High Court Sides with Metrophone over Global Crossing on Payphones
The Supreme Court upheld 7-2 Metrophone’s right to sue a carrier to recover unpaid payphone charges. Global Crossing had challenged Metrophone’s right to sue it to recover payphone charges, arguing that the Communications Act doesn’t let companies enforce FCC regulations in court as they can the law itself. A victory for Global Crossing would have shaken up legal enforcement of telecom regulation. Justice Stephen Breyer wrote for the majority. Justice Antonin Scalia filed a vigorous dissent, and Justice Clarence Thomas also dissented.
Under FCC rules, payphone companies are entitled to reimbursement each time one of their phones is used with a calling card. The fee must be paid by card issuer, which can’t recoup it from the caller. A 2003 FCC order held that payphone companies could sue carriers that won’t pay, under Sec. 201(b) of the Communications Act. The FCC called failure to pay an “unjust and unreasonable practice” prohibited by the provision.
“The underlying regulated activity at issue here resembles activity that both transportation and communications agencies have long regulated,” Breyer wrote: “Here the agency has determined through traditional regulatory methods the cost of carrying a portion (the payphone portion) of a call that begins with a caller and proceeds through the payphone, attached wires, local communications loops, and long-distance lines to a distant call recipient.”
Scalia said the “only serious issue presented by this case [is] whether a practice that is not in and of itself unjust or unreasonable can be rendered such (and thus rendered in violation of the Act itself) because it violates a substantive regulation of the Commission. That conclusion, however, conflicts with the Communications Act’s carefully delineated remedial scheme.”
Breyer disagreed sharply: “We do not accept his statement of the issue because whether the practice is ‘in and of itself’ unreasonable is irrelevant… The FCC has authoritatively ruled that carriers must compensate payphone operators. The only practice before us, then, and the only one we consider, is the carrier’s violation of that FCC regulation.” Breyer noted that Scalia uses terms like “traditional” and “textually based” to describe the distinctions he draws in interpreting the Communications Act, while calling the majority’s arguments “novel” and “absurd.” Breyer said: “We would simply note our disagreement.”