Public Serv. Comm'n of Md. v. Chesapeake & Potomac Telephone Co. of Md.

PETITIONER: Public Serv. Comm'n of Md.
RESPONDENT: Chesapeake & Potomac Telephone Co. of Md.
LOCATION: Court in Ouachita County

DOCKET NO.: 84-1362
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Fourth Circuit

CITATION: 476 US 445 (1986)
ARGUED: Jan 13, 1986
DECIDED: May 27, 1986

ADVOCATES:
D. Michael Stroud - on behalf of Respondent
Jack D. Smith - on behalf of FCC, as amicus curiae, in support of Respondent
Kirk J. Emge - on behalf of Petitioner

Facts of the case

Question

Media for Public Serv. Comm'n of Md. v. Chesapeake & Potomac Telephone Co. of Md.

Audio Transcription for Oral Argument - January 13, 1986 in Public Serv. Comm'n of Md. v. Chesapeake & Potomac Telephone Co. of Md.

Warren E. Burger:

Mr. Emge, I think you may proceed whenever you're ready.

Kirk J. Emge:

Mr. Chief Justice and may it please the Court:

This case involves the authority of the United States district court to issue a preliminary injunction under Section 401(b) of the Communications Act enforcing an FCC rulemaking order on behalf of a private party against a state regulatory commission.

Specifically, the issue in this case is whether a private party can use the FCC preemption order as a basis for obtaining an injunction from the United States district court which will require a state commission to use a particular ratemaking methodology in establishing intrastate telephone rates.

Our principle argument in support of our contention that the preemption order cannot be enforced by a private party against the Maryland commission is that the preemption is an FCC rulemaking and not an order, and that under Section 401 only FCC orders can be enforced by private parties.

William H. Rehnquist:

Mr. Emge, with respect to the case that was just argued before your case, will your case be a live case in the event that the Court of Appeals' judgment were, in the earlier case, was reversed and in the case that it was affirmed?

Kirk J. Emge:

The district court order in our case indicates that if the Fourth Circuit decision is reversed that the judgment would be entered in favor of the defendants in that case, which is the Maryland commission.

However, there are numerous cases involving other matters than the preemption order under Section 401 enforcement proceedings that have just recently been instituted, and since there is a conflict between the First and the Fourth Circuits on whether a private party can enforce the preemption... an FCC rulemaking order... there will be other instances where the decision will depend upon which circuit you're in.

So although the commission's decision... the commission as a defendant will have a judgment in its favor in the event the preceding case is ruled in favor of the states, there are still conflicts that will remain that will arise in other areas.

If the Court agrees that the preemption order is not the type of FCC decision that can be enforced by a private party, it would be unnecessary to address or reach the broader question as to whether a state commission is a person and to what extent the state commission is a person for purposes of the Communications Act.

Under the enforcement scheme established by Congress in Section 401, the FCC has the sole authority to enforce compliance with provisions of the Act, and it's important to note at this point that in the preemption order the FCC based its decision on the fact that it said that Section of the Communications Act preempted inconsistent state depreciation practices.

Clearly, enforcement of the preemption order is nothing more than enforcing compliance with the Act, and under the enforcement scheme established by Congress is Section 401 the [= FCC] and not private parties has the sole authority to determine when and if those violations, such violations, should be enforced.

Under the enforcement scheme in Section 401, private parties can only enforce obedience to FCC orders.

It is clear that by limiting enforcement under Section 401(b) to orders, Congress clearly understood that there were other types of FCC actions that would not be enforceably by private parties under that subsection.

It's clear that there was a distinction, well known distinction, between what constitutes an agency order and what constitutes a rule.

Congress chose to use the word "order" with respect to the type of actions that could be enforced by a private party.

In addition, if Congress had intended private parties to be able to enforce FCC rules, which are the functional equivalent of statutes, the provisions of Section 401(a) would have no meaning.

The sole responsibility, once again, for enforcing the compliance with the Act resides only in the FCC.

The Respondents and their supporting amici curiae concede that not all FCC actions are enforceable under Section 401(b).

For example, the Respondent implies in its brief that regulations and rules which are sufficiently general in their terms and applicability may not be enforceable by private parties under Section 401(b).

They merely say... allege in this case that the Court doesn't have to reach that because of their position that the preemption order is not one of those orders.

But we submit that if you review the terms and provisions of the preemption order, it clearly is a rule of general applicability and is addressed to a broad group of entities.

They seem to indicate, the Respondents that is, that there is a hybrid action called a rulemaking order, and that rulemaking orders such as the preemption order can be enforced by private parties under Section 401(b).

The first point to be made with respect to that argument is that the fact that the FCC calls the action an order is under this Court's decision in CBS not determinative.

It's the substance of what the FCC has done, rather than what it classifies its actions to be, that controls.

Secondly, if the FCC adopted a rule by an order, it's clear that if that action were to be enforced, it would not be the order adopting the rule that would be enforced, it would be the substance of the rule that would be enforced by the court.

So therefore you once again get back to the situation where, although the FCC has the sole responsibility to adopt... to enforce provisions of the Communications Act, a private party under the enforcement scheme suggested by the Respondents would also share that responsibility.

In order to preserve the enforcement scheme that was established by Congress in Section 401 and thereby maintain the role assigned to the FCC by the Act, enforcement under Section 401(b) must be limited to FCC orders which determine the specific rights and responsibilities of specific individual parties and are based upon findings which take into account specific facts associated with that situation.

These orders, in short, must be specific in their requirements and self-executing.

By self-executing, we mean that in order for a court to enforce the FCC order there is no further determination required by the Federal Communications Commission, for, as the FCC has noted in its brief, under the enforcement scheme established by Congress in Section 401(b), the court's role in the enforcement of FCC orders is very limited.