Case: 20-1446 Document: 39 Page: 1 Filed: 04/01/2021
United States Court of Appeals for the Federal Circuit ______________________
SANDWICH ISLES COMMUNICATIONS, INC., Plaintiff-Appellant
v.
UNITED STATES, Defendant-Appellee ______________________
2020-1446 ______________________
Appeal from the United States Court of Federal Claims in No. 1:19-cv-00149-LAS, Senior Judge Loren A. Smith. ______________________
Decided: April 1, 2021 ______________________
LEX RICHARD SMITH, Kobayashi Sugita & Goda, Hono- lulu, HI, argued for plaintiff-appellant.
SHARI A. ROSE, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washing- ton, DC, argued for defendant-appellee. Also represented by JEFFREY B. CLARK, ROBERT EDWARD KIRSCHMAN, JR., LOREN MISHA PREHEIM. ______________________
Before LOURIE, O’MALLEY, and REYNA, Circuit Judges. O’MALLEY, Circuit Judge. Case: 20-1446 Document: 39 Page: 2 Filed: 04/01/2021
Sandwich Isles Communications, Inc. (“SIC”) appeals the decision of the United States Court of Federal Claims (“Claims Court”) granting the United States’ motion to dis- miss for lack of subject matter jurisdiction. Sandwich Isles Commc’ns, Inc. v. United States, 145 Fed. Cl. 566 (2019) (“Decision on Appeal”). Because we agree with the Claims Court that its Tucker Act jurisdiction over SIC’s takings claim is displaced by the comprehensive scheme for review set forth in the Communications Act of 1934, 47 U.S.C. § 402(a), we affirm. I. BACKGROUND A. Statutory and Regulatory Framework Congress enacted the Communications Act of 1934 (“Communications Act”) and created the Federal Commu- nications Commission (“FCC”) to make “available . . . to all the people of the United States . . . a rapid, efficient, Na- tion-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges.” 47 U.S.C. § 151. In 1996, Congress amended the Communica- tions Act to specify that it applies to all “rural, insular, and high cost areas.” 47 U.S.C. § 254(b)(3). The amendment further required the FCC to provide “specific, predictable and sufficient Federal and State mechanisms to preserve and advance universal service.” 47 U.S.C. § 254(b)(5). To implement the Communications Act and fulfill its mandate to provide universal service, the FCC created the Universal Service Fund (“USF”), which is administered by the Universal Service Administrative Company (“USAC”) and overseen by the FCC. See 47 C.F.R. § 54.701(a). The USF consists of four separate funds, but only the high-cost support fund, which is designed to support rural providers serving high-cost areas, is at issue in this appeal. See Ver- mont Pub. Serv. Bd. v. FCC, 661 F.3d 54, 57 (D.C. Cir. 2011) (describing the four funds). Case: 20-1446 Document: 39 Page: 3 Filed: 04/01/2021
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High-cost universal service support is designed to en- sure that consumers in “all regions of the Nation, including low-income consumers and those in rural, insular, and high-cost areas,” have access to telecommunications ser- vices at rates that are reasonably comparable to those in urban areas. 47 U.S.C. § 254(b). The high-cost support programs fulfill these goals by allowing certain eligible car- riers that serve rural, insular, and high-cost areas to re- cover certain reasonable costs of providing service. Eligible telecommunication carriers receiving high-cost universal service support must use it “only for the provision, mainte- nance, and upgrading of facilities and services for which the support is intended.” 47 U.S.C. § 254(e). Telecommunications carriers in high-cost areas may also receive support from the National Exchange Carrier Association (“NECA”) pool, which is a separate fund from the high-cost Universal Service Fund. Sandwich Isles Commc’ns, Inc., v. FCC, 741 F. App’x 808, 809 (D.C. Cir. 2018). NECA is “a not-for-profit organization set up by the [FCC] that provides various services for small carriers, in- cluding filing of tariffs and operating a pooling process that averages the access charges billed to long-distance carri- ers.” Id. B. Factual Background SIC was formed in the mid-1990s to provide telecom- munications services to native Hawaiians. SIC is a wholly- owned subsidiary of Waimana Enterprises, which is a Ha- waiian corporation. Albert Hee was the president of SIC until sometime in 2013. Hee was also the sole owner of Waimana until December 2012, at which point he began to share ownership with trusts benefitting his three adult children. In 1997, SIC was designated as an eligible telecommu- nications carrier to provide service to customers in the Ha- waiian home lands, which consists of “roughly 200,000 acres [of land] spread out over more than 70 non- Case: 20-1446 Document: 39 Page: 4 Filed: 04/01/2021
contiguous parcels on six of the largest eight Hawaiian [I]slands.” Decision on Appeal, 145 Fed. Cl. at 569. SIC subsequently began receiving high-cost support funds and participating in the NECA pool. Id. 1. The Paniolo Lease After initially serving rural communities in Hawaii by leasing capacity on an existing undersea cable, SIC entered into an exclusive, 20-year lease of a newly constructed ca- ble owned by Paniolo, LLC, a different corporate vehicle of Waimana. Sandwich Isles Commc’ns, 741 F. App’x at 809. “While [SIC’s] subscriber base is relatively small, the Pan- iolo cable that it leased is massive, with the capacity to pro- vide broadband service to the entire state of Hawaii. It was also expensive. The variable lease began at $15 million an- nually and had risen to $24 million annually by [2018].” Id. SIC sought to include the cost of the lease in its revenue requirement, which would have allowed it to recover the cost of the lease from NECA’s revenue pool. In 2010, the Commission’s Wireline Competition Bureau issued a De- claratory Ruling allowing 50 percent of SIC’s lease ex- penses to be included in its revenue requirement. Id. at 810. The Wireline Bureau found that “equitable consider- ations, primarily prospective future growth, justified the 50 percent figure.” Id. SIC appealed that decision to the FCC. In December 2016, the FCC “found that the equitable considerations relied upon by the Wireline Bureau’s deci- sion no longer justified recovery of 50 percent of the Paniolo cable costs—the projected growth never materialized.” Id. The FCC permitted SIC to keep the sums it received in the past. But moving forward, the FCC determined that SIC could only recover $1.9 million per year from the NECA pool. Id. SIC filed an appeal challenging the FCC’s order, which the United States Court of Appeals for the District of Columbia (“D.C. Circuit”) denied. Sandwich Isles Commc’ns, 741 F. App’x at 809–11. Case: 20-1446 Document: 39 Page: 5 Filed: 04/01/2021
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2. Changes to SIC’s USF Support In 2011, the FCC comprehensively reformed its exist- ing regulatory system for telephone service. In re FCC 11- 161, 753 F.3d 1015, 1035 (10th Cir. 2014). As a result, the FCC reformed the manner and amount of USF payouts made to rural carriers. In relevant part, the FCC insti- tuted a $250 per-line, per-month cap on USF support, ef- fective July 2014. See 47 C.F.R. § 54.302(a). This was a significant reduction from the $14,000 per line per year that SIC had been receiving. United States v. Sandwich Isles Commc’ns, Inc., 398 F. Supp. 3d 757, 766 (D. Hawaii 2019). The FCC, recognizing that its reforms could impact particular recipients differently, established a waiver mechanism under which a carrier could seek relief from some or all of the reforms if the carrier could demonstrate that the reduction in existing high-cost support would put consumers at risk of losing service. Id. SIC sought a waiver, but the Wireline Competition Bureau denied its re- quest in May 2013. Decision on Appeal, 145 Fed. Cl. at 571. Specifically, the Wireline Competition Bureau found that SIC failed to show good cause for a waiver and explained that SIC sought “a waiver that would allow it to retain a number of significant and wasteful expenses, totaling many millions of dollars, including significant payments to a number of affiliated and closely-related companies.” In re Connect Am. Fund, 28 FCC Rcd. 6553, 2013 WL 1962345, at *1 (Wireline Comp. Bur. May 10, 2013). SIC did not appeal that order. In July 2015, Albert Hee—manager of SIC and its par- ent company, Waimana—was convicted of violating the tax code. Decision on Appeal, 145 Fed. Cl. at 571. Specifically, Hee was found guilty of improperly categorizing certain personal expenses as business expenses from 2002 through 2012, and for failing to report personal expense payments as income. Id. Between 2002 and 2012, Waimana paid Case: 20-1446 Document: 39 Page: 6 Filed: 04/01/2021
$4,063,294.39 of Hee’s personal expenses, which he im- properly designated as business expenses. Id. Shortly after Hee’s conviction, the FCC directed USAC “to suspend ‘high-cost funding to [SIC] pending completion of further investigation and/or other ameliorative measures to ensure that any funding provided is used solely in a manner consistent with Commission rules and policies.’” Id. USAC subsequently suspended SIC’s USF support and audited SIC’s use of USF funds from 2002 to 2015. Id. The audit revealed that SIC received millions of dollars of USF funds that it should not have received. In September 2015, while USAC’s investigation was pending, the Hawaii Public Utilities Commission issued an order stating that it could not certify that all federal high- cost support provided to SIC was used in the preceding cal- endar year (2014), and would be used in the coming calen- dar year (2016), only for the facilities and services for which the support was intended, as required by 47 C.F.R. §54.314(a). SIC has not received funds from the USF since September 2015, because an eligibility certification is a prerequisite to receiving USF funds. Decision on Appeal, 145 Fed. Cl. at 572. In 2015, SIC filed a petition with the FCC alleging that the FCC lacked authority to suspend its high-cost subsidies and requesting release of the funds. SIC’s petition to re- scind the suspension remains pending. Id. at 574. In 2017, SIC petitioned the D.C. Circuit for a writ of mandamus, asking the court to order the FCC to reinstate the USF sup- port. The court denied the petition in February 2018. Sandwich Isles Commc’ns, Inc., No. 17-1248, 2018 U.S. App. LEXIS 4139 (D.C. Cir. Feb. 16, 2018). Following the USAC investigation, the FCC issued an order in December 2016, finding that SIC improperly re- ceived payments in the amount of $27,270,390 from the federal high-cost support mechanisms that were in place between 2002 and 2015. Decision on Appeal, 145 Fed. Cl. Case: 20-1446 Document: 39 Page: 7 Filed: 04/01/2021
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at 572. Specifically, the FCC found that the amounts paid to SIC were excessive. In re Sandwich Isles Commc’ns, 31 FCC Rcd. 12999, 13000, 2016 WL 7129743, at *1 (F.C.C. Dec. 5, 2016). The 2016 order required SIC to repay the over $27 million that it improperly received and continued the suspension of further USF payments to SIC. SIC filed a petition for reconsideration of the 2016 or- der, which the FCC denied in January 2019. Sandwich Isles Commc’ns, Inc., 34 FCC Rcd. 577, 579, 2019 WL 105385, at *2 (F.C.C. Jan. 3, 2019). The D.C. Circuit sub- sequently dismissed SIC’s appeal of the reconsideration or- der on grounds that SIC missed its filing deadline by one day. Sandwich Isles Commc’ns, Inc. v. FCC, No. 19-1056, 2019 WL 2564087, at *1 (D.C. Cir. May 17, 2019). C. Procedural History In January 2019, SIC filed this suit in the Claims Court, alleging that the cumulative effect of the FCC’s re- ductions in SIC’s federal subsidies resulted in a taking of property without just compensation. 1 SIC sought $200 mil- lion in damages. The government moved to dismiss, arguing, among other things, that the court’s Tucker Act jurisdiction is preempted by the comprehensive remedial scheme pro- vided in the Communications Act. Specifically, the govern- ment argued that SIC’s claims seek review of FCC decisions, which are within the exclusive jurisdiction of the courts of appeals. 28 U.S.C. § 2342; 47 U.S.C. § 402(a). The government further argued that SIC failed to allege a
1 SIC’s complaint also included claims relating to an alleged breach of an implied-in-fact contract and alleged vi- olations of Federal statutes and regulations mandating compensation. SIC has not pursued those claims on ap- peal, however. Case: 20-1446 Document: 39 Page: 8 Filed: 04/01/2021
valid takings claim because it has no property interest in receiving support payments from FCC-administered funds. On October 11, 2019, the Claims Court dismissed SIC’s complaint for lack of subject matter jurisdiction. At the outset, the court recognized that the “Communications Act of 1934 and the Hobbs Act specify the process for judicial review of FCC orders.” Decision on Appeal, 145 Fed. Cl. at 573. The court concluded that, although SIC characterized its claim as a Fifth Amendment taking, “the true nature of SIC’s claims is targeted at invalidating the FCC orders.” Id. at 575. The court explained that, by statute, only the D.C. Circuit—not the Claims Court—has jurisdiction over SIC’s claims. Id. at 574. The Claims Court therefore dis- missed SIC’s claims pursuant to Rule 12(b)(1). SIC moved for reconsideration, arguing that no takings claim was ripe at the time of the FCC proceedings, making the Claims Court the appropriate venue for its claims. The Claims Court denied that motion in January 2020, explain- ing that its jurisdiction under the Tucker Act had been preempted by the Communications Act and the Hobbs Act. Order at 1–2, Sandwich Isles Commc’ns, Inc. v. United States, No. 19-149 (Ct. Cl. Jan. 31, 2020), ECF. No. 15. The court further stated that, “[t]o the extent that a takings claim can arise out of the FCC orders at issue here, the Court agrees with the plaintiff’s assertion that the Court cannot rule on a takings claim that is not yet ripe.” Id. at 2. But because SIC has not “received a decision regarding its 2015 petition challenging the suspension of its high-cost subsidies, any takings claim, to the extent that one even exists, remain unripe.” Id. The court therefore denied SIC’s motion for reconsideration. SIC timely appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3). Case: 20-1446 Document: 39 Page: 9 Filed: 04/01/2021
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II. DISCUSSION We review “whether the Court of Federal Claims pos- sesses subject-matter jurisdiction de novo.” Biltmore For- est Broad. FM, Inc. v. United States, 555 F.3d 1375, 1380 (Fed. Cir. 2009). On appeal, SIC argues that it “has a takings claim for Constitutionally confiscatory rates where, as here, it has been denied a waiver and the rates cannot sustain contin- ued service.” Appellant’s Br. 9. According to SIC, it “filed its takings claim at the right time and in the right court” because it made a waiver request to the FCC, and that re- quest was denied. Id. at 11. The government responds that the Claims Court cor- rectly dismissed SIC’s complaint for lack of subject matter jurisdiction because Congress enacted a comprehensive re- gime governing judicial review of FCC orders that dis- places Tucker Act jurisdiction. For the reasons explained below, we agree. 2 Under the Tucker Act, the Claims Court has jurisdic- tion over cases “founded either upon the Constitution, or any Act of Congress or any regulation of an executive de- partment, or upon any express or implied contract with the
2 The government also argues that SIC cannot allege a valid takings claim because it has no vested property in- terest in receiving support from the high-cost universal support fund. The government may well be right. See Members of the Peanut Quota Holders Ass’n, Inc. v. United States, 421 F.3d 1323, 1335 (Fed. Cir. 2005) (“[T]he fact that [the plaintiffs] expected to continue to derive benefits from the program does not create rights to compensation from the government.”). But, because we agree with the Claims Court that the Communications Act preempts its Tucker Act jurisdiction over SIC’s takings claim, we need not address the that alternative argument. Case: 20-1446 Document: 39 Page: 10 Filed: 04/01/2021
United States, or for liquidated or unliquidated damages in cases not sounding in tort.” 28 U.S.C. § 1491(a)(1). The Supreme Court has described the Tucker Act as serving a “gap-filling role” by allowing “for an action against the United States for the breach of monetary obligations not otherwise judicially enforceable.” United States v. Bormes, 568 U.S. 6, 12–13 (2012). Accordingly, the Supreme Court and this court have held that the Tucker Act does not apply in various circumstances where Congress has provided “a precisely drawn, detailed statute” that “contains its own ju- dicial remedies.” Id. at 12 (internal quotation marks omit- ted); Folden v. United States, 379 F.3d 1344, 1357 (Fed. Cir. 2004). “To determine whether a statutory scheme dis- places Tucker Act jurisdiction, a court must ‘examin[e] the purpose of the [statute], the entirety of its text, and the structure of review that it establishes.’” Horne v. Dep’t of Agric., 569 U.S. 513, 527 (2013) (quoting United States v. Fausto, 484 U.S. 439, 444 (1988)). “In the Communications Act, Congress enacted a com- prehensive statutory and regulatory regime governing or- ders of the Commission.” Folden, 379 F.3d at 1357. The Communications Act specifically provides for judicial re- view of FCC decisions in 47 U.S.C. § 402. Subsection 402(a) provides that “[a]ny proceeding to enjoin, set aside, annul, or suspend any order of the Commission under this chapter (except those appealable under subsection (b) of this section) shall be brought as provided by [the Hobbs Act].” 47 U.S.C. § 402(a). The Hobbs Act, in turn, provides for the courts of appeals to have “exclusive jurisdiction” to “enjoin, set aside, suspend (in whole or in part), or to deter- mine the validity of” all final orders of the Commission made reviewable by subsection 402(a). 28 U.S.C. § 2342. Subsection 402(b), on the other hand, indicates that the D.C. Circuit has jurisdiction with respect to certain deci- sions and orders of the Commission, as set forth in subsec- tions 402(b)(1)–(10). 47 U.S.C. § 402(b). Case: 20-1446 Document: 39 Page: 11 Filed: 04/01/2021
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The Supreme Court has held that the statutory juris- diction of the courts of appeals over claims that fall within the scope of subsection 402(a) is exclusive. FCC v. ITT World Commc’ns, Inc., 466 U.S. 463, 468 (1984) (“Exclusive jurisdiction for review of final FCC orders, such as the FCC’s denial of respondents’ rulemaking petition, lies in the Court of Appeals.” (citing 28 U.S.C. § 2342(1); 47 U.S.C. § 402(a)). Likewise, we have recognized that “the D.C. Cir- cuit’s jurisdiction over claims that fall within subsection 402(b) is exclusive.” Folden, 379 F.3d at 1356. In Folden, we examined the Communications Act in de- tail and explained that “subsections 402(a) and (b) com- prise the entire statutory regime by which parties may obtain judicial review of Commission decisions.” Id. We further explained that, “[b]y their plain language, subsec- tions 402(a) and (b) are mutually exclusive.” Id. As such, “[a]ppeals from all decisions of the Commission that do not fall within subsection 402(b) are encompassed by the pro- cedures of subsection 402(a).” Id. And we reiterated that where, as here, a “specific and comprehensive scheme for administrative and judicial review is provided by Congress, the Court of Federal Claims’ Tucker Act jurisdiction over the subject matter covered by the scheme is preempted.” Id. at 1357 (quoting Vereda, Ltda v. United States, 271 F.3d 1367, 1375 (Fed. Cir. 2001)). Because the “true nature” of the plaintiffs’ claims in Folden involved denial of a license application, we found that they fell within the scope of subsection 402(b)(1). 379 F.3d at 1359 n. 13. As such, they were subject to the exclu- sive jurisdiction of the D.C. Circuit. Id. at 1363. We there- fore affirmed the Claims Court’s dismissal for lack of subject matter jurisdiction. Id.; see also Biltmore Forest Broad. FM, Inc. v. United States, 555 F.3d 1375, 1384 (Fed. Cir. 2009) (“There is no jurisdiction in the Court of Federal Claims to initially adjudicate or to re-adjudicate the FCC’s compliance with its rules and regulations in Case: 20-1446 Document: 39 Page: 12 Filed: 04/01/2021
licensing proceedings. The District of Columbia Circuit’s jurisdiction over those issues is exclusive.”). Although Folden expressly addressed claims under subsection 402(b), our reasoning applies with equal force to claims under subsection 402(a)—the jurisdictional provi- sion at issue here—because such claims are part of the same comprehensive statutory scheme governing orders of the FCC. Indeed, it is well-established that courts of ap- peals have exclusive statutory jurisdiction to review claims that fall within subsection 402(a). Folden, 379 F.3d at 1356 (citing FCC, 466 U.S. at 468); see also AT&T Corp. v. FCC, 323 F.3d 1081, 1084 (D.C. Cir. 2003) (“Section 402(a), the Act’s general review provision, vests in courts of appeals exclusive jurisdiction over ‘[a]ny proceeding to enjoin, set aside, annul or suspend’ or determine the validity of final Commission orders, 47 U.S.C. § 402(a)[.]”); U.S. West Commc’ns v. MFS Intelenet, Inc., 193 F.3d 1112, 1120 (9th Cir. 1999) (“The Hobbs Act grants exclusive jurisdic- tion to courts of appeals to determine the validity of all fi- nal orders of the FCC.” (citing 28 U.S.C. § 2342; 47 U.S.C. § 402(a)). Accordingly, the Communication Act’s compre- hensive scheme for review displaces Tucker Act jurisdic- tion for FCC orders and decisions falling within 47 U.S.C. § 402(a). The Supreme Court has made clear that “a claim for just compensation under the Takings Clause must be filed in the Court of Federal Claims in the first instance, unless Congress has withdrawn the Tucker Act grant of jurisdic- tion in the relevant statute.” Horne, 569 U.S. at 527 (quot- ing Eastern Enters. v. Apfel, 524 U.S. 498, 520 (1998) (plurality opinion)); see also Vereda Ltda v. United States, 271 F.3d 1367, 1375 (Fed. Cir. 2001) (holding Tucker Act jurisdiction over plaintiff’s takings claim preempted by statutory scheme that provided for review with the agency and in district court). Accordingly, the relevant inquiry is whether the Communications Act withdraws Tucker Act jurisdiction over takings claims. Case: 20-1446 Document: 39 Page: 13 Filed: 04/01/2021
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We recently determined that the Communication Act’s comprehensive remedial scheme preempts and therefore displaces Tucker Act jurisdiction over takings claims. Al- pine PCS, Inc. v. United States, 878 F.3d 1086, 1096 (Fed. Cir. 2018). In Alpine, the plaintiff alleged that the FCC’s cancellation of two personal communications services li- censes was a taking for which it was entitled just compen- sation. Id. at 1088. We explained that the judicial review scheme set forth in the Communications Act “squarely co- vers Alpine’s grievance” because its “takings claim (like its contract claims) is based on the FCC’s cancellation of the station licenses, a decision that falls squarely within the judicial-review provision, 47 U.S.C. § 402(b)(5).” Id. at 1097–98. First, we examined the Communications Act and found that it provides a “comprehensive statutory scheme through which Alpine could present, and is directed to pre- sent, its takings claim, to the exclusion of the Tucker Act under the Horne analysis.” Id. at 1079. We noted that, “[a]s for relief at the agency level, there was no procedural impediment to Alpine’s presenting a takings claim to the FCC. The FCC did not suggest that it lacked the authority to review the license cancellation and take steps to provide compensation.” Id. at 1097. Indeed, both parties agreed that “the FCC had the power to grant Alpine adequate re- lief, by eliminating the taking, providing compensation, or some combination.” Id. at 1096. We then explained that the D.C. Circuit was capable of ordering any appropriate relief with respect to the takings claim, whether on appeal or on remand to the agency. Id. at 1098. Accordingly, un- der “the comprehensive statutory scheme” provided by the Communications Act, “Alpine could have raised a constitu- tional takings claim; the FCC had the authority to grant relief; and the D.C. Circuit had jurisdiction to review whether a taking occurred and, if so, whether the FCC de- cision ‘yield[ed] just compensation.’” Id. (citation omitted). Because the statutory scheme provided the plaintiff a Case: 20-1446 Document: 39 Page: 14 Filed: 04/01/2021
“ready avenue” to bring its takings claim and displaced Tucker Act jurisdiction over that claim, we affirmed the Claims Court’s judgment dismissing the plaintiff’s claims for lack of jurisdiction. Id. Although Alpine dealt specifically with subsection 402(b), as we explained before, our analysis and reasoning with respect to the statutory scheme set forth in the Com- munications Act applies with equal force in cases involving subsection 402(a). The relevant question is therefore whether SIC’s alleged takings claims challenge FCC ac- tions and orders and thus are governed by subsection 402(a). 3 That subsection, as noted, provides the procedure “to enjoin, set aside, annul, or suspend any order of the [FCC]” except those appealable under subsection 402(b). 47 U.S.C. § 402(a). In analyzing whether subsection 402(a) applies, we “must look to the true nature of [the plaintiff’s] claim, not how plaintiff characterize[s] it.” Folden, 379 F.3d at 1359 n.13. Here, SIC’s takings claim is based on its disa- greement with FCC decisions regarding the amount of
3 Although the Claims Court stated that SIC’s claims fall within the scope of subsection 402(b), it did not identify a particular provision within that subsection. De- cision on Appeal, 145 Fed. Cl. at 574 (“It seems clear to this Court that the ‘true nature’ of SIC’s claims is focused on challenging the validity and propriety of FCC orders and actions, therefore bringing those claims under the purview of 47 U.S.C. § 402(b).”). Notably, the government does not contend that subsection 402(b) applies to SIC claims. Be- cause SIC’s claims do not appear to fall within the scope of a particular provision in subsection 402(b), we focus our in- quiry on subsection 402(a). See Folden, 379 F.3d at 1356 (“Appeals from all decisions of the Commission that do not fall within subsection 402(b) are encompassed by the pro- cedures of subsection 402(a).”). Case: 20-1446 Document: 39 Page: 15 Filed: 04/01/2021
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subsidies SIC could receive from the USF and NECA pools. SIC also takes issue with the FCC’s 2013 order, which de- nied SIC’s petition for waiver of the $250 per-line, per- month cap on high-cost universal service support. These allegations take aim at FCC orders and seek to “enjoin, set aside, annul, or suspend” them. See 47 U.S.C. § 402(a). Be- cause SIC’s takings claim challenges FCC actions and or- ders governed by 47 U.S.C. § 402(a), the statutory scheme set forth in the Communications Act displaces the Claims Court’s Tucker Act jurisdiction. On appeal, SIC argues that it “did not plead its claims as challenges to FCC orders because the claims are not, in fact, facial challenges to FCC orders.” Appellant’s Br. 15. SIC maintains that the FCC’s denial of its “waiver petition in 2013 established the rate in the FCC’s 2011 Order as final,” and that the “rate is confiscatory, resulting in an un- constitutional taking under the Fifth Amendment.” Id. at 15–16. But SIC’s claim, regardless of how it is charac- terized, is premised on its disagreement with the amount of subsidy funding it has received from FCC-administered funds, particularly the high-cost USF. Congress has given the courts of appeals exclusive jurisdiction over “[a]ny pro- ceeding to enjoin, set aside, annul, or suspend” orders of the FCC—which includes FCC decisions relating to univer- sal service support. 28 U.S.C. § 2342(a); 47 U.S.C. § 402(a). Accordingly, if SIC wanted to challenge the FCC orders, it was required to do so within the comprehensive statutory scheme established by the Communications Act—that is, by first filing an appeal with the FCC before pursuing a judicial remedy pursuant to section 402. SIC also maintains that it could not have raised its tak- ings claim as a challenge to any FCC order because “a tak- ings claim asserted in an appeal from the FCC’s order would be unripe.” Appellant’s Br. 12–13. At the same time, however, SIC alleges that “a confiscatory rate takings claim is ripe when its impacts are known” and the “impacts of the FCC’s 2011 rates have been fully manifested.” Id. Case: 20-1446 Document: 39 Page: 16 Filed: 04/01/2021
at 14. Indeed, SIC alleges that its taking claim “was al- ready ripe when SIC filed its 2015 petition.” Id. SIC’s ripe- ness allegations, which seem to be a moving target, miss the mark. The fact remains that SIC has not raised its tak- ings claim before the FCC, which it was required to do be- fore seeking judicial review. See Williamson Cnty. Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172, 194–95 (1985) (“[A] claim that the application of government regulations effects a taking of a property inter- est is not ripe until the government entity charged with im- plementing the regulations has reached a final decision regarding the application of the regulations to the property at issue.”), overruled on other grounds by Knick v. Twp. of Scott, 139 S. Ct. 2162, 2179 (2019). As we said in Alpine, there is no procedural impedi- ment to presenting a takings claim to the FCC. 878 F.3d at 1097. 4 The proper procedure for doing so is set forth in the Communication Act’s comprehensive statutory scheme: SIC could have raised a constitutional takings claim to the FCC, challenging the rate; the FCC had authority to grant relief, including waiver of the rate it set; and if the FCC denied the waiver, SIC could appeal that decision to the full commission and then to the court of appeals. Counsel for the government confirmed this procedure during oral argument. See Oral Arg. at 15:50–17:10, available at
4 As we explained in Alpine, we do not imply that all constitutional challenges to the FCC’s actions must be pre- sented to the FCC before they can be asserted. But, where, as here, the FCC is in the position to prevent an alleged taking in the course of its own proceedings, the agency must be made aware of any such claim. Any such claim is then subsumed into the agency’s final decision and can be appealed only to the court of appeals. See Alpine, 878 F.3d at 1096–98. Case: 20-1446 Document: 39 Page: 17 Filed: 04/01/2021
SANDWICH ISLES COMMUNICATIONS v. UNITED STATES 17
http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20- 1446_01072021.mp3. SIC fails to identify any authority suggesting that the Claims Court has jurisdiction under the Tucker Act to con- sider takings claims based on FCC decisions regarding uni- versal service support, and we have found none. 5 That is not surprising, given that Congress has granted the courts of appeals exclusive jurisdiction over challenges to FCC or- ders under 47 U.S.C. § 402(a). SIC cannot, on alleged ripe- ness grounds, bypass the comprehensive statutory scheme for judicial review established by Congress in the Commu- nications Act. Accordingly, the Claims Court correctly de- termined that it lacked subject matter jurisdiction over SIC’s takings claim. III. CONCLUSION We have considered SIC’s remaining arguments and find them unpersuasive. For the reasons stated herein, we
5 SIC cites the Tenth Circuit’s decision in In re FCC 11-161, 753 F.3d 1015, 1136 (10th Cir. 2014) for the propo- sition that “a takings claim brought as an appeal from the subject [FCC] order would be subject to dismissal for lack of ripeness.” Appellant’s Br. 13. There, the court explained that, “[w]hen a carrier faces an insufficient return, it can seek greater support under the Total Cost and Earnings Review Process. Until this process is invoked, the as-ap- plied challenge is premature.” In re FCC, 753 F.3d at 1136. The Tenth Circuit further stated that, “[i]f the FCC im- poses confiscatory rates, carriers could then bring as-ap- plied challenges.” Id. (citing Verizon Commc’n, Inc. v. FCC, 535 U.S. 467, 526–27, 528 n. 39 (2002)). But nothing in Verizon or In re FCC alters the fact that the Communica- tions Act provides the statutory scheme for judicial review of FCC orders and withdraws Tucker Act jurisdiction over SIC’s takings claims. Case: 20-1446 Document: 39 Page: 18 Filed: 04/01/2021
affirm the Claims Court’s dismissal of SIC’s takings claim for lack of subject matter jurisdiction. AFFIRMED