Supreme Court Allows Private Claims for Certain FCC Rule Violations

On April 17, 2007, the Supreme Court of the United States affirmed a plaintiff’s right to bring action in federal court against a telecommunications carrier for damages caused by the carrier’s violation of certain rules of the Federal Communications Commission (FCC). In Metrophones Telecommunications v. Global Crossing Telecommunications, the Supreme Court considered whether a payphone operator could bring suit in federal court to collect compensation owed by a long-distance carrier for its customers’ use of the plaintiff’s payphones. FCC rules required carriers to reimburse payphone operators $0.24 per completed call. The FCC had declared that a carrier’s failure to pay would be deemed an "unreasonable practice" under Section 201 of the Communications Act.

Although Section 207 of the Communications Act permits claims to be brought in federal court for damages caused by a carrier’s violation of the statute, the Supreme Court agreed with Metrophones that claims could also be brought in federal court for a carrier’s violation of an FCC rule if the FCC specifically states that the rule is intended to prohibit "unreasonable practices" under Section 201 of the Act. Because the FCC had declared that a refusal to remit payphone compensation would be an "unreasonable practice," the Supreme Court concluded that Metrophones was entitled to bring a collection action in federal court under Section 207. The Supreme Court’s decision has the potential to expand opportunities for plaintiffs to bring action against carriers in federal court based on FCC rule violations if those rules are clearly intended to prohibit "unjust or unreasonable" carrier practices.