Utility Reform Network v. California Public Utilities Commission

26 F. Supp. 2d 1208, 1997 U.S. Dist. LEXIS 23116, 1997 WL 448155
CourtDistrict Court, N.D. California
DecidedJuly 1, 1997
DocketNo. C 97-00232 CW
StatusPublished
Cited by2 cases

This text of 26 F. Supp. 2d 1208 (Utility Reform Network v. California Public Utilities Commission) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Utility Reform Network v. California Public Utilities Commission, 26 F. Supp. 2d 1208, 1997 U.S. Dist. LEXIS 23116, 1997 WL 448155 (N.D. Cal. 1997).

Opinion

ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS

WILKEN, District Judge.

Defendants California Public Utilities Commission (“CPUC”), the Commissioners of the CPUC, and the Executive Director of the CPUC move to dismiss Plaintiff The Utility Reform Network’s (“TURN”) complaint for lack of subject matter jurisdiction and for failure to state a claim. Plaintiff opposes the motion. The matter was heard on June 20, 1997. Having considered all of the papers filed by the parties and oral argument on the motion, the Court GRANTS the motion.

BACKGROUND

On February 8, 1996, the Telecommunications Act of 1996, Pub.L. 104-104, 110 Stat. 56, 47 U.S.C. § 251 et seq., was enacted. The Act, among other things, provided for the introduction of competition into local telephone service. See 47 U.S.C. § 252. Congress was concerned, however, that the introduction of local competition might have the effect of rendering basic telecommunications services too expensive in rural and high cost areas. The Act therefore required the Federal Communications Commission (“FCC” or “Commission”) to establish mechanisms by which telecommunications carriers that provide interstate telecommunications services would “contribute” to the preservation and advancement of universal service. 47 U.S.C. § 254(d).1 The Act also provides that telecommunications carriers “that pro[1211]*1211vide intrastate telecommunications services shall contribute, on an equitable and nondis-eriminatory basis, in a manner determined by the State to the preservation and advancement of universal service in that State.” 47 U.S.C. § 254(f).2

On October 25, 1996, the CPUC adopted two end-user surcharges to finance two new intrastate universal telephone service programs. Guerrero Decl, Ex. A, CPUC Decision 96-10-066. Each surcharge is listed as a separate item on customers’ telephone bills and is collected by customers’ telephone service providers. Prior to the CPUC’s decision, Plaintiff TURN, an organization representing residential and small business utility customers, had urged the CPUC to require telephone service providers to fund the universal service programs. Although TURN acknowledges that customers would pay for at least part of the universal service programs regardless of the specific funding mechanism chosen, it urged that telephone service providers be required to pay for the programs in the first instance because it believes that market forces may operate to prevent telephone companies from passing the entire cost of these programs onto customers.

The CPUC denied Plaintiff’s request for a stay on implementation of the decision.

On January 21, 1997, Plaintiff filed this lawsuit in United States District Court, alleging that the CPUC’s decision to impose end-user surcharges violated the Telecommunications Act of 1996 and the Commerce Clause. Defendants moved to dismiss Plaintiffs complaint for lack of subject matter jurisdiction and for failure to state a claim. Hearing on Defendants’ motion was rescheduled to enable the parties to submit briefing on FCC Order 97-157 (“Order”), which imposed fees on interstate telecommunications carriers, rather than on end users, to finance universal service programs.

DISCUSSION

I. Legal Standard for Motion to Dismiss

A motion to dismiss for failure to state a claim will be denied unless it appears that the plaintiff can prove no set of facts which would entitle it to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Fidelity Fin. Corp. v. Federal Home Loan Bank of San Francisco, 792 F.2d 1432, 1435 (9th Cir.1986), cert. denied, 479 U.S. 1064, 107 S.Ct. 949, 93 L.Ed.2d 998 (1987). All material allegations in the complaint will be taken as true and construed in the light most favorable to the plaintiff. NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir.1986).

II. Telecommunications Act of 1996

A. Enforceability

As an initial matter, Defendants contend that Plaintiff does hot have a cause of action even if the CPUC’s decision violates the Telecommunications Act because the Act does not provide Plaintiff a cause of action. Plaintiff responds that it may enforce section 254(£) of the Telecommunications Act through either of two mechanisms: section 1983 or declaratory and injunctive relief based on federal preemption.

1. Section 1983

Section 1983 imposes liability on anyone who, under color of state law, deprives a person of “any rights, privileges, or immunities secured by the Constitution and laws.” 42 U.S.C. § 1983. In order to obtain redress through section 1983, “a plaintiff must assert the violation of a federal right, not merely a violation of federal law.” Blessing v. Freestone, 520 U.S. 329, -, 117 S.Ct. 1353, 1359, 137 L.Ed.2d 569 (1997) (emphasis in the original). The Supreme Court has articulated a three-factor test for determining [1212]*1212whether a particular statutory provision gives rise to a federal right:

First, Congress must have intended that the provision in question benefit the plaintiff. Second, the plaintiff must demonstrate that the right assertedly protected by the statute is not so “vague and amorphous” that its enforcement would strain judicial competence. Third, the statute must unambiguously impose a binding obligation on the States.

Id. (citing Wright v. Roanoke Redevelopment and Housing Auth., 479 U.S. 418, 430-32, 107 S.Ct. 766, 93 L.Ed.2d 781 (1987)).

Plaintiff argues that the Telecommunications Act conferred upon telecommunications consumers the right “to be free from the imposition of ratepayer-funded contributions to finance new universal support mechanisms that may be adopted by both state and federal regulations.” Complaint ¶ 38.

Neither statutory language nor legislative history supports Plaintiffs interpretation.

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26 F. Supp. 2d 1208, 1997 U.S. Dist. LEXIS 23116, 1997 WL 448155, Counsel Stack Legal Research, https://law.counselstack.com/opinion/utility-reform-network-v-california-public-utilities-commission-cand-1997.