United States District Court, D. Colorado
RECOMMENDATION OF UNITED STATES MAGISTRATE
MICHAEL E. HEGARTY, UNITED STATES MAGISTRATE JUDGE.
lawsuit stems from a billing dispute between two providers of
telecommunications services: Plaintiff AT&T Corporation
(a long distance, inter-exchange carrier) and Defendant Level
3 Communications, LLC (a local exchange carrier or
“LEC”). The parties disagree on the appropriate
rate for Level 3's provision of certain services to
AT&T. AT&T contends it is entitled to a refund based
on AT&T Corporation v. FCC, 841 F.3d 1047 (D.C.
Cir. 2016). But Level 3 does not consider that decision to be
“final” for purposes of the governing contract
because the D.C. Circuit remanded to the Federal
Communications Commission (“FCC”) and that remand
remains pending. Level 3 therefore moves to dismiss
AT&T's complaint under Federal Rule of Civil
Procedure 12(b)(1) on the ground that AT&T's claims
are not yet ripe for adjudication. Because I agree the claims
are not yet ripe, I respectfully recommend that the Court
grant the motion to dismiss based on lack of subject matter
jurisdiction and dismiss this action without prejudice.
is a local exchange carrier and AT&T provides long
distance telephone services. Compl. ¶¶ 12, 13, ECF
No. 1. Level 3 provides telecommunications services to
AT&T under a contract. Id. ¶ 8. The parties
are currently embroiled in a dispute over the rates billed
for a type of local access service. Although those rates are
regulated by the FCC, they also can be negotiated in
contracts between LECs and long distance carriers.
Id. ¶ 14. The calls at issue are referred to as
“over-the top (OTT) VoIP calls, ” because they
are routed using a type of Voice over Internet Protocol
(“VoIP”) through high-speed internet obtained by
the callers themselves. Id. ¶ 2. AT&T takes
the position that these calls should be classified as
“tandem” switching services and billed at a lower
rate; by contrast, Level 3 believes they should be classified
as “end office” switching services and billed at
a higher rate. Id. ¶ 23.
the FCC and the D.C. Circuit Court of Appeals have spoken on
this issue. In 2015, the FCC issued a Declaratory Ruling in
In re Connect America Fund, 30 FCC Rcd. 1587 (2015)-
a proceeding to which AT&T was a party. That ruling
(which expanded upon a 2011 decision by the FCC) found that
OTT VoIP calls qualify as end office switching services, not
tandem switching services. Id. at 1588-89, ¶ 3.
AT&T appealed the Declaratory Ruling. See AT&T
Corp. v. FCC, 841 F.3d 1047 (D.C. Cir. 2016). The D.C.
Circuit vacated the ruling and remanded to the FCC for
“further explanation.” Id. at 1049.
2015, amidst the uncertain outcome of the pending appeal,
AT&T and Level 3 executed a Release and Settlement
Agreement (the “Agreement”) to try to resolve
their billing dispute. See Mot. to Dismiss, Exh. 1,
ECF No. 15-1. Among other topics, the Agreement addressed the
parties' difference of opinion about the appropriate
charges for OTT VoIP calls. Id.
For instance, it provided that Level 3 would refund AT&T
if the D.C. Circuit overturned the Declaratory Ruling, with
payment due after the appellate decision “becomes final
and is no longer subject to further appeal or other judicial
review.” Id. at 3, ¶ 1(a)(iv). AT&T
has made some payments under the Agreement but has withheld
others. Compl. ¶¶ 26, 28-29. AT&T concedes that
Level 3 has complied with portions of the Agreement, but
asserts that Level 3 has not provided a required refund and
continues to bill AT&T improperly, using higher rates.
Id. ¶¶ 47-57. AT&T also questions the
percentage of calls that Level 3 has designated to be OTT
VoIP calls for billing purposes. See Id.
filed its complaint on January 16, 2018, asserting claims for
(1) breach of contract; (2) violations of the FCC's rules
on VoIP calls and the Communications Act of 1934, 47 U.S.C.
§§ 201(b), 203, and 251(b)(5); and (3) declaratory
judgment. Level 3 filed its motion to dismiss on February 14,
2018 (ECF No. 14). AT&T filed its opposition to that
motion on March 23, 2018 (ECF No. 48). Level 3 filed a reply
brief in support of its motion on April 4, 2018 (ECF No. 52).
seeks a dismissal under Rule 12(b)(1), which empowers a court
to dismiss a complaint for “lack of subject-matter
jurisdiction.” Fed.R.Civ.P. 12(b)(1). Dismissal under
Rule 12(b)(1) is not a judgment on the merits of a
plaintiff's case, but only a determination that the court
lacks authority to adjudicate the matter. See Pueblo of
Jemez v. United States, 790 F.3d 1143, 1151 (10th Cir.
2015) (recognizing that federal courts are courts of limited
jurisdiction and may only exercise jurisdiction when
specifically authorized to do so). A court lacking
jurisdiction “must dismiss the cause at any stage of
the proceeding in which it becomes apparent that jurisdiction
is lacking.” Id. (quoting Full Life
Hospice, LLC v. Sebelius, 709 F.3d 1012, 1016 (10th Cir.
2013)). Any such dismissal is without prejudice. See
Brereton v. Bountiful City Corp., 434 F.3d 1213, 1216
(10th Cir. 2006).
challenges jurisdiction on ripeness grounds. “[F]or a
claim to be justiciable under Article III, it must be shown
to be a ripe controversy.” New Mexicans for Bill
Richardson v. Gonzales, 64 F.3d 1495, 1499 (10th Cir.
1995); see also Alto Eldorado P'ship v. County of
Santa Fe, 634 F.3d 1170, 1173 (10th Cir. 2011)
(explaining that the “[r]ipeness doctrine is rooted
both in the jurisdictional requirement that Article III
courts hear only ‘cases and controversies' and in
prudential considerations limiting our jurisdiction”).
“Ripeness is peculiarly a question of timing, intended
to prevent the courts, through avoidance of premature
adjudication, from entangling themselves in abstract
agreements. In short, the doctrine of ripeness is intended to
forestall judicial determinations of disputes until the
controversy is presented in ‘clean-cut and concrete
form.'” New Mexicans for Bill Richardson,
64 F.3d at 1499 (brackets and internal citations omitted)
(quoting Renne v. Geary, 501 U.S. 312, 313 (1991));
see also Abbott Labs. v. Gardner, 387 U.S. 136, 149
(1967) (discussing the need “to protect the agencies
from judicial interference until an administrative decision
has been formalized”). For example, “[a] claim is
not ripe for adjudication if it rests upon ‘contingent
future events that may not occur as anticipated, or indeed
may not occur at all.'” Texas v. United
States, 523 U.S. 296, 300 (1998) (quoting Thomas v.
Union Carbide Agric. Prods. Co., 473 U.S. 568, 580-81
question of ripeness properly falls within a Rule 12(b)(1)
motion to dismiss. New Mexicans for Bill Richardson,
64 F.3d at 1499. A Rule 12(b)(1) motion “must be
determined from the allegations of fact in the complaint,
without regard to mere [conclusory] allegations of
jurisdiction.” Groundhog v. Keeler, 442 F.2d
674, 677 (10th Cir. 1971). Even so, a Rule 12(b)(1) movant
may go beyond those allegations “by presenting evidence
to challenge the factual basis upon which subject matter
jurisdiction rests” without converting the motion into
one for summary judgment. Maldonado v. Prudential Ins.
Co. of Am., No. 10-cv-00074-PAB-MEH, 2011 WL 819751, at
*1 (D. Colo. Mar. 2, 2011). The burden of establishing
subject matter jurisdiction is on the party asserting
jurisdiction. Pueblo of Jemez, 790 F.3d at 1151.
Accordingly, AT&T bears the burden of establishing that
this Court has jurisdiction to hear its claims.
Supreme Court has articulated three factors to consider in
evaluating ripeness: “(1) whether delayed review would
cause hardship to the plaintiff; (2) whether judicial
intervention would inappropriately interfere with further
administrative action; and (3) whether the courts would
benefit from further factual development of the issues
presented.” Utah v. U.S. Dep't of the
Interior, 210 F.3d 1193, 1196 (10th Cir. 2000) (citing
Ohio Forestry Ass'n v. Sierra Club, 523 U.S.
726, 733 (1998)). Stated otherwise, courts must assess
“both the fitness of the issues for judicial decision
and the hardship to the parties of withholding court
consideration.” Id. (quoting Abbott
Labs., 387 U.S. at 149).
parties dispute whether OTT VoIP calls should be classified
as lower-priced “tandem switching services”
(AT&T's preference) or higher-priced “end
office switching services” (Level 3's preference)
for billing purposes. Level 3 contends this issue is not ripe
for the Court's consideration because (1) AT&T's
claims are not triggered until entry of a final order
resolving this question and (2) the question is still pending
before the FCC on remand from the D.C. Circuit. Mot. to
Dismiss at 11-20. AT&T counters that it is entitled to a
refund under the Agreement because Level 3 is ...