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PHONE-TEL COMMUNICATIONS, INC. v. AT & T CORP.

June 12, 2000

PHONE-TEL COMMUNICATIONS, INC., ET AL., PLAINTIFFS,
V.
AT & T CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Eduardo C. Robreno, District Judge.

MEMORANDUM

I. BACKGROUND

This is an action brought by plaintiff Phone-Tel Communications, Inc. (plaintiff) against defendants AT & T Corporation, Sprint Corporation, and MCI Worldcom, Inc. (collectively defendants), alleging violations of the Telecommunications Act of 1996 (the Act). Plaintiff is a payphone service provider (PSP) that owns and operates payphones across the country. Defendants are interexchange carriers (IXC's), commonly known as long distance telephone companies.

Plaintiff alleges, in what it terms a "simple collection" case, that defendants have not paid it for calls which defendants' customers completed by using payphones owned by plaintiff. Defendants, on the other hand, argue that because plaintiff's complaint raises technical and policy issues within the expertise and discretion of the Federal Communications Commission (FCC), the court should refer this matter to the FCC under the doctrine of primary jurisdiction and either dismiss the case, or in the alternative, stay these proceedings pending action by the FCC. Before the court are defendants' motions to dismiss plaintiff's complaint, or in the alternative, to stay these proceedings. The court concludes that because plaintiff's claim raises certain technical and policy issues within the special competence of the FCC, those issues shall be referred to the FCC in the first instance for resolution and the case shall be stayed pending consideration of those issues by the FCC.

II. DISCUSSION

A. The Doctrine of Primary Jurisdiction

1. The parties' contentions

In the Telecommunications Act of 1996, Congress required the FCC to promulgate regulations "ensuring that payphone service providers would be `fairly compensated' for calls made on their payphones." MCI Telecommunications Corporation v. Federal Communications Commission, 143 F.3d 606, 607 (D.C.Cir. 1998).*fn1 Pursuant to the direction of Congress, the FCC established a compensation system requiring IXC's such as defendants to compensate PSP's such as plaintiff on a per call basis for each call their customers complete from a payphone owned by the PSP.

Plaintiff seeks relief under the Act in the form of an accounting requiring defendants to: (1) identify the number of calls their customers completed from plaintiff's payphones beginning on October 6, 1996; (2) establish that the procedure employed in making that identification was performed accurately and in accordance with FCC regulations; and (3) compensate plaintiff using the applicable per call compensation rate for each identified call.

Defendants contend that this is not a "simple collection" case, as plaintiff claims, but rather the case implicates "a myriad of outstanding technical, interpretive and policy issues" that fall squarely within the expertise and discretion of the FCC. Defendant MCI Worldcom, Inc.'s Motion to Dismiss (Doc. No. 10), p. 2. Thus, according to defendants, the court should stay its hand and refer the matter to the FCC under the doctrine of primary jurisdiction.

2. Applicable case law

The doctrine of primary jurisdiction applies "to claims properly cognizable in court that contain some issue within the special competence of an administrative agency." Reiter v. Cooper, 507 U.S. 258, 113 S.Ct. 1213, 1220, 122 L.Ed.2d 604 (1993). Under the doctrine, "a court should refer a matter to an administrative agency for resolution, even if the matter is otherwise properly before the court, if it appears that the matter involves technical or policy considerations which are beyond the court's ordinary competence and within the agency's particular field of expertise." MCI Communications Corporation v. American Telephone & Telegraph Company, 496 F.2d 214, 220 (3d Cir. 1974); see also MCI Telecommunications Corporation v. Teleconcepts, Inc., 71 F.3d 1086, 1103 (3d Cir. 1995) ("Primary jurisdiction `applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body.'").*fn2 The Supreme Court described the doctrine of primary jurisdiction as

a principle, now firmly established, that in cases raising issues of fact not within the conventional experience of judges or cases requiring the exercise of administrative discretion, agencies created by Congress for regulating the subject matter should not be passed over. This is so even though the facts after they have been appraised by specialized competence serve as a premise for legal consequences to be judicially defined. Uniformity and consistency in the regulation of business entrusted to a particular agency are secured, and the limited functions of review by the judiciary are more rationally exercised, by preliminary resort for ascertaining and interpreting the circumstances underlying legal issues to agencies that are better equipped than courts by specialization, by insight gained through experience, and by more flexible procedures.

Far East Conference v. United States, 342 U.S. 570, 72 S.Ct. 492, 494, 96 L.Ed. 576 (1952).*fn3

Courts have been cautioned, however, not to instinctively invoke the doctrine of primary jurisdiction "whenever a controversy remotely involves some issue falling arguably within the domain of the agency's `expertise.'" Teleconcepts, 71 F.3d at 1104. Rather, courts are commanded to examine each issue identified by the party proposing application of the doctrine to determine whether resolution of the specific issue requires the special competence of an administrative agency. Id. (quoting Elkin v. Bell Telephone, 491 Pa. 123, 420 A.2d 371, 377 (1980)).

The party urging the court to refer the matter in whole or in part to an administrative agency bears the burden of persuading the court that the case "requires resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body." Id. at 1103. If the moving party satisfies its burden and the court finds that specific and discrete issues in the case require attention from the appropriate administrative agency, the issues identified by the court shall be referred to the administrative agency for its consideration in the first instance.

3. Issues which implicate the doctrine of primary jurisdiction

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