Premiere Network Services, Inc. v. SBC Communications, Inc.

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT February 16, 2006

Charles R. Fulbruge III
Clerk
No. 04-41574

PREMIERE NETWORK SERVICES, INC.,

Plaintiff-Appellant,

v.

SBC COMMUNICATIONS, INC.; SOUTHWESTERN BELL TEXAS
HOLDINGS, INC.; SWBT TEXAS LLC; SOUTHWESTERN BELL
TELEPHONE LP, FORMERLY KNOWN AS SOUTHWESTERN BELL
TELEPHONE COMPANY,

Defendants-Appellees.

Appeal from the United States District Court
for the Southern District of Texas

Before JOLLY, BEAM,1 and BARKSDALE, Circuit Judges.

BEAM, Circuit Judge.

This case involves a long-standing and procedurally

complicated dispute between Premiere Network Services, Inc.

(Premiere) and SBC Communications, Inc. and its affiliates

(collectively SBC) over access to telephone services and

facilities. The district court granted SBC's motion to dismiss and

Premiere appeals. We affirm in part and reverse in part.

1
Circuit Judge of the United States Court of Appeals for the
Eighth Circuit, sitting by designation.
I. BACKGROUND

Under the regulatory regime of the Federal Telecommunications

Act of 1996 (FTA), Premiere is a competitive local exchange carrier

(CLEC) in the Texas telecommunications market. SBC and its

affiliated entities comprise an incumbent local exchange carrier

(ILEC), controlling most of the cables, poles, and systems

necessary to provide telephone exchange service to a particular

area. Pursuant to the FTA, Premiere operates under an

interconnection arrangement with SBC called a "T2A" agreement2 that

regulates the business relationship between the two companies.

This appeal grows out of a somewhat convoluted chain of

litigation. In January 1999, Premiere filed a complaint against

SBC with the Texas Public Utilities Commission (TPUC), alleging

violations of the T2A, the FTA, state law, and orders of the TPUC.

Premiere claimed that the violations stymied competition in the

local telecommunications market. In November 1999, Premiere and

SBC executed a Confidential Joint Settlement Agreement and Release

2
"T2A" is short for "Texas 271 Agreement," which refers to 47
U.S.C. § 271. This section provides for Bell operating companies
to enter into interLATA service in a region. A LATA, or Local
Access and Transport Area, is a contiguous geographic area
comprised of one metropolitan area within the same state that is
served by a telecommunications company. InterLATA service is
telecommunications service between a point within and a point
outside a LATA. Providing interLATA service requires review by
both the specific state utilities commission and the Federal
Communications Commission for compliance with section 271.

2
(Settlement Agreement), and the parties jointly moved to dismiss

Premiere's complaint with prejudice. In December 1999, the TPUC

granted the motion.

In May 2002, Premiere filed a formal complaint against SBC

with the Federal Communications Commission (FCC) alleging

discriminatory and anti-competitive practices regarding access to

"555" telephone numbers.3 In November 2002, Premiere filed a

motion to dismiss the proceeding without prejudice, based on

concerns that the record was flawed, and asserting that dismissal

would conserve the parties' and FCC's resources. In June 2003, the

FCC granted the motion, citing Premiere's optimism that the parties

could resolve their dispute in some other way. The FCC noted that

it does not have a specific rule for dismissing formal complaints,

but found instructive Federal Rule of Civil Procedure (FRCP)

41(a)(2), which provides a court discretion to dismiss an action

upon the plaintiff's request under terms and conditions set by the

court. The FCC declined SBC's request that it treat Premiere's

motion as a motion to dismiss with prejudice per FRCP 41(a)(1)

since Premiere had previously filed a related complaint with the

3
A "555" telephone number is a number assigned by the North
American Numbering Plan Administration (NANPA) to a particular
entity, which can use the number to access sundry information.
Until 1992, these numbers were used mostly for directory
assistance. At that time, the telecommunications industry
determined that "555" numbers should be used in a wider variety of
ways, and NANPA began assigning "555" numbers in 1994.

3
TPUC. The FCC dismissed the proceeding without prejudice. Citing

FRCP 41(a)(2), the FCC added a condition to the dismissal requiring

that if Premiere should file a complaint against SBC with the FCC

within one year of the dismissal raising materially similar facts

and legal issues, Premiere would provide SBC an exhibit comparing

the new complaint with the current complaint, to aid SBC in

preparing for the new case.

Then, in October 2003, Premiere filed the instant action

against SBC in the United States District Court for the Southern

District of Texas. Premiere asserted claims for (1) violations of

sections 201, 202, 251(b), 251(c), and 251(e) of the FTA; (2)

breach of fiduciary duty; (3) fraud under the T2A; (4) fraudulent

inducement to enter an April 2001 settlement agreement;4 (5) breach

of contract (the T2A); (6) fraudulent inducement to enter the

November 1999 settlement agreement; (7) breach of contract (the

November 1999 settlement agreement); (8) tortious interference with

prospective contract; and (9) tortious interference with contract.

The district court noted that either section 252(e)(6) or

section 207 could provide the court with jurisdiction under the

FTA, but that Premiere did not specify under which section it

4
For clarity, we note that only Premiere's claims related to
the November 1999 settlement agreement, and not those related to
the April 2001 settlement agreement, are now before us on appeal.

4
brought its claims. The court estimated that since Premiere and

SBC were parties to an interconnection agreement, the source of

federal jurisdiction for the suit was likely section 252(e)(6), but

the court analyzed the claims under both sections.

Under section 252(e)(6), the district court found that all of

Premiere's federal claims were subsumed within the T2A. The court

dismissed Premiere's federal claims without prejudice, apparently

for lack of subject matter jurisdiction, finding that section

252(e)(6) contemplates exhaustion of administrative remedies for

disputes over interconnection agreements before a state public

utilities commission, which exhaustion had not yet occurred.5 The

5
Given the Supreme Court's recent reminder in Eberhart v.
United States, 126 S. Ct. 403 (2005), that courts be precise in
their use of the term "jurisdiction," we make the following
observation. See id. at 405 (quoting Kontrick v. Ryan, 540 U.S.
443, 455 (2004) for the proposition that clarity would be advanced
"'if courts and litigants used the label 'jurisdictional' not for
claim-processing rules, but only for prescriptions delineating the
classes of cases (subject-matter jurisdiction) and the persons
(personal jurisdiction) falling within a court's adjudicatory
authority.'"). Because the district court dismissed Premiere's
claims under section 252(e)(6) for Premiere's failure to exhaust
administrative remedies, it would have been more accurate for the
court to have framed its dismissal in terms of Premiere's failure
to state a claim, and not in terms of the court lacking
jurisdiction. "Whenever the Congress statutorily mandates that a
claimant exhaust administrative remedies, the exhaustion
requirement is jurisdictional . . . ." Taylor v. United States
Treasury Dep't, 127 F.3d 470, 475 (5th Cir. 1997). But where a
statute does not textually require exhaustion, only the
jurisprudential doctrine of exhaustion controls, which is not
jurisdictional in nature. Id. Section 252(e)(6) does not
expressly require exhaustion of administrative remedies, thus only
the jurisprudential doctrine of exhaustion is applicable. Under

5
court also dismissed what it termed Premiere's "state law" claims

without prejudice, declining to exercise supplemental jurisdiction

over them, and noting that there was no diversity jurisdiction

since both parties are citizens of Texas.

Under section 207, the district court stated it would dismiss

Premiere's claims on two bases. First, it said that those claims

(the court did not differentiate between state or federal) with a

nexus to the "555" number dispute would have to be dismissed,

apparently for lack of subject matter jurisdiction, because of

Premiere's earlier filing of that dispute with the FCC. The court

said that those claims with such a nexus were: (1) violations of

section 251(e)(1) of the FTA; (2) fraudulent inducement to enter

the November 1999 settlement agreement; (3) breach of contract (the

November 1999 settlement agreement); (4) tortious interference with

prospective contract; and (5) tortious interference with contract.

The court did not agree with Premiere that the FCC's dismissal

without prejudice of those claims allowed Premiere to litigate them

in federal court. Second, the court stated that if it had

jurisdiction under section 207 over Premiere's remaining claims, it

that doctrine, Premiere likely failed to state a claim under
section 252(e)(6) because "'no one is entitled to judicial relief
for a supposed or threatened injury until the prescribed
administrative remedy has been exhausted.'" Id. at 476 (quoting
Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51 (1938)).

6
would defer to the primary jurisdiction of the TPUC for those

claims.

Premiere appeals the dismissal of its "555" number-related

claims under section 207.6

II. DISCUSSION

We review de novo a district court's dismissal based on lack

of subject matter jurisdiction. Stiles v. GTE Southwest, Inc.,

128 F.3d 904, 906 (5th Cir. 1997).

A. Effect of Filing With FCC on Application of Section 207

Premiere first argues that section 207 does not bar its "555"

number-related claims from federal court. The statutory provision

at issue in this appeal, 47 U.S.C. § 207, provides that

[a]ny 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

6
Premiere does not appeal the district court's dismissal of
its federal claims under section 252(e)(6). As such, we express no
opinion as to the merits of the court's application of that section
to Premiere's assertions, and we assume that Premiere concedes that
if section 252(e)(6) applies, its federal claims require exhaustion
before the TPUC.

7
 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. The district court pointed to our decision in

Stiles in deciding that since Premiere had earlier filed a formal

complaint with the FCC regarding the "555" dispute, it could not

later bring claims related to that same dispute into federal

district court. In Stiles, appellant had filed an informal

complaint with the FCC against GTE Southwest. Appellant later sued

GTE Southwest in federal court, seeking damages under the FTA. The

central issue in that case was whether section 207 barred the

filing of claims in federal court that had already been brought to

the FCC through an informal, as opposed to formal, complaint. The

Stiles court held that section 207 draws no distinction between

formal and informal proceedings. In interpreting the statute, the

court determined that the language of section 207 "is unambiguous:

A complainant can file a complaint either with the FCC or in

federal district court, but not in both." 128 F.3d at 907. The

court concluded that "§ 207 precludes a complainant from filing

suit in federal court once she has initiated the administrative

complaint process with the FCC either by filing a formal or

informal complaint." Id. (emphasis added).

8
 Premiere asserts that the holdings in Stiles and other similar

cases, some of which rely on Stiles, are bounded by their factual

context: the litigants in those cases brought a federal claim

either while their complaint with the FCC was pending, or after the

FCC had issued a final determination. Premiere asserts that those

cases bar simultaneous actions, or actions in federal court

following a final disposition by the FCC, but that neither

situation applies in this case. See id. at 905-06 (noting that the

defendant-appellee GTE sought to attach a copy of the plaintiff-

appellant's informal complaint and FCC final determination letter

to its motion to dismiss); Mexiport, Inc. v. Frontier Commc'ns

Servs., Inc., 253 F.3d 573 (11th Cir. 2001) (holding that appellant

could not file in federal court after having filed informal

complaint with FCC, in case where FCC had completed informal

complaint process); Digitel, Inc. v. MCI WorldCom, Inc., 239 F.3d

187, 190 (2d Cir. 2001) (concluding that "a party that has filed an

informal complaint [with the FCC] may not also sue in district

court," in case where district court had dismissed appellant's case

in part because FCC was proceeding with informal complaint

process); Cincinnati Bell Tel. Co. v. Allnet Commc'n Servs., Inc.,

17 F.3d 921 (6th Cir. 1994) (deciding that appellant could not have

filed a counterclaim in the district court on the same dispute that

was the subject of its FCC complaint, in case where appellant's FCC

complaint was pending at the time of federal court litigation);

9
Bell Atlantic Corp. v. MFS Commc'ns Co., 901 F. Supp. 835 (D. Del.

1995) (holding that the district court did not have jurisdiction to

hear complaint on same issues brought to the FCC, in case where

appellant's FCC complaint was still pending).

While Premiere points out substantial factual differences

between Stiles, the other cited cases, and this case, we do not

find the argued distinctions persuasive. Though it appears that

either an FCC complaint was pending or the FCC had made a final

determination in Stiles, Mexiport, and Digitel, those cases do not

condition their holdings on those facts. Rather, their decisions

are couched in terms of the appellant having initiated or filed a

complaint with the FCC. The determination in Bell Atlantic in

particular seems to stand apart from the fact that a complaint was

pending with the FCC. Appellant in that case argued that inaction

by the FCC on its complaint allowed it to file in federal court.

But the court stated that appellant "offer[ed] no explanation as to

why or how its choice of fora becomes, in a sense, 'reset' in the

face of FCC inaction. Title 47 offers no indication that a party's

election of fora, once made, is anything but irrevocable." 901 F.

Supp. at 852-53. The court concluded that "[b]y the terms of §

207, the choice to proceed in one or the other available forum

destroys jurisdiction in the remaining body; the electing party

10
must then accept and work through the problems of reaching a

judgment." Id. at 853.

We agree with the weight of authority that section 207 is an

election-of-remedies provision, and we now amplify our holding in

Stiles: once an election is made by either filing a complaint with

the FCC or filing a complaint in federal court, a party may not

thereafter file a complaint on the same issues in the alternative

forum, regardless of the status of the complaint. As the court in

Bell Atlantic pointed out, this has the effect of preventing

"duplicative adjudications and inconsistent results between

[federal court] and the FCC." Id. It also avoids giving a

complaining party several bites at the apple through dismissal and

re-filing of complaints, thereby upholding judicial efficiency and

fairness to responding parties.

B. Effect of Voluntary Dismissal on Filing Status

Premiere alternatively argues that the voluntary dismissal of

its complaint with the FCC prior to a decision essentially "un-

files" the complaint with the FCC just as it would in federal court

under FRCP 41(a)(2), and "'leaves the situation as if the action

never had been filed.'" Br. for Appellant 7 (quoting Long v. Bd. of

Pardons and Paroles of Texas, 725 F.2d 306, 307 (5th Cir. 1984)).

11
Applying that reasoning under our interpretation of section 207,

Premiere would not be barred from filing suit in federal court

since essentially no election would have yet been made. Premiere

offers no precedent in support of this assertion, nor have we found

any. True, the FCC, in its order of dismissal, found FRCP 41(a)(2)

instructive, but only for the proposition that the rule leaves the

decision to dismiss within the sound discretion of courts, and not

for the reason that dismissal under the rule would "un-file" the

action. Regardless of their applicability, which we do not decide

here, we would not read the Federal Rules of Civil Procedure in

such a way as to defeat the clear statutory election-of-remedies

provision of section 207.7 We decline to adopt Premiere's "un-

filing" argument.

C. Disposition of Premiere's "555" Number-Related Claims
Arising Under Confidential Joint Settlement Agreement

After finding that section 207 divested it of jurisdiction,

the district court proceeded to consider which of Premiere's claims

would be barred from federal court. The results of this exercise

create some uncertainties that we now address.

7
Even if we were to strictly apply FRCP 41(a)(2), we would
have to recognize that the FCC conditioned its dismissal of
Premiere's complaint in such a way that it anticipated that any
subsequent legal action by Premiere would take place before the
FCC, not in federal court.

12
 Since Premiere's complaint to the FCC dealt with the "555"

number dispute, the court, citing Digitel, determined that all

claims with any nexus to that issue are barred by section 207, and

must be brought to the FCC for adjudication. In Digitel, the court

stated "[o]f course, the filing of an informal complaint with the

FCC does not bar the complainant from bringing all claims, no

matter how unrelated, in district court. Instead, there must be a

nexus between the claims in the two forums that is sufficient to

bring § 207 into play." (Emphasis added). 239 F.3d at 191. The

claims seemingly relegated to the FCC by the district court under

its section 207 analysis include those for breach of the Settlement

Agreement, fraudulent inducement to enter into the Settlement

Agreement, tortious interference with contract and tortious

interference with prospective contractual relationships.

Premiere argues that these claims were never before the FCC in

the earlier "555"-related complaint and thus are not subject to a

section 207 election because they are based only on the Settlement

Agreement. In response, SBC, relying upon Digitel, asserts that

because Premiere's contract and tort claims are inextricably

intertwined with its FTA-based "555" number dispute, Premiere

cannot establish them as distinct and separable matters. We

disagree.

13
 We note that the district court's conclusions with regard to

these competing arguments are less than precise. The court's

statements under its section 252(e)(6) analysis concerning

dismissal of state-law claims and rejection of supplemental

jurisdiction seem, at least on their face, to conflict with the

court's evaluation of the nature of the identical claims for

section 207 purposes. In this regard, the district court stated

that "all of Premiere's claims with a nexus to the '555' service

must be brought before the FCC." Premiere Network Servs., Inc. v.

SBC Commc'ns, Inc., No. C-03-418, slip op. at 13 (S.D. Tex. Aug.

19, 2004). It also stated, without again mentioning a lack of

diversity jurisdiction or that it would forego exercising

supplemental jurisdiction, that

[t]hose claims that must be dismissed by this court under
Section 207 [presumably to FCC jurisdiction] are:
violations of Sections 251(e)(1), fraudulent inducement
to Settlement Agreements based on "555" numbers, breach
of contract for Settlement Agreements, tortious
interference with prospective contract, and tortious
interference with existing contract.

Id. Thus, the district court appears to make no jurisdictional

distinction in its 207 analysis between federal statutory claims

and claims that it earlier recognized as state causes of action,

apparently directing them all to FCC jurisdiction. To the extent

14
that we have accurately read the district court's opinion, we

disagree with this result.

Section 207 grants federal court (or FCC) jurisdiction over

only FTA-created claims. Statutes granting federal court

jurisdiction "'are to be construed "with precision and with

fidelity to the terms by which Congress has expressed its

wishes,"'" Bread Political Action Committee v. FEC, 455 U.S. 577,

580 (1982) (quoting Palmore v. United States, 411 U.S. 389, 396

(1973) (quoting Cheng Fan Kwok v. Immigration and Naturalization

Service, 392 U.S. 206, 212 (1968))), and courts are to avoid

expanding federal court jurisdiction by reading jurisdictional

statutes broadly. Romero v. Int'l Terminal Operating Co., 358 U.S.

354, 379 (1959), superseded by statute on other grounds as stated

in Miles v. Apex Marine Corp., 498 U.S. 19 (1990). While Congress

has the power to convert complaints purportedly based on state law

into complaints stating federal claims from their inception, see

Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987), legislative

intent to do so must be reasonably clear and discernible. In other

words, as noted in Digitel, the "nexus" between the federal

statute, here the FTA, and claims traditionally viewed as sounding

in state law must be "sufficient to bring [the federal statute]

into play." 239 F.3d at 191. We do not think it necessary to

determine today whether Digitel is an acceptable reading of the

15
FTA's grant of subject matter jurisdiction. Nor do we find it

necessary to lay out the nature and character of the nexus needed

to create federal jurisdiction, if nexus alone is indeed a

satisfactory test. This is because we believe that the purported

connection between the "555" issue and the Settlement Agreement is

too tenuous in this case.8

Premiere's claims for breach of contract, fraudulent

inducement, tortious interference with contract, and tortious

interference with prospective contractual relations arise by virtue

of mutual promises made by Premiere and SBC within the four corners

of a contract–the Settlement Agreement9–or by virtue of SBC's

8
Applying Digitel's nexus theory broadly enough to include the
state-law type claims asserted may run afoul of recent Supreme
Court precedent regarding statutes that impact the state-federal
balance. Where Congress aims to change the usual constitutional
balance between the states and the federal government, it must make
unmistakably clear its intention to do so in the statute's
language. Will v. Michigan Dep't of State Police, 491 U.S. 58, 65
(1989). This precept was recently echoed in Gonzales v. Oregon,
126 S. Ct. 904 (2006).
9
The November 1999 Confidential Joint Settlement Agreement and
Release is not part of the TPUC's order dismissing Premiere's
complaint, or any court's dismissal order, so it is not akin to a
consent decree encompassing an agreement that becomes in essence
part of a judgment of a "hybrid nature." See Ruiz v. Estelle, 161
F.3d 814, 822 (5th Cir. 1998). The Settlement Agreement is purely
a contract between Premiere and SBC arising under state law.
Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 381-82
(1994) (stating that claim for breach of a settlement agreement
that dismissed a federal lawsuit is a claim for breach of contract,
over which there is no federal court jurisdiction, outside of
ancillary jurisdiction when made part of court order).

16
purported conduct relating to this contract. These claims sound in

state, not federal, law, as the district court apparently

recognized under its section 252(e)(6) analysis.

In any event, our conclusion is fully supported by Digitel.

The earlier arguments before the FCC and the contract allegations

set forth in the district court complaint "arise[] out of distinct

disputes." 239 F.3d at 191. Premiere's claims before the FCC,

though they dealt with "555" number use, alleged violations of

specific provisions of federal law, including the FTA, FCC rules,

and SBC's tariff. On the other hand, Premiere's claims under the

Settlement Agreement, which were brought only in federal court,

relate to a purported breach of a promise by SBC, in violation of

state contract law, not to oppose Premiere's efforts to use a

specific "555" number for one of its major clients. That promise

was made to Premiere by SBC in a separate contract designed to end

litigation before the TPUC. In Digitel, the claims found to be

barred by section 207 were federal, not state, claims, brought

pursuant to the Communications Act of 1934, appellee's tariff

(filed under the Communications Act of 1934), and federal common

law. 239 F.3d at 189. Consistent with Digitel, we believe that

since Premiere's contract-related claims are asserted under the

language of the Settlement Agreement and not under the terms of the

FTA, they are substantially unrelated to Premiere's previous claims

17
before the FCC.10 Thus, whatever the reach of section 207, there

is insufficient nexus between the two sets of claims to trigger the

section's election of remedies mandate.11

10
If and when Digitel is fully fleshed out in an appropriate
case, the elements of the "nexus" necessary for section 207
purposes may place at least some facially state-law related claims
within the reach of the FTA's federal subject matter jurisdiction.
State/federal relationships created by the FTA clearly exist. See,
e.g., 47 U.S.C. § 252(e) (providing for state commission
jurisdiction to approve interconnection agreements, and review of
state commission decisions by federal district court).
11
We believe our conclusion that Premiere's claims under the
Settlement Agreement do not arise under federal law is undiminished
by a preemption argument. Because preemption was not raised by
either party below, we mention it only to recognize a potential
issue. Because we do not reach the merits of Premiere's claims
under the Settlement Agreement, but rather analyze only whether
they are susceptible to federal jurisdiction, we are guided by the
theory of complete preemption, as distinct from a general theory of
federal preemption as a defense. See Sullivan v. American
Airlines, Inc., 424 F.3d 267, 273, n.7 (2d Cir. 2005) ("'[I]n
complete preemption cases, federal law so occupies the field that
any complaint alleging facts that come within the statute's scope
necessarily 'arise under' federal law . . . .'") (quoting 15
Moore's Federal Practice § 103.45[2] (3d ed. 2005)) (alterations in
original); Smith v. GTE Corp., 236 F.3d 1292, 1313 (11th Cir. 2001)
("[O]rdinary preemption operates to dismiss state claims on the
merits . . . .") (quotations omitted) (emphasis added). As such,
we express no opinion as to the validity of any defense based on
general federal preemption.

A number of cases have held that the FTA does not completely
preempt state-law causes of action. See, e.g., Smith, 236 F.3d at
1312-13 (reviewing the relationship between section 414 and section
207, and holding that Congress did not intend state-law claims
within the scope of the FTA to be federalized). See also Pinney v.
Nokia, Inc., 402 F.3d 430 (4th Cir. 2005) (holding there is no
evidence, given the FTA's "savings" clause, that Congress intended
the FTA to be the exclusive remedy for state-law claims, and thus
state claims in that case did not arise under federal law); Marcus
v. AT&T Corp., 138 F.3d 46 (2d Cir. 1998) (same). And because
Premiere's claims under the Settlement Agreement apparently do not
challenge SBC's tariff, the filed-rate doctrine likely does not

18
 We further believe that the FTA's savings clause counsels

recognition of these contract-based allegations as non-federal

claims. "Nothing in this chapter contained shall in any way

abridge or alter the remedies now existing at common law or by

statute, but the provisions of this chapter are in addition to such

remedies." 47 U.S.C. § 414.12 Section 207's election requirement

and section 414's preservation of state-law claims requirement are

harmonized in this case by noting that it is only claims brought

pursuant to the FTA that are subject to section 207's election.13

In sum, the district court was correct in directing the

federal claims to the FCC. The district court was also correct in

apply to completely preempt such claims and make them federal. See
AT&T Co. v. Cent. Office Tel., Inc., 524 U.S. 214 (1998) (holding
state contract and tort claims which seek services contrary to
filed tariff are preempted by FTA under filed-rate doctrine);
Cahnmann v. Sprint Corp., 133 F.3d 484 (7th Cir. 1998) (holding
that where effect of contract action is to challenge tariff, the
action arises under federal law).
12
The savings clause merely preserves existing state-law
remedies and does not require a restrictive reading of the FTA's
grant of federal jurisdiction. Thus, proper court analysis of
traditional state-law claims actually subsumed within the federal
legislation, if any, will prohibit reformulated and duplicative
state and federal litigation.
13
Section 207 provides that a complaint about a common carrier
may be brought to the Commission "as hereinafter provided for;"
section 208 states that such complaint must be for "contravention
of the provisions [of the FTA]." 47 U.S.C. § 208 (emphasis added).
Section 207 also provides that suit may be filed in federal court
against a common carrier for the recovery of damages "for which
such common carrier may be liable under the provisions of this
chapter." Id. at § 207 (emphasis added).

19
disclaiming jurisdiction over the state-law claims. With the

federal claims properly dismissed and no diversity of citizenship

apparent, the district court was well within its discretion to

decline supplemental jurisdiction over Premiere's remaining issues.

See Parker & Parsley Petroleum Co. v. Dresser Indus., 972 F.2d 580,

585 (5th Cir. 1992) ("Our general rule is to dismiss state claims

when the federal claims to which they are pendent are dismissed.").

There was also no ancillary jurisdiction over the state-law claims

because the Settlement Agreement did not arise out of a matter

before the district court and was not part of any court order

retaining federal control. See Kokkonen v. Guardian Life Ins. Co.

of America, 511 U.S. 375 (1994).

III. CONCLUSION

We affirm the district court's dismissal of Premiere's federal

claims without prejudice. To the extent the district court

concluded that Premiere's claims for breach of the Settlement

Agreement, fraudulent inducement to enter into the Settlement

Agreement, tortious interference with contract, and tortious

interference with prospective contractual relations must be taken

to the FCC, if anywhere, we reverse and remand for dismissal of the

state-law claims without prejudice to their assertion in a court of

competent jurisdiction.

20