UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 07-1401
MCIMETRO ACCESS TRANSMISSION SERVICES OF VIRGINIA,
INCORPORATED, d/b/a Verizon Access Transmission Services of
Virginia,
Plaintiff - Appellant,
v.
MARK C. CHRISTIE, in his official capacity as Chairman of
the State Corporation Commission of Virginia; THEODORE V.
MORRISON, JR., in his official capacity as Commissioner of
the State Corporation Commission of Virginia; JUDITH
WILLIAMS JAGDMANN, in her official capacity as Commissioner
of the State Corporation Commission of Virginia,
Defendants - Appellees,
and
XO COMMUNICATION SERVICES, INCORPORATED; CAVALIER TELEPHONE,
LLC; DIECA COMMUNICATIONS, INCORPORATED, d/b/a Covad
Communications Company,
Intervenors/Defendants – Appellees,
and
STATE CORPORATION COMMISSION OF VIRGINIA,
Defendant.
-------------------------------------
UNITED STATES OF AMERICA; FEDERAL COMMUNICATIONS COMMISSION,
Amici Curiae.
Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond. James R. Spencer, Chief
District Judge. (3:06-cv-00740-JRS)
Argued: December 5, 2008 Decided: February 11, 2009
Before NIEMEYER, SHEDD, and DUNCAN, Circuit Judges.
Dismissed, vacated, and remanded by unpublished per curiam
opinion.
ARGUED: Scott H. Angstreich, KELLOGG, HUBER, HANSEN, TODD, EVANS
& FIGEL, P.L.L.C., Washington, D.C., for Appellant. Robert A.
Dybing, THOMPSON & MCMULLAN, Richmond, Virginia, for Appellees.
ON BRIEF: Michael E. Glover, Michael D. Lowe, VERIZON,
Arlington, Virginia; Lydia R. Pulley, VERIZON, Richmond,
Virginia; Gregory G. Rapawy, KELLOGG, HUBER, HANSEN, TODD, EVANS
& FIGEL, P.L.L.C., Washington, D.C.; Robert M. Tyler,
MCGUIREWOODS, L.L.P., Richmond, Virginia, for Appellant. John
F. Dudley, William H. Chambliss, STATE CORPORATION COMMISSION OF
VIRGINIA, Richmond, Virginia, for Appellees. Matthew B. Berry,
General Counsel, Joseph R. Palmore, Deputy General Counsel,
Richard K. Welch, Acting Deputy Associate General Counsel,
Christopher L. Killion, Deputy Associate General Counsel,
Nicholas A. Degani, Counsel, FEDERAL COMMUNICATIONS COMMISSION,
Washington, D.C.; Thomas O. Barnett, Assistant Attorney General,
James J. O’Connell, Jr., Deputy Assistant Attorney General,
Catherine G. O’Sullivan, Attorney, Nancy C. Garrison, Attorney,
UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Amici
Curiae.
Unpublished opinions are not binding precedent in this circuit.
2
PER CURIAM:
Verizon Access appeals the district court’s dismissal of
its challenge to conditions placed on its interstate
communications services by the Virginia State Corporation
Commission (“VSCC”). The VSSC moved this court to dismiss the
appeal as moot because of its subsequent rescission of the
contested conditions and its explicit recognition of exclusive
FCC jurisdiction over the interstate communications services at
issue. For the reasons that follow, we agree that the appeal is
moot and dismiss on that basis.
I.
“Verizon Access,” the plaintiff here, is the result of the
2005 merger of the Virginia subsidiaries of telecommunications
companies MCI and Verizon Communications. The merger of MCI
into Verizon required the approval of federal and state
regulatory agencies, including the Federal Communications
Commission (“FCC”) and the VSCC, both of which imposed certain
conditions. The FCC, pursuant to its authority over regulation
of interstate communications services under the Communications
Act, 47 U.S.C. § 151, issued an order (“FCC Order”) requiring
that, for a period of 30 months following the merger date,
Verizon/MCI “shall not increase the rates paid by MCI’s existing
customers.” JA 91. The FCC also stated that its conditions were
3
not intended “to restrict, supersede, or otherwise alter state or
local jurisdiction under the Communications Act.” JA 90.
The VSCC considered and ultimately approved the merger
pursuant to its authority under the Transfers Act, Va. Code §
56-88. 1 However, its order required that Verizon Access
“continue to offer to [current and future] wholesale customers
in Virginia its available intrastate and interstate special
access private line or its equivalent [which provide dedicated
bandwidth for a customer’s usage] . . . at pre-merger terms and
conditions and at prices that do not exceed pre-merger rates.”
VSCC Order I; JA 58. Unlike the FCC’s rate constraints, which
were to continue for 30 months, the VSCC’s condition was to
remain in effect indefinitely, until the VSCC lifted it. JA 52-
53, 58.
In April 2006, Verizon Access petitioned the VSCC to remove
the restriction, arguing that regulation of interstate
1
The Transfers Act requires VSCC approval of any transaction
that involves the acquisition or disposal of control of a
telephone company in Virginia. The Act provides that the VSCC
must issue conditions “as it may deem proper and the
circumstances require” in order to ensure that the proposed
combination will neither impair nor jeopardize “adequate service
to the public at just and reasonable rates.” Va. Code § 56-90.
The Act defines “control” as “(1) the acquisition of twenty-five
percent or more of the voting stock or (ii) the actual exercise
of any substantial influence over the policies and actions of
any . . . telephone company.” Va. Code § 56-88.1.
4
communications services falls exclusively under federal
jurisdiction. In July 2006, the VSCC denied the petition.
These arguments were then repeated in federal district
court, with Verizon Access asserting, and the VSCC resisting,
federal preemption. In March 2007, the district court found
that the VSCC’s authority was not preempted and granted its
motion to dismiss. This appeal followed.
In January 2008, this court requested that the federal
government file an amicus brief setting forth its view on
whether the challenged conditions on the merger are preempted by
federal law. In February 2008, the FCC and the Department of
Justice (“DOJ”) filed their joint amicus brief (“FCC/DOJ Brief”)
supporting Verizon Access’s preemption argument. The government
offered extensive statutory, regulatory and judicial authority 2
2
For instance, the government pointed out that the
provisions of the Communications Act, which created the FCC and
granted it oversight authority, “apply to all interstate and
foreign communication by wire.” 47 U.S.C. § 152(a) (emphasis
added). The government also presented several FCC orders
supporting its preemption argument. See, e.g., In re Vonage
Holdings Corp., 19 FCC Rcd. 22404, 22412, para. 16 (2004)
(stating that the FCC has “exclusive jurisdiction over all
interstate and foreign communication”) (quotation and citation
omitted); Mobile Telecomm. Techs. Corp., 6 FCC Rcd. 1938, 1941
n.6 (1991) (“The [Communications] Act grants this Commission
exclusive authority to regulate the charges and services of
interstate common carriers.”). Finally, the government cited
extensive judicial precedent on point. See, e.g., Global
Crossing Telecomms., Inc. v. Metrophones Telecomms., Inc., 127 S.
(Continued)
5
in support of its argument that “the general rule that the FCC
has exclusive jurisdiction over interstate communications
services applies” here. FCC/DOJ Br. at 12. Specifically, the
brief asserted that the Communications Act generally grants the
FCC exclusive authority to regulate the rates, terms, and
conditions on interstate communications services. The federal
government concluded that in light of the FCC’s exclusive
jurisdiction, the VSCC lacked jurisdiction to regulate Verizon
Access’s interstate communications services. 3 Id. at 7; 14.
On May 30, 2008, the VSCC issued a superseding order
accepting the federal government’s position regarding the
exclusivity of the FCC’s regulatory jurisdiction in this context
Ct. 1513, 1516–17 (2007) (noting that the Communications Act sets
up a “traditional regulatory system” in which the FCC was
“granted broad authority to regulate interstate telephone
communications,” including the authority to “determine a rate’s
reasonableness.”); Crockett Tel. Co. v. FCC, 963 F.2d 1564, 1566
(D.C. Cir. 1992) (“The FCC has exclusive jurisdiction to regulate
interstate common carrier services including the setting of
rates.”).
3
In order to clarify its jurisdiction, the FCC has drawn a
bright line to distinguish interstate communications (over which
it has jurisdiction) and intrastate communication (over which
the states retain jurisdiction). Communications services are
classified as “interstate” for rate regulation and other
purposes “if the interstate traffic on the line involved
constitutes more than ten percent of the total traffic on the
line.” 47 C.F.R. § 36.154(a).
6
and rescinding the contested conditions. See VSCC Order, Case
No PUC-2008-00023 (May 30, 2008) (“VSCC Order II”). VSCC Order
II stated, in part:
On February 19, 2008, . . . the [DOJ] and the FCC
filed an amicus curiae brief . . . Therein, the DOJ
and FCC declared the . . . requirements on interstate
rates, terms, and conditions contained in [VSCC Order
I] is preempted by federal regulation. Upon
consideration of the foregoing, it is hereby ordered
that . . . [t]he condition . . . from [VSCC Order I]
is rescinded insofar as it applies to interstate
special, private line or its equivalent, and high
capacity loop and transport facilities.
VSCC Order II at 2 (emphasis added; original emphases deleted).
On June 9, 2008, the VSCC moved this court to dismiss
Verizon Access’s appeal for mootness. Motion to Dismiss (June
9, 2008) (“VSCC Motion”). The VSCC Motion reaffirmed the VSCC’s
recognition of the FCC’s exclusive authority to regulate the
interstate communications services at issue here, stating that
“the [VSCC] expressly recognized the scope of that federal
preemption in its May 30, 2008 Order [i.e., VSCC Order II].”
VSCC Motion at 5.
We deferred ruling on this motion until after oral
argument. At oral argument, the VSCC again reiterated its
recognition and acceptance of the FCC’s exclusive authority to
regulate the interstate communications services at issue here.
The VSCC stated that it did not object to this court basing a
finding of mootness, in part, on the VSCC’s recognition of FCC
7
preemption; that the government’s analysis was correct; and that
the FCC had spoken with authority.
We turn now to the VSCC’s mootness argument
II.
A case is not necessarily mooted by a defendant’s voluntary
cessation of allegedly offensive conduct. As the Supreme Court
has held, “It is well settled that a defendant’s voluntary
cessation of a challenged practice does not deprive a federal
court of its power to determine the legality of the practice.”
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc.
528 U.S. 167, 189 (2000) (quotation and citation omitted). The
Court explained that if such voluntary cessation resulted in
deprivation of jurisdiction to hear the case, “the courts would
be compelled to leave the defendant free to return to his old
ways.” Id. (punctuation and citation omitted). To prevent a
party from evading judgment by stopping and restarting
challenged conduct, the Court narrowly defined conduct in which
mootness following voluntary cessation might be appropriate: “A
case might become moot if subsequent events made it absolutely
clear that the allegedly wrongful behavior could not reasonably
be expected to recur.” Id. (quotation and citation omitted).
Explaining this “stringent” principle, the Court held that the
party asserting mootness bears the “heavy burden of persuading
8
the court that the challenged conduct cannot reasonably be
expected to start up again.” Id. (quotation and citation
omitted).
Here, the VSCC voluntarily rescinded its conditions that
affected Verizon Access’s interstate communications services.
Standing alone, this rescission would be insufficient for the
VSCC to meet its “heavy burden” of persuading this court that
one could not reasonably expect that it would attempt to
regulate Verizon Access’s interstate communications services in
the future. However, the VSCC also offers its explicit
endorsement of the FCC’s position (and so, the plaintiff’s
identical position) on preemption. 4 VSCC Motion at 5. Given our
general reluctance to assume that a state agency such as the
VSCC would not comply with a properly recognized law, 5 we agree
that the VSCC has met its heavy burden. Consequently, we find
there is no reasonable likelihood that the VSCC would seek to
4
As the VSSC states, “[h]aving . . . acknowledged federal
preemption over the challenged conditions, it is, at the very
least, extremely unlikely that the Commissioners would flout
that statement of preemption . . . .” VSCC Motion at 5.
5
See, e.g., Blackwell v. Thomas, 476 F.2d 443, 445-46 (4th
Cir. 1973) (holding that this court cannot hypothesize that a
state jury commission would not comply with the law).
9
regulate interstate communications services in this manner in
the future.
III.
Because the VSCC rescinded the contested conditions and
explicitly recognized the FCC’s exclusive authority to regulate
the interstate communications services at issue, we conclude
that the complained of activity is unlikely to recur and the
appeal is moot. Therefore, in accordance with established
practice, 6 we vacate the judgment below and remand with a
direction to dismiss.
DISMISSED, VACATED, AND REMANDED
6
See Arizonans for Official English v. Arizona, 520 U.S. 43,
71 (1997); United States v. Munsingwear, Inc., 340 U.S. 36, 39
(1950).
10