurred at the rates
billed by its previous carrier, which we hold is preempted by
the filed-rate doctrine. But insofar as Fisher (as well as the
other state claim plaintiffs) can prove damages that do not
refer to the filed-rate, its state law claims may proceed. We
reverse and remand these claims to the district court.
[14] We need not reach the Sound Travel claim as it is
ordered remanded. Kids’ and Enns’s claims for fraud, fraudu-
lent inducement, and intentional infliction of emotional dis-
tress were also improperly dismissed. All of National’s state
law claims were improperly dismissed, except the claim that
“NOS systematically breached its duty to the Class to exercise
reasonable care,” which we address below. We reverse the
dismissal of these claims, and remand to the district court.
[15] We hold that the remaining state law claims were
properly dismissed by the district court. Kids and Enns
pleaded a breach of contract claim, stating that defendant’s
actions “constitute a breach of the contract between the par-
ties.” National also alleges that NOS “systematically breached
its duty to the Class to exercise reasonable care, including its
duty to exercise reasonable care in disclosing its billing rates.”
In both instances, the rights and duties of the parties are gov-
erned by the contract between them. That contract is the filed
rate. See
Evanns, 229 F.3d at 841 (“that the defendant carriers
had obligations . . . beyond those set out in the filed tariffs . . .
is also barred by the filed-rate doctrine.”) (internal quotation
marks omitted). Since these claims “stem from the alleged
failure of [NOS] to comply with its contractual relationship,”
Central
Office, 524 U.S. at 226, they are preempted by the
filed-rate doctrine. The claims relating to breach of contract
and breach of the duty of reasonable care were properly dis-
8254 IN RE: NOS COMMUNICATIONS
missed by the district court, and we affirm the district court’s
dismissal of these state law claims.
VI.
Omnipure, Hudson, Honeymoon, Kids, and Enns advance
claims under the Truth-in-Billing requirements, but concede
that they did not receive any bills from NOS after the effec-
tive date of the Truth-in-Billing regulations. Thus, we must
first determine whether the Truth-in-Billing regulations
should be applied retroactively.
In Landgraf v. USI Film Products, the Supreme Court pro-
vided a framework for determining whether a statute should
be applied retroactively:
[T]he court’s first task is to determine whether Con-
gress has expressly prescribed the statute’s proper
reach. If Congress has done so, of course, there is no
need to resort to judicial default rules. When, how-
ever, the statute contains no such express command,
the court must determine whether the new statute
would have retroactive effect, i.e., whether it would
impair rights a party possessed when he acted,
increase a party’s liability for past conduct, or
impose new duties with respect to transactions
already completed. If the statute would operate retro-
actively, our traditional presumption teaches that it
does not govern absent clear congressional intent
favoring such a result.
511 U.S. 244, 280 (1994).
[16] Applying these principles to the present case, we hold
that the Truth-in-Billing regulations should not be applied
retroactively. The regulations state in part:
The purpose of these rules is to reduce slamming and
other telecommunications fraud by setting standards
IN RE: NOS COMMUNICATIONS 8255
for bills for telecommunications service. These rules
are also intended to aid customers in understanding
their telecommunications bills, and to provide them
with the tools they need to make informed choices in
the market for telecommunications service.
47 C.F.R. § 64.2400(a). Nothing in the language indicates a
clear congressional intent favoring retroactivity. In addition,
the regulation imposes new duties with respect to transactions
already completed. For example, it requires, among other
things, that telephone bills contain a clear description of
charges. 47 C.F.R. § 64.2401(b). The district court was cor-
rect in holding that the Truth-in-Billing regulation cannot be
retroactively applied, and we affirm the district court’s dis-
missal of the Truth-in-Billing claims asserted by Omnipure,
Hudson, Honeymoon, Kids and Enns. Cf. Covey v. Hollydale
Mobilehome Estates,
116 F.3d 830, 835 (9th Cir. 1997)
(“[T]he courts disfavor retroactivity. Congressional enact-
ments and administrative rules will not be construed to have
retroactive effect unless their language requires this result”)
(quotation marks, alteration, & punctuation omitted).
[17] CTA’s claim under the Truth-in-Billing regulation, in
contrast, does not rest on retroactive application of the regula-
tion. The district court dismissed the claim, however, on the
ground that it was nonjusticiable under the filed-rate doctrine.
We reverse the district court’s dismissal of CTA’s Truth-in-
Billing claim. Like the state law claims discussed above, adju-
dication of this claim does not rest on a determination of the
reasonableness or validity of the filed tariff. Instead, the ques-
tion is whether NOS sent bills that were clear and non-
misleading, as required by the regulation. See 47 C.F.R.
§ 64.2401(b). The calculation of damages for violation of the
regulations does not necessarily depend on the filed-rate.
Thus, we reverse the district court’s dismissal of this claim
and remand for further proceedings.
AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED.