Transcom Enhanced Services, Inc. v. Georgia Public Service Commission et al
Filing
38
ORDER AND OPINION denying as moot the TDS defendants 23 Motion to Stay or Bifurcate and their 22 Motion to Dismiss. Defendant AT&Ts 21 Motion to Dismiss is denied but with a right to re-file on a deadline to be later set by the Court. Any future pleadings filed by AT&T will be struck if they do not comply with the applicable local rules. Signed by Judge Julie E. Carnes on 7/25/13. (ddm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
TRANSCOM ENHANCED SERVICES,
INC.,
Plaintiff,
v.
CIVIL ACTION NO.
1:12-cv-03492-JEC
GEORGIA PUBLIC SERVICE
COMMISSION, et al.,
Defendants.
ORDER & OPINION
This matter is presently before the Court on defendant AT&T
Georgia’s (“AT&T”) Motion to Dismiss [21], TDS defendants’ Partial
Motion to Dismiss [22], and TDS defendants’ Motion to Stay or
Bifurcate [23].
After these motions had been filed, the parties submitted a
Joint Preliminary Report and Discovery Plan (“Joint Report”)[30]. In
the Joint Report, the parties have agreed that the most efficient way
to proceed is by first conducting the administrative review portion
of
the
case
(Count
8
and
possibly
plaintiff’s other claims in Counts 2-7.
Count
1)
before
(Id. at 13.)
addressing
Resolution of
plaintiff’s administrative appeal may eliminate the need to address
any of the plaintiff’s other claims.
The Court agrees with this approach, which will render moot the
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TDS defendants’ motion to dismiss and to stay/bifurcate.
It also
renders moot most of defendant AT&T’s motion to dismiss.
BACKGROUND
This case not only involves complex technology, but it also has
a complicated procedural history. For clarity’s sake, the Court will
address only those aspects of each that are pertinent to the present
discussion.
In
1996,
in
an
effort
to
promote
competition
and
reduce
regulation, Congress passed the Telecommunications Act (“Act”).
The
Act mandated that carriers interconnect with one another and that
local
exchange
carriers
who
had
already
established
a
telecommunications infrastructure share elements of this existing
structure with new competitors.
47 U.S.C. § 201(a).
When these new
competitors use these existing elements, however, the Act requires
them to compensate the incumbent local exchange carriers (“ILECs” or
“carriers”).
See id.
The amount of compensation to which a carrier is entitled
depends on whether the user’s traffic is classified as local or long
distance, and also whether the calls are made from a wireless device
as opposed to a landline phone.
Long distance calls are subject to
higher fees, known as “access charges.”
A call’s status as local or
long distance can change based on whether the call is made from a
wireless or a landline device.
Further, the charges only apply to
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common carriers, and not to other entities, such as enhanced service
providers.
See 47 U.S.C. § 201.
The dispute between the parties
centers around the appropriate regulatory classification for Transcom
and the services it provides.
The events precipitating the present federal litigation began on
June
11,
2010,
when
carrier
TDS
Telecom,
on
behalf
of
its
subsidiaries (collectively, “TDS defendants”), filed a complaint
before
the
Georgia
“Commission”).
Public
Service
Commission
(“PSC”
or
(PSC Order, attached as Ex. 1 to Am. Compl. [2].)
the
In
this complaint, the TDS defendants alleged that Transcom and its
affiliate,
Halo,1
had
pursuant to the Act.
refused
to
pay
(Id. at 1.)
applicable
access
charges
Carrier AT&T later joined the
action as an intervenor, arguing that Halo was also in violation of
the interconnection agreement with AT&T because Halo was sending
traffic to be terminated on AT&T’s network that did not originate on
a wireless device, as mandated by the agreement.
(Id. at 2-3.)
Essentially, the defendants argued that Transcom should have been
paying
access
charges
for
using
1
elements
of
the
carriers’
After TDS’s complaint had been filed before the Commission,
Halo filed for Chapter 11 bankruptcy. Halo is now in liquidation
under Chapter 7 and the TDS defendants state that they have been
informed that the court-appointed trustee in the Chapter 7 bankruptcy
has declined to pursue any litigation initiated by Halo. (TDS’s Mot.
to Dismiss [23] at 6.)
Thus, Halo is not involved in this
litigation.
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telecommunications infrastructure. Transcom disagreed, arguing that
it is exempt from these fees because it is an enhanced service
provider.
After conducting a hearing and reviewing the parties’ written
briefs, on July 17, 2012, the Commission issued its “Order on
Complaints,” which included its factual findings and rulings.
In
this Order, the Commission found that Transcom was a common carrier,
not an enhanced service provider.
(Id. at 9-10.)
Accordingly, the
Commission ordered that Transcom and Halo cease and desist providing
intrastate
telecommunications
service
without
authority
of
the
Commission and that Halo pay all appropriate access fees and other
expenses to the carriers.
(Id. at 13-14.)
After unsuccessfully appealing to the Commission itself, (PSC
Reh’g Order, attached as Ex. 2 to Am. Compl. [2]), plaintiff Transcom
filed a complaint in this Court.
The amended complaint contains
eight counts. These counts can be divided into three categories: (1)
claims seeking review of the Commission Orders (Counts 1 and 8);2 (2)
§ 1983 claims alleging constitutional violations by the commissioners
of the Georgia Public Service Commission (Counts 2 and 3); and (3)
claims for damages against the TDS defendants and AT&T (Counts 4
2
Count 1 seeks review of the Commission’s Order pursuant to
relevant portions of the Telecommunications Act allowing same. Count
8 seeks review pursuant to the Georgia Administrative Procedures Act.
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through 7).
The TDS defendants have moved to dismiss Counts 4 through 7
under FED. R. CIV. P. 12(b)(1).
[22].)
(TDS’s Mot. to Dismiss (“TDS’s MTD”)
They argue that any success on these counts will require a
finding that Transcom is an enhanced service provider, and not a
common carrier: a finding that directly contradicts the findings of
the Commission.
(Id. at 15.)
Thus, defendants argue that Transcom
can succeed on these claims only if this or some other court reverses
the findings of the Commission and concludes that Transcom is an
enhanced service provider. (Id.) Until that occurs, TDS argues, the
claims are not ripe and should be dismissed on that ground.
In its separate motion to dismiss, defendant AT&T has moved to
dismiss Count 1 as well as Counts 4 through 7.
Dismiss (“AT&T’s MTD”) [21].)
(AT&T’s Mot. to
AT&T has also requested that this
Court decline to exercise its supplemental jurisdiction over Count 8.
(Id.) AT&T asserts that Count 1 should be dismissed because Transcom
lacks standing under 47 U.S.C. § 252 to ask for an appellate review
of the Commission’s Order, as it is not a “party aggrieved,” as
required by the statute.
(Id. at 21.)
As to Counts 4 through 7,
AT&T agrees with the TDS defendants that plaintiff Transcom cannot
prevail on these claims, given the rulings of the Georgia Public
Service Commission.
In addition to that fact, AT&T has asserted
other grounds that support dismissal, regardless of the outcome of
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the administrative review of the Commission’s Orders. (Id. at 10-11,
15, & 17-19.)
Finally, AT&T argues that, although this Court has
supplemental jurisdiction, pursuant to 28 U.S.C. § 1367, to consider
the state law claim brought in Count 8 to review and overturn the
Commission’s
decision,
the
Court
should
decline
to
exercise
jurisdiction because the state administrative review claim, brought
pursuant to O.C.G.A. § 50-13-19, substantially predominates over the
federal claims and the plaintiff has already filed a parallel action
in Fulton County Superior Court.
(Id. at 22-23.)
That is, AT&T
argues that the state court should be the judicial body to adjudicate
this claim by conducting an administrative review of the Commission’s
Orders pursuant to the Georgia Administrative Procedure Act.
After these motions were filed, the parties submitted their
Joint Report [30].
This report indicates that the parties have
agreed that the “administrative review portion of the case” should be
litigated before the other claims, with those other claims being
stayed.
(Joint Report [30] at 13.)
The parties stipulate that this
administrative review portion of the case will not require any
discovery because the review is confined to the record compiled
before the Commission.
(Id. at 15.)
The Court is not clear, however, whether the parties mean that
both Count 8 (review of Commission’s decision pursuant to the Georgia
Administrative Appeals Act) and Count 1 (challenge of Commission’s
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decision pursuant to 47 U.S.C. § 252) should proceed simultaneously,
or whether they contend that Count 1 should also await a decision on
the Count 8 claim.
As discussed below, that distinction could be
important in deciding whether to decline supplemental jurisdiction on
Count 8.
DISCUSSION
I.
Motion to Stay or Bifurcate [23]
The TDS defendants’ motion to stay or bifurcate [23] requests
that the Court bifurcate and proceed first with Count 8--the state
law claim for judicial review of the Commission’s decision--and stay
consideration of the additional claims.
14.)
(Mot. to Bifurcate [23] at
This motion mimics the sequencing of claims that the parties
later agreed to in the Joint Report.
Accordingly, in the event that
the Court proceeds at all on Count 8, it will follow the agreed-upon
order of litigation.
See discussion below. For this reason, the TDS
defendants’ motion to stay or bifurcate [23] is DENIED as moot.
II.
TDS Defendants’ Motion to Dismiss [22]
The TDS defendants base their motion to dismiss on the fact that
“the viability of Transcom’s additional claims is entirely contingent
on the outcome of this Court’s review of the PSC Orders [in Count
8].”
(TDS’s MTD [22] at 12.)
As the Court had indicated that review
of the challenge to the Commission’s Order should proceed first, with
other claims stayed, TDS has obtained the relief it seeks through
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this motion. Accordingly, the TDS defendants’ motion to dismiss [22]
is DENIED without prejudice.
III. AT&T’s Motion to Dismiss [21]
AT&T’s motion to dismiss [21] is much more complicated and
difficult to determine on the present briefing.
As to the easy
parts--Counts 4-7--the Court has already indicated that it will stay
those counts pending a review of challenges to the Commission’s
Orders.
Accordingly, even though AT&T says that these counts should
be dismissed no matter what happens with those challenges, the Court
does not have to reach the merits of AT&T’s motion to dismiss Counts
4-7, and this part of the motion is DENIED WITHOUT PREJUDICE.
As to the harder part of this motion, AT&T requests that this
Court first dismiss Count 1, on the ground that plaintiff lacks
standing, and that it then decline to exercise its supplemental
jurisdiction over Count 8.
(AT&T’s MTD [21] at 22-23.)
Looking
first at Count 1, AT&T notes that a state public utility commission’s
decision can be challenged only in federal court pursuant to 47
U.S.C. § 252.
Further, according to AT&T, the only entity that can
bring a challenge in federal court, pursuant to § 252(e)(6), is a
“party aggrieved” by the state commission’s decision.
And the only
such decisions that can be challenged are “decisions that arbitrate,
approve, or enforce interconnection agreements.”
(Id. at 21.)
AT&T
argues that because plaintiff Transcom was not a party to any
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interconnection agreement–-it was Halo that had the interconnection
agreement–-plaintiff cannot be a party that was aggrieved by the
Commission’s decision.
Indeed, AT&T notes that it was the company
that had the agreement with Halo and that AT&T filed its complaint
before the Commission only against Halo, not against plaintiff
Transcom.
(Id.)
In response, plaintiff Transcom insists that it was a “party
aggrieved,”
but
plaintiff
never
adequately
responds
to
AT&T’s
argument that plaintiff has to be a party aggrieved as to the
Commission’s determination concerning an interconnection agreement.
In fact, plaintiff’s argument on this point is conclusory and cites
to no apt legal authority.
Obviously, then, plaintiff’s response does not provide much
reassurance to the Court that it should permit plaintiff to litigate
this claim.
The strongest argument that plaintiff makes is to note
that the Georgia Commission has not moved to dismiss this count; nor
have the TDS defendants.
So, it seems that plaintiff and all
defendants except AT&T want to see Count 1 proceed.
But while that
is curious, and maybe telling, it is not a terribly persuasive legal
position.
On the other hand, while defendant AT&T has been able to
articulate the two preconditions for a § 252 challenge and to make an
argument that the plaintiff perhaps does not literally meet one of
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those elements, defendant is also pretty weak on legal authority.
Perhaps, this means that there is little, or no, authority directly
on point.
Moreover, defendant appears to concede that Counts 1 and
8 are essentially clones of each other, with the only difference
being that each statute looks to a different forum to adjudicate the
respective
statutes:
“And
the
last
remaining
count,
Count
1,
effectively raises the same issues as Count 8, just under the guise
of federal law instead of the state review process.”
(Id. at 23.)
Moreover, while AT&T casts the Commission’s action against plaintiff
Transcom as being separate from the action it took against Halo, the
Commission consolidated the complaints against the two entities and
the facts underlying its ruling on each greatly overlap.
The
question
comes
down
to
how
narrowly
aggrieved,” found in § 252, should be defined.
the
term
“party
If it is literally
defined as including only the entity that had the interconnection
agreement (Halo), then plaintiff Transcom would seem to be out of
luck in hitching its Count 1-wagon to a Commission ruling whose
remedy concerning an interconnection agreement applied only to Halo.
If “party aggrieved [by a ruling on an interconnection agreement],”
can be more broadly defined to include entities that were negatively
affected
by
the
Commission’s
decision
concerning
Halo’s
interconnection agreement with AT&T, even if those entities were not
parties to that agreement, then plaintiff’s Count 1 claim may
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survive.
After all, plaintiff Trancom’s business model appeared to
depend on it structuring its connection operations in a way to avoid
paying the access fees that the Commission indicated it should have
been paying to local carriers. While defendants contended before the
Commission that the plaintiff was essentially stealing their services
through a clever technical argument that masked the reality of what
plaintiff was actually doing, the alleged chicanery of plaintiff does
not mean that it was not aggrieved when its machinations were
disavowed by the Commission.
Clearly, though, given that the conjecture articulated above is
not supported by any caselaw or regulatory authority or practices,
any decision that the Court might make now on this question would
essentially be a coin toss.
which
is
moving
for
a
That uncertainty means that the party
particular
result
will
not
prevail.
Accordingly, if defendant AT&T wishes to pursue its request to
dismiss Count 1 on the ground that plaintiff Transcom has no standing
because it is not a “party aggrieved,” the Court will need more
thorough and persuasive briefing.
Without knowing whether Count 1 will remain with this Court, it
is difficult for the Court to decide whether it should abstain on
Count 8.
If Count 1 goes away, then AT&T’s argument against
exercising
supplemental
unassailable.
jurisdiction
Count
8
seems
almost
Without the federal cause of action permitting this
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over
Court to adjudicate the Georgia Commission’s decision, there will be
no pending federal claims as these other claims have been stayed
because
they
will
likely
have
no
chance
of
success
if
the
Commission’s decision is not overturned. To litigate Count 8 in that
scenario does seem to be allowing the Count 8 state-law tail to wag
the proverbial dog.
If Count 1 remains, one could argue that it would be more
efficient for the parties to litigate Counts 1 and 8 together, as
there will presumably be some replication of issues.
On the other
hand, efficient for the parties is not necessarily efficient for this
Court, whose resources are undoubtedly much thinner than are the
parties.
If the state court can adjudicate Count 8, which it can,
and if this adjudication would resolve Count 1, which it presumably
would, and if the other counts would then be dismissed upon an
affirmance of the Commission’s order, then allowing the state court
to conduct the review under the Georgia Administrative Procedures Act
seems highly efficient from this Court’s point of view.
The only factor that might undercut that argument is plaintiff’s
argument that most of the issues asserted in the review of the
Commission decision under the state administrative procedures law,
set out in Count 8, are highly dependent on federal law and, in
particular, on the construction of federal communications law.
That
might initially make a federal court seem to be a better candidate
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for
the
job
at
hand.
Yet,
jurisdiction or there is not.
there
is
either
federal
question
And here plaintiff is not asserting
that there is federal question jurisdiction.
In fact, plaintiff
concedes that the Court’s jurisdiction over Count 8 arises only as a
supplement to its jurisdiction over the remaining counts, all of
which assert federal statutes as giving rise to the particular causes
of action.
In short, the Court needs to be better educated and better
convinced before throwing out Count 1 and abstaining on Count 8. For
that reason, defendant AT&T’s motion to dismiss [21] is DENIED
WITHOUT PREJUDICE as to Count 1 and its constructive motion to
abstain on Count 8 is likewise DENIED WITHOUT PREJUDICE.
Should AT&T wish to revisit this matter, it may refile a motion
to dismiss/abstain on these two counts.
The Court will, however,
defer setting a deadline for that motion until it becomes clear
whether plaintiff Transcom intends to proceed with this litigation.
Specifically, absent a persuasive objection by July 29, the Court
will be granting the motion of plaintiff’s local counsel to withdraw.
As a corporation, plaintiff must be represented by counsel to proceed
with its case.
Should the Court grant that motion on July 29, it
will set a deadline for new local counsel to appear.
If plaintiff
fails to meet that deadline, the Court will dismiss plaintiff’s case,
litigation will be concluded in federal court, and all of these
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issues will then be moot.
Accordingly, the Court will set a new
deadline for AT&T to file a renewed motion to dismiss after the
status of plaintiff’s representation is determined.
One important caveat on any future pleadings filed by AT&T:
AT&T must follow the Local Rules regarding formatting of their
pleadings, and in particular, LR 5.1, NDGa. AT&T’s current pleadings
are written in a Times New Roman font significantly smaller than the
14-point font called for by LR 5.1C, NDGa.
[21].)
Besides
creating
a
document
with
(See, e.g., AT&T’s MTD
small
print
that
is
difficult to read, it appears that AT&T was trying to get around the
page limits set out by local rule.
The Court will always consider a
meritorious motion to extend the page limit, but greatly resents
straining its eyes on pleadings written by attorneys
who seek to
achieve that same result by simply ignoring another part of the
Court’s local rules.
CONCLUSION
For the above reasons, the TDS defendants’ motion to stay or
bifurcate [23] and their motion to dismiss [22] are DENIED as moot.
Defendant AT&T’s motion to dismiss [21] is DENIED but with a right to
re-file on a deadline to be later set by the Court.
Any future
pleadings filed by AT&T will be struck if they do not comply with the
applicable local rules.
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SO ORDERED, this 25th day of July, 2013.
/s/ Julie E. Carnes
JULIE E. CARNES
CHIEF UNITED STATES DISTRICT JUDGE
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