WASHINGTON – Supreme Court justices peppered lawyers from Verizon Maryland Inc. and the Maryland Public Service Commission with questions Wednesday on what role the federal government has in settling telecommunications contract disputes.
Specifically, the justices questioned whether a federal court can rule on a state agency’s interpretation of fees owed by one communications company to another, under a federally mandated contract between the carriers.
Justice Antonin Scalia worried that there could be a flood of such cases if federal courts are found to have any role at all in the disputes.
“Anytime there is a dispute . . . you’ll run to federal court,” he said to Mark Evans, attorney for Verizon.
The issue stemmed from the PSC’s decision to force Verizon to pay fees to local telephone carrier MFS Intelenet of Maryland for Internet-bound calls that went through the local carrier. The PSC said Verizon was bound by its interconnection agreement with MFS to pay the fees, at least until that agreement expired.
Verizon argued that Internet calls are essentially long-distance calls and that no local fees should be assessed. It said those fees amounted to “many millions of dollars” and should be refunded, citing a Federal Communications Commission ruling that decreed them unnecessary for Internet calls.
But both the U.S. District Court for Maryland and the 4th U.S. Circuit Court of Appeals dismissed Verizon’s request for a review of the PSC decision. Both determined that they had no jurisdiction in the matter because they were federal, and not state, courts.
But Evans argued Wednesday to the high court that interconnection agreements — the formal named used to describe the contract between Verizon and MFS — are like tariffs. Because the federal government requires that communications companies enter into the agreements, much like it mandates tariffs, interpretation of the agreements necessarily falls under federal jurisdiction.
“These are not cases of which the federal government has washed its hands,” Evans said to the court.
The justices pressed Barbara McDowell, assistant to the solicitor general, for the government’s position on how far the federal courts’ jurisdiction should reach, if at all. She declined to draw a line, but said the government does not think “Congress intended to preclude opponents from going to federal court.”
Justice Steven Breyer outlined what appeared to be three options for the high court: all interconnection agreement interpretation disputes could go to federal court, the responsibility could be split between federal and state courts, or all could go to the state.
But Scalia, one of the more vocal justices during the hour-long argument, called the shared option a “crazy hybrid system.”
Susan Stevens Miller, counsel for the PSC, argued that such a shared system should not be an option. She said such disputes should be settled in state court as a state law contract question.
A decision on Wednesday’s arguments could come at any time before the summer recess, usually by the end of June.