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IN RE: )
4 ) Docket No. 2006-274
JAMES D. COWIE, et al., ) January 19, 2007
5 ________________________________ )



Request for Commission Investigation Whether Verizon Is Cooperating In Maine With
The National Security Agency's Warrantless Domestic Wiretapping Program



ANDREW HAGLER, Hearing Examiner
14 STEPHEN WARD, Public Advocate Office
WILLIAM BLACK, Public Advocate Office
15 WAYNE JOYNTNER, Public Advocate Office
ZACHARY L. HEIDEN, Maine Civil Liberties Union
16 DONALD BOECKE, Verizon Maine
JAMES D. COWIE, Complainant
CHRIS MILLER, Mainestreet Communications







1 CONFERENCE COMMENCED (January 19, 2007, 9:04 a.m.)

2 MR. HAGLER: Good morning. We’re here on Commission docket

3 number 2006-274, which is a request brought by consumers -- we call it a ten-

4 person complaint -- with the lead complainant being Mr. Cowie -- requesting a

5 Commission investigation into whether Verizon is cooperating in Maine with the

6 National Security Agency’s warrantless domestic wire tapping program. My

7 name is Andrew Hagler. I’m the presiding officer in this matter for the

8 Commission. I’d ask that those present note their appearances, please.

9 MR. BLACK: Bill Black for the public advocate.

10 MR. JOYNTNER: Wayne Joyntner for the public advocate.

11 MR. WARD: Steve Ward, public advocate.

12 MR. COWIE: James Cowie, lead complainant.

13 MR. BRANSON: (Inaudible) Branson, another complainant.

14 MR. HEIDEN: Zachary Heiden for intervener, Maine Civil Liberties

15 Union.

16 MR. BOECKE: And Don Boecke for Verizon Maine.

17 MR. MILLER: And Chris Miller, who didn't quite make it onto the docket.

18 MR. HAGLER: Okay, great. Well, thank you and thank you for coming

19 this morning. The reason that I scheduled this conference -- case conference

20 or conference of counsel is to address the issues raised initially by Mr. Cowie in

21 his letter of January 9th to the Commission. That was followed by -- very

22 quickly thereafter by a letter by the public advocate. And on January 17th, in

23 response to those letters, Verizon, through Mr. Boecke, filed a letter with the

24 Commission. I’ve received no other letters or communications -- paper

25 communications other than those three. Are there any others that I should be
1 aware of? Okay. The -- I will in a moment ask -- and give an opportunity for

2 everyone here -- to indicate if there’s additional information or elaboration on

3 what we've received that we should discuss. I will also give an opportunity for

4 anyone here who did not submit a letter to speak. I have an initial before I do

5 that and that is to the lead complainant. And I don’t know -- I’ll ask this question

6 going around, but, Doug, your letter indicates the complainants’ anxious

7 concern regarding the upcoming nine-month statutory deadline set forth in

8 Section 1302, which is the Commission’s procedure for consumer complaints.

9 The very narrow question that I have is do you believe that after nine months

10 has run on a complaint brought to the Commission, that the Commission lacks

11 jurisdiction to consider the complaint at some further time after the nine months

12 has expired?

13 MR. COWIE: I -- I guess the first response is that I don't know, but the

14 reading of Section 1302 doesn't provide any -- any text that gives the

15 Commission authority beyond the nine-month deadline to render a decision. So

16 I don’t know whether the Commission has the authority to give itself more time

17 or -- or what (inaudible-too far from microphone).

18 MR. HAGLER: Okay. Mr. Branson, do you have a view on that?

19 MR. BRANSON: No. I have no view on that.

20 MR. HAGLER: Mr. Boecke?

21 MR. BOECKE: I have not researched the issue, but I’ve always viewed

22 1302 as being purely procedural and not really substantive. Offhand today I

23 would say it would not affect the Commission’s jurisdiction. The nine month is

24 clearly a directive in which they’re supposed to complete their investigation, but

25 the statute doesn't say that at the end of nine months plaintiff wins or defendant
1 wins. I think if the legislature had really meant to rob the Commission of

2 jurisdiction after that nine months, they would have been more explicit.

3 MR. HAGLER: To be clear, does that mean that following -- is February

4 3rd, I think, is the date that people seem to be --

5 MR. BOECKE: I had February 7th. Is that --

6 MR. JOYNTNER: February 7th, I believe.

7 MR. HAGLER: Okay. February 7th. If that’s the deadline, but if one or

8 two days or even a month after that deadline -- that date came and went the

9 Commission were to make a final decision on the complaint -- a final agency

10 decision on the complaint, would Verizon’s decision be that that final decision is

11 void for lack of jurisdiction of the Commission to issue that decision relying

12 solely on 1302?

13 MR. BOECKE: I think I can say with full confidence Verizon would not

14 make such a motion.

15 MR. HAGLER: The Public Advocate's view on the -- on whether

16 jurisdiction disappears after the nine months expressed in 1302?

17 MR. JOYNTNER: Well, I think the Commission has authority on its own

18 initiative to conduct that investigation without any unreasonable (inaudible-too

19 far from microphone) so I think it could create a jurisdiction, certainly in a

20 separate proceeding. I think it is stuck with the deadline the statute provides,

21 although I wouldn’t say today that I think it has no jurisdiction to issue a decision

22 a few days later. I haven't researched that either, but I think it has jurisdiction

23 generally to deal with the merits of the case.

24 MR. HAGLER: Okay. My view is that the nine-month period is not a

25 grant of jurisdiction limited to nine months but that action on a complaint
1 brought pursuant to Section 1302 taken, whether by agreement or not of the

2 parties, beyond nine months is a valid agency action. Separate question of

3 what the Commission must do or what the statute directs the Commission to do

4 within a period of time, but I think that any action taken after that time would not

5 be challengeable, and I’m heartened to hear that Verizon indicates that it would

6 not challenge such on the grounds that it was action taken beyond the nine

7 months described in 1302. Just so that you know where I am on that issue. I

8 view that as a preliminary issue, and I wanted to clear it up before we began

9 this morning. Mr. Cowie --

10 MR. COWIE: Could you say again what you just said about what your

11 view is on the nine-month deadline and the Commission’s authority to render a

12 decision after the nine months?

13 MR. HAGLER: I believe that the Commission retains all the authority

14 after the nine months -- after a nine-month period -- in this case after February

15 7th --

16 MR. COWIE: And what --

17 MR. HAGLER: -- to do anything it could have done prior to the nine

18 months. It’s a separate question from what I think might be the subject of most

19 of the discussion here this morning. But if today were February -- or March 1st,

20 I don't believe the Commission lacks the ability to do anything that it could have

21 done on December 1st.

22 MR. COWIE: Can you tell me what the basis of your opinion is and why

23 do you believe (inaudible-too far from microphone) appropriate for me to ask

24 you that.

1 MR. HAGLER: Sure. Nothing in 1302 creates a cause of action. The

2 Commission has (inaudible-unfamiliar word) authority to hear the complaints of

3 consumers brought before the Commission, and nothing in 1302 in effect

4 creates a cause of action that only survives nine months. In my view 1302 is

5 directive towards the Commission in terms of how it should process those

6 complaints.

7 MR. COWIE: Well, in reading 1302 it says the Commission shall render

8 a decision upon a complaint no later than nine months after its filing. You don't

9 see that as -- apparently you don't see that as something -- the Commission

10 can essentially ignore that and take 18 months?

11 MR. HAGLER: No, that's not what I'm saying. What I’m saying is is that

12 if the amount of time -- the nine months passes but action is taken after that,

13 that action is not void or illegal because it didn’t occur within the nine months.

14 MR. JOYNTNER: If I may, I would think Andy isn’t saying that the nine-

15 month directive has no meaning. He’s only saying that the Commission

16 technically still has jurisdiction after the nine months. (Inaudible-too far from

17 microphone) distinction there.

18 MR. COWIE: Yeah.

19 MR. JOYNTNER: He’s not saying that he can ignore the nine months

20 yet. I think we’re going to discuss that this morning.

21 MR. COWIE: Okay.

22 MR. HAGLER: But now I'd like to ask, Doug, what you think the

23 Commission should do?

24 MR. COWIE: Well, beyond what I said in the letter?

1 MR. HAGLER: Yeah. Is there anything else other than what’s in the

2 letter or in response to what Verizon submitted that you’d like to ask?

3 MR. COWIE: Well, I would recommend that the Commission enforce its

4 August 9th order and give Verizon five days to reply and to hold them in

5 contempt if they don't.

6 MR. HAGLER: Okay. Mr. Branson?

7 MR. BRANSON: I'm in agreement with that.

8 MR. HEIDEN: I'm also in agreement.

9 MR. HAGLER: Okay.

10 MR. BLACK: The public advocate --

11 MR. HAGLER: Why don’t we have the public advocate --

12 MR. BLACK: The public advocate is in agreement with that.

13 MR. HAGLER: Okay. And I assume Verizon is not?

14 MR. BOECKE: Verizon finds itself really caught between two

15 jurisdictions here. My suspicion is that as soon as the Commission issued such

16 an order, the United States government would take the appropriate action to

17 enjoin such action in federal court and that action would be taken before

18 Verizon would be able to file its response. So I think what you’d be doing is just

19 precipitating more motion practice before the federal court, but I doubt very

20 much it would in any way -- even if we complied within the five days -- enable

21 the Commission to reach a decision by February 7th. That’s just a couple of

22 weeks away.

23 MR. HAGLER: What's the basis for believing that that would be the

24 response of the Department of Justice?

25 MR. BOECKE: The lawsuit that was filed in federal court.
1 MR. HAGLER: Okay. Okay.

2 MR. BOECKE: The specific instructions to Verizon and to the

3 Commission that Verizon is precluded by federal law from answering the

4 question.

5 MR. HAGLER: Would Verizon likewise seek such relief in the federal

6 district court?

7 MR. BOECKE: I hadn't considered that. I suppose, though, our opinion

8 being that we are not permitted under federal law to divulge this information, if

9 the United States did not take such action, I suspect Verizon would in order to

10 protect its rights and not be found in violation of federal law. It would seek to

11 have the federal court declare that the Maine Commission should or should not

12 have this information.

13 MR. HAGLER: I’ll ask this of anyone who’d like to answer and everyone

14 who’d like to answer. Is my understanding correct that there are dispositive

15 motions pending before the federal district court in Maine -- a motion to dismiss

16 brought by the Commission brought by the Attorney General and his staff on

17 behalf of the Commission, and also a motion for summary judgment brought by

18 the Department of Justice -- and that each of those dispositive motions has

19 been fully briefed by all parties to that case?

20 MR. HEIDEN: That's correct.

21 MR. HAGLER: Okay. Am I also correct that there is a proceeding or a

22 mechanism that was invoked to transfer that federal district court suit to a

23 different district court jurisdiction -- I believe the northern district of California --

24 and that that transfer of that federal court suit has been opposed by the

25 Attorney General on the Commission's behalf and that argument on whether
1 that transfer will occur is to take place on January 25th -- next week -- in

2 Florida, halfway between here and California?

3 MR. HEIDEN: That's also correct.

4 MR. COWIE: It's also been opposed by --

5 MR. HAGLER: By the government.

6 MR. COWIE: -- by the proposed defendant interveners (inaudible-too far

7 from microphone) --

8 MR. HAGLER: Right.

9 MR. HEIDEN: The complainants.

10 MR. COWIE: -- (inaudible-too far from microphone).

11 MR. HAGLER: The complainants in this case oppose the transfer to --

12 MR. COWIE: -- northern district --

13 MR. HAGLER: -- of a federal district court matter to California.

14 MR. COWIE: We filed a motion to vacate that order.

15 MR. HAGLER: And what's the harm in letting that play out -- all of -- both

16 of those motions -- the federal district court motion and the transfer motion?

17 What, as a practical matter, would be achieved by what Mr. Boecke

18 characterized as motion practice -- in effect the Commission doing what the

19 complainants and interveners in this matter would like the Commission to do,

20 which is have a finding of contempt based on Verizon's failure -- presumably

21 based on Verizon’s failure to comply with an August 9th order of the

22 Commission on August -- which had a deadline of August 21st and drawing, as

23 the Commission drew from that order, a lawsuit -- drawing an injunction motion

24 at this point, given the status of where that matter is in federal court?

1 MR. JOYNTNER: My response is that it wouldn't be reasonable for the

2 Commission to ignore state statute based upon the speculation about what’s

3 going to happen in another court, which has no way enjoined the Commission

4 from its normal jurisdiction. The Commission has said repeatedly in its filings

5 with the court that the subject matter of the Commission’s order of August 9th in

6 no way intrudes into the sphere of national security or state secrets doctrine.

7 And, in fact, it hasn’t, and I think everybody in this room probably understands

8 that it hasn't. And given those facts, it would be particularly unreasonable for

9 the Commission to pretend that it's enjoined when it, in fact, is not enjoined and

10 ignore a clear directive from the legislature to process this case.

11 MR. HAGLER: J. COWIE? Okay. (Inaudible-mumbling). Doug?

12 MR. COWIE: I agree with that -- what the public advocate just said and

13 also in looking at the Commission’s memorandum in opposition to the motion

14 for summary judgment, in at least a half a dozen places the Commission insists

15 that it has the authority to investigate the complaint (inaudible-too far from

16 microphone) potentially ask Verizon did it provide records to NSA. That’s actual

17 text that’s in the -- in that (inaudible-too far from microphone). So the

18 Commission is telling the court that it does have the authority to do -- well, at

19 least to do what the Commission says in the memorandum which would

20 essentially say that the Commission has the authority to investigate the

21 complaint. So -- and since it hasn’t been enjoined from doing that by the court

22 -- well, I disagree with the analysis (inaudible-too far from microphone). The

23 complainants don’t see any advantage (inaudible-too far from microphone). If

24 the Commission has the authority to do it -- says it has the authority to do it, we

25 feel it should do it.
1 MR. JOYNTNER: Let me also --

2 MR. HAGLER: One minute. Let me just ask -- just follow up. Has

3 anything from the complainant's perspective bearing on that question changed

4 from August 21st to last week when this was brought to the Commission's

5 attention?

6 MR. COWIE: Has anything -- are you asking me --

7 MR. HAGLER: Yeah. I’m --

8 MR. COWIE: (Inaudible-too far from microphone).

9 MR. HAGLER: I believe that you are correct that there is no injunction --

10 there is no injunction -- impediment against the Commission. However, since

11 August 21st through and including today, the Commission has taken -- there

12 has been no action in the Commission in this matter. Has something changed

13 between that time and today that causes imminent anxiety in light of the fact

14 that I think we agree -- or at least I’m telling you that it’s my belief that the

15 Commission won’t lose jurisdiction on February 7th?

16 MR. COWIE: Well, as far as the complainants are concerned, we view

17 this lawsuit as, I don’t know, capricious. I think it’s an absurd lawsuit. It’s

18 disappointing to us that the judge didn't dismiss it out of hand because of the

19 Commission’s order (inaudible-too far from microphone) sworn affidavits by a

20 knowledgeable person as to the truth of public statements (inaudible-too far

21 from microphone). Had those statements included any national security

22 information, it’s too late. They’re now public. And had they, I’m sure the

23 Department of Justice would have swooped in on Verizon and taken some kind

24 of legal action against them. So we don’t see any -- any -- that the lawsuit -- all

25 the lawsuit did was -- looked like it did was to put our complaint case -- taking it
1 and putting it in the freezer -- putting it on ice, and the Commission could have,

2 as it says in its memorandum in opposition to the summary judgment motion --

3 could have if it wanted to -- and even though Verizon didn’t make the public

4 statement -- could have asked Verizon had it provided call records to NSA. So

5 we don’t see any change really other than a lot of legal work that the Justice

6 Department’s lawsuit has created.

7 MR. HAGLER: Then -- then -- then my question, not meant to carry with

8 it any -- not to be charged at all, is why was the January 9th letter that you

9 wrote to the Commission not written earlier than January 9?

10 MR. COWIE: I -- I should have written it earlier. I was worried from the

11 day -- first, our complainants, as you know, are disappointed with the

12 Commission’s lack of investigation into the complaint -- very disappointed, but I

13 was worried from the date of August 21st what the impact of the -- that lawsuit

14 was going to be on what the Commission did on the complaint.

15 MR. HAGLER: Okay.

16 MR. COWIE: I was advised by counsel that if I tried to press the

17 Commission, it would bring about an injunction motion from the Department of

18 Justice or some kind of motion -- TRO, which would officially, if the judge

19 agreed with it, shut down the complaint case anyway. But I decided finally that I

20 was not going to wait any longer and just essentially tell the Commission it had

21 less than a month left to -- what I considered (inaudible-too far from

22 microphone) what the statute said -- to render a decision upon the complaint.

23 So that’s why I waited all that time. I was advised not to do it, and I finally did it

24 anyway.

25 MR. HAGLER: Okay. Don?
1 MR. BOECKE: I was just going to touch on that same subject that the

2 Commission’s order had set a deadline for the 21st. It’s now almost five months

3 later and no one had seen any change in circumstances that warranted sending

4 the letter earlier. I also just wanted to disagree with the OPA's characterization

5 of what the Commission is doing as ignoring its jurisdiction or ignoring the

6 legislature’s mandate to investigate. The Commission is very much aware of

7 the situation it’s in, and the presumption that it has jurisdiction is the central

8 question. If the Commission doesn’t have jurisdiction, then it clearly has no

9 1302 investigation to conduct. The Commission believes it has jurisdiction.

10 The United States government strongly believes it does not. And that question

11 is now in the appropriate forum before a federal judge, and that’s the question I

12 believe that has to be decided before the Commission and the parties can

13 proceed with whatever direction it goes. And I don’t think it’s fair to say the

14 Commission’s ignoring Section 1302. I think it’s doing everything it practically

15 can do. And the suggestion that, I think, even Mr. Cowie said that if the

16 Commission were to take some further action in its investigation, either in

17 August or in January, it’s going to involve the parties in more motion practice

18 and unlikely to move this case, you know, one inch.

19 MR. HAGLER: Mr. Ward?

20 MR. WARD: Yeah, I do have one comment. I do think there is great

21 value in the PUC upholding the substance of the 1302 law and giving it

22 meaning within the time frame the legislature anticipated it should have

23 meaning. On the other hand I certainly agree with the observation that the

24 Commission has its own independent authority to act in this matter, and it

25 certainly will not lose jurisdiction if it fails to act (inaudible-mumbling). One
1 suggestion is purely procedural -- it's not substantive -- that you might want to

2 consider. The nine-month deadline as established by the Law Court initially is a

3 parallel to the nine-month deadline that exists in rate cases for processing rate

4 filings when utilities request changes in the rates. For many years now the

5 Commission has dealt with that nine-month rate case deadline in a sort of

6 ingenious way where they put out what’s called a part A order that basically

7 says in order to act before the end of the nine-month period, we will say nothing

8 whatever about any basis for any decision, but we will authorize a change in

9 rates in X amount. It’s impossible for any of the litigants at that point to know

10 how their rights have been affected, how -- what the basis for the decision is,

11 whether an appeal is necessary, whether an appeal is legitimate. In short it

12 does nothing whatever to terminate the case. The case then continues until

13 there’s a part B order. Sometimes it’s as much as six months later. It says and

14 here’s why. At that point appeal rights attach, and at that point the parties are

15 free to pursue whatever remedies they think are appropriate.

16 MR. HAGLER: What does that suggest as a suggested course of action

17 here?

18 MR. WARD: Well, I'm thinking out loud here, of course, but I’m thinking

19 that there may be some value prior to the end of the nine-month period in the

20 Commission putting out what is equivalent to a part A order saying it continues

21 to believe it has jurisdiction in this matter and it continues to believe that its

22 initial requirements of Verizon were lawful and should be (inaudible-mumbling).

23 And then, having acted at least to that extent, make explicit its desire to

24 continue to exercise authority beyond the nine-month period under a variety of

1 statutes, including the statute that says all Commission laws and rules should

2 be liberally (inaudible-mumbling). Anyway, it’s just a thought.

3 MR. HAGLER: Would that have the effect of denying the complainants a

4 right to go to a superior court to seek mandamus under the 1302 deadline?

5 MR. WARD: As a practical matter, no. As a practical matter, I think

6 complainants have that right until such time as the Commission acts in the

7 quote/unquote part B portion of the order. If the Commission never issued a

8 part B order --

9 MR. HAGLER: Right.

10 MR. WALKER: -- then justice would be frustrated and fair processing of

11 the complaint would be, obviously, denied, but that’s not what I’m proposing

12 here.

13 MR. HAGLER: Okay.

14 MR. BOECKE: Steve, just so I’m clear. The purpose of getting some

15 order out from the Commission before February 7th would be more or less just

16 to affirm Andy's assessment before that the Commission wouldn’t lose any

17 jurisdiction after the nine months?

18 MR. WARD: That's correct, and also to add some, let’s say, legal force

19 to the arguments the Attorney General will be making on behalf of the

20 Commission in the federal proceedings.

21 MR. COWIE: (Inaudible-too far from microphone) legal force in

22 (inaudible-too far from microphone)?

23 MR. WARD: Legal force in the federal proceedings to the extent that the

24 state, by not acting within the nine-month time frame, is not by implication

1 indicating a lack of desire to act or a lack of interest in the issues or a lack of

2 concern with the complainants’ allegations.


4 MR. HAGLER: Yes, please.

5 MR. BRANSON: I guess I would like to reinforce a couple of points that

6 -- (inaudible-too far from microphone). I think that 1302 very finally states the

7 Commission’s obligation to act within nine months, and I think I agree with the

8 analysis that it’s probably not a jurisdictional nine months. It’s a directive that’s

9 something other than jurisdictional and that the Commission will have

10 jurisdiction after that. But I don’t think that answers the question whether the

11 (inaudible-too far from microphone). I don’t think the fact that it’s not

12 jurisdictional implies that the Commission can, therefore, ignore it. And the

13 question is -- and the only reason I’ve heard suggested this morning why the

14 Commission shouldn’t act within the nine months is fear of the unknown -- a

15 fear that something might happen in the federal court, which I don’t think I’ve

16 heard a single suggestion that says why that has any legal bearing whatsoever

17 on what the Commission should do. That is a separate proceeding. It has no

18 direct bearing on this -- on the Commission’s actions and that the court has

19 taken no action whatsoever to -- to interfere with this proceeding. The

20 Commission retains jurisdiction and has a legal obligation to hear any and all

21 issues before it. I think the Commission has to go forward until it is ordered

22 otherwise. So I don't -- I really don't understand the suggestion that we should

23 -- the implied suggestion that the Commission can and should consider holding

24 back for fear that the federal court might take some action. That doesn't make

25 sense to me. As to what’s -- with regard to the question of has there been any
1 change that now makes it more urgent for the Commission to act, I would like to

2 point out that every day has a change in this case. We’re talking about serious

3 constitutional violations, serious incursions on consumers' privacy rights. And

4 there’s very serious allegations out there of the violations, and it’s important that

5 we get to the bottom of that. Every day that passes is a delay. Justice delayed

6 is justice denied in this case. I think it’s a very serious concern (inaudible-too

7 far from microphone).

8 MR. HAGLER: Mr. Heiden?

9 MR. HEIDEN: No, nothing in addition.

10 MR. BOECKE: Again, I just want to -- at the risk of repeating myself, I

11 think it’s really unfair to say the Commission’s ignoring the complaint.

12 MR. COWIE: Who has said that the Commission is ignoring this

13 complaint?

14 MR. BOECKE: Well, I just heard Mr. Branson say it. I heard Wayne

15 Joyntner say it. We can get the record out -- I believe there’s three or four

16 references to the Commission can’t ignore Section 1302. With all due respect it

17 is not ignoring 1302. It knows its responsibility. It has, by its counsel,

18 participated actively in the federal court to protect its jurisdiction. The problem

19 here is there’s a difference of opinion on a question of legal jurisdiction, and Mr.

20 Branson called it fear -- I think it’s well-placed fear. I believe at least one federal

21 court has already ruled that the United States government is correct that certain

22 of this information cannot be divulged. So --

23 MR. JOYNTNER: They haven't ruled on these facts.

24 MR. HAGLER: Let’s --

25 MR. BOECKE: I understand --
1 MR. HAGLER: Please let --

2 MR. BOECKE: All I’m saying is there’s a legitimate difference of opinion

3 on a legal threshold question which is the Commission’s jurisdiction that’s going

4 to be resolved by the federal court. If the Commission takes one more step to

5 proceed with this investigation now, it’s not going to get any closer to that

6 answer. It’s going to get a motion for a temporary restraining order or for

7 preliminary relief. So I think it’s a vain act for people to counsel the

8 Commission, you know, go ahead and try and move forward with this case

9 before the federal court rules.

10 MR. COWIE: Can I ask you how you know that that’s going to happen?

11 MR. BOECKE: How do I know that's going to happen? I think it's logical

12 to assume that since the United States government has commenced the lawsuit

13 and directed the Department of Justice to oppose the Commission’s

14 investigation, if the Commission took one more step in furtherance of its

15 jurisdiction, the United States government would be prompted to act. I have no

16 inside information. That’s just my surmise.

17 MR. HEIDEN: It is a worthwhile question to consider, though, because

18 the federal government has a number of lawyers. They’re well trained. They

19 know how to make a motion for an injunction. Your question to the

20 complainants about why not could easily be directed at the United States

21 government. Why haven’t they asked for an injunction if it was so -- such a

22 matter of concern for them that the Commission stop an investigation.

23 MR. BOECKE: I think they presumed correctly that the Commission

24 would be interested in having the question resolved. That’s exactly what the

25 Commission has done. That’s exactly what every party in this room has done
1 for the last five months was to await the court's ruling. Now the Commission’s

2 being counseled to not wait any longer. I think that would prompt the

3 Department of Justice to change their view.

4 MR. HAGLER: My question -- and -- and, ultimately, my resolution of it

5 would be a recommendation to the Commission in one fashion or another -- is

6 to what extent -- how much is required of the Commission in -- in -- by 1302 --

7 by a nine-month deadline? How much should the Commission consider what

8 the parties have provided, the work that’s taken place here in consideration of

9 the complaint, the work that has taken place in the federal district court on the

10 Commission’s behalf by not less than three of the ablest Assistants Attorney

11 Generals in that office weighed against -- I mean, should -- should and can the

12 Commission consider likely and possible outcomes and the worth of taking the

13 action that Mr. Cowie suggests, which is enforcement through contempt

14 proceedings? Should we look at what the likely outcome is? Should we look at

15 how much effort that might take? Should we look at what the results are likely

16 to be as compared against what’s happening now that we can see in the federal

17 district court? I read what comes out of the federal district court and what’s filed

18 in the federal district court. Most recently there was an order involving

19 something about page limits or, you know, the -- it’s something procedural in the

20 district court, and Judge Woodcock indicated in the course of it -- and I don't

21 want to -- that this case is in a unique posture. There is currently an order

22 transferring the case to the northern district of California. We discussed that.

23 Although for the moment this court retains jurisdiction, it has expressed its

24 reluctance to issue an order that could affect the orderly disposition of the case.

25 I don’t know -- I don't offer a belief as to what Judge Woodcock might do upon
1 the receipt of a motion for an injunction brought against the enforcement action

2 that the complainants seek. But I wonder whether it would result in the sort of

3 closure or ability for the Commission -- practical ability for the Commission to

4 advance the matter before it any quicker than would be to wait to see what

5 happens both in Florida -- and as I understand it what happens in that -- before

6 that forum happens very quickly. And then you’re sent to California of you’re

7 sent back to the district of Maine with dispositive motions in the can, ready to be

8 decided. Can I recommend to the Commission that it consider those

9 practicalities in discharging its duty under 1302?

10 MR. COWIE: Can I (inaudible-too far from microphone)? We are in a de

11 facto injunction (inaudible-too far from microphone) since August 21st

12 (inaudible-too far from microphone). Quite frankly, I don't -- I'm sure that if the

13 Commission did what I recommended at the beginning -- namely to enforce its

14 order -- if that brings about a motion by the Department of Justice to (inaudible-

15 too far from microphone) temporary restraining order -- whatever the legal thing

16 would be -- what -- what difference -- what difference would it make in

17 (inaudible-too far from microphone) -- in this complaint case? Nothing is

18 happening with the complaint case. Nothing has happened. Only one thing did

19 happen -- namely the Commission’s order (inaudible-too far from microphone)

20 three months after the filing of the complaint. So what difference would it make

21 with the complaint? Would it -- in your opinion or anybody's opinion, would it --

22 what would it do other than what we’re already (inaudible-too far from

23 microphone) -- namely a de facto injunction? What would be -- what do you

24 think would be the impact of it?

25 MR. BRANSON: Andy, (inaudible-too far from microphone)?
1 MR. HAGLER: (Inaudible).

2 MR. BRANSON: Thank you. To address your question of can you -- can

3 the Commission consider practical considerations such as time, expense, or

4 what not -- I don’t know -- in weighing whether to move forward or not, I -- I

5 cannot -- I'm not aware of any support for that in the statutes or regulations.

6 Certainly neither 1302 nor the underlying statute on privacy suggest that the

7 Commission’s authority is any how -- in any way limited or constrained by the

8 expense of enforcing those rights or investigation. (Inaudible-too far from

9 microphone) obligation to investigate is not within reason or within certain

10 limited -- within expenses. It's an absolute obligation to investigate. And

11 similarly the (inaudible-too far from microphone) obligation is absolute. It’s not

12 conditioned on as long as it doesn’t cost the Commission more than X or take

13 more than this much time. So I think as far as applying for authority for that

14 suggestion -- but I want to also put another thing on the table, which is I don't

15 agree with the suggestion that (inaudible-mumbling). I think the Commission

16 could be helping everything by actually moving forward. We have paralysis --

17 breeding paralysis in these two cases right now. And there’s a very real

18 possibility that if the federal court says do nothing -- because it’s going to say

19 the Commission has not done -- taken any action yet. So we’re -- you know --

20 which is exactly what I think Verizon and the government would like to see

21 which is nothing happened which leads everybody to say, oh, we can’t do

22 anything. That’s my worst fear about the federal court right now. They’re likely

23 to look at this and say, look, the Commission hasn’t done anything. They

24 haven’t -- they have an order out there that’s not been acted on, the nine

25 months have come and gone, they still haven’t acted on it. What are we going
1 to do. We can't enjoin anything. It might -- and the federal court record is

2 noticeably thin in terms of what's actually happened. So the federal court’s

3 going to have to guess at what the Commission -- this Commission might or

4 might not do in terms of trying to give some order. So it may actually help in a

5 very real way to have some action because then we’ll actually have a case in

6 controversy to discuss. We have -- we really don’t have one.

7 MR. HAGLER: Don?

8 MR. BOECKE: I'm not sure I understand that last point. I believe there

9 are dispositive motions pending in federal court. I believe the federal court has

10 jurisdiction. I believe there is a case in controversy. I don’t see what -- you

11 know, the Commission order directing Verizon to answer that August 9th order

12 under five days under threat of --

13 MR. BLACK: Contempt.

14 MR. BOECKE: -- yeah -- excuse me -- I’m not sure that adds any

15 additional facts that the court needs. I think it has the facts. Again, I think the

16 Commission is doing all that it practically can. I think prompting this further

17 processing of the case and the inevitable motion practice that’s going to be

18 involved with no real further clarification or crystallization for the court’s benefit

19 or for the parties’ benefit of what already is the threshold issue -- does the

20 Commission have jurisdiction in this case or does it not. Everyone in here has

21 been presuming that the Commission does. The -- you know, the United States

22 government has a different view and has instructed Verizon of its view and told

23 Verizon that if it supplies the information to the Public Utilities Commission, it

24 will be in violation of federal law. That’s the question that’s pending in federal

25 court.
1 MR. JOYNTNER: One of the benefits of being in a democracy is that we

2 don’t have a federal executive branch that can tell everybody what to do absent

3 the court system. I agree with Doug that we're in a de facto injunction now.

4 There isn’t a whole lot to lose as far as the complainants are concerned. What

5 the Commission has asked Verizon to do is so incredibly mild that it can't be

6 construed, as the Commission has repeatedly said to the federal court -- can’t

7 be construed as intruding into state secrets issue.

8 MR. BOECKE: But that's the contested allegation.

9 MR. JOYNTNER: And the people in this room, I think, are prepared to

10 ask the Commission to do nothing more than enforce its August 9th order,

11 which it already (inaudible).

12 MR. HEIDEN: I would further just add -- you’ve referred to the work

13 that’s gone on to the defendants in the United States v. Adams, et al. case -- it’s

14 worth, I think, referring in specific to the position taken by defendants in that --

15 namely, one, that the government had failed to state a claim, and that was part

16 of their motion to dismiss -- that they were asking for an advisory opinion -- and

17 also that the federal court should abstain from deciding the matter because of

18 (inaudible-unfamiliar words) doctrine based on the Commission’s ongoing state

19 proceeding. So the two are connected in an important way that goes back to

20 the points that Mr. Branson (inaudible-mumbling).

21 MR. COWIE: Could I ask a question? We're assuming that if the

22 Department of Justice files a motion for TRO or whatever that (inaudible-too far

23 from microphone). Isn’t that -- wouldn’t that be a high hurdle?

24 MR. BOECKE: No. I think it’s almost a certainty that -- to preserve the

25 status quo in the case since what the Commission would be ordering Verizon to
1 do would go to the heart of the issue. It’d be asking Verizon to disclose

2 information which, if disclosed, is a violation of federal law. I think there’s

3 probably a very, very high probability that the United States Department of

4 Justice could get that motion. It might even be able to get it ex parte.

5 MR. HAGLER: I can tell you I wouldn't venture that sort of guess. First

6 of all, it’s not my role. I do know that there would be, however, an issue of

7 whether the judge needed to confront the merits of the legal positions taken in

8 the dispositive motions, in addition to status quo questions. And I wonder

9 whether the likelihood of success on the merits of the claims is something that

10 would be forthcoming from the court within the time frame that 1302 asks this

11 Commission to act, especially in light of the federal district court’s obvious

12 concern about whether the case is its ultimately to decide or whether it's off to

13 California for some amount of process. But I’m focused on the question of what

14 does 1302 require and to what degree does it require of the Commission before

15 nine months, and your comments and your views and your writings have been

16 very helpful to me for that. Is there anything else that you think I ought to

17 know?

18 MR. JOYNTNER: One thing that hasn't been mentioned is that there

19 should be a fear of litigation on the other side as well because as soon as the

20 Commission fails to render a decision within nine months, the complainants can

21 seek an appeal or an action for mandamus.

22 MR. HAGLER: Right. And the result of that, I believe -- I believe that the

23 1302 nine-month requirement is directory rather than mandatory as that sort of

24 concept comes out of Bradbury Memorial Nursing v. Tall Pines Manor

25 Associates, Maine 1984, and that the result of the -- of such an action brought
1 by the complainants in superior court is likely to be directory that the

2 Commission make a decision. If the decision -- what decision, I don’t know,

3 might come from the -- from such an action, but I don’t think that that sort of

4 litigation in the superior court would result in a remedy for these complainants

5 on the merits of the complaint they brought before the Commission. It's not

6 going to be like the rates are, therefore, in effect or the rates are, therefore, not

7 in effect. It’s likely to be a direction for the Commission to take some action,

8 which is why I’m here so quickly after the letters were filed today because I

9 want to advise the Commission as to what it needs and ought to do and

10 consider in the face of what I believe is a directory instruction in the statute.

11 MR. COWIE: What does that mean -- a directory instruction?

12 (Inaudible-too far from microphone)?

13 MR. HAGLER: Yeah. Sometimes shall in a statute means must, and

14 sometimes shall in a statute means should. I don't know if that -- if that’s a --

15 MR. BLACK: Good.

16 MR. BOECKE: They teach you that in law school.

17 MR. COWIE: So (inaudible-too far from microphone) means should?

18 Does that -- does that --

19 MR. HAGLER: There is no rights-defining consequence, which --

20 listening to myself -- by the Commission be not fulfilling -- not doing something

21 by the nine-month deadline in this statute in my view. What the consequence

22 could be is that a superior court could direct the Commission to do something.

23 But a superior court is not going to order the Commission to grant whatever

24 relief your complaint here asks for, which is tell Verizon not to cooperate with

25 the NSA, and I’m only paraphrasing. That wouldn’t be the --
1 MR. COWIE: No, excuse me, but people keep characterizing that

2 complaint. They’re saying -- it did say -- it says a lot more things before it says

3 tell Verizon to stop doing it, and asks for an investigation into whether Verizon

4 (inaudible-too far from microphone). That's what hasn't happened.

5 MR. HAGLER: Right. And the superior court likely, in a mandamus

6 action -- what we’re -- the possibility is that the -- in that situation is that the

7 Commission would be directed to do what 1302 tells it to do and the superior

8 court could find that the Commission hadn’t.

9 MR. JOYNTNER: That's really quite symmetrical with the other side.

10 The federal court could tell the Commission not to do something. The superior

11 court in Maine could tell the Commission to do something.

12 MR. HAGLER: Correct.

13 MR. JOYNTNER: Those are the two possibilities that the Commission

14 acts or doesn’t act.

15 MR. HAGLER: And what I hear this morning is that there is not an

16 agreement among the parties to avoid -- that would avoid either result that we

17 could walk away from today and that it’s up to me to make a recommendation to

18 the Commission to come up with something.

19 MR. BOECKE: Other than I think you have the agreement of the parties

20 that certainly the nine months does not in any way rob the Commission of

21 jurisdiction if it doesn’t -- if the (inaudible-mumbling).

22 MR. BRANSON: That's correct.

23 MR. BOECKE: We’re all in agreement on that.


1 MR. COWIE: Has the Commission ever, in a 10-person complaint,

2 written an order that gave itself more than nine months to render a decision.

3 Aren’t you saying they don't have to?

4 MR. HAGLER: I'm saying that any action the Commission takes after

5 nine months would not be void for the fact that it occurred after nine months.

6 That's all that I'm saying, and that’s all that I agree the -- I believe the parties

7 agreed to. Not I don’t concede it. You may not.

8 MR. COWIE: Well --

9 MR. BRANSON: The jurisdictional issue, I think, is beyond me

10 (inaudible-too far from microphone) at this point so I don’t have anything to add

11 to that. But I do want to make another point, which is if the Commission is

12 inclined to weigh cost balances and what not, I’ll tell you my sincere belief that if

13 you want -- the quickest way to end this pain and the ongoing litigation is to act.

14 What is almost certain if the Commission fails to act is long, drawn out multi-

15 district litigation which will cost this state and our taxpayers dearly because

16 we’re going to be wrapped up in many other cases that are from all over the

17 country and (inaudible-too far from microphone) in California. If the

18 Commission acts we will probably get, as promised, a motion which will

19 probably get some direction from the federal court which is clearly lacking now.

20 If the Commission wants direction from the federal court, we can get it, but the

21 Commission needs to act. But that will bring it to a swift end and in the end it’s

22 going to cost everybody a lot less and it’ll take a lot less time.

23 MR. JOYNTNER: And one positive aspect of that (inaudible-mumbling)

24 these facts (inaudible-mumbling) actually Maine are -- would be the most

25 difficult of any of the situations around the country for a federal court to see as
1 something that should be -- that needs to be enjoined because what the

2 Commission has done is so mild. It hasn't started any substantive investigation.

3 It simply asked Verizon to reaffirm its own statement. So these are great facts

4 to test before the federal court. I disagree with Don. I think we would win. I

5 don’t think he’d get an injunction on his facts.

6 MR. BOECKE: But the only thing that's going to bring this to an end is a

7 dispositive ruling by the federal court on the Commission’s jurisdiction. Barring

8 a dispositive ruling, Verizon isn't going to turn over anything. And barring a

9 dispositive motion, the United States government isn’t going to consent to let

10 the investigation go forward. I just don’t see how it’s going to precipitate a

11 dispositive decision on the motion. It will precipitate wasting more legal

12 expenses to put us right back where we are right now. You’ll get a formal court

13 order that says the Commission should do what it's been doing for 5 months. It

14 should await the due process of law, and if that’s what it entails, I don’t think a

15 federal judge would have a problem signing that order telling the Commission to

16 wait for the process to unfold.

17 MR. WARD: Well, even that outcome I don’t necessarily see as a

18 negative. I’m inclined to agree with the statement just made by Mr. Branson

19 that otherwise we confront the possibility of an endless -- let’s call it a Mexican

20 stand off. Maybe that’s the wrong term for you.

21 MR. BOECKE: It can't be endless, Steve, because the motions are

22 pending in federal court. You’re saying --

23 MR. WARD: The motions -- the motions will involve delicate questions

24 about state sovereignty and federal jurisdiction.

25 MR. BOECKE: They do.
1 MR. WARD: And there could be a desire to let them move as slowly as

2 possible.

3 MR. BOECKE: By the federal court?

4 MR. WARD: Yes.

5 MR. HAGLER: If there’s anything 1302 law that you know of --

6 MR. WARD: I have one -- one item (inaudible-mumbling). There was a

7 1981 New England telephone case in which a rate order that was granted in the

8 tenth month was voided. So prior to that -- prior to that date there was no

9 expectation that there were legal rights that attached to the nine-month

10 expectation --

11 MR. HAGLER: In a rate case?

12 MR. WARD: In a rate case. So prior to that point, it was directive. But

13 then as a result of that case law, it became mandatory and that’s when the Part

14 A/Part B formula got put into place that enabled the Commission simultaneously

15 to satisfy a nine-month statutory deadline and still complete the orderly

16 processing of extremely complex cases.

17 MR. JOYNTNER: And in terms of --

18 MR. HAGLER: And that reasoning, you believe, would carry over to the

19 mandatory directory distinction in --

20 MR. WARD: -- this morning is there may be a basis for using that

21 procedure to uphold the validity of the investigations law and the nine-month

22 deadline and at the same time account for these other events which are clearly

23 beyond our control.

24 MR. JOYNTNER: And 1302 would -- rather 1302 itself, which was the

25 subject of Agro -- I think the Agro case is probably the only thing that’s out there,
1 but it’s -- it has some pretty -- pretty narrow directives to the Commission like

2 how it should process specifically a 1302 complaint.

3 MR. HAGLER: Cited in your letter?

4 MR. JOYNTNER: Yes. I don’t think Agro leaves a whole lot of room for

5 the Commission to --

6 MR. HAGLER: And 1981 is New England Telephone versus --

7 MR. WARD: Maybe it's '79.

8 MR. BOECKE: There are actually two cases, like NET 1 and NET 2.

9 MR. WARD: Right.

10 MR. HAGLER: If the parties want to send me an e-mail with citations, I’ll

11 look them up.

12 MR. BOECKE: I would just point out, Andy, that the Agro case didn’t

13 directly involve the nine-month statute -- that was not the question before the

14 Law Court whether the Commission has to act within nine months. I believe the

15 Commission in that case did act prior to the nine months by dismissing the

16 complaint, and whether they should have dismissed was the issue the Law

17 Court addressed.

18 MR. HAGLER: I will read them all. You can send me --

19 MR. BOECKE: (Inaudible-multiple speakers).

20 MR. HAGLER: -- feel free to send whatever you’d like. You need not -- I

21 don't want to complicate what has been -- with more motion practice before me

22 because that doesn’t seem to make sense. But giving me the citations -- and

23 I’m sure that I can find them on my own -- but I need to make a

24 recommendation in some manner to the Commission regarding its Section 1302

25 obligations and what it can consider in the course of fulfilling those
1 responsibilities. And I appreciate all of -- all of the input that I've received today

2 here. And I’m not going to make a decision about a recommendation today.

3 MR. COWIE: Well, would it be likely that there’ll be another procedure

4 order (inaudible-too far from microphone) the Commission decides (inaudible-

5 too far from microphone) so we hear -- will we hear anything -- see anything?

6 MR. HAGLER: I really don't know -- don’t know. I'm cognizant of what

7 appears to have been agreed as a date of the expiration of the 1302 timeline

8 being February 7th.

9 MR. BLACK: And you're cognizant of the request made by at least three

10 parties for the enforcement of its order?

11 MR. HAGLER: And I would not be here today if it were otherwise.

12 Thank you.

13 MR. HEIDEN: Thank you.

14 CONFERENCE ADJOURNED (January 19, 2007, 10:05 p.m.)