Donkeys and FCC Orders: Court Lacks Jurisdiction to Hear Fee Case

By Robyn Hagan Cain on October 31, 2012 | Last updated on March 21, 2019

In September, Eleventh Circuit Judge J.L. Edmondson called out fellow Circuit Judge Ed Carnes for his lengthy opinions. (While Judge Carnes' writing may be verbose, we gravitate toward his opinions because he is easily the most engaging writer on the Eleventh Circuit bench.)

This week, Judge Carnes authored a 25-page opinion explaining why a disgruntled Alabama telecomm customer can't recover improperly assessed fees from AT&T. In true Carnes fashion, rife with analogies about donkeys in lions' hides, Carnes explains why the district court didn't have subject matter jurisdiction to hear the case.

After Congress passed the Telecommunications Act of 1996, the Federal Communications Commission was left with the unenviable task of implementing the new law. The Act directed the FCC to create "specific, predictable, and sufficient federal and state mechanisms to preserve and advance universal service," but Congress didn't allocate funding for the universal support mechanisms. Instead, it provided that carriers would have to fund the universal support service." The FCC responded by issuing a "Universal Service Order" in 1997, which established the Universal Service Fund (USF) to pay for implementation of the Act. Certain telecomm contributions under the Order were based on carriers' intrastate revenues.

It wasn't the end of the world for the carriers. They just passed the USF charges along to their customers, per the Order's provisions.

Several carriers challenged the Order. In 1999, the Fifth Circuit decided that the FCC had "exceeded its jurisdictional authority ... when it assessed contributions ... based on the combined intrastate and interstate revenues of interstate telecommunications providers ... because the FCC has no jurisdiction to regulate intrastate telecommunications matters."

The court did not, however, decide the legality of the parts of the Order that allowed carriers to pass their contributions through to the customers, or whether the Universal Service Administrative Company -- which administered the universal service program activities -- must refund the contributions.

In 2008, the FCC issued another order, refusing to apply the Fifth Circuit's earlier decision retroactively and denying refunds of intrastate-revenue-based contributions.

But Martha Self, plaintiff, still wants her money back. Self sued her carrier, AT&T, in September 1998, contesting the USF fee. The problem is that Self spent years filing amended complaints in a district court, but federal appellate courts had exclusive jurisdiction to enjoin, set aside, suspend, or determine the validity of the FCC's final orders. To prevail on her claims, the Eleventh Circuit noted that Self had to establish that carriers were not permitted to pass the cost of contributions through to their customers, which would mean that the FCC orders were wrong or invalid. The district court, therefore, lacked jurisdiction to review those orders.

If you're representing a client challenging an FCC order (and who isn't these days?) take some time to read this opinion to see where Self's claim went awry. Judge Carnes may write wordy decisions, but at least this one is peppered with donkey references.

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