First Round of Lawsuits Filed in Net Neutrality Case. Now What?
First Round of Lawsuits Filed in Net Neutrality Case. Now What?
First Round of Lawsuits Filed in Net Neutrality Case. Now What?

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    Yesterday, the U.S. Telecom Association (USTA), the trade association for incumbent telecoms like Verizon and AT&T, and a Texas Wireless Internet Service Provider called Alamo Broadband, filed separate appeals from the FCC’s Order reclassifying broadband as Title II and applying net neutrality rules. (This Ars piece links to both Petitions). USTA filed in the D.C. Circuit, while Alamo filed in the 5th Circuit – a court that is typically more hostile to the FCC.

    I dig into this a bit, and try to explain what happens next, below…

    What Was Magic About Yesterday?

    As folks may recall from my previous post on procedure and scheduling, parties generally have 60 days from the date the agency action becomes “final” (more on that below) to file for judicial review. If parties file in different circuits, then whoever filed first wins. HOWEVER, to avoid confusion the statute says that any petitions filed within the first 10 days will be considered filed simultaneously.

    Yesterday was 10 days after the Order was issued, so (under one interpretation of the FCC’s rules) it was the magic day for folks to file if they want a chance at their choice of circuit.

    Didn’t You Say Last Time The Order Needed To Be Published In The Federal Register First?

    No, I glossed over this procedural wrinkle because the post was getting way too long. The Order is not “final” until it is published in the Federal Register, and — by its own terms — doesn’t actually go into effect until 60 days after publication in the Federal Register. Generally, Petitions for Review cannot be filed until an Order is “final,” which means not until it is published.

    But, as the USTA folks explain in their Petition, the FCC’s rules actually create something of a question on when the Order is final. The relevant rule is 47 C.F.R. 1.4(b). Rule 1.4(b)(1) explains that a rulemaking document is not final until notification in the federal register. However, Rule 1.4(b)(2) says an adjudication, including a declaratory ruling reversing the previous determination that broadband is a Title I information service and reclassifying it as a Title II telecommunications service, is final on release by the FCC.

    If Rule 1.4(b)(2) applies, then yesterday was the magic day. If Rule 1.4(b)(1) applies, then these appeals are too early and will be dismissed and the parties will come back and appeal again after publication in Federal Register.

    Which Rule Governs?

    The FCC rules contain a note explaining that if an adjudication and a rulemaking are issued together, then Rule 1.4(b)(2) applies. But that note states that it only applies with regard to adjudications made with reference to “specific parties” rather than being a rulemaking or declaratory ruling of general applicability. So the note does not seem applicable in this case.

    As USTA observes in its Petition, they believe that this counts as a general rulemaking and therefore the Order is not final until both its parts – the rules and the declaratory – are published in Federal Register. However, “out of an abundance of caution,” parties anxious for a particular venue have filed on what is the potentially earlier date to protect their rights. You can see USTA’s blog post on the subject here.

    So How Does This Get Resolved?

    Under 47 U.S.C. 2112, the cases automatically go to the Judicial Panel on Multidistrict Litigation which will then do a coin toss to award the case to either the D.C. Circuit or the 5th Circuit, whereupon the losing court transfers the case to the winning court. The court with jurisdiction gets to decide whether the FCC is right and the parties jumped the gun — in which case the Petitions are dismissed and everyone continues to wait for Federal Register publication — or the court decides the appeal was timely filed and the fun begins now.

    Again, as I read the rules, I think this is untimely and the Petitions will be dismissed, but we’ll see. Last time around Verizon filed super early under a bizarre theory that the rulemaking had exclusive jurisdiction in the D.C. Circuit. Instead of dismissing, the D.C. Circuit sat on it for months until the order was published, rendering the question moot. So, if these Petitions land in the D.C. Circuit because of the lottery, they may not decide the case at all.

    What About A Stay?

    Interestingly, no one asked for a stay, and no one has asked the FCC for a stay (which, as I explained last time, they could do now and which is usually considered the first step in getting a stay from the court). It’s not clear if this means anything, as parties may just be waiting see in which court this lands in before filing a stay request – a move that saves them from a procedural headache.

    Doesn’t This Automatically Go To The D.C. Circuit Because Of The Verizon Case?

    28 U.S.C. 2112(a)(5) allows the court that wins the lottery (more formally referred to as “the court in which the record is filed”) to transfer the consolidated Petitions to another court “for the convenience of the parties in the interests of justice.” There is a strong presumption that if a case is part of a set of related cases, or is an agency decision on remand from a previous court decision, then the court that wins the lottery ought to send the case back to the court that has already exercised jurisdiction over the matter. That way, the law stays constant and parties can’t get out of an adverse decision by forum shopping. On the other hand, it is entirely discretionary to the court that won the lottery whether to keep the case or transfer it.

    Furthermore, it doesn’t happen automatically. Parties have to actively petition the court to transfer the case. If the 5th Circuit wins the lottery, we may see motions by parties to have the case transferred to the D.C. Circuit. These may or may not be filed with motions to dismiss the case as filed too early.

    Why Would Folks Want This In The D.C. Circuit Or The 5th Circuit? What’s the Argument For D.C. Circuit Jurisdiction?

    The argument favoring a transfer back to the D.C. Circuit is that this case is basically round two of the earlier case on net neutrality rules, Verizon v. FCC., and therefore ought to return to the D.C. Circuit.

    If this lands in the 5th Circuit, parties can re-litigate the question of whether Section 706 is an independent source of authority or not. The D.C. Circuit already decided this question in the affirmative, so if we are in the D.C. Circuit we stay with Section 706 as an independent source of authority. Oddly, that may seem like good news to the telcom and cable companies, who prefer that to Title II classification. Additionally, if the 5th Cir. decides Section 706 doesn’t give the FCC authority, it creates a circuit split and makes a review by the Supreme Court much more likely. So USTA and other parties may actually prefer the D.C. Circuit. But if Alamo wants to eliminate all FCC authority, including Section 706, it must land in the 5th Circuit.

    Anything Else?  

    It is entirely possible that other parties wishing to defend the rules may have planned to file Petitions in other circuits generally considered more likely to defer to the FCC (e.g., 9th Cir.) using the date most of us assumed was the correct start date — Federal Register publication. We will see if this comes up in the motions to dismiss the current Petitions as untimely.

    Stay tuned…

    A longer version of this post was originally published on

    Image credit: Wikimedia Commons user AgnosticPreachersKid