# Amicus Curiae Brief — Verizon Maryland Inc. v. Public Service Commission of Maryland

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2002
- **Citation:** 535 U.S. 635

## Text

re .
5 '

OCT 25 2001

Nos. 00-1531 and 00-1711

IN THE
Supreme Court of the United States

VERIZON MARYLAND INC.,
Petitioner,

Vv.

PUBLIC SERVICE COMMISSION OF MARYLAND, ET AL.,
Respondents.

UNITED STATES OF AMERICA,
Petitioner,

On Writs of Certiorari
To The United States Court of Appeals
For The Fourth Circuit

BRIEF AMICUS CURIAE OF
THE VIRGINIA STATE CORPORATION COMMISSION

WILLIAM H. CHAMBLISS

(Counsel of Record)
JOSEPH W. LEE II
Virginia State Corporation Commission
1300 East Main Street, 10th Floor
Richmond, Virginia 23219
(804) 371-9671

'BEST AVAILABLE COPY

TABLE OF CONTENTS

QUESTION PRESENTED IN NOS. 00-1531 &

IPE 9G 6 ccesessasacesenncevsessensennsnenssssscenscsensesnsssasnssonsnnsencedhosssseenees 2
STATEMENT OF AMICUS INTERES T.............::cccceeseeeeeeees 2
i TE 5
FITS cnnnesscencesessesnamnenssnemmesssesseneenemnesanneeeneee 8

I. Federal Courts Do Not Have General
Federal Question Jurisdiction To
Determine Whether State Commission
Determinations Violate The 1996 Act

EAE eee 8
A. There Is No Private Cause Of Action
gS Ee ee 9
Il. The Rooker-Feldman Doctrine Was
Properly Applied By The Fourth
SET Cee ee Sn 15
TESTS SI one ane a ee oO 18

TABLE OF AUTHORITIES
CASES
Aetna Inc. Co. v. Chicago RI & PR Co., 229 F.2d 584

(90 Cis. 89D E)....10:scsxsscenserssessiennssectaiinai 8
American Well Works Co. v. Layne & Bowber Co.,

re FT nn 8
Blatchford v. Noatak, 501 U.S. 775 (1991) .....cccccccceeseeeeeeees 7
Burgio and Campofelice, Inc. v. NYS Dept. of Labor,

067 F368 BESO. GEG Git. BFF) cccccsecessstvennintsscsnnieummaaniie 12
California v. Sierra Club, 451 U.S. 287 (1981)..........000000 11
Cont v. Ashe, 423 UB. G6 (0D FED cccsesssssccnntonsinessaninimmniuans 9, 11
District of Columbia Court of Appeals v. Feldman,

SGD UB. SEB CRIBB ccccccccscsscscssvecessessnnsemeuanal 13
FERC v. Mississippi, 456 U.S. 742 (1982) ........cccceccceeeseeees 15
GTE South Inc. v. Morrison, 6 F. Supp. 2d 517 (E.D.

Va. 1998), aff'd 199 F.3d 733 (4th Cir. 1999)... 3
In the matter of Petition of AT&T Communications of

Virginia, Inc., For preemption of jurisdiction of

the Virginia State Corporation Commission

pursuant to § 252(e)(5) of the Telecommunications

Act of 1996, CC Docket No. 00-251, DA 01-198,

2001 WL 62694 (F.C.C. January 26, 2001)... 4
Louisiana Landmarks Soc. Inc. v. City of New

Orleans, 85 F.3d 1119 (5 Cir 1996)........scessesssesesnessneeeses 9
Northwest Airlines, Inc. v. Transport Workers Union,

4351 U.S. 77 (8GB1)..ccccccccssesscnssenentestsenstiensaanaaanaa 9

Petition of Starpower Communications, LLC, For
declaratory judgment and _ enforcement of
interconnection agreement with Bell Atlantic-
Virginia, Inc., Case No. PUC990156, 2000 S.C.C.

Ns te cnccsncscenctesensanensenensnsssnssccsvesccsceseccsssecssessaes

Petition of Starpower Communications, LLC, For
declaratory judgment interpreting interconnection
agreement with GTE South, Inc., Case
No. PUC990023; and Petition of Cox Virginia
Telecom, Inc. v. GTE South Incorporated, For
enforcement of interconnection agreement for
reciprocal compensation for the termination of
local calls to Internet Service Providers, Case

No. PUC990046, 2000 S.C.C. Ann. Rep. 263..............

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

Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923) 12, 13, 14, 1

Scripps-Howard Radio, Inc. v. Federal

Communications Commission, 316 U.S. 4 (1942).......

Smith v. Kansas City Title & Trust Co., 255 U.S. 180

Verlinden B.V. v. Central Bank of Nigeria, 461 U.S.

SR a ccncnesncnscnssenecccsnsenccsevescsscsscnsvecsccenevcssescccssveeeee

Western Airlines, Inc. v. Port Authority of New York
and New Jersey, 817 F.2d 222 (2™ Cir. 1987),

cert. denied, 485 U.S. 1006 (1988)..........ccccccccceeeseeeees

STATUTES

Code of Virginia § 56-38, et SO. ............ccscseseseeeeeeseeeeeeneeees 3
BD AIK © CRG cccsccsessensnszscanssscsasssszsnssensemessmmnesnsssonmsanenss 13
BD GBA. © CSG ccccsesscsnssereseszasmscsscsssvsasemssssesssnnenss 7, 8, 12, 13
Sd 13
Ga GBB. § FIG cccssesssrescsscsescesssssssnsssssssnssseonesssnssmesecmnensess 10
Ge GBA. B FOG cccsccsnsscsssasssressssnssumnssessnssssssensesssessanssensssse 6
Go GSEs. © FR pe ccnczszsnscsczsnssnssnssnccsnssnesemnsnsenssessensnsemmnstee 6
Gr GK. © Fe crccccnsccsssscsemesnemeeeeeemsmn 6
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Re 6
47 U.S.C. §§ 251(c)(4) and (6); 251(d)(3); 251(f),

252, 253(b) and (f), 254 and 261(C)............ccccceeeeeeeeeeeees 12
Re 12
Sa UB. § FGA ccccscnsssccessrssccssasssssssnssesnssscnsncestemnes 6
Ge DBA. © FIRED ccscceszssscssssssssecssavenssnvvevesnessnvensnscsmsasssse 10
Ga AGB. GD FOGG ccrcccsscsccssscsscssssecsssnsnsencrsnssnesensesnssssnaneen 6
Ga GBA... § BPO ccecesscssscssenscssessnssscssnssscssessessssennsssuvessessnsssvsst 10
Can 68 VaeeeED © 62.2- 8D nccesesssssssssssssnsecsscssssnessessecssstsceese 15
Pub. L. No. 104-104, 110 Stat. 56............ccccccesscesseeeeereneeseenes 5

iv

REGULATIONS
Virginia Administrative Code § 20 VAC 5-400-180............ 4

Virginia Administrative Code § 20 VAC 5-400-
BD © D GIG secscsszsassvevasssszszsensevsnssnsnessesnenensnssnssnssessoseanesss 4

Common Carrier Competition Report, CC Report
No. 96-9, FCC, Common Carrier Bureau, 1996

WL 164625 (F.C.C. April 10, 1996)............ccccccceeeeeeeees 5
H.R. Rep. No. 204, 104" Cong., 2™ Sess. 4748,

reprinted in U.S.C.C.A.N. (March 1996) ..............c000000 10
S. Rep. No. 23, 104" Cong., 1" Sess. 1995

ee 11
Telecommunications Act of 1996, Pub. L. No. 104-

104, purpose statement, 1 10 Stat. 56 (1996)................... 10

CONSTITUTIONAL PROVISIONS

United States Constitution, Eleventh Amendment................ 3
We, GRR.,, AID, Tip SOB Ey 68 GIG cecscsccsssscnsecssensnsemseccscessssese 3

IN THE
Supreme Court of the United States

VERIZON MARYLAND INC.,
Petitioner,
v.

PUBLIC SERVICE COMMISSION OF MARYLAND, ET AL.,

Respondents.

UNITED STATES OF AMERICA,
Petitioner,

On Writs of Certiorari
To The United States Court of Appeals
For The Fourth Circuit

BRIEF AMICUS CURIAE

The interest of the Commission in this proceeding is
that of a State agency that, pursuant to State constitutional
authority and legislation, has the authority to regulate the
ielecommunications industry in the Commonwealth of
Virginia. The Commission’s views are not adequately
represented by petitioners, respondents or other parties. It is
believed that the views contained herein will provide a more
complete view of the Constitutional and statutory issues
involved.

Respectfully submitted,

WILLIAM H. CHAMBLISS
General Counsel

JOSEPH W. LEE III
Attorney

VIRGINIA STATE
CORPORATION COMMISSION
Post Office Box 1197

Richmond, Virginia 23218

(804) 371-9671

Counsel of Record

Counsel for Amicus Curiae the
Virginia State Corporation
Commission

QUESTION PRESENTED IN NOS. 00-1531 & 00-1711

Whether a federal district court has subject-matter
jurisdiction under 28 U.S.C. § 1331 to determine whether a
state public utility commission’s order interpreting or
enforcing an interconnection agreement violates the
Telecommunications Act of 1996?

STATEMENT OF AMICUS INTEREST'

The Virginia State Corporation Commission is a
State administrative body created by the Constitution of

' Rule 37.6 Statement: William H. Chambliss, General Counsel to the
Virginia State Corporation Commission, is the author of this brief. No
person or entity other than the Virginia State Corporation Commission
has made a monetary contribution to the preparation or submission of
this brief.

Virginia and charged with, among other things, the
regulation of telecommunications entities within the
Commonwealth of Virginia. Va. Const., 4 *. [IX Sec. 1, et
seq. The Va. Commission continues to be involved in the
regulation of telecommunications entities and the creation of
competitive markets for the benefit of Virginia consumers.
The Constitution of Virginia and Virginia state law confer
upon the Commission the authority under state law to order
interconnection between carriers operating within the
Commonwealth and specifically § 56-38, et seg. of the Code
of Virginia authorizes the Commission, upon request of the
parties, "to effect, by mediation, the adjustment of claims,
and the settlement of controversies, between public service
companies, and their employees and patrons." After the
passage of the 1996 Act, the Va. Commission became
involved in the arbitration and interpretation of
interconnection agreements between competitive local
exchange companies ("CLECs"), seeking to enter the local
telephone market in Virginia and incumbent local exchange
companies ("ILECs").

In GTE South Inc. v. Morrison, 6 F. Supp. 2d 517
(E.D. Va. 1998), aff'd 199 F.3d 733 (4th Cir. 1999), the
Court held that the Commission in arbitrating
interconnection agreements pursuant to § 252 of the 1996
Act, waived any claims of sovereign immunity under the
Eleventh Amendment. Subsequently, the Va. Commission
has declined to waive sovereign immunity under the
Eleventh Amendment of the United States because it has not
been empowered by either the Constitution of Virginia or the
Code of Virginia to do so.” Consequently, the Va.

? Petition of Starpower Communications, LLC, For declaratory judgment

and enforcement of interconnection agreement with Bell Atlantic-

Virginia, Inc., Case No. PUC990156, 2090 S.C.C. Ann. Rep. 272;

Petition of Starpower Communications, LLC, For declaratory judgment

interpreting interconnection agreement with GTE South, Inc., Case

No. PUC990023; and Petition of Cox Virginia Telecom, Inc. v. GTE
, 3

Commission is no longer able to enforce § 252 of the Act for
arbitration since doing so imperils Virginia's sovereign
immunity. Nor does the Va. Commission approve
negotiated interconnection agreements under the 1996 Act,
but instead relies on state law authority.’ The Virginia State
Corporation Commission offers to conduct arbitration of
interconnection agreements pursuant only to existing state
law authority.’ At this time all telecommunications entities
offered this option by the Va. Commission have declined
said offer, and the Federal Communications Commission is
presently arbitrating a Virginia case.”

As the success of the opening of competitive markets
in the telecommunications industry is dependent upon a
well-functioning framework of interdependent regulatory
entities and the appropriate recognition to the decisions and

South Incorporated, For enforcement of interconnection agreement for
reciprocal compensation for the termination of local calls to Internet
Service Providers, Case No. PUC990046, 2000 S.C.C. Ann. Rep. 263.

* Therefore, the Virginia State Corporation Commission awaits this
Court's decision on the issue of a state commission's waiver of sovereign
immunity by participation in actions pursuant to § 252 of the 1996 Act.
It is reasonably believed that other state regulatory bodies are similarly
positioned, i.¢,, without express authority to waive the immunity of their
particular state.

* Virginia SCC Rules codified at 20 VAC 5-400-180 as "Rules governing
the offering of competitive local exchange telephone service" provide for
the authority to address interconnection issues under the authority of the
Virginia Code. Rules 20 VAC 5-400-180 F 5 and 6 specifically provide
for arbitration of contested issues.

> In the matter of Petition of AT&T Communications of Virginia, Inc.,
For preemption of jurisdiction of the Virginia State Corporation

Commission pursuant to § 252(e5) of the Telecommunications Act of

1996, CC Docket No. 00-251, DA 01-198, 2001 WL 62694 (F.C.C.
January 26, 2001).

authority of the State commissions, the Commission urges
this Court to sustain the orders below. The Court of Appeals
decision that no waiver of sovereign immunity occurred by
State commission participation in the regulation of
interconnection agreements is in accord with law and
Congressional intent. The Virginia State Corporation
Commission supports the position that State commissions
must retain the authority to render final orders or decisions
which possess full effect and finality under state law. The
Court should conclude that neither the 1996 Act nor § 1331
provide a basis for a finding of waiver of sovereign
immunity by a state commission fulfilling obligations
imposed by the 1996 Act.

SUMMARY OF ARGUMENT

In 1996, Congress enacted the Telecommunications
Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (codified at
47 U.S.C. § 251 et seg.) to open the local
telecommunications markets to competition.© The 1996 Act’

® At the time the 1996 Act was passed, 19 states had in place rules
opening the local exchange market to competition. In seven states,
competing firms already had begun to offer switched local service.
These states were California, Illinois, Maryland, Massachusetts,
Michigan, New York, and Washington. Competition rules were in place
in Arizona, Colorado, Connecticut, Florida, Georgia, lowa, Louisiana,
North Carolina, Ohio, Oregon, Tennessee, and Virginia. See, Common
Carrier Competition Report, CC Report No. 96-9, FCC, Common
Carrier Bureau 1996 WL 164625 (F.C.C. April 10, 1996) at page 3.
Particularly, the Virginia General Assembly amended § 56-265.4:4 of the
Code of Virginia to provide for competition in local exchange
telecommunications in 1995. The Va. Commission enacted rules
governing the provision of such services; codified at 20 VAC 5-400-180
as “Rules governing the offering of competitive local exchange telephone
service”.

” See, 47 U.S.C. §§ 251-261. The 1996 Act is codified throughout Title
47 of the United States Code. References to the 1996 Act are to the
relevant sections of the Code.

5

— ee eee ee

imposes a general duty on all telecommunications carriers to
interconnect with other telecommunications carriers. 47
U.S.C. § 251(a). With regard to ILECs, the duty to
interconnect is even more specifically defined by

§ 251(c)(2). (Cite to this assertion)

In conjunction with these interconnection obligations,
the 1996 Act requires all local exchange carriers to establish
reciprocal compensation arrangements for the transport and
termination of telecommunications. 47 U.S.C. § 251(b)(5).
For peposes of compliance with this subsection, the 1996
Act provides that such terms and conditions must provide for
the recovery by each carrier of costs associated with the
transport and termination on each carrier's network facilities
of calls that originate on the network facilities of the other
carriers. Further, such terms and conditions must determine
costs on the basis of a reasonable approximation of the
additional costs of terminating such calls. 47 U.S.C.
§ 252(d)(2)(A). However, ILECs may negotiate and enter in
a binding agreement with a requesting carrier without regard
to the standards set forth in subsections (b) and (c) of § 251.

As a State that has been in the forefront of the
development and opening of competitive markets in the
telecommunications industry,® the Commonwealth of
Virginia has an important stake in the protection of the
framework and relationship between the telecommunications
industry, the State commissions, and Federal courts created
under the 1996 Act. Virginia likewise has an equally
important stake in maintaining sovereignty over the
processes of its state judicial and regulatory bodies. The
federal district courts have only that jurisdiction that
Congress grants through statute. The federal district courts
do not possess subject-matter jurisdiction over suits that

* As of June, 2001, 200 competitive local exchange companies (CLECs)
have certificated in the Commonwealth of Virginia.

6

challenge, as contrary to federal laws, orders of state public
utility commissions interpreting or enforcing interconnection
agreements. Congress has not abrogated the State
commission’s sovereign immunity pursuant to 28 U.S.C.
§ 1331.

ARGUMENT

I. Federal Courts Do Not Have General
Federal Question Jurisdiction To
Determine Whether State Commission
Determinations Violate the 1996 Act
Under § 1331.

The Fourth Circuit held that 28 U.S.C. § 1331 does
not provide federal jurisdiction because Congress intended
federal jurisdiction to be limited to the grant in 47 U.S.C. §
252(e)(6).” Furthermore, the Court of Appeals held that "the
simple fact that interconnection agreements are "creations of
federal law" does not make their interpretation a sufficiently
substantial federal question to confer jurisdiction under 28
U.S.C. § 1331.""° Petitioners contend that the federal district
courts have jurisdiction under 28 U.S.C. § 1331.'' The Va
Commission maintains that the case before this Court does
not meet the requirements for jurisdiction under 28 U.S.C.
§ 1331.

* Bell Atlantic Maryland, Inc. v. MCI WorldCom Inc., et al., 240 F.3d
279, 309 (4th Cir. 2001).

Id. at 308.

'' Section 1331 provides in pertinent part, that "(tJhe district courts shall
have original jurisdiction of all civil actions arising under
the. . laws. . .of the United States.

'? The party seeking the federal forum must establish the basis for the
court's jurisdiction. Petitioners have failed to allege that the federal law
creates any cause of action. Jurisdiction may not be sustained on a
theory that the plaintiff does not advance. Healy v. Seagull Specialty
Co., 237 U.S. 479, 480 (1915).

—

The federal district courts have that jurisdiction
which Congress grants through statute. Because federal
question jurisdiction ultimately depends on an act of
Congress, the scope of the district courts’ jurisdiction
depends on the Congressional intent manifested in the statute
at issue.

Furthermore, § 1331 jurisdiction may be preempted
by a doctrine which requires jurisdiction to reside elsewhere.
Congress has not abrogated the State commission's sovereign
immunity pursuant to § 1331. The Supreme Court has
expressly held that § 1331 does not suffice to abrogate
immunity for all federal questions. Blatchford v. Noatak,
501 U.S. 775, 786 (1991). In light of this statement, no
reasonable argument could be made that § 1331 constitutes
an abrogation of state immunity.

A. There is no private cause of action under the 1996
Act

Even though Congress has conferred general federal
question jurisdiction on the federal district courts under 28
U.S.C. § 1331 in terms similar to the constitutional
provision, the term "arising under" in the statute is narrower
than the similarly defined constitutional power. Verlinden
B.V. v. Central Bank of Nigeria, 461 U.S. 480, 495 (1983).
Because federal question jurisdiction ultimately depends on
an act of Congress, the scope of the district courts’
jurisdiction depends on the Congressional intent manifested
in the statute at issue. As this Court has held, "the source of
plaintiffs rights must be found...in the substantive
provisions of the. . .Act which they seek to enforce. . .Touche
Ross & Co. v. Reddington, 442 U.S. 560, 577 (1979).

Section 1331 should be construed strictly and all
doubts should be resolved in favor of State court jurisdiction.
Aetna Inc. Co. v. Chicago RI & PR Co., 229 F.2d 584, 586

9

(10" Cir. 1956). There are two tests under which an action
may present a federal question. The first asks whether
federal law creates the cause of action. If so, federal
question jurisdiction exits. American Well Works Co. v.
Layne & Bowber Co., 241 U.S. 257, 260 (1916). If state law
creates the cause of action, the second test asks whether that
cause of action poses a substantial federal questions. Smith
v. Kansas City Title & Trust Co., 255 U.S. 180, 201 (1921)."°

Courts begin with the presumption that if a statute
does not expressly create a private cause of action, one does
not exist. See, Louisiana Landmarks Soc. Inc. v. City of
New Orleans, 85 F.3d 1119, 1123 (5" Cir 1996). By now,
Congress is well aware of this presumption and how to craft
statutes that unequivocally do provide private remedies. See,
Touche Ross & Co. v. Redington, 442 U.S. 560, 572 (1979)
("Touche"). Appellants argument relies upon the erroneous
assumption that the existence of a federal statute
automatically gives rise to § 1331 jurisdiction.“

Under the settled framework for evaluating whether a
private cause of action may be inferred from a statute, the
factors considered include whether the plaintiff is part of the
class for whose special benefit the statute was passed; and
whether the indicia of legislative intent reveals a
congressional purpose to provide a private cause of action or
deny one; whether it is consistent with the underlying
legislative scheme to imply such a remedy; and whether the

'3 Since no state law claims are raised, this second test does not apply.

4 Petitioners contend in this appeal that if Congress had intended to
restrict the jurisdiction of the federal district courts, it would have
expressly precluded jurisdiction in the 1996 Act. This argument is
obviated by the fact that federal district courts are courts of limited
jurisdiction and only possess that jurisdiction granted expressly by
Congress.

10

cause of action is one traditionally relegated to state law, in
an area basically the concern of the States, so that it would

be inappropriate to infer a cause of action based solely on -
federal law. Cort v. Ash, 422 U.S. 66, 78 (1975) ("Cort").

Unless Congressional intent to create a private cause
of action can be inferred from the language of the statutory
structure, or some other source, the essential predicate for
implication of a private remedy simply does not exist.
Northwest Airlines, Inc. v. Transport Workers Union, 451
U.S. 77, 94 (1981). Whether Congress has created an
enforceable right is determined by its intent. Smith v. Kirk,
821 F.2d 980, 982 (4" Cir. 1987). Neither the language of
the 1996 Act nor its legislative history indicates that
Congress intended to create a private cause of action.

The legislative history of the 1996 Act establishes
that telecommunications entities were not intended to be
special beneficiaries of the statute enacted. The Acct itself
expresses Congress’ intent "to promote competition and
reduce regulation in order to secure lower prices and higher
quality services for American telecommunications
consumers and encourage the rapid deployment of new
telecommunications technologies." Telecommunications Act
of 1996, Pub. L. No. 104-104, purpose statement, 110 Stat.
56, 56 (1996). (cmphasis added) In its report concerning
the legislation, Congress specifically stated that:

. .. In order to secure lower prices and higher
quality services for American

result will be lower prices to consumers and
businesses, . . . a competitive edge for
enormous benefits to American businesses
and consumers from lifting the shackles of

monopoly regulation . . . -
11

H.R. Rep. No. 204, 104" Cong., 2” Sess. 4748, reprinted in
U.S.C.C.A.N. (March 1996) (emphasis added). Thus, it is
clear that the 1996 Act was enacted to benefit consumers
generally and was not intended to special’y »2nefit ILECs
such as BA-MD.

Furthermore, an examination of the legislative history
and statutory scheme presents no indication that Congress
intended to create a general private cause of action. No
language in the Act supports such an argument. There are
limited express grants of federal jurisdiction in the 1996
Act" but, as pertinent here, one such grant is limited'® to
suits brought by parties to interconnection agreements. 47
U.S.C. § 252(e)(6). Under § 252(e)(6), a district court's
review of a State Commission's approval or rejection of an
interconnection agreement is limited to whether the
agreement meets the requirements of §§ 251 and 252. Such
review is narrowly construed and does not cover other
aspects of a State Commission's decision, such as
consistency with State law, or matters covered in § 253. See,
Southwestern Bell Telephone, 225 F.3d 942. Therefore,
§ 252(e)(6) is a limited jurisdictional provision.

Aside from the narrow remedy contained in
§ 252(e)(6), the 1996 Act also explicitly provides for federal

'S Section 252(e)(6) provides, in pertinent part, in any case in which a
State Commission makes a determination under this section, any party
injured by such decision may bring an action in an appropriate Federal
district court to determine whether the agreement or statement meets the
requirements of Section 251.

"© The district courts have construed § 252(e)(6) narrowly. See, e.g.
Citizen's Utility Ratepayers Board v. McKee, 946 F. Supp. 89 (D. Kan.
1996) (Plaintiff is not an aggrieved party under § 252(e)(6); only the
interconnecting service provider or affected local exchange carriers has
standing.)

12

court jurisdiction in two other sections. Section 274 creates
federal jurisdiction in the electronic publishing area and
Section 207 creates the same jurisdiction over interstate
communications disputes. That Congress expressly provided
for a specific right of access to the federal courts in
§ 252(e)(6) and the other sections noted above is evidence
that when Congress wished to provide a private remedy, it
knew how to do so and did so expressly. Touche, 442 U.S.
at 572.

The conclusion that Congress did not intend to create
a private cause of action is further supported by the fact that
Congress considered but failed to include a private right of
action in the 1996 Act for violations of an interconnection
agreement. Section 257 of the Senate Bill expressly
provided for a general private right of action. S. Rep. No.
23, 104" Cong., 1" Sess., 1995 at 104-05 (March 30, 1995).
However, this provision was not enacted in the final
legislation. Congress’ express grant of federal rights of
action in the three sections of the 1996 Act while deleting a
general provision from the Senate Bill, demonstrates that
Congress did not intend to create an implied cause of action.

Consideration of the first two Cort factors is
dispositive. The language of the statute and its legislative
history do not suggest that the Act was intended to create
federal rights for the benefit of a class of persons but rather
was intended to benefit the public at large through a
regulatory scheme to be administered in large part by the
States. See, California v. Sierra Club, 451 U.S. 287, 298
(1981). Nor is there any evidence that Congress anticipated
that there would be a private remedy.

This being the case, it is unnecessary to inquire
further to determine whether the purpose of the statute would
be advanced by the judicial implication of a private action or
whether such a remedy is within the federal domain of

13

interest. These factors are only of relevance if the first two
factors give indication of Congressional intent to create the
remedy. /d., citing, Touche, 442 U.S. at 574-576.

The conclusion that the 1996 Act does not create a
private cause of action negates any claim of federal subject
matter jurisdiction.” In the absence of a federal statutory
cause of action, declaratory relief by a federal court is
available only when a federal statute totally precludes State
regulation of the matter being litigated. In other words, the
federal statute must have entirely occupied the field,
preventing any state regulation of matters within the scope of
the federal statute. Western Airlines, Inc. v. Port Authority
of New York and New Jersey, 817 F.2d 222, 225-26 (2™ Cir.
1987), cert. denied, 485 U.S. 1006 (1988). See, also Burgio
and Campofelice, Inc. v. NYS Dept. of Labor, 107 F.3d 1000,
1007 (2d Cir. 1997). A preemption cause of action for
declaratory relief is not an alternative means for enforcing
the substantive provisions of the federal statute. Western Air
Lines v. Port Authority of New York & New Jersey, 817 F.2d
at 225-26.

No reasonable argument could be made contending
that the 1996 Act entirely preempts state regulation of local
exchange service or local exchange carriers. Among a
variety of other things, § 252 requires a state commission to
determine wholesale rates in the context of an arbitration.
See, e.g., §§ 251(c)(4) and (6); 251(d)(3); 251(f), 252, 253(b)
and (f), 254 and 261(c).

This Court should find that the 1996 Act does not
create a private cause of action, nor does it “occupy the
field,” thereby preventing any state regulation of matters

'’ This Court held that the Federal Communications Act of 1934 "does
not create new private rights". See Scripps-Howard Radio, Inc. v.
Federal Communications Commission, 316 U.S. 4, 14 (1942).

14

a Gem ngage EE

falling within the scope of the federal statute. Given these
conclusions, the Court should hold that the district court did
not have jurisdiction pursuant to 28 U.S.C. § 1331 and
therefore uphold the decision of the Court of Appeals.

II. The Rooker-Feldman Doctrine Was
Properly Applied By the Fourth
Circuit.

The Rooker-Feldman doctrine stems from two
Supreme Court cases decided sixty years apart. In Rooker v.
Fidelity Trust Co., 263 U.S. 413 (1923), the Supreme Court
held that lower federal courts lack jurisdiction to entertain
appeals from state court judgments because that power is
reserved to the Supreme Court. In 1983, the Supreme Court
decided District of Columbia Court of Appeals v. Feldman,
460 U.S. 462 (1983), clarifying Rooker and giving the
Rooker-Feldman doctrine its name. In Feldman, the
Supreme Court held that lower federal courts have no
jurisdiction to hear "challenges to state court decisions in
particular cases arising out of judicial proceedings", /d. at
486, or decide questions “inextricably intertwined" with
State court judgments. Jd. at 483 n. 16.

The Rooker-Feldman doctrine is founded on two
main inferences derived from provisions of Title 28 of the
United States Code. The first inference is that 28 U.S.C.
§ 1257, which gives the Supreme Court appellate review of
certain State court decisions, is the only federal statute that
explicitly provides for federal review of state court decisions.
Congress granted original jurisdiction to federal district
courts under a variety of statutes, including 28 U.S.C.
§§ 1331 and 1332. Under this statutory scheme, federal
district courts are courts of original, not appellate
jurisdiction. Thus, by inference, 28 U.S.C. § 1257 granted
jurisdiction exclusively to the Supreme Court to review final
judgments or decrees from the highest court in a state. The

15

second inference is that Congress intended to foreclose all
other forms of federal court review of state decisions.
Because Congress only gave the Supreme Court the explicit
authority to review the decisions of a state court, Congress
meant to deny all other federal courts that power.

Thus, the Rooker-Feldman doctrine is an extension of
the principle that federal courts are courts of limited
jurisdiction. Also underlying the Rooker-Feldman doctrine
is the idea of federalism. The doctrine is designed to
preserve the two distinct legal systems so that each may
proceed independently of the other with the Supreme Court
as the final arbiter of any federal questions raised in either
system. The policy reasons that underlie the doctrine apply
just as readily to state agency decisions rendered in quasi-
judicial proceedings as they do to State court decisions.

The Feldman Court found that the federal district
court was “without authority to review final determinations
of the [D.C. Court] in judicial proceedings. Review of such
determinations can be obtained only in this Court. See, 28
U.S.C. § 1257." Feldman, 460 U.S. at 476. In reaching this
conclusion, the Supreme Court analyzed the crucial question
whether the proceedings before the D.C. Court "were judicial
in nature” so as to bring these proceedings under the ambit of
Rooker.

The leading case relied upon by the Feldman Court
was Prentis v. Atlantic Coast Line Co., 211 U.S. 210 (1908),
where the Supreme Court acknowledge that your amici, the
Virginia State Corporation Commission, is at least for some
purposes, a court. 211 U.S. at 224. Prentis also held that:

A judicial inquiry investigates, declares and
enforces liabilities as they stand on present or
past facts and under laws supposed already to
exist .... Legislation on the other hand looks

16

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to the future and changes existing conditions
by making a new rule to be applied thereafter
to all or some part of those subject to its
power.

211 U.S. at 226. The Feldman Court agreed with the Prentis
finding that the question regarding whether a proceeding is
judicial in nature "depends not upon the character of the
body but upon the character of the proceedings.” 460 U.S. at
477. The Feldman Court found that the proceedings at issue
were judicial in nature because the tribunal "was called upon
to investigate, declare and enforce liabilities as they stood
on present or past facts and under laws supposed already to
exist." Feldman, 460 U.S. at 479. Consequently, the
Feldman Court ruled that the district court lacked subject
matter jurisdiction over applicants’ claims for individual
relief.

The Va. Commission has the powers of a court of
record to administer oaths, compel the attendance of
witnesses and production of documents, punish for contempt,
and enforce compliance with its orders through fines and
other penalties as prescribed or authorized by law.'® This
Court has recognized that state agencies perform judicial acts
in FERC v. Mississippi, 456 U.S. 742, 760-61 (1982). The
Rooker-Feldman doctrine preserves the autonomy of both
sovereigns and prevents undue incursions of federal courts
upon lower courts. The Fourth Circuit recognized the
judicial nature of state commissions’ proceedings and
properly found that federalism requires the federal district
courts to refrain from taking jurisdiction in cases involving
state commissions.

'§ Code of Virginia § 12.1-13.

17

CONCLUSION

The judgment of the Court of Appeals for the Fourth.
Circuit should be affirmed.

Respectfully submitted,

WILLIAM H. CHAMBLISS
General Counsel

JOSEPH W. LEE Ii
Attorney

VIRGINIA STATE
CORPORATION COMMISSION
P.O. Box 1197

Richmond, Virginia 23218

(804) 371-9671

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0459%3A12. Public record. Not legal advice.