Global Crossing Telecommunications, Inc. v. Metrophones Telecommunications, Inc.

PETITIONER: Global Crossing Telecommunications, Inc.
RESPONDENT: Metrophones Telecommunications, Inc.
LOCATION: Juneau-Douglas High School

DOCKET NO.: 05-705
DECIDED BY: Roberts Court (2006-2009)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 550 US 45 (2007)
GRANTED: Feb 21, 2006
ARGUED: Oct 10, 2006
DECIDED: Apr 17, 2007

ADVOCATES:
Jeffrey L. Fisher - argued the cause for Petitioner
James A. Feldman - argued the cause for Respondent
Roy T. Englert, Jr. - argued the cause for Respondent

Facts of the case

In the Telecommunications Act of 1996, Congress declared that payphone service providers (PSPs) must be compensated for every completed call using their payphones. Previously, PSPs were not compensated for coinless "dial-around" long-distance calls in which the caller pays a long distance carrier rather than the PSP. The Federal Communications Commission (FCC) adopted rules requiring the carriers to pay the PSPs on a per-call basis. Metrophones Telecommunications, a PSP, sued Global Crossing Telecommunications, a long-distance carrier, alleging that Global Crossing had failed to pay for calls placed from Metrophones's payphones.

The District Court dismissed Metrophones's first complaint because the Telecommunications Act of 1996 did not create a private right of action to recover compensation from long-distance carriers. Metrophones then filed an amended complaint based on Section 201(b) of the Communications Act of 1934, which deals with "unjust and unreasonable" practices of carriers. Global Communications argued that Metrophones had no right to sue under this statute either, but the District Court disagreed and ruled for Metrophones.

The Ninth Circuit Court of Appeals affirmed this decision. The Circuit Court relied heavily on the FCC's interpretation of the statute, which was that failure to pay compensation to PSPs is an "unjust and unreasonable" practice in violation of Section 201(b) and that PSPs have a private right of action to sue carriers for such violations. The Circuit Court held that though the FCC rule on the subject was brief, it was entitled to deference from the courts in the absence of specific guidance from the statute.

Question

Does Section 201(b) of the Communications Act of 1934 create a private right of action for a payphone service provider to sue a long distance carrier for violations of the FCC's regulations concerning compensation for coinless payphone calls?

Media for Global Crossing Telecommunications, Inc. v. Metrophones Telecommunications, Inc.

Audio Transcription for Oral Argument - October 10, 2006 in Global Crossing Telecommunications, Inc. v. Metrophones Telecommunications, Inc.

Audio Transcription for Opinion Announcement - April 17, 2007 in Global Crossing Telecommunications, Inc. v. Metrophones Telecommunications, Inc.

John G. Roberts, Jr.:

Justice Breyer has the opinion of the court in two cases this morning.

Stephen G. Breyer:

The first is called Global Crossing v. Metrophones, and it begins with telephone deregulation which allowed callers a choice of what long distance carrier they want.

But sometimes they go a pay-phone, and the pay-phone company would connect them not with the long distance carrier that the caller wanted but with the company that the pay-phone operator wanted.

Well Congress thought that was a bad idea.

So, they passed a law and they said that the pay-phone company has to connect to however the caller wants connected to, whatever carrier, and moreover has to be for free, you don’t have to put $0.25 in the box.

At that point the pay-phone company said, well who is going to pay us for the call.

So Congress passes another law and says let the FCC work that out, and the FCC tried to work it out over a couple of years, and finally what they said was, well here is who pays, the caller connects to a particular carrier through the pay-phone, then the carrier pays, $0.24 a call, or whatever they agree upon and the carrier can charge the ultimate customer with his long distance bill.

Now apparently after that some carriers still wouldn’t turnover the $0.24 to the pay-phone operator, atleast that’s what the pay-phone operator will say.

So, the pay-phone operators, some of them, or one of them anyway went to the FCC, and the FCC issued an order saying that you have to pay, and if you don’t it is unreasonable practice under Section 201(b).

Later the pay-phone operators said they are still not paying us, so they brought a suit in Federal Court, under a different Section 207 which seems linked to §201(b) and the only question before us is whether they can bring that suit in Federal Court.

Well ultimately what we say it is ultimately because it takes a while to explain this case, ultimately what we say is, well §207 if you read the words is linked to violations of §201(b), and what we have here is a regulation under §201(b) which says, when you don’t pay for that call, you don’t pay the pay-phone operator, you have committed an unreasonable practice that seems to us like a violation of §201(b), it says you can bring the suit for a violation of §201(b) its reasonable for them to say that, bring the suit.

Now, that’s the opinion of the court, we affirm the Ninth Circuit similar determination.

Justice Scalia has filed a dissenting opinion, and Justice Thomas has filed a dissenting opinion.