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AT&T v. UA PAYPHONE CORP.

May 12, 1994

AMERICAN TELEPHONE AND TELEGRAPH COMPANY, Plaintiff,
v.
UNITED ARTISTS PAYPHONE CORPORATION, UNITED ARTISTS TELECOMMUNICATIONS, INC., RANLEE COMMUNICATIONS, INC., UA/RANLEE JOINT VENTURE AND UA/RANLEE INC., Defendants.


Leisure


The opinion of the court was delivered by: PETER K. LEISURE

LEISURE, District Judge,

 The defendants in this action (collectively, "United Artists") seek summary judgment on defendants' claim for attorney's fees. Plaintiff ("AT&T") moves to dismiss the claim for attorney's fees pursuant to Fed. R. Civ. P. 12(b)(1), *fn1" for lack of subject matter jurisdiction, and Fed. R. Civ. P. 12(b)(6), for failure to state a claim upon which relief can be granted. For the reasons stated below, the Court grants plaintiff's motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6).

 BACKGROUND

 On May 14, 1990, United Artists petitioned the Federal Communications Commission (the "FCC") for a declaration of nonliability for $ 1.2 million in charges by AT&T for calls from pay telephones operated by United Artists. On June 7, 1990, AT&T sued for payment of these charges in this Court (the "Federal Action"). The Federal Action was stayed pending resolution of the FCC proceedings. On August 18, 1993, the FCC found that United Artists had not intentionally or constructively "ordered" telecommunication services from AT&T and was therefore not AT&T's "customer." See United Artists Payphone Corp. v. New York Tel. Co., 8 F.C.C. Rcd. 5563 (released August 18, 1993), at PP 9-15, 20. Accordingly, the FCC found that United Artists was not liable for the disputed charges and that, by attempting to collect these charges from United Artists, AT&T had violated 47 U.S.C. § 203(c). Since United Artists had never paid these charges, no damages were awarded. United Artists also sought attorney's fees and legal expenses but the FCC found that it lacked the authority to make such an award.

 On September 22, 1993, United Artists filed a counterclaim in this action for attorney's fees and legal expenses incurred in proceedings before both the FCC and this Court. Whether there is a basis for awarding such fees is the issue now before the Court.

 DISCUSSION

 United Artists contends that it should be awarded attorney's fees pursuant to 47 U.S.C. § 206, which provides as follows:

 
In case any common carrier shall do . . . any act, matter, or thing in this Act prohibited or declared to be unlawful . . ., such common carrier shall be liable to the person or persons injured thereby for the full amount of damages sustained in consequence of any such violation of the provisions of this Act, together with a reasonable attorney's fee, to be fixed by the court in every case of recovery, which attorney's fee shall be taxed and collected as part of the costs in the case.

 47 U.S.C. § 206 (1988). AT&T argues that § 206 does not provide a basis for recovering attorney's fees in this action. AT&T argues, inter alia, that under § 206 a party may not recover for attorney's fees incurred in proceedings before the FCC and that a party may not recover attorney's fees if it has not been awarded damages.

 In determining whether § 206 permits an award of attorney's fees in this case, the Court finds relevant decisions construing analogous provisions of the Interstate Commerce Act. Since the Communications Act was modelled on the Interstate Commerce Act, decisions construing the latter are persuasive in establishing the meaning of the former. See MCI Telecommunications Corp. v. FCC, 286 U.S. App. D.C. 316, 917 F.2d 30, 38 (D.C. Cir. 1990). Moreover, the provisions of the Communications Act that are relevant to the instant case were taken practically verbatim from the provisions of the Interstate Commerce Act then in force. *fn2" See Curran v. Mackay Radio & Telephone Co., 123 F. Supp. 83, 89 (S.D.N.Y. 1954). Similar to former § 9 of the Interstate Commerce Act, *fn3" § 207 of the Communications Act provides that a party may bring either an administrative proceeding or a suit in federal court. See 47 U.S.C. § 207 (1988). Similar to former § 16 of the Interstate Commerce Act, *fn4" § 407 of the Communications Act provides that if a party is awarded damages in the administrative proceeding, such party may enforce the award in federal court. See 47 U.S.C. § 407 (1988). Finally, similar to former § 8 of the Interstate Commerce Act, *fn5" § 206 of the Communications Act authorizes the award of damages and attorney's fees. See 47 U.S.C. § 206 (1988).

 The circumstances under which attorney's fees could be awarded pursuant to §§ 8 and 16 of the Interstate Commerce Act were addressed by the Supreme Court in Meeker v. Lehigh Valley R.R. Co., 236 U.S. 412, 59 L. Ed. 644, 35 S. Ct. 328 (1915). In that case, the plaintiff had brought an enforcement action pursuant to § 16 of the Interstate Commerce Act when the defendant failed to make payment of damages awarded by the Interstate Commerce Commission. The district court had awarded damages in accordance with the findings of the Interstate Commerce Commission. In addition, the district court had awarded attorney's fees for services incident to proceedings before both the Commission and the district court. However, the Supreme Court found that the district court had erred in allowing attorney's fees for services before the Commission, writing as follows:

 
Section 8 provides that a carrier violating the act shall be liable to any person injured for the damages he sustains, "together with a reasonable counsel or attorney's fee, to be fixed by the court in every case of recovery, which attorney's fee shall be taxed and collected as part of the costs in the case." And § 16, relating to actions to enforce claims for damages after the Commission has acted thereon, provides: "If the petitioner shall finally prevail, he shall be allowed a reasonable attorney's fee, to be taxed and collected as a part of the costs of the suit."
 
In our opinion the services for which an attorney's fee is to be taxed and collected are those incident to the action in which the recovery is had, and not those before the Commission. This is not only implied in the words of the two provisions just quoted, but is suggested by the absence of any reference to proceedings anterior to the action. And that nothing more is intended becomes plain when we consider another provision in § 16, which requires the Commission, upon awarding damages, to make an order directing the carrier to pay the sum awarded 'on or before a day named,' and then declares that, if the carrier does not comply with the order 'within the time limit,' the claimant may proceed to collect the damages by suit. The Commission is not to allow a fee, but only to find the amount of the damages and fix a time for payment; and, if the carrier pays the award within the time named, no right to an attorney's fee arises. It is only when the damages are recovered by suit that a fee is to be allowed, and this is as true of the provision in § 8 as of that in § 16. The evident purpose is to charge the carrier with the cost and expenses entailed by a failure to pay without suit -- if the claimant finally ...

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