Global Crossing Telecommunications, Inc. v. Metrophones Telecommunications, Inc.
Global Crossing Telecommunications, Inc. v. Metrophones Telecommunications, Inc.
Opinion of the Court
delivered the opinion of the Court.
The Federal Communications Commission (Commission or FCC) has established rules that require long-distance (and certain other) communications carriers to compensate a payphone operator when a caller uses a payphone to obtain free access to the carrier’s lines (by dialing, e. g., a 1-800 number or other access code). The Commission has added that a carrier’s refusal to pay the compensation is a “practice . . . that is unjust or unreasonable” within the terms of the Communications Act of 1934, § 201(b), 48 Stat. 1070, 47 U. S. C. § 201(b). Communications Act language links § 201(b) to § 207, which authorizes any person “damaged” by a violation of § 201(b) to bring a lawsuit to recover damages in federal court. And we must here decide whether this linked section, §207, authorizes a payphone operator to bring a federal-court lawsuit against a recalcitrant carrier that refuses to pay the compensation that the Commission’s order says it owes.
In our view, the FCC’s application of § 201(b) to the carrier’s refusal to pay compensation is a reasonable interpreta
I
A
Because regulatory history helps to illuminate the proper interpretation and application of §§ 201(b) and 207, we begin with that history. When Congress enacted the Communications Act of 1934, it granted the FCC broad authority to regulate interstate telephone communications. See Louisiana Pub. Serv. Comm’n v. FCC, 476 U. S. 355, 360 (1986). The Commission, during the first several decades of its history, used this authority to develop a traditional regulatory system much like the systems other commissions had applied when regulating railroads, public utilities, and other common carriers. A utility or carrier would file with a commission a tariff containing rates, and perhaps other practices, classifications, or regulations in connection with its provision of communications services. The commission would examine the rates, etc., and, after appropriate proceedings, approve them, set them aside, or, sometimes, set forth a substitute rate schedule or list of approved charges, classifications, or practices that the carrier or utility must follow. In doing so, the commission might determine the utility’s or carrier’s overall costs (including a reasonable profit), allocate costs to particular services, examine whether, and how, individual rates would generate revenue that would help cover those costs, and, if necessary, provide for a division of revenues among several carriers that together provided a single service. See 47 U. S. C. §§ 201(b), 203, 205(a); Missouri ex rel. Southwestern Bell Telephone Co. v. Public Serv. Comm’n of Mo., 262 U. S. 276, 291-295 (1923) (Brandeis, J., concurring in judgment) (telecommunications); Verizon Communications
In authorizing this traditional form of regulation, Congress copied into the 1934 Communications Act language from the earlier Interstate Commerce Act of 1887, 24 Stat. 379, which (as amended) authorized federal railroad regulation. See American Telephone & Telegraph Co. v. Central Office Telephone, Inc., 524 U. S. 214, 222 (1998). Indeed, Congress largely copied §§ 1,8, and 9 of the Interstate Commerce Act when it wrote the language of Communications Act §§ 201(b) and 207, the sections at issue here. The relevant sections (in both statutes) authorize the Commission to declare any carrier “charge,” “regulation,” or “practice” in connection with the carrier’s services to be “unjust or unreasonable”; they declare an “unreasonable,” e. g., “charge” to be “unlawful”; they authorize an injured person to recover “damages” for an “unlawful” charge or practice; and they state that, to do so, the person may bring suit in a “court” “of the United States.” Interstate Commerce Act §§ 1,8, 9, 24 Stat. 379, 382; Communications Act §§ 201(b), 206, 207, 48 Stat. 1070, 1072, 1073, 47 U. S. C. §§ 201(b), 206, 207.
Historically speaking, the Interstate Commerce Act sections changed early, preregulatory common-law rate-supervision procedures. The common law originally permitted a freight shipper to ask a court to determine whether a railroad rate was unreasonably high and to award the shipper damages in the form of “reparations.” The “new” regulatory law, however, made clear that a commission, not a court, would determine a rate’s reasonableness. At the same time, that “new” law permitted a shipper injured by an unreasonable rate to bring a federal lawsuit to collect damages. Interstate Commerce Act §§ 1, 8-9; Arizona Grocery Co. v. Atchison, T. & S. F. R. Co., 284 U. S. 370, 383-386
Beginning in the 1970’s, the FCC came to believe that communications markets might efficiently support more than one firm and that competition might supplement (or provide a substitute for) traditional regulation. See MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U. S. 218, 220-221 (1994). The Commission facilitated entry of new telecommunications carriers into long-distance markets. And in the 1990’s, Congress amended the 1934 Act while also enacting new telecommunications statutes, in order to encourage (and sometimes to mandate) new competition. See Telecommunications Act of 1996, 110 Stat. 56, 47 U. S. C. § 609 et seq. Neither Congress-nor the Commission, however, totally abandoned traditional regulatory requirements. And the new statutes and amendments left many traditional requirements and related statutory provisions, including §§ 201(b) and 207, in place. E. g., National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U. S. 967, 975 (2005).
B
The regulatory problem that underlies this lawsuit arises at the intersection of traditional regulation and newer, more competitively oriented approaches. Competing long-distance carriers seek the business of individual local callers, including those who wish to make a long-distance call from a local payphone. A payphone operator, however, controls what is sometimes a necessary channel for the caller to reach the long-distance carrier. And prior to 1990, a payphone op
At the same time, Congress recognized that the “free” call would impose a cost upon the payphone operator; and it consequently required the FCC to “prescribe regulations that... establish a per call compensation plan to ensure that all payphone service providers are fairly compensated for each and every completed intrastate and interstate call.” § 276(b)(1)(A) of the Communications Act of 1934, as added by § 151 of the Telecommunications Act of 1996,110 Stat. 106, codified at 47 U. S. C. § 276(b)(1)(A).
The FCC then considered the compensation problem. Using traditional ratemaking methods, it found that the (fixed and incremental) costs of a “free” call from a payphone to, say, a long-distance carrier warranted reimbursement of (at the time relevant to this litigation) $0.24 per call. The FCC ordered carriers to reimburse the payphone operators in this amount unless a carrier and an operator agreed upon a different amount. 47 CFR § 64.1300(d) (2005). At the same time, it left the carriers free to pass the cost along to their customers, the payphone callers. Thus, in a typical “free” call, the carrier will bill the caller and then must share the revenue the carrier receives — to the tune of $0.24 per call— with the payphone operator that has, together with the car
C
In 2003, respondent, Metrophones Telecommunications, Inc., a payphone operator, brought this federal-court lawsuit against Global Crossing Telecommunications, Inc., a long-distance carrier. Metrophones sought compensation that it said Global Crossing owed it under the FCC’s Compensation Order, 14 FCC Red. 2545 (1999). Insofar as is relevant here, Metrophones claimed that Global Crossing’s refusal to pay amounted to a violation of § 201(b), thereby permitting Metrophones to sue in federal court, under § 207, for the compensation owed. The District Court agreed. 423 F. 3d 1056, 1061 (CA9 2005). The Ninth Circuit affirmed the District Court’s determination. Ibid. We granted certiorari to determine whether §207 authorizes the lawsuit.
II
A
Section 207 says that “[a]ny person claiming to be damaged by any common carrier . .. may bring suit” against the carrier “in any district court of the United States” for “recovery of the damages for which such common carrier may be liable under the provisions of this chapter.” 47 U. S. C. §207 (emphasis added). This language makes clear that the lawsuit
The history of these sections — including that of their predecessors, §§ 8 and 9 of the Interstate Commerce Act — simply reinforces the language, making clear the purpose of §207 is to allow persons injured by § 201(b) violations to bring federal-court damages actions. See, e. g., Arizona Grocery Co., 284 U. S., at 384-385 (Interstate Commerce Act §§8-9); Part I-A, supra. History also makes clear that the FCC has long implemented § 201(b) through the issuance of rules and regulations. This is obviously so when the rules take the form of FCC approval or prescription for the future of rates that exclusively are “reasonable.” See 47 U. S. C. § 205 (authorizing the FCC to prescribe reasonable rates and practices in order to preclude rates or practices that violate §201(b)); 5 U. S. C. §551(4) (“‘rule’. . . includes the approval or prescription for the future of rates ... or practices”). It is also so when the FCC has set forth rules that, for example, require certain accounting methods or insist upon certain carrier practices, while (as here) prohibiting others as unjust or unreasonable under § 201(b). See, e.g. (to name a few), Verizon Tel. Cos. v. FCC, 453 F. 3d 487, 494 (CADC 2006) (rates unreasonable (and hence unlawful) if not adjusted pursuant to accounting rules ordered in FCC regulations); Cable & Wireless P. L. C. v. FCC, 166 F. 3d 1224, 1231 (CADC 1999) (failure to follow Commission-ordered settlement practices unreasonable); MCI Telecommunications Corp. v. FCC,
Insofar as the statute’s language is concerned, to violate a regulation that lawfully implements §201(b)’s requirements is to violate the statute. See, e. g., MCI Telecommunications Corp., 59 F. 3d, at 1414 (“We have repeatedly held that a rate-of-return prescription has the force of law and that the Commission may therefore treat a violation of the prescription as a per se violation of the requirement of the Communications Act that a common carrier maintain ‘just and reasonable’ rates, see 47 U. S. C. § 201(b)”); cf. Alexander v. Sandoval, 532 U. S. 275, 284 (2001) (it is “meaningless to talk about a separate cause of action to enforce the regulations apart from the statute”). That is why private litigants have long assumed that they may, as the statute says, bring an action under § 207 for violation of a rule or regulation that lawfully implements § 201(b). See, e. g., Oh v. AT&T Corp., 76 F. Supp. 2d 551, 556 (NJ 1999) (assuming validity of § 207 suit alleging violation of § 201(b) in carrier’s failure to provide services listed in FCC-approved tariff); Southwestern Bell Tel. Co. v. Allnet Communications Servs., Inc., 789 F. Supp. 302, 304-306 (ED Mo. 1992) (assuming validity of § 207 suit to enforce FCC’s determination of reasonable practices related to payment of access charges by long-distance carrier to local exchange carrier); cf., e. g., Chicago & North Western Transp. Co. v. Atchison, T. & S. F. R. Co., 609 F. 2d 1221, 1224-1225 (CA7 1979) (same in respect to Interstate Commerce Act equivalents of §§ 201(b), 207).
The difficult question, then, is not whether §207 covers actions that complain of a violation of § 201(b) as lawfully implemented by an FCC regulation. It plainly does. It re
B
In our view the FCC’s § 201(b) “unreasonable practice” determination is a reasonable one; hence it is lawful. See Chevron U. S. A. Inc., 467 U. S., at 843-844. The determination easily fits within the language of the statutory phrase. That is to say, in ordinary English, one can call a refusal to pay Commission-ordered compensation despite having received a benefit from the payphone operator a “practic[e]... in connection with [furnishing a] communication service .. . that is . . . unreasonable.” The service that the payphone operator provides constitutes an integral part of the total long-distance service the payphone operator and the long-distance carrier together provide to the caller, with respect to the carriage of his or her particular call. The carrier’s refusal to divide the revenues it receives from the caller with its collaborator, the payphone operator, despite the FCC’s regulation requiring it to do so, can reasonably be called a “practice” “in connection with” the provision of that service that is “unreasonable.” Cf. post, p. 74 (Thomas, J., dissenting).
Moreover, the underlying regulated activity at issue here resembles activity that both transportation and communications agencies have long regulated. Here the agency has determined through traditional regulatory methods the cost of carrying a portion (the payphone portion) of a call that begins with a caller and proceeds through the payphone, attached wires, local communications loops, and long-distance lines to a distant call recipient. The agency allocates costs among the joint providers of the communications service and requires downstream carriers, in effect, to pay an appropriate share of revenues to upstream payphone operators. Traditionally, the FCC has determined costs of
In these more traditional instances, transportation carriers and communications firms entitled to revenues under rate divisions or cost allocations might bring lawsuits under § 207, or the equivalent sections of the Interstate Commerce Act, and obtain compensation or damages. See, e. g., Allnet Communication Serv., Inc. v. National Exch. Carrier Assn., Inc., 965 F. 2d 1118, 1122 (CADC 1992) (§207); Southwestern Bell Tel. Co., supra, at 305 (same); Chicago & North Western Transp. Co., supra, at 1224-1225 (Interstate Commerce Act equivalent of § 207). Again, the similarities support the reasonableness of an agency’s bringing about a similar result here. We do not suggest that the FCC is required to find carriers’ failures to divide revenues to be § 201(b) violations in every instance. Cf. U. S. Telepacific Corp. v. Tel-America of Salt Lake City, Inc., 19 FCC Rcd. 24552, 24555-24556, and n. 27 (2004) (citing cases). Nor do we suggest that every violation of FCC regulations is an unjust and unreasonable practice. Here there is an explicit statutory scheme, and compensation of payphone operators is necessary to the proper implementation of that scheme. Under these circumstances, the FCC’s finding that the failure to follow the order is an unreasonable practice is well within its authority.
That is because we have made clear that where “Congress would expect the agency to be able to speak with the force
C
Global Crossing, its supporting amici, and the dissents make several additional but ultimately unpersuasive arguments. First, Global Crossing claims that §207 authorizes only actions “seeking damages for statutory violations” and not for “violations merely of regulations promulgated to carry out statutory objectives.” Brief for Petitioner 12 (emphasis in original). The lawsuit before us, however, “seek[s] damages for [a] statutory violatio[n],” namely, a violation of §201(b)’s prohibition of an “unreasonable practice.” As we have pointed out, supra, at 53-54, §201(b)’s prohibitions have long been thought to extend to rates that diverge from FCC prescriptions, as well as rates or practices that are “unreasonable” in light of their failure to reflect rules embodied in an agency regulation. We have found no limitation of the kind Global Crossing suggests.
Global Crossing seeks to draw support from Alexander v. Sandoval, 532 U. S. 275 (2001), and Adams Fruit Co. v. Bar
Our analysis does not change in this case simply because the practice deemed unreasonable (and hence unlawful) in the 2003 Payphone Order is in violation of an FCC regulation adopted under authority of a separate statutory section, §276. The FCC here, acting under the authority of §276, has prescribed a particular rate (and a division of revenues) applicable to a portion of a long-distance service, and it has ordered carriers to reimburse payphone operators for the
Second, Justice Scalia, dissenting, says that the “only serious issue presented by this case [is] whether a practice that is not in and of itself unjust or unreasonable can be rendered such (and thus rendered in violation of the Act itself) because it violates a substantive regulation of the Commission.” Post, at 68. He answers this question “no,” because, in his view, a “violation of a substantive regulation promulgated by the Commission is not a violation of the Act, and thus does not give rise to a private cause of action.” Post, at 69. We cannot accept either Justice Scalia’s statement of the “serious issue” or his answer.
We do not accept his statement of the issue because whether the practice is “in and of itself” unreasonable is irrelevant. The FCC has authoritatively ruled that carriers
Nor can we agree with Justice Scalia’s claim that a “violation of a substantive regulation promulgated by the Commission is not a violation of” § 201(b) of the Act when, as here, the Commission has explicitly and reasonably ruled that the particular regulatory violation does violate § 201(b). (Emphasis added.) And what has the substantive/interpretive distinction that Justice Scalia emphasizes, ibid., to do with the matter? There is certainly no reference to this distinction in § 201(b); the text does not suggest that, of all violations of regulations, only violations of interpretive regulations can amount to unjust or unreasonable practices. Why believe that Congress, which scarcely knew of this distinction a century ago before the blossoming of administrative law, would care which kind of regulation was at issue? And even if this distinction were relevant, the FCC has long set forth what we now would call “substantive” (or “legislative”) rules under §205. Cf. 1 R. Pierce, Administrative Law Treatise §6.4, p. 325 (4th ed. 2002); post, at 70. And violations of those substantive § 205 regulations have clearly been deemed violations of § 201(b). E. g., MCI Telecommunications Corp., 59 F. 3d, at 1414. Conversely, we have found no case at all in which a private plaintiff was kept out of federal court because the § 201(b) violation it challenged took the form of a “substantive regulation” rather than an “interpretive regulation.” Insofar as Justice Scalia uses adjectives such as “traditional” or “textually based” to de
We concede that Justice Scalia cites three sources in support of his theory. See post, at 69-70. But, in our view, those sources offer him no support. None of those sources involved an FCC application of, or an FCC interpretation of, the section at issue here, namely, § 201(b). Nor did any involve a regulation—substantive or interpretive—promulgated subsequent to the authority of § 201(b). Thus none is relevant to the case at hand. See APCC Servs., Inc. v. Sprint Communications Co., 418 F. 3d 1238, 1247 (CADC 2005) (per curiam) (“There was no authoritative interpretation of § 201(b) in this case”), cert. pending, No. 05-766; Greene v. Sprint Communications Co., 340 F. 3d 1047, 1052 (CA9 2003) (violation of substantive regulation does not violate §276; silent as to § 201(b)). The single judge who thought that the FCC had authoritatively interpreted § 201(b) (as has occurred in the case before us) would have reached the same conclusion that we do. APCC Servs., Inc., supra, at 1254 (D. H. Ginsburg, C. J., dissenting) (finding a private cause of action, because there was “clearly an authoritative interpretation of § 201(b)” that deemed the practice in question unlawful). See also Huber §3.14.3, p. 317 (no discussion of § 201(b)).
Third, Justice Thomas (who also does not adopt Justice Scalia’s arguments) disagrees with the FCC’s interpretation of the term “practice.” He, along with Global Crossing, claims instead that §§ 201(a) and (b) concern only practices that harm carrier customers, not carrier suppliers. Post, at 67-70 (Scalia, J., dissenting); Brief for Petitioner 37-38. But that is not what those sections say. Nor does history offer this position significant support. A violation of a regulation or order dividing rates among railroads, for example, would
Fourth, Global Crossing argues that the FCC’s “unreasonable practice” determination is unlawful because it is inadequately reasoned. We concede that the FCC’s initial opinion simply states that the carrier’s practice is unreasonable under § 201(b). But the context and cross-referenced opinions, 2003 Payphone Order, 18 FCC Red., at 19990, ¶ 32 (citing American Public Communications Council v. FCC, 215 F. 3d 51, 56 (CADC 2000)), make the FCC’s rationale obvious, namely, that in light of the history that we set forth supra, at 53-54, it is unreasonable for a carrier to violate the FCC’s
Fifth, Global Crossing argues that a different statutory provision, §276, see supra, at 51, prohibits the FCC’s § 201(b) classification. Brief for Petitioner 26-28. But §276 simply requires the FCC to “take all actions necessary ... to prescribe regulations that... establish a per call compensation plan to ensure” that payphone operators “are fairly compensated.” 47 U. S. C. § 276(b)(1). It nowhere forbids the FCC to rely on § 201(b). Rather, by helping to secure enforcement of the mandated regulations the FCC furthers basic § 276 purposes.
Finally, Global Crossing seeks to rest its claim of a §276 prohibition upon the fact that § 276 requires regulations that secure compensation for “every completed intrastate,” as well as every “interstate,” payphone-related call, while § 201(b) (referring to § 201(a)) extends only to “interstate or foreign” communication. Brief for Petitioner 37. But Global Crossing makes too much of too little. We can assume (for argument’s sake) that § 201(b) may consequently apply only to a portion of the Compensation Order’s requirements. But cf., e.g., Louisiana Pub. Serv. Comm’n, 476 U. S., at 375, n. 4 (suggesting approval of FCC authority where it is “not possible to separate the interstate and the intrastate components”). But even if that is so (and we repeat that we do not decide this question), the FCC’s classification will help to achieve a substantial portion of its §276 compensatory mission. And we cannot imagine why Congress would have (implicitly in this §276 language) wished to prohibit the FCC from concluding that an interstate half loaf is better than none.
For these reasons, the judgment of the Ninth Circuit is affirmed.
It is so ordered.
A
In re Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996,14 FCC Red. 2545, 2631-2632, ¶¶ 190-191 (1999) (Compensation Order).
In re the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, 18 FCC Red. 19975, 19990, ¶ 32 (2003) (2003 Payphone Order).
B
Communications Act § 201:
“(a) It shall be the duty of every common carrier engaged in interstate or foreign communication by wire or radio to furnish such communication service upon reasonable request therefor; and, in accordance with the orders of the Commission, in cases where the Commission, after opportunity for hearing, finds such action necessary or desirable in the public interest, to establish physical connections with other carriers, to establish through routes and charges applicable thereto and the divisions of such charges, and to establish and provide facilities and regulations for operating such through routes.
“(b) All charges, practices, classifications, and regulations for and in connection with such communication service, shall be just and reasonable, and any such charge, practice, classification, or regulation that is unjust or unreasonable is declared to be unlawful: Provided, That communications by wire or radio subject to this chapter may be classified into day, night, repeated, unrepeated, letter, commercial, press, Government, and such other classes as the Commission may decide to be just and reasonable, and different charges may be made for the different classes of communications: Provided*66 further, That nothing in this chapter or in any other provision of law shall be construed to prevent a common carrier subject to this chapter from entering into or operating under any contract with any common carrier not subject to this chapter, for the exchange of their services, if the Commission is of the opinion that such contract is not contrary to the public interest: Provided further, That nothing in this chapter or in any other provision of law shall prevent a common carrier subject to this chapter from furnishing reports of positions of ships at sea to newspapers of general circulation, either at a nominal charge or without charge, provided the name of such common carrier is displayed along with such ship position reports. The Commission may prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions of this chapter.” 47 U. S. C. § 201.
Communications Act § 206:
“In case any common carrier shall do, or cause or permit to be done, any act, matter, or thing in this chapter prohibited or declared to be unlawful, or shall omit to do any act, matter, or thing in this chapter required to be done, such common carrier shall be liable to the person or persons injured thereby for the full amount of damages sustained in consequence of any such violation of the provisions of this chapter, together with a reasonable counsel or attorney’s fee, to be fixed by the court in every case of recovery, which attorney’s fee shall be taxed and collected as part of the costs in the case.” 47 U.S.C. §206.
Communications Act § 207:
“Any person claiming to be damaged by any common carrier subject to the provisions of this chapter may either make complaint to the Commission as hereinafter provided for, or may bring suit for the recovery of the*67 damages for which such common carrier may be liable under the provisions of this chapter, in any district court of the United States of competent jurisdiction; but such person shall not have the right to pursue both such remedies.” 47U.S.C. §207.
Dissenting Opinion
dissenting.
Section 276(b)(1)(A) of the Communications Act of 1934, as added by the Telecommunications Act of 1996, instructed the Federal Communications Commission (FCC or Commission) to issue regulations establishing a plan to compensate payphone operators, leaving it up to the FCC to prescribe who should pay and how much. Pursuant to that authority, the FCC promulgated a substantive regulation that required carriers to compensate payphone operators at a rate of 24 cents per call (the payphone-compensation regulation). The FCC subsequently declared a carrier’s failure to comply with the payphone-compensation regulation to be unlawful under § 201(b) of the Act (which prohibits certain “unjust or unreasonable” practices) and privately actionable under §206 of the Act (which establishes a private cause of action for violations of the Act). Today’s judgment can be defended only by accepting either of two propositions with respect to these laws: (1) that a carrier’s failure to pay the prescribed compensation, in and of itself and apart from the Commission’s payphone-compensation regulation, is an unjust or unreasonable practice in violation of § 201(b); or (2) that a carrier’s failure to pay the prescribed compensation is an “unjust or unreasonable” practice under § 201(b) because it violates the Commission’s payphone-compensation regulation.
The Court coyly avoids rejecting the first proposition. But make no mistake: that proposition is utterly implausible, which is perhaps why it is nowhere to be found in the FCC’s opinion. The unjustness or unreasonableness in this case, if any, consists precisely of violating the FCC’s payphone-
The only serious issue presented by this case relates to the second proposition: whether a practice that is not in and of itself unjust or unreasonable can be rendered such (and thus rendered in violation of the Act itself) because it violates a substantive regulation of the Commission. Today’s opinion seems to answer that question in the affirmative, at least with respect to the particular regulation at issue here.
There is no doubt that interpretive rules can be issued pursuant to § 201(b) — that is, rules which specify that certain practices are in and of themselves “unjust or unreasonable.” Orders issued under §205 of the Act, see ante, at 60, which authorizes the FCC, upon finding that a practice will be unjust and unreasonable, to order the carrier to adopt a just and reasonable practice in its place, similarly implement the statute’s proscription against unjust or unreasonable practices. But, as explained above, the payphone-compensation regulation does not implement § 201(b) and is not predicated on a finding of what would be unjust and unreasonable absent the regulation.
The Court naively describes the question posed by this case as follows: Since “[a] practice of violating the FCC’s order to pay a fair share would seem fairly characterized in ordinary English as an ‘unjust practice,’... why should the FCC not call it the same under § 201(b)?” Ante, at 61. There are at least three reasons why it is not as simple as that. (1) There has been no FCC “order” in the ordinary sense, see 5 U. S. C. § 551(6), but only an FCC regulation.
The Court asks (more naively still) “what has the substantive/interpretive distinction that [this dissent] emphasizes to do with the matter? There is certainly no reference to this distinction in § 201(b) .... Why believe that Congress, which scarcely knew of this distinction a century ago before the blossoming of administrative law, would care which kind of regulation was at issue?” Ante, at 61 (citation omitted). The answer to these questions is obvious. Section 206 (which was enacted at the same time as § 201(b), see 48 Stat. 1070, 1072) does not explicitly refer to the distinction between interpretive and substantive regulations. And yet the Court acknowledges that, while a violation of an interpretive regulation is actionable under § 206 (as a violation of
Seemingly aware that it is in danger of rendering the limitation upon § 206 a nullity, the Court seeks to limit its novel approval of private actions for violation of substantive rules to substantive rules that are “analogous] with rate setting and rate divisions, the traditional, historical subject matter of § 201(b),” ante, at 60 (emphasis added). There is absolutely no basis in the statute for this distinction (nor is it anywhere to be found in the FCC’s opinion). As I have described earlier, interpretive regulations are privately enforceable because to violate them is to violate the Act, within the meaning of the private-suit provision of §206. That a substantive regulation is analogous to traditional interpretive regulations, in the sense of dealing with subjects that those regulations have traditionally addressed, is supremely
It is difficult to comprehend what public good the Court thinks it is achieving by its introduction of an unprincipled exception into what has hitherto been a clearly understood statutory scheme. Even without the availability of private remedies, the payphone-compensation regulation would hardly go unenforced. The Commission is authorized to impose civil forfeiture penalties of up to $100,000 per violation (or per day, for continuing violations) against common carriers that “willfully or repeatedly fai[l] to comply with ... any rule, regulation, or order issued by the Commission.” 47 U. S. C. § 503(b)(1)(B). And the Commission can even place enforcement in private hands by issuing a privately enforceable order forbidding continued violation. See §§154(i), 276(b)(1)(A), 407. Such an order, however, would require a prior Commission adjudication that the regulation had been violated, thus leaving that determination in the hands of the agency rather than a court, and preventing the unjustified private suits that today’s decision allows.
I would hold that a private action to enforce an FCC regulation under §§ 201(b) and 206 does not lie unless the regulated practice is “unjust or unreasonable” in its own right and apart from the fact that a substantive regulation of the Commission has prohibited it. As the practice regulated by the payphone-compensation regulation does not plausibly fit
See In re the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, 18 FCG Red. 19975, 19990, ¶ 32 (2003) (“[F]ailure to pay in accordance with the Commission’s payphone rules, such as the rules expressly requiring such payment... constitutes ... an unjust and unreasonable practice in violation of section 201(b)”); In re APCC Servs., Inc. v. NetworkIP, LLC, 21 FCC Red. 10488, 10493, ¶ 15 (2006) (“[F]ailure to pay payphone compensation rises to the level of being ‘unjust and unreasonable’ ” because it is “a direct violation of Commission rules"); id., at 10493, ¶ 15, and n. 46 (“The fact that a failure to pay payphone compensation directly violates Commission rules specifically requiring such payment distinguishes this situation from other situations where the Commission has repeatedly declined to entertain ‘collection actions’ ”).
The Court’s departure from ordinary usage is made possible by the fact that “[t]he FCC commonly adopts rules in opinions called ‘orders.’ ” New England Tel. & Tel. Co. v. Public Util. Comm’n of Me., 742 F. 2d 1, 8-9 (CA1 1984) (Breyer, J.). If there had been violation of an FCC order in this case, a private action would have been available under §407 of the Act.
The Court further asserts that “the FCC has long set forth what we now would call ‘substantive’ (or ‘legislative’) rules under § 205,” “violations of [which]... have clearly been deemed violations of § 201(b),” ante, at 61. The §205 orders to which the Court refers are not substantive in the relevant sense because they interpret §201(b)’s prohibition against unjust and unreasonable rates or practices. See ante, at 53 (§ 205 “authorizes] the FCC to prescribe reasonable rates and practices in order to preclude rates or practices that violate § 201(b)”). The payphone-compensation regulation, by contrast, does not interpret § 201(b) or any other statutory provision.
Dissenting Opinion
dissenting.
The Court holds that failure to pay a payphone operator for coinless calls is an “unjust or unreasonable” “practice” under 47 U. S. C. § 201(b). Properly understood, however, §201 does not reach the conduct at issue here. Failing to pay is not a “practice” under §201 because that section regulates the activities of telecommunications firms in their role as providers of telecommunications services. As such, § 201(b) does not reach the behavior of telecommunication firms in other aspects of their business. I respectfully dissent.
I
The meaning of § 201(b) of the Communications Act of 1984 becomes clear when read, as it should be, as a part of the entirety of §201. Subsection (a) sets out the duties and broad discretionary powers of a common carrier:
“It shall be the duty of every common carrier engaged in interstate or foreign communication by wire or radio to furnish such communication service upon reasonable request therefor; and ... to establish physical connections with other carriers, to establish through routes and charges applicable thereto and the divisions of such charges, and to establish and provide facilities and regulations for operating such through routes.”
Immediately following that description of duties and powers, subsection (b) requires:
“All charges, practices, classifications, and regulations for and in connection with such communication service, shall be just and reasonable, and any such charge, practice, classification, or regulation that is unjust or unreasonable is declared to be unlawful....”
Subsection (a) prescribes a carrier’s duty to render service either to customers (“furnish[ing] . . . communication service”) or to other carriers (e. g., “establishing] physical connections”); it does not set out duties related to the receipt of service from suppliers. Consequently, given the relationship between subsections (a) and (b), subsection (b) covers only those “practices” connected with the provision of service to customers or other carriers. The Court embraced this critical limitation in Missouri Pacific R. Co. v. Norwood, 283 U. S. 249 (1931), which held that the term “practice” means a “‘practice’ in connection with the fixing of rates to be charged and prescribing of service to be rendered by the carriers.” Id., at 257. In Norwood, the Court interpreted language from the Interstate Commerce Act (as amended by the Mann-Elkins Act) that Congress just three years later copied into the Communications Act. 283 U. S., at 253; see § 7 of the Mann-Elkins Act of 1910, 36 Stat. 546. In passing the Communications Act, Congress may “be presumed to have had knowledge” and to have approved of the Court’s interpretation in Norwood. See Lorillard v. Pons, 434 U. S. 575, 581 (1978). As a result, the Supreme Court’s contemporaneous interpretation of “practice” should bear heavily on our analysis.
Other terms in §201 support using Norwood’s restrictive interpretation of “practice,” A word “is known by the company it keeps,” and one should not “ascrib[e] to one word a meaning so broad that it is inconsistent with its accompany
The statutory provisions surrounding §201 confirm this interpretation. Section 203 requires that “[e]very common carrier . .. shall... file with the Commission .. . schedules showing all charges for itself and its connecting carriers ... and showing the classifications, practices, and regulations affecting such charges.” See also §§204-205 (also using the phrase “charge, classification, regulation, or practice” in the tariff context). The “charges” referred to are those related to a carrier’s own services. §203 (“charges for itself and its connecting carriers”). The “classifications, practices, and regulations” are also limited to a carrier’s own services. Ibid, (applying only to practices “affecting such charges”). In this context, “practices” must mean only those “in connection with the fixing of rates to be charged.” Norwood, 283 U. S., at 257. Section 202 — outside of the tariff context— also supports this limitation. It forbids discrimination “in charges, practices, classifications, regulations, facilities, or services.” Discrimination occurs with respect to a carrier’s provision of service — not its purchasing of services from others. I am unaware of any context in which §§ 202-205 were
In this case, Global Crossing has not provided any service to Metrophones. Rather, Global Crossing has failed to pay for a service that Metrophones supplied. The failure to pay a supplier is not in any sense a “ ‘practice’ in connection with the fixing of rates to be charged and prescribing of service to be rendered by the carriers.” Id., at 257. Accordingly, Global Crossing has not engaged in a practice under subsection (b) because the failure to pay has not come in connection with its provision of service or setting of rates within the meaning of subsection (a). On this understanding of §201, Global Crossing’s failure to pay Metrophones is not a statutory violation. All that remains is a regulatory violation, which does not provide Metrophones a private right of action under § 207.
II
The majority suggests that deference under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984), compels its conclusion that a carrier’s refusal to pay a payphone operator is unreasonable. But “unjust or unreasonable” is a statutory term, § 201(b), and a court may not, in the name of deference, abdicate its responsibility to interpret a statute. Under Chevron, an agency is due no deference until the court analyzes the statute and determines that Congress did not speak directly to the issue under consideration:
“The judiciary is the final authority on issues of statutory construction and must reject administrative con*78 structions which are contrary to clear congressional intent.... If a court, employing traditional tools of statutory construction, ascertains that Congress had an intention on the precise question at issue, that intention is the law and must be given effect.” Id., at 843, n. 9.
The majority spends one short paragraph analyzing the relevant provisions of the Communications Act to determine whether a refusal to pay is an “‘unjust or unreasonable’” “‘practice.’” Ante, at 53. Its entire statutory analysis is essentially encompassed in a single sentence in that paragraph: “That is to say, in ordinary English, one can call a refusal to pay Commission-ordered compensation despite having received a benefit from the payphone operator a ‘practice ... in connection with [furnishing a] communication service... that is ... unreasonable.’ ” Ante, at 55 (omissions and modifications in original). This analysis ignores the interaction between § 201(a) and § 201(b), supra, at 74-75; it ignores the three terms surrounding the word “practice” and the context those terms provide, supra, at 76; it ignores the use of the term “practice” in nearby statutory provisions, such as §§202-205, supra, at 76-77; and it ignores the understanding of the term “practice” at the time Congress enacted the Communications Act, supra, at 75.
After breezing by the text of the statutory provisions at issue, the majority cites lower court cases to claim that “the underlying regulated activity at issue here resembles activity that both transportation and communications agencies have long regulated.” Ante, at 55. It argues that these cases demonstrate that “communications firms entitled to revenues under rate divisions or cost allocations might bring lawsuits under §207 . . . and obtain compensation or damages.” Ante, at 56 (citing Allnet Communication Serv., Inc. v. National Exch. Carrier Assn., Inc., 965 F. 2d 1118 (CADC 1992), and Southwestern Bell Tel. Co. v. Allnet Communications Servs., Inc., 789 F. Supp. 302 (ED Mo. 1992)). But in both cases, the only issue before the court was whether the
Ill
Finally, independent of the FCC’s interpretation of the language “unjust or unreasonable” “practice,” the FCC’s interpretation is unreasonable because it regulates both interstate and intrastate calls. The unjust-and-unreasonable requirement of § 201(b) applies only to “practices ... in connection with such communication service,” and the term “such communication service” refers to “interstate or foreign communication by wire or radio” in § 201(a) (emphasis added). Disregarding this limitation, the FCC has applied its rule to both interstate and intrastate calls. 47 CFR §64.1300 (2005). In light of the fact that the statute explicitly limits “unjust or unreasonable” “practices” to those involving “interstate or foreign communication,” the FCC’s application of § 201(b) to intrastate calls is plainly an unreasonable interpretation of the statute. To make matters worse, the FCC has not even bothered to explain its clear misinterpretation. See In re Pay Telephone Reclassi
The majority avoids directly addressing this argument by stating there is no reason “to prohibit the FCC from concluding that an interstate half loaf is better than none.” Ante, at 64. But if the FCC’s rule is unreasonable, Metrophones should not be able to recover for intrastate calls in a suit under § 207. Because intrastate calls cannot be the subject of an “unjust or unreasonable” practice under §201, there is no private right of action to recover for them, and the Court should cut off that half of the loaf. By sidestepping this issue, the majority gives the lower court no guidance about how to handle intrastate calls on remand.
IV
Because the majority allows the FCC to interpret the Communications Act in a way that contradicts the unambiguous text, I respectfully dissent.
Other enforcement mechanisms exist to redress Global Crossing’s failure to pay. The Federal Communications Commission (FCC) has the power to impose fines under 47 U. S. C. §§ 503(b)(1)(B) and (2)(B). In addition, the FCC may have the authority to create an administrative right of action under § 276(b)(1) (giving the FCC power to “take all actions necessary” to “establish a per call compensation plan” that ensures “all payphone service providers are fairly compensated”).
The majority’s citation to Chicago & North Western Transp. Co. v. Atchison, T. & S. F. R. Co., 609 P. 2d 1221 (CA7 1979), is similarly misplaced. There, the Court of Appeals interpreted the meaning of the statutory requirement to ‘“establish just, reasonable, and equitable divisions’” under the Interstate Commerce Act. Id., at 1224. It is difficult to understand why the Seventh Circuit’s interpretation of different statutory language is relevant to the question we face in this ease.
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