Mountain States Telephone & Telegraph Co. v. Department of Public Service Regulation

588 F. Supp. 5, 1983 U.S. Dist. LEXIS 14100, 1983 WL 821941
CourtDistrict Court, D. Montana
DecidedSeptember 2, 1983
DocketNo. CV-83-177-H
StatusPublished
Cited by5 cases

This text of 588 F. Supp. 5 (Mountain States Telephone & Telegraph Co. v. Department of Public Service Regulation) is published on Counsel Stack Legal Research, covering District Court, D. Montana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mountain States Telephone & Telegraph Co. v. Department of Public Service Regulation, 588 F. Supp. 5, 1983 U.S. Dist. LEXIS 14100, 1983 WL 821941 (D. Mont. 1983).

Opinion

MEMORANDUM OPINION

BATTIN, Chief Judge.

This case is before the court on plaintiff’s motion for a preliminary injunction to enjoin defendant from employing in its ratemaking procedures any depreciation methods and rates other than those prescribed by the Federal Communications Commission (FCC). For reasons set forth below, a preliminary injunction should be granted.

FACTS

Due to the inter- and intrastate nature of its services, plaintiff Mountain States Telephone and Telegraph Company (Mountain Bell), a Colorado corporation, is subject to regulation by both the FCC and defendant Montana Public Service Commission (MPSC). The FCC has issued orders requiring Mountain Bell to depreciate certain capital assets, including Customer Premise Equipment (CPE), in a specified manner. See Order, Docket No. 82-542, released December 14, 1982. Mountain Bell contends that the use of the FCC:mandated depreciation methods and rate schedules created an increase in Mountain Bell’s Montana intrastate revenue requirement. Upon the telephone company’s request, the MPSC reviewed proposed changes in depreciation schedules and methodologies (MPSC Docket No. 82.6.37). In its orders 4951 and 4951a, dated November 29, 1982, and December 20, 1982, respectively, the MPSC implemented the FCC depreciation methods and rates for all of Mountain Bell’s subject assets except for CPE assets which are to be transferred to AT & T upon the Bell system divesture which is scheduled for January 1, 1984. The MPSC refused to adopt, for purposes of intrastate revenue calculations, the FCC’s depreciation methods and rates for CPE assets and gave the reasons for its decision in Paragraph 3 of Order 4951a which provides in pertinent part:

[T]he Commission reaffirms its Findings in Order No. 4951 concerning customer premises equipment (CPE). In that order the Commission found that Montana ratepayers should not be asked to pay rates which reflect higher depreciation expenses attributable to competitive activities that will be transferred to AT & T. By not allowing Mountain Bell to accelerate depreciation rates on CPE the Commission does not slow down capital recovery. The embedded CPE area is in a state of rapid change flowing from Computer II and the AT & T divestiture. The Commission prefers to not consider depreciation changes in this area at this time.

On January 6, 1983, the FCC issued a Memorandum Opinion and Order, CC Docket No. 79-105, which asserted that the regulations regarding FCC depreciation rates and methods preempted conflicting state commission regulations for intrastate rate-making purposes. It is this order which is at the root of the present controversy. Mountain Bell petitioned the MPSC to reopen Docket No. 82.6.37 and modify Orders 4951 and 4951a in response to the FCC’s preemptive order. The MPSC denied this petition in an order dated March 15, 1983. On March 28, 1983, Mountain Bell filed a General Rate Case, MPSC's Docket No. 83.3.18. Again Mountain Bell requested that the MPSC conform to the FCC’s order of January 6, 1983. The MPSC denied this request and refused to adopt the new FCC depreciation methodologies and schedules for Mountain Bell’s CPE assets. Mountain Bell filed a complaint in this Court seeking [7]*7to enforce the FCC’s order of January 6, 1983, and to enjoin the MPSC from employing in its rate-making procedures any depreciation methods and rates other than those mandated by the FCC.

JURISDICTION AND SCOPE OF REVIEW

This Court’s jurisdiction is predicated upon 47 U.S.C. § 401(b) which provides that any party injured by a person’s failure to obey an FCC order may apply to a United States District Court for enforcement of that order. Section 401(b) creates a private cause of action cognizable by a Federal District Court. Pacific Northwest Bell Telephone Co. v. Washington Utilities and Transportation Commission, 565 F.Supp. 17, 19-21 (W.D.1983). MPSC is a “person” under this section. Id. at 20-21. At the outset, this Court must define the scope of review in this case. The issue to be decided is whether the MPSC should be enjoined from deviating from the FCC-prescribed depreciation methods and rate schedules in determining Mountain Bell’s intrastate rates. This Court lacks jurisdiction to review the efficacy and validity of the FCC’s preemptive order of January 6, 1983. Jurisdiction over such matters is vested exclusively in the courts of appeals under the Communications Act and the Administrative Orders Review Act, 47 U.S.C. § 402; 28 U.S.C. § 2342(1). See City of Peoria v. General Electric Cablevision Corp., 690 F.2d 116, 119 (7th Cir.1982). The Court notes that a petition for review of the FCC’s order of January 6, 1983, is pending before the Fourth Circuit in Virginia State Corporation Commission v. FCC, No. 83-1136 (4th Cir. filed Feb. 18, 1983). Public service commissions from several states have joined in that action individually or as members of a national organization of public service commissions. During the hearing on the present matter, the parties indicated to this Court that no stay of the contested FCC order has been issued in the Fourth Circuit proceeding. Further, the parties have not apprised the Court of any changes in that status. Because the filing of a petition for review does not automatically stay an FCC order, the FCC order of January 6, 1983, is binding upon the state public service commissions until reversed. See City of Peoria v. General Electric Cablevision Corp., 690 F.2d 116 (7th Cir.1982).

INJUNCTIVE RELIEF

Having determined the limited scope of review, this Court need only decide whether the criteria set forth in § 401(b) as prerequisites to enforcement have been met and whether a preliminary injunction is the appropriate remedy in this case.

The statutory criteria prerequisite to enforcement clearly have been met. Section 401(b) provides in pertinent part:

If, after hearing, that court determines that the order was regularly made and duly served, and that the person is in disobedience of the same, the court shall enforce obedience to such order by a writ of injunction or other proper process

It is not disputed that the FCC order of January 6, 1983, was regularly made and duly served. Further, the record indicates that the MPSC has expressly refused to adopt the FCC-prescribed depreciation methods and rates for CPE assets with full knowledge that this decision is at odds with the FCC order.

Preliminary injunction is an appropriate remedy in this case. The power to grant or deny a request for injunction is discretionary with the Court. See County of Santa Barbara v. Hickel, 426 F.2d 164 (9th Cir.1970). Although injunctive relief is not routinely granted and the Court must use restraint when exercising this equitable power, see Environmental Defense Fund, Inc. v. Morton, 420 F.Supp.

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588 F. Supp. 5, 1983 U.S. Dist. LEXIS 14100, 1983 WL 821941, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mountain-states-telephone-telegraph-co-v-department-of-public-service-mtd-1983.