Petition for Writ of Certiorari — New York State Telecommunications Association, Inc., et al., Petitioners v. Letitia James, Attorney General of New York
Supreme Court briefAug 10, 2024
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APPENDIX
TABLE OF CONTENTS
Page
Opinion of the United States Court of Appeals
for the Second Circuit, New York State Telecomms.
Ass’n, Inc., et al. v. James, No. 21-1975 (Apr. 26,
2024) .......................................................................... 1a
Memorandum and Order of the United States
District Court for the Eastern District of New
York, New York State Telecomms. Ass’n, Inc.,
et al. v. James, No. 2:21-cv-2389 (DRH) (AKT)
(June 11, 2021) ........................................................ 62a
Amended Judgment of the United States District Court for the Eastern District of New York,
New York State Telecomms. Ass’n, Inc., et al. v.
James, No. 2:21-cv-2389 (DRH) (AKT) (Aug. 10,
2021) ........................................................................ 95a
Statutory Provisions Involved ................................ 98a
Communications Act of 1934, 47 U.S.C.
§ 151 et seq.:
§ 2, 47 U.S.C. § 152 ...................................... 98a
§ 3(24), 47 U.S.C. § 153(24).......................... 99a
§ 3(51), 47 U.S.C. § 153(51)........................ 100a
§ 10, 47 U.S.C. § 160 .................................. 100a
§ 201, 47 U.S.C. § 201 ................................ 102a
§ 202, 47 U.S.C. § 202 ................................ 103a
§ 203, 47 U.S.C. § 203 ................................ 104a
Affordable Broadband Act, N.Y. Gen. Bus.
Law § 399-zzzzz ............................................... 107a
1a
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
_______________
No. 21-1975
NEW YORK STATE TELECOMMUNICATIONS ASSOCIATION, INC., CTIA – THE WIRELESS ASSOCIATION,
ACA CONNECTS – AMERICA’S COMMUNICATIONS ASSOCIATION, USTELECOM – THE BROADBAND ASSOCIATION,
NTCA – THE RURAL BROADBAND ASSOCIATION, SATELLITE BROADCASTING AND COMMUNICATIONS ASSOCIATION, ON BEHALF OF THEIR RESPECTIVE MEMBERS,
Plaintiffs-Appellees,
v.
LETITIA A. JAMES, IN HER OFFICIAL CAPACITY
AS ATTORNEY GENERAL OF NEW YORK,
Defendant-Appellant.
_______________
Argued: January 12, 2023
Decided: April 26, 2024
_______________
Before:
Judges.
Sullivan, Nathan, and Merriam, Circuit
Nathan, Circuit Judge:
In April 2021, New York enacted the Affordable
Broadband Act (ABA), which aims to expand internet
access by requiring internet service providers to offer
broadband internet to low-income New Yorkers at
reduced prices. The Plaintiffs, a group of trade
organizations representing internet service providers,
maintain that the ABA is impliedly preempted by
federal law. We conclude that it is not.
2a
As a threshold matter, we conclude that we have
jurisdiction to hear this appeal. Although the parties
stipulated to the judgment from which New York
appeals, they did so under specific conditions that our
case law recognizes as preserving appellate jurisdiction. The district court effectively resolved the Plaintiffs’ preemption claim as a matter of law, by rejecting
the legal basis of New York’s preemption defenses; all
claims have been disposed of with finality and with
prejudice; the parties stipulated to judgment solely to
obtain immediate appellate review, without circumventing any restrictions on our appellate jurisdiction;
and New York expressly preserved its right to appeal
from the stipulated judgment. The parties have not
circumvented the final judgment rule but have merely
accelerated the process of obtaining the final judgment that became inevitable once the district court
reached its legal conclusion.
Turning to the merits, we conclude as follows. First,
the Communications Act of 1934 (as amended by the
Telecommunications Act of 1996) does not wholly
preempt states from regulating the rates charged for
interstate communications services, because the Act
does not establish a framework of rate regulation that
is sufficiently comprehensive to imply that Congress
intended to exclude the states from entering this field.
Second, the ABA is not conflict-preempted by the Federal Communications Commission’s 2018 order classifying broadband as an information service. That order
stripped the agency of its statutory authority to regulate the rates charged for broadband internet, and a
federal agency cannot exclude states from regulating
in an area where the agency itself lacks regulatory
authority. Accordingly, we REVERSE the judgment
of the district court and VACATE the order permanently enjoining enforcement of the ABA.
3a
BACKGROUND
I. Legal Background
The Communications Act of 1934, 47 U.S.C. § 151
et seq., created the Federal Communications Commission (FCC) and authorized it to regulate all “interstate
and foreign communication by wire or radio” and “all
persons engaged within the United States in such
communication.” Id. § 152(a). Under the Communications Act, communications services are subject to
different regulatory regimes depending on how they
are classified. For example, radio and mobile phone
services are regulated under Title III of the Act, and
cable television services are regulated under Title VI.
The FCC has the authority to determine the appropriate statutory category for a particular communications
service, and its determinations are entitled to deference under Chevron, U.S.A., Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81
L.Ed.2d 694 (1984). See Nat’l Cable & Telecomms.
Ass’n v. Brand X Internet Servs., 545 U.S. 967, 980-81,
125 S.Ct. 2688, 162 L.Ed.2d 820 (2005).
Broadband internet has, at different times, alternately been categorized by the FCC as a “telecommunications service” under Title II of the Communications Act, and as an “information service” under Title
I. These designations are mutually exclusive, and
they come with important regulatory consequences. If
broadband is a Title II telecommunications service,
then internet service providers (ISPs) are common
carriers subject to a variety of statutory obligations
and restrictions. For example, common carriers are
barred from levying unreasonable charges, 47 U.S.C.
§ 201(b), or unjustly discriminating in the provision of
services, id. § 202(a). Title II also contains a provision
that permits the FCC to “forbear from applying any
4a
regulation or any provision of ” the Act if it determines
that the regulation is unnecessary. Id. § 160(a). Once
the FCC chooses to exercise this forbearance authority, state and local regulators are preempted and “may
not continue to apply or enforce” the relevant regulation. Id. § 160(e). On the other hand, if the FCC
designates broadband as a Title I information service,
then it is “exempted from common carriage status”
under the Act. Mozilla Corp. v. FCC, 940 F.3d 1, 17
(D.C. Cir. 2019). Courts have accordingly held that
the FCC lacks the power to impose common carrier
obligations on ISPs under Title I. See Comcast Corp.
v. FCC, 600 F.3d 642, 655 (D.C. Cir. 2010) (rejecting
notion that the FCC’s Title I authority allows it to
impose rate regulations on ISPs); Verizon v. FCC, 740
F.3d 623, 655-59 (D.C. Cir. 2014) (concluding that the
FCC lacked the statutory authority under Title I to
impose net neutrality regulations).
The FCC has reclassified broadband internet on
several occasions and did so most recently in 2018.
See In re Restoring Internet Freedom, 33 FCC Rcd. 311
(2018). This 2018 Order reclassified broadband internet as a Title I information service and eliminated the
FCC’s net neutrality regulations1 as part of a broader
agenda to “end utility-style regulation of the Internet
in favor of . . . market-based policies” and adopt a
“light-touch” regulatory framework. Id. ¶¶ 2, 207. The
1 Net neutrality refers to the principle that ISPs should “treat
all Internet traffic the same regardless of source.” Verizon,
740 F.3d at 628. Net neutrality regulations “limit the ability
of Internet service providers to interfere with the applications,
content, and services on their networks [and] allow users to
decide how they want to use the Internet without interference
from Internet service providers.” Barbara van Schewick, Network
Neutrality and Quality of Service: What a Nondiscrimination
Rule Should Look Like, 67 Stan. L. Rev. 1, 4 (2015).
5a
2018 Order also contained a Preemption Directive,
which purported to expressly preempt all state or local
regulations of ISPs that would “interfere with the
federal deregulatory policy restored in this order.” Id.
¶¶ 194-204. The stated goal was to prevent states and
municipalities from implementing the “utility-type”
common-carrier regulations that the federal government was eliminating. Id. ¶ 195.
As will be discussed extensively below, the D.C.
Circuit considered the legality of the FCC’s reclassification of broadband as a Title I service and the
FCC’s authority to issue the Preemption Directive.
See Mozilla, 940 F.3d at 18 (D.C. Cir. 2019). In
Mozilla, the D.C. Circuit upheld the FCC’s reclassification of broadband as a Title I service. However, the
court vacated the Preemption Directive because it was
not grounded “in a lawful source of statutory authority.” Id. at 74. Because the FCC chose to reclassify
broadband as a Title I service, the court concluded
that the FCC could not rely on its Title II forbearance
authority to preempt state regulation over broadband
internet.
II. Factual Background
In 2021, the New York State Legislature enacted
the Affordable Broadband Act, which aims to provide
internet access to the families least able to afford it.
In legislative memoranda, the ABA’s sponsors
explained that the circumstances of the COVID-19
pandemic had “made it abundantly clear” that broadband internet was “an essential service in its own
right.” Joint App’x 100. Legislators noted that internet access had become a de facto requirement for
accessing health care, education, and work opportunities. Id. at 101. But despite its indispensable role in
contemporary society, reliable internet access remained
6a
out of reach for many. The New York State Comptroller cited data from the most recent Census estimate,
which found that “more than 1 million, or 13.8 percent
of, New York households do not have subscriptions to
broadband internet,” and “[o]ne in three low-income
households lacks access.” Office of the N.Y.S. Comptroller, Availability, Access, and Affordability: Understanding Broadband Challenges in New York State 1
(2021). The Comptroller report concluded that “these
access disparities disproportionately impacted lowincome households during the pandemic and may
generally present a disadvantage for these New Yorkers and their communities.” Id.
In an effort to address this digital divide, the ABA
requires anyone “providing or seeking to provide . . .
broadband service in New York state” to “offer high
speed broadband service to low-income consumers” at
statutorily fixed prices. See 2021 N.Y. Sess. Laws 20204 (McKinney) (codified at N.Y. Gen. Bus. Law § 399zzzzz). ISPs must offer one of two broadband plans
to all low-income consumers who qualify for certain
means-tested governmental benefits. N.Y. Gen. Bus.
Law § 399-zzzzz(2). Qualifying consumers must be
offered broadband at no more than $15 per month for
service of 25 Mbps, or $20 per month for high-speed
service of 200 Mbps. Id. §§ 399-zzzzz(2)-(4). This
requirement, however, is not absolute. Certain price
increases may be allowed every few years, and ISPs
that serve 20,000 households or fewer may be
exempted if the New York Public Service Commission
“determines that compliance with such requirements
would result in unreasonable or unsustainable financial impact on the broadband service provider.” Id.
§§ 399-zzzzz(3)-(5).
Soon after the ABA’s passage, the Plaintiffs filed
suit against the New York State Attorney General,
7a
seeking injunctive relief and a declaratory judgment
that federal law preempts the ABA and that enforcement of the ABA would violate the Supremacy Clause
and the Plaintiffs’ rights under 42 U.S.C. § 1983. The
Plaintiffs then moved for a preliminary injunction.
In June 2021, the district court granted the Plaintiffs’ motion and preliminarily enjoined enforcement
of the ABA. Joint App’x 155. The court concluded that
the ABA “triggers field preemption” because it “regulates within the field of interstate communications,”
and separately held that “the ABA conflicts with
the implied preemptive effect of . . . the FCC’s 2018
Order.” N.Y. State Telecomms. Ass’n v. James, 544 F.
Supp. 3d 269, 282, 285 (E.D.N.Y. 2021).
Because a grant of a preliminary injunction is
immediately appealable as of right, see 28 U.S.C.
§ 1292(a)(1), New York initially filed an interlocutory
appeal from this order. However, because the district
court had reached a legal conclusion that appeared
to resolve all of the parties’ claims, the parties later
jointly requested that the district court enter a stipulated final judgment and permanent injunction based
on the court’s reasoning in its preliminary injunction
decision. The district court agreed. It therefore
permanently enjoined enforcement of the ABA and
entered the parties’ stipulated final judgment, which
dismissed the Plaintiffs’ § 1983 claim without prejudice and provided that “[d]efendant reserves the right
to appeal this stipulated final judgment, declaration,
and permanent injunction.” Joint App’x 156-59. After
the stipulated final judgment was entered, the parties
jointly moved to withdraw the appeal of the preliminary injunction, and this appeal followed.
8a
DISCUSSION
I. Appellate Jurisdiction
Before turning to the merits, we first address
whether we have jurisdiction to decide this appeal.
Following oral argument, we issued an order directing
the parties to submit supplemental briefing addressing whether New York’s stipulation to the entry of
judgment deprived us of appellate jurisdiction. All
parties maintain that we have appellate jurisdiction.
We agree.
The fact that the parties stipulated to judgment does
not deprive us of jurisdiction. In general, we lack
appellate jurisdiction to review appeals from consent
judgments. See LaForest v. Honeywell Int’l Inc., 569
F.3d 69, 73 (2d Cir. 2009) (“Appeal from a consent
judgment is generally unavailable on the ground that
the parties are deemed to have waived any objections
to matters within the scope of the judgment.” (citation
omitted)). However, in accordance with nearly all
other circuits to have considered the question,2 we
have held that we may nevertheless exercise appellate
2 See BIW Deceived v. Loc. S6, 132 F.3d 824, 828 (1st Cir.
1997); Keefe v. Prudential Prop. & Cas. Ins. Co., 203 F.3d 218,
222-23 (3d Cir. 2000); Cohen v. Va. Elec. & Power Co., 788 F.2d
247, 249 (4th Cir. 1986); Downey v. State Farm Fire & Cas. Co.,
266 F.3d 675, 682-83 (7th Cir. 2001); Slaven v. Am. Trading
Transp. Co., 146 F.3d 1066, 1070 (9th Cir. 1998); Mock v. T.G. &
Y. Stores Co., 971 F.2d 522, 527 (10th Cir. 1992); Shores v. Sklar,
885 F.2d 760, 762 (11th Cir. 1989) (en banc), cert. denied, 493
U.S. 1045, 110 S.Ct. 843, 107 L.Ed.2d 838 (1990). To our
knowledge, only the Fifth Circuit has arguably disagreed, see
Amstar Corp. v. S. Pac. Transp. Co. of Tex. & La., 607 F.2d 1100
(5th Cir. 1979), but a subsequent Fifth Circuit decision called
Amstar into question, see Ybarra v. Dish Network, L.L.C., 807
F.3d 635, 639 (5th Cir. 2015); see also Dorse v. Armstrong World
Indus., Inc., 798 F.2d 1372, 1375-77 (11th Cir. 1986).
9a
jurisdiction over claims resolved by a consent judgment when certain factors are met. Our cases have
identified four such factors. First, the district court
must have “plainly rejected the legal basis” for the
appellant’s claim or defense. Ali v. Fed. Ins. Co., 719
F.3d 83, 94 (2d Cir. 2013).3 Second, all claims must be
disposed of with prejudice. Id. Third, the appellant’s
consent to final judgment must be “designed solely to
obtain immediate appeal of the prior adverse decision,
without pursuing piecemeal appellate review.” Id.
Fourth, the appellant must have “expressly preserved”
the right to appeal. LaForest, 569 F.3d at 74 (2d Cir.
2009); see also Linde v. Arab Bank, PLC, 882 F.3d 314,
324 (2d Cir. 2018) (same). Consideration of these four
factors is faithful to the Supreme Court’s mandate
that “finality is to be given a practical rather than a
technical construction.” Microsoft Corp. v. Baker, 582
U.S. 23, 37, 137 S.Ct. 1702, 198 L.Ed.2d 132 (2017)
(citation omitted). Our precedents have not directed
that all four factors must be met before we exercise
appellate jurisdiction over a voluntarily dismissed
claim. Our decision in Ali did not discuss the fourth
factor, and our decisions in LaForest and Linde did not
address the first three. We need not decide whether
each factor is necessary because here all four factors
are present.
3 In Ali, the district court issued a ruling denying summary
judgment and rejecting the third-party plaintiffs’ claims “as a
matter of law.” 719 F.3d at 89. The parties then jointly requested
that the district court dismiss all pending claims with prejudice,
which it did, “in order to obtain immediate appellate review.” Id.
at 90. Although in Ali the judgment was a “voluntary dismissal,”
from which a plaintiff sought to appeal, the reasoning of that
decision applies with equal force to the situation here, where a
defendant seeks to appeal after entry of a consent judgment.
10a
First, the district court plainly rejected the legal
basis for New York’s defense. In its June 11 order
granting a preliminary injunction, the district court
conclusively held that “the ABA . . . stands as an
obstacle to the FCC’s accomplishment and execution
of its full purposes and objectives and is conflictpreempted.” N.Y. State Telecomms. Ass’n, 544 F.
Supp. 3d at 282. It further held: “Because the ABA
regulates within the field of interstate communications, it triggers field preemption. Binding Second
Circuit decisions are clear: the Communications Act’s
‘broad scheme for the regulation of interstate service
by communications carriers indicates an intent on the
part of Congress to occupy the field to the exclusion of
state law.’ ” Id. at 285 (quoting Ivy Broad. Co. v. Am.
Tel. & Tel. Co., 391 F.2d 486, 490-91 (2d Cir. 1968)).
The district court was only required to find a likelihood of success on the merits in order to grant a preliminary injunction. But the court did not restrict its
holding to such tentative terms. Instead, it articulated
unequivocal and purely legal conclusions concerning
the preemptive effect of federal law, which were in no
way tentative nor contingent on further discovery or
factual development.
Under our precedents, that practical resolution of
the legal question in this case is sufficient to support
an appeal from the subsequent final judgment. It is
of no consequence that the district court’s conclusion
was not technically final, because our inquiry is a
pragmatic one. We look to whether the court resolved
a claim “in effect” by “plainly reject[ing] [its] legal
basis.” Ali, 719 F.3d at 88, 90. In other words, even a
ruling that does not formally or technically resolve a
claim can suffice, as long as it makes clear that the
court has effectively resolved the claim as a matter of
law. When we have concluded we lacked jurisdiction
11a
to review stipulated judgments it was because we
determined that the relevant interlocutory decision
did not so plainly resolve a claim as a matter of law.
See Empire Volkswagen Inc. v. World-Wide Volkswagen Corp., 814 F.2d 90, 95 (2d Cir. 1987); Palmieri
v. Defaria, 88 F.3d 136, 140 (2d Cir. 1996). This case
readily meets the standard articulated in Ali, given
the district court’s unequivocal conclusions regarding
preemption.4
Even if we were to construe the district court’s legal
conclusions in its June 11 order as merely tentative
ones because they were resolved in the context of a
preliminary injunction, the district court’s July 28
order5 granting a permanent injunction confirmed
that it definitively rejected the legal basis for New
York’s defense. That final judgment determined that
federal law is not only likely to, but indeed does,
preempt the ABA. The judgment stated that “the
Court’s holdings on preemption in the June 11, 2021,
memorandum and order resolve the substantive legal
issues in this matter” and “[f ]or the reasons given in
the Court’s June 11, 2021, memorandum and order,
the Court declares that [the ABA] is preempted by
federal law.” Joint App’x 157. Had the district court
4 The definitive legal conclusion reached by the district court
in this case was nothing like the tentative predictions or contingent in limine rulings the dissent hypothesizes. See [App. 49a50a]. Our reasoning here would not allow immediate appeal
of those decisions, nor of every preliminary injunction decision.
For example, a decision granting a preliminary injunction based
on provisional legal analysis, on facts not yet fully developed, or
primarily on irreparable harm would be entirely different. In
short, the dissent sees a slippery slope only because it misses the
guardrails already built into our case law.
5 The July 28 judgment was amended on August 10 to correct
a clerical error. See Joint App’x 160-61.
12a
determined otherwise, it would have rejected the
parties’ stipulation to judgment or accepted it without
adopting language declaring that its prior holding
“resolve[d] the substantive legal issues in this matter”
and unequivocally concluding that the ABA “is
preempted by federal law” “[f ]or the reasons given” in
its earlier preliminary injunction order. Id. Although
the district court judgment adopted stipulated
language, that adoption reflects the district court’s
understanding of the finality of its legal holding in this
case. District courts are not rubber stamps.6
Second, all claims have now been disposed of with
prejudice. Although in the district court the Plaintiffs
voluntarily dismissed their § 1983 claim without prejudice, they have subsequently agreed to dismiss the
claim with prejudice. See Supp. Br. for Appellees at 3.
Doing so eliminated the risk of piecemeal appeals in
this matter and cured any defect in finality posed by
the § 1983 claim, as “we have allowed a [party] to
appeal an adverse ruling disposing of fewer than all of
its claims following [its] voluntary relinquishment of
its remaining claims with prejudice.” Chappelle v.
Beacon Commc’ns Corp., 84 F.3d 652, 653 (2d Cir.
1996); see also Empire Volkswagen, 814 F.2d at 94
(same).
Third, New York’s stipulation to final judgment was
designed solely to obtain immediate appellate review
of the district court’s underlying legal conclusion and
6 The dissent suggests that we misconstrue the nature of stipulated judgments, which are not rulings on the merits entitled
to preclusive or precedential effect. See [App. 48a-49a]. But
the dissent may misconstrue the nature of our inquiry here.
Whatever the force of this stipulated judgment in a future case,
there is no reason why we cannot look to its language to discern
what this district court effectively determined in this case, under
our case law concerning appeals from stipulated judgments.
13a
does not invite piecemeal litigation or circumvent
limitations on our appellate jurisdiction. Appeals
from stipulated judgments are not permitted as a
means to circumvent carefully calibrated restrictions
on appellate jurisdiction, such as (for example) the
discretionary framework that allows courts to decline
to hear appeals from class certification decisions. See
Microsoft, 582 U.S. at 35, 38-40, 137 S.Ct. 1702.7 But
this is simply not a case in which the parties tried to
hoodwink the courts or skip the last leg of any real
race. New York clearly was not seeking to circumvent
the restrictions on interlocutory appeals, given that
it had an appeal as of right from the grant of the
preliminary injunction, see 28 U.S.C. § 1292(a)(1), or
could have stipulated to the same result pursuant to
Federal Rule of Civil Procedure 65(a)(2) (or through
uncontested summary judgment practice or trial on
7
The dissent misunderstands Microsoft to mean that a
stipulated-judgment appeal can never be used to “seize additional
appellate rights.” [App. 53a-54a]. But that cannot be the rule
if, as the dissent concedes, some stipulated-judgment appeals
are permissible. Any time parties use this procedure, they are
attempting to obtain some form of appellate review otherwise not
immediately available. Microsoft concerns a narrower proposition: that parties may not manipulate stipulated judgments in
order to circumvent restrictions on what parties may ordinarily
appeal. In Microsoft, for example, the Court prohibited parties
from using this strategy to force appellate review of a class certification decision that the court of appeals had exercised its discretion to deny. See 582 U.S. at 39-40, 137 S.Ct. 1702. Similarly,
in the non-precedential summary order cited by the dissent,
we held that we lacked jurisdiction over a stipulated-judgment
appeal following the grant of a motion to compel arbitration
because the appeal would have circumvented the Federal
Arbitration Act’s prohibition of appeals from the grant of such
motions. See Bynum v. Maplebear, Inc., 698 F. App’x 23, 24 (2d
Cir. 2017) (summary order).
14a
stipulated facts).8 Nor can it be said that the parties
stipulated to a final judgment in order to bypass
district court resolution of any open merits questions,
given that the district court had already concluded in
its June 11 order that federal law preempted the ABA.
The parties have not circumvented the final judgment
rule but have merely accelerated the process of obtaining the final judgment that became inevitable once the
district court reached its legal conclusion. There was
simply nothing left to litigate in the district court.
New York had argued its case and lost.
Moreover, the stipulated-to dismissal does not
“invite[ ] protracted litigation and piecemeal appeals.”
Microsoft Corp., 582 U.S. at 37, 137 S.Ct. 1702. If
anything, the parties entered the consent judgment to
avoid piecemeal adjudication and a needless drain on
resources. The procedure here allows one appeal to
resolve the issue of preemption in this case with finality, rather than litigating the same legal question once
at the preliminary injunction stage and again after
final judgment. And with the Plaintiffs having agreed
to dismiss their § 1983 claim with prejudice, there will
be nothing left for the parties to litigate following this
8
In fact, as the dissent acknowledges, if New York had
appealed from the grant of the preliminary injunction, even in
that interlocutory posture we could have determined that the
Plaintiffs’ claim was “entirely void of merit” and decided to
“award judgment to the appropriate party.” New York v. Nuclear
Regul. Comm’n, 550 F.2d 745, 759 (2d Cir. 1977), superseded by
rule on other grounds as recognized by Zervos v. Verizon N.Y.,
Inc., 252 F.3d 163, 170 (2d Cir. 2001). And even if we had not
formally done so, a decision from this Court on the purely legal
question of preemption in this case would not have left the district court with any room to disagree in subsequent proceedings
on remand. In light of this, it is especially puzzling that the dissent suggests that New York circumvented any rules of appellate
jurisdiction.
15a
appeal—barring, of course, review of this decision by
the Supreme Court. As we said in Ali: “The federal
policy against piecemeal appeals is not implicated
where an entire case can be decided in a single
appeal.” 719 F.3d at 89 (cleaned up). Plainly so here.
If we affirm, the case ends. If we reverse, the case also
ends.
Fourth, New York expressly preserved its right to
appeal in the stipulated-to final judgment. See Joint
App’x 158 (stating that New York “reserves the right
to appeal”). Having secured the ability to challenge
the district court’s preemption conclusions in this
Court, New York did not concede to the district court’s
substantive holding, but rather agreed “that, if there
was to be such a judgment, it should be final in form
instead of interlocutory, so that they might come to
this court without further delay.” United States v.
Procter & Gamble Co., 356 U.S. 677, 681, 78 S.Ct. 983,
2 L.Ed.2d 1077 (1958) (citation omitted). The matter
being appealed—the district court’s purely legal
preemption holding—clearly falls within the scope of
this express reservation. If, by contrast, New York
expressly preserved only its right to challenge the
district court’s choice of remedy on appeal and not
its broader right to challenge the underlying legal
holding, then we could not review the district court’s
conclusions regarding preemption. However, New
York’s express reservation of its right to appeal does
not contain any such proviso and the preemption holding of the district court is unquestionably within the
scope of the express reservation.
We recognize that the inquiry into our appellate
jurisdiction will not necessarily end with these four
factors in every case. Satisfying these factors may not
be sufficient to confer jurisdiction if, for example,
there is an independent reason for finding that
16a
adversity no longer remains between the parties or
that the appeal has become moot. But here, we do
not identify any additional basis for questioning our
jurisdiction. To the contrary, this appeal bears all the
hallmarks of a case or controversy: a live and genuine
dispute remains between the parties, with material
consequences at stake.
We are easily satisfied that we have jurisdiction to
decide this appeal and we reject the dissent’s contention that the parties’ unremarkable use of a stipulated
judgment in the circumstances of this case forever
forecloses review of the district court’s decision enjoining New York’s duly enacted law. We turn to that
review now.
II. Preemption
In this case, the Plaintiffs have advanced two
theories of implied preemption.9 First, they contend
that the ABA is preempted because federal law occupies the entire field of rate regulations for interstate
communications services to the exclusion of the states.
Second, the Plaintiffs maintain that the ABA is
conflict-preempted by the 2018 Order because the
ABA stands as an obstacle to the FCC’s stated policy
9 “Federal preemption of a state statute can be express or
implied . . . .” SPGGC, LLC v. Blumenthal, 505 F.3d 183, 188 (2d
Cir. 2007). “Implied preemption renders a state law inoperative
in two circumstances: (1) when the state law ‘regulates conduct
in a field that that Congress intended the Federal Government
to occupy exclusively,’ (so called ‘field preemption’) and (2) when
the state law ‘actually conflicts with federal law,’ (so called
‘conflict preemption’).” In re Jackson, 972 F.3d 25, 33 n.4 (2d
Cir. 2020) (quoting English v. Gen. Elec. Co., 496 U.S. 72, 79,
110 S.Ct. 2270, 110 L.Ed.2d 65 (1990)). In contrast, “[e]xpress
preemption arises when a federal statute expressly directs that
state law be ousted.” Air Transp. Ass’n of Am. v. Cuomo, 520 F.3d
218, 220 (2d Cir. 2008) (cleaned up). The Plaintiffs have not
asserted any claim of express preemption in this appeal.
17a
objective of deregulating ISPs. The district court
agreed with both arguments. We review each of those
conclusions in turn, de novo. Critcher v. L’Oreal USA,
Inc., 959 F.3d 31, 34 (2d Cir. 2020).
A. Field Preemption
Field preemption occurs when Congress manifests
an intent to occupy an entire regulatory field to the
exclusion of the states. This intent “can be inferred
from a framework of regulation ‘so pervasive . . . that
Congress left no room for the States to supplement
it.’ ” Arizona v. United States, 567 U.S. 387, 399, 132
S.Ct. 2492, 183 L.Ed.2d 351 (2012) (quoting Rice v.
Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct.
1146, 91 L.Ed. 1447 (1947)). The Supreme Court has
noted that these are “rare cases.” Kansas v. Garcia,
589 U.S. 191, 140 S. Ct. 791, 804, 206 L.Ed.2d 146
(2020). “[B]ecause the States are independent sovereigns in our federal system,” courts “start with the
assumption that the historic police powers of the
States were not meant to be superseded by the Federal
Act unless that was the clear and manifest purpose of
Congress.” Medtronic, Inc. v. Lohr, 518 U.S. 470, 485,
116 S.Ct. 2240, 135 L.Ed.2d 700 (1996) (citation omitted).
At the district court, the Plaintiffs argued that the
ABA was field-preempted because the Communications Act preempted all state regulation of interstate
communications services. That was quite a stunning
claim. As amici Internet Law Professors note, “no
court ha[d] ever found field preemption of the whole
of interstate communications. Instead, courts have
evaluated field preemption claims with respect to
much narrower subfields . . . .” Internet Law Profs. Br.
13. See, e.g., Freeman v. Burlington Broads., Inc., 204
F.3d 311, 319-20 (2d Cir. 2000) (considering “whether
federal law preempts state and local regulation of
18a
[radio frequency] interference”); N.Y. SMSA Ltd.
P’ship v. Town of Clarkstown, 612 F.3d 97, 105-06
(2d Cir. 2010) (identifying the field as “the regulation
of the technical and operational aspects of wireless
telecommunications service”).
Moreover, courts in New York and across the
country have upheld numerous state regulations of
interstate communications services against preemption challenges. See, e.g., ACA Connects v. Frey, 471
F. Supp. 3d 318, 323-26 (D. Me. 2020) (affirming
Maine’s authority to restrict broadband providers
from disseminating customers’ personal information);
People v. Charter Commc’ns, Inc., 162 A.D.3d 553, 81
N.Y.S.3d 2, 3 (2018) (affirming New York’s authority
to regulate deceptive advertising by broadband
providers about their broadband services); Patriotic
Veterans, Inc. v. Indiana, 736 F.3d 1041, 1046-54 (7th
Cir. 2013) (affirming Indiana’s authority to regulate
robocalls); Tex. Off. of Pub. Util. Counsel v. FCC, 183
F.3d 393, 418 (5th Cir. 1999) (affirming Texas’s
authority to “impos[e] additional eligibility requirements on carriers otherwise eligible to receive federal
universal service support”).
The Plaintiffs’ broad claim was stunning, but not
long for this world. Perhaps recognizing this position
was not tenable, they defend only a narrower version
on appeal. Instead of defining the field as all “interstate communications services,” they now argue that
the relevant field is “rate regulation of interstate communications services.” Appellees’ Br. 34-35 (emphasis
added). Because it appears that the Plaintiffs have
abandoned their original position, we consider whether
Congress has occupied the field of rate regulation of
interstate communications services to the exclusion of
19a
the states.10 We proceed by examining the scope of
states’ historic police powers over communications
services, the text and structure of the Communications
Act, and the relevant case law.
1. The States’ Police Powers
When reviewing preemption challenges, courts
“start with the assumption that the historic police
powers of the States were not to be superseded by [a]
Federal Act unless that was the clear and manifest
purpose of Congress.” Wyeth v. Levine, 555 U.S. 555,
565, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009) (citation
omitted). This Court has held that “[b]ecause consumer protection law is a field traditionally regulated
by the states, compelling evidence of an intention to
preempt is required in this area.” Gen. Motors Corp.
v. Abrams, 897 F.2d 34, 41-42 (2d Cir. 1990).
In this case, however, the Plaintiffs contend that
there should be no presumption against preemption
because “[t]here is no historic presence of state law
regulating the rates of interstate communications
services.” Appellees’ Br. 43. The Plaintiffs’ decision
to narrow their argument on appeal does important
work here. While New York and its amici cite many
10 As a threshold matter, New York argues that the ABA is a
purely intrastate regulation because the ABA’s “price regulation
applies only to products offered by companies operating in
New York to specified consumers who reside in New York, and it
concerns only broadband service to be accessed from computers
in New York.” Appellant’s Br. 32-33. However, the law of this
Circuit instructs us that the FCC has jurisdiction to regulate
communications services if the communications “go from one
state to another.” N.Y. Tel. Co. v. FCC, 631 F.2d 1059, 1066 (2d
Cir. 1980). This “end-to-end” analysis is the controlling test for
whether a regulation is jurisdictionally intra- or interstate, and
applying it, we conclude that the ABA is a regulation of interstate
communications services.
20a
historical examples of state regulations of interstate
communications services, the Plaintiffs argue that
none of them are relevant because they are not rate
regulations.
The Plaintiffs have moved the goalposts on the
preemption field, but their claim fails anyway. Cable
television is an interstate communications service,
and when it was lightly regulated under Title I—as
broadband internet is today—many states enacted
laws that regulated the rates cable companies could
charge for their services. See Philip R. Hochberg,
The States Regulate Cable: A Legislative Analysis of
Substantive Provisions 29-30, 91-96 (1978) (describing
cable rate legislation and regulation in Delaware,
Hawaii, Kansas, Massachusetts, Minnesota, Nebraska,
Nevada, New Jersey, New York, South Dakota, and
Virginia), https://perma.cc/Z89E-JTHQ. Among these
regulatory regimes, New York’s system was “the
most comprehensive,” with robust antidiscrimination
provisions and requirements that price increases be
approved by state authorities. Id. at 91-93. Nevada
also imposed public utility-style regulations on cable
providers, including a requirement that rates be “just
and reasonable.” TV Pix, Inc. v. Taylor, 304 F. Supp.
459, 460 (D. Nev. 1968) (three-judge court), aff ’d, 396
U.S. 556, 90 S.Ct. 749, 24 L.Ed.2d 746 (1970). And
when a group of cable companies challenged the
Nevada statute, arguing—as the Plaintiffs do now—
that it was preempted by the Communications Act, a
three-judge panel unanimously rejected their claim.
See id. at 464-65 (“Congress, in enacting the Federal
Communications Act of 1934, did not intend absolute
preemption of the field to the exclusion of all state
regulation.”). That decision was summarily affirmed
21a
by the Supreme Court. 396 U.S. 556, 90 S.Ct. 749, 24
L.Ed.2d 746 (1970).
The Plaintiffs attempt to distinguish TV Pix by
arguing that it “did not concern interstate rate regulation.” Appellees’ Br. 45. That is incorrect. Although
the TV Pix opinion describes the community antenna
systems as being “essentially a local business,” 304 F.
Supp. at 463, that language was not relevant to the
field preemption holding. Instead, it was related to the
court’s separate holding that the laws did not violate
the Dormant Commerce Clause. Id. The TV Pix court
stated that there was “no doubt” that the community
antenna TV businesses were “engaged in interstate
communication, even where, as here, the intercepted
signals emanate from stations located within the same
State.” Id. at 461 (emphasis added) (quoting United
States v. Sw. Cable Co., 392 U.S. 157, 168-69, 88 S.Ct.
1994, 20 L.Ed.2d 1001 (1968)).
Based on this history and precedent, we conclude
that there is a tradition of states using their police
power to regulate rates charged for interstate communications services. Therefore, we proceed “with the
assumption” that such powers “were not to be superseded by the [Communications Act] unless that was
the clear and manifest purpose of Congress.” Wyeth,
555 U.S. at 565, 129 S.Ct. 1187. We turn next to
the text of the Communications Act to determine that
purpose.
2. The Text of the Communications Act
The Plaintiffs’ main textual argument is that § 152
of the Communications Act evinces Congress’s intent
to preempt all rate regulations of interstate communications services. Section 152 outlines the jurisdictional boundaries of the FCC and provides that:
22a
(a) The provisions of this chapter shall apply to all
interstate and foreign communication by wire or
radio . . . which originates and/or is received within
the United States, and to all persons engaged within
the United States in such communication . . . .
(b) Except as provided in sections 223 through 227
of this title, inclusive, section 276, and section 332
of this title, and subject to the provisions of section
301 of this title and subchapter V-A, nothing in this
chapter shall be construed to apply or to give the
Commission jurisdiction with respect to (1) charges,
classifications, practices, services, facilities, or
regulations for or in connection with intrastate communication service by wire or radio of any carrier
....
47 U.S.C. § 152 (emphases added).
The Plaintiffs contend that this statute “is how Congress confirmed the FCC’s exclusive jurisdiction over
rate-setting for interstate communications services,”
though they do not explain how their reading of this
text could be limited to rate regulation. Appellees’ Br.
36. They quote Louisiana Public Service Commission
v. FCC for the proposition that subsections (a) and (b)
“divide the world . . . into two hemispheres—one comprised of interstate service, over which the FCC would
have plenary authority, and the other made up of
intrastate service, over which the States would retain
exclusive jurisdiction.” 476 U.S. 355, 360, 106 S.Ct.
1890, 90 L.Ed.2d 369 (1986). The district court also
relied on this language from Louisiana, stating that
“[t]he FCC’s jurisdiction would hardly be ‘plenary’ if
it loses, to the states’ gain, the right to make rules
regarding certain interstate communications services
when the FCC alters” the Title under which those
services are regulated. N.Y. State Telecomms. Ass’n,
23a
544 F. Supp. 3d at 287. These arguments are flawed
for two reasons.
First, the Plaintiffs’ reliance on Louisiana is misplaced. The Plaintiffs argue that the Supreme Court
interpreted § 152 as dividing the world of communications into two mutually exclusive hemispheres. But
that is in fact the opposite of what the Supreme Court
did. The Louisiana Court said the following in reference to § 152:
[W]hile the Act would seem to divide the world of
domestic telephone service neatly into two hemispheres—one comprised of interstate service, over
which the FCC would have plenary authority, and
the other made up of intrastate service, over which
the States would retain exclusive jurisdiction—in
practice, the realities of technology and economics
belie such a clean parceling of responsibility. . . .
[B]ecause the same carriers provide both interstate
and intrastate service, actions taken by federal and
state regulators within their respective domains
necessarily affect the general financial health of
those carriers, and hence their ability to provide
service, in the other “hemisphere.”
476 U.S. at 360, 106 S.Ct. 1890 (emphases added).
Louisiana made clear that the states continue to have
a role in regulating communications services, even if
such regulations touch on interstate services. See id.
at 375, 106 S.Ct. 1890 (“The Communications Act not
only establishes dual state and federal regulation of
telephone service; it also recognizes that jurisdictional
tensions may arise as a result of the fact that interstate and intrastate service are provided by a single
integrated system.”). The Supreme Court’s decision in
Louisiana strongly undermines, rather than supports,
the Plaintiffs’ argument based on the text of § 152.
24a
Second, although we agree that § 152(a) broadly
grants the FCC jurisdiction over “all interstate and
foreign communication,” nothing in the text suggests
that the FCC has exclusive jurisdiction over interstate
communication, which is the relevant question for
implied field preemption. And the dissent, for its part,
never explains how it makes the leap from broad
jurisdiction to exclusive jurisdiction. See [App. 56a58a]. The Supreme Court’s decisions on preemption
make clear that “the mere existence of a federal regulatory or enforcement scheme . . . does not by itself
imply pre-emption of state remedies.” English v. Gen.
Elec. Co., 496 U.S. 72, 87, 110 S.Ct. 2270, 110 L.Ed.2d
65 (1990). Thus, “a statute granting regulatory
authority over [a] subject matter to a federal agency”
is not in and of itself sufficient to find field preemption. Kurns v. R.R. Friction Prods. Corp., 565 U.S. 625,
638, 132 S.Ct. 1261, 182 L.Ed.2d 116 (2012) (Kagan,
J., concurring). “Congress must do much more to oust
all of state law from a field.” Id.; see also Hillsborough
Cnty. v. Automated Med. Lab’ys, Inc., 471 U.S. 707,
719, 105 S.Ct. 2371, 85 L.Ed.2d 714 (1985) (“Undoubtedly, every subject that merits congressional legislation is, by definition, a subject of national concern.
That cannot mean, however, that every federal statute
ousts all related state law.”).
The Plaintiffs nonetheless argue that this statutory
language granting federal authority evinces an intent
to preempt because Congress used substantially
similar language in the Federal Power Act and the
Natural Gas Act. See 16 U.S.C. § 824(b)(1); 15 U.S.C.
§717(b)-(c). Those Acts give the Federal Energy
Regulatory Commission “exclusive authority” over
interstate wholesale electricity sales, Hughes v. Talen
Energy Mktg., LLC, 578 U.S. 150, 154, 136 S.Ct. 1288,
194 L.Ed.2d 414 (2016), and “exclusive jurisdiction”
25a
over interstate wholesale natural gas sales, Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 300-01, 305,
108 S.Ct. 1145, 99 L.Ed.2d 316 (1988).
Without context, this seems like a compelling
argument, and it is one the dissent adopts at face
value. See [App. 58a-60a]. But the argument loses its
force when one notices that the jurisdictional provisions in the Federal Power Act and the Natural Gas
Act were passed after the Supreme Court issued a
series of Dormant Commerce Clause decisions holding
that “regulation of wholesale rates of gas and electrical energy moving in interstate commerce is beyond
the constitutional powers of the States.” Interstate
Nat. Gas Co. v. Fed. Power Comm’n, 331 U.S. 682, 689
& n.13, 67 S.Ct. 1482, 91 L.Ed. 1742 (1947). “[T]he
basic purpose of Congress in passing the Natural Gas
Act was to occupy this field in which the Supreme
Court has held that the States may not act.” Id. at
690, 67 S.Ct. 1482 (internal quotation marks omitted);
see also Jersey Cent. Power & Light Co. v. Fed. Power
Comm’n, 319 U.S. 61, 67-68, 63 S.Ct. 953, 87 L.Ed.
1258 (1943) (“The primary purpose of Title II, Part II
[of the Federal Power Act] . . . was to give a federal
agency power to regulate the sale of electric energy
across state lines. Regulation of such sales had been
denied to the States . . . .”). In other words, the similar
jurisdictional language from the Federal Power Act
and the Natural Gas Act does not evince Congress’s
intent to preempt the field, because Congress was
acting in an area in which it was already established
that states were prohibited from regulating.
Therefore, nothing in the text of § 152 provides
“compelling evidence” of Congress’s intent to occupy
the field of rate regulation of interstate communications services. Gen. Motors, 897 F.2d at 41.
26a
3. The Structure of the Communications Act
Other provisions of the Communications Act also
rebut the Plaintiffs’ claim that the federal government
exclusively occupies the field of rate regulation of
interstate communications services.
To start, the Communications Act has no framework
for rate regulation over Title I services like broadband,
let alone one that is “so pervasive . . . that Congress
left no room for the States to supplement it.” Arizona,
567 U.S. at 399, 132 S.Ct. 2492 (cleaned up). When a
service is regulated under Title I, the FCC lacks the
express or ancillary authority to impose rate regulations. See Comcast, 600 F.3d at 655 (D.C. Cir. 2010).
The sole grant of regulatory authority within Title I
is located at 47 U.S.C. § 154(i), which permits the FCC
to “make such rules and regulations, and issue such
orders, not inconsistent with this chapter, as may be
necessary in the execution of its functions.” The
Supreme Court has held that this authority is “restricted
to [acts] reasonably ancillary to the effective performance of the Commission’s various responsibilities.”
Sw. Cable, 392 U.S. at 178, 88 S.Ct. 1994. Thus, the
Court has vacated FCC regulations of information
services unless such regulations are in furtherance of
a “statutorily mandated responsibilit[y]” that is rooted
in “an express delegation of authority to the Commission.” Comcast, 600 F.3d at 652 (citing Sw. Cable,
392 U.S. at 177-78, 88 S.Ct. 1994; United States v.
Midwest Video Corp., 406 U.S. 649, 670, 92 S.Ct. 1860,
32 L.Ed.2d 390 (1972) (plurality opinion)). However,
neither the Plaintiffs—nor the FCC itself—have ever
identified a “statutorily mandated responsibility” in
the Communications Act that would permit the use of
§ 154(i) to impose common carrier requirements such
as rate regulation. Cf. Verizon, 740 F.3d at 635-50
27a
(D.C. Cir. 2014) (upholding broadband disclosure rules
as ancillary to 47 U.S.C. § 1302).
This absence of regulation is the exact opposite of
a federal “framework . . . so pervasive” that it results
in field preemption. Arizona, 567 U.S. at 399, 132
S.Ct. 2492 (cleaned up). The Plaintiffs’ position would
create a regulatory vacuum in which the federal
government has both declined to regulate an industry
and simultaneously prohibited states from regulating.
Though the Supreme Court has noted that such a
vacuum may be constitutionally permissible, “to say
that it can be created is not to say that it can be
created subtly.” P.R. Dep’t of Consumer Affs. v. Isla
Petrol. Corp., 485 U.S. 495, 500, 108 S.Ct. 1350, 99
L.Ed.2d 582 (1988); cf. Sprietsma v. Mercury Marine,
537 U.S. 51, 68-70, 123 S.Ct. 518, 154 L.Ed.2d 466
(2002) (finding no field preemption based on congressional delegation to agency where statute “does not
require the [agency] to promulgate comprehensive
regulations covering every aspect” of the asserted
field). Congress has not legislated an absence of
regulatory authority here.
Furthermore, the Communications Act contains
provisions expressly prohibiting states from regulating
specific types of communications services, and none
covers all rate regulations of interstate communications services. Instead, the Act identifies specific
types of communications services, regulates them
differently under different Titles, and preempts state
regulation of some of them on a case-by-case basis.
For example, when Congress passed the Cable Communications Policy Act of 1984, Pub. L. No. 98-549, 98
Stat. 2779, it added Title VI to the Communications
Act and expressly forbade state regulation of “the
rates for the provision of cable service except to the
28a
extent provided under this section and section 532 of
this title.” 47 U.S.C. § 543(a) (emphasis added). This
provision would be wholly unnecessary if the broader
field had already been preempted. Congress similarly
included a forbearance provision for Title II services,
which prohibits the states from enforcing some Title
II regulations if certain prerequisites are met and
the FCC concludes that the regulations at issue are
unnecessary. Id. § 160. No such regime exists for
services regulated under Title I.
There is simply no indication that Congress intended
to preempt a field as broad as “rate regulation of
interstate communications services.” To the contrary,
Congress made explicit its intent to preempt other
subfields of interstate communications. Supreme
Court precedent is clear that “Congress’ enactment of
a provision defining the pre-emptive reach of a statute
implies that matters beyond that reach are not preempted.” Cipollone v. Liggett Grp., 505 U.S. 504, 517,
112 S.Ct. 2608, 120 L.Ed.2d 407 (1992).
Other provisions of the Communications Act also
support our conclusion that rate regulation is not
field-preempted. For example, Section 414 contains a
“savings clause,” which states that “the provisions of
this chapter are in addition to such remedies” that
“now exist[ ] at common law or by statute.” 47 U.S.C.
§ 414 (emphasis added). And strikingly, § 1302(a) provides:
The Commission and each State commission with
regulatory jurisdiction over telecommunications
services shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans . . . by utilizing,
in a manner consistent with the public interest,
convenience, and necessity, price cap regulation . . .
29a
or other regulating methods that remove barriers to
infrastructure investment.
(emphasis added). The most natural conclusion to
draw from all these provisions (and the one that
comports with our presumption against preemption)
is that Congress intended for the states to retain their
regulatory authority over many interstate communications services—and to play a role in regulating the
rates charged for such services—unless it said otherwise.
4. Case Law on the Communications Act
The final refuge of the Plaintiffs’ case for field
preemption is this Court’s decision in Ivy Broadcasting Co. v. American Telephone & Telegraph Co.,
391 F.2d 486 (2d Cir. 1968). In Ivy, we drew on the
Supreme Court’s decisions in Postal Telegraph-Cable
Co. v. Warren-Godwin Lumber Co., 251 U.S. 27, 40
S.Ct. 69, 64 L.Ed. 118 (1919), and Western Union
Telegraph Co. v. Boegli, 251 U.S. 315, 40 S.Ct. 167, 64
L.Ed. 281 (1920), to conclude that “questions concerning the duties, charges and liabilities of telegraph
or telephone companies with respect to interstate
communications service are to be governed solely by
federal law and that the states are precluded from
acting in this area.” Ivy, 391 F.2d at 491.
The Plaintiffs argue that Ivy’s field preemption
holding extends to all interstate communications
services—not just telephone and telegraph companies.
We disagree. Ivy does not field-preempt rate regulation of broadband internet (or other Title I information
services) because the Communications Act subjects
those services to an entirely different regulatory
regime than telephone and telegraph companies.
Telegraph and telephone services were and continue
to be regulated as common carriers under the
30a
Communications Act. These services are subject to
numerous regulations that do not apply to Title I
services like broadband internet. The Ivy court’s field
preemption holding was premised on its observation
that “Congress has enacted comprehensive legislation
regulating common carriers engaged in interstate
telegraph and telephone transmission.” Id. at 490
(emphases added). The Court highlighted provisions
of the Communications Act that are specific to common carriers: § 201, which “requires communications
carriers to furnish communications service upon reasonable request”; §§ 201-02, which prohibit carriers
from levying “unreasonable or discriminatory charges,
practices, classifications and regulations”; and § 203,
which requires carriers to “file tariff schedules with
the FCC.” Id. Based on “this broad scheme for the
regulation of interstate service by communications
carriers,” it concluded that Congress had preempted
the field. Id. (emphases added).
Moreover, the Supreme Court cases Ivy relied
upon—Postal Telegraph-Cable Co. and Western Union
Telegraph Co.—also concerned telegraph companies
that were regulated as common carriers under the
predecessor to the Communications Act. Both of those
cases relied on the fact that Congress had subjected
carriers to the “rule of equality and uniformity of
rates” when concluding they could only be regulated
by the federal government. Postal Tel.-Cable, 251
U.S. at 30, 40 S.Ct. 69; see also W. Union Tel. Co., 251
U.S. at 316, 40 S.Ct. 167 (“[T]he provisions of the
statute bringing telegraph companies under the Act to
Regulate Commerce as well as placing them under the
administrative control of the Interstate Commerce
Commission so clearly establish the purpose of Congress to subject such companies to a uniform national
31a
rule . . . .” (emphasis added)). Ivy’s logic may apply to
other communications services with common carrier
obligations, but it does not apply to services that are
wholly exempt from them. The extensive federal
regulation of common carriers that justifies field
preemption in Ivy is nowhere to be found for broadband internet.
Reading Ivy to cover all communications services
would also conflict with Supreme Court precedent on
the Communications Act. In Head v. New Mexico
Board of Examiners in Optometry, the Supreme Court
warned that “the validity of [a preemption] claim
cannot be judged by reference to broad statements
about the ‘comprehensive’ nature of federal regulation
under the Federal Communications Act.” 374 U.S.
424, 429–30, 83 S.Ct. 1759, 10 L.Ed.2d 983 (1963).
The Plaintiffs ask us to hold that the Communications
Act exempts all services from state rate regulation—
regardless of how those services are regulated under
the Communications Act. If we were to do that, we
would be making the exact sort of sweeping assumption about the Act that Supreme Court precedent forecloses and that is contrary to the actual statutory
analysis by this Court in Ivy.
In sum, neither the text and structure of the Communications Act, the history of this type of regulation,
nor relevant precedent support the Plaintiffs’ argument that Congress intended to preempt the field of
rate regulation of interstate communications services
when it passed the Communications Act.
B. Conflict Preemption
In the alternative to their field preemption contention, the Plaintiffs argue that the ABA is conflictpreempted because it stands as an obstacle to the
accomplishment and execution of the FCC’s 2018 Order.
32a
As discussed earlier, the 2018 Order reclassified
broadband internet as a Title I service in order to
“end utility-style regulation of the Internet in favor of
. . . market-based policies” and adopt a “light-touch
regulatory framework.” 2018 Order ¶¶ 2, 106. By
moving broadband outside of the more comprehensive
regulatory regime in Title II, the FCC surrendered the
statutory authority to enact any rate regulations on
broadband internet providers. See Comcast, 600 F.3d
at 655 (D.C. Cir. 2010); Verizon, 740 F.3d at 650 (D.C.
Cir. 2014).
Because the ABA subjects broadband providers to
rate regulation—a “centerpiece of common-carrier
regulation”—the Plaintiffs argue that it stands as an
obstacle to the “federal policy of promoting broadband
deployment while preserving an open internet.”
Appellees’ Br. 17. We consider whether this agencydriven federal policy preference carries preemptive
effect against the states and conclude that it does not.
“The burden of establishing obstacle preemption,
like that of impossibility preemption, is heavy: the
mere fact of tension between federal and state law is
generally not enough to establish an obstacle supporting preemption, particularly when the state law
involves the exercise of traditional police power.” In
re MTBE Prods. Liab. Litig., 725 F.3d 65, 101-02 (2d
Cir. 2013) (cleaned up).
Under well-established principles of administrative
law and federalism, “States are not permitted to use
their police power” to enact a regulation if “failure of
. . . federal officials affirmatively to exercise their full
authority takes on the character of a ruling that no
such regulation is appropriate or approved pursuant
to the policy of the statute.” Ray v. Atl. Richfield
Co., 435 U.S. 151, 178, 98 S.Ct. 988, 55 L.Ed.2d 179
(1978) (cleaned up). However, “a federal agency may
33a
pre-empt state law only when and if it is acting within
the scope of its congressionally delegated authority.”
La. Pub. Serv. Comm’n, 476 U.S. at 374, 106 S.Ct.
1890. If Congress has not conferred “power to act”
upon an agency, that agency cannot “pre-empt the
validly enacted legislation of a sovereign State.” Id.
It follows that if an agency has no authority to regulate
in a particular field, its policy preferences cannot be a
valid basis for regulatory action or preemption. See
id. at 374-75, 106 S.Ct. 1890 (“To permit an agency to
expand its power in the face of a congressional limitation on its jurisdiction would be to grant to the agency
power to override Congress.”).
Therefore, the question at the heart of the conflict
preemption inquiry is whether the FCC has the statutory authority to enact (or preempt) common carrierstyle regulations of broadband under Title I. Our two
sister circuits that have considered this question have
determined the answer is “no.” Mozilla, 940 F.3d at
76-86 (D.C. Cir. 2019); ACA Connects v. Bonta, 24
F.4th 1233, 1241-45 (9th Cir. 2022). We agree.
As discussed earlier, Title II imposes common
carrier obligations on telecommunications services,
including a requirement that rates be “just and reasonable.” 47 U.S.C. § 201(b). Title II also includes a
“forbearance provision” that allows the FCC to decline
to enforce some regulations of telecommunications
services if it believes regulation is unnecessary and
forbearance is in the public interest. Id. § 160(a). If
the FCC decides to forbear from imposing a common
carrier obligation, the states are prohibited from
imposing that same obligation on the telecommunications service. Id. § 160(e). There is little doubt that
when the FCC determines that a particular communications service should be subject to the heightened
regulatory regime of Title II, it has the concomitant
34a
power to preempt state law that conflicts with its
regulatory decisions.
In contrast, Title I grants the FCC no authority to
impose rate regulations, nor does it contain a forbearance provision similar to Title II. Thus, because
broadband is now regulated as a Title I service, the
FCC has no congressionally delegated authority to
impose or forebear rate regulations. Absent the
“power to act,” the FCC has no power to preempt
broadband rate regulation. La. Pub. Serv. Comm’n,
476 U.S. at 374, 106 S.Ct. 1890; see also Nat’l Ass’n of
Regul. Util. Comm’rs v. FCC, 533 F.2d 601, 620 n.113
(D.C. Cir. 1976) (noting a “vital difference between a
refusal to use granted power, and an attempt to prevent regulation by others in an area where no ordinary
Commission jurisdiction appears to exist”).
Neither the Plaintiffs nor our dissenting colleague
attempt to identify a source of statutory authority
that gives the FCC the power to preempt anywhere in
Title I. Instead, the Plaintiffs argue (and the dissent
accepts) that the agency’s threshold decision to
recategorize broadband from Title II to Title I is an
independent source of preemptive authority because
it is an “affirmative exercise of the FCC’s statutory
authority” and was done to “prohibit the very ex ante
rate regulation that the ABA imposes.” Appellees’ Br.
18 (internal quotation marks omitted); see also [App.
60a-61a].
To be sure, the FCC’s decision on how broadband
should be classified is entitled to Chevron deference.
Brand X, 545 U.S. at 980-81, 125 S.Ct. 2688; Mozilla,
940 F.3d at 18-20 (concluding that the FCC’s decision
to reclassify broadband from Title II to Title I in the
2018 Order was lawful). But the fact that the FCC can
choose between Title I and Title II does not mean that
the FCC can opt to retain its Title II preemption
35a
authority after reclassifying broadband as a Title I
service. There is a crucial distinction between being
able to choose which of two exclusive regulatory
regimes applies and being able to pick and choose
powers from both regulatory regimes simultaneously.
Whereas the former comports with the agency’s statutory authority, the latter contravenes it. See Mozilla,
940 F.3d at 80 (observing that the FCC “cannot
completely disavow Title II with one hand while still
clinging to Title II forbearance authority with the
other”).
The Plaintiffs defend this pick-and-choose approach
by arguing that “[t]he FCC’s policy preferences are
not separable from the 2018 Order’s classification
decision.” Appellees’ Br. 20. Because “the FCC started
by reaching the affirmative determination that interstate broadband should not be subject to ex ante rate
regulation,” and “[t]he D.C. Circuit [in Mozilla] upheld
the FCC’s policy grounds as a reasoned basis for its
selection of the regulatory regime to govern interstate
broadband,” the Plaintiffs argue that according this
policy decision preemptive force would be consistent
with the principles of Chevron deference. Appellees’
Br. 20-22.
This approach essentially asks us to apply another
layer of deference to a determination that already
receives Chevron deference. The Plaintiffs hope that
the definitional ambiguity “that permits the Commission to classify broadband under Title I” can somehow
“spawn[ ] a power to preempt with all the might of an
express statutory grant of authority.” Mozilla, 940
F.3d at 82. But this Chevron-squared strategy fails
for three reasons.
First, contrary to the Plaintiffs’ claims, the FCC’s
policy preferences and its classification decision are
36a
separable. The FCC did not justify its classification
decision solely on policy grounds. It also engaged in
statutory interpretation and concluded that “the best
reading of the relevant definitional provisions of the
Act supports classifying broadband Internet access
service as an information service.” 2018 Order ¶ 20.
The FCC called its statutory analysis “sufficient
grounds alone on which to base [its] classification
decision.” Id. ¶ 86.
Second, the Plaintiffs’ expansive reading of Chevron
has no basis in Chevron itself. Chevron is a case about
filling gaps in statutes, “not a magic wand that invests
agencies with regulatory power beyond what their
authorizing statutes provide.” Mozilla, 940 F.3d at
84. If the Plaintiffs had pointed to some statutory
ambiguity in Title I and the FCC had construed that
provision as providing it with the power to impose rate
regulations, then Chevron might be invoked in favor
of preempting the ABA. But the only ambiguity that
the Plaintiffs have identified pertains to whether
broadband internet is an “information service” or a
“telecommunications service.” 47 U.S.C. § 153(24),
(53). The FCC has the power to fill that gap, and it
can use its policy judgment to choose one category or
the other, but it cannot rewrite the Communications
Act to change the consequences that flow from that
choice. To hold otherwise “would virtually free the
Commission from its congressional tether.” Comcast,
600 F.3d at 655.
Third, the Plaintiffs provide no coherent basis for
distinguishing our implied preemption analysis from
the express preemption analysis in Mozilla, which is
persuasive authority. The district court concluded
that the D.C. Circuit’s decision in Mozilla did not foreclose a finding of conflict preemption because it struck
37a
down the 2018 Order’s express preemption provision
and left the question of its implied preemptive effect
for another day. The court thus reasoned that the
decision “does not preclude or revoke the 2018 Order’s
implicit preemptive effect.” N.Y. State Telecomms.
Ass’n, 544 F. Supp. 3d at 283.
To be sure, the Mozilla court stated that “it would
be wholly premature to pass on the preemptive effect,
under conflict or other recognized preemption principles, of the remaining portions of the 2018 Order”
because “no particular state law is at issue in this
case.” 940 F.3d at 86. However, Mozilla was also clear
that the statutory ambiguity that allows the FCC
to choose between Title I and Title II is not a freestanding source of preemptive authority. See id. at
82. The Plaintiffs—who do not argue that Mozilla
was wrongly decided—fail to explain why the same
statutory ambiguity should confer implied preemptive
authority when it does not confer express preemptive
authority.
Instead, the Plaintiffs contend that Mozilla vacated
the Preemption Directive on different grounds—
namely, because it tried “to categorically abolish all
fifty States’ statutorily conferred authority to regulate
intrastate communications.” Appellees’ Br. 26 (quoting Mozilla, 940 F.3d at 86). This argument is also
unavailing. Though the scope of the Preemption
Directive was one reason why it was unlawful, it was
not the sole reason. The Preemption Directive was
also vacated because it was not rooted in a relevant
source of statutory authority. See Mozilla, 940 F.3d at
78 (“[T]he power to preempt the States’ laws must be
conferred by Congress. It cannot be a mere byproduct
of self-made agency policy. Doubly so here where
preemption treads into an area—State regulation of
intrastate communications—over which Congress
38a
has expressly ‘deni[ed]’ the Commission regulatory
authority.” (emphasis added)).
Because implied
preemption, like express preemption, “cannot be a
mere byproduct of self-made agency policy,” the Plaintiffs’ attempt to distinguish Mozilla must fail. Id.
***
Several of the Plaintiffs in this action vociferously
lobbied the FCC to classify broadband internet as a
Title I service in order to prevent the FCC from having
the authority to regulate them. See Donald Shaw,
Amidst Fight to Kill Net Neutrality, Comcast and
Other Telecoms Spent $190 Million on Lobbying,
Sludge (June 11, 2018), https://perma.cc/5BVU-Y97E.
At that time, Supreme Court precedent was already
clear that when a federal agency lacks the power
to regulate, it also lacks the power to preempt. The
Plaintiffs now ask us to save them from the foreseeable legal consequences of their own strategic decisions. We cannot. If they believe a requirement to
provide internet to low-income families at a reduced
price is unfair or misguided, they have several pathways available to them. They could take it up with the
New York State Legislature. They could ask Congress
to change the scope of the FCC’s Title I authority
under the Communications Act. They could ask the
FCC to revisit its classification decision, as it has done
several times before. But they cannot ask this Court
to distort well-established principles of administrative
law and federalism to strike down a state law they do
not like.
CONCLUSION
The judgment of the United States District Court for
the Eastern District of New York is REVERSED, and
the permanent injunction barring enforcement of the
Affordable Broadband Act is VACATED.
39a
Richard J. Sullivan, Circuit Judge, dissenting:
I respectfully dissent from the majority’s opinion for
two reasons. First, I believe that we lack jurisdiction
to even hear this appeal. Second, even if we had jurisdiction to reach the merits of the parties’ preemption
arguments, I am persuaded that New York’s Affordable Broadband Act (the “ABA”) is preempted by
federal law.
I. We Lack Appellate Jurisdiction To Review
The Stipulated Judgment.
This appeal comes to us in an “unusual posture.” Ali
v. Fed. Ins. Co., 719 F.3d 83, 88 (2d Cir. 2013). After
New York was preliminarily enjoined from enforcing
the ABA, it stipulated to judgment against it, and then
appealed that stipulated judgment. This was a strategic move. In the district court’s preliminary injunction
order, it stated that the ABA “is conflict-preempted”
by federal law, and thus concluded that the challengers were likely to succeed in showing preemption on
the merits, as required to obtain a preliminary injunction. N.Y. State Telecomms. Ass’n, Inc. v. James, 544
F. Supp. 3d 269, 282 (E.D.N.Y. 2021) (“NYSTA”). At
that point, New York could have appealed the injunction directly under 28 U.S.C. § 1292(a)(1) (in fact, New
York initially filed such an appeal, only to later withdraw it). That interlocutory appeal, however, would
have been a narrow challenge only to whether the
district court “abused its discretion” in granting the
injunction, as opposed to a challenge that would produce “a final resolution of the merits” of preemption.
Univ. of Tex. v. Camenisch, 451 U.S. 390, 393, 101
S.Ct. 1830, 68 L.Ed.2d 175 (1981). In other words, in
appealing the preliminary injunction, New York could
not have asked us for judgment on the merits of
preemption in its favor – it could have asked us only
40a
to dissolve the injunction while it continued to litigate
the merits before the district court.
Rather than pursue that limited appeal, New York
instead consented to a stipulated judgment in order to
take a full appeal on the merits of preemption. That
is, it stipulated to a judgment against it and asked the
district court to enter a permanent injunction forbidding it from enforcing the ABA as preempted. See J.
App’x at 157. The district court obliged, and New York
has now appealed the resulting judgment, asking us
to award it judgment on the merits with a finding that
the ABA is not preempted by federal law.
But this tactic – which I will refer to as a “stipulated
judgment appeal” – is generally not permitted as a
shortcut to appellate review. Because these appeals
are attempts to “evade the final judgment rule,” we
allow them in only limited circumstances. Palmieri
v. Defaria, 88 F.3d 136, 139 (2d Cir. 1996).1 In the
majority’s view, an appellant can appeal from a
1 Over the years, we have confronted stipulated judgment
appeals by both plaintiffs and defendants. For plaintiffs, such
appeals usually follow an adverse interlocutory decision in
the district court and a voluntary dismissal of all claims under
Federal Rule of Civil Procedure 41(a)(2). See, e.g., Palmieri, 88
F.3d at 140. For defendants, stipulated judgment appeals typically involve situations like the one here, in which the appellant
received an adverse interlocutory decision below, followed by
entry of a judgment by consent – effectively a court-approved
settlement. See, e.g., LaForest v. Honeywell Int’l Inc., 569 F.3d
69, 73 (2d Cir. 2009). Though there are subtle distinctions
between these two scenarios, they are not relevant to this discussion, and I collectively refer to both types as “stipulated judgment
appeals.” See generally Bryan Lammon, Manufactured Finality,
69 Vill. L. Rev. (forthcoming 2024) (manuscript at 23-37)
(discussing various attempts to “manufacture[ ] finality” through
voluntary dismissals and stipulated judgments), https://papers.
ssrn.com/sol3/papers.cfm?abstract_id=4572017 [https://perma.cc/
86QK-WMVE].
41a
stipulated judgment when (1) the district court
“plainly rejected the legal basis” for the appellant’s
case (either a claim or defense), (2) all claims are
disposed of with prejudice, (3) the stipulated judgment
is “designed solely to obtain immediate appeal of
the prior adverse decision, without pursuing piecemeal
appellate review,” and (4) the appellant has “expressly
preserved” the right to appeal. [App. 8a-9a] (internal
quotation marks omitted).
Though I agree that all of these elements are prerequisites, our precedent requires two more conditions
before a party may appeal a stipulated judgment.
First, in order to “plainly reject[ ]” the legal basis for
the appellant’s case, id. at 13, the district court’s decision must be a “final ruling” on an issue, as opposed
to a tentative finding or dicta, Palmieri, 88 F.3d at 139
(emphasis added). In other words, a decision cannot
“effectively dismiss[ ]” a claim when it is only a provisional finding that is “subject to change when the case
unfolds.” Id. (quoting Luce v. United States, 469 U.S.
38, 41-42, 105 S.Ct. 460, 83 L.Ed.2d 443 (1984)).
Second, the stipulated judgment appeal cannot be
an attempt to circumvent the interlocutory appellate
rules already in place. As the Supreme Court has
held, if the interlocutory appellate rules preauthorize
a narrow right to appeal certain issues, then a litigant
cannot use a stipulated judgment to claim the right to
appeal additional issues beyond those preauthorized.
See Microsoft Corp. v. Baker, 582 U.S. 23, 31-32, 137
S.Ct. 1702, 198 L.Ed.2d 132 (2017) (holding that a
litigant cannot use a stipulated judgment to appeal a
class certification denial “as a matter of right” (internal quotation marks omitted)).
To invoke our appellate jurisdiction, both conditions
must be met. Because neither is present here, I would
dismiss the appeal for lack of appellate jurisdiction.
42a
A. The Adverse “Decision” Was Provisional
Dicta.
Our precedents make clear that an appellant cannot
appeal a stipulated judgment when it suffered only a
tentative setback in the district court. In other words,
if a district court issues a provisional finding subject
to change – such as one that casts doubt on a litigant’s
claims only in dicta – then that cannot be an “effective
dismissal” of the claims, and no appeal can be taken
from a stipulated judgment thereafter. We said as
much in Palmieri v. Defaria, where we held that a
litigant could not appeal a stipulated judgment when
he suffered a tentative evidentiary loss before the
district court that was “subject to change at trial.”
88 F.3d at 140.
In Palmeiri, the plaintiff brought copyright claims
accusing the defendant of copying his song and sought
to prove up that allegation with evidence that the
defendant had had access to the disputed song prior to
the alleged infringement. See id. at 137. After the
defendant moved in limine to exclude that evidence,
the district court granted the motion in part, finding
that some of the evidence concerning the defendant’s
access to the song was inadmissible and reserving for
trial whether the rest could be introduced. See id.
Disappointed with that ruling, the plaintiff invited the
district court to enter final judgment against him so
that he could appeal the in limine ruling right away.
See id. at 138. The district court did so, and the plaintiff appealed the resulting judgment, challenging the
district court’s in limine findings.
Emphasizing that the in limine ruling was merely
tentative, we held that the stipulated judgment was
not appealable. Though we acknowledged the rule
that stipulated judgment appeals are occasionally
43a
permitted when the district court had “effectively dismissed [the] case,” id. at 139, we nonetheless held that
the in limine ruling was not an “effective dismissal”
because it lacked two features: (1) the district court
had not “take[n] the position” that the plaintiff ’s proof
was insufficient as a matter of law, and (2) the in
limine ruling was merely tentative and “subject to
change at trial in the district court’s discretion.” Id.
at 140. In other words, we recognized an additional
limit on the “effective dismissal” rule – namely, that
the adverse decision below must be a “final ruling” as
opposed to one that is merely tentative or conditional.
Id. at 139 (“An in limine evidentiary ruling does not
constitute a final ruling on admissibility.” (italics
added)).2
Indeed, we emphasized the provisional nature of the
in limine ruling throughout our opinion, and even distinguished earlier “effective dismissal” cases because
those involved district court orders that “could not be
examined again at trial.” Id. at 141 (distinguishing
Allied Air Freight v. Pan Am. World Airways, 393 F.2d
441 (2d Cir. 1968)). As we went on to explain, this rule
– that a stipulated judgment cannot be appealed when
the adverse finding is only tentative – makes good
sense. Though we can take appeals from stipulated
judgments following conclusive holdings, “[t]here is no
reason to spend scarce judicial resources reviewing a
2 Though we have characterized our rule against stipulated
judgment appeals as “jurisdiction[al],” Ali, 719 F.3d at 88, we
have not explained whether the rule is constitutional or statutory
in nature. But see Bryan Lammon, Voluntary Dismissals, Jurisdiction & Waiving Appellate Review, 92 U. Cin. L. Rev. 394, 406
(2023) (arguing that this rule is best understood as a waiver
doctrine and warning that treating it as an Article III issue could
mean conditional guilty pleas are unconstitutional). Whatever
the rule’s origins, it bars New York’s appeal here.
44a
decision that may be changed due to [later] developments.” Id. at 139. We therefore allow a party to
proceed to appeal through a stipulated judgment
only when the case is effectively dismissed by a “final
ruling” on the appealed issue. Id. To hold otherwise
would only encourage “piecemeal appeals,” id. at 141,
with litigants leapfrogging the district court at the
first sign of trouble. The fact that litigants might
prefer such shortcuts is of no moment. One can surely
imagine situations in which litigants might be discouraged by negative comments from a district judge
during an early hearing on a purely legal question, or
even where a litigant might dislike the initial district
court draw based on unfavorable decisions issued by
the assigned judge in other related cases. But those
sorts of tentative setbacks are not enough to bypass
the district court and the adjudicative process. By first
requiring a “final” ruling on an issue, the Palmieri
rule prevents attempts to “evade the final judgment
rule.” Id. at 139.
For that same reason, New York cannot appeal the
provisional findings in the district court’s order granting a preliminary injunction against it. As a threshold
matter, there is little dispute that the district court’s
preliminary injunction was not a “final ruling” on the
merits of preemption. Quite the opposite, “the findings
of fact and conclusions of law made by a court granting
a preliminary injunction are not binding at trial on the
merits.” Univ. of Tex., 451 U.S. at 395, 101 S.Ct. 1830.
Indeed, we have long recognized that, with respect to
preliminary injunction rulings, “[t]he judge’s legal
conclusions, like his fact-findings, are subject to change
after a full hearing and the opportunity for more
deliberation.” Hamilton Watch Co. v. Benrus Watch Co.,
206 F.2d 738, 742 (2d Cir. 1953) (emphasis added); see
45a
id. (“For a preliminary injunction . . . is, by its very
nature, interlocutory, tentative, provisional, ad interim,
impermanent, mutable, not fixed or final or conclusive,
characterized by its for-the-time-beingness.”).
If
anything, “[a] decision on a preliminary injunction is,
in effect, only a prediction about the merits.” Biediger
v. Quinnipiac Univ., 691 F.3d 85, 107 (2d Cir. 2012)
(internal quotation marks omitted). Thus, just like
the in limine ruling in Palmieri, the district court’s
preemption analysis was strictly provisional and could
not have “effectively dismissed” New York’s case.
Palmieri, 88 F.3d at 140.
The majority nevertheless maintains that the
district court’s ruling was an effective dismissal
because the district court used “unequivocal” language
when it said that the ABA “is conflict-preempted.”
[App. 10a] (quoting NYSTA, 544 F. Supp. 3d at 282).
But the tenor of the district court’s language in a
preliminary injunction ruling is not enough to render
the decision “final.” A strong “prediction” is still only
a prediction. Biediger, 691 F.3d at 107. Whatever the
tone of the district court’s order, those statements
came in a preliminary injunction ruling and were necessarily provisional and “subject to change.” Hamilton
Watch, 206 F.2d at 742.
In fact, the district court’s comments about the
merits of preemption were, if anything, even less final
than the evidentiary ruling in Palmieri, given that
the preemption comments here were dicta. Because
the district court needed only to find that the ABA
was likely preempted in order to grant the preliminary
injunction, any more definitive “assessment of the
actual merits” of preemption was “dicta.” Fish v.
Schwab, 957 F.3d 1105, 1140 (10th Cir. 2020) (internal quotation marks omitted); see also United States
46a
v. Hussein, 178 F.3d 125, 129 (2d Cir. 1999) (any
finding “not necessary” to granting a preliminary
injunction is “dictum”). Palmieri could at least argue
that the evidentiary rulings were provisional holdings
on admissibility. New York cannot even claim that
here. Because the district court’s statements about
the ultimate merits of preemption were dicta, they
were not even a “decision” to begin with, let alone a
final ruling. Carroll v. Lessee of Carroll, 57 U.S. (16
How.) 275, 286-87, 14 L.Ed. 936 (1853) (“If [a point of
law] might have been decided either way without
affecting any right brought into question, then,
according to the principles of common law, an opinion
on such a question is not a decision.”).
This conclusion – that litigants cannot take stipulated judgment appeals from dicta in a provisional
order – aligns with our other precedents on this issue.
As far as I can tell, none of our past cases (including
those relied on by the majority) authorized a stipulated judgment appeal after a district court cast doubt
on a litigant’s case through provisional dicta. To the
contrary, each of the appellants in those cases sustained an adverse holding that “effectively dismissed”
his case. See, e.g., Ali, 719 F.3d at 89 (approving stipulated judgment appeal when the district court held
in a partial summary judgment order that appellant’s
proffered reading of a contract was foreclosed by the
“express language” of the contract (internal quotation
marks omitted)); Linde v. Arab Bank, PLC, 882 F.3d
314, 322 (2d Cir. 2018) (approving stipulated judgment
appeal after appellant was found liable by a jury);
Empire Volkswagen Inc. v. World-Wide Volkswagen
Corp., 814 F.2d 90, 94 (2d Cir. 1987) (approving
stipulated judgment appeal of certain claims after
47a
district court granted summary judgment on those
claims).3
Attempting to reconcile its decision with Palmieri,
the majority posits that the only jurisdictional defect
in Palmieri was that the in limine rulings did not
“plainly resolve a claim as a matter of law.” [App.
10a-11a]. But that is not what Palmieri actually said.
We instead made clear that the in limine rulings could
not support a stipulated judgment appeal for two separate reasons: (1) the in limine rulings did not resolve
the claim “as a matter of law,” and (2) the in limine
rulings were only tentative. Palmieri, 88 F.3d at 140.
Indeed, we repeatedly stressed that the in limine
rulings were insufficient because they were “subject to
change” and not a “final ruling on admissibility.” Id.
3 In fact, Empire Volkswagen – one of our most-cited cases
on stipulated judgment appeals – lends further support to the
Palmieri rule against stipulated judgment appeals of provisional
findings. There, the defendant moved for summary judgment on
several of the plaintiffs’ claims, and the district court granted
that motion in part. See 814 F.2d at 93. Even though several
claims survived, the plaintiffs believed that the ruling “unduly
limited” those claims by “excluding” an important theory of
recovery. Id. at 93-94. Consequently, they voluntarily dismissed
the surviving claims and attempted to appeal all of the claims
from the resulting stipulated judgment. See id. at 94. Significantly, we held that the plaintiffs could appeal the claims that
were dismissed at summary judgment but could not appeal
the voluntarily dismissed claims. We concluded that, even if the
partial summary judgment order limited those surviving claims
– and cast doubt on their ultimate success – the district court’s
order did not in fact “decide[ ]” those claims “adversely” to the
plaintiffs. Id. It mattered not that the plaintiffs “interpret[ed]
. . . [the] partial summary judgment order as an effective dismissal of [those claims].” Id. at 95. The only relevant inquiry was
whether the district court had issued a holding that rejected
those claims. See id. at 94 (“[W]e will consider[ ] only those
portions of [the] order decided adversely to [the plaintiffs].”).
48a
The majority’s best counter is that the preliminary
injunction ruling here was more definitive than usual,
but again that goes nowhere, because “a preliminary
injunction . . . is, by its very nature, interlocutory,
tentative, provisional, . . . not fixed or final or conclusive, characterized by its for-the-time-beingness.”
Hamilton Watch Co., 206 F.2d at 742 (emphasis
added).
As a fallback, the majority pivots to the language
of the stipulated judgment, in which the district court
so-ordered the parties’ stipulation that, “[f ]or the
reasons given in the Court’s [preliminary injunction]
order, the Court declares that [the ABA] is preempted
by federal law.” J. App’x at 157. In the majority’s
view, the district court “determined” that the ABA was
preempted as a matter of law when it signed off on the
parties’ stipulated language, which in turn was an
effective dismissal of New York’s case. [App. 10a-11a].
But the majority misconstrues the nature of
stipulated judgments. A stipulated judgment cannot
“effectively dismiss” a case for the simple reason that
a district court does not “determine” anything when it
so-orders a stipulated judgment. That is because a
stipulated judgment “is not a ruling on the merits of
the legal issue.” Langton v. Hogan, 71 F.3d 930, 935
(1st Cir. 1995); see also SEC v. Petro-Suisse Ltd., No.
12-cv-6221 (AJN), 2013 WL 5348595, at *3 (S.D.N.Y.
Sept. 25, 2013) (“A consent decree is ‘not a ruling
on the merits.’ ” (quoting Langton, 71 F.3d at 935)
(alterations omitted)). Instead, a consent judgment is
the “result of private bargaining,” Lipsky v. Commonwealth United Corp., 551 F.2d 887, 894 (2d Cir. 1976),
that “normally embodies a compromise” in which “the
parties each give up something they might have won
had they proceeded with the litigation,” Barcia v.
Sitkin, 367 F.3d 87, 90 (2d Cir. 2004) (quoting United
49a
States v. Armour & Co., 402 U.S. 673, 681, 91 S.Ct.
1752, 29 L.Ed.2d 256 (1971)). In other words, the
entry of a stipulated judgment merely invites the
district court to sign off on a compromise that the
parties reached on their own accord.
Because the language in the stipulated judgment
was the product of “consent” rather than a “decision
on the merits,” the district court could not have effectively dismissed New York’s case merely by granting
the stipulated judgment. HS Equities, Inc. v. Hartford
Accident & Indem. Co., 609 F.2d 669, 674 n.8 (2d
Cir. 1979) (internal quotation marks omitted). Even
though the stipulated judgment contained language
declaring that the ABA was preempted, that language
was not a finding or a determination by the district
court. Indeed, the preemption “declar[ation]” appeared
in a portion of the stipulated judgment that was “stipulated and agreed” to by the parties (as opposed to a
finding that the district court had to make on its own).
J. App’x at 157. The majority’s only response is to
suggest that the district court’s “adoption” of the
stipulated language reflected the “finality” of the
“legal holding” from its preliminary injunction order.
[App. 11a-12a]. But as already discussed, the district
court did not “adopt” or “determine” anything in the
stipulated judgment, nor was its earlier finding on
preemption “final” or even a “holding.” The district
court merely signed off on a compromise that the
parties (not the court) reached about the meaning of
provisional dicta that appeared in an earlier order.
That is not enough to establish finality.
To be clear, none of this means that New York was
required to toil in the district court until the conclusion of a trial on the merits. New York could have
pursued its interlocutory appeal of the preliminary
50a
injunction under 28 U.S.C. § 1292(a)(1) and asked this
Court to dissolve it. Alternatively, it could have moved
to consolidate the preliminary injunction hearing with
an expedited trial on the merits under Rule 65(a)(2),
which would have triggered an earlier merits ruling
(and with it, an earlier appeal). Better yet, New York
could have invited the district court to enter summary
judgment against it sua sponte – which, unlike the
stipulated judgment, would have required the district
court to make “an actual adjudication” on preemption.
Lipsky, 551 F.2d at 893.
The majority says it was fine to skip those steps –
and to “accelerate[ ]” the appeal – because it would
be “pragmatic.” [App. 2a, 10a]. But our “jurisdiction
. . . does not entail an assessment of convenience.”
Wachovia Bank v. Schmidt, 546 U.S. 303, 316, 126
S.Ct. 941, 163 L.Ed.2d 797 (2006). Quite the opposite,
we enforce our jurisdictional rules “strictly,” Muskrat
v. United States, 219 U.S. 346, 356, 31 S.Ct. 250, 55
L.Ed. 246 (1911), and this case illustrates why. By
abandoning Palmieri’s teachings, we give the greenlight to “piecemeal appeals.” Palmieri, 88 F.3d at 141.
Like the parties here, litigants will forego the relief
available under Section 1292(a)(1) – dissolution of
a preliminary injunction – to proceed straight to a
merits appeal through a stipulated judgment. In
limine rulings will invite more of the same. By
the majority’s logic, litigants may turn to stipulated
judgments merely because a judge makes critical
remarks during oral argument or at a premotion
conference. There may be worthy occasions for a
stipulated judgment appeal, but a district court’s
provisional dicta is not one of them.
51a
B. The Stipulated Judgment Appeal Circumvents Preauthorized Rules On Interlocutory Appeals.
In addition to lacking the finality required under
Palmieri, the stipulated judgment also runs afoul of
the Supreme Court’s decision in Microsoft v. Baker
because it was procured by subverting the established
regime for interlocutory appeals.
In Microsoft, the Supreme Court held that parties
cannot use stipulated judgments to circumvent interlocutory appeal rules that otherwise would foreclose
their appeal. See 582 U.S. at 37, 137 S.Ct. 1702.
There, the plaintiffs brought a putative class action
and moved to certify it. Id. at 33, 137 S.Ct. 1702. After
the district court denied that motion, the plaintiffs
sought discretionary interlocutory review under Federal Rule of Civil Procedure 23(f ), a special provision
under which a plaintiff (or a defendant) can ask the
court of appeals to immediately review a denial (or a
grant) of class certification. Id. at 34, 137 S.Ct. 1702.
When the Ninth Circuit declined to hear the appeal,
the plaintiffs endeavored to force a mandatory appeal
through a stipulated judgment. Specifically, they
moved to dismiss their case with prejudice, explaining
that once the district court entered final judgment
they would then “appeal the order striking their class
allegations.” Id. at 35, 137 S.Ct. 1702 (alterations and
internal quotation marks omitted). As requested, the
district court granted the plaintiffs’ stipulated motion
to dismiss and directed entry of final judgment. The
plaintiffs then appealed the class certification order,
arguing that they were appealing from a final judgment under section 1291 – and that the appeals court
now had to hear their appeal of the class certification
denial. See id. The Ninth Circuit agreed that it had
jurisdiction to consider the appeal under section 1291,
52a
found that the district court had abused its discretion
in striking the class allegations, and remanded the
case to the district court for further proceedings on the
merits. See id. at 35-36, 137 S.Ct. 1702.
The Supreme Court granted certiorari on the
jurisdictional question and held that the stipulated
judgment was not final – and thus not appealable –
under section 1291. See id. at 37, 137 S.Ct. 1702.
Significantly, the Court reasoned that the judgment
could not be final because the plaintiffs had procured
it in a bid to “subvert[ ] the final judgment rule” and
the interlocutory review process Congress (in tandem
with the Rules Committee) had established. Id.
Indeed, Rule 23(f ) prescribed a “discretionary regime”
under which litigants could ask courts of appeals to
review adverse class certification decisions. Id. at 39,
137 S.Ct. 1702. But after the Ninth Circuit exercised
that discretion and declined to review the district
court’s initial certification denial, the plaintiffs sought
to force the Ninth Circuit to hear their appeal anyway,
even though the established interlocutory rules allowed
only for discretionary appeals. See id. at 40, 137 S.Ct.
1702. In other words, the plaintiffs had sought to use
a stipulated judgment to manufacture appellate rights
(there, mandatory appeals) that neither Congress
nor the Rules Committee had preauthorized. Therefore, even though the stipulated judgment was “technical[ly]” compliant – in that it resolved all of the
plaintiffs’ claims and left nothing else for the district
court to do – it still could not be truly final. Id. at 41,
137 S.Ct. 1702 (“[Section] 1291’s firm final-judgment
rule is not satisfied whenever a litigant persuades a
district court to issue an order purporting to end the
litigation.”).
Significantly, Microsoft did not purport to limit this
rule – that litigants cannot use stipulated judgments
53a
to subvert established interlocutory rules – to class
certification appeals. See Trendsettah USA v. Swisher
Int’l, Inc., 31 F.4th 1124, 1132 (9th Cir. 2022) (explaining that Microsoft applies when there are “similar
statutory restrictions [to Rule 23(f )] that would be
adversely affected by permitting voluntary dismissal
of claims with prejudice”). Indeed, we ourselves have
extended Microsoft to another context in holding that
litigants cannot use stipulated judgments to subvert
the interlocutory rules on orders deciding motions to
compel arbitration. See Bynum v. Maplebear Inc.,
698 F. App’x 23, 24 (2d Cir. 2017). As we explained,
Congress provided a special mechanism in 9 U.S.C.
§ 16 under which a defendant can immediately appeal
an order denying its motion to compel arbitration. Yet
Congress provided no such avenue for orders granting
those motions. We therefore barred plaintiffs from
using stipulated judgments to engineer an appeal
of an otherwise unappealable interlocutory order
sending plaintiffs’ claims to arbitration. See id. (citing
Microsoft, 582 U.S. at 27-28, 137 S.Ct. 1702). Other
circuits are in accord. See Keena v. Groupon, Inc., 886
F.3d 360, 365 (4th Cir. 2018) (reaching the same result
as Bynum under Microsoft); Langere v. Verizon Wireless Servs., LLC, 983 F.3d 1115, 1122 (9th Cir. 2020)
(same).
Microsoft thus sets forth a broad rule: whenever
Congress or the Rules Committee has preauthorized
the right to appeal specific interlocutory orders, a
litigant may not employ a stipulated judgment to
seize additional appellate rights beyond those preauthorized avenues. If the interlocutory rules provide
for only discretionary review of certain orders, then
litigants cannot exploit stipulated judgments to
secure mandatory review. And if the rules authorize
interlocutory review only of orders denying a given
54a
motion, then litigants cannot resort to such tactics
to obtain appellate review of orders granting those
motions. A district court’s entry of an “actual final
judgment” is of no moment if that final judgment was
procured in a bid to subvert the preapproved interlocutory rules. Microsoft, 582 U.S. at 40, 137 S.Ct. 1702
(emphasis and internal quotation marks omitted).
Because New York used a stipulated judgment to
expand its preauthorized appellate rights, Microsoft
bars our appellate jurisdiction here. Once New York
was preliminarily enjoined, it had one preauthorized
appellate right: to seek dissolution of the preliminary
injunction under section 1292(a)(1). See 28 U.S.C.
§ 1292(a)(1) (permitting interlocutory appeal of orders
“granting . . . injunctions”). Had it taken this route,
New York could have argued that the district court
abused its discretion in granting the preliminary
injunction under the familiar four-factor test; if we
agreed, we would then dissolve the injunction and
send the case back to the district court for continued
litigation on the merits of preemption. See Univ. of
Tex., 451 U.S. at 392, 101 S.Ct. 1830 (listing the discretionary four-factor test for granting a preliminary
injunction). But rather than take that narrow appeal,
New York used a stipulated judgment to appeal the
ultimate merits of preemption right away – that is,
by asking us to issue a “final resolution” on whether
the ABA is preempted as a matter of law. Id. That
is a “significantly different” inquiry than an appeal
seeking dissolution of an injunction under section
1292(a)(1). Id. There is thus no escaping it: section
1292(a)(1) did not preauthorize New York to appeal
the ultimate merits of preemption, yet New York has
done so anyway through a stipulated judgment.
That is precisely what Microsoft disallowed. And
just as in Microsoft, New York’s gambit upsets the
55a
“careful calibration” of section 1292(a)(1). 582 U.S. at
31, 137 S.Ct. 1702. When Congress passed this provision, it authorized interlocutory appeals of preliminary injunctions “in order to prevent the injustice of
burdening a party with a manifestly erroneous decree
while the ultimate merits of a dispute are being
litigated.” Indep. Party of Richmond Cnty. v. Graham,
413 F.3d 252, 256 (2d Cir. 2005) (emphasis added). In
other words, Congress provided a limited appellate
right to challenge only the injunction, so that a defendant would not be burdened by an erroneous restraint
while it litigated the merits before the district court.
If Congress had also desired for enjoined defendants
to appeal the “ultimate merits” right away, then it
would have authorized as much in section 1292(a). Id.
Congress did no such thing, and that alone should
foreclose New York’s attempt to secure that appellate
right by stipulated judgment here.
For its part, the majority suggests that Microsoft
does not apply because we have discretion (under our
“pendent appellate jurisdiction”) to reach the merits
when we hear an interlocutory appeal of an injunctive
order under section 1292(a)(1). See San Filippo v. U.S.
Tr. Co. of N.Y., 737 F.2d 246, 255 (2d Cir. 1984).4 But
that makes this case more like Microsoft, not less. As
already discussed, Microsoft bars parties from using a
stipulated judgment appeal to convert a discretionary
right to appeal into a mandatory one. See 582 U.S. at
4 To be clear, we can exercise this discretionary power in
contexts beyond interlocutory appeals of injunctions; as a general
matter, “once we have taken jurisdiction over one issue in a case,
we may, in our discretion, consider otherwise nonappealable
issues in the case as well, where there is sufficient overlap
[between] the appealable and nonappealable issues.” San Filippo,
737 F.2d at 255 (alterations and internal quotation marks omitted).
56a
31-32, 137 S.Ct. 1702 (explaining that Rule 23(f ) gives
appellate courts discretion to accept an appeal of
a class certification denial and rejecting plaintiffs’
attempt to force an appeals court to hear such an
appeal). That is essentially what New York has done
here. If it had appealed the preliminary injunction
under section 1292(a)(1), then we would have had
limited discretion to address the ultimate merits of
preemption. But because New York appeals on the
basis of its stipulated judgment, it now contends that
we must address the ultimate merits of preemption,
thereby diminishing the discretion of the Court while
enhancing its own. There is no meaningful distinction
between what the parties have done here and what
the parties did in Microsoft. In both cases the parties
used a stipulated judgment appeal to secure greater
appellate rights than those preauthorized by Congress.
As the Supreme Court made clear in Microsoft, that is
not permitted.
II. The ABA Is Preempted By Federal Law.
Although the lack of appellate jurisdiction should,
by itself, be dispositive and compel dismissal of this
appeal, I write briefly to respond to the majority’s
resolution of the merits question concerning federal
preemption of the ABA. To my mind, our precedents
make clear that the ABA is both field- and conflictpreempted by federal law.
First, the ABA is field-preempted because the
Communications Act preempts all rate regulation of
interstate communication services. By its text, the
Communications Act grants the FCC authority over
“all interstate” communication services – save for a
limited set of state-law prohibitions – while leaving to
the states the power to regulate intrastate communications. 47 U.S.C. § 152(a)-(b) (defining the interstate
57a
and intrastate division); id. § 414 (preserving a limited
set of state common-law rules). Thus, the Act
prescribes that the FCC has exclusive authority over
interstate communications, except for certain areas
like consumer protection where states have traditionally exercised power. See, e.g., Head v. N.M. Bd. of
Exam’rs in Optometry, 374 U.S. 424, 443-44, 83 S.Ct.
1759, 10 L.Ed.2d 983 (1963) (explaining that the
“savings clause” in section 414 preserved state power
to regulate interstate radio advertisements). Because
rate regulation was not one of those traditional
spheres of state authority, only the FCC retains the
authority to regulate rates of interstate communications.5
Indeed, we held as much in Ivy Broadcasting Co. v.
American Telephone & Telegraph Co., 391 F.2d 486,
490–91 (2d Cir. 1968). There, we explained that both
the Communications Act and its predecessor (the
Mann-Elkins Act) manifested “an intent on the part of
Congress to occupy the field to the exclusion of state
law,” including with respect to the “rates” charged.
Id. (internal quotation marks omitted). Though the
majority asserts that Ivy Broadcasting meant to say
that this preemption covered only the rates of Title II
5 The majority offers scant support for its claim that states
have historically regulated the rates of interstate communications. See [App. 19a-21a]. It offers only an article noting that
eleven states oversaw rate regulation of cable during the 1970s.
But limited activity in twenty percent of the states is far from
a meaningful tradition. Moreover, at the time of that rate
regulation, cable was “essentially a local business,” where local
operators broadcast to small surrounding regions. TV Pix, Inc.
v. Taylor, 304 F. Supp. 459, 463 (D. Nev. 1968). That is quite
unlike the modern internet, which virtually always involves
interstate communications even for the most routine tasks. I
therefore do not see a meaningful tradition of such rate regulation at the state level.
58a
common carriers, we have not so limited Ivy Broadcasting when we have cited it in the intervening
decades. See, e.g., Glob. NAPs, Inc. v. Verizon New
England, Inc., 454 F.3d 91, 102 n.10 (2d Cir. 2006)
(citing Ivy Broad., 391 F.2d at 491) (finding that a
state regulatory board had “narrowly sidestepped
encroachment on the FCC’s jurisdiction to set rates
on interstate communications” without limiting these
statements to Title II).
The structure of the Communications Act confirms
its preemptive scope. When Congress defined the
FCC’s authority in section 152, it used language –
contrasting “interstate” versus “intrastate” “authority,”
47 U.S.C. § 152(a)-(b) – that mirrored other statutes
where Congress conferred exclusive federal authority.
For instance, Congress granted the Federal Energy
Regulatory Commission (“FERC”) exclusive authority
over interstate electricity sales when it provided that
a federal statute “shall apply to the transmission
of electric energy in interstate commerce,” but not
to “the transmission of electric energy in intrastate
commerce.” 16 U.S.C. § 824(b)(1); see Hughes v. Talen
Energy Mktg., LLC, 578 U.S. 150, 154, 136 S.Ct. 1288,
194 L.Ed.2d 414 (2016). Congress also used such
language in granting FERC “exclusive jurisdiction”
over interstate natural gas sales. Schneidewind v.
ANR Pipeline Co., 485 U.S. 293, 300-01, 308, 108 S.Ct.
1145, 99 L.Ed.2d 316 (1988); see 15 U.S.C. § 717(b)-(c)
(providing that the 1938 Natural Gas Act “shall apply
to the transportation of natural gas in interstate
commerce” but not to gas sales occurring “within”
a state). By employing the same structure here,
Congress likewise granted the FCC exclusive domain
over rate regulation of interstate communications.
Put succinctly, in passing the Communications Act,
Congress enacted a “federal law [that] occupies [the]
59a
field of [rate] regulation so comprehensively that it
has left no room for supplementary state regulation.”
Murphy v. Nat’l Collegiate Athletic Ass’n, 584 U.S.
453, 479, 138 S.Ct. 1461, 200 L.Ed.2d 854 (2018)
(internal quotation marks omitted). Because the ABA
intrudes into that field, it is preempted, and its
enforcement should be enjoined.
Second, the ABA is conflict-preempted because it
would “frustrate the purposes” of the FCC’s 2018
decision to reclassify broadband as a Title I service.
SPGGC LLC v. Blumenthal, 505 F.3d 183, 189 (2d
Cir. 2007). For the purposes of conflict preemption,
“[f ]ederal regulations have no less preemptive effect
than federal statutes.” Id. at 188 (internal quotation
marks omitted). Thus, we need not focus on whether
Congress intended to “supersede state law” so much
as whether the agency meant to do so in issuing the
regulations. Fid. Fed. Sav. & Loan Ass’n v. de la
Cuesta, 458 U.S. 141, 154, 102 S.Ct. 3014, 73 L.Ed.2d
664 (1982).
Here, there is little doubt that the FCC intended
to preempt state laws that, like the ABA, imposed
ex ante rate regulation on broadband. Even when
the FCC briefly reclassified broadband as a Title II
telecommunications service in 2015, it explained that
“we do not and cannot envision adopting new ex ante
rate regulation of broadband [i]nternet access in the
future.” 30 FCC Rcd. 5601, ¶ 451 (2015); see also id.
¶ 382 (“There will be no rate regulation.”). And in 2018,
when the FCC returned broadband to its traditional
classification as a Title I information service, the
agency explained that its decision was driven by
“concerns” that even the possibility of “rate regulation”
attendant to Title II common carriage status “ha[d]
resulted” in “untenable social cost[s] in terms of foregone investment and innovation.” 33 FCC Rcd. ¶¶ 87,
60a
101. To that end, the FCC’s order stated its intent to
“end utility-style regulation of the Internet in favor of
. . . market-based policies” and a “light-touch” regulatory framework. Id. ¶¶ 2, 207.
In sum, the FCC’s actions and words evince an
obvious “purpose[ ],” SPGGC, 505 F.3d at 188, to foster
openness and investment by sheltering broadband
internet service from rate regulation. Because the
ABA seeks to impose that very regulation, it is
preempted.
For its part, New York insists that the FCC’s 2018
Order cannot preempt state law because the FCC has
no power to regulate services when they are classified
under Title I, as broadband is now. New York Br.
at 50-51. In other words, New York suggests that
because the FCC currently lacks power to regulate
broadband rates, it cannot prevent states from regulating those rates either.
That argument fails to account for the obvious fact
the FCC does have the power to regulate broadband.
Just as it did in 2015, the FCC could reclassify broadband as a Title II service and impose ex ante rate
regulations on it. Yet the FCC chose not to – a choice
that “takes on the character of a ruling that no such
regulation is appropriate or approved.” Ray v. Atl.
Richfield Co., 435 U.S. 151, 178, 98 S.Ct. 988, 55
L.Ed.2d 179 (1978). Because “federal officials affirmatively [declined] to exercise their full authority” under
the Communications Act in making a discretionary
choice, “[s]tates are not permitted to use their police
powers to enact such a regulation” in the resulting
void. Id.
***
At bottom, we cannot hear a stipulated judgment
appeal until the district court has issued a final ruling
61a
on the appealed issue. Nor can we entertain such
an appeal when it is the product of an open attempt
to subvert the interlocutory appellate rules. Because
this appeal violates both of these precepts, I would
dismiss it without reaching the merits of preemption.
And even if I had to reach the merits, I would find that
the ABA is preempted by federal law, as the majority’s
cribbed reading of the Communications Act undermines the authority of the FCC to regulate interstate
communications and emboldens states like New York
to impose costs on broadband internet service that
extend well beyond their borders. For all these
reasons, I respectfully dissent from the majority’s
opinion.
62a
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NEW YORK
_______________
Civil Action No. 2:21-cv-2389 (DRH) (AKT)
NEW YORK STATE TELECOMMUNICATIONS ASSOCIATION, INC., CTIA – THE WIRELESS ASSOCIATION,
ACA CONNECTS – AMERICA’S COMMUNICATIONS ASSOCIATION, USTELECOM – THE BROADBAND ASSOCIATION,
NTCA – THE RURAL BROADBAND ASSOCIATION, SATELLITE BROADCASTING AND COMMUNICATIONS ASSOCIATION, ON BEHALF OF THEIR RESPECTIVE MEMBERS,
Plaintiffs,
v.
LETITIA A. JAMES, IN HER OFFICIAL CAPACITY
AS ATTORNEY GENERAL OF NEW YORK,
Defendant.
_______________
[Filed June 11, 2021]
_______________
MEMORANDUM AND ORDER
HURLEY, Senior District Judge:
INTRODUCTION
On May 6, 2021, the captioned Plaintiffs, a group of
trade associations whose members provide broadband
internet service to New Yorkers, moved this Court
under Federal Rule of Civil Procedure 65(a) for a preliminary injunction barring New York State Attorney
General Letitia A. James from enforcing the Affordable Broadband Act, N.Y. Gen. Bus. Law § 399-zzzzz,
63a
which would require them by June 15, 2021 to offer
qualifying low-income costumers high-speed broadband
service at or below certain price ceilings. For the reasons set forth below, Plaintiffs’ motion is GRANTED.
BACKGROUND
Internet access has transcended beyond mere
luxury to modern necessity. So integrated has the
Internet become with contemporary American life
that our nation adapted to—if not survived—the
COVID-19 pandemic by relying on how easily it
facilitates access to our fundamental needs: e.g.,
healthcare (“telehealth”), education (“remote learning”),
employment (“work from home”), camaraderie (“social
networking”). Def. Mem. in Opp. at 5 [DE 19] (“Def.
Opp.”). But the Internet’s promise of access is only as
promising as its accessibility – which depends in part
on whether individuals can afford it.
The New York State Affordable Broadband Act’s
(the “ABA”) stated purpose is to ensure all New Yorkers have access to affordable Internet. Signed into law
April 16, 2021, the ABA regulates every New York
“broadband service,” defined as
[a] mass-market retail service that provides the
capability to transmit data to and receive data from
all or substantially all internet endpoints, including
any capabilities that are incidental to and enable
the operation of the communications service provided
by a wireline, fixed wireless or satellite service provider, . . . [excluding] dial-up service.
N.Y. Gen. Bus. Law § 399-zzzzz(1). The ABA covers
every broadband service provider operating in New York
except those serving “no more than twenty-thousand
households” whose compliance, as determined by
the New York State Public Service Commission (the
“PSC”), “would result in unreasonable or unsustainable
64a
financial impact.” Id. § 399-zzzzz(5). Plaintiffs are
trade associations whose members provide “wireline,
fixed wireless, or satellite broadband service”; they
are “broadband service” providers. Compl. ¶¶ 12-18,
26.
The ABA mandates such providers offer, by June 15,
2021, all qualifying low-income households at least
two Internet access plans: (i) download speeds of
at least 25 megabits-per-second at no more than
$15-per-month, or (ii) download speeds of at least 200
megabits-per-second at no more than $20-per-month.
N.Y. Gen. Bus. Law §§ 399-zzzzz(2)-(4). A household
qualifies if it:
(a) is eligible for free or reduced-priced lunch
through the National School Lunch Program; or
(b) is eligible for, or receiving the supplemental
nutrition assistance program benefits; or (c) is eligible for, or receiving Medicaid benefits; or (d) is eligible for, or enrolled in senior citizen rent increase
exemption; or (e) is eligible for, or enrolled in disability rent increase exemption; or (f ) is a recipient
of an affordability benefit from a utility.
Id. § 399-zzzzz(2). These qualifications cover approximately “[7] million New Yorkers and 2.7 million
households,”1 the latter of which exceeds one-third of
all New York State households.2
Providers may raise prices only according to a
statutory formula and only once every five years
1 Press Release, Governor Cuomo Signs Legislation Establish-
ing First-in-the-Nation Program to Provide Affordable Internet
to Low-Income Families (Apr. 16, 2021), https://on.ny.gov/
2QZqDtl.
2 U.S. Census Bureau, QuickFacts: New York, https://www.
census.gov/quickfacts/fact/table/NY/HSD410219 (last accessed
June 11, 2021) (7,343,234 households).
65a
(for the $15 monthly plan) or two years (for the $20
monthly plan). Id. §§ 399-zzzzz(3)-(4). These Internet
plans must be offered “on the same terms and
conditions . . . as for the regularly priced offerings
for similar service[s]” and on a standalone basis,
i.e., separate from any “bundled cable and/or phone
services.” Id. §§ 399-zzzzz(3), (5). Providers must
“make all commercially reasonable efforts to promote
and advertise” the plans. Id. § 399-zzzzz(7). The ABA
empowers the New York State Attorney General,
Defendant Letitia A. James, to seek injunctive relief
against and civil penalties up to a $1000 per violation
from any noncompliant providers. Id. § 399-zzzzz(10).
Plaintiffs brought this action on April 30, 2021,
[DE 1], and on May 6, 2021 moved for a preliminary
injunction barring Defendant from enforcing and
giving effect to the ABA, Pls. Mem. in Support [DE 16]
(“Pls. Mem.”). Declarations from six executives at
Plaintiffs’ member organizations accompany Plaintiffs’ briefs. See Declaration of Jim Baase (“Empire
Tele. Decl.”), Ex A. to Pls. Mem. [DE 16-1]; Declaration of Matthew Kramer Coakley, (“Verizon Decl.”),
Ex. B. to Pls. Mem. [DE 16-2]; Declaration of Glen
Faulkner (“Heart of the Catskills Decl.”), Ex. C to
Pls. Mem. [DE 16-3]; Declaration of Jennifer Manner
(“Hughes Network Decl.”), Ex. D to Pls. Mem. [DE 164]; Declaration of Jason Miller (“Delhi Tele. Decl.”),
Ex. E to Pls. Mem. [DE 16-5]; Declaration of Mark T.
Webster (“Champlain Tele. Decl.”), Ex. F to Pls. Mem.
[DE 16-6].
Defendant opposed on May 17, 2021 and advised
that the PSC scheduled a hearing for May 19, 2021
to address pending exemption applications. Def. Opp.
at 10. At the hearing, the PSC granted “temporary
exemption[s] to allow for the orderly review and
66a
evaluation of the exemption requests” to several
companies, four of whose executives submitted
declarations in support of Plaintiffs’ motion. Order
Granting Temporary Exemptions attached to Def.’s
May 20, 2021 Ltr. [DE 21] (“PSC Order”). The PSC
issued a “Notice Soliciting Comment” on May 28,
2021, inviting public comment “on the criteria and
factors that may be considered by the [PSC] in
evaluating” the ABA’s “unreasonable or unsustainable financial impact” exemption criteria. Ex. B to
Pls. June 1, 2021 Ltr. [DE 24-2].
Plaintiffs submitted their Reply brief on May 21,
2021. Pls. Reply in Support [DE 23] (“Pls. Reply”).
Oral argument was held on June 3, 2021.
DISCUSSION
“To obtain a preliminary injunction against government enforcement of a statute, [a plaintiff ] must
establish (1) that it is likely to succeed on the merits,
(2) that it is likely to suffer irreparable harm if the
injunction is not granted, (3) that the balance of the
equities tips in its favor, and (4) that the injunction
serves the public interest.” SAM Party of New York v.
Kosinski, 987 F.3d 267, 273-74 (2d Cir. 2021).
First, the Court will address irreparable injury.
“[T]he moving party must first demonstrate that such
injury is likely before the other requirements for the
issuance of an injunction will be considered,” Grand
River Enter. Six Nations, Ltd. v. Pryor, 481 F.3d 60,
66 (2d Cir. 2007), for imminent, irreparable injury
is “the single most important prerequisite for the
issuance of a preliminary injunction.” Yang v. Kosinski, 960 F.3d 119, 128 & n.32 (2d Cir. 2020).
Second, the Court analyzes Plaintiffs’ likelihood of
success on the merits, despite Plaintiffs’ availment
also of the alternative “serious questions” standard.
67a
Pls. Mem. at 6-7, 24. The Second Circuit “ha[s] repeatedly stated that the serious-questions standard cannot
be used to preliminarily enjoin governmental action,”
Trump v. Deutsche Bank AG, 943 F.3d 627, 637 (2d
Cir. 2019), rev’d on other grounds sub nom., Trump v.
Mazars USA, LLP, ––– U.S. –––, 140 S.Ct. 2019, 207
L.Ed.2d 951 (2020), and the ABA is the product of New
York State’s legislative process, see Able v. United
States, 44 F.3d 128, 131 (2d Cir. 1995) (instructing not
to apply serious-questions standard to “governmental
policies implemented through legislation or regulations
developed through presumptively reasoned democratic
processes [because they] are entitled to a higher degree
of deference and should not be enjoined lightly”).
Third, the Court balances the equities and weighs
the public interest. Pharaohs GC, Inc. v. U.S. Small
Bus. Admin., 990 F.3d 217, 225 (2d Cir. 2021) (quoting
Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20,
129 S.Ct. 365, 172 L.Ed.2d 249 (2008)). The Court
finishes by addressing Federal Rule of Civil Procedure
65(c).
I. Imminent, Irreparable Harm
In the context of a preliminary injunction motion,
irreparable harm must be “actual and imminent,” not
“remote,” not “speculative,” and not capable of remedy
should “a court wait[ ] until the end of trial to resolve”
the matter. Grand River Enter. Six Nations, Ltd., 481
F.3d at 66. If redressable through monetary damages,
an injury ordinarily will not justify preliminary injunctive relief, Moore v. Consol. Edison Co. of New York,
409 F.3d 506, 510 (2d Cir. 2005) (citing Morales v.
Trans World Airlines, Inc., 504 U.S. 374, 381, 112
S.Ct. 2031, 119 L.Ed.2d 157 (1992)), unless the Eleventh
Amendment precludes recovery of monetary damages,
United States v. New York, 708 F.2d 92, 93 (2d Cir.
1983) (per curiam).
68a
A. Parties’ Arguments
Plaintiffs ground irreparable harm in a “Hobson’s
choice” whereby they suffer injury whether or not they
comply with ABA. Should they choose noncompliance,
they face civil penalties and the Governor’s “promise”
that they “will lose [their] franchise in the State of
New York.” Should they comply, the ABA will “likely”
require them to provide these services at a loss, raise
advertising expenditures, impose administrative costs
due to providers’ need “to develop a system for validating customers’ eligibility,” force them to cancel preexisting business plans for upgrades to, and expansion
of, their broadband networks, and inflict reputational
harm. Pls. Mem. at 18-20.
Defendant counters that Plaintiffs “speculate” with
“conclusory arguments” about “possible” future events,
whose effects may be “long term” and not “imminent.”
Def. Opp. at 8-10. Defendant says Plaintiffs fail to
consider the “benefits” providers “are likely to gain
from the ABA,” such as new customers and increased
goodwill. Id. Defendant also notes an uncertainty as
to whether or not certain of Plaintiffs’ member organizations must comply with the ABA, considering the
specific services they offer and the availability of
exemptions. Id. With respect to the latter, Defendant
notified the Court that the PSC granted four organizations whose executives submitted declarations
“temporary exemption[s] . . . pending complete review
of individual exemption applications.” PSC Order at 7.
B. Analysis
Plaintiffs have adequately demonstrated imminent
irreparable injury largely due to the monetary harm
they would suffer. Though monetary damages would
usually supply an adequate remedy at law negating
the availability of preliminary injunctive relief, the
69a
harm takes on special import where, as here, the
Eleventh Amendment precludes redressability. See
United States v. New York, 708 F.2d at 93-94; e.g.,
UnitedHealthcare of N.Y., Inc. v. Vullo, 2018 WL
4572243, at *2 (S.D.N.Y. Sept. 21, 2018). “Where
[monetary] damages cannot be later collected because
the defendant enjoys [E]leventh [A]mendment
immunity, the damages become irreparable.”3 N.Y.S.
Trawlers Ass’n v. Jorling, 764 F. Supp. 24, 25-26
(E.D.N.Y.), aff ’d, 940 F.2d 649 (2d Cir. 1991); e.g.,
John E. Andrus Mem’l, Inc. v. Daines, 600 F. Supp. 2d
563, 572 n.6 (S.D.N.Y. 2009) (plaintiffs “unable to
collect a judgment for monetary damages” due to
“sovereign immunity under the Eleventh Amendment”
may have irreparable injury “presumed” because “the
only relief available . . . is injunctive.”); Am. Soc. of
Composers, Authors, & Publishers v. Pataki, 930 F.
Supp. 873, 880 n.15 (S.D.N.Y. 1996). “[A]t least three
circuits have held that unrecoverable damages may
be irreparable harm, without reference to the amount
of the loss.” Regeneron Pharms., Inc. v. U.S. Dep’t
of Health & Hum. Servs., 2020 WL 7778037, at *4
(S.D.N.Y. Dec. 30, 2020) (citing Odebrecht Const., Inc.
v. Sec’y, Fla. Dep’t of Transp., 715 F.3d 1268, 1289
(11th Cir. 2013); Chamber of Commerce v. Edmondson, 594 F.3d 742, 770-71 (10th Cir. 2010); and Iowa
Utils. Bd. v. FCC, 109 F.3d 418, 426 (8th Cir. 1996)).
3 At oral argument, Defendant pointed to the availability of
state remedies, notwithstanding the Eleventh Amendment. Tr.
of Oral Arg. at 24:10-14. Yet “in deciding whether a federal plaintiff has an available remedy at law that would make injunctive
relief unavailable, federal courts may consider only the available
federal legal remedies.” United States v. New York, 708 F.2d
at 93-94 (emphasis in original) (citing Petroleum Expl., Inc. v.
Commissioner, 304 U.S. 209, 217 & n.8, 58 S.Ct. 834, 82 L.Ed.
1294 (1938)).
70a
Beginning June 15, 2021, Plaintiffs will suffer
unrecoverable losses increasing with time, and the
enormity of the matter—six plaintiffs with multiple
member organizations attacking a statute affecting
one-third of all New York households—portends a
lengthy litigation. See, e.g., Regeneron Pharms., Inc.,
2020 WL 7778037, at *4 (quoting Jayaraj v. Scappini,
66 F.3d 36, 40 (2d Cir. 1995)). The bulk of these losses
will stem from lost income. Three of Plaintiffs’ declarants estimate the ABA will reduce annual net income
by at least $1 million each. Empire Tele. Decl. ¶ 8 (“net
income loss of approximately $2 million per year”);
Heart of the Catskills Decl. ¶ 17 (“top-line revenue
will decrease by $1,364,000, and net cash flow will
decrease by $1,031,000,”); Delhi Tele. Decl. ¶ 7 (“net
income loss of about $1 million per year (or $90,000
per month)”). While a telecommunications giant like
Verizon may be able to absorb such a loss, others may
not: the Champlain Telephone Company, for example,
“estimates that nearly half [approximately 48%] of
[its] existing broadband customers will qualify for
discounted rates,” with each such customer “caus[ing]
a monetary loss.” Champlain Tele. Decl. ¶¶ 4, 6-7.
Beyond decreasing revenue, the ABA will increase
costs. Providers must “make all commercially reasonable efforts” to advertise the ABA offers, N.Y. Gen.
Bus. Law § 399-zzzzz(7), an ad campaign estimated
to cost one provider (Verizon) between $250,000 and
$1,000,000, Verizon Decl. ¶ 10. These advertising
costs, like lost income, will continue in perpetuity.
And the ABA also imposes upfront, one-time administrative costs – namely, those necessary to develop
an eligibility verification system (as New York State
has not provided one of its own) estimated to start at
$125,000, id. ¶ 8 – to say nothing of administrative
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costs to check on a participant’s continuing eligibility,
likely a perpetual obligation as well. Because providers will begin to face these consequences (revenue
losses, additional costs) and bear these responsibilities
(advertising logistics, eligibility determinations) on
June 15, 2021, Plaintiffs’ harms are therefore imminent.
Defendant impugns Plaintiffs’ figures by arguing
“none are supported by financial records of any sort.”
Def. Opp. at 8. Defendant cites no cases identifying
the form of Plaintiffs’ evidence as a problem, and
courts have long granted preliminary injunctive relief
by relying on affidavits supplying specific financial
figures to demonstrate the magnitude of irreparable
monetary injury. E.g., Nationwide Auto Transporters,
Inc. v. Morgan Driveaway, Inc., 441 F. Supp. 755, 760
(S.D.N.Y. 1977); see Regeneron Pharms., Inc., 2020
WL 7778037, at *4-5; see also Mullins v. City of
New York, 626 F.3d 47, 52 (2d Cir. 2010) (“[H]earsay
evidence may be considered by a district court in
determining whether to grant a preliminary injunction.”). Moreover, the declarants provide these figures
under the penalty of perjury, see 28 U.S.C. § 1746,
which their positions qualify them to assert, Empire
Tele. Decl. ¶ 1 (Chief Operating Officer); Verizon Decl.
¶ 1 (Executive Director of Home Segment Marketing);
Heart of the Catskills Decl. ¶ 1 (President and General
Manager); Hughes Network Decl. ¶ 1 (Senior Vice
President for Regulatory Affairs); Delhi Tele. Decl. ¶ 1
(Vice President/General Manager); Champlain Tele.
Decl. ¶ 1 (Controller). Plaintiffs have met their burden
of proof.
To the extent Defendant faults Plaintiffs’ declarants
for predicting these harms as “likely,” Def. Opp. at 8
& n.5, the law does not demand absolute prescience.
The Supreme Court’s “frequently reiterated standard
72a
requires plaintiffs seeking preliminary relief to
demonstrate that irreparable injury is likely in the
absence of an injunction.” Winter, 555 U.S. at 22, 129
S.Ct. 365 (emphasis in original). Further, to the extent
Defendant contests irreparable harm by relying on
the purported “benefits” some providers “are likely to
gain from the ABA,” Def. Opp. at 9, these “benefits”
actually exacerbate Plaintiffs’ harms. Plaintiffs’ declarants aver, and Defendant does not dispute, that many
providers will furnish broadband service at ABAmandated rates at a loss, meaning every “new
customer” who takes advantage of the offer pushes a
provider closer to (if not deeper in) the red. E.g., Heart
of the Catskills Decl. ¶ 15; Hughes Network Decl. ¶ 6.
The availability of exemptions similarly offers little
in refute at this juncture. Once the ABA goes into
effect, later exemption requests “do[ ] not relieve [a
provider] from its obligations under the [ABA] until
such time as the request is granted by the Commission.” PSC Order at 4, 6. The granted temporary
exemptions to some, but not all, of Plaintiffs’ member
organizations do not guarantee that such organizations will avoid irreparable injury. The temporary
exemptions merely give the PSC more time to decide
(viz. potentially deny) the requests, pursuant to
“criteria and factors” not yet identified. Id. at 5; N.Y.
Gen. Bus. Law § 399-zzzzz(5). Providers serving fewer
than 20,000 households are eligible for, not entitled to,
an exemption and require the PSC to find “compliance” would “result in unreasonable or unsustainable
financial impact.” N.Y. Gen. Bus. Law § 399-zzzzz(5).
How the PSC makes determination will remain
unknown until after June 25, 2021 – the deadline to
submit public comment to the PSC on the issue. Ex. B
to Pls. June 1, 2021 Ltr.
73a
Accordingly, when considered alongside the obvious
downsides to noncompliance, which include possible
initiation of dissolution proceedings,4 Plaintiffs have
demonstrated the ABA going into effect on June 15,
2021 compliance will result in irreparable injury
absent preliminary injunctive relief.
II. Likelihood of Success
Plaintiffs’ likelihood of success depends on the
strength of their preemption arguments, namely
whether the ABA (a) conflicts with federal law by
standing as an obstacle to the accomplishment and
execution of the full purposes and objectives of
Congress (“conflict preemption”), or (b) invades a field
of regulation entirely occupied by federal law, with no
room left for state law (“field preemption”).
4 At an April 7, 2021 press conference, Governor Cuomo indi-
cated that the failure to comply with ABA would result in the loss
of the provider’s franchise in the State of New York. The Court
notes that the New York Attorney General has long wielded
the power to dissolve businesses which, “by the abuse of [their]
powers contrary to the public policy of the state[,] ha[ve] become
liable to be dissolved.” See People by Abrams v. Oliver Sch., Inc.,
206 A.D.2d 143, 147-48, 619 N.Y.S.2d 911 (4th Dep’t 1994) (citing
People v. Buffalo Stone & Cement Co., 131 N.Y. 140, 29 N.E. 947
(1892) and People v. N. River Sugar Ref. Co., 121 N.Y. 582, 24
N.E. 834 (1890)).
This is not to suggest a violation of law should go unremedied.
Rather, it lends credence to Plaintiffs’ asserted “Hobson’s choice”
through which they face irreparable injury via the destruction of
the business regardless of their choice to comply or not to comply.
Dissolution constitutes irreparable harm because it threatens
the viability of a provider’s business. See Tom Doherty Assocs.,
Inc. v. Saban Ent., Inc., 60 F.3d 27, 38 (2d Cir. 1995); John B.
Hull, Inc. v. Waterbury Petroleum Prod., Inc., 588 F.2d 24, 28-29
(2d Cir. 1978).
74a
A. Preemption Generally
“The purpose of Congress is the ultimate touchstone
in every preemption case.” Altria Grp., Inc. v. Good,
555 U.S. 70, 76, 129 S.Ct. 538, 172 L.Ed.2d 398 (2008)
(quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485,
116 S.Ct. 2240, 135 L.Ed.2d 700 (1996)). Accordingly,
a court’s analysis begins “with the assumption that
the historic police powers of the States [are] not to be
superseded by [federal law] unless that was the clear
and manifest purpose of Congress.” Id. at 77, 129
S.Ct. 538 (alteration in original) (internal quotation
marks omitted) (quoting Rice v. Santa Fe Elevator
Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 91 L.Ed. 1447
(1947)). However, if “a local government regulates in
an area ‘where there has been a history of significant
federal presence,’ ” a purported exercise of historic
police powers is not afforded deference. N.Y. SMSA
Ltd. P’ship v. Town of Clarkstown, 612 F.3d 97, 104
(2d Cir. 2010) (quoting United States v. Locke, 529
U.S. 89, 108, 120 S.Ct. 1135, 146 L.Ed.2d 69 (2000)).
“Federal regulations have no less preemptive effect
than federal statutes.” SPGGC, LLC v. Blumenthal,
505 F.3d 183, 188 (2d Cir. 2007) (internal quotation
marks omitted) (quoting Fid. Fed. Sav. & Loan Ass’n
v. de la Cuesta, 458 U.S. 141, 153, 102 S.Ct. 3014, 73
L.Ed.2d 664 (1982)). A statute or regulation with
plausible alternative preemption readings requires a
court “to accept the reading that disfavors preemption.” Bates v. Dow Agrosciences LLC, 544 U.S. 431,
449, 125 S.Ct. 1788, 161 L.Ed.2d 687 (2005).
There are two types of preemption asserted here:
conflict preemption and field preemption. The Court
begins with conflict preemption.
B. Conflict Preemption
“[F]ederal law must prevail” over state law
pursuant to the doctrine of conflict preemption if
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“ ‘compliance with both state and federal law is impossible’ or [if ] ‘the state law stands as an obstacle to the
accomplishment and execution of the full purposes
and objectives of Congress.’ ” Oneok, Inc. v. Learjet,
Inc., 575 U.S. 373, 377, 135 S.Ct. 1591, 191 L.Ed.2d
511 (2015) (quoting California v. ARC America Corp.,
490 U.S. 93, 100, 101, 109 S.Ct. 1661, 104 L.Ed.2d 86
(1989)).
Before addressing the merits, it is necessary to
review broadband service under the Federal Communications Act of 1934 (the “Communications Act”), 47
U.S.C. § 151 et seq., as amended by the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56
(1996). The Federal Communications Commission
(the “FCC”) has classified broadband internet under
the Communications Act as either a Title I “information service” or a Title II “telecommunications service.” The two classifications are mutually exclusive.
47 U.S.C. §§ 153(24), (53) (“The term ‘information service’ . . . does not include any use of any such capability for . . . the management of a telecommunications
service.”). “These similar-sounding [classifications]
carry considerable significance: Title II [telecommunications services] entails common carrier status,”
whereas Title I information services do not. Mozilla
Corp. v. FCC, 940 F.3d 1, 17 (D.C. Cir. 2019) (per
curiam); see 47 U.S.C. § 153(51) (permitting treatment
“as a common carrier . . . only to the extent that [an
entity] is engaged in providing telecommunications
services”).
Prior to 2015 the FCC classified, and since 2018
has classified, broadband internet as a Title I “information service.” 2015 Order ¶ 308;5 2018 Order ¶¶ 2,
5 Report and Order on Remand, Declaratory Ruling, and
Order, Protecting and Promoting the Open Internet, 30 FCC Rcd.
5601, ¶ 25 (2015) (“2015 Order”).
76a
26.6 In the interim between 2015 and 2018, the FCC
classified broadband as a Title II “telecommunications
service.” Its present “information service” status
prevents the FCC from imposing common carrier
obligations on providers. 2018 Order ¶¶ 26-64; see
Mozilla Corp., 940 F.3d at 17 (“ ‘[I]nformation services’
are exempted from common carriage status and,
hence, Title II regulation.”).
1. Parties’ Arguments
Plaintiffs contend the ABA conflicts with Congress’s
purposes and objectives in the Communications Act,
as interpreted by the FCC and embodied in the FCC’s
2018 Order. The ABA, they say, “subjects the same
broadband service that the Communications Act says
should not be subject to common-carrier obligations
to a form of per se common-carrier regulation: rate
regulation.” Pls. Mem. at 12. Plaintiffs compare the
2018 Order, in which the FCC announced a policy
to “further[ ] its goal of making broadband available
to all Americans” and exempted broadband from
common carrier treatment, with the ABA, in which
New York purported to reach the same goal through
contradictory means. Compare 2018 Order ¶¶ 86-87,
and 2015 Order ¶¶ 382, 451 (“[W]e do not and cannot
envision adopting new ex ante rate regulation of
broadband Internet access service in the future . . . .”),
with N.Y. Gen. Bus. Law § 399-zzzzz.
Defendant casts the ABA not as common carrier
rate regulation, but as an “accessible pricing scheme.”
Def. Opp. at 17-18. By choosing a Title I classification,
she says, the FCC does not deregulate broadband
internet but, rather, “disclaim[s]” authority to regulate it altogether. Def. Opp. at 23; see also Hr’g Tr. at
6 Declaratory Ruling, Report and Order, and Order, Restoring
Internet Freedom, 33 FCC Rcd. 311, ¶ 21 (2018) (“2018 Order”).
77a
65:16-23, ACA Connects v. Becerra, No. 18-cv-2684
(E.D. Cal. Feb. 23, 2021), Ex. H to Pls. Mem. [DE
16-8] (“Becerra Tr.”) (“[R]einterpret[ting] broadband
Internet as an information service covered by Title I
. . . place[s] it outside the FCC’s regulatory ambit . . . ,
a decision by the FCC that it lacked authority to regulate in the first place.”). She reads the Communications Act’s prohibition of common-carrier treatment of
“information services” not to limit states, see 47 U.S.C.
§ 153(51), and argues that finding Congress intended
preemption of state law there contravenes the express
manner in which it did so elsewhere in the statute,
Def. Opp. at 20 (citing 47 U.S.C. § 160(a)). Defendant
contends the FCC’s 2018 Order fails to express a
policy preference strong enough to overcome New
York’s “historic police powers.” Def. Opp. at 17-18.
2. Analysis
Plaintiffs have demonstrated a likelihood of success
on the issue of conflict preemption. The Court rejects
Defendant’s contention that the FCC disclaimed “its
authority to regulate broadband at all.” Tr. of Oral
Arg. at 17:15-17. In reclassifying broadband internet
as a Title I information service, the FCC made the
affirmative decision not to treat it as a common
carrier. The FCC’s affirmative decision is different
from an abdication of jurisdiction writ large, even
though Title I may not confer as expansive of powers
as, say, Title II and its grant to impose commoncarrier obligations. Ray v. Atl. Richfield Co., 435 U.S.
151, 178, 98 S.Ct. 988, 55 L.Ed.2d 179 (1978) (“The
Court has previously recognized that where failure of
. . . federal officials affirmatively to exercise their full
authority takes on the character of a ruling that no
such regulation is appropriate or approved pursuant
to the policy of the statute, States are not permitted to
78a
use their police power to enact such a regulation.” (internal quotation marks omitted)); Bethlehem Steel Co.
v. New York State Labor Relations Board, 330 U.S.
767, 774, 67 S.Ct. 1026, 91 L.Ed. 1234 (1947) (holding
federal nonregulation was not an “administrative concession that the nature of these appellants’ business
put” the particular subject matter “beyond reach of
federal authority”). “Information-service providers . . .
are not subject to mandatory common-carrier regulation under Title II, though the Commission has jurisdiction to impose additional regulatory obligations
under its Title I ancillary jurisdiction to regulate
interstate and foreign communications.” Nat’l Cable
& Telecomms. Ass’n v. Brand X Internet Servs., 545
U.S. 967, 976, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005)
(emphasis added); Am. Libr. Ass’n v. FCC, 406 F.3d
689, 692-93 (D.C. Cir. 2005) (The FCC’s “general grant
of jurisdiction under Title I . . . encompasses ‘all interstate and foreign communication by wire.’ ”) (quoting
United States v. Southwestern Cable Co., 392 U.S. 157,
88 S.Ct. 1994, 20 L.Ed.2d 1001 (1968)). “In a statutory
scheme in which Congress has given an agency various bases of jurisdiction and various tools with which
to protect the public interest, the agency is entitled
to some leeway in choosing which jurisdictional base
and which regulatory tools will be most effective in
advancing the Congressional objective.” Computer &
Commc’ns Indus. Ass’n v. FCC, 693 F.2d 198, 212
(D.C. Cir. 1982) (emphasis in original) (quoting Phila.
Television Broadcasting Co. v. FCC, 359 F.2d 282,
284 (D.C. Cir. 1966)). The FCC’s 2018 Order chooses
Title I “information service” treatment for broadband
internet and, in doing so, does not tender jurisdiction
to the States to regulate interstate broadband providers as common carriers. Rather, the FCC binds itself
to the confines of Title I jurisdiction, cementing its
79a
long-standing policy choice concerning the propriety
of imposing common-carrier rate regulations upon
broadband internet service.7 The ABA stands as
an obstacle to the accomplishment and execution of
the FCC’s reasoned decision to assure interstate
broadband providers that no common-carrier rate
regulations await them beyond the horizon.8 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.” (internal citation omitted)).
To be clear, the ABA is rate regulation, and rate
regulation is a form of common carrier treatment.
In Defendant’s words, the ABA concerns “Plaintiffs’
pricing practices” by creating a “price regime” that
“set[s] a price ceiling,” which flatly contradicts her
simultaneous assertion that “the ABA does not ‘rate
regulate’ broadband services.” Def. Opp. at 1, 6, 14,
18 (capitalization omitted). “Price ceilings” regulate
rates. E.g., AT&T Co. v. FCC, 974 F.2d 1351, 1352
(D.C. Cir. 1992) (“The FCC issued an order adopting a
new method for regulating the rates charged by AT&T
7 Previous to the 2015 Order, the FCC treated broadband
internet as a Title I information service for “almost twenty
years.” 2018 Order ¶¶ 1-2. And even though Title II gave it the
power to impose common-carrier rate regulations on broadband
internet between 2015 and 2018, the FCC expressly decided
against doing so. 2015 Order ¶¶ 382, 451 (“[B]ecause we do
not and cannot envision adopting new ex ante rate regulation
of broadband Internet access service in the future, we forbear
from applying sections 201 and 202 to broadband services to that
extent.”).
8 The FCC reclassified broadband internet service under
Title I “due to concerns that the [FCC] could reverse course in
the future and impose [pursuant to Title II] a variety of costly
regulations on the broadband industry—such as rate regulation.”
2018 Order ¶ 101.
80a
. . . that established a ‘price cap index,’ that serves
as a price ceiling for each of three “baskets” of AT&T
services.” (emphasis added)); see, e.g., In re Permian
Basin Area Rate Cases, 390 U.S. 747, 758-60, 768,
88 S.Ct. 1344, 20 L.Ed.2d 312 (1968) (recognizing
the Federal Power Commission, “for purposes of rate
regulation,” devised a “rate structure” by setting “two
area maximum prices,” using the “legislative power
to create price ceilings” (internal quotation marks
omitted)); see also, e.g., Verizon Commc’ns, Inc. v. FCC,
535 U.S. 467, 486-87, 122 S.Ct. 1646, 152 L.Ed.2d 701
(2002) (“The regulatory response in some markets
was adoption of a rate-based method commonly called
‘price caps,’ as, for example, by the FCC’s setting of
maximum access charges paid to large local-exchange
companies by interexchange carriers.” (internal citations omitted)).
And rate regulation is a long-accepted method of
regulating common carriers. E.g., MCI Telecomms.
Corp. v. AT&T Co., 512 U.S. 218, 231-32, 234, 114
S.Ct. 2223, 129 L.Ed.2d 182 (1994) (“[T]he [Communications] Act establishes a rate-regulation, filed-tariff
system for common-carrier communications.” (emphasis added)); Maislin Indus., U.S., Inc. v. Primary Steel,
Inc., 497 U.S. 116, 119, 110 S.Ct. 2759, 111 L.Ed.2d 94
(1990) (“The ICC regulates interstate transportation
by motor common carriers to ensure that rates are
both reasonable and nondiscriminatory.” (emphasis
added)). Defendant resists by noting the ABA is
“limited to a discrete subset of customers,” whereas
common carriers offer service to the public indiscriminately and on general terms. Def. Opp. at 18. But
“common carrier status” does not turn on a provider’s
offered service being “practically . . . available to the
entire public.” Nat’l Ass’n of Regul. Util. Comm’rs v.
FCC, 525 F.2d 630, 641 (D.C. Cir. 1976). A regulation
81a
may impose common carrier obligations even if a
service is “of practical use to only a fraction of the
population” as a result of the obligation “limit[ing]” its
benefits to those “eligible[ ].” Id. at 642. “The key
factor is that the operator offer indiscriminate service
to whatever public its service may legally and practically be of use.” Id.
Putting it all together, the ABA conflicts with the
implied preemptive effect of both the FCC’s 2018
Order and the Communications Act. The ABA’s
common carrier obligations directly contravenes the
FCC’s determination that broadband internet “investment,” “innovation,” and “availab[ility]” best obtains
in a regulatory environment free of threat of commoncarrier treatment, including its attendant rate regulation. 2018 Order ¶¶ 86-87, 101; see Mozilla Corp., 940
F.3d at 49-55 (upholding the FCC’s determination);
the ABA thereby stands as an obstacle to the FCC’s
accomplishment and execution of its full purposes and
objectives and is conflict-preempted.9
9 As Defendant would have it, the FCC’s 2018 Order reflects
so profound a misunderstanding of Communications Act that,
instead of protecting broadband internet providers from common
carrier treatment and its attendant threat of rate regulation, it
actually exposes them to fifty states-worth of such regulations.
Moreover, if Defendant’s reading of Mozilla Corporation is
correct, the FCC’s decision to “reclassif[y broadband] away from
public-utility style regulation” survived the D.C. Circuit’s application of the “arbitrary-and-capricious” standard of review despite
causing more public-utility style regulation. 940 F.3d at 50-55
(emphasis added) (internal quotation marks and citations omitted). The Court has its doubts. How could the FCC’s 2018 Order
make a “rational connection between the facts found [i.e., publicutility style regulation impedes investment, innovation, and
availability] and the choice made [i.e., to classify broadband under
Title I]” if, as a matter of law, Title I treatment unfetters fifty
state sovereigns to impose their own public-utility style regulations?
See id.
82a
The D.C. Circuit holding in Mozilla Corporation
does not convince the Court otherwise. The Mozilla
Court upheld the FCC’s 2018 Order with the exception
of the “Preemptive Directive,” 940 F.3d at 19, 74-109,
through which the FCC attempted to expressly
preempt “any state or local requirements that are
inconsistent with [its] deregulatory approach,” 2018
Order ¶¶ 194-204. The Mozilla Court held that the
FCC could not expressly preempt such state or local
requirements pursuant to its Title I authority because
Congress did not vest therein the power to expressly
preempt. See Mozilla Corp., 940 F.3d at 83 (“[N]othing
[ ] empower[s] the [FCC] to engage in express preemption in the 2018 Order.”). The FCC may regulate only
so far as Congress grants it “express statutory authority” and “ancillary authority,” each of which the FCC
lacked in trying to expressly preempt under Title I.
Id. at 74-76. The Preemptive Directive’s reach was
all-the-more-so ultra vires because it entered the
intrastate communications hemisphere “over which
Congress expressly denied the [FCC] regulatory
authority.” Id. at 77-78 (internal quotation marks
omitted); id. at 82 (noting the Preemptive Directive
purported to make “a categorical determination that
any and all forms of state regulation of intrastate
broadband would inevitably conflict with the 2018
Order”).
Mozilla’s holding does not preclude or revoke the
2018 Order’s implicit preemptive effect. The D.C.
Circuit concluded its decision by noting “it would be
wholly premature to pass on the preemptive effect,
under conflict or other recognized preemption principles, of the remaining portions of the 2018 Order.” Id.
at 86. Those same preemption principles are implicated by the ABA. And parallel to the D.C. Circuit’s
83a
prediction, when faced with the ABA, Plaintiffs have
“explain[ed] how [that] state practice actually undermines the 2018 Order,” thus “invok[ing] conflict
preemption.” Id. at 85.10
C. Field Preemption
Field preemption reflects a congressional decision
“ ‘to foreclose any state regulation in the area,’
irrespective of whether state law is consistent or
inconsistent with ‘federal standards.’ ” Oneok, Inc. v.
Learjet, Inc., 575 U.S. 373, 377, 135 S.Ct. 1591, 191
L.Ed.2d 511 (2015) (quoting Arizona v. United States,
567 U.S. 387, 401, 132 S.Ct. 2492, 183 L.Ed.2d 351
(2012)). Where “federal law occupies a ‘field’ of regulation ‘so comprehensively that it has left no room for
supplementary state legislation,’ ” it may not only
impose federal obligations “but also confer a federal
right to be free from any other [state law] requirements.” Murphy v. Nat’l Collegiate Athletic Ass’n, ––
U.S. ––, 138 S.Ct. 1461, 1480-81, 200 L.Ed.2d 854
(2018) (quoting R.J. Reynolds Tobacco Co. v. Durham
County, 479 U.S. 130, 140, 107 S.Ct. 499, 93 L.Ed.2d
449 (1986)).
Laws governing “interstate communication services”
comprise the field purportedly preempted here.
10 To the extent Defendant relies on the Eastern District of
California’s Oral Ruling in ACA Connects v. Becerra, No. 18-cv2684 (E.D. Cal. Feb. 23, 2021), for its holding on conflict preemption, such reliance is misplaced. The California Attorney General
defeated the preliminary injunction motion by, in part, “pointing
out” that the statute there did “not regulate how much providers
can charge their customers because providers can charge the
user as much or as little as they like for the service and, thus,
there is no conflict with the Act.” Becerra Tr. at 67:18-21. The
ABA’s express goal is to regulate how much providers can charge.
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1. Parties’ Arguments
Plaintiffs argue federal law preempts the field of
interstate communications services, citing precedent
finding Congress’s “intent” in the Communications
Act’s “broad scheme” of regulation over “interstate
service by communications carriers.” Ivy Broadcasting
Co. v. AT&T Co., 391 F.2d 486, 490-91 (2d Cir. 1968)
(citing Supreme Court cases); see Cap. Cities Cable,
Inc. v. Crisp, 467 U.S. 691, 699-700, 104 S.Ct. 2694,
81 L.Ed.2d 580 (1984) (discussing Southwestern Cable
Co., 392 U.S. 157, 88 S.Ct. 1994, 20 L.Ed.2d 1001
(1968)). Plaintiffs’ asserted “field” is demarcated in 47
U.S.C. § 152:
(a) The provisions of this chapter shall apply to all
interstate and foreign communication by wire or
radio . . . , which originates and/or is received within
the United States, and to all persons engaged within
the United States in such communication . . . .
(b) . . . [N]othing in this chapter shall be construed
to apply or to give the Commission jurisdiction with
respect to (1) charges, classifications, practices, services, facilities, or regulations for or in connection
with intrastate communication service by wire or
radio of any carrier ....
47 U.S.C. §§ 152(a) & (b) (emphasis added). Because
the ABA defines “broadband service” in the exact
same way as the FCC, Plaintiffs say, New York impermissibly seizes jurisdiction outside its “intrastate
services” boundary. Compare N.Y. Gen. Bus. Law
§ 399-zzzzz(1), with 2018 Order ¶ 21 (explaining that
the FCC “continue[s] to define” broadband services in
the same manner as it did in (now-repealed) 47 C.F.R.
§ 8.11(a) and reciting the definition), and 2015 Order
¶ 25 (defining “broadband internet access service”).
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Defendant opposes by observing “[t]he [Communications] Act establishes . . . a system of dual state and
federal regulation,” Louisiana Pub. Serv. Comm’n v.
FCC, 476 U.S. 355, 360, 106 S.Ct. 1890, 90 L.Ed.2d
369 (1986), with states retaining jurisdiction over
intrastate communication services and through which
New York may enact the ABA’s “purely intrastate
affordable-pricing scheme,” Def. Opp. 14. Defendant
contends that Plaintiffs’ reading of 47 U.S.C. § 152(a)
impermissibly renders other Communications Act
provisions “superfluous.” Id. at 15. Defendant also
cites circuit court precedent outside the Second
Circuit that rejects field preemption even where
“states seek to regulate interstate telecommunications services.” Id. at 13 (capitalization and emphasis
removed) (citing Tennessee v. FCC, 832 F.3d 597 (6th
Cir. 2016); Johnson v. American Towers, LLC, 781
F.3d 693 (4th Cir. 2015); In re Universal Serv. Fund
Tel. Billing Prac. Litig., 619 F.3d 1188 (10th Cir.
2010); In re NOS Commc’ns, 495 F.3d 1052 (9th Cir.
2007)).
2. Analysis
Plaintiffs have demonstrated a likelihood of success
on the merits based on field preemption. The ABA is
not a “purely intrastate affordable-pricing scheme,”
nor is it reasonable to read its statutory text in that
manner: It covers providers with “the capability to
transmit data to and receive data from all or substantially all internet endpoints.” N.Y. Gen. Bus. Law
§ 399-zzzzz(1) (emphasis added). As implied by a
cousin term, the “world wide web,” broadband internet
connects New York State users to internet endpoints
well beyond New York’s borders. For example, the
household from which this New York-based federal
Court, working from home, can so-order the parties’
briefing schedule on the Internet-based ECF docket,
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and, in doing so, communicate with Plaintiffs’ Washington, D.C.-based counsel, with proof documented
on the Notice of Electronic Filing receipt. E.g., Order
entered May 5, 2021. The ABA’s plain terms apply
(absent an exemption) to the telecommunications
provider transmitting this interstate communication.
In other words, the ABA is not confined to intrastate
communications services.
Indeed, the ABA borrowed its definition the “broadband services” from the FCC. The FCC before 2015,
between 2015 and 2018, and since 2018 has
continue[d] to define “broadband Internet access
services” as a mass-market retail service by wire or
radio that provides the capability to transmit data
to and receive data from all or substantially all
Internet endpoints,
2018 Order ¶ 21 (footnote omitted); see 2015 Order
¶ 25 (“Consistent with the [FCC’s] 2010 Order . . .”),
which is reprinted in N.Y. Gen. Bus. Law § 399zzzzz(1). While the Court need not, and will not, at
this stage hold that all broadband internet services
are categorically interstate, it suffices to say that the
ABA clearly wanders beyond the intrastate communications line, with no provisions reasonably inferable
as limiting (or even trying to limit) its reach.
Defendant calls this view “mistaken” because the
ABA is not “an interstate-communication statute” but,
rather, “an intrastate pricing regulation.” How the
ABA is “purely intrastate” is counterintuitive, if not
implausible. See Def. Opp. at 14-15. It covers broadband internet communications from “all Internet
endpoints,” including those sent from or to endpoints
outside New York State’s borders; the ABA is not
confined to communications between two New York
endpoints. It covers every provider “engaged” in
87a
“interstate and foreign [broadband internet] communication,” 47 U.S.C. § 152(a), so long as the provider
serves New York customers, not just the “many” providers operating “exclusively within the State” who
thus serve only New York customers, Def. Opp. at 14.
The sole basis on which Defendant relies to call the
ABA “intrastate” is its applicability only to “[c]ompanies that have chosen to provide service in New York.”
Id. But any state law can be construed as applicable
only to those subject to that state’s jurisdiction, which,
accordingly, does not make it “intrastate.” “The key
to [the FCC’s] jurisdiction,” the line between inter- vs.
intrastate, “is the nature of the communication itself
rather than the physical location of the technology” or
the consumers served. See New York Tel. Co. v. FCC,
631 F.2d 1059, 1066 (2d Cir. 1980).
Because the ABA regulates within the field of interstate communications, it triggers field preemption.
Binding Second Circuit decisions are clear: the Communications Act’s “broad scheme for the regulation
of interstate service by communications carriers indicates an intent on the part of Congress to occupy the
field to the exclusion of state law.” Ivy Broadcasting
Co., 391 F.2d at 490-91 (emphasis added) (analyzing
Postal-Tel. Cable Co. v. Warren-Godwin Lumber Co.,
251 U.S. 27, 40 S.Ct. 69, 64 L.Ed. 118 (1919) and Western Union Tel. Co. v. Boegli, 251 U.S. 315, 40 S.Ct.
167, 64 L.Ed. 281 (1920)); e.g., GTE Serv. Corp. v.
FCC, 474 F.2d 724, 730-31 (2d Cir. 1973) (“The courts,
however, have uniformly and consistently interpreted
the [Communications] Act to give the [FCC] broad
and comprehensive rule-making authority in the new
and dynamic field of electronic communication.”); cf.,
Sprint Spectrum L.P. v. Mills, 283 F.3d 404, 416 (2d
Cir. 2002) (“When federal law preempts state law, it
88a
prohibits a state or local governmental entity ‘from
regulating within a protected zone, whether it be a
zone protected and reserved for market freedom . . . or
for [federal agency] jurisdiction.’ Federal regulation
of interstate and foreign communications plainly
preempts much of the field of wireless broadcasting.”
(ellipses and alteration in original) (quoting Bldg.
& Constr. Trades Council v. Associated Builders &
Contractors of Mass./R.I., Inc., 507 U.S. 218, 226-27,
113 S.Ct. 1190, 122 L.Ed.2d 565 (1993))).
Defendant contends that subsequent courts have
called these Second Circuit decisions’ “reasoning into
question,” id. (citing Marcus v. AT&T Corp., 138 F.3d
46 (2d Cir. 1998)), a contention with which the Court
disagrees based on the arguments presented.11
However, it is not this Court’s prerogative to disregard
Ivy Broadcasting when assessing Plaintiffs’ likelihood
of success.
11 In Global NAPs, Inc. v. Verizon New England, Inc., for
example, the Second Circuit noted that Vermont Public Service
Board “made no attempt to set rates or charges for” an interstate
communication service and therefore “narrowly sidestepped
encroachment on the FCC’s jurisdiction to set rates on interstate
communications.” 454 F.3d 91, 102 n.10 (2d Cir. 2006) (citing
Ivy Broadcasting); see also Cap. Cities Cable, Inc. v. Crisp,
467 U.S. 691, 700, 104 S.Ct. 2694, 81 L.Ed.2d 580 (1984) (FCC
h
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