Weber v. Interbel Telephone Cooperative, Inc.

No. 02-517
IN THE SUPREME COURT OF THE STATE OF MONTANA
2003 MT 320
FREDERICK WEBER and MOOSEWEB CORP.,
Plaintiffs and Appellants,
v.
INTERBEL TELEPHONE COOPERATIVE, INC.,
Defendant and Respondent.
APPEAL FROM: District Court of the Nineteenth Judicial District,
In and for the County of Lincoln, Cause No. DV-01-61,
The Honorable Michael C. Prezeau, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Ivan C. Evilsizer, Attorney at Law, Helena, Montana (Argued for Appellants)
For Respondent:
Darrell S. Worm, Ogle & Worm, PLLP, Kalispell, Montana (Argued for
Respondent)
For Amicus Mid-Rivers Telephone Cooperative, Inc.:
Thomas E. Smith, Moulton, Bellingham, Longo & Mather, P.C., Billings,
Montana
For Amicus 3 Rivers Telephone Cooperative, Inc.; Range Telephone Cooperative,
Inc.; Blackfoot Telephone Cooperative, Inc.; and Montana Independent
Telecommunications Systems:
Michael J. Rieley, Attorney at Law, Helena, Montana
Michael C. Strand, Attorney at Law, Helena, Montana
Orally Argued: July 10, 2003
Submitted: July 15, 2003
Decided: November 24, 2003
Filed:
__________________________________________
Clerk
Justice Jim Regnier delivered the Opinion of the Court.
¶1 Appellants Frederick Weber and Mooseweb Corporation (collectively “Mooseweb”)
filed a Complaint in Montana’s Nineteenth Judicial District Court, Lincoln County, alleging,
among other things, that Respondent InterBel Telephone Cooperative, Inc. (“InterBel”) acted
ultra vires by providing dial-up Internet access services to its customers. Mooseweb and
InterBel filed cross motions for summary judgment. The District Court granted summary
judgment in favor of InterBel and Mooseweb appeals. We affirm the District Court.
¶2 The sole issue on appeal is whether InterBel acted ultra vires and exceeded the scope
of business authorized for Cooperatives by Montana law by providing dial-up Internet access
service.
BACKGROUND
¶3 InterBel is a Montana corporation organized under the Montana Rural Electric and
Telephone Cooperative Act, § 35-18-101, et. seq., MCA. Mooseweb operates an Internet
service provider which provides dial-up Internet access to its customers, and is a member of
the InterBel Telephone Cooperative. Mooseweb began providing dial-up access in 1996, and
now has customers in Lincoln, Flathead, and Lake Counties. InterBel joined the Internet
market in 1999, placing itself in competition with Mooseweb for Mooseweb’s north Lincoln
County customers.
¶4 Mooseweb filed a Complaint against InterBel alleging that InterBel is forbidden by
Montana law to provide Internet services, and its actions were thereby ultra vires.
Mooseweb and InterBel filed cross motions for summary judgment. The District Court
granted InterBel’s motion and denied Mooseweb’s motion, concluding that InterBel’s
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Internet services are not ultra vires. Mooseweb appeals from the District Court’s Order.
STANDARD OF REVIEW
¶5 We review a district court's decision granting summary judgment de novo and apply
the same criteria as a district court. Minnie v. City of Roundup (1993), 257 Mont. 429, 431,
849 P.2d 212, 214. Summary judgment is appropriate where the movant shows there are no
genuine issues of material fact and the movant is entitled to judgment as a matter of law.
Lemont Land Corp. v. Rogers (1994), 269 Mont. 180, 183, 887 P.2d 724, 726. The “moving
party has the burden of showing a complete absence of any genuine issue as to all facts
considered material in light of the substantive principles that entitle the moving party to
judgment as a matter of law and all reasonable inferences are to be drawn in favor of the
party opposing summary judgment.” Kolar v. Bergo (1996), 280 Mont. 262, 266, 929 P.2d
867, 869.
DISCUSSION
¶6 Did InterBel act ultra vires and exceed the scope of business authorized for
Cooperatives by Montana Law by providing dial-up Internet access service?
¶7 InterBel is a rural telephone cooperative organized under the Montana Rural Electric
and Telephone Cooperative Act (the “Act”), which is codified at § 35-18-101, et. seq., MCA.
The Act was originally enacted in 1939, and has been amended several times. The purposes
for which rural cooperatives may be organized and the powers they may exercise are defined
strictly by law. See Montana Power Company v. Fergus Electric Co-op (1967), 149 Mont.
258, 262-63, 425 P.2d 329, 332-33. Section 35-18-105, MCA, which identifies permissible
purposes for incorporation under the Act, states:
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Cooperative nonprofit membership corporations may be organized under this
chapter:
(1) for the purpose of supplying electrical energy and promoting and
extending the use of electrical energy in rural areas, as provided in this
chapter;
(2) for the purposes of making generally available adequate telephone
service, cable television service, or broadband facilities through the
improvement and expansion of existing telephone, cable television, or
broadband facilities and the construction and operation of additional facilities
as are required to ensure the availability of service to the widest practicable
number of users of telephone service, cable television service, or broadband
facilities; and
(3) for purposes allowable under federal authorization, including rural
economic development activities.
Mooseweb argues that pursuant to § 35-18-105(2), MCA, InterBel is limited to providing
“adequate telephone service” and the other services specifically enumerated in the statute,
and that its dial-up Internet service, therefore, constitutes an ultra vires act.
¶8 It is Mooseweb's position that the plain meaning of the phrase “adequate telephone
service,” as used in § 35-18-105(2), MCA, proscribes InterBel from providing dial-up
Internet access. In its brief, Mooseweb examines dictionary definitions of the words
“adequate,” “telephone,” and “service,” and urges us to define it as “basic two-way voice
communication on the telephone network, or in other words, ordinary telephone calls that
allow private voice conversations between two parties.” This proposed definition originates
in an affidavit by Mooseweb’s founder and owner, Fred Weber. Mooseweb argues that
Internet access service is completely different from telephone service. An Internet service
provider, it argues, provides a computer data connection to the Internet, which originates on
a different network, using different protocols, and different technology, and for a different
purpose.
¶9 In response to Mooseweb's proscription argument, InterBel points to recent
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legislative amendments that ostensibly provide assistance in the interpretation and meaning
of "adequate telephone service." In 1993, the legislature added subsection (3) to § 35-18-
105, MCA, permitting cooperatives to be organized “for purposes allowable under federal
authorization, including rural economic development activities.” The 1993 legislature also
amended § 35-18-106, MCA, to permit cooperatives to engage in activities “authorized
under federal law.” Section 35-18-106(1)(l), MCA, now states that a cooperative may
“perform all other acts and exercise all other powers that may be necessary, convenient, or
appropriate to accomplish the purpose for which the cooperative is organized or authorized
under federal law.” InterBel urges that this reference to federal law permissibly draws us
to various federal statutes and regulations, specifically the Rural Electrification Act of 1936,
that provide a more expansive definition of "telephone service." Mooseweb counters by
relying on other federal statutes and regulations to support its more limited view of the
phrase "adequate telephone service."
¶10 Statutory language must be construed according to its plain meaning, and if the
language is clear and unambiguous, no further interpretation is required. Mattson v.
Montana Power Co., 2002 MT 113, ¶ 10, 309 Mont. 506, ¶ 10, 48 P.3d 34, ¶ 10. “When
construing a statute, our goal is to ascertain and give effect to the legislative intent. If the
words of the statute are clear and plain, we discern the intent of the legislature from the text
of the statute.” Fliehler v. Uninsured Employers Fund, 2002 MT 125, ¶ 13, 310 Mont. 99,
¶ 13, 48 P.3d 746, ¶ 13 (citations omitted). A court’s duty when interpreting a statute is “not
to insert what has been omitted or to omit what has been inserted.” Section 1-2-101, MCA.
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¶11 Unfortunately, the Act does not define “adequate telephone service.” In our view the
phrase “adequate telephone service” as used in § 35-18-105(2), MCA, is unclear, vague and
ambiguous. An examination of the legislative history of § 35-18-105(2), MCA, reveals that
the phrase was added to the statute in 1957; however, nothing in the legislative history sheds
light on the legislature’s intent in enacting the statute to aid us in our interpretation. The
legislature, however, provided guidance in our task of interpreting the Act. Section 35-18-
103, MCA, states: “This chapter shall be construed liberally. The enumeration of any object,
purpose, power, manner, method, or thing shall not be deemed to exclude like or similar
objects, purposes, powers, manners, methods, or things.”
¶12 After sorting through the arguments in the summary judgment proceeding, the District
Court concluded that while the legislature "most likely did not foresee the advent of the
World Wide Web and the Internet when it passed subsection (2) in 1957–just as it may not
have foreseen fiber optic cable, touch tone dialing, cordless telephones, automatic redial, call
waiting, and a hundred other advances–the mandate to liberally construe the Act provides
the latitude necessary to permit technological progress, so long as the advances are
reasonably related to the business of providing telephone and cable television service." The
District Court further determined that the federal government's definition of "telephone
service" encompassed "much more than voice communication between telephone handsets."
The District Court reasoned that the Internet market was a permissible activity for InterBel
to enter.
¶13 We agree with the District Court, although we see no need to venture into federal law
for our analysis. The mandate of § 35-18-103, MCA, is clear. Not only did the legislature
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direct us to liberally construe the Act, it specifically provided, in the second sentence of §
35-18-103, MCA, that, “[t]he enumeration of any object, purpose, power, manner, method,
or thing shall not be deemed to exclude like or similar objects, purposes, powers, manners,
or things.” (Emphasis added). This unique statutory guidepost is compelling.
¶14 Nonetheless, Mooseweb contends that Internet services, such as web-site hosting,
modems, computer installation, and support are not "like or similar" to "adequate telephone
service." Mooseweb points out that the hardware and software associated with computer and
Internet access is entirely different than two-way simultaneous voice communication. We
cannot accept Mooseweb's narrow view of § 35-18-105, MCA, and its interpretation of
"adequate telephone service" when considering the statutory backdrop of § 35-18-103, MCA.
¶15 Rather than focusing on the difference in technologies, we believe the more
appropriate inquiry is to examine the purpose or end result of the communication. E-mail
has replaced traditional voice communication for many of us; now we routinely
communicate with friends, relatives and business associates through electronic mail rather
than a telephone call. Fax transmissions over phone lines are commonplace and provide a
preferable method of transporting various types of documents. Even voice communication
can be transmitted over the Internet. All of this information and data is transmitted over
phone lines by means of the dial-up connection. In essence, these new technologies in many
instances have replaced the telephone as the instrument of choice.
¶16 In the final analysis, we agree with the District Court and InterBel that dial-up
Internet service, albeit not specifically enumerated under § 35-18-105(2), MCA, is
sufficiently "like or similar" to telephone service so as to be allowable under the Act. In the
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words of the District Court, dial-up Internet service is "reasonably related to the business of
providing telephone or cable television service."
¶17 We affirm the District Court.
/S/ JIM REGNIER
We Concur:
/S/ KARLA M. GRAY
/S/ JAMES C. NELSON
/S/ PATRICIA COTTER
/S/ W. WILLIAM LEAPHART
/S/ JOHN WARNER
/S/ JIM RICE
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