Emergency Application — New York State Telecommunications Association, Inc., et al., Applicants v. Letitia A. James, Attorney General of New York
Supreme Court briefAug 2, 2024
Ask Donna
What actually matters in this document.
Text
EXHIBIT 1
NEW YORK STATE TELECOMMUNICATIONS ASSN. v. JAMES
Cite as 544 F.Supp.3d 269 (E.D.N.Y. 2021)
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, and
Satellite Broadcasting & Communications Association, on behalf of their
respective members, Plaintiffs,
v.
Letitia A. JAMES, in her official
capacity as the Attorney General
of New York, Defendant.
2:21-cv-2389 (DRH) (AKT)
United States District Court,
E.D. New York.
Signed 06/11/2021
Background: Trade associations, whose
members provide broadband internet service, filed motion for a preliminary injunction barring New York State Attorney
General from enforcing the Affordable
Broadband Act, which would require them
to offer qualifying low-income customers
high-speed broadband service at or below
certain price ceilings.
Holdings: The District Court, Denis R.
Hurley, Senior District Judge, held that:
(1) providers adequately demonstrated imminent irreparable injury;
(2) providers adequately demonstrated
likelihood of success based on conflict
prevention;
(3) providers adequately demonstrated
likelihood of success based on field
prevention by the Federal Communications Act of 1934;
(4) providers adequately demonstrated balance of equities and the public interest
favored a preliminary injunction; and
269
(5) Court would exercise its discretion to
decline to require providers to post a
bond.
Motion granted.
1. Injunction O1252
To obtain preliminary injunction
against government enforcement of statute, plaintiff must establish that it is likely
to succeed on merits, that it is likely to
suffer irreparable harm if injunction is not
granted, that balance of equities tips in its
favor, and that injunction serves public
interest.
2. Injunction O1106
Party moving for preliminary injunction must first demonstrate that irreparable injury is likely before other requirements for issuance of injunction will be
considered, for imminent, irreparable injury is single most important prerequisite
for issuance of preliminary injunction.
3. Injunction O1106
In context of preliminary injunction
motion, irreparable harm must be actual
and imminent, not remote, not speculative,
and not capable of remedy should court
wait until end of trial to resolve matter.
4. Federal Courts O2377
Injunction O1114
If redressable through monetary damages, injury ordinarily will not justify preliminary injunctive relief, unless Eleventh
Amendment precludes recovery of monetary damages. U.S. Const. Amend. 11.
5. Telecommunications O1338
Broadband internet service providers
adequately demonstrated imminent irreparable injury, largely due to the monetary
harm they would suffer, as required to
obtain preliminary injunction barring New
York State Attorney General from enforcing the Affordable Broadband Act (ABA),
270
544 FEDERAL SUPPLEMENT, 3d SERIES
which would require them to offer qualifying low-income customers high-speed
broadband service at or below certain
price ceilings; providers would suffer decreasing revenue as well as increased costs
from requirement that they make ‘‘reasonable efforts’’ to advertise the ABA’s offers,
many providers would furnish broadband
service at ABA-mandated rates at a loss,
state had potential Eleventh Amendment
immunity from monetary damages, and
noncompliance could lead to possible initiation of dissolution proceedings. U.S.
Const. Amend. 11; N.Y. General Business
Law § 399-zzzzz.
6. Federal Courts O2377
Injunction O1114
Though monetary damages would usually supply an adequate remedy at law
negating the availability of preliminary injunctive relief, the harm takes on special
import where the Eleventh Amendment
precludes redressability, as where damages cannot be later collected because the
defendant enjoys Eleventh Amendment
immunity, the damages become irreparable. U.S. Const. Amend. 11.
7. Injunction O1052
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.
8. Injunction O1104
The law does not demand absolute
prescience when predicting future harm
for purposes of a preliminary injunction.
9. States O18.11
The purpose of Congress is the ultimate touchstone in every state law preemption case.
10. States O18.13
A court’s preemption 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.
11. Municipal Corporations O53
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 in preemption analysis.
12. States O18.9
Federal regulations have no less
preemptive effect on state law than federal
statutes.
13. States O18.3
A statute or regulation with plausible
alternative preemption readings requires a
court to accept the reading that disfavors
preemption of state law.
14. States O18.5
Federal law must prevail over state
law pursuant to doctrine of conflict preemption if compliance with both state and
federal law is impossible or if state law
stands as obstacle to accomplishment and
execution of full purposes and objectives of
Congress.
15. Telecommunications O611
Under the Federal Communications
Act of 1934, Title II ‘‘telecommunications
services’’ entails common carrier status,
while Title I ‘‘information services’’ do not.
Communications Act of 1934 § 3, 47
U.S.C.A. §§ 153(24), 153(51), 153(53).
16. Telecommunications O1338
Broadband internet service providers
adequately demonstrated likelihood of success based on conflict prevention, as required to obtain preliminary injunction
barring New York State Attorney General
from enforcing the Affordable Broadband
NEW YORK STATE TELECOMMUNICATIONS ASSN. v. JAMES
Cite as 544 F.Supp.3d 269 (E.D.N.Y. 2021)
Act (ABA), which would require them to
offer qualifying low-income customers
high-speed broadband service at or below
certain price ceilings; ABA was rate regulation, a form of common carrier treatment
which conflicted with the implied preemptive effect of both the Federal Communication Commission’s (FCC’s) order, choosing
Title I ‘‘information service’’ treatment for
broadband internet and deciding to treat
broadband services as a common carrier,
and the Federal Communications Act of
1934, which prohibited common-carrier
treatment of ‘‘information services.’’ Communications Act of 1934 § 3, 47 U.S.C.A.
§ 153(51); N.Y. General Business Law
§ 399-zzzzz.
17. Telecommunications O1321
Information-service providers are not
subject to mandatory common-carrier regulation under Title II of the Federal Communications Act of 1934, though the Federal Communications Commission (FCC)
has jurisdiction to impose additional regulatory obligations under its Title I ancillary jurisdiction to regulate interstate and
foreign communications. Communications
Act of 1934 § 1, 47 U.S.C.A. § 151 et seq.
18. Administrative Law and Procedure
O1104, 1112
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.
19. Carriers O12(.5)
Rate regulation is a long-accepted
method of regulating common carriers.
20. Carriers O4
‘‘Common carrier status’’ does not
turn on provider’s offered service being
practically available to entire public.
271
21. Carriers O10
A regulation 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 limiting its
benefits to those eligible; the key factor is
that the operator offer indiscriminate service to whatever public its service may
legally and practically be of use.
22. States O18.7
Field preemption reflects congressional decision to foreclose any state regulation
in area, irrespective of whether state law is
consistent or inconsistent with federal
standards.
23. States O18.7
Where federal law occupies 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 federal right to be
free from any other state law requirements.
24. Telecommunications O1338
Broadband internet service providers
adequately demonstrated likelihood of success based on field prevention by the Federal Communications Act of 1934, as required to obtain preliminary injunction
barring New York State Attorney General
from enforcing the Affordable Broadband
Act (ABA) which would require them to
offer qualifying low-income customers
high-speed broadband service at or below
certain price ceilings; ABA regulated within the field of interstate communications,
and thus triggered field preemption.
Communications Act of 1934 § 2, 47
U.S.C.A. § 152; N.Y. General Business
Law § 399-zzzzz.
25. Telecommunications O615
The key to the Federal Communications Commission’s (FCC’s) jurisdiction,
272
544 FEDERAL SUPPLEMENT, 3d SERIES
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. Communications Act of 1934 § 2, 47 U.S.C.A. § 152(a).
26. States O18.81
Telecommunications O609
Federal Communications Act of 1934’s
broad scheme for regulation of interstate
service by communications carriers indicates intent on part of Congress to occupy
field to exclusion of state law. Communications Act of 1934 § 1, 47 U.S.C.A. § 151
et seq.
27. Federal Courts O2218(2)
States O18.3
Complete preemption is distinct from
ordinary or defensive preemption, which
includes express, field, and conflict preemption.
28. Federal Courts O2218(2)
States O18.3
‘‘Complete preemption’’ is where certain federal statutes are construed to have
such extraordinary preemptive force that
state-law claims coming within scope of
federal statute are transformed, for jurisdictional purposes, into federal claims.
See publication Words and Phrases
for other judicial constructions and
definitions.
29. Telecommunications O615
The ‘‘impossibility exception’’ gives
the Federal Communications Commission
(FCC) jurisdiction where it is not possible
to separate the interstate and the intrastate components of the asserted FCC regulation. Communications Act of 1934 § 2,
47 U.S.C.A. § 152.
30. States O18.11
A federal law’s express preemption
clause does not immediately end the preemption inquiry, because the question of
the substance and scope of Congress’ displacement of state law still remains.
31. States O18.5, 18.7
Preemptive intent may be inferred if
scope of statute indicates that Congress
intended federal law to occupy legislative
field, or if there is actual conflict between
state and federal law.
32. Injunction O1246
The balance of equities and public interest factors for granting a preliminary
injunction merge when the Government is
the opposing party.
33. Telecommunications O1338
Broadband internet service providers
adequately demonstrated balance of equities and the public interest favored a preliminary injunction barring New York
State Attorney General from enforcing the
Affordable Broadband Act (ABA), which
would require them to offer qualifying lowincome customers high-speed broadband
service at or below certain price ceilings;
while the stated purpose of the ABA was
to expand access to broadband internet,
several federal programs allocated billions
of dollars to achieve that same end, and
there was evidence the ABA may not
achieve its desired effect and in fact reduce Internet access statewide due to cancellation of expansion projects based on
costs. N.Y. General Business Law § 399zzzzz.
34. Injunction O1653, 1658
District court has wide discretion to
set the amount of a preliminary injunction
bond, and even to dispense with the bond
requirement where there has been no
proof of likelihood of harm. Fed. R. Civ.
P. 65(c).
35. Telecommunications O1338
District Court, when granting broadband internet service providers’ motion for
NEW YORK STATE TELECOMMUNICATIONS ASSN. v. JAMES
Cite as 544 F.Supp.3d 269 (E.D.N.Y. 2021)
a preliminary injunction barring New York
State Attorney General from enforcing the
Affordable Broadband Act, which would
require them to offer qualifying low-income customers high-speed broadband
service at or below certain price ceilings,
would exercise its discretion to decline to
require providers to post a bond; state
defendants had not requested one, nor was
there any proof of a likelihood of harm to
the state that could result from granting
the injunction. N.Y. General Business
Law § 399-zzzzz; Fed. R. Civ. P. 65(c).
West Codenotes
Validity Called into Doubt
N.Y. General Business Law § 399zzzzz
MOLOLAMKEN LLP, Attorneys for
Plaintiff ACA Connects – America’s Communications Association, 600 New Hampshire Ave. N.W., Suite 500, Washington,
D.C. 20037, By: Jeffrey A. Lamken, Esq.,
Rayiner I. Hashem, Esq.
KELLOGG, HANSEN, TODD, FIGEL
& FREDERICK, P.L.L.C., Attorneys for
Plaintiffs New York State Telecommunications Association, Inc., CTIA – The Wireless Association, USTelecom – The Broadband Association, and NTCA – The Rural
Broadband Association, 1615 M Street,
N.W., Suite 400, Washington, D.C. 20036,
By: Scott H. Angstreich, Esq., Joseph S.
Hall, Esq., Andrew E. Goldsmith, Esq.
HARRIS, WILTSHIRE & GRANNIS
LLP, Attorneys for Plaintiff Satellite
Broadcasting & Communications Association, 1919 M Street, N.W., The Eighth
Floor, Washington, D.C. 20036, By: Jared
Marx, Esq., Michael Nilsson, Esq.
LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK,
273
Attorney for Defendant Letitia A. James,
300 Motor Parkway, Suite 230, Hauppauge, N.Y. 11788, By: Patricia M. Hingerton, Esq., Susan M. Connolly, Esq.
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,
which would require them by June 15,
2021 to offer qualifying low-income customers 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 COVID19 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
274
544 FEDERAL SUPPLEMENT, 3d SERIES
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, TTT [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
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.
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 (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 TTT 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).
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 $15per-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;
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
1.
2.
Press Release, Governor Cuomo Signs Legislation Establishing First-in-the-Nation Program to Provide Affordable Internet to LowIncome Families (Apr. 16, 2021), https://on.
ny.gov/2QZqDtl.
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).
NEW YORK STATE TELECOMMUNICATIONS ASSN. v. JAMES
Cite as 544 F.Supp.3d 269 (E.D.N.Y. 2021)
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 16-4]; 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 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
[1] ‘‘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).
275
[2] 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. 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 seriousquestions 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
[3, 4] In the context of a preliminary
injunction motion, irreparable harm must
276
544 FEDERAL SUPPLEMENT, 3d SERIES
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).
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’’ provid3.
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, fed-
ers ‘‘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] TTT pending complete
review of individual exemption applications.’’ PSC Order at 7.
B.
Analysis
[5–7] 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 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
eral 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)).
NEW YORK STATE TELECOMMUNICATIONS ASSN. v. JAMES
Cite as 544 F.Supp.3d 269 (E.D.N.Y. 2021)
Eleventh Amendment’’ may have irreparable injury ‘‘presumed’’ because ‘‘the only
relief available TTT 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)).
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 onethird 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
277
‘‘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, onetime 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 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 perju-
278
544 FEDERAL SUPPLEMENT, 3d SERIES
ry, 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.
[8] 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 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
ABA-mandated rates at a loss, meaning
every ‘‘new customer’’ who takes advantage of the offer pushes a provider closer
4.
At an April 7, 2021 press conference, Governor Cuomo indicated 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)).
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.
Accordingly, when considered alongside
the obvious downsides to noncompliance,
which include possible initiation of dissolution proceedings,4 Plaintiffs have demonThis 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).
NEW YORK STATE TELECOMMUNICATIONS ASSN. v. JAMES
Cite as 544 F.Supp.3d 269 (E.D.N.Y. 2021)
strated 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’’).
A.
Preemption Generally
[9–11] ‘‘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)).
[12, 13] ‘‘Federal regulations have no
less preemptive effect than federal statutes.’’ SPGGC, LLC v. Blumenthal, 505
279
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
[14] ‘‘[F]ederal law must prevail’’ over
state law pursuant to the doctrine of conflict preemption if ‘‘ ‘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)).
[15] 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’ TTT does not include any
use of any such capability for TTT the
management of a telecommunications ser-
280
544 FEDERAL SUPPLEMENT, 3d SERIES
vice.’’). ‘‘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 TTT
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, 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
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 TTTT’’), 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
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 TTT place[s] it outside the FCC’s regulatory ambit TTT, 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.
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
[16–18] Plaintiffs have demonstrated a
likelihood of success on the issue of conflict preemption. The Court rejects Defendant’s contention that the FCC disclaimed
5.
6.
Report and Order on Remand, Declaratory
Ruling, and Order, Protecting and Promoting
the Open Internet, 30 FCC Rcd. 5601, ¶ 25
(2015) (‘‘2015 Order’’).
2. Analysis
Declaratory Ruling, Report and Order, and
Order, Restoring Internet Freedom, 33 FCC
Rcd. 311, ¶ 21 (2018) (‘‘2018 Order’’).
NEW YORK STATE TELECOMMUNICATIONS ASSN. v. JAMES
Cite as 544 F.Supp.3d 269 (E.D.N.Y. 2021)
‘‘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 common-carrier 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
TTT 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 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’’). ‘‘Informationservice providers TTT 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
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
281
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 TTT 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
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.
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.
282
544 FEDERAL SUPPLEMENT, 3d SERIES
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 TTT
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)).
[19–21] And rate regulation is a longaccepted method of regulating common
carriers. E.g., MCI Telecomms. Corp. v.
AT&T Co., 512 U.S. 218, 231–32, 234, 114
9.
As Defendant would have it, the FCC’s 2018
S.Ct. 2223, 129 L.Ed.2d 182 (1994) (‘‘[T]he
[Communications] Act establishes a rateregulation, filed-tariff system for commoncarrier 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 TTT 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 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 common-carrier
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 conflictpreempted.9
Order reflects so profound a misunderstand-
NEW YORK STATE TELECOMMUNICATIONS ASSN. v. JAMES
Cite as 544 F.Supp.3d 269 (E.D.N.Y. 2021)
283
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’’).
ing 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., public-utility 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.
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 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
[22, 23] 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,
10. To the extent Defendant relies on the Eastern District of California’s Oral Ruling in ACA
Connects v. Becerra, No. 18-cv-2684 (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.
284
544 FEDERAL SUPPLEMENT, 3d SERIES
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.
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 TTT, which
originates and/or is received within the
United States, and to all persons engaged within the United States in such
communication TTTT
(b) TTT [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 communica-
tion service by wire or radio of any
carrier TTTT
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’’).
Defendant opposes by observing ‘‘[t]he
[Communications] Act establishes TTT 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
[24] Plaintiffs have demonstrated a
likelihood of success on the merits based
on field preemption. The ABA is not a
‘‘purely
intrastate
affordable-pricing
NEW YORK STATE TELECOMMUNICATIONS ASSN. v. JAMES
Cite as 544 F.Supp.3d 269 (E.D.N.Y. 2021)
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 Internetbased ECF docket, 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.
285
reasonably inferable as limiting (or even
trying to limit) its reach.
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,
[25] Defendant calls this view ‘‘mistaken’’ because the ABA is not ‘‘an interstatecommunication 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 ‘‘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).
2018 Order ¶ 21 (footnote omitted); see
2015 Order ¶ 25 (‘‘Consistent with the
[FCC’s] 2010 Order TTT’’), 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
[26] 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)
Indeed, the ABA borrowed its definition
the ‘‘broadband services’’ from the FCC.
The FCC before 2015, between 2015 and
2018, and since 2018 has
286
544 FEDERAL SUPPLEMENT, 3d SERIES
(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 prohibits a state or
local governmental entity ‘from regulating
within a protected zone, whether it be a
zone protected and reserved for market
freedom TTT 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))).
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 has ‘‘comprehensive authority’’
and ‘‘ ‘broad responsibilit[y]’ to regulate all
aspects of interstate communication by wire
or radio by virtue of TTT47 U.S.C. § 152(a)’’);
United States v. Southwest Cable Co., 392 U.S.
157, 167–68, 88 S.Ct. 1994, 20 L.Ed.2d 1001
(1968) (FCC ‘‘expected to serve as the single
Government agency with unified jurisdiction
and regulatory power over all forms of electrical communication, whether by telephone,
telegraph, cable, or radio’’ and Communication Act’s ‘‘terms, purposes, and history all
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.
[27, 28] And while complete preemption 12 and field preemption ‘‘must be distinguished,’’ Sullivan v. Am. Airlines, Inc.,
424 F.3d 267, 272–73 & n.7 (2d Cir. 2005),
despite Defendant’s reliance on cases involving the former to contest the latter, see
Def. Opp. at 16–17; see Pls. Reply at 7 &
n.7, the Ivy Broadcasting Court held Congress both field-preempted and completepreempted the realm of interstate communications:
It seems reasonable that the congressional purpose of uniformity and equality of rates should be taken to imply
uniformity and equality of service. The
published tariff rate will not be uniform
if the service for which a given rate is
indicate that Congress formulated a unified
and comprehensive regulatory system for the
(broadcasting) industry’’ (internal quotation
marks omitted)).
12. ‘‘Complete preemption is distinct from ordinary or ‘defensive’ preemption, which includes express, field, and conflict preemption.’’ Whitehurst v. 1199SEIU United
Healthcare Workers E., 928 F.3d 201, 206
n.2 (2d Cir. 2019); see Sullivan v. Am. Airlines, Inc., 424 F.3d 267, 272–73 & n.7 (2d
Cir. 2005) (‘‘The complete-preemption doctrine must be distinguished from ordinary
preemption.’’). Complete preemption is
where ‘‘certain federal statutes are construed
to have such ‘extraordinary’ preemptive
force that state-law claims coming within
the scope of the federal statute are transformed, for jurisdictional purposes, into federal claims.’’ Sullivan, 424 F.3d at 273.
NEW YORK STATE TELECOMMUNICATIONS ASSN. v. JAMES
Cite as 544 F.Supp.3d 269 (E.D.N.Y. 2021)
charged varies from state to state according to differing state requirements.
It seems to us that the congressional
purpose can be achieved only if a uniform federal law governs as to the standards of service which the carrier must
provide and as to the extent of liability
for failure to comply with such standards.
391 F.2d at 490–91. In other words, Congress set aside interstate communications
as an area in which a uniform federal law
governs ‘‘standards of service’’ (field preemption) and ‘‘extent of liability’’ (complete
preemption). See id.
[29] Defendant’s position stems from
reading 47 U.S.C. § 152(a) to speak ‘‘entirely on federal—not state—authority.’’
Def. Opp. at 15; see also Becerra Tr. at
63:3–65:7. The Court finds it hard to
square that view with the Supreme Court’s
decision in Louisiana Public Service Commission v. FCC, which described the Communications Act as dividing communications services 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, 357,
106 S.Ct. 1890, 90 L.Ed.2d 369 (1986) (emphasis removed);13 Crockett Tel. Co., 963
F.2d at 1566 (‘‘The FCC has exclusive
jurisdiction to regulate interstate common
carrier services including the setting of
rates.’’ (citing 47 U.S.C. § 152)). The
FCC’s jurisdiction would hardly be ‘‘plena13. The Supreme Court observed ‘‘the realities
of technology and economics belie [ ] a clean
parceling of responsibility’’ between federal
interstate matters and state intrastate matters.’’ Louisiana Pub. Serv. Comm’n, 476 U.S.
at 360, 106 S.Ct. 1890 (where infrastructure
‘‘provid[ing] intrastate service is also used to
provide interstate service’’ it is ‘‘conceivably
within the jurisdiction of both state and federal authorities’’). But any unavoidable overlap
is not an invitation for concurrent state regu-
287
ry’’ if it loses, to the states’ gain, the right
to make rules regarding certain interstate
communications services when the FCC
alters, through formal rulemaking procedure, the Title of the Communications Act
under which it continues to effect its longstanding policy of nonregulation of those
communications. See 83 Fed. Reg. 7852
(Apr. 23, 2018); Plenary, Black’s Law Dictionary (11th ed. 2019) (‘‘Full; complete;
entire’’); cf. Bethlehem Steel Co., 330 U.S.
at 776, 67 S.Ct. 1026 (holding there is no
state-federal ‘‘concurrent jurisdiction’’
where a federal agency ‘‘has jurisdiction of
the industry’’ because, otherwise, ‘‘action
by one necessarily denies the discretion of
the other. The second to act either must
follow the first, which would make its action useless and vain, or depart from it,
which would produce a mischievous conflict’’). The field of interstate communications gets no smaller, and no less exclusive, when the FCC does so. Mozilla
Corp., 940 F.3d at 77 (holding that § 152(a)
identifies ‘‘communications matters falling
under the [FCC’s] authority’’ and § 152(b)
identifies ‘‘those remaining within the
States’ wheelhouse,’’ with ‘‘the impossibility exception’’ helping to ‘‘police the line
between’’ the two (emphasis added)). The
2018 Order does not say broadband internet no longer reflects an interstate communication service.
For that reason, this Court respectfully
believes the Eastern District of California
in ACA Connects v. Becerra has it backlation of interstate communications because
the ‘‘impossibility exception’’ gives the FCC
jurisdiction where it is ‘‘not possible to separate the interstate and the intrastate components of the asserted [FCC] regulation.’’ Mozilla, 940 F.3d at 77 (quoting Louisiana Pub.
Serv. Comm’n, 476 U.S. at 375 n.4, 106 S.Ct.
1890). Defendant does not suggest the ABA
operates within the overlap and, even if she
had, the ABA is plainly interstate regulation.
288
544 FEDERAL SUPPLEMENT, 3d SERIES
wards. The Communications Act does not
‘‘specifically le[ave] out certain types of
interstate communications [e.g., those
transmitted by information services] from
the FCC’s jurisdiction.’’ Becerra Tr. at
63:18–20. Rather, the Communications Act
specifically leaves out certain types of jurisdiction (e.g., Title II authority to impose
common carrier obligations), but not jurisdiction writ large, over interstate communications transmitted by information services.
[30, 31] Therefore, Plaintiffs has demonstrated a likelihood of success on the
issue of field preemption.14
III.
Balance of Equities and the Public
Interest
[32] Second Circuit precedent suggests
that a plaintiff ‘‘may be able to show that a
preliminary injunction is warranted on the
strength of these first two factors alone,’’
i.e., without considering the ‘‘balance of
the equities’’ and the ‘‘public interest.’’
New York v. United States Dep’t of Homeland Sec., 969 F.3d 42, 86 n.38 (2d Cir.
2020). Plaintiffs likely have done so here.
But pursuant to Supreme Court instruction, see id. (citing Winter, 555 U.S. at 20,
129 S.Ct. 365); Pharaohs GC, Inc., 990
F.3d at 225, the Court nevertheless analyzes these last two factors, which ‘‘merge
when the Government is the opposing party,’’ Nken v. Holder, 556 U.S. 418, 435, 129
S.Ct. 1749, 173 L.Ed.2d 550 (2009).
14. At oral argument, Defendant contended
that Communications Act provisions ‘‘expressly preempt[ing] state action would [ ] not
be required if there was field preemption,’’
suggesting the former rules out the latter. Tr.
of Oral Arg. at 25:20–22. But a federal law’s
express preemption clause ‘‘does not immediately end the [preemption] inquiry because
the question of the substance and scope of
Congress’ displacement of state law still remains. Preemptive intent may also be inferred
if the scope of the statute indicates that Con-
[33] The Court also holds these two
factors favor preliminary injunctive relief.
While the stated purpose of the ABA is to
expand access to broadband internet, that
is not to say it is the sole legislative effort
doing so. Plaintiffs discuss several federal
programs allocating billions of dollars to
achieve that same end: the Lifeline program, the Emergency Broadband Connectivity Fund, the American Rescue Plan.
Pls. Mem. at 21–24; Pls. Reply at 9–10.
While Defendant argues that the New
York Legislature determined these federal
benefits were insufficient, that determination was made prior to the FCC’s April 29,
2021 announcement that the Emergency
Broadband Benefit would become on effective May 12, 2021.15
Additionally, the evidence before the
Court suggests the ABA may not achieve
its desired effect – and in fact reduce
Internet access statewide. Empire Telephone Corporation’s declarant avers that
Empire will have to cancel expansion projects which, if completed, would result in
Empire ‘‘serv[ing] more than 20,000 households,’’ thereby disqualifying Empire from
an exemption. Empire Tele. Decl. ¶ 10.
These projects include ‘‘building out the
network to reach the City of Binghamton’’
and ‘‘building more than 330 miles of fiber
optic network that would be capable of
servicing nearly 1,100 homes’’ in Livingston County. Id. ¶¶ 6–7. Likewise Delhi
Telephone Company will ‘‘be forced to
abandon efforts to expand its rural broadband coverage, TTT set[ting] it back in
gress intended federal law to occupy the legislative field, or if there is an actual conflict
between state and federal law.’’ Altria Grp.,
Inc., 555 U.S. at 76–77, 129 S.Ct. 538.
15. Public Note, FCC, Wireline Competition
Bureau Announces Emergency Broadband
Benefit Program Launch Date (Apr. 29,
2021), https://docs.fcc.gov/public/attachments/
DA-21-493A1.pdf.
AL SAIDI v. U.S. EMBASSY IN DJIBOUTI
Cite as 544 F.Supp.3d 289 (E.D.N.Y. 2021)
terms of growing its subscriber base.’’ Delhi Tele. Decl. ¶ 2. Heart of the Catskills
Communications Inc. would have to ‘‘forgo
expansion of its network’’ which would
have reached unserved customers. Heart
of the Catskills Decl. ¶¶ 3, 19.
Given the foregoing, a balance of the
equities and the public interest support a
preliminary injunction keeping the status
quo.
IV.
Rule 65(c) Security
[34, 35] A court ‘‘may issue a preliminary injunction TTT only if the movant
gives security in an amount that the court
considers proper to pay the costs and damages sustained by any party found to have
been wrongfully enjoined or restrained.’’
Fed. R. Civ. P. 65(c). ‘‘Rule 65(c) gives the
district court wide discretion to set the
amount of a bond, and even to dispense
with the bond requirement where there
has been no proof of likelihood of harm
TTTT’’ Doctor’s Assocs., Inc. v. Distajo, 107
F.3d 126, 136 (2d Cir. 1997) (internal quotation marks omitted). The Court exercises
its discretion not to require Plaintiffs’ to
post a bond. Defendants have neither requested one, nor is there any ‘‘proof of a
likelihood of harm’’ to New York that could
result from granting the injunction. E.g.,
Regeneron Pharms., Inc., 2020 WL
7778037, at *14; Town of Brookhaven v.
Sills Rd. Realty LLC, 2014 WL 2854659,
at *11 (E.D.N.Y. June 23, 2014).
CONCLUSION
For the reasons discussed above, Plaintiffs’ motion for a preliminary injunction is
granted. The Court will enter a separate
Preliminary Injunction Order enjoining
Defendant from enforcing the ABA.
SO ORDERED.
,
289
Mohamed Kaid Hezam AL SAIDI,
B.M.K.A., a minor child, and S.M.K.A.,
a minor child, Plaintiffs,
v.
U.S. EMBASSY IN DJIBOUTI,
et al., Defendants.
21-cv-3393 (BMC)
United States District Court,
E.D. New York.
Signed 06/18/2021
Background: Parent, a United States citizen, and his children, who were born and
living in Yemen, filed action seeking a writ
of mandamus and temporary restraining
order (TRO) directing United States Embassy in Djibouti to adjudicate their petitions required to bring noncitizen family
members to the United States by a certain
date.
Holdings: The District Court, Brian M.
Cogan, J., held that:
(1) plaintiffs did not demonstrate irreparable harm from children potentially
losing ability to qualify for derivative
citizenship due to delays in processing
petitions;
(2) there was no unreasonable delay in
processing petitions;
(3) there was no basis for court to require
consular officers to accept and adjudicate petitions;
(4) plaintiffs’ estoppel claim against the
government was not likely to succeed;
(5) plaintiff’s challenge to determination
made at consulate that petitions were
not clearly approvable and would need
to be sent to United States Citizenship
and Immigration Services (USCIS)
was likely to fail;
EXHIBIT 2
Case 2:21-cv-02389-DRH-AKT Document 26 Filed 06/11/21 Page 1 of 1 PageID #: 329
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------------------------------X
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, and
SATELLITE BROADCASTING &
COMMUNICATIONS ASSOCIATION, on
behalf of their respective members,
PRELIMINARY INJUCTION
ORDER
2:21-cv-2389 (DRH) (AKT)
Plaintiffs,
- against LETITIA A. JAMES, in her official capacity as
the Attorney General of New York,
Defendant.
---------------------------------------------------------------X
Upon reading and filing of the Complaint and the papers submitted in support of
and in opposition to the issuance of a preliminary injunction, and having heard the
arguments of counsel, for the reasons set forth in the Court’s Memorandum & Order,
dated June 11, 2021, it is hereby
ORDERED, pursuant to Federal Rule of Civil Procedure 65, that Defendant
Letitia A. James, in her official capacity as the Attorney General of the State of New
York, her employees, agents, and all persons acting on her behalf are preliminarily
enjoined from enforcing the Affordable Broadband Act, N.Y. Gen. Bus. Law § 399-zzzzz;
and it is
FURTHER ORDERED that no bond shall be required.
Dated: Central Islip, New York
June 11, 2021
s/ Denis R. Hurley
Denis R. Hurley
United States District Judge
Page 1 of 1
EXHIBIT 3
Case 2:21-cv-02389-DRH-AKT Document 34 Filed 08/10/21 Page 1 of 2 PageID #: 432
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------------------------X
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, and
SATELLITE BROADCASTING &
COMMUNICATIONS ASSOCIATION, on
behalf of their respective members,
Plaintiffs,
AMENDED JUDGMENT
CV 21-2389 (DRH)(AKT)
- against LETITIA A. JAMES, in her official capacity as
the Attorney General of New York,
Defendant.
----------------------------------------------------------X
A Memorandum and Order of Honorable Denis R. Hurley, United States District Judge,
having been filed on June 11, 2021, granting Plaintiffs’ motion for a preliminary injunction; and
a Preliminary Injunction Order of Honorable Denis R. Hurley, United States District Judge,
having been filed on June 11, 2021, preliminarily enjoining Defendant Letitia A. James, in her
official capacity as the Attorney General of the State of New York, her employees, agents, and
all persons acting on her behalf, from enforcing the Affordable Broadband Act, N.Y. Gen. Bus.
Law §399-zzzzz; and an Order of Honorable Denis R. Hurley, United States District Judge,
having been filed on July 28, 2021, granting the parties’ motion for judgment, granting the
stipulated final judgment, declaring that N.Y. Gen. Bus. Law §399-zzzzz, as enacted by ch. 56,
pt. NN (244th Sess. 2021) is preempted by federal law, permanently enjoining Defendant Letitia
A. James, in her official capacity as the Attorney General of the State of New York, her
employees, agents, and all persons acting on her behalf, from enforcing the Affordable
Case 2:21-cv-02389-DRH-AKT Document 34 Filed 08/10/21 Page 2 of 2 PageID #: 433
Broadband Act, N.Y. Gen. Bus. Law §399-zzzzz, as enacted by ch. 56, pt. NN (244th Sess.
2021), dismissing Plaintiffs’ second claim for relief without prejudice; and directing the Clerk of
the Court to enter such final judgment in favor of Plaintiffs, and to close this case; and an Order
of Honorable Denis R. Hurley, United States District Judge, having been filed on August 4,
2021, granting motion to amend the judgment and directing the Clerk of Court to enter an
amended judgment, it is
ORDERED AND ADJUDGED that judgment is hereby entered in favor of Plaintiffs
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, and Satellite Broadcasting & Communications
Association against Defendant Letitia A. James, in her official capacity as Attorney General of
New York; that the parties’ motion for judgment is granted; that N.Y. Gen. Bus. Law §399zzzzz, as enacted by ch. 56, pt. NN (244th Sess. 2021) is preempted by federal law; that
Defendant Letitia A. James, in her official capacity as the Attorney General of the State of New
York, her employees, agents, and all persons acting on her behalf, are permanently enjoined from
enforcing the Affordable Broadband Act, N.Y. Gen. Bus. Law §399-zzzzz, as enacted by ch. 56,
pt. NN (244th Sess. 2021); that Plaintiffs’ second claim for relief is dismissed without prejudice;
and that this case is closed.
Dated: August 10, 2021
Central Islip, New York
By:
2
DOUGLAS C. PALMER
CLERK OF THE COURT
/s/ James J. Toritto
Deputy Clerk
EXHIBIT 4
Case 2:21-cv-02389-DRH-AKT Document 31 Filed 07/28/21 Page 1 of 4 PageID #: 422
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------------------------------------X
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,
and SATELLITE BROADCASTING &
COMMUNICATIONS ASSOCIATION, on behalf of
their respective members,
Plaintiffs,
- against -
Docket No.: 21 CV 2389
(DRH)(AKT)
LETITIA A. JAMES, in her official capacity as
Attorney General of New York,
Defendant.
---------------------------------------------------------------------X
STIPULATED FINAL JUDGMENT
WHEREAS, on April 30, 2021, 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; and
Satellite Broadcasting & Communications Association (together, “plaintiffs”), filed a complaint
against Letitia A. James, in her official capacity as Attorney General of the State of New York,
alleging that N.Y. General Business Law (“GBL”) § 399-zzzzz, as enacted by ch. 56, pt. NN (244th
Sess. 2021), is preempted by federal law;
WHEREAS, on May 6, 2021, plaintiffs filed a motion for an order preliminarily enjoining
the Attorney General from enforcing N.Y. GBL § 399-zzzzz, as enacted by ch. 56, pt. NN (244th
Sess. 2021); on May 17, 2021, the Attorney General opposed the motion; and on May 21, 2021,
plaintiffs filed a reply brief in support of their motion;
1
Case 2:21-cv-02389-DRH-AKT Document 31 Filed 07/28/21 Page 2 of 4 PageID #: 423
WHEREAS, on June 11, 2021, the Court granted plaintiffs’ motion for a preliminary
injunction against enforcement of N.Y. GBL § 399-zzzzz, as enacted by ch. 56, pt. NN (244th
Sess. 2021), holding that plaintiffs were likely to succeed on their claims of conflict preemption
and field preemption;
WHEREAS, the parties have conferred and agree that the Court’s holdings on preemption
in the June 11, 2021, memorandum and order resolve the substantive legal issues in this matter
and render the entry of final judgment appropriate;
WHEREAS, in light of that agreement and to enable entry of a final, appealable judgment,
plaintiffs consent to the dismissal of their second claim for relief without prejudice; and
WHEREAS, notwithstanding this agreement that entry of final judgment is appropriate at
this time, defendant expressly reserves all appellate rights in this matter;
NOW, THEREFORE, it is hereby stipulated and agreed that:
(a)
For the reasons given in the Court’s June 11, 2021, memorandum and order,
the parties agree to the issuance of a final judgment in favor of plaintiffs;
(b)
For the reasons given in the Court’s June 11, 2021, memorandum and order,
the Court declares that N.Y. GBL § 399-zzzzz, as enacted by ch. 56, pt. NN
(244th Sess. 2021), is preempted by federal law;
(c)
For the reasons given in the Court’s June 11, 2021, memorandum and order,
defendant Letitia A. James, in her official capacity as the Attorney General
of the State of New York, her employees, agents, and all persons acting on
her behalf are permanently enjoined from enforcing N.Y. GBL § 399-zzzzz,
as enacted by ch. 56, pt. NN (244th Sess. 2021);
2
Case 2:21-cv-02389-DRH-AKT Document 31 Filed 07/28/21 Page 3 of 4 PageID #: 424
(d)
To enable the entry of a final, appealable judgment, plaintiffs’ second claim
for relief is dismissed without prejudice;
(e)
Defendant reserves the right to appeal this stipulated final judgment,
declaration, and permanent injunction; plaintiffs recognize defendant’s
right to appeal this stipulated final judgment, declaration, and permanent
injunction; and
(f)
Pursuant to Federal Rule of Civil Procedure 54(d), a motion by any party
for costs shall be filed no later than 30 days after the expiration of the period
for appeal or, in the event of an appeal, shall be filed within 30 days of the
judgment of the court of appeals, the United States Supreme Court, or the
final judgment of this Court on remand, whichever is later.
STIPULATED AND AGREED BY:
Dated: July 23, 2021
Respectfully submitted,
/s/ Patricia M. Hingerton
Letitia James
Attorney General of the State of New York
Patricia M. Hingerton
Assistant Attorney General
300 Motor Parkway, Suite 230
Huappauge, N.Y. 11788
/s/
Andrew E. Goldsmith
Scott H. Angstreich (admitted pro hac vice)
Joseph S. Hall (admitted pro hac vice)
Andrew E. Goldsmith
KELLOGG, HANSEN, TODD,
FIGEL & FREDERICK, P.L.L.C.
1615 M Street, N.W., Suite 400
Washington, D.C. 20036
(202) 326-7900
sangstreich@kellogghansen.com
jhall@kellogghansen.com
agoldsmith@kellogghansen.com
Attorneys for Defendant Letitia A. James, in
her official capacity as Attorney General of
New York
/s/
Jared Marx (w/permission)
Jared Marx
Michael Nilsson (admitted pro hac vice)
Harris, Wiltshire & Grannis LLP
1919 M Street, N.W.
The Eighth Floor
Washington, D.C. 20036
(202) 494-4174
Attorneys for Plaintiffs New York State
Telecommunications Association, Inc.,
CTIA – The Wireless Association,
USTelecom – The Broadband Association, and
NTCA – The Rural Broadband Association
/s/
3
Jeffrey A. Lamken (w/permission)
Case 2:21-cv-02389-DRH-AKT Document 31 Filed 07/28/21 Page 4 of 4 PageID #: 425
jmarx@hwglaw.com
mnilsson@hwglaw.com
Jeffrey A. Lamken*
Rayiner I. Hashem*
MOLOLAMKEN LLP
600 New Hampshire Ave., N.W., Suite 500
Washington, D.C. 20037
(202) 556-2010
jlamken@mololamken.com
rhashem@mololamken.com
Attorneys for Plaintiff Satellite Broadcasting
& Communications Association
*Pro hac vice motion to be filed
Attorneys for Plaintiff ACA Connects –
America’s Communications Association
IT IS ORDERED THAT:
(a) This stipulated final judgment is hereby granted; and
(b) The Clerk of the Court is directed to enter such final judgment in favor of plaintiffs, and
to close this case.
Dated: Central Islip, New York
July 28, 2021
s/ Denis R. Hurley
Denis R. Hurley
United States District Judge
4
EXHIBIT 5
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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, and
SATELLITE BROADCASTING &
COMMUNICATIONS ASSOCIATION, on
behalf of their respective members,
Case No. 2:21-cv-2389-GRB-AKT
Plaintiffs,
v.
LETITIA A. JAMES, in her official capacity as
Attorney General of New York,
Defendant.
STIPULATION REGARDING AGREEMENT NOT TO ENFORCE
N.Y. GEN. BUS. LAW § 399-zzzzz
Plaintiffs — 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; and Satellite Broadcasting
& Communications Association (collectively, “Plaintiffs”) — and Defendant Letitia A. James, in
her official capacity as Attorney General of New York (“Defendant,” and collectively with
Plaintiffs, the “Parties”), by and through their respective counsel, hereby stipulate and agree as
follows:
WHEREAS, in April 2021, New York enacted General Business Law § 399-zzzzz, as
enacted by ch. 56, pt. NN (24th Sess. 2021) (“the Affordable Broadband Act”);
1
WHEREAS, in June 2021, the U.S. District Court for the Eastern District of New York
(Hurley, J.) entered an order preliminarily enjoining Defendant from enforcing the Affordable
Broadband Act, ECF No. 25;
WHEREAS, in August 2021, the district court entered an Amended Judgment
permanently enjoining the Affordable Broadband Act, ECF No. 34;
WHEREAS, in April 2024, the United States Court of Appeals for the Second Circuit
issued both an opinion and judgment reversing the district court’s Amended Judgment and
vacating the permanent injunction, New York State Telecomms. Ass’n v. James, No. 21-1975 (2d
Cir. Apr. 26, 2024) (“NYSTA II ”), ECF Nos. 232, 241;
WHEREAS, in April 2024, the Federal Communications Commission (“FCC”) voted to
adopt an order in which it classified broadband internet access service as a telecommunications
service, subject to Title II of the federal Communications Act, see Declaratory Ruling, Order,
Report and Order, and Order on Reconsideration, Safeguarding and Securing the Open Internet,
WC Docket Nos. 23-320 & 17-108, FCC 24-52 (adopted Apr. 25, 2024, released May 7, 2024)
(“April 2024 Order”);
WHEREAS, on May 22, 2024, the FCC’s April 2024 Order was published in the Federal
Register, with an effective date (subject to certain exceptions not relevant to this stipulation) of
July 22, 2024, Final Rule, Safeguarding and Securing the Open Internet, 89 Fed. Reg. 45,404
(May, 22, 2024);
WHEREAS, Plaintiffs contend that the FCC’s April 2024 Order, if it takes effect, will
preempt the Affordable Broadband Act;
WHEREAS, Defendant disputes Plaintiffs’ contention and contends that the FCC’s April
2024 Order, if it takes effect, will not preempt the Affordable Broadband Act;
2
WHEREAS, Plaintiffs have informed Defendant that, if the FCC’s April 2024 Order
takes effect, they intend to file a new complaint and to seek a preliminary and permanent
injunction of enforcement of the Affordable Broadband Act based on their arguments about the
preemptive effect of the FCC’s April 2024 Order;
WHEREAS, the Second Circuit’s mandate is scheduled to issue on June 14, 2024, which
will have the effect of vacating and dissolving the permanent injunction and permitting
Defendant to enforce the Affordable Broadband Act;
WHEREAS, to avoid potential uncertainty or confusion about the effect of the
Affordable Broadband Act during the period before and immediately after the FCC’s April 2024
Order, if it takes effect, becomes effective;
NOW, THEREFORE, in consideration of the foregoing, the Parties stipulate and agree
as follows:
1.
Defendant agrees not to enforce the Affordable Broadband Act, N.Y. Gen. Bus.
Law § 399-zzzzz, against any member of the Plaintiff Associations until the expiration of the
earlier of the following periods: (a) 95 days after the publication of the FCC’s April 2024 Order
in the Federal Register (August 25, 2024); or (b) 14 days after any federal court issues a stay
pending review of the FCC’s April 2024 Order, preventing the FCC’s April 2024 Order from
taking effect.
2.
Plaintiffs agree not to seek further relief from the Second Circuit in Case No. 21-
1975, whether through a petition for rehearing or rehearing en banc, a motion for a stay of the
mandate, or otherwise; provided, however, that nothing herein prevents Plaintiffs from
petitioning for certiorari or relief pending resolution of such a petition for certiorari from the
United States Supreme Court or, upon a grant of certiorari, litigating on remand in the Second
3
Circuit. Plaintiffs further agree to inform the Second Circuit by letter, within two business days
of the date this stipulation is fully executed, of their decision not to seek rehearing or rehearing
en banc.
3.
Plaintiffs agree that any new complaint they may file alleging that the Affordable
Broadband Act is preempted by the FCC’s April 2024 Order will not be filed under the abovecaptioned docket number and will instead be filed as part of a new action; provided, however,
that nothing in this clause precludes plaintiffs from marking a new action as related to the abovecaptioned docket. Plaintiffs agree that they will file such new complaint on or after the date when
the FCC’s April 2024 Order takes effect, and not earlier.
4.
The Parties agree that, after the Second Circuit’s mandate issues, they will jointly
seek to have the above-captioned matter placed into abeyance until the later of the expiration of
time for Plaintiffs to petition the U.S. Supreme Court for certiorari review of the Second
Circuit’s decision in NYSTA II or the date the U.S. Supreme Court resolves such a certiorari
petition.
5.
The Parties agree that by signing this stipulation and agreement, Defendant does
not consent to the filing of the new complaint that Plaintiffs have stated they intend to file after
the FCC’s April 2024 Order takes effect, and Defendant does not waive or prejudice, and instead
hereby fully preserves, all objections and arguments that Defendant may make in response to
such a new complaint.
4
6.
The Parties agree that this stipulation and agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of which, taken
together, constitute one and the same agreement.
IT IS SO STIPLUATED AND AGREED.
Dated: June 11, 2024
Judith N. Vale
Deputy Solicitor General
Office of the New York Attorney General
28 Liberty Street
New York, NY 11215
Andrew E. Goldsmith
KELLOGG, HANSEN, TODD,
FIGEL, & FREDERICK, P.L.L.C.
1615 M Street, N.W., Suite 400
Washington, D.C. 20036
(202) 326-7900
Attorneys for Letitia James, Attorney General
of the State of New York
Attorney for Plaintiffs New York State
Telecommunications Association, Inc. CTIA –
The Wireless Association, USTelecom – The
Broadband Association, and NTCA – The
Rural Broadband Association
Jeffrey A. Lamken
MOLOLAMKEN LLP
600 New Hampshire Ave. N.W., Suite 500
Washington, D.C. 20037
(202) 556-2010
Jared Marx
HARRIS, WILTSHIRE & GRANNIS LLP
1919 M Street, N.W.
The Eighth Floor
Washington, D.C. 20036
(202) 494-4174
Attorney for Plaintiff ACA Connects –
America’s Communications Association
Attorney for Plaintiff Satellite Broadcasting
& Communications Association
5
EXHIBIT 6
Case: 24-7000
Document: 71-2
Filed: 08/01/2024
Page: 1
No. 24-7000
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
In re: MCP No. 185; FEDERAL
COMMUNICATIONS COMMISSION, IN THE
MATTER OF SAFEGUARDING AND
SECURING THE OPEN INTERNET,
DECLARATORY RULING, ORDER, REPORT
AND ORDER, AND ORDER ON
RECONSIDERATION, FCC 24-52, 89 Fed. Reg.
45404, Published May 22, 2024.
)
)
)
)
)
)
)
)
ORDER
Before: SUTTON, Chief Judge; CLAY and DAVIS, Circuit Judges.
PER CURIAM. On May 22, 2024, the Federal Communications Commission issued a rule
classifying broadband internet providers as common carriers subject to heightened regulatory
requirements under Title II of the Communications Act of 1934. See Safeguarding and Securing
the Open Internet, 89 Fed. Reg. 45404 (May 22, 2024) (to be codified at 47 CFR pts. 8, 20). The
rule was set to go into effect on July 22, 2024. We administratively stayed this effective date until
August 5, 2024. Several broadband providers asked this court to stay the final rule pending review
of their petitions. Because the broadband providers have shown that they are likely to succeed on
the merits and that the equities support them, we grant the stay.
I.
Broadband internet refers to the set of platforms that permit users to access the internet at
speeds faster than dial-up services. See F.C.C., Getting Broadband Q&A (Jan. 25, 2024),
https://www.fcc.gov/consumers/guides/getting-broadband-qa. Over three-quarters of Americans
have access to high-speed broadband service. Safeguarding, 89 Fed. Reg. at 45412. In addition
Case: 24-7000
Document: 71-2
Filed: 08/01/2024
Page: 2
No. 24-7000
-2-
to renting or constructing the physical network connecting computers, broadband internet
providers offer other services that enable subscribers to access content from “edge providers”—
namely websites, such as Google, Netflix, and Amazon, that host content on their own networks.
Id. at 45430. These services include DNS, short for Domain Name Services, a “phonebook” that
matches web addresses (e.g., http://www.ca6.uscourts.gov) with their IP (internet protocol)
addresses. And they include “caching” services that speed up data access by storing copies of edge
provider content closer to the user’s home system. Id. at 45428–30.
The Communications Act of 1934 covers broadband providers, and it gives the Federal
Communications Commission authority to promulgate rules and regulations under the Act. The
extent of that regulatory authority turns on whether the providers count as common carriers under
the Act. If a business counts as a common carrier, it must comply with Title II of the Act, which
includes rate-review regulations and non-discrimination obligations. See 47 U.S.C. §§ 201–03.
For other businesses, the Commission may impose only the ancillary regulations authorized under
Title I, which generally preserve the ability of companies to respond to market conditions. See,
e.g., id. §§ 154(i), 161.
The development of the internet presented the Commission with a classification challenge.
When Congress first enacted this law in 1934, it defined common carriers to include anyone
involved in “wire communications.” Pub. L. 73-416, § 3(a), (h), 48 Stat. 1064, 1065–66 (codified
at 47 U.S.C. §§ 153(11), (59)). Think telephone companies and the monopolies that went with
them. But by the 1970s, telephone companies and others had begun competing to offer data
processing services through telephone wires. See In the Matter of Regul. & Pol’y Probs. Presented
by the Interdependence of Comput. & Commc’n Servs. & Facilities, 28 F.C.C.2d 291, 293–300,
¶¶ 8–28 (1970). Common carrier rules designed for telephone-wire monopolies, the Commission
Case: 24-7000
Document: 71-2
Filed: 08/01/2024
Page: 3
No. 24-7000
-3-
realized, could inhibit the development of “data information services.” Re Second Comput.
Inquiry, 77 F.C.C.2d 384, 433, ¶ 128 (1980). The Commission responded by distinguishing the
“basic transmission service” that transferred data between two points from the “enhanced service”
that allowed subscribers to interact with data stored elsewhere. Id. at 419–22, ¶¶ 95–99.
Responding to these developments, Congress enacted the Telecommunications Act of
1996.
It established a new category of “telecommunications service,” which offers “the
transmission, between or among points specified by the user, of information of the user’s choosing,
without change in the form or content of the information as sent and received.” 47 U.S.C.
§ 153(50), (53). The Commission must treat telecommunications service providers as common
carriers. See id. § 153(51). The 1996 Act also created a new category of “information service,”
which applies to a company that offers “a capability for generating, acquiring, storing,
transforming, processing, retrieving, utilizing, or making available information via
telecommunications.” Id. § 153(24). The Commission may not treat information service providers
as common carriers. Id. § 153(11), (51).
After passage of the 1996 Act, the Commission for many years took the view that
broadband internet access services were information services, not telecommunication services.
That left them free of Title II’s common carrier requirements. See In re Inquiry Concerning HighSpeed Access to Internet over Cable & Other Facilities, 17 F.C.C. Rcd. 4798, 4823, ¶¶ 38–40
(2002) (cable modem broadband); In the Matters of Appropriate Framework for Broadband
Access to the Internet over Wireline Facilities, 20 F.C.C. Rcd. 14853, 14858, ¶ 5 (2005) (DSL);
In the Matter of United Power Line Council’s Petition for Declaratory Ruling, 21 F.C.C. Rcd.
13281, 13285–90, ¶¶ 7–15 (2006) (broadband over power lines); In the Matter of Appropriate
Regul. Treatment for Broadband Access to the Internet over Wireless Networks, 22 F.C.C. Rcd.
Case: 24-7000
Document: 71-2
Filed: 08/01/2024
Page: 4
No. 24-7000
-4-
5901, 5908–14, ¶¶ 18–34 (2007). (wireless broadband); see also In the Matter of Fed.-State Joint
Bd. on Universal Serv., 13 F.C.C. Rcd. 11501, 11540, ¶ 81 (1998) (internet access providers).
Reviewing a decision from the Ninth Circuit, the Supreme Court upheld this classification
under Chevron. Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 974
(2005). Specifically, the Supreme Court found that the classification of broadband internet access
offered through cable modems as an information service was a permissible interpretation of the
Communications Act. Id. at 986.
In 2010, the Commission continued to treat broadband internet services as something
covered by Title I but opted to alter its rules based on a debate over the risk that broadband
providers could favor some edge providers’ content over others. See Safeguarding, 89 Fed. Reg.
at 45498. The Commission tried to use its Title I authority to impose “open internet” rules on
broadband providers that banned them from blocking or unreasonably discriminating between
lawful content. In the Matter of Preserving the Open Internet Broadband Indus. Pracs., 25 F.C.C.
Rcd. 17905, 17940–46, 17968, ¶¶ 59–75, 117 (2010). A federal court invalidated this rule on the
ground that the Commission could impose such requirements only under Title II. Verizon v.
F.C.C., 740 F.3d 623, 650, 655–56 (D.C. Cir. 2014).
The next chapter unfolded in 2015. That year, the Commission promulgated a rule that
categorized broadband providers as common carriers and required net neutrality under Title II.
See In the Matter of Protecting & Promoting the Open Internet, 30 F.C.C. Rcd. 5601, 5757–58,
¶¶ 355–56 (2015). Relying on Chevron, the D.C. Circuit upheld the rule. U.S. Telecom Assoc. v.
F.C.C., 825 F.3d 674, 697–711 (D.C. Cir. 2016).
In 2018, the Commission returned to its prior view. It issued a new rule that broadband
providers fall under Title I and do not qualify as common carriers. In the Matter of Restoring
Case: 24-7000
Document: 71-2
Filed: 08/01/2024
Page: 5
No. 24-7000
-5-
Internet Freedom, 33 F.C.C. Rcd. 311, 322–24, ¶¶ 30–31 (2018). The D.C. Circuit again upheld
the classification and again did so under Chevron. Mozilla Corp. v. F.C.C., 940 F.3d 1, 19–35
(D.C. Cir. 2019) (per curiam).
On May 22, 2024, the Commission switched positions again. Under its current rule, the
Commission has classified broadband providers as common carriers under Title II. Safeguarding,
89 Fed. Reg. at 45421. The rule requires broadband providers to disclose “accurate information
regarding the network management practices” and forbids them from engaging in blocking,
throttling, paid prioritization, and “unreasonable interference” with users and edge providers. Id.
at 45554 (to be codified at 47 C.F.R. §§ 8.2, 8.3(a)–(d)). The rule at this point forbears other Title
II regulations, including rate regulation and tariffing. See id. at 45482–86.
Several broadband providers and supporting organizations petitioned for review of the rule
in eight different federal circuit courts. Consistent with the relevant statute, a lottery was held to
determine which circuit would handle the case. 28 U.S.C. § 2112(a)(3). The Sixth Circuit was
drawn, and we consolidated the petitions for review.
II.
A stay decision rests on four factors: likelihood of success on the merits; injury to the
petitioners in the absence of a stay; injury to others from a stay; and the public interest. Nken v.
Holder, 556 U.S. 418, 434 (2009).
Likelihood of success. The petitioners are likely to succeed on the merits because the final
rule implicates a major question, and the Commission has failed to satisfy the high bar for imposing
such regulations. Although the petitioners have raised other arguments in support of their position
that the FCC exceeded its authority in promulgating the rule at issue, such as whether broadband
can be classified as a telecommunications service under the Communications Act and the stare
Case: 24-7000
Document: 71-2
Filed: 08/01/2024
Page: 6
No. 24-7000
-6-
decisis effect of the Brand X decision, we decline to reach those arguments at this preliminary
stage.
An agency may issue regulations only to the extent that Congress permits it. See MCI
Telecomms. Corp. v. Am. Tel. & Tel. Co., 512 U.S. 218, 229 (1994). When Congress delegates its
legislative authority to an agency, it presumably resolves “major questions” of policy itself while
authorizing the agency to decide only those “interstitial matters” that arise in day-to-day practice.
Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 159 (2000) (quoting
Stephen Breyer, Judicial Review of Questions of Law and Policy, 38 Admin. L. Rev. 363, 370
(1986)). When Congress upsets that presumption and delegates its power to “alter the fundamental
details of a regulatory scheme” to an agency, it must speak clearly, without “hid[ing] elephants in
mouseholes.” Whitman v. Am. Trucking Assocs., 531 U.S. 457, 468 (2001); see Util. Air Regul.
Grp. v. E.P.A., 573 U.S. 302, 324 (2014). The more an agency asks of a statute, in short, the more
it must show in the statute to support its rule.
Net neutrality is likely a major question requiring clear congressional authorization. As
the Commission’s rule itself explains, broadband services “are absolutely essential to modern day
life,
facilitating
employment,
education,
healthcare,
commerce,
community-building,
communication, and free expression,” to say nothing of broadband’s importance to national
security and public safety. Safeguarding, 89 Fed. Reg. at 45405–12; see also id. at 45496–97.
Congress and state legislatures have engaged in decades of debates over whether and how to
require net neutrality. Because the rule decides a question of “vast ‘economic and political
significance,’” it is a major question. Util. Air Regul. Grp., 573 U.S. at 324 (citation omitted).
The Communications Act likely does not plainly authorize the Commission to resolve this
signal question. Nowhere does Congress clearly grant the Commission the discretion to classify
Case: 24-7000
Document: 71-2
Filed: 08/01/2024
Page: 7
No. 24-7000
-7-
broadband providers as common carriers. To the contrary, Congress specifically empowered the
Commission to define certain categories of communications services—and never did so with
respect to broadband providers specifically or the internet more generally. See 47 U.S.C. § 153(51)
(requiring the Commission to “determine whether the provision of fixed and mobile satellite
service shall be treated as common carriage” under the definition of a “telecommunications
carrier”); id. § 332(d)(1), (3) (defining mobile services in part “as specified by regulation by the
Commission”). Absent a clear mandate to treat broadband as a common carrier, we cannot assume
that Congress granted the Commission this sweeping power, and Petitioners have accordingly
shown that they are likely to succeed on the merits.
Other stay factors. The petitioners also have shown a “possibility of irreparable injury.”
Nken, 556 U.S. at 434 (quotation omitted). The petitioners face delays in product rollouts and
disadvantages in negotiating interconnection agreements, and such competitive injuries qualify as
irreparable consequences. See Ohio v. Becerra, 87 F.4th 759, 781–82 (6th Cir. 2023). Plus, they
will incur “unrecoverable compliance costs” in accommodating the rule. Kentucky v. Biden, 57
F.4th 545, 550, 555–56 (6th Cir. 2023).
The remaining stay factors, assessing the harm to the opposing party and weighing the
public interest, merge in a challenge to government action. Nken, 556 U.S. at 435. The public
interest generally “lies in a correct application” of law, and the Commission’s action likely exceeds
its legal authority. Coal. to Def. Affirmative Action v. Granholm, 473 F.3d 237, 252 (6th Cir. 2006)
(quotation omitted).
III.
The Commission tries to head off this conclusion in several ways.
Case: 24-7000
Document: 71-2
Filed: 08/01/2024
Page: 8
No. 24-7000
-8-
As for prospects of success, the Commission invokes its own stare decisis argument,
claiming that Brand X supports today’s rule. In its view, Brand X’s silence about the majorquestions doctrine implies that it does not matter to today’s dispute. But silence is just that. It is
particularly irrelevant when it comes to comparing the 2002 Brand X rule (which sought only lighttouch authority under Title I) and the 2024 rule (which seeks broad authority to regulate broadband
providers like common carriers under Title II).
The Commission separately claims clear congressional delegation of authority to classify
broadband as a common carrier. It observes that it may “prescribe such rules and regulations as
may be necessary in the public interest” to effectuate Title II and other sections. 47 U.S.C.
§ 201(b); see id. §§ 154(i), 303(r). That is true. But such general or “ancillary” authority to fill
gaps in Congress’s regulatory scheme does not suffice to show that Congress clearly delegated
authority to resolve a major question like this one. Whitman, 531 U.S. at 468; see also Loper
Bright Enters. v. Raimondo, 144 S. Ct. 2244, 2263 (2024).
The Commission next notes that the Act’s sole mention of broadband allows the
Commission to use “price cap regulation” and “regulatory forbearance” to promote “broadband
telecommunications capability.” 47 U.S.C. § 1302(a), (d)(1). But this authorization to impose
some regulations on broadband providers does not provide the Commission with clear authority to
regulate all broadband providers as common carriers. See Verizon, 740 F.3d at 650. The section’s
reference to broadband telecommunications, as opposed to broadband generally, suggests that
Congress recognized the potential existence of broadband information services as well. This
section also applies when the Commission determines that broadband telecommunications are not
“being deployed to all Americans in a reasonable and timely fashion.” 47 U.S.C. § 1302(b). That
finding does not resolve whether broadband counts as a telecommunication service, and it’s hard
Case: 24-7000
Document: 71-2
Filed: 08/01/2024
Page: 9
No. 24-7000
-9-
to believe Congress hid this claimed broad delegation of power in the “Miscellaneous Provisions”
of Title VII, as opposed to Title II. Telecommunications Act of 1996, Pub. L. 104-104, 110 Stat.
56, 153.
As for the other stay factors, the Commission counters that the petitioners have not
submitted quantitative estimates of their compliance costs or identified specific plans that the rule
threatens. Yet the rule itself “acknowledge[s] that reclassifying [broadband providers] as a Title
II telecommunications service may lead to some increase in compliance costs.” Safeguarding, 89
Fed. Reg. at 45532. Although the Commission has found these costs to be small relative to the
rule’s overall benefits, see id. at 45532, 45551–52, we do not evaluate that tradeoff once we
conclude that the Commission likely exceeded its legal authority, see Nat’l Fed’n of Indep. Bus.
v. Dep’t of Lab., Occupational Safety & Health Admin., 595 U.S. 109, 120 (2022) (per curiam).
The joint motion to stay pending review of the final rule is GRANTED. The clerk is
DIRECTED to schedule this case for oral argument at the court’s fall sitting, October 28–
November 1, 2024, so that a randomly drawn merits panel may consider the case. The petitioners
are DIRECTED to submit their opening brief by August 12, 2024.
The respondents are
DIRECTED to submit their brief by the sooner of September 11, 2024, or thirty days after the
petitioners file their opening brief. The petitioners may submit a reply brief by the sooner of
October 2, 2024, or twenty-one days after the respondents have filed their brief.
SUTTON, Chief Judge, concurring. I concur in full in the per curiam opinion and write to
offer one additional reason for granting the stay.
Case: 24-7000
Document: 71-2
Filed: 08/01/2024
Page: 10
No. 24-7000
-10-
The best reading of the statute, and the one in place for all but three of the last twenty-eight
years, shows that Congress likely did not view broadband providers as common carriers under
Title II of the Telecommunications Act. At one level, the United States Supreme Court has already
resolved this question of classification. All nine justices in Brand X agreed that broadband internet
access—the same issue in front of us—provides an information service as the Act defines that term
under Title I. See Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 974
(2005) (“[C]able companies that sell broadband Internet service do not provide
‘telecommunications servic[e]’ . . . under Title II.”); id. at 987 (“Cable modem service is an
information service . . . because it provides consumers with a comprehensive capability for
manipulating information using the internet via high-speed telecommunications. That service
enables users, for example, to browse the World Wide Web, to transfer files . . . and to access email.”); id. at 1010 (Scalia, J., dissenting) (“[T]he delivery service provided by cable . . . merely
serves as a conduit for the information services that have already been ‘assembled’ by the cable
company in its capacity as ISP.”); id. (Scalia, J., dissenting) (“When cable-company-assembled
information enters the cable for delivery to the subscriber, the information service is already
complete.
The information has been (as the statute requires) generated, acquired, stored,
transformed, processed, retrieved, utilized, or made available.”). The only disagreement in that
case centered on a separate issue, whether the Commission could treat the “offering” of last-mile
broadband transmission as an integral part of that information service. Id. at 986–87. The majority
held that the Commission reasonably concluded it did not. Id. at 989–90. Given the accepted
premise of Brand X—that broadband providers are not common carriers under the Act—it would
be odd for a lower court to look the other way. See Rodriguez de Quijas v. Shearson/Am. Express
Inc., 490 U.S. 477, 484 (1989).
Case: 24-7000
Document: 71-2
Filed: 08/01/2024
Page: 11
No. 24-7000
-11-
The
history
of
the
relevant
statutory
terms—“information
service”
and
“telecommunications service”—shows that the Act likely classifies broadband as an information
service. When Congress enacted the Telecommunications Act, it enshrined the Commission’s
prior dichotomy between basic and enhanced services within its new definitions of
telecommunications and information services.
See Brand X, 545 U.S. at 977.
Telecommunications services, like basic services, offer pure data transmission without any
processing. See 47 U.S.C. § 153(50), (53). An information service, like enhanced services, uses
those telecommunication services to process information. See id. § 153(24). In addition to data
transmission, broadband providers offer data processing and storage to users through DNS and
caching services. See Brand X, 545 U.S. at 992–94, 999–1000. These services provide users “with
a comprehensive capability for manipulating information.” Id. at 987. Just as it did for dial-up
predecessors, Congress covered broadband under information services.
Other sections of the Telecommunications Act confirm that Congress meant to exclude
broadband from Title II. Section 230, for instance, begins with Congress’s findings that “[t]he
Internet and other interactive computer services have flourished, to the benefit of all Americans,
with a minimum of government regulation.” 47 U.S.C. § 230(a)(4). It goes on to declare a federal
policy “to preserve the vibrant and competitive free market that presently exists for the Internet
and other interactive computer services, unfettered by Federal or State regulation.” Id. § 230(b)(2).
And it defines “interactive computer service” to include “any information service . . . that provides
access to the Internet.” Id. § 230(f)(2). Section 231 adopts this same deregulatory approach,
interpreting the term “internet access service” to exclude “telecommunication services.” Id.
§ 231(e)(4). Only a two-faced Congress would bolster deregulation as the best means to promote
the internet economy and then treat broadband providers as heavily regulated common carriers.
Case: 24-7000
Document: 71-2
Filed: 08/01/2024
Page: 12
No. 24-7000
-12-
The Commission rejects this conclusion. It notes that the Act’s sole mention of broadband
allows the Commission to use “price cap regulation” and “regulatory forbearance” to promote
“broadband telecommunications capability.” Id. § 1302(a), (d)(1). But data transmission is only
one component of the broader package of services offered to consumers. And, as the per curiam
opinion notes, this authorization under Title VII to impose some regulations on broadband
providers does not provide the Commission with the power to regulate all broadband providers as
common carriers under Title II. See Verizon v. F.C.C., 740 F.3d 623, 650 (D.C. Cir. 2014).
The Commission next invokes Skidmore, asking us to give credence to the agency’s expert
judgment over the technical questions implicated by this case. Skidmore v. Swift & Co., 323 U.S.
134, 139–40 (1944). An agency’s power to persuade turns on the thoroughness of its reasoning,
its technical expertise, and its “consistency with earlier and later pronouncements,” especially
those contemporaneous with the statute’s enactment. Id. The problem is, we do not know which
group of experts to respect. Most of them since the passage of the 1996 Act have reasoned that
broadband and similar services come under Title I, not Title II’s coverage of common carriers.
The contemporaneous interpretation of the Act, the one in place for nearly two decades, refused to
treat broadband internet access services as the offering of telecommunication services. See Gen.
Elec. Co. v. Gilbert, 429 U.S. 125, 142 (1976). In just three of the Act’s twenty-eight years has
the agency taken its current position that broadband internet access service qualifies as a
telecommunications service as opposed to an information service. The consistency query makes
matters worse. The Commission’s “intention to reverse course for yet a fourth time” suggests that
its reasoning has more to do with changing presidential administrations than with arriving at the
true and durable “meaning of the law.” Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244, 2288
(2024) (Gorsuch, J., concurring). In truth, the Skidmore factors, the doctrine’s “power to persuade,
Case: 24-7000
Document: 71-2
Filed: 08/01/2024
Page: 13
No. 24-7000
-13-
if lacking the power to control,” id. at 2267 (quotation omitted), all favor the Commission’s first
interpretation, not its recent one.
ENTERED BY ORDER OF THE COURT
Kelly L. Stephens, Clerk
Powered by TCPDF (www.tcpdf.org)
EXHIBIT 7
NEW YORK STATE TELECOMMUNICATIONS ASS’N v. JAMES
Cite as 101 F.4th 135 (2nd Cir. 2024)
‘‘violations of plea agreements on the part
of the government serve not only to violate
the constitutional rights of the defendant,
but directly involve the honor of the government, public confidence in the fair administration of justice, and the effective
administration of justice in a federal
scheme of government.’’ Riggs, 287 F.3d at
226 (quoting United States v. McQueen,
108 F.3d 64, 66 (4th Cir. 1997)) (concluding
that the government’s breach of the plea
agreement met the fourth prong of plain
error review).
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.
No. 21-1975
August Term 2022
WHERE THE CASE GOES
FROM HERE
United States Court of Appeals,
Second Circuit.
[25] For the reasons explained above,
the government breached the plea agreement during the sentencing hearing. The
district court’s judgment is therefore vacated, and we remand this case for further proceedings before a different district
court judge. See Brown, 5 F.4th at 917
(applying the same disposition after holding the government breached the plea
agreement); Riggs, 287 F.3d at 226 (same);
Clark, 55 F.3d at 15 (same).9
Argued: January 12, 2023
,
NEW YORK STATE TELECOMMUNICATIONS
ASSOCIATION,
INC.,
CTIA - The Wireless Association, ACA
Connects - America’s Communications Association, USTelecom - The
9.
The Bureau of Prisons’ electronic database
for the location of inmates shows that Cortés
was released from incarceration in early
April, about one month after oral argument in
this case. In the intervening period, neither
party has suggested that his appeal is moot.
And, in fact, his release does not automatical-
135
Decided: April 26, 2024
Background: Trade organizations representing internet service providers brought
action against New York Attorney General
seeking injunctive relief and a declaratory
judgment that New York’s Affordable
Broadband Act (ABA), which regulated
rates charged to low-income customers for
broadband internet access, was preempted
by the federal Communications Act of
1934. The United States District Court for
the Eastern District of New York, Denis
R. Hurley, J., 544 F. Supp. 3d 269, granted
organizations’ motion for a preliminary injunction and, at the parties’ request, entered a stipulated final judgment and a
permanent injunction against the ABA’s
enforcement. New York Attorney General
appealed.
Holdings: The Court of Appeals, Nathan,
Circuit Judge, held that:
ly moot this appeal, given that Cortés is still
serving a three-year term of supervised release and is subject to a restitution order
based on the higher total loss amount in the
PSR. See United States v. Reyes-Barreto, 24
F.4th 82, 84-86 (1st Cir. 2022).
136
101 FEDERAL REPORTER, 4th SERIES
(1) appellate jurisdiction existed over Attorney General’s appeal;
(2) section of Communications Act of 1934
outlining the jurisdictional boundaries
of the Federal Communications Commission (FCC) did not provide compelling evidence of Congress’s intent to
occupy the field of rate regulation of
interstate communications services;
(3) structure of Communications Act of
1934, and various of its provisions,
showed that it was not Congress’s intent for the federal government to exclusively occupy the field of rate regulation of interstate communications
services, and field preemption based
on the statute thus did not invalidate
ABA; and
(4) in light of FCC’s decision to regulate
broadband internet access as an information service under Title I of the
Communications Act of 1934, rather
than as a telecommunications service
under Title II of that statute, conflict
preemption did not invalidate ABA.
Judgment reversed; permanent injunction
vacated.
Sullivan, Circuit Judge, filed dissenting
opinion.
1. Administrative Law and Procedure
O2275
Telecommunications O1852, 1924
The Federal Communications Commission (FCC) has the authority to determine the appropriate category under the
Communications Act of 1934 for a particular communications service, and its determinations are entitled to Chevron deference. Communications Act of 1934 § 1, 47
U.S.C.A. § 151 et seq.
2. Federal Courts O3321, 3334(1)
Appellate court had jurisdiction over
state Attorney General’s appeal of stipu-
lated final judgment and permanent injunction barring, as preempted by the
federal Communications Act of 1934, enforcement of New York’s Affordable
Broadband Act (ABA), which regulated
rates charged to low-income customers for
broadband internet access, in action
against Attorney General by trade groups
representing internet service providers,
despite general rule barring appellate review of consent judgments, where the
judgment resolved the preemption issue
as a matter of law, all claims had been
disposed of with finality, the parties stipulated to obtain immediate appellate review
without circumventing restrictions on appellate jurisdiction, and the Attorney General had expressly preserved the right to
appeal. Communications Act of 1934 § 1,
47 U.S.C.A. § 151 et seq.; N.Y. General
Business Law § 399-zzzzz.
3. Federal Courts O3321
In general, an appellate court lacks
appellate jurisdiction to review appeals
from consent judgments.
4. Federal Courts O3278
Even a district-court ruling that does
not formally or technically resolve a claim
can suffice to support an appeal, as long as
the ruling makes clear that the court has
effectively resolved the claim as a matter
of law.
5. Federal Courts O3321
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.
6. Federal Courts O3271
The federal policy against piecemeal
appeals is not implicated where an entire
case can be decided in a single appeal.
NEW YORK STATE TELECOMMUNICATIONS ASS’N v. JAMES
Cite as 101 F.4th 135 (2nd Cir. 2024)
7. Federal Courts O3321
The inquiry into appellate jurisdiction
over a stipulated judgment will not necessarily end in every case with four factors,
namely (1) whether the district court plainly rejected the legal basis for an appellant’s claim or defense, (2) whether all
claims were disposed of with prejudice, (3)
whether the appellant’s consent to final
judgment was designed solely to obtain
immediate appeal of the prior adverse decision, without pursuing piecemeal appellate review, and (4) whether the appellant
expressly preserved the right to appeal;
satisfying those factors may not be sufficient to confer jurisdiction if, for example,
there is an independent reason for finding
that adversity no longer remains between
the parties or that the appeal has become
moot.
8. Federal Preemption O3
Federal preemption of a state statute
can be express or implied.
9. Federal Preemption O6, 9
Implied preemption renders a state
law inoperative in two circumstances: (1)
when the state law regulates conduct in a
field that Congress intended the federal
government to occupy exclusively (socalled field preemption), and (2) when the
state law actually conflicts with federal law
(so-called conflict preemption).
10. Federal Preemption O13
Express preemption arises when a
federal statute expressly directs that state
law be ousted.
11. Federal Preemption O9
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.
137
12. Federal Preemption O24
Because the states are independent
sovereigns in the federal system, when a
court determines whether a federal act
preempts state law through field preemption, the court starts 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.
13. Federal Preemption O94
Telecommunications O1512(1)
New York’s Affordable Broadband
Act (ABA) is a regulation of interstate
communications services for purposes of
determining whether it is preempted by
the federal Communications Act of 1934.
Communications Act of 1934 § 1, 47
U.S.C.A. § 151 et seq.; N.Y. General Business Law § 399-zzzzz.
14. Federal Preemption O94
Telecommunications O1513
There is a tradition of states using
their police power to regulate rates
charged for interstate communications services, and court would thus assume, for
purposes of determining whether the Communications Act of 1934 preempted New
York’s Affordable Broadband Act (ABA),
which regulated rates charged to low-income customers for broadband internet access, that New York’s exercise of its rateregulation power was not preempted unless doing so was the clear and manifest
purpose of Congress. Communications
Act of 1934 § 1, 47 U.S.C.A. § 151 et seq.
15. Federal Preemption O94
Telecommunications O1513
Section of the Communications Act of
1934 outlining the jurisdictional boundaries
of the Federal Communications Commission (FCC) and providing that the statute
applies ‘‘to all interstate and foreign com-
138
101 FEDERAL REPORTER, 4th SERIES
munication by wire or radio’’ and barring
FCC jurisdiction over ‘‘intrastate communication service by wire or radio’’ did not
provide compelling evidence of Congress’s
intent to occupy the field of rate regulation
of interstate communications services, and
that section thus did not support invalidating, through field preemption, New York’s
Affordable Broadband Act (ABA), which
regulated rates charged to low-income customers for broadband internet access.
Communications Act of 1934 § 2, 47
U.S.C.A. § 152; N.Y. General Business
Law § 399-zzzzz.
16. Federal Preemption O24
The mere existence of a federal regulatory or enforcement scheme does not by
itself imply preemption of state remedies.
17. Federal Preemption O9, 10
A statute granting regulatory authority over a subject matter to a federal agency is not in and of itself sufficient to find
field preemption; Congress must do much
more to oust all of state law from a field.
18. Federal Preemption O48
Gas O2
The basic purpose of Congress in
passing the Natural Gas Act was to occupy
a field in which the Supreme Court had
held that the states may not act. Natural
Gas Act § 1, 15 U.S.C.A. § 717 et seq.
(NGA).
19. Federal Preemption O94
Telecommunications O1513
Structure of the Communications Act
of 1934, and various of its provisions,
showed that it was not Congress’s intent
for the federal government to exclusively
occupy the field of rate regulation of interstate communications services, and field
preemption based on the statute thus did
not invalidate New York’s Affordable
Broadband Act (ABA), which regulated
rates charged to low-income customers for
broadband internet access, where the act
had no framework for rate regulation over
Title I information services like broadband
internet access, the act had provisions barring states from regulating specific types
of communication services, not including
broadband, and other provisions preserved
state remedies and allowed states to impose ‘‘price cap regulation’’ over telecommunications services.
Communications
Act of 1934 §§ 1, 414, 47 U.S.C.A. §§ 151 et
seq., 414; 47 U.S.C.A. § 1302(a); N.Y. General Business Law § 399-zzzzz.
20. Telecommunications O1852
When a service is regulated as an
information service under Title I of the
Communications Act, the Federal Communications Commission (FCC) lacks the express or ancillary authority to impose rate
regulations. Communications Act of 1934
§ 1, 47 U.S.C.A. § 151 et seq.
21. Federal Preemption O94
Telecommunications O1513
In light of the decision by the Federal
Communications Commission (FCC) to
regulate broadband internet access as an
information service under Title I of the
Communications Act of 1934, rather than
as a telecommunications service under Title II of that statute, conflict preemption
did not invalidate New York’s Affordable
Broadband Act (ABA), which regulated
rates charged to low-income customers for
broadband, even though the FCC had decided that broadband should not be subject
to utility-style regulation, since Title I
granted the FCC no authority either to
impose or to forbear rate regulations, and
the FCC could not exclude New York from
regulating in an area where the FCC itself
lacked the power to act. Communications
Act of 1934 § 1, 47 U.S.C.A. § 151 et seq.;
N.Y. General Business Law § 399-zzzzz.
NEW YORK STATE TELECOMMUNICATIONS ASS’N v. JAMES
Cite as 101 F.4th 135 (2nd Cir. 2024)
22. Federal Preemption O3
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.
23. Federal Preemption O19
Under the doctrine of obstacle preemption, states are not permitted to use
their police power to enact a regulation if
the failure of federal officials affirmatively
to exercise their full authority under a
federal statute takes on the character of a
ruling that no such regulation is appropriate or approved pursuant to the policy of
the statute.
24. Federal Preemption O10
A federal agency may preempt state
law only when and if it is acting within the
scope of its congressionally delegated authority.
25. Federal Preemption O10
If Congress has not conferred power
to act upon an agency, that agency cannot
preempt the validly enacted legislation of a
sovereign state.
26. Administrative Law and Procedure
O1103
Federal Preemption O10
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.
27. Federal Preemption O94
Telecommunications O1512(1)
When the Federal Communications
Commission (FCC) determines that a particular communications service should be
subject to the heightened regulatory regime of Title II of the Communications Act
139
of 1934, governing telecommunications services, the FCC has the concomitant power
to preempt state law that conflicts with its
regulatory decisions. Communications Act
of 1934 § 1, 47 U.S.C.A. § 151 et seq.
Appeal from the United States District
Court for the Eastern District of New
York, No. 21-cv-2389, Denis R. Hurley,
Judge.
Judith N. Vale (Barbara D. Underwood,
Steven C. Wu, Eric Del Pozo, on the brief)
for Letitia James, Attorney General, State
of New York, New York, NY, for Appellant.
Scott H. Angstreich, Kellogg, Hansen,
Todd, Figel & Frederick, P.L.L.C. (Andrew E. Goldsmith, Joseph S. Hall, Alex A.
Parkinson, Kellogg, Hansen, Todd, Figel &
Frederick, P.L.L.C., Jeffrey A. Lamken,
MoloLamken LLP, Jared P. Marx, Harris,
Wiltshire & Grannis, LLP, on the brief),
Washington DC, for Appellees.
Before: Sullivan, Nathan, and Merriam,
Circuit Judges.
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.
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 ef-
140
101 FEDERAL REPORTER, 4th SERIES
fectively 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 conflictpreempted 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.
BACKGROUND
I.
Legal Background
[1] 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 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,
NEW YORK STATE TELECOMMUNICATIONS ASS’N v. JAMES
Cite as 101 F.4th 135 (2nd Cir. 2024)
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 regulations 1 as part of a broader
agenda to ‘‘end utility-style regulation of
the Internet in favor of TTT market-based
policies’’ and adopt a ‘‘light-touch’’ regulatory framework. Id. ¶¶ 2, 207. The 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’’ commoncarrier regulations that the federal government was eliminating. Id. ¶ 195.
As will be discussed extensively below,
the D.C. Circuit considered the legality of
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
141
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 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
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).
142
101 FEDERAL REPORTER, 4th SERIES
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 low-income 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 TTT 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 202–04 (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. §§ 399zzzzz(3)–(5).
Soon after the ABA’s passage, the Plaintiffs filed suit against the New York State
Attorney General, 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 TTT 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.
DISCUSSION
I.
Appellate Jurisdiction
[2] 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
NEW YORK STATE TELECOMMUNICATIONS ASS’N v. JAMES
Cite as 101 F.4th 135 (2nd Cir. 2024)
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.
[3] 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 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, with2.
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,
143
out 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.
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 TTT stands as an obstacle to the FCC’s accomplishment and execution of its full purposes and objectives
and is conflict-preempted.’’ N.Y. State Telecomms. Ass’n, 544 F. Supp. 3d at 282. It
further held: ‘‘Because the ABA regulates
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).
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.
144
101 FEDERAL REPORTER, 4th SERIES
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.
[4] 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 to review stipulated judgments
it was because we determined that the
relevant interlocutory decision did not so
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
Diss. Op. at 163–64. 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
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 order 5 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 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
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.
NEW YORK STATE TELECOMMUNICATIONS ASS’N v. JAMES
Cite as 101 F.4th 135 (2nd Cir. 2024)
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).
[5] Third, New York’s stipulation to
final judgment was designed solely to obtain immediate appellate review of the dis6.
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 Diss. Op. at 162–
63. 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.
7.
The dissent misunderstands Microsoft to
mean that a stipulated-judgment appeal can
never be used to ‘‘seize additional appellate
rights.’’ Diss. Op. at 165. 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 appel-
145
trict court’s underlying legal conclusion
and 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 stipulated facts).8 Nor can it be said that the
late 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 stipulatedjudgment 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).
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 preemp-
146
101 FEDERAL REPORTER, 4th SERIES
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.
[6] 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 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 Ap
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.