Nixon v. Missouri Municipal League

PETITIONER: Southwestern Bell Telephone, L.P., fka Southwestern Bell Telephone Company
RESPONDENT: Missouri Municipal League, et al.
LOCATION: Pennsylvania General Assembly

DOCKET NO.: 02-1238
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Eighth Circuit

CITATION: 541 US 125 (2004)
GRANTED: Jun 23, 2003
ARGUED: Jan 12, 2004
DECIDED: Mar 24, 2004

ADVOCATES:
David A. Strauss - argued the cause for Respondents
James A. Feldman - argued the cause for Petitioners
Ronald Molteni - for petitioner in No. 02-1238
Ronald S. Molteni - argued the cause for Petitioner Nixon

Facts of the case

The Telecommunications Act of 1996 allowed federal preemption of state and local regulations "prohibiting the ability of any entity" to provide telecommunications services. Based on this act, a group of local governments in Missouri (the Missouri Municipal League) asked the Federal Communications Commission (FCC) to nullify a state law that prevented municipalities from providing telecommunications services. Missouri argued that municipal governments were not separate entities but merely subsections of the state government and that the state could therefore restrict their authority. The FCC agreed with the state, refusing to nullify the law.

The Municipal League appealed, and an Eighth Circuit Court of Appeals panel reversed the decision. The panel held the words "any entity" were intentionally broad and that a proper understanding of them would include municipal governments. The state could therefore not regulate attempts by municipalities to provide telecommunications services. The FCC, along with the state of Missouri and Southwestern Bell Telephone Company, appealed the decision to the Supreme Court.

Question

Under the Telecommunications Act of 1996, are states permitted to regulate the provision of telecommunications services by municipal governments?

Media for Nixon v. Missouri Municipal League

Audio Transcription for Oral Argument - January 12, 2004 in Nixon v. Missouri Municipal League

Audio Transcription for Opinion Announcement - March 24, 2004 in Nixon v. Missouri Municipal League

William H. Rehnquist:

The opinion of the Court in three companion cases, Nixon versus Missouri Municipal League and others will be announced by Justice Souter.

David H. Souter:

These cases come to us on writ of certiorari to the United States Court of Appeals for the Eighth Circuit.

In 1997, the General Assembly of Missouri enacted a statute prohibiting political subdivisions of the State from providing telecommunications services.

The municipal respondents in these cases petitioned to Federal Communications Commission for an order declaring the State statute unlawful and preempted.

Under the provisions of the Telecommunications Act of 1996, the relevant Section 253 of the federal statute provides that no State or local statute or regulation or other State or local legal requirement may prohibit or have the affect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunication service.

After noticing the comment, the FCC refused to declare the Missouri statute preempted.

The agency concluded that the term, ‘any entity,’ in section 253(a) was not intended to include political subdivisions of the State, but rather appeared to prohibit restrictions on market entry that apply to independent entities subject to state regulation.

In so concluding the FCC relied on its own earlier order resolving a challenge to a comparable Texas law, as well as on the affirming opinion of the United States Court of Appeals for the District of Columbia Circuit.

The municipal respondents here appealed to the Eighth Circuit, where a panel unanimously reversed the agency disposition with the explanation that the generic term ‘entity,’ especially when modified by any manifest its sufficiently clear congressional intentional attention to governmental entities, to get pass the plain statement rule of Gregory and Ashcroft.

We granted certiorari to resolve the resulting conflict between the District of Colombia Circuit and the Eighth Circuit.

In an opinion filed today with the Clerk of the Court, we reverse.

The result in this litigation is controlled neither by public policy considerations, nor by any laser like focus on Section 253’s reference to any entity.

As for policy, the municipalities have at the least a respectable position, that state law is fencing governmental entities out of the telecommunications business disserved the public interest, but it does not follow that preempting state or local barriers to governmental entry into the market, would be an effective way to draw municipalities into the business.

In any event the issue here does not turn on the merits of municipal telecommunication services.

Concerning the text, the Eighth Circuit trained its analysis on the words, "any entity," left undefined by the statute, but there is no common practice of omitting modifiers like public and private when both are meant to be covered.

Nor is coverage of public entities reliably signaled by speaking of any entity.

The word ‘any’ can and does mean different things depending upon the setting.

To get it Congress's understanding, it helps if we ask, how Congress could have envisioned the Preemption Clause, actually working if the FCC applied it at the municipal respondents' urging, we think that the strange and indeterminate results of using federal preemption in an effort to free public entities from the State and local limitations is the key to understanding that Congress used "any entity" in a limited sense when it cast the preemption and that in the statute.

The municipal respondents' position hold sufficient promise of futility and uncertainty to keep us from accepting it, and a complementary principle would bring us to the same conclusion.

Our preemption to the state law regulating the conduct of its political subdivisions, retrench on the states' arrangements for conducting their own governance.

The want of any unmistakably clear congressional statement that such an effect was actually intended, would be fatal to the respondents’ reading under the case of Gregory and Ashcroft.

Justice Scalia has filed an opinion concurring in the judgment in which Justice Thomas has joined and Justice Stevens has filed a dissenting opinion.