OPINION OF THE COURT
GLOBAL CROSSING TELECOMMUNICATIONS, INC. V.METROPHONES
TELECOMMUNICATIONS, INC.
550 U. S. ____ (2007)
SUPREME COURT OF THE UNITED STATES
NO. 05-705
GLOBAL CROSSING TELECOMMUNICATIONS, INC.,
PETITIONER
v. METROPHONES TELE- COMMUNICATIONS, INC.
on writ of certiorari to the united states court of
appeals for the ninth circuit
[April 17, 2007]
Justice Breyer delivered the
opinion of the Court.
The Federal Communications
Commission (Commission or FCC) has established rules that require
long-distance (and certain other) communications carriers to
compensate a payphone operator when a caller uses a payphone to
obtain free access to the carrier’s lines (by dialing,
e.g., a 1–800 number or other access code). The Commission
has added that a carrier’s refusal to pay the compensation is a
“practice … that is unjust or unreasonable” within the terms of the
Communications Act of 1934, §201(b), 48 Stat. 1070, 47 U.
S. C. §201(b). Communications Act language links §201(b) to
§207, which authorizes any person “damaged” by a violation of
§201(b) to bring a lawsuit to recover damages in federal court. And
we must here decide whether this linked section, §207, authorizes a
payphone operator to bring a federal-court lawsuit against a
recalcitrant carrier that refuses to pay the compensation that the
Commission’s order says it owes.
In our view, the FCC’s application of §201(b)
to the carrier’s refusal to pay compensation is a reasonable
interpretation of the statute; hence it is lawful. See
Chevron
U. S. A. Inc. v.
Natural Resources Defense Council,
Inc.,
467 U. S.
837, 843–844, and n. 11 (1984). And, given the linkage with
§207, we also conclude that §207 authorizes this federal-court
lawsuit.
I
A
Because regulatory history helps
to illuminate the proper interpretation and application of §§201(b)
and 207, we begin with that history. When Congress enacted the
Communications Act of 1934, it granted the FCC broad authority to
regulate interstate telephone communications. See
Louisiana
Pub. Serv. Comm’n v.
FCC,
476 U. S. 355, 360
(1986). The Commission, during the first several decades of its
history, used this authority to develop a traditional regulatory
system much like the systems other commissions had applied when
regulating railroads, public utilities, and other common carriers.
A utility or carrier would file with a commission a tariff
containing rates, and perhaps other practices, classifications, or
regulations in connection with its provision of communications
services. The commission would examine the rates, etc., and, after
appropriate proceedings, approve them, set them aside, or,
sometimes, set forth a substitute rate schedule or list of approved
charges, classifications, or practices that the carrier or utility
must follow. In doing so, the commission might determine the
utility’s or carrier’s overall costs (including a reasonable
profit), allocate costs to particular services, examine whether,
and how, individual rates would generate revenue that would help
cover those costs, and, if necessary, provide for a division of
revenues among several carriers that together provided a single
service. See 47 U. S. C. §§201(b), 203, 205(a);
Missouri
ex rel. Southwestern Bell Telephone Co. v.
Public
Serv. Comm’n of Mo.,
262 U. S. 276, 291–295
(1923) (Brandeis, J., concurring in judgment) (telecommunications);
Verizon Communications Inc. v.
FCC,
535 U. S. 467, 478
(2002) (same);
Chicago & North Western R. Co. v.
Atchison, T. & S. F. R. Co.,
387 U. S. 326, 331 (1967) (railroads);
Permian Basin Area Rate Cases,
390 U. S. 747, 761–765,
806–808 (1968) (natural gas field production).
In authorizing this traditional
form of regulation, Congress copied into the 1934 Communications
Act language from the earlier Interstate Commerce Act of 1887, 24
Stat. 379, which (as amended) authorized federal railroad
regulation. See
American Telephone & Telegraph Co. v.
Central Office Telephone, Inc.,
524 U. S. 214, 222
(1998). Indeed, Congress largely copied §§1, 8, and 9 of the
Interstate Commerce Act when it wrote the language of
Communications Act §§201(b) and 207, the sections at issue here.
The relevant sections (in both statutes) authorize the commission
to declare any carrier “charge,” “regulation,” or “practice” in
connection with the carrier’s services to be “unjust or
unreasonable”; they declare an “unreasonable,”
e.g.,
“charge” to be “unlawful”; they authorize an injured person to
recover “damages” for an “unlawful” charge or practice; and they
state that, to do so, the person may bring suit in a “court” “of
the United States.” Interstate Commerce Act §§1, 8, 9, 24 Stat.
379, 382; Communications Act §§201(b), 206, 207, 47 U. S. C.
§§201(b), 206, 207.
Historically speaking, the Interstate Commerce
Act sections changed early, preregulatory common-law
rate-supervision procedures. The common law originally permitted a
freight shipper to ask a
court to determine whether a
railroad rate was unreasonably high and to award the shipper
damages in the form of “reparations.” The “new” regulatory law,
however, made clear that a commission, not a court, would determine
a rate’s reasonableness. At the same time, that “new” law permitted
a shipper injured by an unreasonable rate to bring a federal
lawsuit to collect damages. Interstate Commerce Act §§1, 8–9;
Arizona Grocery Co. v.
Atchison, T. & S. F. R.
Co.,
284 U. S.
370, 383–386 (1932);
Texas & Pacific R. Co. v.
Abilene Cotton Oil Co.,
204 U. S. 426, 436,
440–441 (1907);
Keogh v.
Chicago & Northwestern R.
Co.,
260 U. S.
156, 162 (1922);
Louisville & Nashville R. Co. v.
Ohio Valley Tie Co.,
242 U. S. 288, 290–291
(1916); J. Ely, Railroads and American Law 71–72, 226–227 (2001);
A. Hoogenboom & O. Hoogenboom, A History of the ICC 61 (1976).
The similar language of Communications Act §§201(b) and 207
indicates a roughly similar sharing of agency authority with
federal courts.
Beginning in the 1970’s, the FCC came to
believe that communications markets might efficiently support more
than one firm and that competition might supplement (or provide a
substitute for) traditional regulation. See
MCI
Telecommunications Corp. v.
American Telephone &
Telegraph Co.,
512 U. S. 218, 220–221
(1994). The Commission facilitated entry of new telecommunications
carriers into long-distance markets. And in the 1990’s, Congress
amended the 1934 Act while also enacting new telecommunications
statutes, in order to encourage (and sometimes to mandate) new
competition. See Telecommunications Act of 1996, 110 Stat. 56, 47
U. S. C. §609
et seq. Neither Congress nor the
Commission, however, totally abandoned traditional regulatory
requirements. And the new statutes and amendments left many
traditional requirements and related statutory provisions,
including §§201(b) and 207, in place.
E.g.,
National
Cable & Telecommunications Assn. v.
Brand X Internet
Services,
545
U. S. 967, 975 (2005).
B
The regulatory problem that
underlies this lawsuit arises at the intersection of traditional
regulation and newer, more competitively oriented approaches.
Competing long-distance carriers seek the business of individual
local callers, including those who wish to make a long-distance
call from a local payphone. A payphone operator, however, controls
what is sometimes a necessary channel for the caller to reach the
long-distance carrier. And prior to 1990, a payphone operator,
exploiting this control, might require a caller to use a
long-distance carrier that the operator favored while blocking
access to the caller’s preferred carrier. Such a practice
substituted the operator’s choice of carrier for the caller’s, and
it potentially placed disfavored carriers at a competitive
disadvantage. In 1990, Congress enacted special legislation
requiring payphone operators to allow a payphone user to obtain
“free” access to the carrier of his or her choice,
i.e.,
access from the payphone without depositing coins. Telephone
Operator Consumer Services Improvement Act of 1990, 104 Stat. 986,
codified at 47 U. S. C. §226. (For ease of exposition, we
often use familiar terms such as “long distance” and “free” calls
instead of more precise terms such as “interexchange” and
“coinless” or “dial-around” calls.)
At the same time, Congress
recognized that the “free” call would impose a cost upon the
payphone operator; and it consequently required the FCC to
“prescribe regulations that … establish a per call compensation
plan to ensure that all payphone service providers are fairly
compensated for each and every completed intrastate and interstate
call.” §276(b)(1)(A) of the Communications Act of 1934, as added by
§151 of the Telecommunications Act of 1996, 110 Stat. 106, codified
at 47 U. S. C. §276(b)(1)(A).
The FCC then considered the compensation
problem. Using traditional ratemaking methods, it found that the
(fixed and incremental) costs of a “free” call from a payphone to,
say, a long-distance carrier warranted reimbursement of (at the
time relevant to this litigation) $0.24 per call. The FCC ordered
carriers to reimburse the payphone operators in this amount unless
a carrier and an operator agreed upon a different amount. 47 CFR
§64.1300(d) (2005). At the same time, it left the carriers free to
pass the cost along to their customers, the payphone callers. Thus,
in a typical “free” call, the carrier will bill the caller and then
must share the revenue the carrier receives—to the tune of $0.24
per call—with the payphone operator that has, together with the
carrier, furnished a communications service to the caller. The FCC
subsequently determined that a carrier’s refusal to pay the
compensation ordered amounts to an “unreasonable practice” within
the terms of §201(b). (We shall refer to these regulations as the
Compensation Order and the 2003 Payphone Order, respectively. See
Appendix A,
infra, for full citations.) See generally P.
Huber, M. Kellogg, & J. Thorne, Federal Telecommunications Law
§8.6.3, pp. 710–713 (2d ed. 1999) (hereinafter Huber). That
determination, it believed, would permit a payphone operator to
bring a federal-court lawsuit under §207, to collect the
compensation owed. 2003 Payphone Order, 18 FCC Rcd. 19975, 19990,
¶32.
C
In 2003, respondent, Metrophones
Telecommunications, Inc., a payphone operator, brought this
federal-court lawsuit against Global Crossing Telecommunications,
Inc., a long-distance carrier. Metrophones sought compensation that
it said Global Crossing owed it under the FCC’s Compensation Order,
14 FCC Rcd. 2545 (1999). Insofar as is relevant here, Metrophones
claimed that Global Crossing’s refusal to pay amounted to a
violation of §201(b), thereby permitting Metrophones to sue in
federal court, under §207, for the compensation owed. The District
Court agreed. 423 F. 3d 1056, 1061 (CA9 2005). The Ninth
Circuit affirmed the District Court’s determination.
Ibid.
We granted certiorari to determine whether §207 authorizes the
lawsuit.
II
A
Section 207 says that “[a]ny
person claiming to be damaged by any common carrier … may bring
suit” against the carrier “in any district court of the United
States” for “recovery of the
damages for which such common
carrier
may be liable under the provisions of this
chapter.” 47 U. S. C. §207 (emphasis added). This language
makes clear that the lawsuit is proper
if the FCC could
properly hold that a carrier’s failure to pay compensation is an
“unreasonable practice” deemed “unlawful” under §201(b). That is
because the immediately preceding section, §206, says that a common
carrier is “
liable” for “
damages sustained in
consequence of” the carrier’s doing “
any act, matter, or thing
in this chapter prohibited or
declared to be
unlawful.” And §201(b) declares “
unlawful” any
common-carrier “charge,
practice, classification, or
regulation
that is unjust or unreasonable.” (See Appendix
B,
infra, for full text; emphasis added throughout).
The history of these
sections—including that of their predecessors, §§8 and 9 of the
Interstate Commerce Act—simply reinforces the language, making
clear the purpose of §207 is to allow persons injured by §201(b)
violations to bring federal-court damages actions. See,
e.g.,
Arizona Grocery Co., 284 U. S., at 384–385
(Interstate Commerce Act §§8–9); Part I–A,
supra. History
also makes clear that the FCC has long implemented
§201(b) through the issuance of rules and
regulations. This is obviously so when the rules take the form of
FCC approval or prescription for the future of rates that
exclusively are “reasonable.” See 47 U. S. C. §205
(authorizing the FCC to prescribe reasonable rates and practices in
order to preclude rates or practices that violate §201(b)); 5 U.
S. C. §551(4) (“ ‘rule’ . . . includes the approval or
prescription for the future of rates . . . or practices”). It is
also so when the FCC has set forth rules that, for example, require
certain accounting methods or insist upon certain carrier
practices, while (as here) prohibiting others as unjust or
unreasonable under §201(b). See,
e.g. (to name a few),
Verizon Tel. Cos. v.
FCC, 453 F. 3d 487, 494
(CADC 2006) (rates unreasonable (and hence unlawful) if not
adjusted pursuant to accounting rules ordered in FCC regulations);
Cable & Wireless P. L. C. v.
FCC, 166
F. 3d 1224, 1231 (CADC 1999) (failure to follow
Commission-ordered settlement practices unreasonable);
MCI
Telecommunications Corp. v.
FCC, 59 F. 3d 1407,
1414 (CADC 1995) (violation of rate-of-return prescription
unlawful);
In re NOS Communications, Inc., 16 FCC
Rcd. 8133, 8136, ¶6 (2001) (deceptive marketing an unreasonable
practice);
In re Promotion of Competitive Networks in
Local Telecommunications Markets, 15 FCC Rcd. 22983, 23000,
¶35 (2000) (entering into exclusive contracts with commercial
building owners an unreasonable practice).
Insofar as the statute’s language is
concerned, to violate a regulation that lawfully implements
§201(b)’s requirements
is to violate the statute. See,
e.g.,
MCI Telecommunications Corp., 59
F. 3d, at 1414 (“We have repeatedly held that a rate-of-return
prescription has the force of law and that the Commission may
therefore treat a violation of the prescription as a
per
se violation of the requirement of the Communications Act that
a common carrier maintain ‘just and reasonable’ rates,
see
47 U. S. C. §201(b)”); cf.
Alexander v.
Sandoval,
532 U. S. 275, 284 (2001) (it is
“meaningless to talk about a separate cause of action to enforce
the regulations apart from the statute”). That is why private
litigants have long assumed that they may, as the statute says,
bring an action under §207 for violation of a rule or regulation
that lawfully implements §201(b). See,
e.g.,
Oh
v.
AT&T Corp., 76 F. Supp. 2d 551, 556 (NJ 1999)
(assuming validity of §207 suit alleging violation of §201(b) in
carrier’s failure to provide services listed in FCC-approved
tariff);
Southwestern Bell Tel. Co. v.
Allnet
Communications Servs., Inc., 789 F. Supp. 302, 304–306
(ED Mo. 1992) (assuming validity of §207 suit to enforce FCC’s
determination of reasonable practices related to payment of access
charges by long-distance carrier to local exchange carrier); cf.,
e.g.,
Chicago & North Western Transp. Co. v.
Atchison, T. & S. F. R. Co., 609 F. 2d 1221,
1224–1225 (CA7 1979) (same in respect to Interstate Commerce Act
equivalents of §§201(b), 207).
The difficult question, then, is
not whether §207 covers actions that complain of a violation of
§201(b) as lawfully implemented by an FCC regulation. It plainly
does. It remains for us to decide whether the particular FCC
regulation before us lawfully implements §201(b)’s “un- reasonable
practice” prohibition. We now turn to that question.
B
In our view the FCC’s §201(b)
“unreasonable practice” determination is a reasonable one; hence it
is lawful. See
Chevron U. S. A. Inc., 467 U. S., at
843–844
. The determination easily fits within the language
of the statutory phrase. That is to say, in ordinary English, one
can call a refusal to pay Commission-ordered compensation despite
having received a benefit from the payphone operator a “practic[e]
… in connection with [furnishing a] communication service … that is
… unreasonable.” The service that the payphone operator provides
constitutes an integral part of the total long-distance service the
payphone operator and the long-distance carrier together provide to
the caller, with respect to the carriage of his or her particular
call. The carrier’s refusal to divide the revenues it receives from
the caller with its collaborator, the payphone operator, despite
the FCC’s regulation requiring it to do so, can reasonably be
called a “practice” “in connection with” the provision of that
service that is “unreasonable.” Cf.
post, at 1–5 (Thomas,
J., dissenting).
Moreover, the underlying
regulated activity at issue here
resembles activity that
both transportation and communications agencies have long
regulated. Here the agency has determined through traditional
regulatory methods the cost of carrying a portion (the payphone
portion) of a call that begins with a caller and proceeds through
the payphone, attached wires, local communications loops, and
long-distance lines to a distant call recipient. The agency
allocates costs among the joint providers of the communications
service and requires downstream carriers, in effect, to pay an
appropriate share of revenues to upstream payphone operators.
Traditionally, the FCC has determined costs of some segments of a
call while requiring providers of other segments to divide related
revenues. See,
e.g.,
Smith v.
Illinois Bell
Telephone Co.,
282 U. S. 133, 148–151
(1930) (communications). And traditionally, transportation agencies
have determined costs of providing some segments of a larger
transportation service (for example, the cost of providing the San
Francisco–Ogden segment of a San Francisco–New York shipment) while
requiring providers of other segments to divide revenues. See,
e.g.,
New England Divisions Case,
261 U. S. 184 (1923);
Chicago & North Western R. Co.,
387 U. S. 326; cf.
Cable &
Wireless P. L. C.,
supra, at 1231. In all instances
an agency allocates costs and provides for a related sharing of
revenues.
In these more traditional instances,
transportation carriers and communications firms entitled to
revenues under rate divisions or cost allocations might bring
lawsuits under §207, or the equivalent sections of the Interstate
Commerce Act, and obtain compensation or damages. See,
e.g.,
Allnet Communication Serv., Inc. v.
National Exch. Carrier Assn.,
Inc., 965
F. 2d 1118, 1122 (CADC 1992) (§207);
Southwestern Bell
Tel. Co.,
supra, at 305 (same);
Chicago &
North Western Transp. Co.,
supra, at 1224–1225
(Interstate Commerce Act equivalent of §207). Again, the
similarities support the reasonableness of an agency’s bringing
about a similar result here. We do not suggest that the FCC is
required to find carriers’ failures to divide revenues to be
§201(b) violations in every instance. Cf.
U. S. Telepacific
Corp. v.
Tel-America of Salt Lake City, Inc., 19 FCC
Rcd. 24552, 24555–24556, and n. 27 (2004) (citing cases). Nor do we
suggest that every violation of FCC regulations is an unjust and
unreasonable practice. Here there is an explicit statutory scheme,
and compensation of payphone operators is necessary to the proper
implementation of that scheme. Under these circumstances, the FCC’s
finding that the failure to follow the order is an unreasonable
practice is well within its authority.
There are, of course, differences between the
present “unreasonable practice” classification and the similar more
traditional regulatory subject matter we have just described. For
one thing, the connection between payphone operators and
long-distance carriers is not a traditional “through route” between
carriers. See §201(a). For another, as Global Crossing’s
amici point out, the word “practice” in §201(b) has
traditionally applied to a carrier practice that (unlike the
present one) is the subject of a carrier tariff—
i.e., a
carrier agency filing that sets forth the carrier’s rates,
classifications, and practices. Brief for AT&T et al. as
Amici Curiae 8–11. We concede the differences. Indeed,
traditionally, the filing of tariffs was “the centerpiece” of the
“[Communications] Act’s regulatory scheme.”
MCI
Telecommunications Corp., 512 U. S., at 220. But we do not
concede that these differences require a different outcome.
Statutory changes enhancing the role of competition have radically
reduced the role that tariffs play in regulatory supervision of
what is now a mixed communications system—a system that relies in
part upon competition and in part upon more traditional regulation.
Yet when Congress rewrote the law to bring about these changes, it
nonetheless left §201(b) in place. That fact indicates that the
statute permits, indeed it suggests that Congress likely expected,
the FCC to pour new substantive wine into its old regulatory
bottles. See Policy and Rules Concerning the Interstate,
Interexchange Marketplace, 12 FCC Rcd. 15014, 15057, ¶77 (1997)
(despite the absence of tariffs, FCC’s §201 enforcement obligations
have not diminished);
Boomer v.
AT&T Corp.,
309 F. 3d 404, 422 (CA7 2002) (same). And this circumstance,
by indicating that Congress did not
forbid the agency to
apply §201(b) differently in the changed regulatory environment, is
sufficient to convince us that the FCC’s determination is
lawful.
That is because we have made clear that where
“Congress would expect the agency to be able to speak with the
force of law when it addresses ambiguity in the statute or fills a
space in the enacted law,” a court “is obliged to accept the
agency’s position if Congress has not previously spoken to the
point at issue and the agency’s interpretation” (or the manner in
which it fills the “gap”) is “reasonable.”
United States
v.
Mead Corp.,
533 U. S. 218, 229
(2001);
National Cable & Telecommunications Assn., 545
U. S., at 980;
Chevron U. S. A. Inc., 467 U. S., at
843–844
. Congress, in §201(b), delegated to the agency
authority to “fill” a “gap,”
i.e., to apply §201 through
regulations and orders with the force of law.
National Cable
& Telecommunications Assn., supra, at 980–981. The
circumstances mentioned above make clear the absence of any rele-
vant congressional prohibition. And, in light of the traditional
regulatory similarities that we have discussed, we can find nothing
unreasonable about the FCC’s §201(b) determination.
C
Global Crossing, its supporting
amici, and the dissents make several additional but
ultimately unpersuasive arguments. First, Global Crossing claims
that §207 authorizes only actions “seeking damages for
statutory violations” and not for “violations merely of
regulations promulgated to carry out statutory
objectives.” Brief for Petitioner 12 (emphasis in original). The
lawsuit before us, however, “seek[s] damages for [a]
statutory violatio[n],” namely, a violation of §201(b)’s
prohibition of an “unreasonable practice.” As we have pointed out,
supra, at 8, §201(b)’s prohibitions have long been thought
to extend to rates that diverge from FCC prescriptions, as well as
rates or practices that are “unreasonable” in light of their
failure to reflect rules embodied in an agency regulation. We have
found no limitation of the kind Global Crossing suggests.
Global Crossing seeks to draw support from
Alexander v.
Sandoval,
532 U. S. 275 (2001), and
Adams
Fruit Co. v.
Barrett,
494 U. S. 638 (1990),
which, Global Crossing says, hold that an agency cannot determine
through regulation when a private party may bring a federal court
action. Those cases do involve private actions, but they do not
support Global Crossing. The cases involve different statutes and
different regulations, and the Court made clear in each of those
cases that its holding relied on the specific statute before it. In
Sandoval,
supra, at 288–289, the Court found that
an implied right of action to enforce one statutory provision, 42
U. S. C. §2000d, did not extend to regulations implementing
another, §2000d–1. In contrast, here we are addressing the FCC’s
reasonable interpretation of ambiguous language in a substantive
statutory provision, 47 U. S. C. §201(b), which Congress
expressly linked to the right of action provided in §207. Nothing
in
Sandoval requires us to limit our deference to the
FCC’s reasonable interpretation of §201(b); to the contrary, as we
noted in
Sandoval, it is “meaningless to talk about a
separate cause of action to enforce the regulations apart from the
statute. A Congress that intends the statute to be enforced through
a private cause of action intends the authoritative interpretation
of the statute to be so enforced as well.” 532 U. S., at 284. In
Adams Fruit Co., supra, at 646–647, we rejected an agency
interpretation of the worker-protection statute at issue as
contrary to “the plain meaning of the statute’s language.” Given
the differences in statutory language, context, and history, those
two cases are simply beside the point.
Our analysis does not change in this case
simply because the practice deemed unreasonable (and hence
unlawful) in the 2003 Payphone Order is violation of an FCC
regulation adopted under authority of a separate statutory section,
§276. The FCC here, acting under the authority of §276, has
prescribed a particular rate (and a division of revenues)
applicable to a portion of a long-distance service, and it has
ordered carriers to reimburse payphone operators for the relevant
portion of the service they jointly provide. But the conclusion
that it is “unreasonable” to fail so to reimburse is not a §276
conclusion; it is a §201(b) conclusion. And courts have treated a
carrier’s failure to follow closely analogous agency rate and
rate-division determinations as we treat the matter at issue here.
That is to say, the FCC properly implements §201(b) when it
reasonably finds that the failure to follow a Commission,
e.g., rate or rate-division determination made under a
different statutory provision is unjust or unreasonable
under §201(b). See,
e.g.,
MCI Telecommunications
Corp., 59 F. 3d, at 1414 (failure to follow a rate
promulgated under §205 properly considered unreasonable under
§201(b)); see also
Baltimore & O. R. Co. v.
Alabama Great Southern R. Co., 506 F. 2d 1265,
1270 (CADC 1974) (statutory obligation to provide reasonable rate
divisions is “implemented by orders of the ICC” issued pursuant to
a
separate statutory provision). Moreover, in resting our
conclusion upon the analogy with rate setting and rate divisions,
the traditional, historical subject matter of §201(b), we avoid
authorizing the FCC to turn §§201(b) and 207 into a back-door
remedy for violation of FCC regulations.
Second, Justice Scalia, dissenting, says that
the “only serious issue presented by this case [is] whether a
practice that is
not in and of itself unjust or
unreasonable can be rendered such (and thus rendered in violation
of the Act itself) because it violates a substantive regulation of
the Commission.”
Post, at 2–3. He answers this question
“no,” because, in his view, a “violation of a substantive
regulation promulgated by the Commission is not a violation of the
Act, and thus does not give rise to a private cause of
action.
” Post, at 3. We cannot accept either
Justice Scalia’s statement of the “serious issue” or his
answer.
We do not accept his statement of the issue because
whether the practice is “in and of itself” unreasonable is
irrelevant. The FCC has authoritatively ruled that carriers must
compensate payphone operators. The only practice before us, then,
and the only one we consider, is the carrier’s violation of that
FCC regulation requiring the carrier to pay the payphone operator a
fair portion of the total cost of carrying a call that they jointly
carried—each supplying a partial portion of the total carriage. A
practice of violating the FCC’s order to pay a fair share would
seem fairly characterized in ordinary English as an “unjust
practice,” so why should the FCC not call it the same under
§201(b)?
Nor can we agree with Justice Scalia’s claim that a “violation
of a
substantive regulation promulgated by the Commission
is not a violation of” §201(b) of the Act when, as here, the
Commission has explicitly and reasonably ruled that the particular
regulatory violation
does violate §201(b). (Emphasis
added.) And what has the substantive/interpretive distinction that
Justice Scalia emphasizes,
post, at 3, to do with the
matter? There is certainly no reference to this distinction in
§201(b); the text does not suggest that, of all violations of
regulations, only violations of
interpretive regulations
can amount to unjust or unreasonable practices. Why believe that
Congress, which scarcely knew of this distinction a century ago
before the blossoming of administrative law, would care which kind
of regulation was at issue? And even if this distinction were
relevant, the FCC has long set forth what we now would call
“substantive” (or “legislative”) rules under §205. Cf. 1 R. Pierce,
Administrative Law Treatise §6.4, p. 325 (4th ed. 2002);
post, at 4. And violations of those substantive §205
regulations have clearly been deemed violations of §201(b).
E.g.,
MCI Telecommunications Corp., 59
F. 3d, at 1414. Conversely, we have found no case at all in
which a private plaintiff was kept out of federal court because the
§201(b) violation it challenged took the form of a “substantive
regulation” rather than an “interpretive regulation.” Insofar as
Justice Scalia uses adjectives such as “traditional” or “textually
based” to describe his distinctions,
post, at 4, and
“novel” or “absurd” to describe ours,
post, at 5, 2, we
would simply note our disagreement.
We concede that Justice Scalia cites three sources in support of
his theory. See
post, at 3. But, in our view, those
sources offer him no support. None of those sources involved an FCC
application of, or an FCC interpretation of, the section at issue
here, namely §201(b). Nor did any involve a regulation—substantive
or interpretive—promulgated subsequent to the authority of §201(b).
Thus none is relevant to the case at hand. See
APCC Servs.,
Inc. v.
Sprint Communications Co., 418 F. 3d
1238, 1247 (CADC 2005)
(per curiam) (“There was no
authoritative interpretation of §201(b) in this case”);
Greene v.
Sprint Communications Co., 340
F. 3d 1047, 1052 (CA9 2003) (violation of substantive
regulation does not violate §276; silent as to §201(b)). The single
judge who thought that the FCC had authoritatively interpreted
§201(b) (as has occurred in the case before us) would have reached
the same conclusion that we do.
APCC Servs., Inc.,
supra, at 1254. (D. H. Ginsburg, C. J., dissenting)
(finding a private cause of action, because there
was
“clearly an authoritative interpretation of §201(b)” that deemed
the practice in question unlawful). See also Huber §3.14.3, p. 317
(no discussion of §201(b)).
Third, Justice Thomas (who also does not adopt Justice Scalia’s
arguments) disagrees with the FCC’s interpretation of the term
“practice.” He, along with Global Crossing, claims instead that
§§201(a) and (b) concern only practices that harm carrier
customers, not carrier
suppliers.
Post,
at 2–4 (dissenting opinion); Brief for Petitioner 37–38. But that
is not what those sections say. Nor does history offer this
position significant support. A violation of a regulation or order
dividing rates among railroads, for example, would likely have
harmed another carrier, not a shipper. See,
e.g.,
Chicago & North Western Transp. Co., 609 F. 2d, at
1225–1226 (“Act … provides for the regulation of inter-carrier
relations as a part of its general rate policy”). Once one takes
account of this fact, it seems reasonable, not unreasonable, to
include as a §201(b) (and §207) beneficiary a firm that performs
services roughly analogous to the transportation of one segment of
a longer call. We are not here dealing with a firm that supplies
office supplies or manual labor. Cf.,
e.g.,
Missouri
Pacific R. Co. v.
Norwood,
283 U. S. 249, 257
(1931) (“practice” in §1 of the Interstate Commerce Act does not
encompass employment decisions). The long-distance carrier ordered
by the FCC to compensate the payphone operator is so ordered in its
role as a provider of communications services, not as a consumer of
office supplies or the like. It is precisely because the carrier
and the payphone operator
jointly provide a communications
service to the caller that the carrier is ordered to share with the
payphone operator the revenue that only the carrier is permitted to
demand from the caller. Cf.
Cable & Wireless P. L. C.,
166 F. 3d, at 1231 (finding that §201(b) enables the
Commission to regulate not “only the terms on which U. S. carriers
offer telecommunication services to the public,” but also “the
prices U. S. carriers pay” to foreign carriers providing the
foreign segment of an international call).
Fourth, Global Crossing argues
that the FCC’s “unreasonable practice” determination is unlawful
because it is inadequately reasoned. We concede that the FCC’s
initial opinion simply states that the carrier’s practice is
unreasonable under §201(b). But the context and cross-referenced
opinions, 2003 Payphone Order, 18 FCC Rcd., at 19990, ¶32 (citing
American Public Communications Council v.
FCC,
215 F. 3d 51, 56 (CADC 2000)), make the FCC’s rationale
obvious, namely, that in light of the history that we set forth
supra, at 7–9, it is unreasonable for a carrier to violate
the FCC’s mandate that it pay compensation. See also
In re
APCC Servs., Inc. v.
NetworkIP, LLC, 21 FCC Rcd.
10488, 10493–10495, ¶¶ 13–16 (2006) (Order) (spelling out the
reasoning).
Fifth Global Crossing argues that a different
statutory provision, §276, see
supra, at 5, prohibits the
FCC’s §201(b) classification. Brief for Petitioner 26–28. But §276
simply requires the FCC to “take all actions necessary … to
prescribe regulations that … establish a per call compensation plan
to ensure” that payphone operators “are fairly compensated.” 47 U.
S. C. §276(b)(1). It nowhere forbids the FCC to rely on
§201(b). Rather, by helping to secure enforcement of the mandated
regulations the FCC furthers basic §276 purposes.
Finally, Global Crossing seeks to rest its
claim of a §276 prohibition upon the fact that §276 requires
regulations that secure compensation for “every completed
intrastate,” as well as every “
interstate”
payphone-related call, while §201(b) (referring to §201(a)) extends
only to “
interstate or foreign” communication. Brief for
Petitioner 37. But Global Crossing makes too much of too little. We
can assume (for argument’s sake) that §201(b) may consequently
apply only to a
portion of the Compensation Order’s
requirements. But cf.,
e.g.,
Louisiana Pub. Serv.
Comm’n, 476 U. S., at 375, n. 4 (suggesting approval of
FCC authority where it is “
not possible to separate the
interstate and the intrastate components”). But even if that is so
(and we repeat that we do not decide this question), the FCC’s
classification will help to achieve a substantial portion of its
§276 compensatory mission. And we cannot imagine why Congress would
have (implicitly in this §276 language) wished to forbid the FCC
from concluding that an interstate half loaf is better than
none.
For these reasons, the judgment
of the Ninth Circuit is affirmed.
It is so ordered.
APPENDIXES TO OPINION OF THE COURT
A
In re Implementation of the Pay Telephone
Reclassification and Compensation Provisions of the
Telecommunications Act of 1996, 14 FCC Rcd. 2545, 2631–2632,
¶¶190–191 (1999) (Compensation Order).
In re the Pay Telephone Reclassification and
Compensation Provisions of the Telecommunications Act of 1996,
18 FCC Rcd. 19975, 19990, ¶32 (2003) (2003 Payphone Order).
B
Communications Act §201:
“(a) It shall be the duty of
every common carrier engaged in interstate or foreign communication
by wire or radio to furnish such communication service upon
reasonable request therefor; and, in accordance with the orders of
the Commission, in cases where the Commission, after opportunity
for hearing, finds such action necessary or desirable in the public
interest, to establish physical connections with other carriers, to
establish through routes and charges applicable thereto and the
divisions of such charges, and to establish and provide facilities
and regulations for operating such through routes.
“(b) All charges, practices, classifications,
and regulations for and in connection with such communication
service, shall be just and reasonable, and any such charge,
practice, classification, or regulation that is unjust or
unreasonable is declared to be unlawful:
Provided, That
communications by wire or radio subject to this chapter may be
classified into day, night, repeated, unrepeated, letter,
commercial, press, Government, and such other classes as the
Commission may decide to be just and reasonable, and different
charges may be made for the different classes of communications:
Provided further, That nothing in this chapter or in any
other provision of law shall be construed to prevent a common
carrier subject to this chapter from entering into or operating
under any contract with any common carrier not subject to this
chapter, for the exchange of their services, if the Commission is
of the opinion that such contract is not contrary to the public
interest:
Provided further, That nothing in this chapter
or in any other provision of law shall prevent a common carrier
subject to this chapter from furnishing reports of positions of
ships at sea to newspapers of general circulation, either at a
nominal charge or without charge, provided the name of such common
carrier is displayed along with such ship position reports. The
Commission may prescribe such rules and regulations as may be
necessary in the public interest to carry out the provisions of
this chapter.” 47 U. S. C. §201.
Communications Act §206:
“In case any common carrier shall
do, or cause or permit to be done, any act, matter, or thing in
this chapter prohibited or declared to be unlawful, or shall omit
to do any act, matter, or thing in this chapter required to be
done, such 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 of the provisions of this
chapter, together with a reasonable counsel or attorney’s fee, to
be fixed by the court in every case of recovery, which attorney’s
fee shall be taxed and collected as part of the costs in the case.”
47 U. S. C. §206.
Communications Act §207:
“Any person claiming to be
damaged by any common carrier subject to the provisions of this
chapter may either make complaint to the Commission as hereinafter
provided for, or may bring suit for the recovery of the damages for
which such common carrier may be liable under the provisions of
this chapter, in any district court of the United States of
competent jurisdiction; but such person shall not have the right to
pursue both such remedies.” 47 U. S. C. §207.
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