F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
July 19, 2005
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
CRYSTAL CLEAR
COMMUNICATIONS, INC., an
Oklahoma corporation; KKW GOLD
EXCHANGE, INC., an Oklahoma
corporation; doing business as
Southwestern Payphones; ROUVEN
IROM, doing business as Sooner
Payphones; TELETRUST, INC., a
Texas corporation, No. 03-6219
Plaintiffs-Appellants,
v.
SOUTHWESTERN BELL
TELEPHONE COMPANY, a Missouri
corporation,
Defendant-Appellee.
Appeal from the United States District Court
for the Western District of Oklahoma
(D.C. No. 00-CV-1683-C)
Jon W. Laasch (J. David Jacobson, with him on the briefs), Jacobson & Laasch,
Edmond, Oklahoma, for Plaintiffs-Appellants.
Donald L. Flexner, Boies, Schiller & Flexner, LLP, New York, NY (David A.
Barrett, Boies, Schiller & Flexner, LLP, New York, NY, Scott E. Gant, Boies,
Schiller & Flexner, LLP, Washington, DC, with him on the brief), for Defendant-
Appellee.
Before BRISCOE, ANDERSON, and MURPHY, Circuit Judges.
MURPHY, Circuit Judge.
I. INTRODUCTION
Plaintiffs, several independent payphone providers doing business in
Oklahoma, filed suit against Southwestern Bell Telephone Company in United
States District Court for the Western District of Oklahoma, claiming that
Southwestern Bell engaged in anticompetitive conduct in violation of federal and
state antitrust laws. The district court concluded that primary jurisdiction for the
issues raised in plaintiffs’ complaint lies with the Federal Communications
Commission (“FCC”) and the Oklahoma Corporation Commission (“OCC”). The
court therefore ordered the case stayed pending decisions by those agencies.
Plaintiffs appeal from the court’s order. Because the district court’s decision to
stay the case was not a final or immediately appealable decision, this court has no
jurisdiction to hear plaintiffs’ appeal. Accordingly, the appeal is dismissed.
-2-
II. BACKGROUND 1
Southwestern Bell is a local exchange carrier offering telephone services in
Oklahoma. Prior to 1996, it was also the sole provider of payphones in its
operating area. The Telecommunications Act of 1996, however, authorized
independent payphone providers to operate competing payphone businesses within
Southwestern Bell’s territory. Plaintiffs are independent payphone providers that
subsequently began operating in competition with Southwestern Bell.
Payphone providers typically enter into contracts with property owners in
order to obtain locations at which to install their payphones. To obtain service
for the phones, independent payphone providers then contract with local exchange
carriers such as Southwestern Bell. The Telecommunications Act regulates the
manner in which local exchange carriers interconnect with competing independent
payphone providers. See 47 U.S.C. § 276. In particular, the Act prohibits local
exchange carriers from discriminating against independent payphone providers in
the provision of telephone services. See id. § 276(a).
Plaintiffs claim that Southwestern Bell engaged in a variety of
anticompetitive conduct in an attempt to retain its payphone monopoly after
deregulation, in violation of the Sherman Act, 15 U.S.C. § 2, and the Oklahoma
1
For purposes of this appeal, this court will presume the factual allegations
in plaintiffs’ complaint to be true. The parties do not dispute any of the facts
relevant to this court’s resolution of the jurisdictional inquiry.
-3-
Antitrust Reform Act, Okla. Stat. Ann. tit. 79, § 203. Among the allegations in
plaintiffs’ complaint are assertions that Southwestern Bell abused its control of
telephone access lines to discriminate against plaintiffs, and that it entered into
long-term restrictive contracts with property owners in an effort to lock up the
market and prevent competitors from gaining a foothold. As a result of these
anticompetitive actions, plaintiffs allege that Southwestern Bell was able to
unfairly retain its monopoly in the Oklahoma payphone market.
Southwestern Bell moved in the district court for a judgment on the
pleadings, or in the alternative a stay pending referral of certain issues to the FCC
and OCC. Southwestern Bell argued that the subject matter of the complaint was
pervasively regulated by FCC rules promulgated under the authority of the
Telecommunications Act and that the FCC had procedures in place to provide
relief for the issues raised in the complaint. It further argued that the OCC had
primary jurisdiction over the issue of restrictive long-term contracts. The district
court agreed with Southwestern Bell that “Plaintiffs and Defendant operate in a
field that has been extensively regulated at both the federal and state levels,” and
therefore that the doctrine of primary jurisdiction required the case to be “stayed
pending resolution of Plaintiffs’ claims by the [FCC] and/or the [OCC], as may be
-4-
appropriate.” 2 The court ordered the proceeding “administratively close[d]” and
required that any party wishing to proceed following final disposition by the
administrative agencies must move to reopen the matter with thirty days of that
final disposition.
Recognizing that resolution of plaintiffs’ claims before the FCC “may
involve a lengthy process,” the district court certified its order for immediate
appeal pursuant to 28 U.S.C. § 1292(b), which authorizes this court to permit an
appeal from an interlocutory order certified under that section as long as
application is made by the appealing party within ten days after entry of the order.
See 28 U.S.C. § 1292(b). Rather than petitioning this court for review within ten
days as required by § 1292(b), however, plaintiffs filed a notice of appeal in the
In Williams Pipe Line Co. v. Empire Gas Corp., this court explained the
2
concept of primary jurisdiction:
The doctrine of primary jurisdiction is concerned with promoting
proper relationships between the courts and administrative agencies
charged with particular regulatory duties. In essence, the doctrine
represents a determination that administrative agencies are better
equipped than the courts to handle particular questions, and that
referral of appropriate questions to an agency ensures desirable
uniformity of results.
76 F.3d 1491, 1496 (10th Cir. 1996) (quotation, citation, and alteration omitted).
When a district court applies the doctrine, “the judicial process is suspended
pending referral of such issues to the administrative body for its views.” United
States v. W. Pac. R.R. Co., 352 U.S. 59, 64 (1956).
-5-
district court twenty days after entry of the district court’s order. This court
tolled briefing and ordered the parties to submit memoranda on the question
whether the district court had entered a final or immediately appealable decision.
After receiving memoranda from both parties, briefing on the merits was ordered
to resume.
III. DISCUSSION
Plaintiffs argue on appeal that the district court abused its discretion in
staying the case pending submission of their claims to the FCC and OCC. Before
reaching that question, however, this court must first satisfy itself that it has
jurisdiction to hear the appeal.
Although the district court certified its stay order for immediate appeal
pursuant to 28 U.S.C. § 1292(b), plaintiffs did not comply with the requirements
for an interlocutory appeal under that section. This court may permit an appeal of
an order certified under § 1292(b) only if an application for permission to appeal
is filed with the clerk of this court within ten days after entry of the order. 28
U.S.C. § 1292(b); Fed. R. App. P. 5(a)(1); Hellerstein v. Mr. Steak, Inc., 531 F.2d
470, 471 (10th Cir. 1976). Instead of petitioning this court as required by
§ 1292(b), plaintiffs filed a notice of appeal in the district court. Because
plaintiffs failed to comply with the jurisdictional requirements of § 1292(b), this
-6-
court lacks jurisdiction to hear an appeal under that section. Hellerstein, 531 F.2d
at 471-72.
Plaintiffs nevertheless argue two alternative bases for jurisdiction. First,
they contend that the district court’s stay order was a final decision over which
this court has jurisdiction pursuant to 28 U.S.C. § 1291. Second, they argue that
the district court’s order was an appealable collateral order under the Supreme
Court’s decision in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541
(1949).
A. 28 U.S.C. § 1291
Section 1291 grants this court jurisdiction over “appeals from all final
decisions of the district courts of the United States.” 28 U.S.C. § 1291. A
decision of the district court is considered final under this section when it “ends
the litigation on the merits and leaves nothing for the court to do but execute the
judgment.” Gray v. Baker, 399 F.3d 1241, 1244 (10th Cir. 2005) (quotation
omitted).
In Moses H. Cone Memorial Hospital v. Mercury Construction Corp., the
Supreme Court noted that a district court’s decision to stay litigation “is not
ordinarily a final decision for purposes of § 1291.” 460 U.S. 1, 10 n.11 (1983).
The Court also recognized an exception to this general rule, however, for cases in
which the stay order operates to put a party “effectively out of court.” Id. at 10.
-7-
The plaintiff in Moses H. Cone brought suit under the United States Arbitration
Act to compel arbitration of a contract dispute. Id. at 7. The district court stayed
proceedings pending resolution of a prior state-court action in which the
defendants in the federal action sought a declaratory judgment that the plaintiff
had no right to arbitration. Id. Because the arbitrability of the contract was the
only substantive issue in the federal proceeding, the Supreme Court noted that
resolution of the state-court suit would render the federal proceeding res judicata
and would therefore effectively end litigation in federal court. Id. at 10. For this
reason, the Court concluded that the stay order amounted to a dismissal of the
case. Id.
As the Supreme Court recognized in Moses H. Cone, most stay orders do
not operate to put the plaintiff effectively out of federal court. Id. at 10 n.11. If a
stay merely delays litigation and does not effectively terminate proceedings, it is
not considered a final decision. See, e.g., United States v. Section 17 Township
23 N., Range 22 E. of the IBM, Del. County, Okla., 40 F.3d 320, 322 (10th Cir.
1994) (holding that a stay order that merely postponed consideration of a civil
forfeiture action pending adjudication of related state criminal charges did not
constitute a final order); Pioneer Props., Inc. v. Martin, 776 F.2d 888, 890-91
(10th Cir. 1985) (holding that a stay pending arbitration was not a final order
because the plaintiff could return to federal court following the arbitrator’s
-8-
decision). In In re Kozeny, for example, a two-judge panel of this court examined
a decision of the District of Colorado staying proceedings pending resolution of a
related lawsuit in London, England. 236 F.3d 615, 617 (10th Cir. 2000). 3 The
panel noted that even though the English court would resolve a central issue in
the case, the parties could eventually return to Colorado to litigate the remaining
issues and causes of action. Id. at 619. Because “termination of the London case
[would] not necessarily end the litigation in Colorado,” the panel concluded that
the decision of the district court was not final. Id.
Like the order at issue in Kozeny, the stay order in this case contemplates
an eventual return to federal court. The order requires plaintiffs to “first pursue
their claims” in the FCC and OCC, and then to “pursue any remaining Sherman
Act claims upon their return to this Court.” (emphasis added). This course of
action is consistent with the general purposes of the primary jurisdiction doctrine,
which is designed to allow an agency to pass on issues within its particular area
of expertise before returning jurisdiction to federal district court for final
3
Although both parties rely on In re Kozeny, 236 F.3d 615 (10th Cir. 2000),
in support of their respective arguments, they fail to note that the decision was
rendered by a two-judge motions panel and its precedential value is therefore
questionable. Cf. Homans v. City of Albuquerque, 366 F.3d 900, 904-05 (10th
Cir. 2004) (holding that the decision of a motions panel is not binding for
purposes of law of the case). Regardless of the precedential value of Kozeny,
however, this court finds its reasoning persuasive on the question whether the stay
order was final under § 1291.
-9-
resolution of the case. See United States v. Phila. Nat’l Bank, 374 U.S. 321, 353
(1963) (noting that under the doctrine of primary jurisdiction, “[c]ourt jurisdiction
is not [] ousted, but only postponed”). Although the district court ordered the
proceeding “administratively close[d],” it is clear from the context of the order
that the court contemplated continued litigation after completion of the
administrative proceedings. See Corion Corp. v. Chen, 964 F.2d 55, 56-57 (1st
Cir. 1992) (holding that a district court’s order that a proceeding be
administratively closed pending arbitration was not equivalent to a final judgment
of dismissal); Quinn v. CGR, 828 F.2d 1463, 1465 (10th Cir. 1987) (concluding
that a district court’s order stating that the case is “ordered closed, to be reopened
upon a showing of good cause” was not a final decision because it contemplated
further proceedings in district court following arbitration).
The Third Circuit in Richman Brothers Records, Inc. v. U.S. Sprint
Communications Co., facing a similar set of facts, held that a district court’s
order staying proceedings and transferring certain issues to the FCC did not
constitute a final decision under § 1291. 953 F.2d 1431, 1446 (3d Cir. 1991). In
explaining its rationale, the Richman Brothers court distinguished cases where
federal courts abstain in deference to a state administrative body and thereby
completely relinquish federal jurisdiction. Id. at 1442. In cases of deference to
state agencies, appeal from the decision of the agency would be to the state court
-10-
systems, and the case would be res judicata upon return to the federal court. Id.
In contrast, referral of a discrete issue to a federal agency under the doctrine of
primary jurisdiction leaves open the possibility of an eventual return to federal
court. Id. at 1444.
Like the order in Richman Brothers, the district court order in this case
referred issues to a federal agency without permanently relinquishing jurisdiction
over the cause of action. 4 Plaintiffs attempt to distinguish Richman Brothers on
the ground that the district court’s order in this case referred all plaintiffs’
“claims,” as opposed to merely discrete issues, to the FCC and OCC. Plaintiffs
reason that the district court’s decision was therefore a complete relinquishment
of jurisdiction over the case. This view gains some support in the Ninth Circuit’s
decision in United States v. General Dynamics Corp., 828 F.2d 1356 (9th Cir.
1987). The court in General Dynamics held that the referral by a district court of
a criminal case to a federal agency under the doctrine of primary jurisdiction
constituted a final judgment for purposes of § 1291. Id. at 1362. The court noted
4
Plaintiffs contend that the district court’s order was final at least as to
those issues referred to the OCC, because referring those issues to a state agency
constituted a relinquishment of federal jurisdiction. Even if plaintiffs are correct
that the order is final as to these issues, however, the case as a whole must be
final before an appeal can be taken to this court. See Dodge v. Cotter Corp., 328
F.3d 1212, 1221 (10th Cir. 2003) (“To be final, a decision must reflect the
termination of all matters as to all parties and causes of action.” (quotation
omitted)).
-11-
that the issues referred to the agency were identical to those in the criminal case
and therefore “a decision adverse to the government in the collateral proceedings .
. . would [have] require[d] dismissal of the government’s criminal prosecution.”
Id. 5
Although the district court’s order does state that plaintiffs must submit
their “claims” to the FCC and OCC, viewing the order in context makes it clear
that the court actually intended to refer only particular issues to those agencies.
In the district court, the only issues that Southwestern Bell asserted fell within the
primary jurisdiction of the FCC were: (1) discriminatory delay or denial of access
line service requests, (2) facilitation of dial-around compensation, (3) misuse of
customer information, and (4) use of unreasonable demarcation points. The only
issue that Southwestern Bell asserted fell into the primary jurisdiction of the OCC
was the issue of restrictive long-term contracts with property owners. Both
As the court in Richman Brothers noted, a plaintiff in this situation is not
5
necessarily out of federal court because the plaintiff can appeal the agency
decision to one of the federal courts of appeals. Richman Bros. Records, Inc. v.
U.S. Sprint Communications Co., 953 F.2d 1431, 1443 (3d Cir. 1991). The court
in General Dynamics nevertheless found the finality requirement of § 1291
satisfied when “exclusive authority to review the agency’s determination [was]
granted to a court other than the referring district court.” United States v. Gen.
Dynamics Corp., 828 F.2d 1356, 1360 (9th Cir. 1987). Because the district
court’s order in this case refers only a subset of plaintiffs’ claims to the
administrative agencies, this court need not decide whether it would agree with
the Ninth Circuit that a complete referral of all material issues in a case to a
federal agency effectively puts a party out of court within the meaning of Moses
H. Cone.
-12-
parties agree that these issues make up only a subset of plaintiffs’ claims, and the
district court’s order specifies that plaintiffs may pursue their remaining federal
antitrust claims following agency action. Furthermore, given that the FCC lacks
jurisdiction to decide plaintiffs’ Sherman Act claims, the only possible purpose of
the district court’s order was to gain the assistance of the FCC in interpreting
those regulations falling within its statutory authority. See United States v. Radio
Corp. of Am., 358 U.S. 334, 343-44 (1959). Viewing the order as a whole and in
context, it is therefore apparent that the district court did not intend to transfer the
entirety of the action to the agencies. See Richman Bros., 953 F.2d 1431, 1438-
40 (construing a district court’s order “transfer[ring] the action” to the FCC as
transferring only a discrete issue). 6
The district court’s order staying the case pending submission of certain
issues to the FCC and OCC therefore does not constitute a final decision as that
term is used in § 1291, and this court accordingly lacks jurisdiction under that
section.
6
This interpretation of the district court’s order is also consistent with the
usual course of action in primary jurisdiction cases, in which courts refer
particular issues to agencies but reserve final authority on the ultimate issue of
antitrust liability. See, e.g., Ricci v. Chi. Mercantile Exch., 409 U.S. 289, 305-06
(1973).
-13-
B. Collateral Order Doctrine
In Cohen v. Beneficial Industrial Loan Corp., the Supreme Court
recognized that interlocutory review of non-final decisions is warranted for a
“small class [of cases] which finally determine claims of right separable from,
and collateral to, rights asserted in the action, too important to be denied review
and too independent of the cause itself to require that appellate consideration be
deferred until the whole case is adjudicated.” 337 U.S. at 546. Plaintiffs contend
that, even if the decision of the district court is not final under § 1291, this court
has jurisdiction under Cohen’s collateral order exception.
“To establish jurisdiction under the collateral order doctrine, defendants
must establish that the district court’s order (1) conclusively determined the
disputed question, (2) resolved an important issue completely separate from the
merits of the case, and (3) is effectively unreviewable on appeal from a final
judgment.” Gray, 399 F.3d at 1245. These requirements are “stringent and apply
to only certain classes of cases.” Section 17 Township, 40 F.3d at 322. Because
this court determines that the district court’s order in this case did not resolve an
issue that was completely separate from the merits, it need not reach the other two
prongs of the collateral order test. Magic Circle Energy 1981–A Drilling
Program v. Lindsey (In re Magic Circle Energy Corp.), 889 F.2d 950, 954 (10th
-14-
Cir. 1989) (noting that this court need not address all prongs of the test if any one
is not satisfied).
Under Cohen, appeals are not permitted, “even from fully consummated
decisions, where they are but steps toward final judgment.” Cohen, 337 U.S. at
546. The district court in Cohen denied the motion of the defendant in a diversity
action to require the plaintiff to post a bond covering the defendant’s reasonable
expenses incurred in defending the action, as required by New Jersey law. Id. at
543-45. The Supreme Court found jurisdiction for an appeal because the order
was merely collateral to the plaintiff’s cause of action. Id. at 546-47. The Court
emphasized that the issue of security was completely unrelated to the subject
matter of the litigation and therefore that the “order of the District Court did not
make any step toward final disposition of the merits of the case and will not be
merged in final judgment.” Id.
In contrast, the Court in Coopers & Lybrand v. Livesay held that a district
court’s denial of class certification was not an immediately appealable order
under Cohen, in part because the decision was too “enmeshed in the factual and
legal issues comprising the plaintiff’s cause of action.” 437 U.S. 463, 469 (1978)
(quotation omitted). The Court noted that several issues relevant to the district
court’s decision whether to certify a class pursuant to Federal Rule of Civil
Procedure 23, including the typicality of the claims, the adequacy of the
-15-
representative, and the presence of common questions of law or fact, were closely
related to the merits of plaintiffs’ claims. Id. at 469 n.12. Similarly, the Court in
Van Cauwenberghe v. Biard held that a district court’s denial of a motion to
dismiss on grounds of forum non conveniens was not completely separate from the
merits. 486 U.S. 517, 527 (1988). The Court concluded that the district court’s
consideration of the motion required it to “scrutinize the substance of the dispute
between the parties.” Id. at 528. Because “the issues that arise in forum non
conveniens determinations [] substantially overlap[ped] factual and legal issues of
the underlying dispute,” the Court held the collateral order doctrine inapplicable.
Id. at 529.
The situation in this case is more similar to Coopers & Lybrand and Van
Cauwenberghe than to Cohen. The entire purpose of the primary jurisdiction
doctrine is to allow agencies to render opinions on issues underlying and related
to the cause of action. See United States v. W. Pac. R.R. Co., 352 U.S. 59, 63-64
(1956). Moreover, in order to determine whether the doctrine of primary
jurisdiction was implicated in this case, the district court was required to give
preliminary consideration to plaintiffs’ claims to determine the extent to which
they fell under the jurisdiction of the FCC and OCC. See Delta Traffic Serv., Inc.
v. Occidental Chem. Corp., 846 F.2d 911, 914 (3d Cir. 1988) (“Only after [the
district court] had ascertained the nature of the claim and related defenses could it
-16-
know whether it needed to request the expert and specialized knowledge of the
[agency] as a preliminary step in the resolution of this matter.” (quotation
omitted)). In particular, the district court’s decision whether to invoke primary
jurisdiction required it to consider whether the issues of fact in the case: (1) are
not within the conventional experience of judges; (2) require the exercise of
administrative discretion; or (3) require uniformity and consistency in the
regulation of the business entrusted to a particular agency. See Marshall v. El
Paso Natural Gas Co., 874 F.2d 1373, 1377 (10th Cir. 1989). These issues are all
highly dependent on the specific allegations in plaintiffs’ complaint and required
the district court to examine factual and legal issues underlying the dispute. The
parties’ briefs on appeal, filled with detailed factual and legal arguments
regarding plaintiffs’ claims, further underscore the impropriety of reviewing the
district court’s stay order prior to final judgment.
Because the issues involved in a determination of primary jurisdiction are
“inextricably bound up” with a determination of the merits, the Third Circuit in
Richman Brothers held that an order staying proceedings and referring certain
issues to the FCC was not an immediately appealable collateral order. 953 F.2d at
1447. Other courts, in examining the denial of motions to stay proceedings and
refer issues to an administrative agency, have come to the same conclusion. See
Delta Traffic Serv., Inc., 846 F.2d at 914 (holding that the question of referral to
-17-
a federal agency “was not separate from the merits of the action, but involved
considerations that were enmeshed in the factual and legal issues comprising the
plaintiffs’ cause of action.” (quotation and alteration omitted)); see also Feldspar
Trucking Co. v. Greater Atlanta Shippers Ass’n, 849 F.2d 1389, 1392 (11th Cir.
1988); Thill Sec. Corp. v. N.Y. Stock Exch., 469 F.2d 14, 16 (7th Cir. 1972). This
court is persuaded by the reasoning of these courts and holds that the district
court’s order staying the case pending submission of plaintiffs’ claims to federal
and state agencies is not an immediately appealable collateral order. 7 A district
court’s determination of whether to invoke the primary jurisdiction doctrine is not
sufficiently separable from the cause of action to qualify for interlocutory review.
Accordingly, this court lacks jurisdiction to review the stay order in this case.
V. CONCLUSION
Because the district court’s stay order was neither a final decision nor an
appealable collateral order, this court DISMISSES the appeal for lack of
jurisdiction.
7
With little analysis, the Fifth Circuit in Litton Systems, Inc. v.
Southwestern Bell Telephone Co. held that a district court’s referral under the
doctrine of primary jurisdiction to several state agencies was an immediately
appealable order. 539 F.2d 418, 427 (5th Cir. 1976). In light of the convincing
reasoning in Richman Brothers and the other cases to consider the question, this
court is unpersuaded by Litton Systems and declines to apply it in this case.
-18-