78 S. Ct. 99 (1957); Harsco Corp. v. Segui, 91 F.3d 337, 341 (2d Cir. 1996).
Under the "filed tariff doctrine," a duly filed tariff exclusively defines the rates a carrier may charge for its services, and deviation from the tariff is not permitted. See Maislin Industries, U.S. v Primary Steel, Inc., 497 U.S. 116, 117, 111 L. Ed. 2d 94, 110 S. Ct. 2759 (1990); Arkansas Louisiana Gas Co. v. Hall, 453 U.S. 571, 577, 69 L. Ed. 2d 856, 101 S. Ct. 2925 (1981); Louisville & Nashville R.R. Co. v. Maxwell, 237 U.S. 94, 97, 59 L. Ed. 853, 35 S. Ct. 494 (1915); Armour Packing Co. v. United States, 209 U.S. 56, 81, 52 L. Ed. 681, 28 S. Ct. 428 (1908). The rational underlying the doctrine is that tariffs are public documents, and therefore a customer may be charged with knowledge of the filed tariff rate. See Maislin, 497 U.S. at 127; Marco Supply Co. v. AT&T Communications, 875 F.2d 434 (4th Cir. 1989). Accordingly, once a tariff has been filed and the rates therein deemed reasonable by the governing agency, a defendant may not assert equitable defenses to collection of the tariff. See Maislin, 497 U.S. at 117, 126-27 (prohibiting equitable defenses to the collection of a filed tariff under the Interstate Commerce Act); Louisville & Nashville R.R., 237 U.S. at 97, 98 (prohibiting deviation from filed tariff under Interstate Commerce Act).
Although the majority of cases addressing the filed tariff doctrine have done so in the context of the Interstate Commerce Act ("ICA"), courts have also applied the filed tariff doctrine in cases arising under the Communications Act. See Marco Supply, 875 F.2d at 436 (4th Cir. 1989) (dismissing aggrieved customer's tortious misrepresentation claim); AT&T v. New York City Human Resources Admin., 833 F. Supp. 962, 978-79 (S.D.N.Y. 1993) (stating that rationale underlying decisions dealing with the ICA applies to tariffs under the Communications Act); MCI Telecommunications Corp. v. TCI Mail, Inc., 772 F. Supp. 64, 67-68 (D.R.I.) (finding that doctrine does not preclude claim of willful misconduct where liability for claim is permitted in tariff); see generally MCI Telecommunications Corp. v. American Telephone and Telegraph Co., 512 U.S. 218, 114 S. Ct. 2223, 2233, 129 L. Ed. 2d 182 (1994) (holding that FCC's ability to modify Communications Act's requirements does not permit FCC to make basic fundamental changes in regulatory scheme).
In the instant case, there are sufficient allegations in the record to establish that MCI declined to match Sprint's original rate and two subsequent offers that were below MCI's rate, which rates Dominican claims it was prepared to accept, and one of which it did accept. Therefore, the only question is whether the Tariff's CRP clause permits MCI to exercise discretion in declining to match offers. Dominican argues that it does not, and that MCI's failure to match competing offers constitutes an unreasonable practice
under the Communications Act. Moreover, Dominican argues that its unreasonable practice counterclaim must be referred
to the FCC since enforcement of the claim requires the resolution of issues which have been placed within that administrative body's special competence. See generally United States v. Western Pacific Railroad Co., 352 U.S. 59, 64, 1 L. Ed. 2d 126, 77 S. Ct. 161 (1956).
Under the doctrine of primary jurisdiction, the Second Circuit has enumerated the following factors to determine when to refer a claim to an agency: (1) whether the question at issue is within the conventional expertise of judges or whether there are technical or policy issues present which require agency expertise; (2) whether there exists a substantial danger of inconsistent rulings; and (3) whether the fair administration of justice weighs substantially against referral. See Nat'l Communications Assoc., Inc. v. Am. Tel. & Tel. Co., 46 F.3d 220, 222-23 (2d Cir. 1995) (analyzing above factors and finding no risk of inconsistent tariff interpretation where tariff did not need to be interpreted and only narrow factual dispute at issue). In addition, the Supreme Court has emphasized the desirability of establishing uniformity and the benefits of utilizing an agency's expert and specialized knowledge. See Western Pacific Railroad Co., 352 U.S. at 64.
In this case, unquestionably a resolution of the issues raised requires that a determination be made as to 1) whether a deviation from the filed rate, can, consistent with communications policy, be left to the discretion of the carrier; and 2) whether the Tariff permits the exercise of discretion once the conditions for a deviation are met. Thus, the resolution of the unreasonable practice counterclaim requires an interpretation of the CRP clause which the FCC is better suited to resolve. The FCC will also presumably have knowledge of the prevalence and use of such clauses in the industry. Moreover, interpretation of the CRP clause may implicate policy considerations better left to the FCC since allowing parties to selectively deviate from a filed rate could undermine the Communications Act's mandate of uniformity. See MCI Telecommunications Corp., 114 S. Ct. at 2226 (the Communications Act authorizes the FCC to regulate rates for communication services to ensure that such rate are reasonable and non-discriminatory). Furthermore, referring construction and interpretation of the CRP clause to the FCC will mitigate the danger that other courts, when faced with this issue, may render inconsistent rulings. See Nat'l Communications Assoc., 46 F.3d at 224, 225.
The majority of Dominican's remaining counterclaims appear to be barred by the filed tariff doctrine and/or preempted by the Communications Act. See Maislin, 497 U.S. 116 at 127, 111 L. Ed. 2d 94, 110 S. Ct. 2759 (explaining filed rate doctrine); Wegoland, Ltd. v. NYNEX Corp., 27 F.3d 17, 22 (2d Cir. 1994) (no fraud exception to filed rate doctrine); Nordlicht v. New York Telephone Co., 799 F.2d 859, 864 (2d Cir. 1986), cert. denied 479 U.S. 1055, 93 L. Ed. 2d 981, 107 S. Ct. 929 (1987) (concluding that it is appropriate to fashion uniform body of federal common law to resolve plaintiff's claims); Ivy Broadcasting Co. v. Am. Tel. & Tel. Co., 391 F.2d 486, 490 (2d Cir. 1968) (federal common law preempts state law and supplies the rule of decision for tort and contract claims relating to duties, charges, and liabilities of telephone carriers concerning interstate telecommunications); Fax Telecommunicaciones v. AT&T, 952 F. Supp. 946, 955 (E.D.N.Y. 1996) (stating that because of the requirements of the filed rate doctrine, claims of willful misconduct must be barred if they would require the Court to either enforce a discriminatory rate or to assess the reasonableness of a proposed rate); but see AT&T v. New York City Human Resources Admin., 833 F. Supp. at 979, n.9 (stating that filed tariff doctrine would not preclude defendant from avoiding charges by proving willful misconduct pursuant to the Tariff); Gelb v. Am. Tel. & Tel. Co., 813 F. Supp. 1022, 1025 (S.D.N.Y. 1993) (filed rate doctrine does not bar tort claim with an indirect nexus to rate setting function of agencies but may prohibit retroactive rate-setting as part of remedy); Towne Reader Service, Inc. v. MCI Telecommunications Corp., 1992 U.S. Dist. LEXIS 13569, at *6, 1992 WL 225550, at *2, 3 (W.D.N.Y. 1992) (explaining that previous courts have failed to address savings clause contained in Communications Act, and finding tortious misrepresentation claim not barred by filed tariff doctrine); MCI Telecommunications Corp. v. TCI Mail, Inc., 772 F. Supp. at 67-68 (stating that if defendant can demonstrate that Tariff permits recovery for willful misconduct, and can prove such conduct by plaintiff during the negotiations to provide services to defendant, liability is not precluded).
However, as noted above, it is not clear that all of Dominican's claims would be barred since the Tariff specifically provides that it does not limit liability for willful misconduct. Dominican alleges that MCI: 1) intentionally misrepresented the rate that MCI would charge for telecommunications services in order to induce Dominican to switch service from Sprint to MCI; 2) used duress to coerce Dominican to accept a rate that was less favorable than the one originally offered by MCI and accepted by Dominican; 3) failed to train or otherwise supervise its sales agents who MCI knew, or should have known, were intentionally, recklessly, or negligently misrepresenting MCI's rates to induce customers to commence telecommunications services with MCI; and 4) otherwise breached contracts, warranties, representations and undertakings made orally in the MCI Tariff and otherwise. Some of these claims may be subject to a motion for summary judgment on the theory that there could be no reasonable reliance since a customer is presumed to have knowledge of the Tariff rate. Others, however, that are not based upon reliance on the alleged misrepresentations, may not be subject to dismissal on that ground. However, since on a motion to dismiss the Court must indulge every inference in favor of the pleadings, it is not clear that the counterclaims, as drafted, are barred. Therefore, MCI's motion to dismiss must be denied.
The only other issue left for the Court to resolve is whether to stay MCI's collection action pending the FCC's evaluation of Dominican's unreasonable practices counterclaim. In Reiter v. Cooper, 507 U.S. at 263, the Supreme Court held that an unreasonable rate issue could not be asserted as a defense, but was properly raised as a counterclaim, and could proceed to separate judgment. While that case was an attack on the reasonableness of a rate itself, the reasoning is equally applicable here, where the failure to deviate from a filed rate is at issue. One factor the Supreme Court indicated the Court should consider in deciding whether to stay the collection action is solvency. Here, there is no indication that MCI is insolvent and could not respond on a counterclaim for damages at some point in the future. However, it is less clear whether Dominican will be in a similar position to respond to MCI's collection action in the future. That being so, and since tariff rates not disapproved by an agency are at the very least prima facie legal rates, the equities favor allowing MCI to proceed to separate judgment on its principal claim.
For the reasons set forth above, MCI's motion to dismiss is denied, Dominican's unreasonable practice counterclaim is stayed pending an FCC determination of that issue, and Dominican's cross-motion to stay all proceedings herein is denied.
It is SO ORDERED.
DATED: New York, New York
November 10, 1997
John E. Sprizzo
United States District Judge