Sprint Commc’ns, Inc. v. Jacobs

Sprint, a national telecommunications company, declined to pay intercarrier access fees imposed by Windstream, an Iowa telecommunications carrier, for long distance Voice over Internet Protocol (VoIP) calls, concluding that the Telecommunications Act of 1996 (TCA) preempted intrastate regulation of VoIP traffic. Windstream threatened to block Sprint customer calls; Sprint sought an injunction from the Iowa Utilities Board (IUB). Windstream retracted its threat, and Sprint sought to withdraw its complaint. Concerned that the dispute would recur, IUB continued the proceedings, ruling that intrastate fees applied to VoIP calls. Sprint sought a declaration that the TCA preempted the IUB decision. Sprint also sought review in Iowa state court. Invoking Younger v. Harris, the district court abstained from adjudicating Sprint’s complaint in deference to the state-court proceeding. The Eighth Circuit affirmed, concluding that Younger abstention was required because the state-court review concerned Iowa’s important interest in regulating and enforcing state utility rates. The Supreme Court reversed. The case does not fall within any of the classes of exceptional cases for which Younger abstention is appropriate to avoid federal intrusion into ongoing state criminal prosecutions; interfering with pending “civil proceedings . . . uniquely in furtherance of the state courts’ ability to perform their judicial functions;” and certain civil enforcement proceedings. IUB’s proceeding was not criminal and did not touch on a state court’s ability to perform its judicial function. Nor is the IUB order an act of civil enforcement of the kind to which Younger has been extended; the proceeding is not “akin to a criminal prosecution,” nor was it initiated by “the State in its sovereign capacity,” to sanction a wrongful act. The court rejected an argument that once Sprint withdrew its complaint the proceedings became, essentially, a civil enforcement action. IUB’s authority was invoked to settle a civil dispute between private parties. View "Sprint Commc'ns, Inc. v. Jacobs" on Justia Law