Opinion
CIVIL ACTION No. 03-2330-GTV
November 5, 2003
MEMORANDUM AND ORDER
This action is before the court on Kansas City Power and Light Company's ("KCPL") motion to dismiss (Doc. 8) Count n of American Fiber Systems, Inc.'s ("AFS") counterclaim. The counterclaim seeks damages due to KCPL's alleged violation of the Pole Attachment Act, 47 U.S.C. § 224. The parties' briefs present one issue for the court to determine: whether Congress intended for a private right of action to be available under the Pole Attachment Act. For the following reasons, the court holds that Congress did not intend for a private right of action to be available under the Act. Accordingly, KCPL's motion to dismiss (Doc. 8) is granted. However, the court concludes sua sponte that the case should be stayed and referred to the Federal Communications Commission ("FCC") under the doctrine of primary jurisdiction for a decision as to whether or not AFS is a telecommunications carrier under the Pole Attachment Act.
I. BACKGROUND
In 1978, Congress enacted the Pole Attachment Act in an effort to curb "anticompetitive practices by utilities in connection with cable television service." FCC v. Fla. Power Corp., 480 U.S. 245, 247 (1987). Generally, cable television operators entered into leasing agreements with utility companies to secure space on utility poles. Id. Cable television operators could then install their television cables and provide service to their subscribers. Id. Cable television operators, however, complained that the utility companies used their monopoly position to overcharge for access to the poles. Id. Congress answered with the Pole Attachment Act, granting the FCC authority to "regulate the rates, terms and conditions for pole attachments" and requiring "that such rates, terms, and conditions [be] just and reasonable." 47 U.S.C. § 224(b)(1). In 1996, Congress amended the Pole Attachment Act. Congress expanded the coverage of the act to cover not only cable television systems, but also telecommunications carriers. Congress mandated that any entity meeting the definition of "cable television system" or "telecommunications carrier, "as defined in the Communications Act of 1934, as amended, 47 U.S.C. § 151 et seq., be provided "with nondiscriminatory access to any pole, duct, conduit, or right-of-way owned or controlled by "a utility. 47 U.S.C. § 224(f)(1).On June 20, 2003 KCPL filed this action requesting declaratory relief pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, as well as requesting other injunctive relief. It is undisputed that KCPL is a "utility" company "who owns or controls poles, ducts, conduits or rights-of-way" as that term is defined in the Pole Attachment Act. 47 U.S.C. § 224(a)(1). KCPL seeks a declaratory judgment determining that AFS is not a "telecommunications carrier" as defined in the Communications Act, and thus, is not entitled to access to "any pole, duct, conduit, or right-of-way owned or controlled" by KCPL under the Pole Attachment Act. See 47 U.S.C. § 224(f)(1). AFS made two counterclaims in response to KCPL's complaint. First, pursuant to the Declaratory Judgment Act, AFS seeks a determination that AFS is a "telecommunications carrier" covered by the Pole Attachment Act. Second, AFS claims that KCPL violated the Pole Attachment Act when it refused to provide AFS access to KCPL's poles. AFS's second counterclaim, which the court dismisses pursuant to Fed.R.Civ.P. 12(b)(6), sought damages for "lost profits, revenues, customers and business opportunities" due to KCPL's claimed unlawful actions.
II. DISCUSSION A. Private Right of Action
The issue of before this court-whether Congress intended a private right of action to be available under the Pole Attachment Act-is a question of first impression. To this court's knowledge, no other court has addressed this issue. Both KCPL and AFS admit the same. KCPL argues that there is no indication from the language of the Pole Attachment Act, its legislative history or surrounding statutory scheme that Congress intended to create a private right of action for damages. In response, AFS argues that the FCC's powers under the Pole Attachment Act do not occupy the entire field in this area, and do not preclude AFS's action for damages.
The test for determining whether a private right of action exists focuses on a "single inquiry: whether Congress, expressly or by implication, intended to create a private right of action for civil parties in the statute." Kaw Nation v. Springer. 341 F.3d 1186, 1189 (10th Cir. 2003) (citing Schmeling v. Nordara 97 F.3d 1336, 1343-44 (10th Cir. 1996); Transamerica Mortgage Advisors. Inc. v. Lewis. 444 U.S. 11, 15-16 (1979));see also louche Ross Co. v. Redingtoa 442 U.S. 560, 575-76 (1979) ("[T]he language and focus of the statute, its legislative history, and its purpose . . . are ones traditionally relied upon in determining legislative intent").
Tenth Circuit precedent directs this court to "exercise great caution in finding an implied right of action." Davis-Warren Auctioneers. J.V. v. FDIC. 215 F.3d 1159, 1162 (10th Cir. 2000) (citation omitted). A plaintiffs burden is a formidable one:
"[a] plaintiff asserting an implied right of action under a federal statute bears the relatively heavy burden of demonstrating that Congress affirmatively contemplated private enforcement when it passed the statute. In other words, he must overcome the familiar presumption that Congress did not intend to create a private right of action."Med. Supply Chain. Inc. v. U.S. Bancorp. NA No. 02-2539, 2003 WL 21479192, at *8 (D. Kan. June 16, 2003) (quoting Casas v. Am. Airlines. Inc., 304 F.3d 517, 521 (5th Cir. 2002)). After reviewing the statute and its legislative history, the court concludes that Congress did not intend to create a private right of action available under the Pole Attachment Act.
Both parties acknowledge that the express language of the statute does not create a private action for damages. Consequently, the court must examine the Pole Attachment Act's legislative history. As stated previously, Congress enacted the Pole Attachment Act in 1978 in response to cable system operators' complaints about the "exorbitant rental fees and other unfair terms" utility companies commanded due their "local monopoly in ownership or control of poles." S. Rep. No. 95-580, at 13 (1977), reprinted in 1978 U.S.C.C.A.N. 109, 121. The legislative history of the Pole Attachment Act notes that during the relevant time period, the "policies and practices of utilities owning or controlling poles [was] generally unregulated" by the States and that the FCC had decided that it did not have "jurisdiction under the Communications Act of 1934, as amended, to regulate pole attachment and conduit rental arrangements." S. Rep. No. 95-580, at 14 (1977),reprinted in 1978 U.S.C.C.A.N. 109, 122. The legislative history discloses that the act was intended to serve two specific purposes: (1) "To establish a mechanism whereby unfair pole attachment practices may come under review and sanction"; and (2) "to minimize the effect of unjust or unreasonable pole attachment practices on the wider development of cable television service to the public." Id. To this end, Congress established "jurisdiction within the [FCC] to regulate the provision by utilities to cable television systems of space on utility poles, ducts, conduits, or other rights-of-way owned or controlled by those utilities." S. Rep. No. 95-580, at 1 (1977),reprinted in 1978 U.S.C.C.A.N. 109.
The Pole Attachment Act empowers the FCC "to hear and resolve complaints regarding the arrangements between cable television systems and the owners or controllers of utility poles." S. Rep. No. 95-580, at 2 (1977),reprinted in 1978 U.S.C.C.A.N. 109, 110; see 47 U.S.C. § 224 (b)(1). With this authority, the FCC established the "Pole Attachment Complaint Procedures." 47 C.F.R. § 1.1401- 47 C.F.R. § 1.1418 (2003). These regulations "provide complaint and enforcement procedures to ensure that telecommunications carriers and cable system operators have nondiscriminatory access to utility poles, ducts, conduits, and rights-of-way on rates, terms, and conditions that are just and reasonable."Id § 1.1401. The Pole Attachment Act, however, does not restrict the power of the States, as States may preempt the FCC's "involvement in pole attachment arrangements . . . by notifying the FCC that it regulates the rates, terms, and conditions for such attachments." S. Rep. No. 95-580, at 2 (1977), reprinted in 1978 U.S.C.C.A.N. 109, 110; see 47 U.S.C. § 224(c).
Congress's purpose in enacting the Pole Attachment Act in 1978 is clear: to expand the FCC's regulatory authority "only so far as is necessary to permit the Commission to involve itself in arrangements affecting the provision of utility pole communications space to CATV systems." S. Rep. No. 95-580, at 15 (1977), reprinted in 1978 U.S.C.C.A.N. 109, 123. Congress commanded the FCC to establish a regulatory scheme to settle pole attachment disputes; Congress remained silent on the availability of a private right of action for damages under the Pole Attachment Act. Congress did make minor modifications to the Pole Attachment in 1982, 1984, and 1994. It was not until the Telecommunications Act of 1996 that Congress made a significant change to the Pole Attachment Act and expanded the act's coverage to "telecommunications carriers." Once again, Congress remained silent on the availability of a private right of action.
"When Congress wishes to provide a private remedy, it knows how to do so." Brown v. Am. Home Prods. Corp., 520 F. Supp. 1120, 1128 (D. Kan. 1981) (citing Touche Ross Co., 442 U.S. at 572). The court is reluctant to imply a cause of action without evidence of congressional intent. Congress created jurisdiction in the FCC to settle utility pole disputes and provided the States the option of preempting the FCC; Congress did not intend to create a private cause of action for damages. Accordingly, the court grants KCPL's motion to dismiss Count II of AFS's counterclaim for damages under the Pole Attachment Act.
B. Doctrine of Primary Jurisdiction
AFS's response to KCPL's motion to dismiss claims that AFS requested access to KCPL's infrastructure on several occasions. AFS also claimed that it "initiated an alternative dispute resolution process at the Federal Communications Commission" and "advised the FCC that it intended to file a complaint against KCPL for its denial of access." AFS maintains that KCPL "abruptly terminated that process" and then filed the present action seeking a declaration that AFS is not a "telecommunications carrier" as defined by the Pole Attachment Act. AFS's answer to KCPL's original complaint maintained that the FCC has concurrent jurisdiction with this court over the subject matter of the litigation. AFS's answer also claimed that it "does not waive its right to assert that the FCC has primary jurisdiction over the dispute, and is the proper forum for resolution of the dispute." "[B]ecause the doctrine of primary jurisdiction `exists for the proper distribution of power between judicial and administrative bodies and not for the convenience of parties,' we may examine whether it applies sua sponte." Williams Pipe Line Co. v. Empire Gas Corp., 76 F.3d 1491, 1496 (10th Cir. 1996) (quoting Fontan-de-Maldonado v. Lineas Aereas Costarricenses. S.A., 936 F.2d 630, 632 (1st Cir. 1991)). The court concludes that the allegations contained in the parties' pleadings and briefs demonstrate the necessity to refer this matter to the FCC for resolution of whether AFS is a telecommunications carrier under the Pole Attachment Act.
In Williams Pipe Line Co., the Tenth Circuit discussed the doctrine of primary jurisdiction:
The doctrine of primary jurisdiction allows a federal court to refer a matter extending beyond the "conventional experiences of judges" or "falling within the realm of administrative discretion" to an administrative agency with more specialized experience, expertise, and insight Specifically, courts apply primary jurisdiction to cases involving technical and intricate questions of fact and policy that Congress has assigned to a specific agency.
76 F.3d at 1496 (quoting Nat'l Communications Ass'n. Inc. v. Am. Tel. Tel. Co., 46 F.3d 220, 223 (2d Cir. 1995)). The two main goals of the doctrine are to: "(1) ensure desirable uniformity in determinations of certain administrative questions[;] and (2) promote resort to agency experience and expertise where the court is presented with a question outside its conventional experience." Id.(citingUnited States v. W. Pace. R.R. Co., 352 U.S. 59, 64 (1956)).
The court concludes that under the doctrine of primary jurisdiction, the parties' claims involve the application of the FCC's expertise and that it is proper to refer the case to the FCC for decision. The central dispute between KCPL and AFS is whether AFS is a "telecommunications carrier" entitled to access KCPL's poles under the Pole Attachment Act. KCPL contends that AFS provides "dark fiber" services which are not considered telecommunications services under the Pole Attachment Act. In support of its position, KCPL cites one Eleventh Circuit opinion and two prior FCC decisions. AFS disputes the fact that dark fiber is not a telecommunications service. AFS's brief claims this issue "has not been decided by any court, and that question is now before the FCC." AFS also contends that it provides services other than dark fiber.
The court concludes that these issues require the expertise of the FCC, and that their resolution is a part of the regulatory scheme Congress delegated to the FCC under the Pole Attachment Act. If either party wishes to pursue this matter, it is directed to file an appropriate administrative action with the Federal Communications Commission. The parties are directed to report the status of any such action before the FCC, or lack thereof, to this court on or before March 5, 2004.
IT IS, THEREFORE, BY THE COURT ORDERED that KCPL's motion to dismiss Count n of AFS's counterclaim (Doc. 8) is granted.
IT IS FURTHER ORDERED that this action is stayed pending a decision of the FCC as to whether AFS is a telecommunications carrier under the Pole Attachment Act, or until further order of the court.
IT IS FURTHER ORDERED that the parties, either jointly or separately, shall submit a status report to the court regarding any action before the FCC on or before March 5, 2004.
Copies of this order shall be transmitted to counsel of record.
IT IS SO ORDERED.