Bell Atl PA v. PA Pub Util Comm ( 2001 )

Opinions of the United
2001 Decisions States Court of Appeals
for the Third Circuit
11-7-2001
Bell Atl PA v. PA Pub Util Comm
Precedential or Non-Precedential:
Docket 00-2619
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Recommended Citation
"Bell Atl PA v. PA Pub Util Comm" (2001). 2001 Decisions. Paper 257.
http://digitalcommons.law.villanova.edu/thirdcircuit_2001/257
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Filed November 2, 2001
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 00-2619/2620
BELL ATLANTIC-PENNSYLVANIA, INC.
v.
THE PENNSYLVANIA PUBLIC UTILITY COMMISSION;
JOHN M. QUAIN, Chairman of the Pennsylvania Public
Utility Commission, in his individual and official
capacities; ROBERT K. BLOOM, Vice-Chairman of the
Pennsylvania Public Utility Commission, in his individual
and official capacities; NORA MEAD BROWNELL,
Commissioner of the Pennsylvania Public Utility
Commission, in her individual and official capacities;
AARON WILSON, JR., Commissioner of the Pennsylvania
Public Utility Commission, in his individual and official
capacities; VINCENT J. FUMO, State Senator Vincent J.
Fumo; ROGER A. MADIGAN, State Senator Roger A.
Madigan; MARY JO WHITE, State Senator Mary Jo White
UNITED STATES OF AMERICA
(Intervenor-Plaintiff in D.C.)
MCI WORLDCOM NETWORK SERVICES, INC.;
MCIMETRO ACCESS TRANSMISSION SERVICES, LLC;
AT&T COMMUNICATIONS OF PENNSYLVANIA, INC.; TCG
PITTSBURGH; TCG DELAWARE VALLEY; SPRINT
COMMUNICATIONS COMPANY, L.P.; THE UNITED
TELEPHONE COMPANY OF PENNSYLVANIA
(Intervenors-Defendants in D.C.)
Vincent J. Fumo; Roger A. Madigan,
Mary Jo White,
Appellants (00-2619)
The Pennsylvania Public Utility Commission;
John M. Quain; Robert K. Bloom;
Nora Mead Brownell; Aaron Wilson, Jr.,
Appellants (00-2620)
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 99-cv-05391)
District Judge: Honorable Marvin Katz
Argued June 21, 2001
Before: ROTH, AMBRO and FUENTES, Circuit Judge s
(Opinion filed: November 2, 2001)
Julia A. Conover, Esquire
Suzan DeBusk Paiva, Esquire
Verizon Pennsylvania Inc.
1717 Arch Street, Floor 32N
Philadelphia, PA 19103
John M. Elliott, Esquire
Henry F. Siedzikowski, Esquire
Elliott, Reihner, Siedzikowski
& Egan
925 Harvest Drive, Suite 300
Blue Bell, PA 19422
Mark L. Evans, Esquire
Geoffrey M. Klineberg, Esquire
Kellogg, Huber, Hansen, Todd
& Evans
1615 M Street, N.W., Suite 400
Washington, D.C. 20036
Attorneys for Appellee
Bell Atlantic-Pennsylvania, Inc.
2
Michael R. Stiles
United States Attorney
Stuart E. Schiffer
Acting Assistant Attorney General
Mark B. Stern, Esquire
Charles W. Scarborough, Esquire
Kathleen A. Kane, Esquire
United States Department of Justice
Civil Division, Appellate Staff
601 D Street, N.W.
Washington, D.C. 20530
Attorneys for Appellee
United States of America
Albert G. Bixler, Esquire
Eckert, Seamans, Cherin & Mellott
1515 Market Street, Suite 900
Philadelphia, PA 19102
Attorney for Appellants
Vincent J. Fumo; Roger A.
Madigan, Mary Jo White
Bohdan R. Pankiw, Chief Counsel
Robert J. Longwell, Deputy Chief
Counsel
Maryanne R. Martin (Argued)
Assistant Counsel
Pennsylvania Public Utility
Commission
P.O. Box 3265
Harrisburg, PA 17105-3265
Attorneys for Appellants
The Pennsylvania Public Utility
Commission; John M. Quain;
Robert K. Bloom; Nora Mead
Brownell; Aaron Wilson
3
Maureen F. Del Duca, Esquire
Jenner & Block
601 13th Street, N.W., 12th Floor
Washington, D.C. 20005
Jeffrey A. Rackow, Esquire (Argued)
MCI Worldcom, Inc.
1133 19th Street, N.W.
Washington, D.C. 20036
Attorneys for Appellees
MCI Telecom Corp. and
MCIMETRO Access Transmission
Services, Inc.
David M. Levy, Esquire
Stephen B. Kinnaird, Esquire
Michael L. Post, Esquire
Sidley & Austin
1722 Eye Street, N.W.
Washington, D.C. 20006
Daniel Clearfield, Esquire
Alan C. Kohler, Esquire
Joseph C. Crawford, Esquire
Wolf, Block, Schorr & Solis-Cohen
1650 Arch Street, 22nd Floor
Philadelphia, PA 19103-2097
Mark A. Keffer, Esquire
Robert C. Barber, Esquire
AT&T Communications
3033 Chain Bridge Road
Oakton, VA 22185
Attorneys for Appellees
AT&T Communications of PA, Inc.;
TCG Pittsburgh; and
TCG Delaware Valley, Inc.
Counsel on Sovereign Immunity
Issues Exclusively
Albert G. Bixler, Esquire (Argued
for Appellants)
Susan D. Paiva, Esquire (Argued
for Appellees)
4
OPINION OF THE COURT
ROTH, Circuit Judge:
The Pennsylvania Public Utility Commission (PUC),
several PUC Commissioners, and several Pennsylvania
State Senators appeal the District Court's denial of their
motions to dismiss the claims and cross-claims brought
against them under the Telecommunications Act of 1996 by
Bell Atlantic (now known as Verizon), MCI/Worldcom
(Worldcom), and AT&T. The PUC and the Commissioners
argue that under the Eleventh Amendment they are
immune from suit in federal court and that the claims and
cross-claims against them are untimely and barred by res
judicata.
For the reasons stated in our decision in MCI Telecomm.
Corp. v. Verizon Pennsylvania, Inc., [Nos. 00-2257, 00-2258,
November 2, 2001] ___ F.3d ___ (3d Cir. 2001), decided this
day, we will affirm the District Court's denial of the defense
of sovereign immunity under the Eleventh Amendment to
the United States Constitution. We further hold that we
have no jurisdiction to hear the PUC's remaining claims on
appeal; we will dismiss them for want of jurisdiction and
remand the case to the District Court.
I. Background
The statutory background of the Telecommunications Act
of 1996 and a discussion of its operation is set out in our
companion opinion in MCI Telecomm. The Act essentially
requires incumbent local exchange carriers (ILECs) to share
their networks and services with competitive local exchange
carriers (CLECs) seeking entry into the local service market.
Verizon, an ILEC, was involved in negotiations with
Worldcom, a CLEC, to provide local service in Pennsylvania.
These talks were part of several ongoing negotiations for
interconnection agreements proceeding before the PUC. In
1998, the PUC initiated discussions aimed at a global
settlement of a variety of pending and anticipated issues
arising in several different dockets. Competing petitions
5
were filed with the PUC by two groups, one consisting of
Verizon and other companies, the other consisting of AT&T,
Worldcom, the State Senators, and others who had opposed
Verizon in various PUC proceedings.
In September 1999, the PUC issued a Global Order,
resolving the issues before it and ordering that the
decisions be incorporated into interconnection agreements.
Verizon appealed the Global Order to the Commonwealth
Court of Pennsylvania, primarily challenging it on state law
grounds. Verizon did assert its federal claims under the
1996 Act in the Commonwealth Court although Verizon
claims that this was done solely for the purpose of making
a reservation of the federal issues, pursuant to England v.
Louisiana State Bd. of Med. Exam'rs, 375 U.S. 411, 421
(1964) (holding that plaintiff may preserve federal claims by
presenting them to state court only for the purpose of
informing the state court of their existence and nature).
Verizon then brought suit in federal district court against
the PUC and individual PUC Commissioners under
S 252(e)(6), challenging terms of the Global Order as being
inconsistent with the 1996 Act.1 Worldcom and AT&T
intervened as defendants and counterclaimed and cross-
claimed to challenge other aspects of the Global Order.
Several Pennsylvania Senators intervened as defendants.
The United States intervened as plaintiff to defend the
constitutionality of S 252(e).
The Senators, the PUC, and the Commissioners moved to
dismiss the suit on grounds, among others, that the PUC
and the Commissioners were immune from suit in federal
court under the Eleventh Amendment, that Worldcom's and
AT&T's cross-claims were untimely, and that the remainder
of the claims should be dismissed for failure to state a
claim. The District Court denied the motions in all respects.2
_________________________________________________________________
1. During the pendency of the instant appeal, Verizon notified this Court
that it was withdrawing its underlying claims in the District Court.
Because the cross-claims and counterclaims remain, the case has not
been rendered moot.
2. The District Court also considered and rejected arguments that it
should abstain from hearing the case, pursuant to a variety of federal
abstention doctrines. The abstention issues have not been appealed and
are not before us.
6
The PUC, the Commissioners, and the Senators
immediately appealed the District Court's decision, not only
the Eleventh Amendment immunity ruling but also the
denial of the bar of the statute of limitations and res
judicata.
II. Collateral Order Doctrine
With certain exceptions not applicable here, we may take
jurisdiction of appeals only from the entry of a final
judgment by a District Court. See 28 U.S.C.S 1291;
Cunningham v. Hamilton County, 527 U.S. 198, 200 (1999).
A decision ordinarily is final when it ends the litigation and
leaves nothing for the court to do but execute the
judgment. See id. at 204 (quoting Van Cauwenberghe v.
Biard, 486 U.S. 517, 521-22 (1988)).
The Supreme Court has interpreted the phrase "final
decision" in S 1291 to include a narrow class of orders that
do not terminate the litigation but are conclusive of a
disputed legal question apart from the merits and are
effectively unreviewable on appeal from a final judgment in
the underlying action. See Cunningham, 527 U.S. at 204;
Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863,
867-68 (1994). The collateral order doctrine of Cohen v.
Beneficial Indus. Loan Corp., 337 U.S. 541 (1949), is a
practical construction of the final decision rule ofS 1291,
applicable to a narrow class of decisions that are
considered final in the interest of achieving a healthy and
efficient legal system. See Digital, 511 U.S. at 867. An order
is immediately reviewable under Cohen if it 1) conclusively
determines a disputed legal question, 2) resolves an
important issue completely separable from the merits of the
action, and 3) is effectively unreviewable on appeal from a
final judgment. See Bines v. Kulayat, 215 F.3d 381, 384-85
(3d Cir. 2000) (quoting Transtech Indus., Inc. v. A&Z Septic
Clean., 5 F.3d 51, 55 (3d Cir. 1993)).
Importantly, the collateral order doctrine is narrow and
limited to a small class of cases. See Digital , 511 U.S. at
868 ("[T]he ``narrow' exception should stay that way and
never be allowed to swallow the general rule."); see also
Bines, 215 F.3d at 384; Transtech, 5 F.3d at 57. The
7
application of the doctrine does not turn on whether the
litigation will be speeded along by immediate review. See
Digital, 511 U.S. at 868. The fact that an erroneous ruling
may result in additional litigation expenses is not alone
sufficient to justify immediate review. See Transtech, 5 F.3d
at 56; see also 15A Charles A. Wright, Arthur R. Miller, &
Edward H. Cooper, Federal Practice and Procedure S 3914.6,
529 (recognizing that "much time and money are spent on
trial court proceedings that ultimately prove abortive," but
stating that the "cost is tolerated because of the
fundamental calculus of the final judgment rule").
The District Court denied motions to dismiss the
complaint and cross-claims by the PUC, the
Commissioners, and the Senators. The denial of a motion to
dismiss does not end the litigation and ordinarily is not a
final order for S 1291 purposes. See 15A Wright, Miller, &
Cooper, Federal Practice and Procedure S 3914.6 at 526
("Orders refusing to dismiss an action almost always are
not final."). We may assert appellate jurisdiction over the
issues before us only if they are the types of claims which
fall within the narrow class of decisions immediately
reviewable under the collateral order doctrine of Cohen.
A. Sovereign Immunity
We have jurisdiction over the Eleventh Amendment
issues because the denial of a defense of sovereign
immunity is immediately appealable under the collateral
order doctrine. See Puerto Rico Aqueduct and Sewer Auth. v.
Metcalf & Eddy, Inc., 506 U.S. 139, 147 (1993).
The sovereign immunity issue in the instant case was
consolidated for oral argument with the immunity issue in
MCI Telecomm., ___ F.3d ___, decided this day. The legal
issues and arguments in both cases are substantially
identical and we need not repeat them in the instant
opinion. The result on the merits is also the same: Neither
the PUC nor the Commissioners have Eleventh Amendment
immunity from an action under S 252(e)(6). For the reasons
stated in our opinion in MCI Telecomm, we will affirm the
District Court's conclusion that the Eleventh Amendment
does not bar the actions against the PUC and the
Commissioners.
8
B. Res Judicata and Statute of Limitations
We turn now to the two remaining issues on appeal: the
PUC's argument that the claims and cross-claims against it
are untimely and are barred by res judicata.
The PUC suggested at oral argument that, because we
have collateral order doctrine jurisdiction over the sovereign
immunity issue, we had the discretion to reach and decide
the remaining issues in the interest of judicial economy,
regardless of whether those issues are themselves
immediately reviewable under the collateral order doctrine.
We reject that suggestion. Our appellate jurisdiction is
established by statute. We can exercise no jurisdiction
other than as provided by statute. The fact that we have
jurisdiction over one issue on an appeal does not grant us
discretion to decide unrelated issues which lack an
independent basis for jurisdiction. See Triad Assocs., Inc. v.
Robinson, 10 F.3d 492, 496-97 n.2 (7th Cir. 1993) (stating
that the fact that court had collateral order jurisdiction to
review denial of immunity defense "is not sufficient to
confer on us jurisdiction to review other claims presented to
the district court" because "[o]therwise nonappealable
issues cannot be bootstrapped to an appealable question").
Nor are concerns for judicial economy alone a sufficient
consideration to create jurisdiction. See Digital, 511 U.S. at
868.
We reach the merits of the two remaining issues only if
they are subject to immediate review under Cohen . We
conclude that neither the denial of a motion to dismiss on
res judicata grounds nor the denial of a motion to dismiss
on statute of limitations grounds is immediately appealable
under the collateral order doctrine. We lack jurisdiction to
address either of these issues on their merits and for the
reasons that follow we will dismiss the appeal of these
claims for want of appellate jurisdiction.
Not only is it generally recognized that the denial of a
motion to dismiss on res judicata, or claim preclusion,
grounds should not be immediately appealable, see, e.g.,
Digital, 511 U.S. at 873; Transtech, 5 F.3d at 58; see also
15A Wright, Miller, Cooper, Federal Practice and Procedure
S 3911.4 at 424-26, but more particularly the defense of
9
claim preclusion in the instant case fails the first and third
prongs of the Cohen standard. First, the District Court's
decision did not conclusively resolve the claim preclusion
issue because the District Court never addressed or
resolved it. The Pennsylvania Commonwealth Court
decision to which the PUC seeks to accord preclusive effect
did not issue until after the District Court had rendered its
decision. Although the District Court took explicit notice of
the pendency of the state court action, there was no state
court decision for it to consider at the time. The court never
had an opportunity to address the res judicata effect of the
state court judgment and cannot be deemed to have
conclusively resolved that legal issue for purposes of
collateral order doctrine jurisdiction.3
Second, the denial of a defense of claim preclusion is not
effectively unreviewable on appeal from final judgment. We
have recognized two distinct categories of affirmative
defensive immunities: those that provide immunity from
suit and those that provide only a defense against liability.
See Puerto Rico Aqueduct, 506 U.S. at 143-44 (discussing
Mitchell v. Forsyth, 472 U.S. 511 (1985)) (distinguishing
immunities from suit from defenses to liability); see also 15
A Wright, Miller, Cooper, Federal Practice and Procedure
S 3914.6 at 529 ("[S]ome rights are intended to protect
against the burdens of trial, not just the burden of a
judgment that, if erroneous, can be reversed on appeal.").
An immunity from suit generally is grounded in the need
to free parties from the costs, burdens, and consequences
of having to be party to an action and to defend one's self.
Such a right will be forfeited if not vindicated prior to trial,
see Transtech, 5 F.3d at 56; 15A Wright, Miller, Cooper,
_________________________________________________________________
3. We also could decline to address the res judicata issue for a second,
unrelated reason: the argument was not raised in the District Court. Our
general practice is not to address legal issues not raised below, absent
exceptional circumstances. See Berda v. CBS, Inc., 881 F.2d 20, 28 (3d
Cir. 1989). No such exceptional circumstances are present and neither
the PUC nor the Senators point to any such circumstances. Moreover,
Verizon argues that its England reservation in the Commonwealth Court
preserved its federal claims and avoids the preclusive effect of the state
court decision. The sufficiency and effect of that reservation is in
dispute
and should be addressed by the District Court in the first instance.
10
Federal Practice and Procedure S 3914.6 at 529-30; and its
denial should be subject to immediate review. See, e.g.,
Puerto Rico Aqueduct, 506 U.S. at 144 (state sovereign
immunity immediately appealable); Mitchell, 472 U.S. at
526 (qualified executive immunity immediately appealable);
Larsen v. Senate of Commonwealth of Pennsylvania, 152
F.3d 240, 245 (3d Cir. 1998) (legislative immunity
immediately appealable). Defenses to ultimate liability
should not be subject to immediate review. See We, Inc. v.
City of Philadelphia, 174 F.3d 322, 326 (3d Cir. 1999)
(concluding that Noerr-Pennington immunity was defense to
liability and not immediately appealable); Transtech, 5 F.3d
at 58 (holding that defense that suit barred by prior
settlement or release is not immediately appealable).
The fact, however, that a defense may warrant pre-trial
dismissal is not dispositive of whether it is immediately
appealable. See Digital, 511 U.S. at 873 (rejecting notion
that every right that could be enforced by pretrial dismissal
can be understood as conferring a right not to stand trial);
We, Inc., 174 F.3d at 325 ("Not all defenses that warrant a
pretrial dismissal entail a right not to stand trial."). We
must determine the essential nature of the right to be
protected to decide whether it is an immunity from trial or
merely a defense to liability.
An examination of the doctrine res judicata or claim
preclusion reveals that it is better understood as a defense
against liability, not an absolute guarantee against having
to face a suit. Claim preclusion entitles a party to rely on
prior judicial decisions and not to be held liable on claims
on which that party previously has prevailed. Claim
preclusion is based on concerns of fairness, on reliance on
the finality of prior judicial determinations, and on the
expectation of not having to conform primary conduct to
inconsistent decisions and inconsistent legal obligations.
See E.E.O.C. v. United States Steel Corp., 921 F.2d 489, 492
(3d Cir. 1990) (stating that claim preclusion fosters reliance
on prior judicial decisions by minimizing the possibility of
inconsistent judgments). It is not, however, an explicit
guarantee that trial will not occur. Unlike qualified
immunity or Eleventh Amendment sovereign immunity,
claim preclusion is not based on a right to be free from all
11
the costs and burdens of having to be a party to a case in
the first instance or from having to defend oneself.
The interests protected by claim preclusion will not be
irretrievably forfeited if the PUC must wait until after trial
to appeal an erroneous res judicata determination. Perhaps
that vindication will come after a delay and at a higher
cost, but such cost is insufficient to establish collateral
order doctrine jurisdiction.
We turn now to the denial of the statute of limitations
defense. A statute of limitations defense is considered to be
of the same mold as claim preclusion. A denial of both is
similarly unsuitable for immediate review. See , e.g., Digital,
511 U.S. at 873 (discussing statute of limitations as same
type of defense as claim preclusion, both presumptively not
immediately appealable as part of a right not to stand trial);
Transtech, 5 F.3d at 58 (rejecting immediate appealability of
denial of defense that suit barred by settlement because
recognizing immediate appeal in that circumstance would
require recognizing immediate appeal for litigants asserting
affirmative and dispositive defense of statute of limitations).
The statute of limitations defense fails the third prong of
the Cohen standard because it is not effectively
unreviewable on appeal from final judgment. See Brown v.
United States, 881 F.2d 615, 619 (3d Cir. 1988); see also
Parmar v. Jeetish Imp., Inc., 180 F.3d 401, 402 (2d Cir.
1999) ("[T]he denial of a statute-of-limitations defense may
effectively be reviewed on appeal from a final judgment.");
Triad, 10 F.3d at 496 n.2 ("Limitations issues fail the last
prong of this test."). In Powers v. Southland Corp., 4 F.3d
223, 237 (3d Cir. 1993), we held that an order joining a
party to a lawsuit despite the lapse of the limitations period
was not appealable under the collateral order doctrine. We
based that decision on our view that the statute of
limitations provided only a right to repose that would not
be irreparably lost if appeal must await final judgment. See
id. at 232-33 (citing United States v. Levine, 658 F.2d 113(3d Cir. 1981)).
Statutes of limitations are not guarantees that suit and
trial will not occur on untimely claims. Limitations periods
are designed to foreclose the potential for inaccuracies and
12
unfairness brought about by a finding of liability based on
stale evidence. See Powers, 4 F.3d at 233 (quoting Levine,
658 F.2d at 127). This interest is not in defending against
an old claim, but an interest in not being held ultimately
liable on that old claim based on old, less reliable evidence.
Such an interest is not irretrievably lost if a party must
wait until after final judgment to appeal the adverse ruling
and to vindicate the right to be free from liability. Again, the
litigation costs may be increased by the delay, but that
alone is insufficient to establish jurisdiction.
III. Conclusion
We will affirm the District Court's denial of the claims of
Eleventh Amendment sovereign immunity. We lack
appellate jurisdiction of the remainder of the issues on
appeal; we will dismiss that portion of the appeal and
remand this case to the District Court for further
proceedings consistent with this opinion.
13
AMBRO, Circuit Judge, concurring in part:
I concur in Judge Roth's excellent opinion for the same
reasons set out in my concurrence in the companion
opinion issued today in MCI Telecommunications Corp., et
al. v. Bell Atlantic-Pennsylvania, Inc., et al., Nos. 00-
2257/58.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
14