United States District Court, Western District of Pennsylvania
April 3, 2003
MARK B. ARONSON, UPON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF COUNTERCLAIM-DEFENDANT,
IDT CORPORATION D/B/A IDT AMERICA, DEFENDANT/COUNTERCLAIM-PLAINTIFF
The opinion of the court was delivered by: Terrence F. Merry, United State District Judge
MEMORANDUM OPINION AND ORDER
Presently pending before the Court for disposition are the following:
(i) "Motion to Remand" filed by Plaintiff, Mark B. Aronson, upon behalf of himself and all others similarly situated, (Document No. 12) and the brief in opposition filed by Defendant, EDT Corporation d/b/a EDT America (Document No. 17-1); and
(ii) "Cross Motion for Referral of Issues to the [Federal Communications Commission] under the Doctrine of Primary Jurisdiction and for a Stay of the District Court Proceedings Pending the Referral" filed by Defendant EDT Corporation d/b/a EDT America (Document No. 17-2), the response in opposition filed Plaintiff, Mark B. Aronson, upon behalf of himself and all others similarly situated, (Document No. 21), and the Reply Brief filed by Defendant EDT Corporation d/b/a EDT America (Document No. 22).
After careful consideration of the motions, the filings in support and opposition thereto, the relevant case law, and after hearing and considering the oral arguments of counsel, the Court will deny the Motion to Remand, grant the Cross Motion for Referral of Issues to the Federal Communications Commission, and stay this matter pending resolution of the issues by the Federal Communications Commission.
On or about September 13, 2002, Mark Aronson ("Aronson"), on his own behalf and on behalf of all others similarly situated, filed a Complaint in the Court of Common Pleas of Allegheny County, Pennsylvania, against EDT Corporation, d/b/a EDT America ("EDT"), alleging breach of contract. Aronson alleges that without his authorization EDT requested his telephone service provider, Verizon, to switch his regional toll and long distance carrier from Global Crossing to AT&T Long Distance, which resulted in a $10.00 charge per phone to the customers of EDT.
The purported class members each obtained their regional toll and long distance telephone service from EDT and their local telephone service from Verizon. Aronson seeks to certify a class of as many as 500,000 persons and demands judgment against EDT for compensatory damages, consequential damages, punitive damages, costs including attorney's fees, and any other relief which the Court "deems fair and proper under the circumstances."
On October 7, 2002, EDT filed a Notice of Removal based on diversity of citizenship, two days later, on October 9, 2002, Aronson filed his first Motion to Remand. (Documents Nos, 1 and 2, respectively).
On October 16, 2002, EDT filed an amended Notice of Removal alleging both diversity jurisdiction and federal question jurisdiction. (Document No. 4).
On November 4, 2002, unaware of the amended Notice of Removal, the Court remanded the matter to state court based on lack of diversity. (Document No. 6). EDT then filed a Motion to Vacate, which the court granted on November 27, 2002. (Document Nos. 7 and 11, respectively).
On November 25, 2002, EDT filed its Answer and Affirmative Defenses to the Complaint as well as a Counterclaim. (Document No. 9).
On December 13, 2002, Aronson filed his second Motion to Remand. (Document No. 12).
On January 10, 2003, EDT responded to the Motion to Remand and filed a crossmotion for referral of issues to the Federal Communications Commission ("FCC") under the doctrine of primary jurisdiction and for a stay of the district court's proceedings pending the referral. (Document No. 17).
On February 12, 2003, the Court heard oral arguments on both the motion to remand and the motion for referral of issues. The matter is now ripe for disposition.
MOTION TO REMAND
The propriety of removal depends on whether the case originally could have been filed in federal court. City of Chicago v. Int'l Coll. of Surgeons, 522 U.S. 156, 163 (1997). "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c).
Aronson contends that removal to federal court was improper because (i) the "matter in controversy" required under 28 U.S.C. § 1332(a)(1) cannot be met;*fn1 and (ii) no cause of action arising under federal law is involved in this case as required under 28 U.S.C. § 1331.*fn2
IDT argues, inter alia, that removal was proper because any obligation IDT had to obtain Aronson's authorization or follow any procedures prior to switching its underlying facilities are governed by federal law, 47 U.S.C. § 258(a), and must be resolved in a federal forum, 47 U.S.C. § 207.
Under the well-pleaded complaint rule, the plaintiff is the master of his complaint and, ordinarily, may avoid federal jurisdiction by exclusive reliance on state law. See, e.g., Caterpillar v. Williams, 482 U.S. 386, 392 (1987). One exception, however, is the artful pleading doctrine, which allows a defendant to remove a case to federal court when a plaintiff's facially well-pleaded complaint fails to mention a necessary federal issue.
EDT argues that the artful pleading doctrine applies in this matter as any resolution of Aronson's claims requires a decision as to what, if any, authorizations a carrier must obtain, or procedures a carrier must follow, when switching facilities in the manner that Aronson describes. EDT argues that the answers to these questions are dictated by a "pervasive federal statutory and administrative body of law," namely the Federal Communications Act (the "FCA"), 47 U.S.C. § 151, et seq, and the rules and regulations of the FCC. Def's Opp'n to Mot. to Remand, at 9.
The FCA states that the FCC has sole authority to prescribe "verification procedures" that shall be required of switching carriers.*fn3 EDT argues that the FCC has established through its rules and decisions a comprehensive federal scheme governing what is, and what is not, an unauthorized carrier change.
Additionally, the FCA limits the forum available to those claiming violations of these rules. One complaining exclusively of violations with respect to intrastate services may complain to a "State commission." However, complainants with respect to interstate services must "either make complaint to the Commission [or file suit] in any district court of the United States of competent jurisdiction." 47 U.S.C. § 207.*fn4
Aronson argues, without authority, that IDT is a telecommunications provider not a common carrier, and thus, federal statutory and administrative law do not apply to it. IDT responds that Aronson is "wildly mistaken" as EDT is a common carrier, is regulated by the FCC, and is subject to the entire panoply of FCC rules and regulations concerning unauthorized carrier changes.
By its terms, title 47, United States Code, section 258, applies to all telecommunications carrier[s]. Def's Opp'n to Mot. to Remand, at 12. A "telecommunications carrier" is defined as "any provider of telecommunications services." 47 U.S.C. § 153(44). Moreover, EDT points out that not only is it subject to FCC regulation generally, and to its carrier change rules in particular, it has been involved in agency proceedings brought under those rules.
In his Reply to the Motion to Refer to the FCC, Aronson contends that the gravamen of his complaint is that when EDT changed its underlying network facility from Global Crossing to AT&T Long Distance, it (i) failed to notify its customers of the switch and (ii) failed to reimburse its customers for the fees they incurred as a result of the switch.*fn5
The Complaint, in relevant part, alleges:
5. Although Plaintiff had authorized EDT to request
Verizon to switch Plaintiff's regional toll and
long distance carriers on Plaintiff's two numbers
to EDT when Plaintiff became a customer of EDT
(which switch of carriers Verizon processed), at
no time did Plaintiff authorize EDT to request
Verizon to switch Plaintiff's regional toll and
long distance carrier to AT&T Long Distance
Service or any other carriers.
6. Nevertheless, on or about July 29, 2002, EDT
placed an Order with Verizon requesting and
authorizing Verizon to change the regional toll
company and the long distance company servicing
Plaintiff's two telephone numbers assigned to
Plaintiff by Verizon from Global Crossing Telecom
(an EDT designary) to AT&T Long Distance Service
(apparently a new EDT designary)
10. Plaintiff had not requested or authorized
Defendant to request Verizon to change Plaintiff's
regional toll and long distance service
Complaint at ¶¶ 5, 6 and 10.
The Court finds that resolution of Aronson's claims, no matter how they are framed, requires a determination of what obligations (if any) EDT had to obtain Aronson's authorization or follow any procedures prior to switching its underlying facilities. There is no doubt that a pervasive federal scheme exists which governs the circumstances under which a phone company may "change [a customer's] regional toll and long distance service providers." Complaint at ¶ 10. Therefore, Aronson cannot avoid federal jurisdiction by artfully pleading exclusive reliance on state law. See, e.g., Catepillar v. Williams, 482 U.S. 386, 392 (1987).
For these reasons, the Courts finds that Aronson's claims are governed by federal law and, thus, will deny the Motion to Remand.*fn6
Cross-Motion For Referral of Issues To The FCC Under
The Doctrine of Primary Jurisdiction And For A Stay of
The District Court Proceedings Pending The Referral
IDT argues that the propriety of its carrier switch is dictated by federal law, including Section 258 of the FCA, and various FCC rules, regulations and orders, the interpretation of which should lie within the discretion and expertise of the FCC. Moreover, EDT argues that the resolution of this matter requires a decision that implicates significant policy concerns and administrative discretion, and this Court should allow the FCC to make that decision by referring the question to the FCC on grounds of primary jurisdiction. While continuing to deny that jurisdiction is based on federal law, Aronson argues in the alternative that this matter should not be referred to the FCC as "Plaintiff's claims do not raise questions within the expertise and discretion of the Federal Communications Commission." Reply at 7.
As explained by the Supreme Court of the United States, under the doctrine of primary jurisdiction, referral to an administrative agency is appropriate if an action appears to involve technical or policy considerations beyond the trial court's ordinary competence and within the agency's field of expertise. Reiter v. Cooper, 507 U.S. 258 (1993); MCI Communications Corp. v. American Telephone & Telegraph Co., 496 F.2d 214, 220 (3d Cir. 1974).
When enforcement of a claim originally cognizable in court requires resolution of issues within the special competence or expertise of an administrative body, the issues should be referred to the agency with primary jurisdiction. United States v. Western Pacific R. Co., 352 U.S. 59, 64 (1956). This ensures a "workable relationship between the courts and administrative agencies wherein . . . the court can have the benefit of an agency's views on issues within the agency's competence." MCI Telecomm. Corp. v. Teleconcepts, Inc., 71 F.3d 1086, 1105 (3d Cir. 1995).
There is no fixed formula for determining whether the doctrine of primary jurisdiction applies. See United States v. Western Pacific Railroad Co., 352 U.S. 59. 77 (1956). Some courts have found the following four factors helpful in determining whether to apply the doctrine:
1. whether the question at issue is within the
conventional experience of judges or whether it
involves technical or policy considerations within
the agency's particular field of expertise;
2. whether the question at issue is particularly
within the agency's discretion;
3. whether there exists a substantial danger of
inconsistent rulings; and
4. whether a prior application to the agency has been
AT&T Corp. v. PAB, Inc., 935 F. Supp. 584, 589-90 (E.D. 1996); Oh v. AT&T Corp., 76 F. Supp.2d 551, 557 (D.N.J. 1999) (citing American Telephone & Telegraph Co. v. People's Network, Inc., 1993 WL 248165 (D.N.J. 1993)).
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." MCI Telecommunications Corp., 71 F.3d 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.
The FCC is empowered to adjudicate the fairness, reasonableness or lawfulness of a practice, and to award damages to the complainant injured by an improper practice. As stated above, the core of Aronson's lawsuit is the allegation that the switching practice of IDT was unlawful.
The FCC has a regulatory scheme and can best examine the switching practice of IDT and other switchless retailers. While recognizing that this issue is not beyond the Court's jurisdiction, the Court finds that the FCC expertise with the nuances and policies of telecommunications practice and the potentiality of inconsistent rulings militates in favor of referring this issue to the FCC.
Accordingly, the Motion for Referral of Issues will be granted and this matter will be stayed pending the final resolution of Aronson's claims by the FCC. An appropriate Order follows.
ORDER OF COURT
AND NOW, this 3rd day of April, 2003, it is hereby ORDERED, ADJUDGED, AND DECREED as follows:
1. The "Motion to Remand" filed by Plaintiff (Document No. 12) is DENIED; and
2. The "Cross Motion for Referral of Issues to the FCC under the Doctrine of Primary Jurisdiction and for a Stay of the District Court Proceedings Pending the Referral" filed by Defendant (Document No. 17-2) is GRANTED.
It is also ORDERED that Defendant shall initiate an appropriate proceeding at the FCC on or before April 30, 2003, to consider the issues raised in the pleadings of this case and the parties are to update the Court periodically on the progress of the FCC proceedings and report to the Court promptly upon the conclusion of same.
It is further ORDERED that this matter is STAYED and ADMINISTRATIVELY CLOSED pending completion of the FCC proceedings. Nothing contained in this Order shall be considered a dismissal or disposition of this action and should further proceedings become necessary or desirable before the completion of the FCC proceedings, either party may initiate the same in the same manner as if this Order had not been entered.