Myhre v. AT & T

247 F. Supp. 2d 1215, 2002 U.S. Dist. LEXIS 25071
CourtDistrict Court, D. Kansas
DecidedDecember 19, 2002
DocketNos. 02-MD-1468
StatusPublished
Cited by1 cases

This text of 247 F. Supp. 2d 1215 (Myhre v. AT & T) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Myhre v. AT & T, 247 F. Supp. 2d 1215, 2002 U.S. Dist. LEXIS 25071 (D. Kan. 2002).

Opinion

MEMORANDUM & ORDER

LUNGSTRUM, District Judge.

This multidistrict litigation arises out of AT & T’s and Sprint’s practice of charging their customers to recoup contributions they are required to make to the Universal Service Fund (“USF”) program.1 Plaintiffs, customers of AT & T and Sprint who believe the charges to be excessive and/or believe AT & T and Sprint have misrepresented the charges, brought multiple class action and individual lawsuits against AT & T and Sprint throughout the country. Many of the lawsuits were filed in state court; however, AT & T and Sprint removed nearly all of the lawsuits to federal court under 28 U.S.C. § 1441(b), asserting federal jurisdiction.

The Judicial Panel on Multidistrict Litigation transferred the cases to this court for coordinated and consolidated pretrial proceedings pursuant to 28 U.S.C. § 1407. After the transfer, this court issued Practice and Procedure order No. 2, appointing plaintiffs’ co-lead counsel. Plaintiffs’ co-leads then filed both a first consolidated and amended class action complaint (Doc. 24) and a joint motion for remand and brief in support (Doc. 25). Certain other plaintiffs also filed motions to remand and a memorandum in support (Docs. 20, 21, 22, 29, and 88).2 In total, plaintiffs seek to remand eight of the complaints3 pursuant to 28 U.S.C. § 1447(c).4 Each cause of action in each of the complaints is brought, on its face, under state statutory or common law. AT & T and Sprint, nonetheless, contend removal is proper under the “substantial federal-question” and “complete preemption” doctrines. More specifically, AT & T and Sprint argue that at least one claim in each of plaintiffs’ complaints requires resolution of a substantial disputed question of federal law under the Federal Communications Act of 1934 (“FCA”), 47 U.S.C. § 151, et seq.5 Alternatively, AT & [1219]*1219T and Sprint argue that the FCA completely preempts plaintiffs’ state law claims.

The issues have been fully briefed, and a hearing was held on November 20, 2002. After considering the parties’ arguments, the court concludes that the complaints which include a facially state law claim which is premised exclusively on the notion that AT & T’s and Sprint’s alleged practice of charging their customers more than they are required to remit to the USF program (plus their reasonable expenses) is wrongful in fact raise substantial disputed questions of federal law under the FCA. Accordingly, such complaints — Benjamin, Risher, and McKown — do arise under federal law and were therefore properly removed from state court. On the other hand, the complaints in which at least one theory of each claim rests on AT & T’s and Sprint’s alleged misrepresentations regarding their recoupment of their USF contributions, but which theory does not challenge the practice itself, do not raise substantial questions of federal law under the FCA. Moreover, such claims are not completely preempted by the FCA. Accordingly, such complaints — Thomas, Jordan, Myhre, Gordon, and Mount — do not arise under federal law and therefore should be remanded to state court.

• Background

Resolution of these issues requires a close reading of the FCA and of plaintiffs’ complaints. The court begins then with a brief review of the relevant sections of the FCA and then will turn to the allegations of the causes of action in each of the eight complaints in question.

A. Federal Communications Act

The FCA regulates interstate telecommunications carriers, such as AT & T and Sprint. The USF is a part of the FCA. Congress created the USF as part of the Telecommunications Act of 1996 to support telecommunications services to rural customers, under-served markets, non-profit organizations, and other entities designated by the FCC. 47 U.S.C. § 254. Section 254 sets forth the FCC’s authority to administer and implement the USF program, as well as the carriers’ obligations to contribute to the USF. 47 U.S.C. § 254(a)(2), (d), (g). Under FCC regulations, Sprint and AT & T (as well as other carriers) must contribute a percentage of their gross-billed interstate and international end-user revenues to the USF. 47 C.F.R. § 54.706; Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Red 8776, 9205-07 (¶¶ 842-44) (1997). Each quarter, the FCC adjusts the percentage of revenues that a carrier must contribute, the “Contribution Factor,” to ensure sufficient funding for the program. 47 C.F.R. § 54.709(a); Proposed Second Quarter 2002 Universal Service Contribution Factor, 17 FCC Red 4451, 4451-58 (Rel. March 8, 2002). The FCC authorizes carriers to recover their USF contributions from their customers. Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Red at 9209-11 (¶¶ 851-53) (1997).

As “common carriers,6” AT & T and Sprint are also subject to the substantive requirements of sections 201 and 202 of the FCA. 47 U.S.C. § 201 and 202. Under [1220]*1220section 201(b), common carriers may impose only those “charges, practices, classifications, and regulations” that are “just and reasonable.” 47 U.S.C. § 201(b). Under section 202(a), common carriers are prohibited from making any “unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services” and they may not give any “undue or unreasonable preference or advantage to any particular person, class of persons, or locality.” 47 U.S.C. § 202(a). The FCC has recognized that these sections apply to USF charges as well as other rates and charges imposed by carriers. See, e.g., Federal-State Joint Board on Universal Service, CC Doc. No. 96-45, Further Notice of Proposed Rule-making and Report and Order, 17 FCC Red 3752 ¶ 95 (rel. Feb. 26, 2002).7

Should a common carrier “omit to do any act, matter, or thing in this chapter required to be done,” section 206 dictates that the “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 ... together with a reasonable counsel or attorney’s fee[J” 47 U.S.C. § 206.

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Bluebook (online)
247 F. Supp. 2d 1215, 2002 U.S. Dist. LEXIS 25071, Counsel Stack Legal Research, https://law.counselstack.com/opinion/myhre-v-at-t-ksd-2002.