CallerID4u, Inc. v. MCI Communications Services Inc.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CALLERID4U, INC., No. 15-35028
Plaintiff-Appellant,
D.C. No.
v. 2:14-cv-00654-TSZ
MCI COMMUNICATIONS
SERVICES INC., DBA Verizon
Business Services,
Defendant-Appellee.
CALLERID4U, INC., No. 15-35029
Plaintiff-Appellant,
D.C. No.
v. 2:14-cv-00700-TSZ
BELLSOUTH LONG DISTANCE,
INC., DBA AT&T Long Distance OPINION
Service,
Defendant,
and
AT&T CORP.,
Defendant-Appellee.
2 CALLERID4U V. MCI COMM’CN SERVS.
Appeal from the United States District Court
for the Western District of Washington
Thomas S. Zilly, Senior District Judge, Presiding
Argued and Submitted June 6, 2017
Seattle, Washington
Filed January 22, 2018
Before: Ferdinand F. Fernandez, Consuelo M. Callahan,
and Sandra S. Ikuta, Circuit Judges.
Opinion by Judge Ikuta
CALLERID4U V. MCI COMM’CN SERVS. 3
SUMMARY*
Communications Act
The panel affirmed the district court’s dismissal of claims
brought under Washington state law by CallerID4u, Inc.,
seeking compensation for telecommunications services it
provided to AT&T Corp. and Verizon Business Services.
CallerID4u sought compensation for local
telecommunications services it provided during a period
when it had neither entered into a negotiated compensation
agreement nor filed a valid tariff setting rates for the services
with the Federal Communications Commission. The panel
concluded that CallerID4u was subject to the tariff-filing
requirements of Section 203 of the Communications Act
because it did not have a negotiated agreement. Agreeing
with the Tenth Circuit, the panel also concluded that, under
the filed rate doctrine, CallerID4u’s state law equitable claims
for unjust enrichment and quantum meruit were preempted
under Section 203. In addition, CallerID4u failed to state a
claim under the Washington Consumer Protection Act.
COUNSEL
Matthew Alexander Henry (argued), McCollough Henry PC,
West Lake Hills, Texas, for Plaintiff-Appellant.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
4 CALLERID4U V. MCI COMM’CN SERVS.
Joshua D. Branson (argued), Melanie L. Bostwick, and Scott
H. Angstreich, Kellogg Huber Hansen Todd Evans & Figel
PLLC, Washington, D.C.; Demetrios G. Metropoulos, Mayer
Brown LLP, Chicago, Illinois; for Defendants-Appellees.
OPINION
IKUTA, Circuit Judge:
Under the Communications Act of 1934 and Federal
Communications Commission (FCC) rules, CallerID4u was
required to either file a valid tariff setting rates for local
telecommunications services or enter into a negotiated
agreement regarding compensation for services rendered. See
47 U.S.C. § 203; see also Access Charge Reform, 16 FCC
Rcd. 9923, 9934 (2001) (“Access Reform Order”); 47 C.F.R.
§ 61.26. But CallerID4u had neither a tariff nor a contract in
place during a six-month period in which it provided
telecommunications services to AT&T and Verizon. When
AT&T and Verizon refused to pay for these services,
CallerID4u brought claims against them under Washington
state law equitable principles for the value of services
rendered. We conclude that CallerID4u was subject to the
tariff-filing requirements of Section 203 of the
Communications Act, 47 U.S.C. § 203, because it did not
have a negotiated agreement. We also conclude that
CallerID4u’s state law equitable claims are preempted under
Section 203 of the Communications Act. We therefore affirm
the district court’s dismissal of CallerID4u’s claims.
I
CALLERID4U V. MCI COMM’CN SERVS. 5
In order to provide the context necessary to address
CallerID4u’s arguments, we begin by reviewing the relevant
regulatory history and legal framework.
A
The Communications Act of 1934 (the Communications
Act), 47 U.S.C. §§ 151 et seq., gave the FCC “broad authority
to regulate interstate telephone communications.” Glob.
Crossing Telecomms., Inc. v. Metrophones Telecomms., Inc.,
550 U.S. 45, 48 (2007). At the time the Communications Act
was passed, AT&T and its subsidiaries “enjoyed a virtual
monopoly over the nation’s telephone service industry,” Ting
v. AT&T, 319 F.3d 1126, 1130 (9th Cir. 2003), which at that
time consisted of wire communications (i.e., landlines). The
Communications Act was intended in part “to address the
unique problems inherent in a monopolistic environment.”
Id.
The wire communications provisions of the
Communications Act “authorized the [FCC] to regulate the
rates charged for communication services to ensure that they
were reasonable and nondiscriminatory.” MCI Telecomms.
Corp. v. Am. Tel. & Tel. Co., 512 U.S. 218, 220 (1994).
Section 201 of the Communications Act requires that “[a]ll
charges, practices, classifications, and regulations for and in
connection with [interstate wire] communication service[s],
shall be just and reasonable.” 47 U.S.C. § 201(b). If the FCC
concludes that a common carrier’s charges or practices are
unjust or unreasonable, they will be “declared to be
unlawful,” id., and the FCC may “determine and prescribe
what will be the just and reasonable” charges and practices,
id. § 205(a).
6 CALLERID4U V. MCI COMM’CN SERVS.
Section 203 of the Communications Act requires most
common carriers engaged in the provision of
telecommunications services to set the rates and terms of their
interstate telecommunications services by filing schedules or
“tariffs” with the FCC. See 47 U.S.C. § 203(a).1 A common
carrier’s tariffs “are essentially offers to sell on specified
terms, filed with the FCC and subject to modification or
disapproval by it.” Cahnmann v. Sprint Corp., 133 F.3d 484,
487 (7th Cir. 1998). Section 203(c) prohibits common
carriers from providing any interstate wire
telecommunications services without filing tariffs with the
FCC, and prohibits common carriers from charging,
demanding, collecting, or receiving any compensation for
such services except as specified in the carriers’ filed tariffs.
47 U.S.C. § 203(c).2
1
Section 203 applies to “common carriers, except connecting
carriers.” 47 U.S.C. § 203(a). “Common carrier” is defined as “any
person engaged as a common carrier for hire, in interstate or foreign
communication by wire or radio or interstate or foreign radio transmission
of energy, except where reference is made to common carriers not subject
to this chapter; but a person engaged in radio broadcasting shall not,
insofar as such person is so engaged, be deemed a common carrier.” Id.
§ 153(11). “Connecting carrier” is defined, in relevant part, as “any
carrier engaged in interstate or foreign communication solely through
physical connection with the facilities of another carrier not directly or
indirectly controlling or controlled by, or under direct or indirect common
control with such carrier.” Id. §§ 152(b)(2), 153(12).
2
47 U.S.C. § 203(c) states in full:
No carrier, unless otherwise provided by or under
authority of this chapter, shall engage or participate in
[interstate or foreign wire or radio communication]
unless schedules have been filed and published in
accordance with the provisions of this chapter and with
the regulations made thereunder; and no carrier shall
CALLERID4U V. MCI COMM’CN SERVS. 7
B
It has long been established that the tariff requirement of
§ 203 preempts state law. Because § 203 was modeled after
similar provisions of the Interstate Commerce Act (ICA),
“and share[s] its goal of preventing unreasonable and
discriminatory charges,” the Supreme Court concluded that
“the century-old ‘filed rate doctrine’ associated with the ICA
tariff provisions applies to the Communications Act as well.”
Am. Tel. & Tel. Co. v. Cent. Office Tel., Inc., 524 U.S. 214,
222 (1998). As applied to state law, the filed rate doctrine “is
a form of deference and preemption, which precludes
interference with the rate setting authority of an
administrative agency.” Wah Chang v. Duke Energy Trading
& Mktg., LLC, 507 F.3d 1222, 1225 (9th Cir. 2007). Under
the doctrine, “the rate of the carrier duly filed is the only
lawful charge. Deviation from it is not permitted upon any
pretext.” Cent. Office Tel., 524 U.S. at 222 (quoting
Louisville & Nashville R.R. Co. v. Maxwell, 237 U.S. 94, 97
(1915)). The doctrine “embodies the policy which has been
adopted by Congress in the regulation of interstate
[telecommunications services] in order to prevent unjust
discrimination.” Id. (quoting Maxwell, 237 U.S. at 97).
(1) charge, demand, collect, or receive a greater or less
or different compensation for such communication, or
for any service in connection therewith, between the
points named in any such schedule than the charges
specified in the schedule then in effect, or (2) refund or
remit by any means or device any portion of the
charges so specified, or (3) extend to any person any
privileges or facilities in such communication, or
employ or enforce any classifications, regulations, or
practices affecting such charges, except as specified in
such schedule.
8 CALLERID4U V. MCI COMM’CN SERVS.
When the filed rate doctrine applies, it generally
precludes a regulated party from obtaining any compensation
under other principles of federal or state law that is different
than the filed rate. See Keogh v. Chicago & N.W. Ry. Co.,
260 U.S. 156, 163 (1922). In Keogh, a manufacturer claimed
it was entitled to damages under the Sherman Act caused by
certain carriers that had conspired to set an unreasonably high
filed rate. Id. at 160. The Court rejected this argument,
reasoning that the rate approved by the Interstate Commerce
Commission (ICC) was the legal rate and could not be
“varied or enlarged by either contract or tort of the carrier.”
Id. at 163. “This stringent rule prevails, because otherwise
the paramount purpose of Congress—prevention [sic] of
unjust discrimination—might be defeated.” Id. The Court
reasoned that if one manufacturer was able to recover for
damages resulting from paying the filed rate, it effectively
received a rate different than the filed rate, and would have a
preference over its competitors. Id.
The Supreme Court later applied the doctrine to preclude
state courts from awarding damages under state law, where
doing so would interfere with the exclusive rate-setting
authority of federal administrative agencies. “In this
application, the doctrine is not a rule of administrative law
designed to ensure that federal courts respect the decisions of
federal administrative agencies, but a matter of enforcing the
Supremacy Clause.” Nantahala Power & Light Co. v.
Thornburg, 476 U.S. 953, 963 (1986). In Arkansas Louisiana
Gas Co. v. Hall, for example, the Supreme Court overturned
a state court’s award of damages for breach of contract to
federally regulated sellers of natural gas. 453 U.S. 571, 584
(1981). The sellers had filed rates with the Federal Energy
Regulatory Commission (FERC), as required under federal
law, but alleged that they were entitled to a higher rate under
CALLERID4U V. MCI COMM’CN SERVS. 9
a contract with their customer than the rate they had filed
with FERC. Id. at 573–74. The state court agreed, and held
that the sellers were entitled to damages for breach of
contract, notwithstanding the tariff-filing requirements and
the filed rate doctrine. Id. at 575. The state court reasoned
that if the sellers had filed rate increases with FERC based on
their negotiated contracts, the rate increases would have been
approved. Id. The Supreme Court reversed, explaining that,
in order to award damages, the state court had to “speculat[e]
about what the Commission might have done had it been
faced with the facts of this case.” Id. at 578–79. Such an
approach, the Court concluded, “would undermine the
congressional scheme of uniform rate regulation” by allowing
“a state court to award as damages a rate never filed with the
Commission and thus never found to be reasonable within the
meaning of the Act.” Id. at 579. Because “under the filed
rate doctrine, the Commission alone [was] empowered to
make that judgment,” the Supreme Court concluded that the
state court had “usurped a function that Congress has
assigned to a federal regulatory body,” in violation of the
Supremacy Clause. Id. at 582.
The Supreme Court has consistently applied the filed rate
doctrine to preclude the award of any rate other than the filed
rate, even where doing so has resulted in harsh consequences.
In Maislin Industries, U.S., Inc. v. Primary Steel, Inc., for
example, the Supreme Court considered whether the
bankruptcy trustee for a motor common carrier could collect
undercharges for the difference between the rate the motor
common carrier had negotiated with a shipper and the higher
rate the motor common carrier had filed with the ICC.
497 U.S. 116, 122–23 (1990). The Supreme Court held that
the trustee could collect undercharges because the filed rate
alone governed the legal relationship between the carrier and
10 CALLERID4U V. MCI COMM’CN SERVS.
the shipper. The Court explained that “[i]n order to render
rates definite and certain, and to prevent discrimination and
other abuses, the statute require[s] the filing and publishing
of tariffs specifying the rates adopted by the carrier, and
ma[kes] these the legal rates, that is, those which must be
charged to all shippers alike.” Id. at 126 (alterations in
original) (emphasis in original) (quoting Az. Grocery Co. v.
Atchison, T. & S.F. Ry. Co., 284 U.S. 370, 384 (1932)). Strict
adherence to the filed rate doctrine was necessary to prevent
carriers from “misquoting” rates, as a means of charging
different rates to different customers. Id. at 127. The
Supreme Court rejected the shipper’s argument that awarding
the filed rate rather than the negotiated rate would give the
carrier a windfall, explaining that federal law “requires the
carrier to collect the filed rate.” Id. at 131 (emphasis in the
original). Allowing the collection of any other rate would
“sanction[] adherence to unfiled rates,” thereby
“undermin[ing] the basic structure of the Act.” Id. at 132.
In short, § 203 and the accompanying filed rate doctrine
preempts state law claims that conflict with the rate-setting
authority of the FCC. Courts have applied the filed rate
doctrine strictly in order to ensure that Congress’s goal of
uniformity and reasonableness in rates, “which lies at ‘the
heart of the common-carrier section of the Communications
Act,’” is not undermined. Cent. Office Tel., 524 U.S. at 223
(quoting MCI Telecomms., 512 U.S. at 229).
C
We now turn to the history of the regulation of common
carriers engaged in the provision of telecommunications
services. Until the 1970s, AT&T and its subsidiaries
maintained a virtual monopoly over interstate wire telephone
CALLERID4U V. MCI COMM’CN SERVS. 11
services, including both long distance and local wire
telephone services. See MCI Telecomms. Corp., 512 U.S. at
220. AT&T provided long-distance services to consumers,
while the Bell Operating Companies, twenty-two local
telephone companies wholly owned by AT&T, provided local
services to consumers. See Access Charge Reform, 12 FCC
Rcd. 15982, 15990–91 (1997) (“Access Charge Reform Price
Cap Order”); see also California v. FCC, 905 F.2d 1217,
1225 (9th Cir. 1990). In the rubric of the wire
telecommunications industry, AT&T and other long-distance
providers are referred to as interexchange carriers, or IXCs,
and the Bell Operating Companies and other local telephone
companies are referred to as local exchange carriers, or LECs.
The LECs provide what is referred to as “switched access
service[s]” to IXCs. AT&T Corp. v. Alpine Commc’ns, LLC,
27 FCC Rcd. 11511, 11512 (2012). When a caller makes a
long-distance call on a landline, the call is initiated on the
local telephone lines of the LEC that provides local telephone
services to the caller. Id. The LEC then switches the call to
that caller’s IXC’s long-distance telephone lines. See id. The
initiating LEC charges the IXC for this service. Id. The IXC
then carries the call to the LEC that provides local telephone
services to the recipient of the call, and switches the call to
that LEC’s local telephone lines. See id. The terminating
LEC then terminates the call at the recipient’s phone. Id.
The terminating LEC also charges the caller’s IXC for this
service. Id. The caller and the call recipient choose their
LECs and pay the LECs’ charges for local telephone services,
but they do not pay the LECs’ switched access service
charges; rather, the IXC pays those charges. See Access
Reform Order, 16 FCC Rcd. at 9935. Therefore, LECs are
“insulated from the effects of competition,” because the caller
and call recipient who choose their LECs (but do not pay for
12 CALLERID4U V. MCI COMM’CN SERVS.
switched access services) have “no incentive to select a
[LEC] with low rates.” Id.
Beginning in the 1970s, new IXCs began entering the
long-distance market to compete with AT&T. But because
AT&T controlled the Bell Operating Companies, AT&T
could freeze out competition by having its LECs charge
higher prices to competing IXCs. See Access Charge Reform
Price Cap Order, 12 FCC Rcd. at 15991. The federal
government challenged these activities in an antitrust lawsuit
against AT&T, which resulted in AT&T agreeing to divest
itself of all twenty-two Bell Operating Companies. Id. The
former Bell LECs are known as Incumbent LECs, or ILECs.
Id.
Although the divestiture ended AT&T’s anticompetitive
control over the ILECs, the ILECs themselves had few
competitors, and could use their local monopoly power to
charge the IXCs unreasonable and discriminatory rates. See
id. To avoid this problem, the FCC began regulating LECs’
switched access service rates and required all LECs to file
tariffs setting their rates.3 See, e.g., MTS & WATS Mkt.
3
The source of the FCC’s authority to require LECs to file tariffs is
not entirely clear. See Access Reform Order, 16 FCC Rcd. at 9956 n.160.
In Lincoln Telephone & Telegraph Co. v. FCC, 659 F.2d 1092, 1107–09
(D.C. Cir. 1981), the D.C. Circuit questioned whether LECs were
“connecting carriers,” which are exempt from § 203, but indicated that the
FCC could nonetheless have authority under other provisions of the
Communications Act, such as 47 U.S.C. § 154(i), which gives the FCC
authority to “perform any and all acts, make such rules and regulations,
and issue such orders, not inconsistent with this chapter, as may be
necessary in the execution of its functions.” More recently, the FCC has
interpreted its authority as coming from § 203, see AT&T Corp. v. All Am.
Tel. Co., 28 FCC Rcd. 3477, 3494 (2013) (“All American II”), and courts
have assumed the same, see All Am. Tel. Co., Inc. v. FCC, 867 F.3d 81, 84
CALLERID4U V. MCI COMM’CN SERVS. 13
Structure, 93 F.C.C.2d 241, 246 (1983); see also Access
Charge Reform Price Cap Order, 12 FCC Rcd. at 15991–92.
In the early 1980s, in light of increased competition, the
FCC began experimenting with deregulation of those IXCs
and LECs deemed to be nondominant. See MCI Telecomms.
Corp., 512 U.S. at 221. A “dominant carrier” is a carrier that
the FCC has found “to have market power (i.e., power to
control prices),” and a “non-dominant carrier” is a carrier
“not found to be dominant.” 47 C.F.R. § 61.3(q), (z). The
FCC distinguished between the ILECs (the former Bell
Operating Companies which had market power and were
found to be dominant) and the new LECs, which were
deemed nondominant. See Tariff Filing Requirements for
Nondominant Common Carriers, 8 FCC Rcd. 1395, 1397
(1993) (“Nondominant Common Carriers Order”). While
ILECs still had to file tariffs, the FCC determined that
because nondominant carriers (such as the new LECs) lacked
market power, their customers would “simply move to other
carriers” if they charged unjust and unreasonable rates. Id. at
1396. Accordingly, the FCC adopted “permissive
detariffing,” id., meaning that the new LECs could avoid
filing tariffs if they instead negotiated agreements with the
IXCs for switched access services, id. at 1399 (stating that for
ten years, the FCC permitted nondominant carriers “to refrain
from filing tariffs under our permissive detariffing policy”);
see also In the Matter of Policy & Rules Concerning Rates
for Competitive Common Carrier Servs. & Facilities
Authorizations Therefor, 84 F.C.C.2d 445, 484 (1981)
(concluding that “neither statutory nor judicial authority
prohibit[ed] the substitution of tariffs with contracts.”).
(D.C. Cir. 2017). The parties here do not dispute that LECs are subject to
the requirements of § 203.
14 CALLERID4U V. MCI COMM’CN SERVS.
Several years after instituting its permissive detariffing
policy, the FCC took a further step by completely prohibiting
nondominant carriers, including new LECs, from filing tariffs
of any sort. See Policy and Rules Concerning Rates for
Competitive Common Carrier Services and Facilities
Authorizations Therefor, 99 F.C.C.2d 1020, 1021–22 (1985),
vacated by MCI Telecomms. Corp. v. F.C.C., 765 F.2d 1186,
1195 (D.C. Cir. 1985). This policy was referred to as
“mandatory detariffing.” Id. at 1024 n.13.
In 1994, the Supreme Court struck down the FCC’s
experiments in detariffing, concluding that § 203 of the
Communications Act “establishes a rate-regulation, filed-
tariff system for common-carrier communications, and the
[FCC’s] desire ‘to “increase competition” cannot provide [it]
authority to alter the well-established statutory filed rate
requirements.’” MCI Telecomms. Corp., 512 U.S. at 234
(second alteration in original) (quoting Maislin, 497 U.S. at
135). “[S]uch considerations address themselves to
Congress, not to the courts.” Id. (quoting Armour Packing
Co. v. United States, 209 U.S. 56 (1908)).
In response to the Supreme Court’s ruling, Congress
passed the Telecommunications Act of 1996 (the 1996 Act),
Pub. L. No. 104-104, 110 Stat. 56, which gave the FCC the
authority to forbear from enforcing § 203’s tariff-filing
requirements if the FCC determined that (1) enforcement was
not necessary to ensure that the common carriers’ charges
were just and reasonable, (2) enforcement was not necessary
to ensure that consumers were protected, and (3) forbearance
was “consistent with the public interest.” 47 U.S.C.
CALLERID4U V. MCI COMM’CN SERVS. 15
§ 160(a).4 The 1996 Act also required ILECs to share their
switched access networks with the new LECs (now referred
to as Competitive LECs or CLECs) in order to facilitate
greater competition among LECs. 47 U.S.C. §§ 251(b)–(c),
253(a); see 47 C.F.R. § 61.26(a)(1).
D
After the 1996 Act took effect, the FCC promptly began
exercising its new forbearance authority. As a first step, it
imposed mandatory detariffing on all non-dominant IXCs
(i.e., IXCs other than AT&T) and prohibited them from filing
tariffs. See Policy and Rules Concerning the Interstate,
4
47 U.S.C. § 160(a) provides:
Notwithstanding section 332(c)(1)(A) of this title, the
Commission shall forbear from applying any regulation
or any provision of this chapter to a
telecommunications carrier or telecommunications
service, or class of telecommunications carriers or
telecommunications services, in any or some of its or
their geographic markets, if the Commission determines
that –
(1) enforcement of such regulation or provision is not
necessary to ensure that the charges, practices,
classifications, or regulations by, for, or in connection
with that telecommunications carrier or
telecommunications service are just and reasonable and
are not unjustly or unreasonably discriminatory;
(2) enforcement of such regulation or provision is not
necessary for the protection of consumers; and
(3) forbearance from applying such provision or
regulation is consistent with the public interest.
16 CALLERID4U V. MCI COMM’CN SERVS.
Interexchange Marketplace, 11 FCC Rcd. 20730, 20732–33
(1996) (“IXC Detariffing Order”). In other words, the FCC
“chose to replace the rate filing mechanism with a market-
based mechanism,” for all nondominant IXCs, creating a
“deregulated and competitive marketplace.” Ting, 319 F.3d
at 1141. In its rulings regarding the complete detariffing of
IXCs, the FCC stated that because IXCs would be completely
detariffed “consumers will be able to take advantage of
remedies provided by state consumer protection laws and
contract law against abusive practices.” IXC Detariffing
Order, 11 FCC Rcd. at 20733. The FCC reiterated this view
following its complete detariffing of nondominant IXCs,
stating that “consumers may have remedies under state
consumer protection and contract laws as to issues regarding
the legal relationship between the carrier and customer in a
detariffed regime.” Policy and Rules Concerning the
Interstate, Interexchange Marketplace, 12 FCC Rcd. 15014,
15057 (1997).
We subsequently agreed with the FCC’s analysis. See
Ting, 319 F.3d at 1146. In Ting, we considered whether
federal law preempted state common remedies in the context
of a completely detariffed and competitive marketplace. We
noted that “[u]nlike rate filing, this market-based method
depends in part on state law for the protection of consumers
in the deregulated and competitive marketplace.” Id. at 1141.
In the absence of a federal rate-filing requirement, state law
action would no longer “interfere[] with Congress’ chosen
method of rate filing.” Id. at 1143. We concluded that in an
environment where tariffs do not apply, “we find no reason
to imply a conflict between otherwise compl[e]mentary state
and federal laws.” Id. Accordingly, we concluded that § 203
and the filed rate doctrine, which “rested entirely on the filing
requirement” of § 203, did not apply and that other provisions
CALLERID4U V. MCI COMM’CN SERVS. 17
of the Communications Act did not preempt state law claims
regarding the rates charged by completely detariffed IXCs.
Id. at 1142, 1146.5
E
The FCC next considered whether and how to deregulate
the CLECs. Although CLECs were required to file tariffs
setting the rates of their interstate switched access services,
the FCC had decided that it did not need to modify or regulate
the rates the CLECs were charging at the time, though the
FCC “would be sensitive to indications that the terminating
access rates of CLECs are unreasonable, and would revisit the
issue if necessary.” Hyperion Telecomms., Inc. Petition
Requesting Forbearance, 12 FCC Rcd. 8596, 8601 (1997)
(“Hyperion Order”). ILECs, by contrast, were both required
to file tariffs and were also subject to FCC rate regulations.
See id.
The FCC declined to impose mandatory detariffing on
CLECs. Instead, it instituted a permissive detariffing regime
for CLECs, making CLECs subject to the tariff-filing
requirement in § 203 unless they entered into negotiated
agreements with IXCs. See id. at 8608. CLECs that filed
tariffs were not subjected to limitations on the amount they
could charge, and they could choose freely between filing a
tariff and negotiating an agreement. The FCC reasoned that
it could forbear from requiring CLECs to file tariffs if they
5
There is a circuit split on the question whether the Communications
Act preempts state law claims in a completely detariffed environment.
See, e.g., Dreamscape Design, Inc. v. Affinity Network, Inc., 414 F.3d 665,
674 (7th Cir. 2005); Boomer v. AT&T Corp., 309 F.3d 404, 424 (7th Cir.
2002).
18 CALLERID4U V. MCI COMM’CN SERVS.
entered into negotiated agreements because under those
circumstances: (1) tariffs were not necessary to ensure that
CLECs’ switched access rates were just and reasonable;
(2) tariffs were not necessary to ensure that consumers were
protected, and (3) permissive detariffing was “consistent with
the public interest.” See id. at 8608–12; see also 47 U.S.C.
§ 160(a).
After several years of experience with this new
permissive detariffing policy, the FCC determined that some
CLECs were taking advantage of the system by filing tariffs
setting unreasonably high switched access rates that were
“subject neither to negotiation nor to regulation designed to
ensure their reasonableness.” Access Reform Order, 16 FCC
Rcd. at 9924–25. Because callers and call recipients were
able to choose their own LECs to initiate and terminate their
calls, the IXCs had to pay whatever rate was set by the
CLECs in their tariffs in order to provide phone service to
their customers. The CLECs could therefore impose rates far
higher than the ILECs’ rates (which were regulated by the
FCC) with no risk that these high rates would drive away
their individual customers. See Developing a Unified
Intercarrier Comp. Regime, 16 FCC Rcd. 9610, 9657–58
(2001). The CLECs would then rely “on their tariff to
demand payment from IXCs for access services that the
[IXCs] likely would have declined to purchase at the tariffed
rate.” Access Reform Order, 16 FCC Rcd. at 9925.
In response to this regulatory arbitrage opportunity, the
FCC issued the Access Reform Order in 2001, revising its
CLEC tariffing system and conducting a new forbearance
analysis. Id. In this order, the FCC revisited its reasoning in
two of its earlier orders. First, the FCC set aside its decision
in the Access Charge Reform Price Cap Order not to regulate
CALLERID4U V. MCI COMM’CN SERVS. 19
the switched access rates charged by CLECs. Instead, the
FCC established a “benchmark” level for CLEC rates based
on the rates charged by the ILEC or ILECs operating in a
CLEC’s service area. Id. at 9938, 9941. CLECs’ tariffed
rates would be “presumed to be just and reasonable” so long
as they did not exceed the benchmark rate. Id. at 9938.
Second, the FCC revised its decision in the Hyperion
Order. Rather than give CLECs free rein to choose whether
to file tariffs, the FCC decided to exercise its forbearance
authority “only for those CLEC interstate access services for
which the aggregate charges exceed our benchmark” by
requiring CLECs that sought to charge rates above the
benchmark to negotiate agreements with IXCs. Id. at 9957.
As a result of the Access Reform Order, there are “two means
by which a CLEC can provide an IXC with, and charge for,
interstate access services.” AT&T Servs. Inc. v. Great Lakes
Comnet. Inc., 30 FCC Rcd. 2586, 2588 (2015). “First, a
CLEC may tariff interstate access charges if its rates are no
higher than the rates charged for such services by the
competing ILEC.” Id. “Second, as an alternative to tariffing,
a CLEC may negotiate and enter into an agreement with an
IXC to charge rates higher than those permitted under the
benchmark rule.” Id. at 2589. Under this new regime,
CLECs could charge rates exceeding the benchmark only if
the market conditions so allowed.
The FCC applied its 2001 Access Reform Order in two
adjudicatory decisions which further clarified the scope of the
FCC’s order. See AT&T Corp. v. All Am. Tel. Co., 28 FCC
Rcd. 3477 (2013) (“All American II”); AT&T Corp. v. All Am.
Tel. Co., 30 FCC Rcd. 8958 (2015) (“All American II
Damages”), rev’d in part, All Am. Tel. Co., Inc. v. FCC,
867 F.3d 81, 84 (D.C. Cir. 2017). In All American II, AT&T
20 CALLERID4U V. MCI COMM’CN SERVS.
filed a formal complaint with the FCC against CLECs,
alleging that they had violated § 203 and § 201(b) of the
Communications Act by billing AT&T for switched access
services without valid and applicable interstate tariffs or a
negotiated agreement. 28 FCC Rcd. at 3477, 3492–93.
AT&T also alleged that the CLECs were engaged in the
practice of “access stimulation,” which made their charges
unjust and unreasonable under § 201(b).6 Id. at 3477,
3480–84. The FCC agreed with AT&T, holding that the
CLECs had engaged in access stimulation and had violated
§ 203 and § 201(b) by billing AT&T for access services that
were not set forth in a “valid and applicable” tariff or a
negotiated agreement. Id. at 3492. The FCC reiterated that
under the Access Reform Order, “until a CLEC files valid
interstate tariffs under Section 203 of the [Communications]
Act or enters into contracts with IXCs for the access services
it intends to provide, it lacks authority to bill for those
services.” Id. at 3494 (footnote omitted).
The FCC repeated this rule at the damages phase of the
All American II proceedings. The CLECs argued that AT&T
had received “in excess of $11 million worth of terminating
switched access” services and therefore would be unjustly
enriched if it could also collect damages from the CLECs. All
American II Damages, 30 FCC Rcd. at 8962, 8962 n.48
6
“Access stimulation” is a practice in which CLECs enter into
agreements with providers of high call volume operations, such as chat
line operators, to increase the volume of switched access services that they
provide to IXCs. See All American II, 28 FCC Rcd. at 3480–84; see also
47 C.F.R. § 61.3(bbb). By artificially increasing call volume, CLECs can
collect extra revenue without raising their rates and violating the FCC’s
benchmark rule. All American II, 28 FCC Rcd. at 3480–84. The FCC has
issued a regulation strictly limiting the rates that can be charged by a
CLEC engaged in access stimulation. 47 C.F.R. § 61.26(g).
CALLERID4U V. MCI COMM’CN SERVS. 21
(internal quotation marks omitted). The FCC rejected this
assertion, holding that because the CLECs were “entitled to
compensation for access services only through a valid tariff
or a contract negotiated with AT&T,” id. at 8963 n.50
(internal quotation marks omitted), neither of which was
applicable in that case, the CLECs could not “seek equitable
relief relating to matters subject to regulation,” id. at 8963.
On appeal of this ruling, the D.C. Circuit concluded that the
FCC “lacked the legal authority to discuss the merits of their
state-law quantum meruit claims” because “Congress has
vested the [FCC] only with the authority to address
allegations of actions taken ‘in contravention of’ the
Communications Act,” and a “state common law claim, by
definition, does not arise under or state a violation of the
Communications Act[.]” All Am. Tel. Co., Inc. v. FCC,
867 F.3d 81, 94 (D.C. Cir. 2017) (quoting 47 U.S.C.
§ 208(a)). Accordingly, the D.C. Circuit held that the “merits
of the [CLECs’] state-law claims must be decided by the
district court in the first instance,” and vacated the portion of
the FCC’s All American II Damages order that held that
CLECs could not seek equitable relief under state law relating
to matters subject to regulation. Id. at 95.
In sum, under the current FCC orders, CLECs are subject
to § 203 of the Communications Act’s tariff-filing
requirements and must file tariffs with rates at or below the
benchmark, unless they negotiate an agreement with an IXC.
See Access Reform Order, 16 FCC Rcd. at 9956–57. If a
CLEC does not file a tariff, and does not negotiate an
agreement with an IXC, it lacks authority under the
Communications Act to bill for those services. See All
American II, 28 FCC Rcd. at 3493–94; see also All Am. Tel.
Co., Inc., 867 F.3d at 84–85. Although the FCC has
expressed its views that CLECs could not “seek equitable
22 CALLERID4U V. MCI COMM’CN SERVS.
relief relating to matters subject to regulation” under state
law, All American II Damages, 30 FCC Rcd. at 8963,
following the D.C. Circuit’s decision in All American
Telephone Co., this issue remains open.
II
We now turn to the facts of this case. CallerID4u is a
CLEC that provided specialized local telephone services to
telemarketing companies.7 When individuals phoned in long-
distance “do not call” requests8 to CallerID4u’s telemarketing
customers, CallerID4u picked up the calls from the
individuals’ IXCs and delivered the calls to the telemarketing
companies. Beginning in April 2012, CallerID4u provided
this switched access service for multiple long-distance “do
not call” requests that were carried by AT&T and Verizon.
CallerID4u did not negotiate an agreement with these IXCs
and did not have a filed tariff in effect until September 28,
2012.
In April 2014, CallerID4u filed complaints against AT&T
and Verizon in Washington state court, alleging that it was
entitled to compensation at the rate set in its federal tariff for
the periods both before and after its tariff went into effect on
September 28, 2012. In the alternative, CallerID4u claimed
that it was entitled to quantum meruit and unjust enrichment
damages pursuant to Washington law, as well as to damages
7
While this appeal was pending, CallerID4u ceased operations as a
CLEC and no longer provides switched access services.
8
See 47 C.F.R. § 64.1200(d)(3) (“Persons or entities making calls for
telemarketing purposes . . . must honor a residential subscriber’s do-not-
call request within a reasonable time . . . .”).
CALLERID4U V. MCI COMM’CN SERVS. 23
for unfair and deceptive practices in violation of the
Washington Consumer Protection Act (WCPA), Wash. Rev.
Code §§ 19.86.010–19.86.920,9 again for the periods both
before and after its tariff went into effect.10
After removing the cases to federal court, AT&T and
Verizon filed separate motions to dismiss. See Fed. R. Civ.
Proc. 12(b)(6). In November 2014, the district court
dismissed with prejudice CallerID4u’s federal tariff claims
for the period before CallerID4u’s tariff went into effect. It
also dismissed with prejudice all of CallerID4u’s alternative
state law claims as barred by § 203 of the Communications
Act and the filed rate doctrine. The district court dismissed
CallerID4u’s WCPA claims on the additional ground that
they were barred by an express statutory exemption. See
Wash. Rev. Code § 19.86.170.11 Although the district court
did not dismiss CallerID4u’s tariff claims for the period after
9
The WCPA provides: “Unfair methods of competition and unfair or
deceptive acts or practices in the conduct of any trade or commerce are
hereby declared unlawful.” Wash. Rev. Code § 19.86.020.
10
CallerID4u also claimed conversion, breach of contract, and
constructive trust, but waived these claims on appeal.
11
Section 19.86.170 of the Revised Code of Washington states in
pertinent part that:
Nothing in this chapter shall apply to actions or
transactions otherwise permitted, prohibited or
regulated under laws administered by the insurance
commissioner of this state, the Washington utilities and
transportation commission, the federal power
commission or actions or transactions permitted by any
other regulatory body or officer acting under statutory
authority of this state or the United States.
24 CALLERID4U V. MCI COMM’CN SERVS.
the tariff went into effect, CallerID4u voluntarily dismissed
these claims with prejudice in December 2014.
The district court thereafter entered judgment in favor of
AT&T and Verizon. CallerID4u timely filed this
consolidated appeal, challenging only the dismissal of its
alternative state law claims.
III
We have jurisdiction pursuant to 28 U.S.C. § 1291. We
review a district court’s grant of a motion to dismiss under
Rule 12(b)(6) of the Federal Rules of Civil Procedure de
novo. Cervantes v. Countrywide Home Loans, Inc., 656 F.3d
1034, 1040 (9th Cir. 2011). To survive a motion to dismiss
under Rule 12(b)(6), “a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that
is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atlantic Co. v. Twombly, 550 U.S. 544,
570 (2007)).
When considering whether a federal statute preempts state
law, we may look to the pronouncements of the federal
agency that administers the statute for guidance. See Wyeth
v. Levine, 555 U.S. 555, 576–77 (2009). “While agencies
have no special authority to pronounce on pre-emption absent
delegation by Congress, they do have a unique understanding
of the statutes they administer and an attendant ability to
make informed determinations about how state requirements
may pose an ‘obstacle to the accomplishment and execution
of the full purposes and objectives of Congress.’” Id.
(quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)).
CALLERID4U V. MCI COMM’CN SERVS. 25
We are limited in evaluating the FCC’s construction of
the Communications Act by the Hobbs Act, 28 U.S.C.
§ 2342, which “requires that all challenges to the validity of
final orders of the FCC be brought by original petition in a
court of appeals.” Pac. Bell Tel. Co. v. Cal. Pub. Utils.
Comm’n, 621 F.3d 836, 843 n.10 (9th Cir. 2010). Because
this case was not initiated through such a petition, we must
presume the validity of FCC regulations, rules, and orders
that are currently in effect. Id. at 843.
IV
On appeal, CallerID4u argues that the district court erred
in dismissing its state law claims of quantum meruit and
unjust enrichment. According to CallerID4u, it provided
detariffed services to AT&T and Verizon and therefore can
obtain compensation under state law principles even in the
absence of a valid tariff or negotiated agreement.
A
We first consider CallerID4u’s contention that it is
permissively detariffed under the Hyperion Order, and
therefore not subject to the requirement in the Access Reform
Order that it negotiate an agreement or file a tariff under
§ 203. CallerID4u’s arguments proceeds in several steps.
First, CallerID4u contends that the Access Reform Order did
not overrule the Hyperion Order, and that a CLEC therefore
need not negotiate an agreement or file a tariff under § 203,
so long as it does not charge rates above the benchmark rate
because it is permissively detariffed. Next, CallerID4u
argues that it complied with the Hyperion Order, because it
did not charge rates above the benchmark rate, but rather
intended to charge rates at or below the benchmark (as
26 CALLERID4U V. MCI COMM’CN SERVS.
demonstrated by its September 28, 2012 tariff). Finally,
CallerID4u contends that because it was permissively
detariffed under the Hyperion Order, it can bring claims of
quantum meruit and unjust enrichment against its customers,
despite its failure to negotiate an agreement or file a tariff.
This argument errs at the threshold, because the FCC’s
Access Reform Order revised the Hyperion Order by
requiring CLECs to file tariffs at or below the benchmark rate
unless they entered into a negotiated agreement with an IXC.
Access Reform Order, 16 FCC Rcd. at 9925. The FCC has
repeatedly reaffirmed that under the Access Reform Order, a
CLEC must file a tariff pursuant to § 203 to collect switched
access services unless it has a negotiated agreement with its
customer. See, e.g., Great Lakes, 30 FCC Rcd. at 2588
(stating that there are “two means by which a CLEC can
provide an IXC with, and charge for, interstate access
services,” either by tariffing its access charges at or below the
benchmark rate or by negotiating and entering into an
agreement with an IXC); All American II, 28 FCC Rcd. at
3480 (similar). Therefore, “until a CLEC files valid interstate
tariffs under Section 203 of the Act or enters into contracts
with IXCs for the access services it intends to provide, it
lacks authority to bill for those services” under federal law.
All American II, 28 FCC Rcd. at 3494 (footnote omitted).
Because CallerID4u did not negotiate any agreements with
IXCs, it remains subject to § 203’s tariff-filing requirements.
See id. at 3493–94; see also Great Lakes, 30 FCC Rcd. at
2588. We therefore reject CallerID4u’s contention that it was
not required under federal law to file a tariff or negotiate an
agreement in order to bill for switched access services.
CALLERID4U V. MCI COMM’CN SERVS. 27
B
We next consider CallerID4u’s argument that it is entitled
to recover state common law remedies because it is operating
in a detariffed regime in which the filed rate doctrine is no
longer applicable. In making this argument, CallerID4u relies
on our decision in Ting, in which we held that § 203 and the
filed rate doctrine did not preempt state law claims made by
the completely detariffed IXCs. Ting, 319 F.3d at 1146.
We reject this argument because CallerID4u
misunderstands the nature of the environment in which it is
operating pursuant to the FCC’s Access Reform Order. As
explained above, a CLEC remains subject to § 203 and the
filed rate doctrine unless it negotiates an agreement. See
Great Lakes, 30 FCC Rcd. at 2588; All American II, 28 FCC
Rcd. at 3493–94. Under the Access Reform Order, a CLEC
that elects to negotiate such an agreement with an IXC is not
subject to the federal rate-filing requirement as to that
agreement. For the reasons explained in Ting, where a CLEC
has entered into the marketplace by negotiating a competitive
agreement, a state law action to recover equitable remedies
would not “interfere[] with Congress’ chosen method of rate
filing.” Ting, 319 F.3d at 1143. But unless and until a CLEC
has avoided the tariff filing requirement by entering into such
an agreement, § 203 and the filed rate doctrine apply.
CallerID4u argues that because the FCC has established
a permissive detariffing environment, it should not be
precluded from bringing a state law action against the IXCs
in cases where it neglected to file a tariff. We disagree.
Allowing carriers to seek compensation through state law
equitable principles would interfere with Congress’s goals
whether or not the carrier neglected to file a tariff. First,
28 CALLERID4U V. MCI COMM’CN SERVS.
CLECs that do not negotiate contracts are subject to § 203
and the FCC’s requirement that they file tariffs charging no
more than the benchmark rate. If CLECs that failed to
negotiate a contract could bring legal actions under state law,
CLECs could receive different rates either because different
state equitable principles applied or because different courts
weighed the equities differently, thus defeating Congress’s
uniformity goals. As the Supreme Court reasoned in Keogh,
in order to uphold Congress’s purpose to ensure uniform
treatment of carriers, the legal rate should not be “varied or
enlarged by either contract or tort of the carrier.” Keogh,
260 U.S. at 163.
CallerID4u argues that awarding damages under state law
would not interfere with the FCC’s exclusive rate-setting
authority here because the FCC already concluded in the
Access Reform Order that rates at or below the benchmark
will be presumed just and reasonable, and a state court could
award that benchmark amount. CallerID4u’s argument is
unavailing. The benchmark serves as a cap, but does not
represent the reasonable rate in all circumstances. For
CLECs engaged in access stimulation, for example, the FCC
has deemed the benchmark rate to be unreasonably high, and
has strictly limited the rates that these CLECs can charge.
See 47 C.F.R. § 61.26(g). Moreover, the damages that a court
would award depends on state law equitable principles, which
may result in a rate other than the benchmark rate. By
applying state law equitable principles to determine the
reasonable rate, a court would usurp “a function that
Congress has assigned to a federal regulatory body.” Ark. La.
Gas Co., 453 U.S. at 581.
In Marcus v. AT&T Corp., the Second Circuit considered
a similar argument. There, the appellants argued that
CALLERID4U V. MCI COMM’CN SERVS. 29
allowing a court to award damages despite the filed rate
doctrine “would not amount to judicial rate-making” because
appellants sought damages in an amount that the FCC had
already determined was reasonable in approving a
competitor’s tariff. Marcus v. AT&T Corp., 138 F.3d 46, 61
(2d Cir. 1998). The Second Circuit rejected this argument,
explaining that “[t]he filed rate doctrine prevents more than
judicial rate-setting; it precludes any judicial action which
undermines agency rate-making authority.” Id. (emphasis
added).
In addition, allowing CallerID4u to bring state law claims
would “discourage conduct that federal legislation
specifically seeks to encourage” under the 1996 Act. City of
Morgan City v. S. La. Elec. Co-op. Ass’n, 31 F.3d 319, 322
(5th Cir. 1994). In exercising its § 160 forbearance authority,
the FCC determined that CLECs do not need to file tariffs
only under limited circumstances, i.e., if they negotiate
agreements with IXCs. See Access Reform Order, 16 FCC
Rcd. at 9925; see also Great Lakes, 30 FCC Rcd. at 2588; All
American II, 28 FCC Rcd. at 3480. Relieving CLECs of their
obligation to file a tariff under § 203 if they fail to negotiate
an agreement would create an incentive for CLECs to neither
negotiate an agreement nor file a tariff, knowing they could
bring state law equitable claims instead.
The Tenth Circuit reached a similar conclusion in an
analogous case. See Union Tel. Co. v. Qwest Corp., 495 F.3d
1187, 1197 (10th Cir. 2007). In Union Telephone, the Tenth
Circuit considered whether the plaintiff, a
telecommunications provider that was required under federal
law to set rates through interconnection agreements, could
instead recover damages under a theory of unjust enrichment
or quantum meruit. Id. at 1190, 1197. The defendant argued
30 CALLERID4U V. MCI COMM’CN SERVS.
that federal law preempted the plaintiff’s equitable claims.
Id. at 1196. The Tenth Circuit agreed, holding that although
the plaintiff had “shown facts that might support each
element of the unjust enrichment claim,” equitable relief was
“not appropriate under the circumstances.” Id. at 1197. The
Tenth Circuit explained that “[b]ecause federal law requires
parties such as Qwest and Union to set rates through
interconnection agreements, allowing Union to recover
damages under a theory of unjust enrichment or quantum
meruit would frustrate the federal regulatory mechanism.”
Id. (citation omitted). Therefore, the court concluded that “it
is inappropriate to imply a contract in equity considering that
under federal law Union had an obligation to contract directly
with Qwest but chose not to do so.” Id.
We also find support for our conclusion in the FCC’s
decisions in this area, where the FCC has expressed its view
on the role that state law equitable claims can play under the
current CLEC regulatory regime. Although the FCC lacks
the authority to consider the merits of state law claims, see
All Am. Tel. Co., 867 F.3d at 89, the FCC has authority to
consider the preemptive effect of the statute it enforces, see
Wyeth, 555 U.S. at 576–77. While we do not need to defer to
the FCC’s views, we do give it weight where its reasoning is
persuasive. See id. at 577 (“The weight we accord the
agency’s explanation of state law’s impact on the federal
scheme depends on its thoroughness, consistency, and
persuasiveness.”). In the All American II orders, the FCC
indicated that state law equitable claims would conflict with
the current CLEC regulatory scheme. The FCC explained
that, in its view, because CLECs are required to either
negotiate agreements or file tariffs under § 203, they cannot
“seek equitable relief relating to matters subject to
regulation.” All American II Damages, 30 FCC Rcd. at 8963,
CALLERID4U V. MCI COMM’CN SERVS. 31
8963 n.50. The FCC explained that, in holding that the All
American II CLECs had violated § 203 by billing for
switched access services in the absence of a valid tariff or
negotiated agreement, the FCC had not intended to leave a
“‘regulatory gap’ entitling [the CLECs] to pursue alternate
damage theories.” Id. at 8963 n.50. Allowing the CLECs to
bring state law equitable claims under those circumstances
would effectively allow them to “avoid the [FCC’s]
regulation of competitive interstate switched access services.”
Id.12
We agree with the reasoning of both the Tenth Circuit in
Union Telephone and the FCC in All American II and
conclude that the preemptive effect of the filed rate doctrine
precludes CallerID4u from recovering damages under a
theory of unjust enrichment or quantum meruit.13
12
In light of the FCC’s clear statement in All American II that state
law equitable claims would interfere with the CLEC regulatory scheme,
All American II Damages, 30 FCC Rcd. at 8963 n.50, we give little weight
to the FCC’s passing remark in its prior decision, All American Telephone
Co. v. AT&T Corp. (“All American I”), that carriers may in some
circumstances be entitled to some compensation for services not specified
in a tariff, depending on “the totality of the circumstances.” All American
I, 26 FCC Rcd. 723, 731 (2011). We likewise reject CallerID4u’s reliance
on New Valley Corp. v. Pacific Bell, 8 FCC Rcd. 8126 (1993). In that
case, the FCC rejected a carrier’s argument that it was entitled to a refund
for the charges it had paid a LEC for services that fell outside the terms of
the LEC’s tariff. Id. at 8126–27. That decision has little value here
because it predated the 1996 Act and the 2001 Access Reform Order.
13
Although the Eighth Circuit concluded that a carrier could be paid
the contract rate for its fully completed services, even after a new judicial
ruling clarified that the carrier was subject to the filed rate doctrine, see
Ets-Hokin & Galvan, Inc. v. Maas Transp., Inc., 380 F.2d 258, 260–61
(8th Cir. 1967), we do not find it persuasive in this context, because the
Eighth Circuit relied on the unique equities of the case and did not explain
32 CALLERID4U V. MCI COMM’CN SERVS.
We likewise reject CallerID4u’s claims that it is entitled
to state law remedies for the period after CallerID4u’s tariff
went into effect on September 28, 2012 as barred by the filed
rate doctrine. CallerID4u acknowledges that it filed a tariff
with the FCC, but argues that it pleaded its state law claims
as “alternative[s]” to its federal tariff claims in the event that
a court were to conclude that its tariff is invalid (e.g., if it
determined that CallerID4u was engaged in access
stimulation) or that it provided switched access services not
covered by the terms of its tariff. Because CallerID4u
voluntarily dismissed its federal tariff claims, the validity of
its tariff is not before us.
V
As a secondary state law claim, CallerID4u argues that
even if it is subject to the tariff-filing requirements of
§ 203(c), and therefore cannot raise state quasi-contract or
equitable theories, it is nevertheless entitled to recover under
the WCPA’s prohibition of “[u]nfair methods of competition
and unfair or deceptive acts or practices in the conduct of any
trade or commerce.” Wash. Rev. Code § 19.86.020.
In raising this argument, CallerID4u relies on our decision
in In re NOS Communications, 495 F.3d 1052 (9th Cir. 2007).
In that case, the customer of a telephone carrier claimed that
the carrier had violated the WCPA “by marketing false billing
information and by failing to notify consumers of differences
between the quoted price and the actual price.” Id. at 1057.
Because these claims did not involve any challenge to the
filed rate, nor did they suggest that some other rate should
why the well-established preemptive effect of the filed rate doctrine was
not applicable.
CALLERID4U V. MCI COMM’CN SERVS. 33
apply, we reasoned that the customer’s claims could be
“maintained without reference to federal law” and “would not
necessarily require a setting aside of the filed tariff or a
renegotiation of its terms.” Id. at 1059. Accordingly, we
held that the customer’s WCPA claims were not preempted.
Id.
NOS does not help CallerID4u, however, because
CallerID4u does not allege any unfair or deceptive acts. In
order to prove “an unfair or deceptive act or practice” for
purposes of the WCPA, a plaintiff must show “that the
alleged act had the capacity to deceive a substantial portion
of the public.” Hangman Ridge Training Stables, Inc. v.
Safeco Title Ins. Co., 105 Wash. 2d 778, 785 (1986)
(emphasis omitted). “Even accurate information may be
deceptive if there is a representation, omission or practice that
is likely to mislead.” Bain v. Metro. Mortg. Grp., Inc.,
175 Wash. 2d 83, 115 (2012) (internal quotation marks
omitted). While CallerID4u argues that AT&T’s and
Verizon’s “repeated refusal to pay for services received,”
constitutes an unfair and deceptive act, a refusal to pay for a
carrier’s services when the carrier has not filed a tariff or
negotiated a contract is not an act with “the capacity to
deceive a substantial portion of the public.” Hangman Ridge
Training Stables, Inc., 105 Wash. 2d at 785 (emphasis
omitted). Nor is the simple refusal to pay an unauthorized
charge a practice that is “likely to mislead.” Bain, 175 Wash.
2d at 115. CallerID4u cites no cases to the contrary.
Accordingly, we conclude that CallerID4u failed to state a
34 CALLERID4U V. MCI COMM’CN SERVS.
claim under the WCPA, and the district court did not err in
dismissing CallerID4u’s WCPA claims.14
AFFIRMED.
14
We do not reach the district court’s alternative holding that the
WCPA’s statutory exemption codified at § 19.86.170 of the Revised Code
of Washington barred CallerID4u’s WCPA claims against AT&T and
Verizon.