BellSouth Telecommunications, LLC v. Halo Wireless, Inc.

Filing 37

ORDER granting 10 Motion to Remand, and that this case is REMANDED to the Alabama Public Service Commission, pursuant to § 1442(b); DIRECTING the Clerk to take appropriate steps to effectuate the remand. Signed by Chief Judge William Keith Watkins on 1/26/2012. (Attachments: # 1 Civil Appeals Checklist) (wcl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
NORTHERN DIVISION
BELLSOUTH
TELECOMMUNICATIONS, LLC,
d/b/a AT&T ALABAMA,
Plaintiff,
v.
HALO WIRELESS, INC.,
Defendant.

)
)
)
)
)
)
)
)
)
)
)

CASE NO. 2:11-CV-758-WKW
[WO]

ORDER
Before the court are Defendant’s Motion to Transfer (Doc. # 3) and Plaintiff’s
Motion to Remand (Doc. # 10). Plaintiff and Defendant are parties to a wireless
interconnection agreement (“ICA”). Plaintiff filed a complaint with the Alabama
Public Service Commission (“Alabama PSC”), claiming that Defendant materially
breached the ICA by engaging in conduct to avoid certain charges. On September 14,
2011, Defendant removed the present action from the pending Alabama PSC
proceeding, pursuant to 28 U.S.C. § 1452, which allows the removal of certain cases
related to bankruptcy proceedings. (See Doc. # 1.) Defendant had filed a voluntary
petition for relief in the United States Bankruptcy Court for the Eastern District of
Texas on August 8, 2011. (Doc. # 1, at 2–3.)

On September 16, 2011, Defendant filed its Motion to Transfer. (Doc. # 3.)
Defendant explained that as of August 8, 2011, “approximately 100 different
telecommunications companies located in ten different states brought at least 20
separate proceedings against [Defendant] in the public utility commissions of those
states[.]” (Doc. # 3, at 2.) Defendant sought to “transfer [these] action[s] to the
United States Bankruptcy Court for the Eastern District of Texas . . . to become an
adversary proceeding in [its] Bankruptcy case,” and then consolidate the actions
before that court. (Doc. # 3, at 3.)
After Defendant filed its Motion to Transfer, the Bankruptcy Court ruled that
pending state public utility commission proceedings against Defendant are exempt
from its automatic stay, but that attempts to collect any monetary judgments are not
exempt. (Ex. 1 to Doc. # 28.) Defendant intends to appeal the Bankruptcy Court’s
ruling to the Fifth Circuit. (Doc. # 28, at 2.) Additionally, the FCC has issued a
ruling specifically “disagree[ing] with Halo’s contrary position.” (Ex. F to Doc. 34.)
Finally, at least four other federal courts have remanded similar proceedings involving
Defendant to their respective state public utility commissions.1

1

These courts include the United States District Courts for the Middle District of
Tennessee, Northern District of Florida, and Western District of Missouri, and the United States
Bankruptcy Court for the District of South Carolina.
2

The removing defendant has the burden of establishing the existence of federal
jurisdiction. Leonard v. Enter. Rent a Car, 279 F.3d 967, 972 (11th Cir. 2002).
“[R]emoval statutes are construed narrowly; where plaintiff and defendant clash about
jurisdiction, uncertainties are resolved in favor of remand.” Burns v. Windsor Ins.
Co., 31 F.3d 1092, 1095 (11th Cir. 1994).
Defendant removed under 28 U.S.C. § 1452, which governs the removal of
claims related to bankruptcy cases. The statute provides that
[a] party may remove any claim or cause of action in a civil action other
than a proceeding before the United States Tax Court or a civil action by
a governmental unit to enforce such governmental unit’s police or
regulatory power, to the district court for the district where such civil
action is pending, if such district court has jurisdiction of such claim or
cause of action under section 1334 of this title.
§ 1452(a). However, § 1452(b), allows “[t]he court to which such claim or cause of
action is removed [to] remand such claim or cause of action on any equitable ground.”
There is no controlling authority in the Eleventh Circuit on this issue. In a
recent action similar to this case, the United States District Court for the Northern
District of Florida found that a proceeding removed from the Florida public utility
commission was a “civil action” within the meaning of § 1452(a). BellSouth
Telecomms., LLC, v. Halo Wireless, Inc., No. 4:11cv470-RH/WCS, at 5–6 (N.D. Fla.
Dec. 9, 2011). The court ultimately concluded that it had discretion to accept or
remand the case. However, on balance, equity favored that the case be remanded to
3

the Florida Public Service Commission pursuant to § 1452(b). Id. at 10. The
Northern District of Florida’s reasoning is persuasive.
First, the Alabama PSC proceeding is a removable civil action within the
meaning of § 1452(a). Alabama law provides a public utility commission scheme
similar to that of Florida’s. See, e.g., Ala. Code § 37-1-84 (allowing a complaint to
be filed before the Alabama PSC); Ala. Code § 37-1-86 (entitling parties to be heard
through counsel and call witnesses at proceedings); Ala. Code § 37-1-92 (permitting
parties to take witness depositions in accordance with the laws governing depositions
in civil actions in the Alabama circuit courts); Ala. Pub. Serv. Comm’n Rule of
Practice 16 (allowing parties to make requests for discovery). Proceedings before the
Alabama PSC contain all the elements of a judicial controversy and are not simply
administrative concerns. See BellSouth Telecomms., LLC, No. 4:11cv470-RH/WCS,
at 5–6; see also Comm’rs of Road Improvement Dist. No. 2 v. St. Louis Southwestern
Ry. Co., 257 U.S. 547, 557 (1992) (describing the essential characteristics of a judicial
controversy).
Second, equity favors that the case be remanded to the Alabama PSC pursuant
to § 1452(b).

Given the expertise of the Alabama PSC in adjudicating ICA

disagreements, the minimal effect of remand on the administration of Defendant’s
bankruptcy estate, and the FCC’s recent ruling against the practices engaged in by
4

Defendant, equity favors that the case be remanded. See BellSouth Telecomms., LLC,
No. 4:11cv470-RH/WCS, at 8–10; see also BellSouth Telecomms., LLC, v. Halo
Wireless, Inc., No. 3:11-0795, at 5–6 (M.D. Tenn. Nov. 1 2011) (holding that the case
should be remanded for a determination by the state commission, otherwise, “a state
commission’s authority to approve or reject an [ICA] would itself be undermined if
it lacked authority to determine in the first instance the meaning of an agreement that
it has approved (quoting Core Commc’ns, Inc. v. Verizon Pa., Inc., 493 F.3d 333, 343
(3d Cir. 2007)). Furthermore, Defendant may challenge any order of the Alabama
PSC in federal court. BellSouth Telecomms., Inc. v. MCIMetro Access Transmission
Servs., Inc., 317 F.3d 1270, 1277–79 (11th Cir. 2003).
Finally, Defendant is protected from exposure to monetary damages by order
of the Bankruptcy Court. That leaves largely regulatory issues at play in the Alabama
PSC proceeding, including whether Defendant’s actions under the ICA violated
applicable regulations and agency rulings. Those issues should be resolved in the
state utility commission forum.
Accordingly it is ORDERED that Plaintiff’s Motion to Remand (Doc. # 10) is
GRANTED, and that this case is REMANDED to the Alabama Public Service
Commission, pursuant to § 1442(b). The Clerk of the Court is DIRECTED to take
appropriate steps to effectuate the remand.
5

DONE this 26th day of January, 2012.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE

6