Carroll Electric Cooperative Corporation v. Southwestern Bell Telephone Company Incorporated et al

Filing 30

MEMORANDUM OPINION AND ORDER granting in part and denying in part 23 Motion to Dismiss. See order for specifics. Signed by Honorable Timothy L. Brooks on September 14, 2016. (tg)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
HARRISON DIVISION

CARROLL ELECTRIC
COOPERATIVE CORPORATION
v.

PLAINTIFF

CASE NO. 3:16-cv-3034

SOUTHWESTERN BELL TELEPHONE
COMPANY, INC. d/b/a AT&T; and
JOHN DOES 1-22

DEFENDANTS

MEMORANDUM OPINION AND ORDER
Currently before the Court is a Motion to Dismiss, Abstain, or in the Alternative,
Stay (Doc. 23) filed by Defendant Southwestern Bell Telephone Company, Inc. d/b/a
AT&T (“SWBT”). 1 The Motion has been fully briefed and is ripe for decision. For the
reasons stated herein, the Motion is GRANTED IN PART and DENIED IN PART.
I.

BACKGROUND

According to its Complaint, Carroll Electric Cooperative Corporation (“Carroll
Electric”) is an entity originally organized in 1938 pursuant to the Rural Electrification
Act. It is in the business of supplying electricity to the Northwest Arkansas and
Southwest Missouri communities, and to that end it has established and maintained
hundreds of miles of wood poles—colloquially known as telephone poles or utility poles.
SWBT is one of the nation’s largest telecommunications companies. On December 8,
1958, Carroll Electric and SWBT entered into a written agreement entitled “General
Agreement Joint Use of Wood Poles” (the “JUA”). In relevant part, the JUA establishes
1

According to Defendant, the Complaint inadvertently lists its name incorrectly. It
should be listed as “Southwestern Bell Telephone Company d/b/a AT&T Arkansas,”
which is “a Delaware company with its principal place of business in Dallas, Texas.”
(Doc. 25, p. 1).
1

terms and conditions related to the parties’ abilities to attach electric and telephone
lines, respectively, to each other’s poles. Article XX of the JUA provides for possible
termination of the agreement after 25 years, or “thereafter upon the giving of written
notice to the other party not less than three years prior to the date of termination.” (Doc.
20-1, p. 9).
On February 25, 2011, Carroll Electric gave written notice of termination to
SWBT providing for the termination of the JUA effective March 1, 2014. (Doc. 20-2).
The notice instructs SWBT to “make necessary arrangements to have all attachments
removed from Carroll Electric Cooperative Corporation facilities prior to this date.” Id.
Nonetheless, and for reasons that will become apparent in this Memorandum Opinion,
SWBT’s telephone lines remain attached to Carroll Electric’s poles to this day.
Carroll Electric filed a Complaint in the Circuit Court of Carroll County, Arkansas,
and SWBT removed the suit to this Court on March 22, 2016. Carroll Electric filed a
four-count Amended Complaint (Doc. 22) on June 20, 2016. Count I alleges that the
continued presence of SWBT’s attachments on Carroll Electric’s poles constitutes a
trespass. Count II asks the Court to grant Carroll Electric injunctive relief to remedy that
alleged trespass. Count III argues that SWBT breached its contract with Carroll Electric
by (a) installing facilities on Carroll Electric’s poles in violation of the National Electrical
Safety Code; (b) attaching to Carroll Electric’s poles without its permission; (c) paying
Carroll Electric an annual rental amount below the specifications of the JUA; and (d)
failing to remove its facilities from Carroll Electric’s poles after the termination of the
JUA. Count IV seeks punitive damages for SWBT’s conduct.

2

SWBT filed an Answer (Doc. 25) to the Amended Complaint on July 7, 2016,
generally denying the claims against it. It also filed the instant Motion to Dismiss,
Abstain, or in the Alternative, Stay (Doc. 23) on June 16, 2016. The Motion argues that
the Court lacks subject-matter jurisdiction because the Arkansas Public Services
Commission (“APSC”) has primary and exclusive jurisdiction over Carroll Electric’s
claims. Alternatively, the Motion suggests that this Court should abstain from deciding
this case under the Burford abstention doctrine. Again alternatively, the Motion asks the
Court to stay these proceedings until the APSC’s Amended Pole-Attachment Rules are
adopted into law. Carroll Electric filed its Response (Doc. 26) on July 13, 2016,
contending that this Court has subject-matter jurisdiction and that Burford abstention
would be improper. SWBT then filed a Reply (Doc. 28) on July 18, 2016. Finally, on
August 24, 2016, Carroll Electric submitted Supplemental Authority (Doc. 29) in the form
of an August 19, 2016 Rehearing Order from the APSC, and a case out of the Court of
Appeals of Texas, Fort Worth Division.
II.
A.

DISCUSSION

Establishing and Exercising Jurisdiction

SWBT frames its Motion as one for dismissal due to lack of subject-matter
jurisdiction, or in the alternative, abstention under the Burford doctrine. See Doc. 23,
¶ 6. The Court believes that SWBT’s reference to subject-matter jurisdiction is a
misnomer, as it cannot be seriously argued that this Court lacks subject-matter
jurisdiction.
“It is a verity that federal courts are courts of limited jurisdiction.” Ark. Blue Cross
& Blue Shield v. Little Rock Cardiology Clinic, P.A., 551 F.3d 812, 816 (8th Cir. 2009).

3

Specifically, federal courts’ jurisdiction is limited to what is permitted by the Constitution
and then conferred by Congress. In this case, the Court undoubtedly has subject-matter
jurisdiction by virtue of Article III, Section 2, Clause 1 of the Constitution, and 28 U.S.C.
§§ 1332 and 1441. Article III grants federal courts the power to hear controversies
“between Citizens of different States.” In accordance with this constitutional grant of
power, Congress conferred the district courts with original jurisdiction “of all civil
actions,” between citizens of different states, “where the matter in controversy exceeds
the sum or value of $75,000.” 28 U.S.C. § 1332(a)(1). Congress also authorized the
district courts to hear “any civil action brought in a State court of which the district courts
of the United States have original jurisdiction,” once the action is properly removed by a
defendant. 28 U.S.C. § 1441(a).
The Court does not understand SWBT to be questioning whether these
requirements for diversity jurisdiction have been met. It is uncontested that SWBT is not
a citizen of Arkansas, Carroll Electric is a citizen of Arkansas, and more than $75,000 is
in controversy. Insofar as the Court is mistaken, and SWBT does intend to challenge
the Court’s subject-matter jurisdiction, its motion to that effect is denied. However, the
Court believes SWBT’s Motion is best understood as a request for this Court to decline
to exercise its otherwise undisputed jurisdiction.
Federal courts “have a strict duty to exercise the jurisdiction that is conferred
upon them by Congress.” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996).
“This duty is not, however, absolute. . . . [F]ederal courts may decline to exercise their
jurisdiction, in otherwise ‘exceptional circumstances,’ where denying a federal forum
would clearly serve an important countervailing interest.” Id. (quotation omitted). One

4

such circumstance is captured by the Burford abstention doctrine, named for the case in
which it was first recognized by the Supreme Court. See Burford v. Sun Oil Co., 319
U.S. 315 (1943). Pursuant to Burford abstention:
Where timely and adequate state-court review is available, a federal court
sitting in equity must decline to interfere with the proceedings or orders of
state administrative agencies: (1) when there are difficult questions of
state law bearing on policy problems of substantial public import whose
importance transcends the result in the case then at bar; or (2) where the
exercise of federal review of the question in a case and in similar cases
would be disruptive of state efforts to establish a coherent policy with
respect to a matter of substantial public concern.
New Orleans Pub. Serv., Inc. v. Council of City of New Orleans, 491 U.S. 350, 361
(1989) (quotations omitted). In simpler terms, “a federal court should abstain when the
action before it involves matters of state law best left to the state alone.” Middle S.
Energy, Inc. v. Ark. Pub. Serv. Comm'n, 772 F.2d 404, 417 (8th Cir. 1985). The doctrine
applies only where the relief being sought is equitable or otherwise discretionary in
nature; it does not allow federal courts to dismiss cases where the relief requested is
non-discretionary damages. See Quackenbush, 517 U.S. at 728-31. “Burford might
support a federal court's decision to postpone adjudication of a damages action,”
however, by entering a stay. Id. at 730 (second emphasis added).
B.

Arkansas’ Statutory and Regulatory Scheme for Pole Attachments

To decide whether dismissal or a stay might be appropriate under the Burford
doctrine, the Court must first review Arkansas’ statutory and regulatory scheme for pole
attachments. In light of this scheme, it must then evaluate whether the case presents
difficult questions of state law bearing on policy problems of public import, or whether
the Court’s adjudication would disrupt Arkansas’ regulatory efforts. This analysis begins
with determining the scope of the APSC’s authority to resolve pole-attachment disputes.
5

1.

The APSC’s Jurisdiction to Resolve Disputes Involving Pole Attachments
When an appropriate party brings a complaint to the APSC, it has the authority

“to conduct investigations and public hearings, to mandate monetary refunds and billing
credits, or to order appropriate prospective relief as authorized or required by law, rule,
regulation, or order.” Ark. Code Ann. § 23-3-119(d). The APSC’s jurisdiction in such
disputes “is primary and shall be exhausted before a court of law or equity may assume
jurisdiction.” Id. However, the APSC “shall not have the authority to order payment of
damages or to adjudicate disputes in which the right asserted is a private right found in
the common law of contracts, torts, or property.” Id. Section 23-3-119(f) further clarifies:
(1) It is the specific intent of the General Assembly . . . to vest in the
[APSC] the authority to adjudicate individual disputes between
consumers and the public utilities which serve them when those
disputes involve public rights which the commission is charged by law
to administer.
(2) Public rights which the commission may adjudicate are those arising
from the public utility statutes enacted by the General Assembly and
the lawful rules, regulations, and orders entered by the commission in
the execution of the statutes. The commission's jurisdiction to
adjudicate public rights does not and cannot, however, extend to
disputes in which the right asserted is a private right found in the
common law of contracts, torts, or property.
Id. at (f)(1), (2).
To appreciate the contours of the APSC’s authority to resolve disputes in poleattachment cases, two points must be made about the distinction between “public
rights” and “private rights” set forth in Ark. Code Ann. § 23-3-119. The first is that the
distinction is not dependent on the labels applied to the causes of action in a complaint.
In at least four cases, the Arkansas Supreme Court has held that the APSC has primary
jurisdiction over claims involving contract or tort causes of action. In Cullum v. Seagull

6

Mid-South, Inc., 322 Ark. 190 (1995), a group of customers brought a class-action
lawsuit against a natural gas company alleging the tort of fraud. Id. at 193. In
determining whether the circuit court properly dismissed the case for lack of subjectmatter jurisdiction, the Arkansas Supreme Court framed the question not in terms of
how the cause of action was labelled, but instead based on “whether the tort action . . .
encroache[d] on the exclusive authority of the [APSC] to fix rates.” Id. at 196. Finding
that it did, the Cullum Court adopted the filed-rate doctrine—a doctrine not directly
relevant to this motion—and affirmed the dismissal, thus holding that the APSC had
primary jurisdiction over the dispute despite the tort cause of action. Id. at 197-98.
Eleven years later in Austin v. Centerpoint Energy Arkla, 365 Ark. 138 (2005), the
Arkansas Supreme Court held that a natural gas customer’s “use of the phrases
‘replevin,’ ‘tort,’ and ‘civil rights,’” did not change the “reality” that her action was “a
dispute over rates.” Id. at 146. Instead, “when a plaintiff’s tort action is nothing more
than a collateral attack on a utility’s rate-making authority, the tort action impermissibly
encroaches on the exclusive authority of the [APSC] to fix rates.” Id. Thus, “the mere
labeling of a claim as a tort claim does not automatically deprive the [APSC] of authority
to hear the complaint.” Id.
Cullum and Austin were heavily relied on in Centerpoint Energy, Inc. v. Miller
County Circuit Court, Second Division, 370 Ark. 190 (2007). As in Cullum, Centerpoint
Energy involved a class-action suit brought against a natural gas company. The classaction complaint alleged fraud, unjust enrichment, and conspiracy, and specifically
argued that “state regulatory agencies do not have the authority to adjudicate private
causes of action or tort claims.” Id. at 194-95. The circuit court agreed with the class

7

plaintiffs, denying the defendants’ motion to dismiss in part because “the APSC did not
have the authority to adjudicate claims of common law fraud.” Id. at 195. The Arkansas
Supreme Court reversed. Again declining to rely on the complaint’s labelling of the
claims in terms of common law tort, the Court looked to the scope of the APSC’s
authority and the “true nature of the complaint.” Id. at 202-03. It noted the APSC’s
exclusive jurisdiction over determining rates for natural gas; found that the plaintiffs’ suit
was really premised on being charged too much for gas, despite being couched in terms
of tort; and declared the case to be “precisely the kind of dispute that should be decided
by the APSC.” Id.
Finally, in Capps v. Carroll Electric Cooperative Corp., 2011 Ark. 48, customers
of the electric-company defendant sought a refund of certain capital credits retained by
the defendant. The customers argued that their claims involved private contractual
rights premised on the defendant’s bylaws. Id. at *4. Rejecting this contention, the
Arkansas Supreme Court held that the “statutes that create and regulate public utilities,
specifically the electric-cooperative corporations, address the matter of capital credits.”
Id. at *6. Accordingly, it was “clear that the APSC [had] primary jurisdiction over any
claims that [the defendant had] in some way violated the requirements” of the statute,
despite the plaintiffs’ “repeated attempts to couch the claim as some sort of private right
found in the common law of contracts, torts, or property.” Id. at *7.
To be sure, these cases are distinguishable from the instant case in some
important ways. They all involve disputes between utility companies and their
customers, not between two utility companies. And, all but Capps involved application of
the filed-rate doctrine. Nonetheless, the Arkansas Supreme Court’s approach to

8

determining whether these cases involved private or public rights is incredibly
instructive. They indicate that courts should focus not on the labels applied to the claims
in the complaint, but on whether the substance of the claims encroaches on the
exclusive authority of the APSC, and on whether Arkansas’ statutes and regulations
address the subject-matter of the complaint.
The second point that must be made about the distinction between public rights
and private rights is that in the specific context of pole-attachment disputes, the APSC
does have jurisdiction to resolve cases involving some private rights. This is so because
Ark. Code Ann. § 23-3-119 must be read in light of the later-enacted Act 740 of 2007.
Ark. Laws Act 740 (H.B. 1636) (codified at Ark. Code Ann. § 23-4-1001 et seq.); see
Kyle v. State, 312 Ark. 274, 278 (1993) (“The settled rule of statutory construction is that
if two legislative acts relating to the same subject are in conflict with each other, the
later act controls.”). The purpose of Act 740 was to give the APSC jurisdiction over poleattachment agreements and disputes among utilities regarding pole attachments. Id.
The Act states in relevant part:
(a) The Arkansas Public Service Commission may hear and determine all
complaints arising from:
(1) A public utility's failure or refusal to provide access for a pole
attachment;
(2) The inability of a public utility and an entity seeking access for a pole
attachment to reach a voluntarily negotiated, written agreement
governing access for the pole attachment; and
(3) Disputes between a public utility and an entity over the implementation
of an existing contract granting the entity access for a pole attachment.
Ark. Code Ann. § 1004(a) (emphasis added); see also Doc. 24-1, p. 6 (APSC’s 2008
Pole Attachment Rules) (enacting a procedure for bringing complaints to the APSC that
9

includes reference to disputes over written pole-attachment agreements). Importantly,
the General Assembly’s use of the phrase “may” indicates that the APSC has
permissive, but not primary and exclusive, jurisdiction over the enumerated categories
of claims.
Viewing the Assembly’s grants of jurisdiction to the APSC in Ark. Code Ann.
§§ 23-3-119 and 23-4-1004 together, the Court believes the APSC’s jurisdiction to
resolve pole-attachment disputes can be summarized by reference to three categories
of cases.
•

First, the APSC has primary and exclusive jurisdiction over such disputes
when they involve “public rights,” as defined by Ark. Code Ann. § 23-3-119
and elaborated upon by Cullum, Austin, Centerpoint Energy, and Capps.

•

Second, the APSC has permissive jurisdiction over such disputes when they
do not involve “public rights,” but do involve “private rights” encompassed by
the categories listed in Ark. Code Ann. § 1004(a). That is, the APSC has
permissive jurisdiction over disputes involving the refusal to provide access
for a pole attachment, the inability to reach agreement over a pole
attachment, or the implementation of an existing contract granting access for
a pole attachment.

•

Third, the APSC has no jurisdiction to resolve such disputes when they
involve only “private rights” of the sort not encompassed by Ark. Code Ann.
§ 1004(a).

Why is it important to identify these jurisdictional categories? Understanding the
scope of the APSC’s jurisdiction is essential to determining whether the Court’s

10

resolution of this case “would be disruptive of [Arkansas’] efforts to establish a coherent
policy with respect to” pole attachments. New Orleans Pub. Serv., Inc., 491 U.S. at 361.
Generally speaking, adjudicating claims within the first category—those committed to
the primary jurisdiction of the APSC—would reason to create the most disruption;
adjudicating claims within the second category—those within the permissive jurisdiction
of the APSC—may also create disruption; and adjudicating claims within the third
category—those that the APSC has no jurisdiction to resolve—would not cause
disruption.
2.

The APSC’s Authority to Promulgate Regulations for Pole Attachments
Beyond its jurisdiction to resolve disputes related to pole attachments, the scope

of the APSC’s authority to promulgate regulations related to pole attachments is also
relevant to determining whether this Court should abstain from or stay these
proceedings. The APSC’s regulatory authority for such matters is set forth in Act 740.
(a) The Arkansas Public Service Commission shall regulate the rates,
terms, and conditions upon which a public utility shall provide access
for a pole attachment.
(b) (1) The commission shall develop rules necessary for the effective
regulation of the rates, terms, and conditions upon which a public utility
shall provide access for a pole attachment. . . .
(c) Nothing in this section prevents a public utility . . . from entering into a
voluntarily negotiated, written agreement regarding the rates, terms,
and conditions upon which access for a pole attachment is provided.
Ark. Code Ann. § 23-4-1003. Also relevant is Ark. Code Ann. § 1002, which instructs
that “[a] public utility shall provide nondiscriminatory access for a pole attachment” to
other utilities.

11

This statutory scheme highlights three features of Arkansas’ public policy
respecting pole attachments: First, the APSC has broad rulemaking authority over the
rates, terms, and conditions for pole attachments. Second, rules made pursuant to that
authority can be circumvented by private agreements. Third, regardless of whatever
else the APSC’s rules—or private agreements—require, public utilities must provide
non-discriminatory access to their poles.
As with the APSC’s jurisdiction to resolve pole-attachment disputes, Arkansas’
statutory scheme and the APSC’s rule-making authority have implications for whether
this Court should abstain from or otherwise stay this case. Because utility companies
can set their own rates, terms, and conditions by private agreement, construing such
agreements will generally be unlikely to disrupt Arkansas’ state policy regarding pole
attachments. However, in cases requiring the Court to look outside of an agreement to
determine what a reasonable rate, term, or condition would be, the potential for
disruption is higher. And, when resolving an issue requires the Court to decide whether
a utility provided nondiscriminatory access for a pole attachment, the potential for
disruption is similarly higher.
C.
1.

Whether this Court Should Abstain From or Stay These Proceedings
The Court Will Abstain From Adjudicating Carroll Electric’s Request for
Injunctive Relief
In applying the principles articulated in Sections II.B.1 & 2, supra, the Court first

finds that abstention is proper with respect to Carroll Electric’s request for injunctive
relief. As a reminder, Burford abstention is appropriate:
(1) when there are difficult questions of state law bearing on policy
problems of substantial public import whose importance transcends the
result in the case then at bar; or (2) where the exercise of federal review of
12

the question in a case and in similar cases would be disruptive of state
efforts to establish a coherent policy with respect to a matter of substantial
public concern.
New Orleans Pub. Serv., Inc., 491 U.S. at 361 (quotations omitted). Dismissal under
Burford, moreover, is only appropriate where the relief requested is equitable or
otherwise discretionary. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 728-31 (1996).
Injunctive relief is, of course, an equitable remedy.
Simply put, the Court is convinced that ordering SWBT to remove its attachments
from Carroll Electric’s poles would both (1) involve difficult questions of state law
bearing on policy problems of substantial public import, and (2) be incredibly disruptive
of Arkansas’ efforts to establish a coherent policy related to pole attachments.
Regarding the former, even if the Court were to find that SWBT is trespassing on Carroll
Electric’s poles, Ark. Code Ann. § 23-4-1002’s command that utility companies shall
provide nondiscriminatory access for pole attachments makes the appropriateness of
injunctive relief a difficult question of state law. That is, assuming SWBT’s attachments
were otherwise unauthorized, Carroll Electric still has a statutory duty to provide it with
nondiscriminatory access to its poles. What, then, would the effect of an injunctive order
be? Ought the Court to order SWBT to remove its attachments, only for SWBT to then
re-establish its legal right to access Carroll Electric’s poles by virtue of § 1002? This
difficult question of state law, further, bears on problems of substantial public import
going far beyond this case. If the Court were to order SWBT to remove its attachments,
it would risk leaving thousands of Arkansans without telephone access for an
undetermined amount of time. Accord Ark. Elec. Co-op. Corp. v. Ark. Pub. Serv.

13

Comm’n, 461 U.S. 375, 377 (1983) (“[T]he regulation of utilities is one of the most
important of the functions traditionally associated with the police power of the States.”).
Second, adjudication of the injunction issue would disrupt Arkansas’ efforts to
establish coherent policy with respect to pole attachments. Some context is useful to
appreciate the Court’s full concern on this front. Animating much of this case is the
APSC’s effort to overhaul its regulations related to pole attachments. After Act 740 was
passed in 2007 and the General Assembly conferred upon the APSC regulatory power
over pole attachments, the APSC enacted its original set of Pole Attachment Rules on
June 30, 2008. See Doc. 24-1. These rules are relatively bare bones, providing only
basic procedural requirements for filing complaints with the APSC. Beginning in early
2015, the APSC initiated its rulemaking process to modify and expand its 2008 Pole
Attachment Rules. See Doc. 24-2. Specifically, it sought to modify its rules related to:
“(a) Rates, terms and conditions for pole attachments . . . including consideration of
formula rates . . .; (b) Technical standards for pole attachments . . .; (c) Terms regarding
pole replacement, maintenance, reclamation of space and rearrangement; and (d)
notice requirements . . . .” Id. at 2.
On June 24, 2016—after this suit had been filed and less than a week before
SWBT filed the instant Motion—the APSC entered an extensive 170-page order
adopting a set of revised pole-attachment rules (the “Revised Rules”). See Doc. 23, p.
2;

APSC

Docket

#15-019R,

Doc.

62

(available

at

http://www.apscservices.info/pdf/15/15-019-R_62_1.pdf). The purpose and scope of the
Revised Rules are set forth as follows:
These Rules govern the [APSC’s] regulation of the rates, terms, and
conditions upon which a Pole Owner shall provide nondiscriminatory
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access for a Pole Attachment in the absence of a voluntarily negotiated
agreement. These Rules also govern procedures necessary and
appropriate to hear and resolve complaints arising from the failure or
refusal to provide access, the inability of a Pole Owner and an entity
seeking access for a Pole Attachment to reach a voluntarily negotiated
written agreement, and disputes over implementation of an existing
contract.
Id. at Ex. B, p. 1-2. To those ends, the Revised Rules establish a formula “for
determining the maximum just and reasonable rates” when “the parties fail to reach a
voluntarily negotiated written agreement” and bring a complaint before the APSC. Id. at
Ex. B, pp. 1-4; 2-4. And, they allocate responsibility for modifying poles to create
additional space for attachments. Id. at Ex. B, p. 4-3.
If the Court were to order injunctive relief in this case (and other similar cases) it
would be directly interfering with the APSC’s attempt to create a uniform and coherent
policy with respect to disagreements surrounding pole attachments. The Revised Rules
constitute the APSC’s attempt to establish a series of reasonable default rates, terms,
and conditions to govern utility companies’ relationships regarding pole attachments
when private agreements break down, or never come to fruition. Ordering one party to
remove its attachments from the other’s poles is directly contra to this intricate
regulatory scheme. That scheme contemplates the application of “the maximum just
and reasonable rates,” as determined by a formula, when pole attachments are not
otherwise governed by a private agreement. Id. at Ex. B, p. 1-4. The Revised Rules also
contemplate requiring a party who needs additional space to bear the cost of installing a

15

taller pole. Id. at Ex. B, p. 4-3. Granting injunctive relief and requiring the removal of
attachments, rather than the expansion of poles, undermines that preferred remedy. 2
Additionally, granting injunctive relief would interfere with the APSC’s attempt to
create a uniform and coherent policy because the issue involves public rights and,
therefore, falls within the primary jurisdiction of the APSC. As the Court discussed in
Section II.B.1, supra, whether a right is “public” or “private” depends on whether the
substance of the claim encroaches on the exclusive authority of the APSC, and on
whether Arkansas’ statutes and regulations address the subject-matter of the claim. The
substance of Carroll Electric’s request for injunctive relief is that SWBT has no legal
right to remain attached to its poles, and so SWBT must remove its attachments. To
determine whether SWBT has a legal right to attach to Carroll Electric’s poles, the Court
would have to interpret and apply Ark. Code Ann. § 23-4-1002, which requires utility
companies to “provide nondiscriminatory access for a pole attachment” to other utility
companies. Since a statute, and not a contract or private wrong, would determine
whether SWBT should have to remove its attachments from Carroll Electric’s poles, the
right to injunctive relief complained of by Carroll Electric is public.
For these reasons, Burford abstention is appropriate with respect to Carroll
Electric’s request for injunctive relief.

2

To be sure, the Revised Rules have a long way to go before they are enacted into law.
They are subject to revision within the APSC, and must also be approved by the
Arkansas Legislative Council and the Governor. Id. at 169. But what is important for the
purposes of Burford abstention is that the Rules reflect the state’s efforts to establish a
coherent policy for what is, undoubtedly, a matter of substantial public concern.
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2.

The Court Will Stay Proceedings With Respect to Carroll Electric’s
Trespass Claim

Carroll Electric’s trespass claim is already dismissed to the extent that it is tied to
its request for an injunction, but the Amended Complaint also requests damages related
to SWBT’s alleged trespass. See Doc. 22, ¶ 15. “Arkansas's law of trespass requires a
physical invasion of a plaintiff’s real property that is caused by a defendant and results
in damages.” Cross v. W. Waste Indus., 2015 Ark. App. 476, at *6 (citing Jewel Coal &
Mining Co. v. Watson, 176 Ark. 108 (1928)). 3 Implicit within the definition of trespass is
that the invasion of property be unauthorized. E.g., Passmore v. Hinchey, 2010 Ark.
App. 581 (describing an alleged intentional trespass as one involving “notice from the
landowner that [the defendant’s] use of the property was unauthorized”); Restatement
(Second) of Torts § 160 (defining a “failure to remove” trespass as occurring after
“consent has been effectively terminated” or after a “privilege has been terminated”).
In order to determine whether SWBT’s attachments to Carroll Electric’s poles are
unauthorized, the Court would have to interpret and apply Ark. Code Ann. § 23-4-1002,
just as it would have to do in the aforementioned injunction context. 4 This makes Carroll
Electric’s trespass claim one falling under the category of “public rights,” and within the
3

The issue of whether a trespass must result in damages, though not important to
adjudication of the instant Motion, may not be as clear cut as the Cross Court seems to
suggest. See Howard W. Brill, 1 Arkansas Law of Damages § 30:6 (5th ed. 2004)
(stating that under common law a trespass occurs regardless of “the absence of
damage to the land”).
4

To be perfectly clear, the fact that the Court must interpret and apply a state statute, in
and of itself, is not a justification for abstaining or staying any proceedings. The
application of state law in this case is relevant to the abstention / stay inquiry only
because it makes the trespass claim one involving “public rights” under Arkansas law.
Since such claims are committed to the primary jurisdiction of the APSC as part of a
complex regulatory scheme, the Court’s adjudication of the claim would interfere with
that scheme. This is especially so while the APSC is in the process of making
substantial changes to its regulations.
17

primary jurisdiction of the APSC. Were the Court to assess damages for SWBT’s
alleged trespass—and do so in similar cases—it would greatly undermine Arkansas’
efforts to create a coherent regulatory scheme. One of the fundamental purposes of the
APSC’s Revised Rules is to establish reasonable rates to assess liability in situations
where attachments are maintained outside the context of a voluntarily negotiated
agreement. The Revised Rules accomplish this by applying a set formula to determine
what rates are just and reasonable. Were the Court to award damages for trespass
based on some other metric before the Revised Rules are enacted, the utility
companies to whom the metric was more favorable than the proposed formula in the
Revised Rules would rush to this Court in an effort to get their liability or damages
assessed at the preferable rate. This would, no doubt, completely undermine the
APSC’s efforts in carefully prescribing reasonable rates.
Because Carroll Electric’s request for damages based on trespass falls under the
category of public rights, and because awarding damages based on a trespass theory
would undermine Arkansas’ efforts to craft a coherent regulatory scheme regarding
attachments without agreements, the Court will stay proceedings regarding Carroll
Electric’s trespass claim. This stay will remain in effect until the APSC’s Revised Rules
are enacted into law, at which point the parties can move the Court to lift the stay. If
Carroll Electric would like to have its trespass claim adjudicated in the interim, the Court
encourages it to file a complaint with the APSC. 5

5

Given the Court’s determination that Carroll Electric’s trespass claim is a public rights
claim, and thus within the primary jurisdiction of the APSC, the Court is also concerned
about the potential for forum shopping presented by this case, should it eventually reach
the merits. Were the claim brought in state court, it would be dismissed and the parties
would be directed to the APSC to resolve their dispute. In federal court, because the
18

3.

The Court Will Not Stay Proceedings With Respect to Carroll Electric’s
Breach of Contract Claim
Arkansas’ regulatory scheme for pole attachments is not intended to “prevent[] a

public utility . . . from entering into a voluntarily negotiated, written agreement regarding
rates, terms, and conditions upon which access for a pole attachment is provided.” Ark.
Code. Ann. § 23-4-1003. Relatedly, the APSC’s jurisdiction to adjudicate disputes over
pole-attachment agreements is permissive, not primary and exclusive. Ark. Code Ann.
§ 1004(a). It follows that interpreting and applying such agreements would not
necessarily involve difficult questions of state law of substantial public importance, or
disrupt Arkansas’ efforts to establish coherent policy. Indeed, because it explicitly
authorizes private agreements and grants the APSC only permissive jurisdiction over
them, Arkansas’ regulatory scheme implicitly contemplates the interpretation and
application of privately negotiated pole-attachment agreements by the courts.
That is not to say, however, that a breach of contract claim in a pole-attachment
dispute can never require a stay to avoid undue interference with state regulatory
processes. In the instant case, for example, if the Court is eventually asked to assess
damages or liability based on the determination of a reasonable rate, rather than a rate
specified in the JUA, a stay may be appropriate. But, these proceedings are still in a
relatively early stage, and the Court is mostly in the dark about the details of Carroll
Electric’s breach of contract claim. The Court accordingly does not believe a stay is
appropriate at this time.

claim is one for damages, the Court cannot just decline to exercise its jurisdiction in
favor of the APSC’s—at least not on the instant Motion. Thus, litigants who want to
avoid the APSC and instead have their disputes resolved by a court will select federal
courts over state courts.
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Finally, SWBT avers in its Brief in Support (Doc. 24) that Carroll Electric’s breach
of contract claims fall outside the applicable statute of limitations. (Doc. 24, pp. 4, 6).
The Court views these passing references as insufficient to raise the statute of
limitations issue. Thus, it will not reach that question herein.
III.

CONCLUSION

For the reasons stated above, SWBT’s Motion to Dismiss, Abstain, or in the
Alternative, Stay (Doc. 23) is GRANTED IN PART and DENIED IN PART as follows:
•

To the extent that the Motion asks the Court to dismiss the case for lack of
subject-matter jurisdiction, it is DENIED.

•

As to Carroll Electric’s request for injunctive relief, SWBT’s request for the
Court to abstain is GRANTED, and Count II of the Amended Complaint
(Doc. 22) is DISMISSED WITHOUT PREJUDICE.

•

As to Carroll Electric’s trespass cause of action, SWBT’s request for the
Court to stay proceedings is GRANTED, and all proceedings related to
Count I of the Amended Complaint (Doc. 22) are hereby STAYED. The
stay shall remain in effect until the earlier of: (i) the APSC’s Revised Rules
are enacted into law and the Court grants a motion to lift the stay; (ii) the
APSC abandons the rulemaking process for its Revised Rules and the
Court grants a motion to lift the stay; or (iii) sua sponte at any time, or
upon motion filed not sooner than one year from the entry of this Order,
the Court finds that undue delay in the APSC’s rulemaking process
justifies lifting the stay. Throughout the duration of the stay, the parties
shall jointly submit a filing updating the Court on the status of the Revised
Rules every 90 days.

•

As to Carroll Electric’s breach of contract cause of action, and the punitive
damages count associated with it, SWBT’s Motion is DENIED. 6 SWBT is
permitted to move for a stay at a later date, in accordance with Section
II.C.3, supra.

6

SWBT does not raise the issue of whether a party can recover punitive damages for a
breach of contract under Arkansas law. Therefore, the Court’s denial of SWBT’s Motion
to Dismiss, Abstain, or Stay with respect to Carroll Electric’s Count IV (Punitive
Damages), insofar as that count applies to its breach of contract claim, should not be
interpreted as deciding that issue.
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IT IS SO ORDERED on this

~ay

of Septe

OKS
S DISTRICT JUDGE

21