Amicus Curiae Brief — Mathias v. WorldCom Technologies, Inc.

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MAY 24 720! No. 00.878 9 L ae

IN THE AAY 29

Supreme Court of the United States... qeasx |

RICHARD L. MATHIAS, et al.,

Petitioners,

Vv.

WORLDCOM TECHNOLOGIES, et al.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Seventh Circuit

BRIEF OF THE COUNCIL OF STATE GOVERNMENTS,

NATIONAL CONFERENCE OF STATE LEGISLATURES,

NATIONAL GOVERNORS ASSOCIATION, NATIONAL

ASSOCIATION OF COUNTIES, NATIONAL LEAGUE OF

CITIES, INTERNATIONAL CITY/COUNTY

MANAGEMENT ASSOCIATION, INTERNATIONAL

MUNICIPAL LAWYERS ASSOCIATION, AND U.S.

CONFERENCE OF MAYORS AS AMICI CURIAE

SUPPORTING PETITIONERS

RICHARD RUDA*

Chief Counsel

JAMES I. CROWLEY

STATE AND LOCAL LEGAL CENTER

444 North Capitol Street, N.W.

Suite 345

Washington, D.C. 20001

(202) 434-4850

* Counsel of Record for the

Amici Curiae

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 - WASHINGTON, D. C. 20001 A HW

under the Ex

commissioners

of Eleventh Amendment immunity.

Whether an official capacity action seeking pros-

for errors allegedly made in interpreting pre-existing

ietained

ne.

agreements under the Telecommu-

nications Act of 1996 can be

a waiver

Whether a state commission’s acceptance of Con-

gress’ invitation to participate in implementing sections

251 and 252 of the Telecommunications Act of 1996

pective relief against state public utility

interconnection

parte Young

;

’ "

was

Rott

Pa = ° Payhi oe

(i)

TABLE OF CONTENTS

Page

QUESTION PRESENTED .........:+::ssesssvsssvessvesssesssessseees

TABLE OF AUTHORITIES ........::cccsssesssesssesssvessveesevee iv

INTEREST OF THE AMICI CURIAE.....cccscccvessvesssees0ves I

SUMMARY OF ARGUMENT ........ccsssesssvssssesssessneessees 2

Ee 5

THE LOWER FEDERAL COURTS LACK

JURISDICTION TO REVIEW THE ILLINOIS

COMMERCE COMMISSION’S ORDER............ 5

Il. THE ELEVENTH AMENDMENT BARS

THE LOWER FEDERAL COURTS FROM

REVIEWING THE ICC’S ORDER..........c+e000+ 7

ll. EX PARTE YOUNG DOES NOT PROVIDE A

BASIS FOR FEDERAL COURT JURISDIC-

TION TO REVIEW THE ICC’S ORDER.......... 19

I sesemmenineens 30

}

(iii)

TABLE OF AUTHORITIES

CASE Page

Allen v. McCurry, 449 U.S. 90 (1980) .......cccceseees 26

Atascadero State Hosp. v. Scanlon, 473 U.S. 234

(a mnaiauanil 8, 10, 14, 15

Atlantic Coast Line R.R. Co. v. Brotherhood of

Local Eng., 398 U.S. 281 (1970) .......cccccecseeeeeees 27, 28

AT & T Corp. v. lowa Utilities Bd., 525 U.S. 366

4,18

In re Ayers, 123 U.S. 443 (1887) ......ccccccccceeeseeeneees 24

Bel! Atlantic Maryland, Inc. v. MCI Worldcom,

Inc., 240 F.3d 279 (4th Cir. 2001) ......c.ccc00e peas 16

Board of Trustees of the Univ. of Ala. v. Garrett,

vibe. of |) 1, 3, 16

Bradley v. Fisher, 80 U.S. (13 Wall.) 335

ee 5, 25, 26

Butz v. Economou, 438 U.S. 478 (1978).....c..c00000 5, 25

Chicago, RI. & P. R.R. Co. v. Stude, 346 U.S.

So ( 6, 27

City of Chicago v. International College of

Surgeons, 522 U.S. 169 (1997).......cccceseseseeeeees 6, 27

College Savings Bank v. Florida Prepaid

Postsecondary Ed. Exp. Bd., 527 U.S. 666

| passim

County of Imperial v. Munoz, 449 U.S. 54

a 28

Crowell v. Benson, 285 U.S. 22 (1932) .....ccccceeeeees 21

Edelman v. Jordan, 415 U.S. 651 (1974) .....c..000- 8, 16

Employees of Dept. of Pub. Health and Welfare

v. Department of Pub. Health and Welfare,

Te 9

FERC v. Mississippi, 456 U.S. 742 (1982)........ 19, 22, 29

Florida Dept. of Health and Rehab. Servs. v.

Florida Nursing Home Ass'n, 450 U.S. 147

ears

TABLE OF AUTHORITIES—Continued

Page

Florida Prepaid Postsecondary Ed. Exp. Bd. v.

College Savings Bank, 527 U.S. 627 (1999)...... 7

Gibson v. Berryhill, 411 U.S. 564 (1973).............. 23

Great Northern Life Ins. Co. v. Read, 322 U.S.

GF Gare ccna 8

Hans v. Louisiana, 134 U.S. 1 (1890)..........c.c0000 7

Horton v. Liberty Mut. Ins. Co., 367 U.S. 348

Ge ccncennssvennnsntnmesnnminspamasipesnmementnemenennees 6

Huffman v. Pursue, Ltd., 420 U.S. 592 (1975) ...... 28

Idaho v. Coeur d' Alene Tribe of Idaho, 521 U.S.

ae Ce i crneretnenqnemnsenncienentnninieneinns 24, 29

Kennecott Copper Corp. v. State Tax Comm'n,

Be Cle FEO Ce ee cress 8

Larson v. Domestic & Foreign Comm. Corp.,

Soe Cee Ge Ca een 24-25

Middlesex County Ethics Committee v. Garden

State Bar Ass'n., 457 U.S. 432 (1982)........... 26, 28, 29

Moncada v. ICC, 571 N.E.2d 1004 (Il. App. Ct.

ee 23

National Private Truck Council, Inc. v. Okla-

homa Tax Comm’ n, 515 U.S. 582 (1995)........... 26

New Orleans Pub. Serv., Inc. v. New Orleans,

GO GAR, Be ee rresarassensmemnmnennemnee 28

New York v. United States, 505 U.S. 144 (1992)... 17

Ohio Civil Rights Comm'n v. Dayton Christian

Schools, Inc., 477 U.S. 619 (1986) ..........000+ 20, 28, 29

Palmore v. United States, 411 U.S. 389 (1973)..... 26

Parden v. Terminal Ry. of Ala. Docks Dept., 377

ee Gi ee ensenncsnememunsnensenmeeiicenn 2,9

Pennhurst State Sch. & Hosp. v. Halderman, 451

eee BF Gree ncennesnnssssntommnentnemnnen 10, 14

Pennhurst State Sch. & Hosp. v. Halderman, 465

OLS. SD (ISDS) .ccccccscscsssecsscesscsccssssssssssssseee 24, 24-25, 26

vi vii

TABLE OF AUTHORITIES—Continued TABLE OF AUTHORITIES—Continued

Page Page

Pony v. Tennessce-Missouri Bridge Comm'n, 220 ILCS § 5/10-201(€)(iv)(A) -ccscs-ccecssssesessveecenveee 23

ERE 9, 15 220 ILCS §§ 5/13-101-902 .......sssssvseeesseeeernnnssnvesses 18

Pierson v. Ray, 386 U.S. 547 (1967) ..cccccssssssveeseee 25 | Mann-Elkins Act, Act of Jun. 18, 1910, ch.309,

Prentis vy. Atlantic Coast Line Co.., 21 | US. 210 | § 7, 36 Stat. 544 cocccccccccoccccccococeccecococosoocososocoosoces 18

NALA SEL MO 22, 23 28 U.S.C. § 1331 cevsssssssssseseecssssssnnnnnnnesessecessennnnnsen 13

Printz v. United States, 521 U.S. 898 (1997) iced 4, 21, 22 28 U.S.C. § 2342(1) PTEISTITICI ITT TTT TTT TTT ttt TTT itt ttt ttt ttt ttt ttt) 13

Regents of the Univ. of Cal. v. Doe, 519 U.S. 425 Sd eee 0 aie incncerteveseteusseanenentomenmennniemmenianeii 13

EAL LLANE L I 7 28 U.S.C. § 2347(a) ..ssssessessssessesesneeesssenseeesssnneeeesen 13

Rooker v. Fidelity Trust Co., 263 U.S. 413 42 U.S.C. § 1983 PPITTTTITITITITITITITTTTT Titi TTT 28

RTE Nee 27 4T U.S.C. § 251 ..ssesssesssessnessnesssnsenscessesnnssnnecnsesnesene 11

Seminole Tribe of Florida v. Florida, 517 U.S. Go Geliase © Tip ennnenseennessssmnnsttmmnnenennmninn 2,11

LEE TC ene 1,7, 16 47 U.S.C. § 252(d) ........nsscsscssessnssnssnrsnssneesssecserseees 11

Smith v. Reeves, 178 U.S. 436 (1900) ..cc.ccecse-seeevee. 8 , Er Ce I ccrnincincinnssaniiinmneninasiainiaiiaiia 11

South Dakota v. Dole, 483 U.S. 203 (1987) ........9, 10, 15 Chl RRR RE 12

Steward Machine Co. v. Davis, 301 U.S. 548 ! j Or i te I icnrsicntcncnettisciiieidniiindeiiiiiaaiinnass passim

EEE TT 15 ‘ 4T U.S.C. § 402.......ssscsesssesessssscssscssnsesseesseesnnsennsens 13

Sate v. + - mvt a mama 22, 26 | OTHER AUTHORITIES

oucey Vv. ivVew Tor e ins. CO., >.

(194 NR ENE AEE ES 28 J. Brooks, Telephone: The First Hundred Years

United States ». Mississippi, 380 US. 128 (19PG) anenencrsenenessssenesereesenentnnenenenrnnen 18

CETERA ELLE 16 Henry Hart, The Relations Between State and

Welch v. Texas Dept. of Highways and Pub. Federal Law, 54 Colum. L. Rev. 48 (1954) pesesee 29

Transp. 483 U.S. 468 (1987) oecccasssssssccccccccssssee 8,9 W. Page Keeton et al., Prosser and Keeton on

Ex parte Young, 209 U.S. 123 (1908) .......ccsssssesses passim the Law of a (Sth Cd. 1984).......sssssssseeeeeeeeees 25

Younger v. Harris, 401 U.S. 37 (1971) ccccccccsssse 20, 28, 29 Charles Alan Wright et al., Federal Practice and

Eee 20

STATUTES

Anti-Injunction Act, Act of March 2, 1793, § 5, |

Stat. 335, codified as amended, 28 U.S.C.

8 EAT REET 20, 28

220 TLCS § S/10-11 Deseccccscccccsccscscsssecessvcessveeessvesee 22

220 TLCS § 5/10-201(a) ....ccccsccsessssseecsseeessveesseveees 5, 23, 27

UU” Ee 23

220 ILCS § 5/10-201(€) iV) ......cccccsersersereereeneenennes 23

INTEREST OF THE AMICI CURIAE

Amici are organizations whose members include state,

county and municipal governments and officials throughout

the United States. Amici have a compelling interest in

opposing federal judicial encroachment on the States’

sovereign prerogative to structure their administrative and

judicial processes.

The Eleventh Amendment is one of the principal

constitutional protections of state sovereignty. The Amend-

ment recognizes tha, “each State is a sovereign entity in our

federal system” ard that “[iJt is inherent in the nature of

sovereignty not to be amenable to the suit of an individual

without its consent.” Seminole Tribe of Florida v. Florida,

517 U.S. 44, 54 (1996) (quotations and citations omitted). As

the Court recently reaffirmed, “Congress may not, of course,

base its abrogation of the States’ Eleventh Amendment

immunity upon the powers enumerated in Article 1.” Board

of Trustees of the Univ. of Ala. v. Garrett, 121 S.Ct. 955, 962

(2001).

The court of appeals reasoned that when a state

commission exercises regulatory authority to interpret a

telephone interconnection agreement under sections 251 and

252 of the 1996 Telecommunications Act, Congress has

provided it with a “gratuity.” MCI Telecom. Corp. v. Illinois

Bell Telephone Co., 222 F.3d 324, 342 (7th Cir. 2000). The

court therefore held that Illinois had constructively waived its

Eleventh Amendment immunity from suit in federal district

court. This holding ignores the clear instruction of College

Savings Bank v. Florida Prepaid Postsecondary Ed. Exp. Bd.,

' The parties have consented to the filing of this amicus brief and their

letters of consent filed with the Clerk of the Court. This brief was not

authored in whole or in party by counsel for a party, and no person or

entity, other than amici or their members, made a monetary contribution

towards its preparation or submission.

527 U. S. 666 (1999), that “the constructive-waiver

experiment . . . was ill conceived” and there is “no merit in

attempting to salvage any remnant of it.” /d. at 680 (citing

Parden v. Terminal Ry. of Ala. Docks Dept., 377 U.S. 184

(1964)).

The court of appeals further held that Ex parte Young, 209

U.S. 123 (1908), provides an independent basis for the federal

district court to exercise jurisdiction over the Commissioners’

order in this case, notwithstanding that it was adjudicatory in

nature. This holding erroneously expands the scope of the

Young doctrine to sanction federal court review of a state

agency's judicial act. Unless reversed, it will result in federal

district courts displacing state appellate Courts as reviewers

of state administrative adjudications.

Affirmance of these holdings would result in a highly

disruptive expansion of federal court jurisdiction over state

proceedings and interfere with the States’ sovereign

prerogative to structure the relationship between their

administrative agencies and their courts. Because of the

importance of these issues to amici and their members, this

brief is submitted to assist the Court in its resolution of the

case.

SUMMARY OF ARGUMENT

1. Illinois has not expressly consented to suit in federal

court and section 252 does not unequivocally express

Congress’ intent that a State that regulates interconnection

agreements subjects itself to suit in federal court. Section 252

merely establishes “[p]rocedures for negotiation, arbitration,

and approval of [interconnection] agreements.” 47 U.S.C.

§ 252. It does not address the enforcement of, or resolution

of disputes arising under, previously negotiated and approved

agreements. The court of appeals thus erred in holding that

Illinois had clear notice that interpreting a pre-existing

interconnection agreement would subject the State to suit in

federal court.

The most pertinent statutory language states only that “[iJn

any case in which a State commission makes a determination

under this section, any party aggrieved by such determination

may bring an action in an appropriate Federal district court to

determine whether the agreement or statement meets the

requirements of section 251 of this title and this section.” /d.

§ 252(e)(6). By its plain terms, this provision limits federal

court review to state commission actions resolving disputes

over the terms of agreements through arbitration, approval

and rejection of agreements. And even with respect to these

determinations, the statute does not say that the States

themselves are suable in federal court. In short, section 252

lacks the clear statement necessary so that a State

contemplating regulation can make its choice fully cognizant

that its participation will subject it to suit in federal district

court.

2. The court of appeals erred in holding that Congress has

power under Article I to “extract” a constructive waiver of the

State’s Eleventh Amendment immunity as a condition of

allowing it to regulate. See 222 F.3d at 342 (citing College

Savings Bank v. Florida Prepaid Postsecondary Ed. Exp. Bd.,

527 U.S. 666, 686 (1999)). Contrary to the view of the court

below, College Savings does not establish that Congress can

extract a constructive waiver as long as it is providing the

States with a gift or gratuity. No decision of this Court has

ever held that Congress can condition a grant of federal funds

on a State’s waiver of its Eleventh Amendment immunity.

Rather, the cases have merely assumed the existence of such

a power and been decided on statutory grounds. To allow

such waivers would violate the principle that “ ‘[tJhe

Eleventh Amendment restricts the judicial power under

Article If], and Article I cannot be used to circumvent the

constitutional limitations placed upon federal jurisdic-

tion.”” Board of Trustees of the Univ. of Ala. v. Garrett, 121

S.Ct. 955, 962 (2001) (citation omitted).

In any event, the court’s characterization of a congressional

grant of regulatory power as a gift or gratuity is erroneous. If

there is any party who is receiving a gift or gratuity when a

State agrees to regulate in accordance with federal

instructions, it is Congress and the FCC which are spared the

substantial costs of setting up a local field office of the

federal bureaucracy. Furthermore, the States have regulated

local phone service since early in the last century. See

AT & T Corp. v. lowa Utilities Bd., 525 U.S. 366, 402-03

(1999) (Thomas, J., concurring in part and dissenting in part).

Such regulation protects the interests of millions of telephone

users and has created enormous constituencies of consumers

and interest groups. States cannot realistically abandon

regulation when Congress does not preempt all aspects of

regulation but leaves substantial areas to the States.

3. The court of appeals erred in holding that Ex parte

Young, 209 U.S. 123 (1908), provides a basis for Ameritech

to challenge the ICC’s order in federal district court. While

the Young doctrine allows a party to bring a federal court suit

challenging state legislative and executive action, the doctrine

does not allow a challenge to a state judicial act.

Young makes clear that “an injunction against a state court

would be a violation of the whole scheme of our

government,” 209 U.S. at 163, and this Court has subse-

quently recognized that the States can transfer judicial power

to an administrative agency. Printz v. United States, 521 U.S.

898, 929 n.14 (1997). It is also well established that an

administrative agency engaged in adjudication is performing

a judicial act.

The ICC proceeding which Ameritech challenged here

was, in every sense, an exercise of judicial power. It com-

menced when Ameritech’s competitors filed complaints with

the ICC, and included a prehearing conference, a status

hearing, and a full evidentiary hearing with both direct and

rebuttal testimony. See J.A. 98a-99a. The proceeding

culminated with the ICC’s adjudication of the rights of the

parties under a pre-existing interconnection agreement.

Because the ICC acted as a court in this case, the Young

doctrine does not permit Ameritech to bring a federal court

suit against a state commission challenging its order.

Furthermore, the theory of Young that a state officer is

stripped of the State’s sovereign immunity when violating

federal law because he has committed a tortious act is

inapplicable in this case. Under the common law, judicial

officers are not liable in a civil action for any judicial act

committed within their jurisdiction. Bradley v. Fisher, 80

U.S. (13 Wall.) 335, 351 (1872). This rule applies to persons

who exercise judicial functions within an administrative

agency. Butz v. Economou, 438 U.S. 478, 514 (1978). Errors

committed in the judicial process are corrected on appeal—

not by civil actions against judicial officers. Because the

common law does not recognize a judicial officer’s erroneous

interpretation of law to be grounds for a lawsuit, Ameritech’s

suit against the Commissioners for injunctive relief is barred

by the Eleventh Amendment.

ARGUMENT

THE LOWER FEDERAL COURTS LACK JURIS-

DICTION TO REVIEW THE ILLINOIS COM-

MERCE COMMISSION’S ORDER

The Illinois Commerce Commission (ICC), a state admin-

istrative agency with longstanding expertise in the regulation

of local telephone service, exercised judicial power granted it

under Illinois law when it adjudicated complaints filed

against Ameritech, the incumbent local exchange carrier, by

several of its competitors concerning the interpretation of

their interconnection agreements. [Illinois law provides for

appeal of the ICC’s order in the Illinois Appellate Court, see

220 ILCS § 5/10-201(a), and Ameritech filed such an appeal.

Ameritech also challenged the ICC’s order by filing suit in

federal district court, J.A. 125a, even though a federal district

court “does not sit to review on appeal action taken

administratively or judicially in a state proceeding.” Chi-

cago, RJ. & P. RR. Co. v. Stude, 346 US. 574,

581 (1954).? The Seventh Circuit nonetheless rejected the

Commissioners’ Eleventh Amendment defenses and held that

both the State and the Commissioners were subject to suit in

federal district court. See Pet. App. 12a-13a (citing MCI

Telecommunications Corp. v. Illinois Commerce Commission,

168 F.3d 315 (7th Cir. 1999)).

The court of appeals’ holding that Illinois waived its

Eleventh Amendment immunity because the acceptance of

regulatory responsibility is the equivalent of a “gratuity” is

erroneous. Its predicate conclusion that section 252 manifests

in clear terms that a State is required to waive its immunity

from suit in federal court as a condnion of exercising

regulatory authority under sections 251 and 252 is irrecon-

cilable with the statutory language. The court’s further

holding that Ex parte Young provides an independent basis

for federal court jurisdiction marks an unprecedented and

unwarranted expansion of the doctrine and threatens vital

principles of federalism. This Court should therefore reverse

the judgment of the court of appeals.”

? See also Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 354-55

(1961); but see City of Chicago v. International College of Surgeons, 522

U.S. 156 (1997). Amici discuss the inapplicability of /CS at p.27, n. 13,

infra.

> Amici agree with petitioners’ argument that the Commissioners’

interpretation of a previously approved interconnection agreement is not a

determination subject to federal court jurisdiction under section 252. See

Pet. Br. Section I.

I. THE ELEVENTH AMENDMENT BARS THE

LOWER FEDERAL COURTS FROM REVIEW-

ING THE ICC’S ORDER

This Court has long recognized that “ ‘although the text of

the [Eleventh] Amendment would appear to restrict only the

Article Ill diversity jurisdiction of the federal courts, “we

have understood the Eleventh Amendment to stand not so

much for what it says, but for the presupposition ... which it

confirms.” ’” Florida Prepaid Postsecondary Ed. Exp. Bd.

v. College Savings Bank, 527 U.S. 627, 634 (1999) (quoting

Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 54 (1996)

(quoting Hans v. Louisiana, 134 U.S. 1, 15 (1890))). In

Florida Prepaid the Court reiterated that this presupposition

“has two parts: first, that each State is a sovereign entity in

our federal system; and second, that ‘ “[i]t is inherent in the

nature of sovereignty not to be amenable to the suit of an

individual without its consent.”’” Jd. at 634 (citations

omitted). Thus, “‘[flor over a century, [the Court has]

reaffirmed that federal jurisdiction over suits against

unconsenting States “was not contemplated by the

Constitution when establishing the judicial power of the

United States.” ’” /d. (citations omitted). It has also “long

been settled” that the Eleventh Amendment immunity applies

“not only [to] actions in which a State is actually named as

the defendant, but also certain actions against state agents and

state instrumentalities.” Regents of the Univ. of Cal. v. Doe,

519 U.S. 425, 429 (1997) (citations omitted).

In Seminole Tribe, the Court held “that Congress may not

abrogate state sovereign immunity pursuant to its Article I

powers” such as the Commerce Clause. Florida Prepaid, 527

U.S. at 636; see also Seminole Tribe, 517 U.S. at 72-73. The

Court has also made clear that “constructive waiver” and

“abrogation” are functional equivalents. College Savings

Bank v. Florida Prepaid Postsecondary Ed. Exp. Bd., 527

U.S. 666, 683 (1999) (“Forced waiver and abrogation . . . are

the same side of the same coin.”). Thus, where Congress acts

pursuant to its Article I powers, a State can be sued in federal

court only if it has expressly and affirmatively consented to

suit in federal court. See id.

The test for consent “‘is a stringent one.’” /d. at 675

(quoting Atascadero State Hosp. v. Scanlon, 473 U.S. 234,

241 (1985)). As consent to suit requires a “voluntary” act on

the part of the sovereign, a State must either “voluntarily

invoke[]” the jurisdiction of the federal courts, or “make[] a

‘clear declaration’ that it intends to submit itself to” the

jurisdiction of the lower federal courts. /d. at 675-76 (quoting

Great Northern Life Ins. Co. v. Read, 322 U.S. 47, 54

(1944)). And because waiver of Eleventh Amendment

immunity involves the relinquishment of a constitutional

privilege, “the Court will find waiver . . . ‘only where stated

“by the most express language or by such overwhelming

implications from the text as [will] leave no room for any

other reasonable construction.” ’” Welch v. Texas Dept. of

Highways and Pub. Transp., 483 U.S. 468, 473 (1987)

(quoting Edelman v. Jordan, 415 U.S. 651, 673 (1974) (other

citation omitted)).*

In this case, Illinois has neither “expressly consented to

being sued in federal court,” nor “affirmatively invoked” the

jurisdiction of the lower federal courts. College Savings, 527

U.S. at 676. Instead, the court of appeals premised its finding

of “constructive waiver” on the notion that Illinois did so by

agreeing to participate in the federal regulatory program

*The Court has thus held that “a State does not consent to suit in

federal court merely by consenting to suit in the courts of its own

creation,” College Savings, 527 U.S. at 676 (citing Smith v. Reeves, 178

U.S. 436, 441-45 (1900)), “by stating its intention to ‘sue and be sued,” ”

id. (quoting Florida Dept. of Health and Rehab. Servs. v. Florida Nursing

Home Ass'n, 450 U.S. 147, 149-50 (1981) (per curiam)), or “by

authorizing suits against it “ ‘in any court of competent jurisdiction.” *

Id. (quoting Kennecott Copper Corp. v. State Tax Comm'n, 327 U.S. 573,

577-79 (1946)).

enacted by Congress in sections 251 and 252 of the 1996

Telecommunications Act. See, e.g., MCI Telecom. Corp. v.

Illinois Bell Tel. Co., 222 F.3d 323, 341-44 (7th Cir. 2000);

MCI Telecom. Corp. v. ICC, 183 F.3d 558, 566-67 (7th Cir.

1999) (on rehearing).

While the Court once indicated that a State could be

deemed to have waived its Eleventh Amendment immunity

by participating in a commercial activity subject to federal

regulation, see Parden v. Terminal Ry. of Ala. Docks Dept.,

377 U.S. 184, 192 (1964), the Court has “never applied the

holding of Parden to another statute.” College Savings, 527

U.S. at 680. See also Welch, 483 U.S. at 478 n.8; Employees

of Dept. of Pub. Health and Welfare v. Department of Pub.

Health and Welfare, 411 U.S. 279 (1973). In College

Savings, the Court recognized that Parden was premised on

the erroneous “notion that state sovereign immunity is not

constitutionally grounded” and that to “recogniz[e] a

congressional power to extract constructive waivers of

sovereign immunity through the exercise of Article I powers

would also, as a practical matter, permit Congress to

circumvent the antiabrogation holding of Seminole Tribe.”

527 U.S. at 682-83.

In College Savings, the Court also responded to the United

States’ assertion that this Court has in “two other contexts”

permitted “Congress, in the exercise of its Article I powers, to

extract ‘constructive waivers’ of state sovereign immunity.”

Id. at 686-87 (discussing Petty v. Tennessee-Missouri Bridge

Comm'n, 359 U.S. 275 (1959) (compact clause); South

Dakota v. Dole, 483 U.S. 203 (1987) (spending clause)).°

* Amici strenuously disagree with the court of appeals’ conclusion that

“Petty- and Dole-style waivers [were] endorsed by the . . . Court in

College Savings.” See 222 F.3d at 342. The Court was merely

responding to assertions of the United States, and did not “endorse”

anything. See 527 U.S. at 686-87. Dole, of course, was not even an

Eleventh Amendment case. See 483 U.S. at 205.

The Court, however, declined to follow these cases, explain-

ing that these exercises of congressional power were

“fundamentally different” from the case before it which

involved Congress’ conditioning of the State’s right to

participate in otherwise lawful activity on the relinquishment

of their Eleventh Amendment immunity. See 527 U.S. at

686-87. It reasoned that Petty and Dole involved the granting

of a gratuity and not the imposition of a sanction. For

example, under the Compact Clause, “States cannot form an

interstate compact without first obtaining the express consent

of Congress.” /d. at 686. Likewise, “Congress has no obliga-

tion to use its Spending Clause power to disburse funds to the

States; such funds are gifts.” /d. at 686-87.

2. The court of appeals’ analysis properly began with the

threshold question of whether Congress had “unequivocally”

expressed its intent that waiver of Eleventh Amendment

immunity was a condition of the States’ participation as

“ ‘deputized’ federal regulator[s].” See MCI v. lilinois Bell,

222 F.3d at 340-342, 344. The court acknowledged that this

Court “has required ‘an unequivocal expression of congres-

sional intent’ to obtain an Eleventh Amendment waiver from

states,” id. at 341 (quoting Atascadero, 473 U.S. at 238-40);

that “Congress must state the condition ‘unambiguously,’ ”

id. (quoting Dole, 483 U.S. at 207, and Pennhurst State Sch.

& Hosp. v. Halderman, 451 U.S. 1, 17 (1981) (Pennhurst 1),

and that “Congress must ‘speak with a clear voice’ so that the

states may exercise their choice to waive their immunity

‘knowingly, cognizant of the consequences of their partici-

pation.” Jd. at 340 (quoting Pennhurst 1, 451 U.S. at 17).

The court of appeals then disregarded these principles and

invoked “the structure of the pertinent section of the statute”

to conclude that it is “clear that Congress intended to provide

for federal court review of any regulatory determination made

under” Section 252. 222 F.3d at 341.

The court of appeals acknowledged that section 252 “does

not contain [an] express waiver” of the States’ Eleventh

Amendment immunity. /d. Indeed, section 252 merely

establishes “[p]rocedures for negotiation, arbitration, and

approval of [interconnection] agreements.” 47 U.S.C. § 252.

In short, section 252’s purpose is to get the parties—the

incumbent local exchange carrier (ILEC) and competing local

exchange carriers (CLECs)}—to an agreement. The statute

simply does not address the enforcement of, or resolution of

disputes arising under, previously negotiated and approved

agreements, as is the case here.

Moreover, the most pertinent statutory language states only

that “[iJn any case in which a State commission makes a

determination under this section, any party aggrieved by such

determination may bring an action in an appropriate Federal

district court to determine whether the agreement or statement

meets the requirements of section 251 of this title and this

section.” /d. § 252(e)(6). By its plain terms, this provision

limits federal court review to those instances “in which a

State commission makes a determination under this section,”

thus contemplating at most review of State commission

actions in resolving disputes over the terms of agreements

through arbitration, approval and rejection of agreements.°

Id. This conclusion is buttressed by subsection 252(e)(4),

which provides that “[nJo State court shall have jurisdiction

to review the action of a State commission in approving or

rejecting an agreement under this section.” Id. § 252(e)(4)

(emphasis added).

Furthermore, even when a state commission has made a

determination under section 252, the statute does not say that

the States themselves are suable in federal court. See id.

Subsection 252(e)(6) provides only that the aggrieved party

* Indeed, Congress did not define what constitutes a “a determination

under” section 252. Congress used the term “determination” and its root

“determine” only in the provisions related to “[p)ricing standards,” see 47

U.S.C. § 252(d), thus suggesting an even narrower scope of federal court

review.

“may bring an action . . . to determine whether the agreement

or statement meets the requirements of” sections 251 and 252.

It does not state that a party can bring an action to determine

whether the state commission violated federal law in

approving or rejecting an agreement. As there are two parties

to every interconnection agreement—the CLEC and ILEC,

who have strong economic interests in obtaining the most

advantageous terms possible under federal law—there is no

need to subject a state commission to the coercive process of

a federal district court suit, with all the disruption of the

federal-state balance that results.’ In short, section 252 lacks

the clear statement necessary so that a State contemplating

service as a deputized federal regulator can choose to regulate

(or not), fully cognizant that Congress intended that its

interpretation of pre-existing interconnections agreements

would subject it to suit in federal district court.

While acknowledging the lack of “express waiver

language,” the court of appeals asserted that the structure of

section 252 “nevertheless makes clear that Congress intended

to provide for federal court review of any regulatory

determination made under this section.” 222 F.3d at 341.

According to the court, “if a state commission does not carry

out its responsibilities under § 252, the FCC will act in place

of the state commission,” and “the exclusive remedy for a

state commission’s failure to act will be the proceedings

before the FCC and any judicial review of the FCC's

actions.” /d. (citing 47 U.S.C. § 252(e)(5) & (6)). The court

thus reasoned that:

under the terms of § 252, the state commission or, if that

body chooses not to act, the FCC will exercise

regulatory authority over interconnection agreements.

That administrative action, whether taken by a state

administrative tribunal or by the FCC, is subject to

’ A state commission can, of course, voluntarily intervene in federal

court or participate as an amicus Curiae.

i eR ee ee ae "ay

rere

review in federal court. If the reviewing body is a state

commission, the statute provides that the commission’s

actions are reviewable in federal court under subsection

252(e)(6); if the reviewing body is the FCC, its actions

are reviewable in federal court under 28 U.S.C.

§ 2342(1).

Id. Evidently, the court concluded that because any action

taken by the FCC under section 252 is reviewable in the

federal courts, Congress sought a form of procedural and

remedial equivalence by subjecting state commissions to suit

in the federal district courts.

Jurisdiction to review the FCC’s orders, however, lies in

the United States courts of appeals. See 28 U.S.C. § 2342(1);

47 U.S.C. § 402. Such a proceeding takes the form of a

“petition to review,” 28 U.S.C. § 2344, and is “heard in the

court of appeals on the record of the pleadings, evidence

adduced, and proceedings before the agency.” /d. § 2347(a).

It is an appeal and not a “civil action{},” which is subject to

the original jurisdiction of the federal district courts. See 28

U.S.C. § 1331.

It is thus a non-sequitur to reason that because Congress

subjected FCC actions under subsection 252(e)(5) to limited

appellate review, the state commissions have clear and

unequivocal notice that they can be hauled into federal

district court. The FCC is Congress’s creation. Congress

can subject FCC orders to whatever system of judicial review

it chooses, and it chose appellate review. Yet if the Seventh

Circuit's construction is correct, Congress intended to subject

the state commissions to the far more intrusive process of

district court litigation, notwithstanding that the commissions

are sovereign entities whose immunity from suit is a constitu-

tional privilege. This, according to the court below, is the

price Congress imposed on the States for assisting in the

implementation of a federal regulatory program by adjudi-

cating what is in essence a commercial dispute.

Affirmance of this result would, of course, fundamentally

alter the federal-state balance. The structure of the Act thus

provides no basis for departing from the settled rule that

Congress must provide an unequivocal textual statement that

the States waive their immunity from suit in federal court as a

condition of helping Congress implement federal policy. See

Atascadero, 473 U.S. at 239-40; Pennhurst 1, 451 U.S. at 17.

3. Even if section 252 provides clear notice to the States

that their participation in the regulatory scheme subjects them

to waiver of Eleventh Amendment immunity, the court of

appeals erred in holding that Congress has power to extract

such a waiver when regulating pursuant to the commerce

clause. In the court of appeals’ view, because Congress has

power under the commerce clause entirely to preempt state

regulation of local phone service, its decision to give States

the choice to regulate aspects of local phone service is a “gift

or gratuity” to which Congress can attach the condition that

the State waive its immunity. 222 F.3d at 344 (citing College

Savings, 527 U.S. at 686-87). The court of appeals’ holding

erroneously resuscitates congressional power under Article I

to “extract” constructive waivers in a manner contrary to

College Savings. See 527 U.S. at 680, 686. It erroneously

characterizes the Court’s discussion, which rejected the

United States’ attempt to save the constructive waiver

doctrine, into a holding. See id. at 686-87. Finally, it

demonstrates a serious misunderstanding of the federal-state

relationship and eviscerates the landmark holding of

Seminole Tribe.

In College Savings, the Court addressed and rejected the

United States’ attempt to revive the doctrine based on its

argument that there were “two other contexts in which ...

[the Court has] permitted Congress, in the exercise of its

Article I powers, to extract ‘constructive waivers’ of state

sovereign immunity.” 527 U.S. at 686. The United States

there argued that Congress has power to extract waiver where

States seek Congressional approval of an interstate compact,

and where Congress conditions a State’s receipt of federal

funds on waiver of the immunity. See id. (discussing Petty,

359 U.S. 275, and South Dakota v. Dole, 483 U.S. 203). The

Court dismissed the United States’ argument as inapposite,

distinguishing these exercises of congressional power on the

ground that they did not impose a sanction but rather

bestowed a “gift or gratuity,” which Congress does not have

to make and a State does not have to accept. /d. at 687. Even

then the Court explained that where Congress imposes a

condition on the grant of federal funds, “ ‘the financial

inducement ... might be so coercive as to pass the point at

which “pressure turns into compulsion.”’” /d. (quoting

Dole, 483 U.S. at 211 (quoting Steward Machine Co. v.

Davis, 301 U.S. 548, 590 (1937))).

Contrary to the view of the court of appeals, see 222 F.3d

at 342, this discussion does not “endorse” the view that

Congress has power under Article I to extract a waiver of

Eleventh Amendment immunity as long as it provides the

States with a “gift.” Indeed, no decision of this Court has

ever squarely held that Congress can condition a grant of

federal funds on a State’s waiver of its Eleventh Amendment

immunity. Dole, for example, did not involve a condition

that States waive their Eleventh Amendment immunity. See

483 U.S. at 205. Dole even recognized “that other

constitutional provisions may provide an independent bar to

the conditional grant of federal funds.” /d. at 208.

In Atascadero, the Court merely held that the Reha-

bilitation Act “falls short of manifesting a clear intent to

condition participation in the programs funded under the Act

on a State’s consent to waive its constitutional immunity.”

473 U.S. at 247. Similarly, both Florida Dept. of Health and

Edelman were decided on the ground that the relevant federal

law lacked the clear statement required to put the States on

notice that Congress was extracting a waiver of their Eleventh

Amendment immunity as a condition for participation in the

program. See Florida Dept. of Health, 450 U.S. at 149-50;

Edelman, 415 U.S. at 673-74.

Thus, none of these cases establishes the proposition that

Congress can, in the exercise of its Article | powers, extract a

waiver as long as it is providing the States with a “gratuity.”

Such a rule would violate the fundamental principle that

“‘ttlhe Eleventh Amendment restricts the judicial power

under Article Ill, and Article I cannot be used to circumvent

the constitutional limitations placed upon federal juris-

diction.’ ” Board of Trustees of the Univ. of Ala. v. Garrett,

121 S.Ct. 955, 962 (2001) (quoting Seminole Tribe, 517 U.S.

at 72-73)."

Moreover, College Savings did not suggest that a grant of

regulatory power enacted pursuant to the commerce power

which must be carried out in accordance with federal

instructions, is a gift or gratuity. See 527 U.S. at 686-87.

Indeed, such a characterization is fundamentally flawed.

Congress did not offer the States any financial recompense

for undertaking to administer sections 251 and 252. If there

is any party that has received a gift or gratuity when a State

accepts regulatory authority under the Telecommunications

Act, it is Congress and the FCC, which are spared the

substantial costs of setting up a local field office of the

federal bureaucracy.”

As Congress did not provide federal funds in exchange for

the States agreeing to regulate, the court of appeals was

forced to construct an alternative hypothesis. Because

Congress could preempt state regulation of local telephone

* If the United States is not satisfied with a State’s performance of its

obligations under a spending clause enactment, it can, off course, sue the

State. Such a suit is not barred by the Eleventh Amendment. See United

States v. Mississippi, 380 U.S. 128, 140-41 (1965).

* As the Fourth Circuit obsery.d in response to the same argument,

“ ‘Some gift.’ " Bell Atlantic Maryland, Inc. v. MCI Worldcom, Inc., 240

F.3d 279, 293 n.3 (4th Cir. 2001) (quoting opinion of district court).

——— eee

rrr re ee ee —_

rr ee

— se

service, the court reasoned that “[s]uch regulation is no longer

an ‘otherwise permissible activity’ for states.” 222 F.3d at

344, Therefore, “Congress may choose to ‘give back’ to

states some of the regulatory power Congress has taken away,

and Congress may attach conditions to the return of that

power.” /d.

This theory rests on a fundamental rnisunderstanding of the

commerce power. As the Court has explained, the Consti-

tution authorizes Congress to “exercise its legislative

authority directly over individuals rather than over States.”

New York v. United States, Id. 144, 165 (1992). “The

allocation of power contained in the Commerce Clause . . .

authorizes Congress to regulate interstate commerce directly;

it does not authorize Congress to regulate state governments’

regulation of interstate commerce.” /d. at 166. Thus, while

“Congress has the authority . . . to pass laws requiring or

prohibiting certain acts, it lacks the power directly to compel

the States to require or prohibit those acts.” /d. Subjecting

States to suits based on their assertedly erroneous

administration of federal standards is simply an imper-

missible attempt to “regulate state governments’ regulation of

interstate commerce.” /d.

Indeed, even those who argued in College Savings for the

retention of some form of Parden waivers implicitly

recognized the invalidity of such waivers when the State is

engaged in regu'ation. See 527 U.S. at 679-80 (summarizing

argument of petitioners and United States that “a State is

never deemed to have constructively waived its sovereign

immunity by engaging in activities that it cannot realistically

choose to abandon, such as the operation of a police force;

but constructive waiver is appropriate where a State runs an

enterprise for profit, operates in a field traditionally occupied

by private persons or corporations, engages in activities

sufficiently removed from ‘core state functions,’ or otherwise

acts as a ‘market participant’ in interstate commerce”) (other

Citation omitted).

The Court rejected this argument observing that a “State's

mere presence in a field subject to Congressional regulation”

does not demonstrate that it has voluntarily waived its

immunity. /d. at 680. Indeed, the potential for involuntary

waiver is even greater where, as here, the activity which

purportedly subjects a State to suit is its activity as a regulator

in a field historically subject to state authority.

The States have long exercised their police powers to

~ regulate commercial activity generally and telecommuni-

cations specifically. “By 1915, most States had established

oublic utility commissions and charged them with regulating

telephone service.” AT & T Corp. v. lowa Utilities Bd., 525

U.S. at 403 (Thomas, J., joined by Rehnquist, C.J., & Breyer,

J., concurring in part and dissenting in part) (citing J. Brooks,

Telephone: The First Hundred Years 144 (1976)). When

Congress entered the field by enacting the Mann-Elkins Act

(Act of Jun. 18, 1910, ch. 309, § 7, 36 Stat. 544-45), it did not

preempt the States’ regulation of intrastate phone service.

See AT & T Corp., 525 U.S. at 403 (Thomas, J.). The

jurisdictional separation between state and federal authority

remained unaltered until the Telecommunications Act of

1996. See id. at 403-05 (Thomas, J.). During this period, the

States created extensive schemes (comprised of both

substantive rules and administrative bodies) to regulate the

intrastate aspects of phone service. See 220 ILCS §§ 5/13-

101-902. It was this “policy expertise” that Congress sought

“to take advantage of.” 525 U.S. at 412 (Thomas, J.).

Given the longstanding and extensive role played by the

States in regulating local phone service, Congress knew full

well that the state commissions could not respond to sections

251 and 252 by simply closing up shop. Indeed, because the

1996 Telecommunications Act does not preempt all aspects

of the States’ regulation of local phone service, but leaves

substantial areas, such as the setting of retail rates, within

their authority, States were highly unlikely to walk away. Cf.

_— ST Gi il sat

FERC v. Mississippi, 456 U.S. 742, 766 (1982) (“[T]he

choice put to the States—that of either abandoning regulation

of the field altogether or considering the federal standards—

may be a difficult one.”). Indeed, it is absurd to suggest that

the States can realistically abandon regulation which protects

the interests of millions of telephone users.

Contrary to the view of the court of appeals, the state

commissions have not “entered into the same kind of

exchange with Congress that takes place when Congress

offers federal funds conditioned on a state’s acceptance of the

federal terms.” 222 F.3d at 343. The “exchange” is inher-

ently coercive as the enormous constituency of phone users

and interest groups protected by state commissions would

object strenuously if a State proposed to cease regulation.

The court of appeais therefore erred in holding that the

Illinois Commerce Commission constructively waived the

State’s Eleventh Amendment immunity by interpreting a pre-

oe interconnection agreement under sections 251 and

Il. EX PARTE YOUNG DOES NOT PROVIDE A

BASIS FOR FEDERAL COURT JURISDICTION

TO REVIEW THE ICC’S ORDER

The court of appeals held that the Ex parte Young doctrine

provides an “independent basis” for the carriers to “pursu[e]

injunctive relief against the individual members of the state

commissions” in federal court. 222 F.3d at 345. According

° As explained infra at page 22, in FERC v. Mississippi, the Court held

that a state agency that exercises adjudicatory powers is required to apply

federal law if it has jurisdiction over similar state law disputes. See 456

U.S. at 760-61. Thus, in the absence of complete preemption, a state

agency that adjudicates disputes under state law, as does the ICC, has no

choice but to apply federal law. The State's decision to apply federal law

is thus involuntary and cannot be deemed a waiver of the State’s Eleventh

Amendment immunity.

to the court of appeals, this is a “‘straightforward Ex parte

Young case[]’” because the commissioners’ “determinations

are still in place, and the carriers seek to have the

commissioners conform their future actions, including their

continuing enforcement of the challenged determinations,

with federal law.” Jd. “Thus,” the court explained, “the

carriers’ suits fit squarely within the traditional framework of

Ex parte Young.” /d.

The court’s holding reflects a profound misunderstanding

of the Ex parte Young doctrine. It marks an unprecedented

expansion of the doctrine from the accepted realm of

reviewing state legislative and executive action, to

interposing the federal district courts as reviewing bodies of

state judicial and quasi-judicial proceedings. See 17 Charles

Alan Wright et al., Federal Practice & Procedure § 4231, at

559-60 (1988) (“Ex parte Young established the power of the

federal courts to enforce the Constitution against state

legislative and executive action.”) (emphasis added and

footnote omitted).

The lower court’s expansion of the doctrine is contradicted

by the Young opinion itself, and, in any event, cannot be

justified by its theory and purpose. It is also contrary to the

principles of federal court non-interference with state judicial

proceedings as reflected in the Anti-Injunction Act, 28 U.S.C.

§ 2283, and abstention doctrine. See Younger v. Harris, 401

U.S. 37, 43-44 (1971); Ohio Civil Rights Comm'n v. Dayton

Christian Schools, Inc., 477 U.S. 619, 625-29 (1986)

(abstention doctrine based on the “‘vital consideration’ of the

proper respect for the fundamental role of the States in our

federal system”) (quoting Younger, 401 U.S. at 44).

The court of appeals acknowledged that “the present case

arises in a slightly different context” than its MC/ decision,

Pet. App. 13a, which arose out of the arbitration and approval

of an agreement. See 183 F.3d at 561. The court failed,

however, to conduct any further examination into the nature

UN eee.

of the ICC proceeding, summarily concluding that all

commission actions involving interconnection agreements are

reviewable by suits that are “to be brought exclusively in the

federal courts.” Pet. App. 14a.

This case, however, is far removed from the paradigm of

Ex parte Young. It is not a challenge to a legislative act. Nor

is it a challenge to an executive branch official’s authority to

enforce a legislative act. See Young, 209 U.S. at 132. Rather,

it is a challenge to an adjudication, which, while rendered by

an administrative agency, nonetheless acted as a judicial body

in the underlying proceeding. Young simply does not con-

template the exercise of federal court jurisdiction to review

= ICC’s order in this proceeding. As the Court explained in

oung:

[T]he right to enjoin an individual, even though a state

official, from commencing suits under circumstances

already stated, does not include the power to restrain a

court from acting in any case brought before it, either of

a civil or criminal nature, nor does it include power to

prevent any investigation or action by a grand jury. The

latter body is part of the machinery of a criminal court,

and an injunction against a state court would be a

violation of the whole scheme of our government. . . .

_The difference between the power to enjoin an indi-

vidual from doing certain things, and the power to enjoin

courts from proceeding in their own way to exercise

jurisdiction, is plain, and no power to do the latter exists

because of a power to do the former.

209 U.S. at 163.

The Court has, of course, long recognized that “[iJt is

within the power of the States, as it is within the power of the

Federal Government, to transfer some adjudicatory functions

to administrative agencies, with opportunity for subsequent

judicial review.” Printz v. United States, 521 U.S. 898, 929

n.14 (1997) (citing Crowell v. Benson, 285 U.S. 22 (1932)).

It is likewise well established that an administrative agency

engaged in adjudication is performing a judicial act. See

Prentis v. Atlantic Coast Line Co., 211 U.S. 210, 224-26

(1908). Indeed, that is the very premise of FERC v.

Mississippi, 456 U.S. 742, 760-61 (1982), which held that

Testa v. Katt, 330 U.S. 386 (1947), requires a state

administrative agency to apply federal law when it

adjudicates disputes arising within its jurisdiction. See 456

U.S. at 760 (“the [State] Commission has administrative as

well as judicial duties”); see also Printz, 521 U.S. at 929 n.14

(“We have no doubt that FERC would not have been decided

the way it was if nonadjudicative responsibilities of the state

agency were at issue.”); FERC, 456 U.S. at 775 n.1 (O’Con-

nor, J., concurring in part and dissenting in part) (agreeing

that Testa was controlling because “the Mississippi Public

Service Commission has jurisdiction over similar state

disputes, and it is settled that a State may not exercise its

judicial power in a manner that discriminates between

analogous federal and state causes of action”).

The ICC proceeding which Ameritech challenged here

was, in every sense, an exercise of judicial power. It was

initiated when various CLECs filed complaints with the ICC

against respondent Ameritech alleging that it had failed to

pay them reciprocal compensation due for calls to internet

service providers under their interconnection agreements. See

J.A. 52a-95a; see also id. at 97a-98a. The cases were

consolidated and assigned to a Hearing Examiner—the

State’s equivalent of an administrative law judge—who

conducted a prehearing conference, a status hearing, and a

full evidentiary hearing at which numerous witnesses

testified. See id. at 99a. Other parties were allowed to

intervene. See id. at 98a. The parties filed both initial cnd

reply briefs, as well as draft orders, and were served with the

Hearing Examiner’s proposed order. See id. at 99a-100a. ''

'! The Illinois statute also allows the parties to file briefs in response to

the hearing examiner’s recommended order. See 220 ILCS § 5/10-111.

The ICC’s order interpreted the agreements to require

respondent Ameritech to pay reciprocal compensation, and

ordered relief, which was both retroactive (by requiring the

payment of past due compensation) and prospective in nature.

See id. at 12la-124a. Not only was the form of the

proceeding judicial in nature, the proceeding was in every

sense an adjudication of the existing rights of the parties and

thus a judicial act. See Prentis, 211 U.S. at 226 (“A judicial

wey investigates, declares and enforces liabilities as they

on present or facts and

already to exist.”),'? = eT ee

To be sure, the Court has reserved the question of whether

a state administrative body engaged in an adjudication is a

court for purposes of the Anti-Injunction Act. See Gibson v.

Berryhill, 411 U.S. 564, 573 n.12 (1973); Prentis, 211 U.S. at

226. Nonetheless, an examination of Young’s theoretical

underpinnings demonstrates that it does not authorize a suit

against state Commissioners when they exercise judicial

functions.

In Young, the Court rejected the assertion of a state

attomey general that because he was acting under the

authority of the State, he was cloaked with its Eleventh

* Appeal of the ICC’s order lies in the State’s appellate courts. See

220 ILCS § 5/10-201(a). Ameritech has filed such an appeal. See

Pet. 7 al. Under Illinois law, “[njo new or additional evidence may be

introduced in any proceeding upon appeal from [an] . . . order or decision

of the Commission, issued or confirmed after a hearing, but the appeal

shall be heard on the record of the Commission as certified by it.” Id. §

10-201(d). Review of the ICC’s orders is deferential. Its factual

findings are reviewed under the “substantial evidence” standard, id. §

5/10-201(eiv(A), and the appellate court “will give substantial weight

and deference to an interpretation of an ambiguous statute by the agency

charged with its administration and enforcement.” Moncada v. ICC, 571

aan — oe (Ill. App. Ct. 1991). The appellate court can reverse

an if it “is in violati ituti ,

a Giubanene iolation of the . . . . federal constitution or laws.

Amendment immunity. 209 U.S. at 159. To this the Court

responded:

The act to be enforced is alleged *o be unconstitutional;

and if it be so, the use of the name “f the state to enforce

an unconstitutional act to the injury of complainants is a

proceeding without the authority of, and one which does

not affect, the state in its sovereign or governmental

capacity. It is simply an illegal act upon the part of a

state official in attempting, by the use of the name of the

state, to enforce a legislative enactment which is void

because unconstitutional.

Id. As the Court has subsequently explained, “[sJince the

State could not authorize the action, the officer was ‘stripped

of his official or representative character and [was] subjected

in his person to the consequences of his individual conduct.’ ”

Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89,

102 (1984) (quoting Ex parte Young, 209 U.S. at 160).

Young thus rests on the common law fiction that “the act

complained of, considered apart from the official authority

alleged as its justification, and as the personal act of the

individual defendant, constituted a violation of right for

which the plaintiff was entitled to a remedy at law or in

equity against the wrongdoer in his individual character.’ ”

Idaho v. Coeur d'Alene Tribe of Idaho, 521 U.S. 261, 272

(1997) (opinion of Kennedy, J.) (quoting /n re Ayers, 123

U.S. 443, 502 (1887)); see also id. at 288 (O'Connor, J.,

concurring) (“The Young doctrine recognizes that if a state

official violates federal law, he is stripped of his official or

representative character and may be personally liable for his

conduct{.}”). Put another way, “where the individual would

have been liable at common law for his actions, sovereign

immunity was no bar regardless of the person's official

position.” /d. at 272 (Kennedy, J.).

The Young doctrine has a further applicable limit. “As the

Court in Larson explained, an ultra vires claim rests on ‘the

officer’s lack of delegated power. A claim of error in the

=>_--—_—_ -—— —_— —co— ~

exercise of that power is therefore not sufficient.’ ”

Pennhurst Il, 465 U.S. at 101 n.11 (quoting Larson vy.

Domestic & Foreign Comm. Corp., 337 U.S. 682, 690

(1949)). Thus, mere assertions of good faith error in the

exercise of lawful authority, such as a tribunal’s alleged

mistake in the interpretation of an agreement, do not support

an action under Young.

At the same time, the common law has long recognized “

general principle, applicable to all judicial officers, thet they

were not liable to a civil action for any judicial act done by

them within their jurisdiction.” Bradley v. Fisher, 80 U.S.

(13 Wall.) 335, 351 (1872). See also Pierson v. Ray, 386

U.S. 547, 553-54 (1967). As the Court explained in Pierson,

“[flew doctrines were more solidly established at common

4 pom the ae of judges from liability for damages

or commi within their judicial jurisdiction.”

U.S. at 553054. jx ons

For an act within a court’s jurisdiction, a judge “cannot be

subjected to responsibility for it in a civil action, however

ego the [ajct may have been, and however injurious in

its consequences it may have ed to the plaintiff.”

Bradley, 80 U.S. (13 Wall.) at 347: see also W. Page dl

et al., Prosser and Keeton on the Law of Torts 1058 (Sth ed.

1984) (Judicial immunity “covers all decisions within the

general ambit of the judge’s authority, even if the decision is

clearly wrong on the merits.”). Judicial “errors may be

corrected on appeal,” not by lawsuits against the judge.

Pierson, 386 U.S. at 554. And because “adjudication within

[an] administrative agency shares enough of the

characteristics of the judicial process . . . those who partici-

pate in such adjudication [are] immune from suits for

damages.” Butz v. Economou, 438 U.S. 478, 512-13 (1978);

of. id. at 514 (persons “performing adjudicatory functions

within a federal agency are entitled to absolute immunity

from damages liability for their judicial acts. Those who

complain of error in such proceedings must seek agency or

judicial review.”).

Ameritech’s suit for injunctive relief thus falls well outside

the Young paradigm. As its federal court complaint states,

“the State commission is empowered to enforce the

agreements it approves.” J.A. 131a (Complaint 415). Thus,

even if the ICC is analogous to a court of limited jurisdiction,

there can be no contention that the Commissioners have acted

on a matter that is outside their jurisdiction. The Com-

missioners clearly possessed power to decide this dispute.

Ameritech’s suit is based on the Commissioners’ asserted

violations of federal law in interpreting the agreements. See

J.A. 140a-144a. But under the common law, the Com-

missioners cannot be sued for any errors they committ in

adjudicating a dispute. See e.g., Bradley, 80 U.S. (13 Wall.)

at 351. And because “‘[{a] claim of error in the exercise of

that power is . . . not sufficient” to strip the Commissioners

of their official character, Ameritech’s suit for injunctive

relief is barred by the Eleventh Amendment. Pennhurst II,

465 U.S. at 101 n.11 (quoting Larson, 337 U.S. at 690).

The need to vindicate the supremacy of federal law does

not justify the court of appeals’ unprecedented expansion of

the Young doctrine to authorize the federal courts to review

state proceedings which are “judicial in nature.” Middlesex

County Ethics Committee v. Garden State Bar Ass'n, 457

U.S. 423, 432-34 (1982). State courts are, of course, required

to apply federal law, see Testa, 330 U.S. at 394, and are fully

able to do so. See Allen v. McCurry, 449 U.S. 90, 105 (1980).

Indeed, until 1875 Congress did not provide “any kind of

general federal-question jurisdiction to the lower federal

courts” and “‘the state courts provided the only forum for

vindicating many important federal claims.’” National

Private Truck Council, Inc. v. Oklahoma Tax Comm'n, 515

U.S. 582, 588 (1995) (quoting Palmore v. United States, 411

U.S. 389, 401 (1973)).

The court of appeals’ holding is simply an invitation to

conflict and confusion. It manifests a shocking disrespect for

the integrity of state judicial processes that is contrary to this

Court’s cases. A federal district court, the Court has

observed, “does not sit to review on appeal action taken

administratively or judicially in a state proceeding.”

Chicago, RJ. & P. RR. Co. v. Stude, 346 U.S. 574, 581

(1954). Whatever may be the precise scope of the Court’s

holding in City of Chicago v. International College of

Surgeons, 522 U.S. 156 (1997), it does not apply here, where

Illinois has vested judicial review of the ICC’s order in the

Illinois’ appellate courts and not its trial courts. See 220

ILCS § 5/10-201(a)."°

Moreover, even if the federal district court has jurisdiction

over Ameritech’s suit, exercising that jurisdiction disregards

“the fundamental constitutional independence of the States

and their courts.” Aftlantic Coast Line RR. Co. v.

Brotherhood of Loc. Engs., 398 U.S. 281, 287 (1970). While

in this case the Illinois Appellate Court stayed further

proceedings pending resolution of Ameritech’s federal suit,

what if the court had declined to issue the stay? How then

would the court of appeals’ allocation of appellate authority

work? See Pet. App. 4a-Sa (court of appeals acknowledges

that its “allocation of authority has the potential to cause

problems”).

' This case does not involve an instance in which the State has vested

judicial review of an administrative proceeding in a trial court of general

jurisdiction. See City of Chicago v. International College of Surgeons,

522 U.S. 156, 159 (1997). Rather, judicial review lies in the Illinois’

appellate courts, see p. 23 n.12, supra, and is thus an appeal rather than a

civil action within the original jurisdiction of the federal district court.

“Cross-system appellate authority is entrusted to this Court . . . but it is

outside the domain of the lower federal courts.” 522 U.S. at 177

(Ginsburg, J., dissenting) (citing Rooker v. Fidelity Trust Co., 263 U.S.

413 (1923)).

Under the Anti-Injunction Act, the federal courts have no

authority to enjoin either the Illinois Appellate Court from

deciding the appeal or the parties from litigating the appeal in

state court. See Atlantic Coast Line, 398 U.S. at 287; County

of Imperial v. Munoz, 449 U.S. 54, 58 (1980). As this Court

has explained, “a federal court does not have inherent power

to ignore the limitations of § 2283 and to enjoin state court

proceedings merely because those proceedings interfere with

a protected federal right or invade an area preempted by

federal law, even when the interference is unmistakably

clear.” Atlantic Coast Line, 398 U.S. at 294. The relief

Ameritech sought—‘“a declaration that the [state com-

mission’s] Order is invalid and . . . an injunction against

enforcement of the Order,” J.A. 141a-142a (49 51, 56)}—

would require a federal court to do exactly that—enjoin

further proceedings in the state courts. See Toucey v. New

York Life Ins. Co., 314 U.S. 118, 136 (1941) (Section 2283

applies to “all steps taken in or which may be taken in the

state court or by its officers from the institution to the close of

the final process. It applies to appellate as well as to original

proceedings... Ly

' Even when a party invokes 42 U.S.C. § 1983—one of the few

“expressly authorized” exceptions to § 2283—the Court has frequently

instructed the lower federal courts to refrain from exercising their

equitable powers to enjoin pending state proceedings if those proceedings

provide an adequate opportunity to raise a federal claim. See Ohio Civ.

Rights Comm'n, 477 U.S. at 625-29; Middlesex County Ethics Committee,

457 U.S. at 431-37; Younger, 401 U.S. at 43-49. While the Court has not

resolved the issue of whether Younger and its progeny require a losing

party in a state administrative adjudication to exhaust appellate remedies,

in the context of a civil action the Court has held ““that a party [wishing to

contest in federal court the judgment of a state judicial tribunal] must

exhaust his state appellate remedies before seeking relief in the District

Court.’ New Orleans Pub. Serv., Inc. v. New Orleans, 491 U.S. 350,

369 (1989) (quoting Huffman v. Pursue, Ltd., 420 U.S. 592, 608 (1975)).

Respect for the authority of state institutions and processes requires the

As the court of appeals candidly observed, its proposed

system of federal district court review of state commission

interpretations “may not have much to recommend it.” Pet.

App. 5a. That, coupled with the absence of any statutory

support for it, is ample reason to reject it.

same result when a party seeks to overturn a state agency’s adjudication

by a suit for injunctive relief in federal district court.

The damage to Illinois’ dignitary interests caused by federal court

intervention in this case is not minimized because the federal district

court was determining whether the State's officials had violated federal

law. That argument was raised and rejected in Younger, see 401 U.S. at

39-40; Middlesex County Ethics Committee, see 457 U.S. at 429; and

Ohio Civil Rights Comm'n, see 477 U.S. at 625. The federal law

applicable to interconnection agreements may be complex, but that does

not give Congress the right to choose which institutions of state

government are to enforce the act. See, e.g., FERC, 456 U.S. at 774

(Powell, J., concurring in part and dissenting in part) (quoting Henry Hart,

The Relations Between State and Federal Law, 54 Colum. L. Rev. 489,

508 (1954) (“The general rule, bottomed deeply in belief in the

importance of state control of state judicial procedure, is that federal law

takes the state courts as it finds them.’ I believe the same principle must

apply to other organs of state government.”)). See also Coeur d'Alene

Tribe, 521 U.S. at 276 (Kennedy, J.) (“It is a principal concern of the

court system in any State to define and maintain a proper balance between

the State’s courts on one hand, and its officials and administrative

agencies on the other.”’).

CONCLUSION

The judgment of the court of appeals should be reversed.

Respectfully submitted,