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TON Servs. v. Qwest Corp. - 493 F.3d 1225 (10th Cir. 2007)


The federal filed rate doctrine, codified at 47 U.S.C.S. § 203, is a central tenet of telecommunications law; it generally requires that service providers in regulated industries, such as the communications and shipping industries, adhere to tariffs approved by and filed with the regulatory agency. In the telecommunications context, the doctrine provides that once a carrier's tariff is approved by the Federal Communication Commission (or an appropriate state agency), the terms of the federal tariff are considered to be the law and therefore conclusively and exclusively enumerate the rights and liabilities as between the carrier and the customer. In order to prevent price discrimination and preserve agencies' exclusive role in ratemaking, courts have no power to adjudicate claims that would invalidate, alter, or add to the terms of the filed tariff. However, the filed-rate doctrine does not bar a suit to enforce a command of the very regulatory statute giving rise to the tariff-filing requirement, even where the effect of enforcement would be to change the tariff. In the context of the Interstate Commerce Act, the statute upon which the common carrier provisions of the 1934 Communications Act were modeled, and from which the filed rate doctrine in the telecommunications context derives, the failure to file a required tariff has been held to defeat the doctrine's application.

In the Tenth Circuit, a district court's decision to invoke the primary jurisdiction doctrine requires it to consider whether the issues of fact in the case: (1) are not within the conventional experience of judges; (2) require the exercise of administrative discretion; or (3) require uniformity and consistency in the regulation of the business entrusted to the particular agency. Additionally, when the regulatory agency has actions pending before it which may influence the instant litigation, invocation of the doctrine may be appropriate. There is, however, no fixed formula for applying the doctrine. Courts should consider case-by-case whether the reasons for the existence of the doctrine are present and whether the purposes it serves (i.e., uniformity and resort to administrative expertise) will be aided by its application in the particular litigation. When the primary jurisdiction doctrine is invoked, the judicial process is suspended pending referral of such issues to the administrative body for its views. Referral does not automatically divest the court of jurisdiction. The district court may retain jurisdiction over the proceedings by staying the plaintiff's claims pending agency action or, if neither party will be unfairly disadvantaged, dismissing the case without prejudice.


Plaintiff TON Services, Inc. (TON) is a Payphone Service Provider (PSP) which owned and operated payphones. Defendant Qwest Corporation ("Qwest") provided public access line (PAL) services to TON in Qwest's role as a Local Exchange Carrier (LEC). TON filed a complaint against Qwest for violations of the Telecommunications Act of 1996. TON alleged that Qwest failed to file new intrastate PAL tariffs with state regulatory commissions and also failed to file cost data supporting the rates in its existing tariffs as required by law. Moreover, TON alleged that once Qwest filed new tariffs in April 2002, its new PAL rates were "substantially lower" than its prior rates, giving rise to the inference that TON's prior rates were not NST compliant and triggering Qwest's duty to pay refunds under the terms of the Waiver/Refund Order. Qwest filed a motion to dismiss, claiming the Filed Rate Doctrine, the prohibition on retroactive ratemaking, the primary jurisdiction doctrine, and the statute of limitations barred TON's ability to proceed in federal court. Qwest's basic argument to the district court was that the regulatory agencies in each of the states in which Qwest's tariffs were to be filed were in the best position to determine whether Qwest's pre-2002 rates were "reasonable." The federal district court concluded that the Filed Rate Doctrine barred the suit; it invoked the Primary Jurisdiction Doctrine and dismissed without prejudice. TON filed a motion for reconsideration and argued that the district court should have stayed the federal court litigation instead of dismissing it. The district court denied the motion. On appeal, TON raised the same arguments it made to the district court regarding the nature of its claims, the inapplicability of the Filed Rate Doctrine and Primary Jurisdiction doctrine, and the prejudice it will suffer from the dismissal of its claims.


1. Was the claim by the plaintiff PSP barred by the Filed Rate Doctrine?

2. Was the consideration of the district court of the Doctrine of Primary Jurisdiction proper?

3. Was the district court in error when it dismissed the action filed by the plaintiff PSP instead of ordering the case to be stayed?


1. No. 2. Yes. 3. Yes.


1. The Court held that the claim of TON was not barred by the Filed Rate Doctrine. At the stage of the litigation, where the procedural posture of the case required all allegations in the complaint to be construed in TON's favor and this court's reading of TON's complaint demonstrates that TON's central challenge involved Qwest's procedural compliance with FCC orders and regulations rather than a challenge to the reasonableness of Qwest's rates, the Filed Rate Doctrine cannot categorically precluded TON's claims. Based on the determination that TON's claims were not a challenge to the reasonableness of Qwest's rates, and in light of the analysis above, the Filed Rate Doctrine did not bar TON's ability to proceed in federal court at this stage of the litigation.

2. The Court affirmed the district court's general determination that a primary jurisdiction referral was appropriate. However, the district court erred by misidentifying the issues to be referred and failing to clearly direct its primary jurisdiction referral to the FCC. The court never considered whether Qwest's procedural noncompliance might have affected state regulators' ability to assess Qwest's substantive compliance with § 276(a) and the FCC's regulations implementing that statutory provision. Moreover, the district court confused the exhaustion doctrine with the concept of primary jurisdiction. The Communications Act did not require that a plaintiff exhaust his administrative remedies before proceeding to federal court. The district court should have considered whether FCC’s expertise was necessary to evaluate Qwest’s substantive compliance with NST.

3. The Court held that the district court abused its discretion in dismissing, rather than staying, TON's suit because dismissal might result in a § 415(b) statute-of-limitations bar to TON's claims under the Waiver/Refund Order and because § 207's election-of-forum provision might prevent TON from seeking agency relief. Where damages are sought and the relevant statute of limitations might preclude relief, a stay is likely to be preferable than dismissal.

The Court vacated the dismissal order of the district court and remanded the case for further proceedings.

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