Court Declines to Apply Filed Rate Doctrine to Rates Dictated By Statute

The filed rate doctrine (also called the filed tariff doctrine) is a century-old cornerstone of regulated-industries law that, generally speaking, bars claims where the effect would be to allow a customer to receive service, or the carrier to provide service, on rates, terms, or conditions that differ from the carrier’s tariff filed with the relevant regulatory agency.  Central Office Tel., Inc. v. AT&T Corp., 524 U.S. 214, 222-23 (1998).  The rule is strict and, where it applies, unyielding.  Id.  The recent district court decision in Smith v. FirstEnergy Corp., No. 2:20-cv-03755 et al., 2021 WL 496415 (S.D. Ohio, Feb. 10, 2021), however, declined to apply the filed rate doctrine where the rates at issue were set directly by legislation.

In the summer of 2020, former Speaker of the Ohio House of Representatives Larry Householder and his political associates were indicted for an alleged $60 million-dollar federal racketing conspiracy. The criminal complaint asserted that Householder and others, in exchange for large bribes from FirstEnergy Corp., collaborated to pass House Bill 6 (HB 6), a near billion-dollar nuclear power plant bailout that would benefit FirstEnergy.  HB 6 required that a monthly surcharge be added to ratepayers’ bills (capped at 85 cents for residential customers and $2,400 for commercial customers), along with other adjustments that would increase rates.  Ratepayers sued FirstEnergy on behalf of a proposed class, asserting federal claims under RICO and other statutes and a state-law claim under the Ohio Corrupt Practices Act.  The alleged injury was having to pay costs and fees set forth in HB 6, and the plaintiffs sought both prospective relief (to stop enforcement of HB 6) and retroactive relief for charges already paid as a result of HB 6.

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FCC Emphasizes Limits On Local Fees For Small-Cell Facilities

Wireless telecom providers have been deploying new small-cell technology and equipment for 5G service across the nation.  Deployment often requires the providers to obtain access to public rights of way to put their small-cell equipment on cities’ or municipalities’ utility poles (or use underground ducts or conduit).  Cities and municipalities, of course, seek compensation for allowing this access to public equipment and rights-of-way.  The FCC addressed this compensation issue in 2018, setting safe-harbor caps on local fees but allowing higher charges if they meet certain requirements.  Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Investment, 33 FCC Rcd 9088 (2018).  The Ninth Circuit upheld that decision in relevant part.  City of Portland v. FCC, 969 F.3d 1020 (9th Cir. 2020).

Clark County, Nevada (home of Las Vegas) adopted an ordinance with annual fees well above the FCC’s safe harbors.  The ordinance required holder of a Master Use License Fee to pay 5% of gross revenues each calendar quarter, plus a Wireless Site License Fee of $700 to $3,960/year/facility (with annual increases of 2%), plus an Annual Inspection Fee of $500 per Small Wireless Facility in county rights-of-way.  Verizon challenged that ordinance at the FCC as being preempted by 47 U.S.C. 253(d) because it effectively prohibited Verzon from providing service.  The FCC, through its Wireless Telecommunications Bureau, recently dismissed Verizon’s complaint without prejudice in light of Clark County having adopted a new ordinance.  Petition for Declaratory Ruling That Clark County, Nevada Ordinance No. 4659 is Unlawful Under Section 253 of the Communications Act as Interpreted by the Federal Communications Commission and is Preempted, WT Docket No. 19-230, DA 21-59 (rel. Jan. 14, 2021).   In doing so, however, the FCC emphasized three key aspects of its rules that certainly will bear on any pending or future disputes between wireless providers and other municipalities that seek to impose fees above the FCC’s safe harbors.  These points appear directed at preventing other state or local authorities from making some of the same arguments Clark County was making.

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Executive Order Addresses Foreign Threats to U.S. Information and Communications Technology and Services Systems

On May 15, 2019, President Donald Trump signed Executive Order 13873, “Securing the Information and Communications Technology and Services Supply Chain” (Federal Register Vol. 84. No. 96, page 22689-92).

Supported by various laws and regulations, the president determined that the United States’ information communication technology systems are increasingly under threat from “foreign adversaries,” defined as “any foreign government or foreign non-government person engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the United States or security and safety of United States persons.” These systems and services are targets for “malicious cyber-enabled actions, including economic and industrial espionage” as they “store and communicate vast amounts of sensitive information, facilitate the digital economy, and support critical infrastructure and vital emergency services.”

To read the full text of this Duane Morris Alert, please visit the firm website.