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North County Comm v. Cellco Partnership, 08-55048 (2010)

Court: Court of Appeals for the Ninth Circuit Number: 08-55048 Visitors: 3
Filed: Feb. 10, 2010
Latest Update: Mar. 02, 2020
Summary: FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT NORTH COUNTY COMMUNICATIONS CORP., Plaintiff-Appellant, v. CALIFORNIA CATALOG & TECHNOLOGY, d/b/a CTT Telecomms (OCN 573B), Defendant, TGEC COMMUNICATIONS CO. LLC, CA (OCN 5969); UNITED STATES CELLULAR CORP-CALIFORNIA, (OCN 6261); GTE MOBILNET OF TAMPA, No. 08-55048 INC., (OCN 6339); ARCH WIRELESS HOLDINGS, INC., (OCN 6630); EL D.C. No. CV-06-01542-LAB DORADO CELLULAR, d/b/a Mountain Cellular (OCN 6980); BROOKS OPINION FIBE
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                  FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

NORTH COUNTY COMMUNICATIONS            
CORP.,
                Plaintiff-Appellant,
                 v.
CALIFORNIA CATALOG &
TECHNOLOGY, d/b/a CTT
Telecomms (OCN 573B),
                         Defendant,
TGEC COMMUNICATIONS CO. LLC,
CA (OCN 5969); UNITED STATES
CELLULAR CORP-CALIFORNIA, (OCN
6261); GTE MOBILNET OF TAMPA,                No. 08-55048
INC., (OCN 6339); ARCH WIRELESS
HOLDINGS, INC., (OCN 6630); EL                D.C. No.
                                           CV-06-01542-LAB
DORADO CELLULAR, d/b/a Mountain
Cellular (OCN 6980); BROOKS                   OPINION
FIBER PROPERTIES, INC., (OCN
7219); THE OTHER PHONE
COMPANY, INC., (OCN 7452);
CHARTER FIBERLINK CA-CCO LC,
(OCN 776C); FIRSTWORLD SO. CA,
(OCN 7839); A+ WIRELESS INC.,
d/b/a Advantage Wireless-CA
(OCN 822A); MPOWER
COMMUNICATIONS CORP-CA, (OCN
8322); CHOICE TELECOMM, LLC-CA
(OCN 885B); TRANS NATIONAL
COMMUNICATIONS INTL, INC.-CA
                                       


                            2419
2420         NORTH COUNTY COMM. v. CELLCO.



(OCN 864C); COMMPARTNERS,          
LLC-CA (OCN 869C); ALLEGIANCE
TELECOM, INC.-CA (OCN 8782;
ONESTAR COMMUNICATIONS, LLC-
MD (OCN 9992); INTEGRATED
COMMUNICATIONS CONSULTANTS,
INC.-CA (OCN 9397); NTCH-
CALIFORNIA, INC. (OCN 9607);
TELEMEX INTERNATIONAL-CA (OCN
998B); BAY AREA CELLULAR
TELEPHONE; PACIFIC CENTREX
SERVICES, INC.-CA (OCN 3662);
BULLSEYE TELECOM, INC.-CA (OCN
069A); COMM SOUTH COMPANIES,
INC.-CA (OCN 4 00A); ARRIVAL
COMMUNICATIONS, INC.-CA (4553);
BLUE CASA COMMUNICATIONS LLC-      
CA (OCN 111B); COMCAST
PHONE OF CALIFORNIA LLC-CA
(OCN 7610); COMMUNICATIONS
EXPRESS INC., d/b/a Com Express;
ECI COMMS INC., d/b/a ITS
Network Services-CA (OCN
3630); ERNEST COMMUNICATIONS,
INC.-CA (OCN 4961); EXCEL
TELECOMMUNICATIONS, INC.-CA
(OCN 243A); EXPRESS TELEPHONE
SERVICES, INC.-CA (OCN 093A);
GLOBAL NAPS CALIFORNIA, INC.-CA
(OCN 5300); IN TOUCH
COMMUNICATIONS, INC.-CA (OCN
047B);
                                   
               NORTH COUNTY COMM. v. CELLCO.   2421



LIGHTYEAR NETWORK SOLUTIONS,           
LLC-CA (OCN 5370); MCGRAW
COMMUNICATIONS, INC. (OCN
5597); METROPOLITAN TELECOMMS
CALIFORNIA, D/B/A Mettel-CA
(OCN 180A); PNG TELECOMMS
d/b/a Powernet Global Comms CA
(OCN 240B); POINTE
COMMUNICATIONS CORP-CA (OCN
2595); PREFERRED CARRIER
SERVICES, INC., d/b/a Phones For
All (OCN 5428); TELEPHONE
SERVICE INCORPORATED, d/b/a
FRIENDLYLEC CA (OCN 2015);
VCOM SOLUTIONS, INC.-CA (OCN
334B); WHOLESALE AIR-TIME, INC.-
CA (OCN 199B); LEAP WIRELESS
INTL, INC. d/b/a Cricket Comm,         
Inc. (OCN 0822); BLUE LICENSES
HOLDING LLC, (OCN 6010);
PACIFIC BELL MOBILE SERVICES,
(OCN 6672),
                         Defendants,
                 and
CELLCO PARTNERSHIP, d/b/a
Verizon Wireless-CA (OCN
6006); CELLCO PARTNERSHIP, d/b/a
Verizon Wireless-NM (OCN
6573); T-MOBILE USA, INC., (OCN
6529); CAL-ONE CELLULAR LP,
(OCN 6604); PHONECO, L.P.-CA,
(OCN 542B); CINGULAR WIRELESS;
CRICKET COMMUNICATIONS, INC.,
              Defendants-Appellees.
                                       
2422            NORTH COUNTY COMM. v. CELLCO.
        Appeal from the United States District Court
          for the Southern District of California
         Larry A. Burns, District Judge, Presiding

                    Argued and Submitted
             April 17, 2009—Pasadena, California

                    Filed February 10, 2010

    Before: Johnnie B. Rawlinson and N. Randy Smith,
    Circuit Judges, and Claudia Wilken,* District Judge.

                  Opinion by Judge Rawlinson




  *The Honorable Claudia Wilken, United States District Judge for the
Northern District of California, sitting by designation.
               NORTH COUNTY COMM. v. CELLCO.                2425




                          COUNSEL

Appellant North County Communications is represented by
Joseph G. Dicks (argued) and Christopher J. Reichman, Dicks
& Workman, San Diego, California.

Appellee Cal-One Cellular L.P. and Cellco Partnership are
represented by John Hueston and Laura W. Brill (argued),
Irell & Manella, Los Angeles, California.

Appellees T-Mobile USA, Cingular Wireless, and Cricket
Communications, Inc. are represented by Martin L. Fineman,
Suzanne K. Toller, and Gregory J. Kopta (argued), Davis
Wright Tremaine LLP, San Francisco, California.

Appellee PhoneCo, L.P. is represented by Alan E. Greenberg
and Kelly A. Van Nort, Wilson, Elser, Moskowitz, Edelman
& Dicker LLP, San Diego, California.


                          OPINION

RAWLINSON, Circuit Judge:

  The dispute in this telecommunications case stems from
Appellant North County Communication’s (North County)
contention that it has a private right of action to enforce vari-
ous compensation arrangements pursuant to the Federal Com-
munications Act. In its complaint, North County, a
2426             NORTH COUNTY COMM. v. CELLCO.
competitive local exchange carrier (CLEC), alleged that
Appellees, as commercial mobile radio service (CMRS) pro-
viders, failed to properly compensate North County for termi-
nating their calls on North County’s network.

   North County challenges the district court’s dismissal of its
declaratory judgment claims for lack of subject matter juris-
diction. Specifically, the district court held that North County
had no private right of action to enforce the compensation
arrangements in federal court. On appeal, North County
asserts that 47 U.S.C. §§ 251(b)(5), 201(b), 206 and 207, and
the implementing Federal Communications Commission
(Commission or FCC) regulation, 47 C.F.R. § 20.11, provide
the requisite private right of action. We disagree, and affirm
the district court’s judgment.

I.    BACKGROUND

     A.   Statutory and Regulatory Background

   Prior to enactment of the 1996 Telecommunications Act,
the Commission established rules governing connections
between Local Exchange Carriers (LECs) and CMRS provid-
ers. These rules required “mutual compensation for the
exchange of traffic between LECs and CMRS providers.” In
The Matter of Developing a Unified Intercarrier Compensa-
tion Regime (T-Mobile Decision), 20 F.C.C.R. 4855, 4856,
¶ 2 (2005) (footnote reference omitted). “In particular, the
rules required the originating carrier, whether LEC or CMRS
provider, to pay reasonable compensation to the terminating
carrier in connection with traffic that terminates on the latter’s
network facilities.” 
Id. at 4856,
¶ 2 (footnote reference omit-
ted).

   The Commission eventually determined that 47 U.S.C.
§ 251(b)(5) “obligates LECs to establish reciprocal compen-
sation arrangements for the exchange of intraMTA [Major
Trading Area] traffic between LECs and CMRS providers.”
                   NORTH COUNTY COMM. v. CELLCO.                           2427
Id. at 4856,
¶ 3 (footnote reference omitted). For traffic origi-
nating and terminating within the same MTA, reciprocal com-
pensation obligations under § 251(b)(5), rather than interstate
or intrastate access charges, applied. See 
id. at 4856-57,
¶ 3
(footnote references omitted).

   “Although section 251(b)(5) and the Commission’s recipro-
cal compensation rules reference an arrangement between
LECs and other telecommunications carriers, including
CMRS providers, they do not explicitly address the type of
arrangement necessary to trigger the payment of reciprocal
compensation or the applicable compensation regime, if any,
when carriers exchange traffic without making prior arrange-
ments with each other.” 
Id. at 4857,
¶ 4 (footnote reference
and internal quotation marks omitted). This lack of guidance
generated a legion of disputes among the carriers, see 
id. at 4858,
¶ 6, and prompted clarification from the Commission.

   As the existing rules did not expressly preclude the filing
of tariffs to set compensation, the Commission clarified that
the reciprocal compensation rules did not, at that time, pro-
hibit incumbent LECs from filing state termination tariffs,
which CMRS providers were obligated to accept. See 
id. at 4860,
¶ 9. “Because the existing compensation rules [were]
silent as to the type of arrangement necessary to trigger pay-
ment obligations, [the Commission found] that it would not
have been unlawful for incumbent LECs to assess transport
and termination charges based upon a state tariff.” 
Id. at 4860,
¶ 10 (footnote reference omitted). However, the Commission
also “amend[ed] [its] rules to make clear [its] preference for
contractual arrangements by prohibiting LECs from imposing
compensation obligations for non-access CMRS traffic pursu-
ant to tariff.” 
Id. at ¶
9 (footnote reference omitted).1
   1
     “[T]he term ‘non-access traffic’ refers to traffic not subject to the inter-
state or intrastate access charge regimes, including traffic subject to sec-
tion 251(b)(5) of the Act [reciprocal compensation arrangements] and ISP-
bound traffic.” T-Mobile Decision, 20 F.C.C.R. at n.6 (internal quotation
marks omitted).
2428              NORTH COUNTY COMM. v. CELLCO.
  Upon the effective date of the Commission’s amendments,
any “existing wireless termination tariffs [would] no longer
apply.” 
Id. at 4863,
¶ 14.

  B.    The District Court’s Dismissal of North County’s
        Third Amended Complaint

   According to its third amended complaint, North County
“is a CLEC that provides switched and non-switched local
exchange, exchange access, and other telecommunication ser-
vices to end users in California.” North County alleged that
the defendant-appellees “are CMRS and CLEC providers that
offer calling plans allowing calls to areas serviced by [North
County].”

   North County asserts that it “incurs costs in terminating
calls sent to [its] end users by the Defendants’ end users.”
North County alleged that defendant-appellees “knowingly
send traffic to [North County] in the absence of an intercon-
nection agreement or a reciprocal compensation agreement[2]
for [North County] to terminate to its end users customers. As
a common carrier, [North County] is obligated to terminate
calls received from other carriers to [North County’s] end
users.”

   North County alleged that it “began sending monthly bills
to the Defendants for traffic termination in January, 2003,”
and that it “billed the Defendants $ 0.004 per minute and
$0.007 per call set-up, before increasing its rate to the prevail-
ing market rate of $0.011 per minute.” According to North
County, the defendants refused to pay the bills or enter into
a compensation arrangement.
  2
    North County defined reciprocal compensation as “the payment
arrangement that recovers the costs incurred for the transport and termina-
tion of local telecommunication traffic originating on one party’s network
and terminating on the other party’s network.”
               NORTH COUNTY COMM. v. CELLCO.                2429
   Relying on the T-Mobile Decision, North County con-
tended that “it is proper for a LEC, like [North County], to be
compensated for traffic sent to its end-users that originates
with CMRS providers pursuant to its tariff on file.” North
County acknowledged that the Commission “limited the scope
of this finding to time periods preceding April 29, 2005, the
effective date of the amendments to 47 C.F.R. section 20.11
promulgated by the T-Mobile Decision.” According to North
County, “CMRS providers still remained obligated to comply
with the principles of mutual compensation and to pay reason-
able compensation to the LEC for the termination of traffic
that originates with the CMRS provider.”

   In its first cause of action, North County sought declaratory
judgment, alleging that “it is entitled to be compensated for
the termination of traffic which the Defendants sent and con-
tinue to send to [North County’s] end users . . .” North
County recognized that “while determining the precise rate of
compensation for termination of traffic, including call set-up
and minutes of use, under these circumstances may be a mat-
ter beyond the expertise of this court and within the expertise
of the appropriate regulatory body, the FCC has also indicated
that ‘collection actions’ do not state a cause of action under
its rules.” North County requested that the district court deter-
mine:

    (1) the number of calls and the number of minutes
    originating on the Defendants’ networks and termi-
    nated on [North County’s] network from April 29,
    2005 up through the time of trial, (2) that [North
    County] is entitled to receive mutual compensation
    for the termination of calls to [North County’s] end-
    users which originate on the Defendants’ networks,
    and (3) that the Defendants are required to commit
    to compensate [North County] at a rate to be deter-
    mined by the appropriate regulatory body, or else
    refrain from sending any traffic to [North County’s]
    end-users and refrain from taxing [North County’s]
2430            NORTH COUNTY COMM. v. CELLCO.
      limited resources, (4) that the Defendants’ conduct
      amounts to an unjust and unreasonable practice in
      violation of section 201 and 202 of the Federal Com-
      munications Act (47 U.S.C. §§ 201, 202) which has
      damaged [North County] (47 U.S.C. §§ 206, 207).

   North County’s second cause of action is premised on
quantum meruit. North County alleged that “Defendants
knowingly accepted, used, enjoyed and benefitted from the
services provided by [North County].” According to North
County, “[i]t would be unjust to allow the Defendants to have
the benefit of [North County’s] services without paying rea-
sonable compensation for these benefits and the Defendants
should be so ordered to pay.” North County sought damages
“covering the period beginning April 29, 2005 and continuing
up through the time of trial.”

  In its third cause of action, North County asserted damages
pursuant to the applicable tariff “covering the period begin-
ning 3 years before the filing of this complaint and continuing
up to and including April 28, 2005.”

   The district court granted defendant-appellees’ motion to
dismiss, holding that it lacked subject matter jurisdiction,
because North County failed to properly allege a federal
claim. The district court also concluded that declaratory judg-
ment “would not achieve the objectives of granting such
relief.” North County filed a timely notice of appeal.

II.    STANDARDS OF REVIEW

   “We review de novo dismissals under Rules 12(b)(1) and
12(b)(6).” Rhoades v. Avon Prods., Inc., 
504 F.3d 1151
, 1156
(9th Cir. 2007) (citing Holcombe v. Hosner, 
477 F.3d 1094
,
1097 (9th Cir. 2007)). “For the purposes of reviewing such
dismissals, and where, as here, no evidentiary hearing has
been held, all facts alleged in the complaint are presumed to
be true.” 
Id. (quoting Wilton
v. Seven Falls Co., 
515 U.S. 277
,
               NORTH COUNTY COMM. v. CELLCO.               2431
289-90 (1995)) (alterations and internal quotation marks omit-
ted).

   “District court decisions about the propriety of hearing
declaratory relief actions are reviewed for abuse of discre-
tion.” 
Id. (quoting Wilton
, 515 U.S. at 289-90) (alterations and
internal quotation marks omitted).

   “Although we review the ultimate decision to decline to
exercise jurisdiction for abuse of discretion, we conduct de
novo review of the court’s application of the primary jurisdic-
tion doctrine[.]” 
Id. at 1162
n.11 (citations omitted).

III.   DISCUSSION

  A.   North County’s Declaratory Judgment Act Claims

   [1] North County’s claims are hampered by the very relief
it seeks — a declaratory judgment. “[T]he Declaratory Judg-
ment Act does not by itself confer federal subject-matter juris-
diction[.]” Nationwide Mut. Ins. Co. v. Liberatore, 
408 F.3d 1158
, 1161 (9th Cir. 2005). “As required by Article III, courts
may adjudicate only actual cases or controversies.” 
Rhoades, 504 F.3d at 1157
(citation omitted). “The disagreement under-
lying the declaratory relief action must not be nebulous or
contingent but must have taken on a fixed and final shape so
that a court can see what legal issues it is deciding, what
effect its decision will have on the adversaries, and some use-
ful purpose to be achieved in deciding them.” 
Id. (quoting Pub.
Serv. Comm’n v. Wycott Co. Inc., 
344 U.S. 237
, 244
(1952)) (alteration omitted).

   [2] North County contends that the district court has sub-
ject matter jurisdiction under the Declaratory Judgment Act
because the Federal Communications Act creates a private
right of action for violations of its compensation require-
ments. “Where a federal statute does not explicitly create a
private right of action, a plaintiff can maintain a suit only if
2432           NORTH COUNTY COMM. v. CELLCO.
Congress intended to provide the plaintiff with an implied pri-
vate right of action.” In re Digimarc Corp. Derivative Litig.,
549 F.3d 1223
, 1230 (9th Cir. 2008) (quoting First Pac. Ban-
corp, Inc. v. Helfer, 
224 F.3d 1117
, 1121 (9th Cir. 2000))
(alteration and internal quotation marks omitted). “Accord-
ingly, the judicial task is to interpret the statute Congress has
passed to determine whether it displays an intent to create not
just a private right but also a private remedy.” 
Id. at 1231
(quoting Alexander v. Sandoval, 
532 U.S. 275
, 286 (2001))
(alteration and internal quotation marks omitted).

   Thus, it is not enough for North County to broadly pro-
claim that it is entitled to compensation under the Federal
Communications Act. Instead, North County “must demon-
strate that a federal statute vests [North County] with such a
right.” Rouse v. United States Dep’t of State, 
567 F.3d 408
,
418 (9th Cir. 2009), as amended (citation omitted) (emphasis
in the original). “Language in a regulation may invoke a pri-
vate right of action that Congress through statutory text cre-
ated, but it may not create a right that Congress has not.” 
Id. (quoting Alexander,
532 U.S. at 291) (parentheses and foot-
note reference omitted).

   A broad assertion of a private right of action is not easily
maintained under the Federal Communications Act, as our
statutory analysis is intertwined with the requisite deference
to the Commission’s interpretation of the Federal Communi-
cations Act. This is so because “the FCC is the agency that
is primarily responsible for the interpretation and implementa-
tion of the Telecommunications Act and of its own regula-
tions.” Greene v. Sprint Commc’ns Co., 
340 F.3d 1047
, 1052
(9th Cir. 2003) (citation omitted); see also Howard v. AOL,
208 F.3d 741
, 752 (9th Cir. 2000) (“Congress created the
FCC to enforce the Communications Act. The Supreme
Court’s opinions have repeatedly emphasized that the FCC’s
judgment regarding how the public interest is best served is
entitled to substantial judicial deference.”) (quoting FCC v.
WNCN Listeners Guild, 
450 U.S. 582
, 596 (1981)) (alteration
               NORTH COUNTY COMM. v. CELLCO.               2433
and internal quotation marks omitted). Absent a supporting
Commission determination, and with no showing of Congres-
sional intent to create a private right of action, North County
cannot assert a viable claim for relief. See 
Greene, 340 F.3d at 1050-51
.

   In support of its contention that it has a private right of
action to seek compensation from the CMRS providers in fed-
eral court, North County relies on 47 C.F.R. § 20.11(b); 47
U.S.C. § 251(b)(5); 47 U.S.C. § 201(b); 47 U.S.C. § 206; and
47 U.S.C. § 207. We examine each of these cited sources to
determine if the referenced statutory or regulatory language
provides for a private right of action or for a private remedy.
We simultaneously consider any relevant determinations from
the Commission. Applying this two-fold analysis and defer-
ring to the Commission’s primary jurisdiction, we conclude
that 47 U.S.C. § 251(b) and 47 C.F.R. § 20.11(b) cannot sup-
port North County’s claims for declaratory relief. “The pri-
mary jurisdiction doctrine is a doctrine specifically applicable
to claims properly cognizable in court that contain some issue
within the special competence of an administrative agency.”
W. Radio Servs. Co. v. Qwest Corp., 
530 F.3d 1186
, 1200 (9th
Cir. 2008) (citation and internal quotation marks omitted).
“[T]he primary jurisdiction doctrine is designed to protect
agencies possessing quasi-legislative powers and that are
actively involved in the administration of regulatory statutes.”
Clark v. Time Warner Cable, 
523 F.3d 1110
, 1115 (9th Cir.
2008) (citation and internal quotation marks omitted).
“Charged with the administration of the Telecommunications
and Federal Communications Acts, the FCC is such an agen-
cy.” 
Id. (citation omitted).
Under the primary jurisdiction doc-
trine, courts may decline to decide issues that are “within the
special competence of an administrative agency.” 
Id. at 1114.
Specifically, the Commission’s determinations that 47 U.S.C.
§ 251(b) is inapplicable to CMRS providers, and that the
Commission is the appropriate forum for pursuing compensa-
tion under 47 C.F.R. § 20.11(b) are fatal to North County’s
contention. We also conclude that North County’s declaratory
2434           NORTH COUNTY COMM. v. CELLCO.
judgment claims premised on 47 U.S.C. § 201(b) are fatally
flawed because the Commission has not determined that the
CMRS providers’ lack of compensation to CLECs violates
§ 201(b). Finally, we hold that, because North County cannot
establish an independent right to compensation, 47 U.S.C.
§ 206 and § 207 are not viable vehicles for it to seek relief.

    1.   47 C.F.R. § 20.11(b)

  47 C.F.R. § 20.11(b) provides:

    Local exchange carriers and commercial mobile
    radio service providers shall comply with principles
    of mutual compensation. (1) A local exchange car-
    rier shall pay reasonable compensation to a commer-
    cial mobile radio service provider in connection with
    terminating traffic that originates on facilities of the
    local exchange carrier. (2) A commercial mobile
    radio service provider shall pay reasonable compen-
    sation to a local exchange carrier in connection with
    terminating traffic that originates on the facilities of
    the commercial mobile radio service provider.

   [3] Pursuant to 47 U.S.C. § 251(b)(5), “[e]ach local
exchange carrier has the following duties: . . . The duty to
establish reciprocal compensation arrangements for the trans-
port and termination of telecommunications.”

   [4] According to North County, a violation of 47 C.F.R.
§ 20.11(b)’s compensation requirements is the equivalent of
a violation of 47 U.S.C. § 251(b)(5) for which it has a federal
remedy. However, nothing in the plain language of
§ 251(b)(5) provides for a right to compensation. Rather,
§ 251(b)(5) provides for the duties of local exchange carriers,
not even mentioning CMRS providers. See 47 U.S.C.
§ 251(b)(5).

   [5] Our reading of § 251(b)(5)’s plain language is bol-
stered by the Commission’s determination that § 251(b) is
                 NORTH COUNTY COMM. v. CELLCO.                    2435
inapplicable to CMRS providers. In North County Commc’ns
Corp. v. MetroPCS California, LLC, 24 F.C.C.R. 3807
(2009), North County alleged that MetroPCS, a CMRS pro-
vider, failed to compensate North County for traffic termi-
nated on North County’s network. See 
id. at 3807-08,
¶¶ 1, 4.
Rejecting North County’s claims made pursuant to § 251, the
Commission held:

      Section 251(b)(5) imposes a duty to establish recip-
      rocal compensation only upon LECs. Moreover, the
      Commission has stated unequivocally that CMRS
      providers will not be classified as LECs and are not
      subject to the obligations of section 251(b). There-
      fore, as a CMRS provider, MetroPCS is not subject
      to the obligations arising directly from section
      251(b) itself . . .

MetroPCS, 24 F.C.C.R. at 3814-15, ¶ 16 (footnote references
and internal quotation marks omitted).

   [6] The Commission also delineated the procedures that a
private party must undertake in pursuit of reasonable compen-
sation under 47 C.F.R. § 20.11(b). The Commission “de-
cline[d] to determine, in the first instance, what constitutes
reasonable compensation” under 47 C.F.R. § 20.11(b). 
Id. at 3810,
¶ 9 (footnote reference and internal quotation marks
omitted). The Commission expounded that “the more appro-
priate venue for determining what constitutes reasonable com-
pensation for North County’s termination of intrastate traffic
originated by MetroPCS is not this Commission, but rather
the California PUC, via whatever procedural mechanism it
deems appropriate under state law (e.g., complaint proceed-
ing, declaratory ruling proceeding, generic cost or rulemaking
proceeding).” 
Id. (internal quotation
marks omitted).3,4 The
  3
   The full FCC upheld the enforcement bureau’s determination that “the
California PUC is the more appropriate forum for determining the reason-
able compensation rate for North County’s termination of intrastate,
2436              NORTH COUNTY COMM. v. CELLCO.
Commission explained that it would consider North County’s
claims once a determination of the rate of reasonable compen-
sation was made by the appropriate state commission. 
Id. The Commission’s
ruling demonstrates that it is the proper forum
for North County’s claims premised on 47 C.F.R. § 20.11(b),
once North County has met the predicate procedural require-
ments.5

   [7] We readily defer to the Commission’s resolution of
North County’s claims asserted pursuant to 47 U.S.C. § 251,
and its determination of the procedures applicable to claims
made under 47 C.F.R. § 20.11(b). See Fones4All Corp. v.
F.C.C., 
550 F.3d 811
, 820 (9th Cir. 2008) (“[W]e are inter-
preting the FCC’s regulations, and courts should give
substantial deference to an agency’s interpretation of
its own regulations.”) (citation and internal quotation marks




intraMTA traffic originated by MetroPCS.” North County Commc’ns
Corp. v. MetroPCS California, LLC, No. EB-06-MD-007, FCC 09-100,
2009 WL 4005067
, at *3, ¶ 12 (F.C.C. November 19, 2009). The full FCC
also denied “the parties’ Applications for Review regarding the forum
issue primarily by affirming and incorporating by reference the reasoning
and holdings of the Bureau Merits Order.” 
Id. (footnote reference
omit-
ted).
   4
     The Commission observed that its T-Mobile Decision was consistent
with the conclusion that state commissions should initially determine the
reasonable rate of compensation. See MetroPCS, 24 F.C.C.R. at 3812-13,
¶ 12; see also North County Commc’ns Corp. v. MetroPCS California,
LLC, 
2009 WL 4005067
, at *4, ¶¶ 13-14.
   5
     North County’s assertion that the Commission equated a violation of
47 C.F.R. § 20.11 with a violation of the Federal Communications Act is
unfounded. The Commission did not make such a determination. Rather,
it “assume[d], without deciding, that a violation of rule 20.11 would be a
violation of the Act cognizable under section 208 of the Act.” MetroPCS,
24 F.C.C.R. at n.30 (citations omitted) (emphasis added). In any event, the
Commission’s determination demonstrates that the Commission, not the
federal courts, should make this decision.
                  NORTH COUNTY COMM. v. CELLCO.                       2437
omitted).6,7

      2.   47 U.S.C. § 201(b)

   Section 201(b) provides in relevant part:

      All charges, practices, classifications, and regula-
      tions for and in connection with such communication
      service, shall be just and reasonable, and any such
      charge, practice, classification, or regulation that is
      unjust or unreasonable is declared to be unlawful[.]

   [8] It is arguable that the plain language of § 201(b) con-
tains an implication that private parties may pursue remedies
for violations of the statute. However, given the broad lan-
guage of the statute, a more reasonable interpretation is that
it is within the Commission’s purview to determine whether
a particular practice constitutes a violation for which there is
a private right to compensation. See In re Long Distance Tele-
comm. Litig., 
831 F.2d 627
, 631 (6th Cir. 1987), as amended
  6
     North County maintains that CMRS providers are subject to the same
regulations as common carriers under 47 U.S.C. § 332(c)(1)(A) and 47
C.F.R. § 20.15(a). However, these broad statutory and regulatory provi-
sions appear to be limited to CMRS providers’ general obligations under
the Federal Communications Act. See 47 C.F.R. § 20.15(a) (“Commercial
mobile radio services providers, to the extent applicable, must comply
with sections 201, 202, 206, 207, 208, 209, 216, 217, 223, 225, 226, 227,
and 228 of the Communications Act”); see also 47 U.S.C. § 332(c)(1)(A)
(deferring expressly to regulations promulgated by the Commission). The
Commissions’s recent decision regarding CMRS providers supports this
conclusion. See MetroPCS, 24 F.C.C.R. at 3812, ¶ 11 (noting that § 332
does not apply to “intercarrier rates”).
   7
     North County’s reliance on the T-Mobile Decision to establish a private
right to compensation is also misplaced. In T-Mobile, the Commission
considered a petition seeking “to reaffirm that wireless termination tariffs
are not a proper mechanism for establishing reciprocal compensation
arrangements for the transport and termination of traffic.” 20 F.C.C.R. at
4855, ¶ 1 (footnote reference omitted). The Commission never addressed
violations of 47 C.F.R. § 20.11, nor the remedies for such violations.
2438              NORTH COUNTY COMM. v. CELLCO.
(“This [charge of unreasonable practices] is a determination
that Congress has placed squarely in the hands of the FCC.”)
(quoting Consol. Rail Corp. v. Nat’l Ass’n of Recycling
Indus., Inc., 
449 U.S. 609
, 612 (1981)) (alteration and internal
quotation marks omitted); see also 
Greene, 340 F.3d at 1049
-
50. However, the Commission has not determined that the
CMRS providers’ lack of payment to CLECs like North
County violates § 201(b).8 North County essentially requests
that the federal courts fill in the analytical gap stemming from
the absence of a Commission determination regarding
§ 201(b). This we decline to do. The district court properly
dismissed North County’s declaratory judgment claim prem-
ised on § 201(b), because entry of a declaratory judgment
“would . . . put interpretation of a finely-tuned regulatory
scheme squarely in the hands of private parties and some 700
federal district judges, instead of in the hands of the Commis-
sion.” 
Greene, 340 F.3d at 1053
(quoting Conboy v. AT&T
Corp., 
241 F.3d 242
, 253 (2d Cir. 2001)) (alteration and inter-
nal quotation marks omitted); see also In re Long Distance
Telecommunications 
Litig., 831 F.2d at 631
.9
  8
     North County argues that the Commission concluded in MetroPCS that
the CMRS providers’ failure to pay reasonable compensation violated
§ 201(b). However, in MetroPCS, the Commission merely “[f]or purposes
of [that] Order only, . . . assume[d], without deciding, that a CMRS carri-
er’s failure to enter in good faith into an agreement with a CLEC regard-
ing the termination of intrastate traffic, and a failure to pay a CLEC for
such termination, could constitute a violation of section 201(b) of the
Act.” MetroPCS, 24 F.C.C.R. at n.72 (citation omitted). The Commission
simply did not make the determination that North County seeks.
   9
     North County fails to provide any supporting authority evidencing
Congressional intent to create a private right to compensation pursuant to
§ 201(b). See In re Digimarc Corp. Derivative 
Litig., 549 F.3d at 1230-31
(“In the absence of clear evidence of congressional intent, we may not
usurp the legislative power by unilaterally creating a cause of action. Tou-
che Ross [& Co. v. Redington], 442 U.S. [560,] 578 [1979]). The ultimate
question is one of congressional intent, not one of whether this Court
thinks that it can improve upon the statutory scheme that Congress enacted
into law.”) 
Id. (parenthesis omitted).
               NORTH COUNTY COMM. v. CELLCO.                2439
   Our conclusion, that an FCC determination is integral to
claims involving § 201(b), is bolstered by the Supreme
Court’s recent decision in Global Crossing Telecommuns.,
Inc. v. Metrophones Telecommuns., Inc., 
550 U.S. 45
(2007).
In Global Crossing, the Supreme Court considered whether
§ 207 of the Telecommunications Act authorized a payphone
operator to bring a federal claim against carriers who refused
to pay compensation ordered by the 
FCC. 550 U.S. at 47
. The
FCC determined “that a carrier’s refusal to pay the compensa-
tion ordered amounts to an unreasonable practice within the
terms of § 201(b).” 
Id. at 52
(citation and internal quotation
marks omitted). “That determination, it believed, would per-
mit a payphone operator to bring a federal-court lawsuit under
§ 207, to collect the compensation owed.” 
Id. (citation omit-
ted). The Supreme Court opined that § 207’s language “makes
clear that the lawsuit is proper if the Commission could prop-
erly hold that a carrier’s failure to pay compensation is an
unreasonable practice deemed unlawful under § 201(b).” 
Id. at 52
-53 (internal quotation marks omitted) (emphasis in the
original).

   In reviewing § 207, the Supreme Court noted the linkage
between the statute’s purpose and the FCC’s regulations.
“[T]he purpose of § 207 is to allow persons injured by
§ 201(b) violations to bring federal-court damages actions.”
Id. at 53
(citations omitted). “History also makes clear that the
FCC has long implemented § 201(b) through the issuance of
rules and regulations. This is obviously so when the rules take
the form of FCC approval or prescription for the future of
rates that exclusively are reasonable.” 
Id. (citations omitted).
“It is also so when the FCC has set forth rules that, for exam-
ple, require certain accounting methods or insist upon certain
carrier practices, while (as here) prohibiting others as unjust
or unreasonable under § 201(b).” 
Id. (citations omitted).
“In-
sofar as the statute’s language is concerned, to violate a regu-
lation that lawfully implements § 201(b)’s requirements is to
violate the statute.” 
Id. at 54
(citation omitted) (emphasis in
the original).
2440              NORTH COUNTY COMM. v. CELLCO.
   Given these statutory and regulatory considerations, the
Supreme Court framed the issue as “whether the particular
FCC regulation . . . lawfully implements § 201(b)’s unreason-
able practice prohibition.” 
Id. at 55.
The Supreme Court
opined that “[t]he carrier’s refusal to divide the revenues it
receives from the caller with its collaborator, the payphone
operator, despite the FCC’s regulation requiring it to do so,
can reasonably be called a ‘practice’ ‘in connection with’ the
provision of that service that is ‘unreasonable.’ ” 
Id. (citation omitted).
   However, the Supreme Court limited its holding, as it did
“not suggest that the FCC is required to find carriers’ failures
to divide revenues to be § 201(b) violations in every
instance.” 
Id. at 56
(citation omitted). “Nor [did it] suggest
that every violation of FCC regulations is an unjust and unrea-
sonable practice. Here there is an explicit statutory scheme,
and compensation of payphone operators is necessary to the
proper implementation of that scheme. Under these circum-
stances, the FCC’s finding that the failure to follow the order
is an unreasonable practice is well within its authority.” 
Id. “[T]he FCC
properly implements § 201(b) when it reasonably
finds that the failure to follow a Commission, e.g., rate or
rate-division determination made under a different statutory
provision is unjust or unreasonable under § 201(b).” 
Id. at 60
(citations and emphasis omitted). “Moreover, in resting [its]
conclusion upon the analogy with rate setting and rate divi-
sions, the traditional, historical subject matter of § 201(b),
[the Supreme Court] avoid[ed] authorizing the FCC to turn
§§ 201(b) and 207 into a back-door remedy for violation of
FCC regulations.” Id.10
  10
     North County cites APCC Servs., Inc. v. Sprint Commc’ns Co., 
489 F.3d 1249
(D.C. Cir. 2007). However, in that case, the D.C. Circuit con-
sidered whether violations of § 201(b) provide a private right of action for
payphone service providers. See 
id. at 1250.
The D.C. Circuit held that,
in accordance with Global Crossing, “a violation of the regulation at issue
is a violation of § 201(b) of the Act, for which a private right of action is
                  NORTH COUNTY COMM. v. CELLCO.                       2441
  [9] In contrast to the facts in Global Crossing, the Com-
mission has not made any findings that CMRS providers’ fail-
ure to compensate CLECs constitutes an unreasonable
practice in violation of § 201(b). Because North County can-
not demonstrate a violation of § 201(b) in the absence of an
FCC determination, the district court properly dismissed
North County’s claims. See 
Greene, 340 F.3d at 1052-53
.

   Unable to demonstrate any statutory or regulatory viola-
tions for which there is a private right to compensation, North
County fares no better in seeking declaratory judgment under
47 U.S.C. § 206 and § 207.

     3.   47 U.S.C. § 206 and § 207

   47 U.S.C. § 206 provides in pertinent part:

     In case any common carrier shall do, or cause or per-
     mit to be done, any act, matter, or thing in this chap-
     ter prohibited or declared to be unlawful, or shall
     omit to do any act, matter, or thing in this chapter
     required to be done, such common carrier shall be
     liable to the person or persons injured thereby for the
     full amount of damages sustained in consequence of
     any such violation of the provisions of this chapter
     ...

   [10] 47 U.S.C. § 207 provides:

     Any person claiming to be damaged by any common
     carrier subject to the provisions of this chapter may
     either make complaint to the Commission as herein-

authorized by § 207 of the Act, in effect creating a right of action to rem-
edy a violation of the regulation itself.” 
Id. (citation omitted).
The D.C.
Circuit’s holding was based on the reasoning of Global Crossing and its
reference to the predicate determination by the Commission of a regula-
tory violation, facts not present here.
2442           NORTH COUNTY COMM. v. CELLCO.
    after provided for, or 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 juris-
    diction; but such person shall not have the right to
    pursue both such remedies.

The plain language of §§ 206 and 207 establish procedures for
private parties to pursue claims in federal court, but does not
establish an independent private right of action for compensa-
tion. In Greene, we clarified that there must be an independent
right to compensation for a private right of action to lie under
§§ 206 and 207. 
Greene, 340 F.3d at 1050-51
(“Because the
private right of action created by §§ 206 and 207 extends only
to violations of this chapter, and § 276 does not require IXCs
to compensate PSPs, there is no violation of § 276 for which
a private action explicitly lies for payphone compensation.”)
(internal quotation marks omitted). Similarly, because North
County has failed to establish a right to specific compensation
pursuant to any statute or regulation, §§ 206 and 207 cannot
form the basis for its compensation claims. See 
id. [11] We
have also held that claims pursuant to § 207, like
those premised on § 201(b), are particularly amenable to reso-
lution by the FCC. In W. Radio Servs. Co., we considered
whether the district court had subject matter jurisdiction over
claims that an ILEC failed to negotiate an interconnection
agreement in good 
faith. 530 F.3d at 1189
. We observed that
“issues regarding the applicability of § 207 are complex and
should not be decided without the participation of the FCC,
the agency principally responsible for the enforcement of the
Telecommunications Act.” 
Id. at 1204.
“Whether § 207 pro-
vides a cause of action may, in fact, have an impact on FCC
regulation in other contexts. For example, determining
whether § 207 provides a private right of action . . . may
involve interpreting the relationship between the terms com-
mon carrier, local exchange carrier, and telecommunications
carrier. Section 207 refers to damages caused by a common
                 NORTH COUNTY COMM. v. CELLCO.                     2443
carrier.” 
Id. (internal quotation
marks omitted). “On the one
hand, the statutory definitions and the use of the terms in
other provisions of the Acts suggest that local exchange carri-
ers are not necessarily a subset of common carriers.” 
Id. (cita- tions
omitted). “On the other hand, the statutory definition of
telecommunications carrier — a term which is used along
with local exchange carrier in § 252 — as well as FCC guid-
ance on the relationship between common carriers and tele-
communications carriers, suggests that local exchange carriers
may be common carriers for purposes of § 207.” 
Id. (citations and
internal quotation marks omitted). “As all three terms are
frequently used throughout the telecommunications acts,
interpreting them may have consequences in areas of telecom-
munications law other than the reach of § 207.” 
Id. at 1205.
We opined:

     In addition, interpretation of § 207 potentially impli-
     cates the jurisdiction of the F.C.C. Section 207 offers
     aggrieved individuals a choice of remedies for
     alleged violations of the Telecommunications Act:
     they may go to the F.C.C., presumably by bringing
     a complaint under § 208—which provides a mecha-
     nism for filing complaints before the F.C.C.—or to
     a district court. Given that the statute provides a
     choice between these two remedies, it may be logical
     to expect that if a claim can be brought in district
     court under § 207, it also may be brought to the
     F.C.C. under § 208. On the other hand, the F.C.C.
     has never directly decided whether it has jurisdiction
     over good faith claims . . .

Id. Because of
this complexity, § 207 does not lend itself to
declaratory relief.11
   11
      North County also posits, without legal support, that the CMRS pro-
viders’ payment to other LECs, and not North County, constitutes a dis-
criminatory practice prohibited by 47 U.S.C. § 202(a). North County has
waived this argument. See Maldonado v. Morales, 
556 F.3d 1037
, 1048
n.4 (9th Cir. 2009) (“Arguments made in passing and inadequately briefed
are waived.”) (citation omitted). In any event, the Commission has
rejected North County’s claims under § 202(a) against CMRS providers.
MetroPCS, 24 F.C.C.R., at 3817, ¶ 22.
2444               NORTH COUNTY COMM. v. CELLCO.
   [12] We, therefore, conclude that the district court properly
dismissed North County’s declaratory judgment claims, as
North County cannot demonstrate a right to compensation
under any statute or regulation that is enforceable pursuant to
a federal private right of action.12

  B.     North County’s State Law Claims

   [13] North County’s second cause of action was for quan-
tum meruit and its third cause of action sought compensation
pursuant to a state tariff. Because the district court dismissed
North County’s federal claims for lack of subject matter juris-
diction, the district court lacked jurisdiction over North Coun-
ty’s state claims. See Herman Family Revocable Trust v.
Teddy Bear, 
254 F.3d 802
, 806 (9th Cir. 2001) (“If the Dis-
trict Court had original jurisdiction, but dismissed for non-
jurisdictional reasons, then it could maintain supplemental
jurisdiction at its discretion. If it dismissed the underlying
claim on jurisdictional grounds, then it could not exercise sup-
plemental jurisdiction.”) (quoting Saksenasingh v. Sec’y of
Educ., 
126 F.3d 347
, 351 (D.C. Cir. 1997)).

  C.     The District Court’s Dismissal Of North County’s
         Claims With Prejudice13

   [14] “The primary jurisdiction doctrine allows courts to
stay proceedings or to dismiss a complaint without prejudice
  12
      North County also contends that the federal courts are the proper
forum for resolving its claims because the Commission does not decide
collection actions. However, the Commission has ruled that once North
County seeks a rate of reasonable compensation from the relevant state
commission, the Commission would be able to resolve North County’s
“collection” claims. See MetroPCS, 24 F.C.C.R. at 3810-11, ¶ 9.
   13
      It does not appear that the district court relied on the primary jurisdic-
tion doctrine in dismissing North County’s declaratory judgment claims,
nor did North County request a stay of the proceedings. However, we may
apply the doctrine sua sponte. See Syntek Semiconductor Co., Ltd. v.
Microchip Tech. Inc., 
307 F.3d 775
, 780 n.2 (9th Cir. 2002), as amended.
               NORTH COUNTY COMM. v. CELLCO.              2445
pending the resolution of an issue within the special compe-
tence of an administrative agency.” 
Clark, 523 F.3d at 1114
.
Given the Commission’s consideration of North County’s
compensation claims in MetroPCS and the absence of a Com-
mission determination regarding whether the CMRS provid-
ers’ failure to compensate North County violates § 201(b), we
conclude that “the initial decisionmaking responsibility
should be performed by the relevant agency rather than the
courts.” Syntek 
Semiconductor, 307 F.3d at 778
. As a result,
the dismissal of North County’s claims should have been
without prejudice to allow filing of the claim in the proper
forum. See Syntek 
Semiconductor, 307 F.3d at 782
; see also
Clark, 523 F.3d at 1115
.

IV.   CONCLUSION

   We hold that the district court did not abuse its discretion
when it dismissed North County’s declaratory judgment
claims, because North County is unable to assert a federal
claim. The district court lacked subject matter jurisdiction
pursuant to the Declaratory Judgment Act, as North County
cannot establish a private right to compensation under the
provisions of the Federal Communications Act. The Commis-
sion has not determined that the CMRS providers’ failure to
pay compensation violates the Federal Communications Act.
Because we are ill equipped to properly resolve North Coun-
ty’s claim in the absence of a predicate determination from
the Commission, we vacate the judgment and remand this
case so that North County’s claims can be dismissed without
prejudice.

  VACATED and REMANDED for dismissal without
prejudice.

Source:  CourtListener

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