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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2002
- **Citation:** 535 U.S. 682

## Text

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

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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

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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)

iV

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

v
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.

2

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.

3

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).

4

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

5

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.

6

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.

7

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)).

9

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.

10

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.

12

“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

13

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.

14

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,

=

15

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

16

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

17

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).

18

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.

gi
_— ST Gi il sat

19

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.

20

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.

21

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

22

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.

23

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.

24
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— ~

25

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

26

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)).

27

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)).

28

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

29

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.”’).

30
CONCLUSION

The judgment of the court of appeals should be reversed.
Respectfully submitted,

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
May 29, 2001 Amici Curiae

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0435%3A13. Public record. Not legal advice.