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Salsgiver Communications, Inc. v. Consolidated Communications Holdings

June 30, 2008

SALSGIVER COMMUNICATIONS, INC., SALSGIVER TELECOM, INC. SALSGIVER, INC., PLAINTIFFS,
v.
CONSOLIDATED COMMUNICATIONS HOLDINGS, INC., NORTH PITTSBURGH SYSTEMS, INC., NORTH PITTSBURGH TELEPHONE COMPANY, INC. DEFENDANTS.



The opinion of the court was delivered by: Arthur J. Schwab United States District Judge

ELECTRONICALLY FILED

MEMORANDUM OPINION

I. Introduction and Background

Before the Court are defendants' motion to dismiss a complaint which they removed from the Court of Common Pleas of Allegheny County to this Court on May 16, 2008, and plaintiffs' motion to remand to that Court for lack of federal jurisdiction. After careful consideration of the complaint, the notice of removal, the pending motions, and the briefs in support and in opposition thereto, the Court will grant plaintiffs' motion to remand to state court, and will deny defendants' motion to dismiss without prejudice to raise the issues set forth therein in the Court of Common Pleas of Allegheny County, including any federal preemption defense they may have.

A. State Court Complaint

Plaintiffs Salsgiver Communications, Inc., Salsgiver Telecom, Inc., and Salsgiver, Inc. filed their Complaint in Civil Action in state court setting forth three causes of action, each sounding in Pennsylvania common law tort, namely, negligent and intentional interference with prospective and existing contractual relations with third parties. Count I alleges that Salsgiver Communications, Inc. is and was at all relevant times a "cable television system" within the meaning of the Pole Attachment Act (the Act"), 47 U.S.C. § 224 (a provision of the Federal Communications Act of 1934, as amended); that defendants Consolidated Communications Holdings, Inc., North Pittsburgh Systems, Inc., and North Pittsburgh Telephone Company, Inc. were required by the Act to allow cable television systems, including Salsgiver Communications access to defendants' poles, as the Federal Communications Commission held and ordered following its adjudication of Salsgiver Communications' administrative complaint; that defendants knew or should have known since October 2004 that Salsgiver Communications was entitled to use defendants' poles; and that defendants' refusal to allow access to said poles willfully, intentionally, purposefully and negligently interfered with Salsgiver Communications' prospective and existing contractual relations with third parties, causing over one hundred million dollars in lost profits and other damages when Salsgiver Communications was unable to fulfill its obligations to third parties. Complaint, ¶¶ 1-23. Count II alleges that Salsgiver Telecom, Inc. is and was a "telecommunications carrier" within the meaning of the Act at all relevant times and, as such, was also entitled to access to defendants' poles, as the FCC held and ordered following its adjudication of Salsgiver Telecom's administrative complaint; that defendants knew or should have known since October 2005 that Salsgiver Telecom was entitled to use defendants' poles; and that defendants' refusal to allow access to said poles willfully, intentionally, purposefully and negligently interfered with Salsgiver Telecom's contractual relations with third parties, causing the loss of over $1.6 million in lost profit and other damages when Salsgiver Telecom was unable to fulfill its obligations to third parties. Complaint, ¶¶ 24- 30. Count III alleges that defendants willfully, intentionally, purposefully and negligently interfered with Salsgiver Inc.'s contractual relations with its wholly-owned subsidiaries, the other Salsgiver entities, causing over $3.2 million in unnecessary costs and expenditures and other damages. Complaint, ¶¶ 31-35.

B. Notice of Removal

Defendants' Notice of Removal claims federal question jurisdiction, 28 U.S.C. § 1331, as the basis for removal under 28 U.S.C. § 1441, stating "two independent bases" for federal question jurisdiction. First, defendants assert that the complaint raises a "substantial federal question," and therefore arises under federal law, because a necessary element of plaintiffs' cause of action for intentional interference with existing and prospective contractual relations is that defendants had no privilege or justification for their alleged acts of interference, that whatever duties defendants have to provide access to plaintiffs to use its poles is established by the Act, and that the alleged violation of the Act and lack of privilege or justification "are central and essential elements of Plaintiffs' purported causes of action." Notice of Removal (doc. no. 1) at ¶¶ 10-13. Second, defendants claim that the Act completely preempts any state regulations or laws implicating pole attachments under the Act. Id. at ¶¶ 14-17.

C. Motion to Remand

Plaintiffs contend that this Court lacks subject matter jurisdiction because their claims of interference with prospective and existing contractual relations under Pennsylvania common law do not present a substantial federal question. Whatever federal question may have existed has been finally adjudicated by the decisions of the FCC*fn1 holding that Salsgiver Communications, Inc. qualifies as a "cable television system" and that Salsgiver Telecom, Inc. is a "telecommunications carrier" within the meaning of the Act, and therefore, both are and were entitled to non-discriminatory access to defendants' utility poles.

Defendants respond that a substantial federal dispute remains an essential element of plaintiffs' claims, that the Act completely preempts state regulatory authority over pole attachments, and that plaintiffs' claims must be recharacterized as federal claims under the Federal Communications Act of which the Pole Attachment Act is a part.

II. Removal Jurisdiction

A. In General

Removal is governed by statute, 28 U.S.C. § 1441, which provides: "(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." Federal district courts have "federal question" jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States," 28 U.S.C. § 1331, and diversity jurisdiction over citizens of different states, 28 U.S.C. § 1332. Where, as here, "the parties are not diverse, removal is appropriate only if the case falls within the district court's original 'federal question' jurisdiction." U.S. Express Lines Ltd. v. Higgins, 281 F.3d 383, 389 (3d Cir. 2002).

Whether filed initially in federal court or on removal from a state court, a federal court must always consider its own jurisdiction to proceed in a matter, and should do so sua sponte if not raised by the parties. Id. at 388-89 (recognizing the "duty of federal courts to examine their subject matter jurisdiction at all stages of the litigation sua sponte if the parties fail to raise the issue."). As federal courts are courts of only limited jurisdiction, there is a general presumption against federal jurisdiction which the party seeking to invoke federal jurisdiction bears the burden of rebutting. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Thus, "statutes purporting to confer federal jurisdiction are to be construed narrowly, with ambiguities resolved against a finding of federal jurisdiction," given the "well-established principles reflecting a reluctance to find federal jurisdiction unless it is clearly provided . . ." by Congress. ErieNet, Inc. v. Velocity Net, Inc., 156 F.3d 513, 518 (3d Cir. 1998) (citations omitted) (Telephone Consumer Protection Act did not provide for private suits in federal court; "appellants' argument that federal question jurisdiction is proper because the complaint poses a substantial federal question seems misplaced [here because] federal law is the source of appellants' cause of action, but refers litigants to state courts only. Thus, regardless of the presence of a substantial federal question, Congress' intent to preclude consumer suits under TCPA in federal court trumps the general grant of federal question jurisdiction in § 1331.").

So too, because federal courts have limited jurisdiction as defined by Congress, the removal statutes are strictly construed against removal. E.g., American Fire & Cas. Co. v. Finn, 341 U.S. 6 (1951); Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir. 1974). The United States Court of Appeals for the Third Circuit has repeatedly emphasized that because the party "who urges jurisdiction on a federal court bears the burden of proving that jurisdiction exists . . . , all doubts should be resolved in favor of remand." Boyer v. Snap-on Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990) (internal quotations and citations omitted). See also Morgan v. Gay, 471 F.3d 469, 472 (3d Cir. 2006) ("The party seeking to remove a case to federal court bears the burden to establish jurisdiction."), citing Boyer and Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) ( "The party invoking federal jurisdiction bears the burden of ...


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