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METRO EAST CENTER v. QWEST COMMUNICATIONS INTERNATIONAL
January 28, 2002
METRO EAST CENTER FOR CONDITIONING AND HEALTH, INDIVIDUALLY AND BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
QWEST COMMUNICATIONS INTERNATIONAL, INC., DEFENDANT.
The opinion of the court was delivered by: David R. Herndon, United States District Judge.
On June 18, 2001, Metro East Center for Conditioning and Health filed
suit against Qwest Communications, alleging that Qwest has been charging
it a presubscribed interexchange carrier charge ("PICC") in violation of
a Federal Communications Commission regulation, 47 C.F.R. § 69.153,
and in excess of the appropriate rate as set forth in Qwest's FCC tariff
(Doc. 1). On August 20, 2001, Qwest filed a motion to dismiss this action
asserting that the FCC has primary jurisdiction over this case because
Metro East seeks application and interpretation of a FCC regulation
(Doc. 17). On September 13, 2001, Metro East voluntarily dismissed Count
I of its Complaint which alleges a violation of a FCC regulation (Doc.
33). Therefore, Metro East now only alleges that the PICC charged is in
excess of the rate set forth in Qwest's tariff. After Metro East
voluntarily dismissed Count I of its Complaint, Qwest sent a letter to
Metro East indicating its intent to invoke the "tariff provision
requiring arbitration." Consequently, Metro East filed a "motion for the
declaration of the inapplicability/unenforceability
clause" (Doc. 32) and Qwest filed a motion to compel arbitration (Doc.
34). On January 18, 2002, the Court held a hearing on these motions and
took the matter under advisement. The Court now finds that Metro East's
claim is not subject to arbitration and that Qwest's motion to dismiss
must be denied.
Qwest's tariff, filed with the FCC, contains an arbitration clause
which requires that:
Any claim, controversy or dispute, whether sounding in
contract, statute, tort, fraud, misrepresentation, or
other legal theory, related directly or indirectly to
the Services, whenever brought and whether between the
Company and the Customer or between the Company or the
Customer and its employees, agents or affiliated
businesses of the other party, shall be resolved by
arbitration as prescribed in this section. The
Federal Arbitration Act, 9 U.S.C. § 1-15, not
state law, shall govern the arbitrability of all
(Doc. 37, Exh. A). Qwest, therefore, argues that Metro East's claim is
subject to mandatory arbitration. In response, Metro East argues that
the arbitration clause contained in Qwest's tariff is unenforceable
because it is not a "written agreement to arbitrate" as required by the
Qwest's tariff provides that the Federal Arbitration Act "shall govern
the arbitrability of all claims." (Doc. 37, Exh. A) (emphasis added).
The Court must, therefore, turn to the FAA to determine whether Metro
East's claim is arbitrable. Section 3 of the FAA provides:
If any suit or proceeding be brought in any of the
courts of the United States upon any issue referable
to arbitration under an agreement in writing for such
arbitration, the court in which such suit is pending,
upon being satisfied that the issue involved in such
suit or proceeding is referable to arbitration under
such an agreement, shall on application of one of the
parties stay the trial of the action until such
arbitration has been had in accordance with the terms
of the agreement, providing the applicant for the stay
is not in default in proceeding with such
9 U.S.C. § 3. Therefore, in order to stay proceedings pursuant to
section 3, the movant must satisfy two conditions: (1) the issue must be
referable to arbitration under a written agreement to arbitrate and (2)
the movant must not be in default in proceeding with arbitration. Merit
Ins. Co. v. Leatherby Ins. Co., 581 F.2d 137, 142 (7th Cir. 1978).
Although national policy encourages arbitration of disputes, submission
to arbitration is consensual, not coercive. See Mastrobuono v. Shearson
Lehman Hutton, Inc., 514 U.S. 52, 57, 62 (1995). Thus, a court cannot
force a party to arbitrate unless that party has entered into a
contractual agreement to do so. See First Options of Chicago, Inc. v.
Kaplan, 514 U.S. 938, 943 (1995).
The need for an agreement as a condition to gaining access to the
provisions of the FAA manifests itself through various
provisions of the
Act. Section 2 of the FAA provides that "[a] written provision in
any . . . contract, or an agreement in writing to submit to arbitration,"
is valid and enforceable "save upon such grounds as exist at law or equity
for the revocation of any contract." 9 U.S.C. § 2. Similarly,
section 4 states that "[i]f the making of the arbitration agreement . . .
be in issue, the court shall proceed summarily to the trial thereof."
9 U.S.C. § 4. From this review, "it is apparent that determining
whether there was a written agreement to arbitrate the controversy in
question is the first and crucial step in any enforcement proceeding
before a district court." MCI Telecommunications Corp. v. Exalon
Indus., Inc., 138 F.3d 426, 429 (1st Cir. 1998). In order to determine
whether the parties intended to submit to arbitration, a court reviews
the contract (if any) at issue. See AT&T Technologies v. Communications
Workers of Am., 475 U.S. 643, 648 (1986). In doing so, the court looks to
contract law. Mastrobuono, 514 U.S. at 57, 62. Therefore, it is
necessary to show a manifestation of mutual assent or a meeting of the
minds. Interstate Indus., Inc. v. Barclay Indus., Inc., 540 F.2d 868,
870-71 (7th Cir. 1976).
In this case, there was no contract between Qwest and Metro East. The
arbitration clause at issue is contained in a tariff filed with the FCC.
The unilateral and nonnegotiable nature of a tariff filed with the FCC
negates any contention that a tariff constitutes an "agreement" between
parties. Qwest has repeatedly and correctly asserted that a tariff is not
a contract. MCI Telecommunications Corp. v. Graham, 7 F.3d 477, 479 (6th
Cir. 1993). It cannot now argue that the arbitration clause contained in
the tariff is part of a contract by which the parties agreed to
Qwest also argues that under the filed-rate doctrine, its valid
tariff, filed with the FCC, "conclusively and exclusively controls the
rights and liabilities between a carrier and its customer." Graham, 7
F.3d at 479. Therefore, Qwest argues, it does not matter that Metro East
did not assent to the particular terms of the tariff. Even assuming that
Qwest is correct in arguing that its tariff conclusively controls the
rights and liabilities of the parties, Qwest's tariff requires that the
FAA "govern the arbitrability of all claims," and the FAA requires a
written agreement to arbitrate. Exalon Indus., 138 F.3d at 429. An
"agreement" presupposes a mutual assent to the terms. Interstate Indus.,
540 F.2d at 870-71. Under the analysis above, the arbitration clause in
Qwest's tariff does not constitute a written agreement to arbitrate. The
Court, therefore, finds that Qwest and Metro East clearly did not enter
into a ...
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