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SkyTel Note: Plantiff Telesaurus is one of the supporters (by outright charitable donations) to Skybridge Spectrum Foundation. The court denied this petition with no comment. Telesaurus will be submitting this to the US Supreme Court in a petitoin for writ of certiorari in or about April 2011. The Ninth Circuit essentially held that a FCC license that was issued by mistate (and Telesaurus asserts by by fraud) can grant federal premption immunity to the party that held the defective license from state law claims of fraud, conversion, interference with prospective economic advantage, etc. Evetually, SkyTel and its supporting LLCs believes the courts will get this and related issues right. If they do not, that will effectively gut the rights Congress reserved in the Communications Act to allow court action to police serious violations of state and federal law by FCC licenses: That is the flip side of Congress's substantial de-regulation in the 1996 Telecom Reform Act. Federal de-reglation calls for access to courts for remedies to unlawful actions beyond the scope of the regulation. Defendatns such as in this case, and MCLM, PSI and others in other cases brought by SkyTel entities, assert that their FCC licenses grant them FCC preemption immunity from any prosecuttion in court-- while before the FCC they argue that their acts cannot be challenged, at least not subject to any serious challenge including evidentiary hearings. This makes a mockery of FCC licensing and due process of law.

IN THE
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT Case No. 09-15446
TELESAURUS VPC, LLC, a Delaware Limited Liability Company,

Plaintiff-Appellant,
VS.

RANDY POWER,

an

individual; PATRICIA A. POWER, an individual; RADIOLINK CORPORATION,
Defendants-Appellees,
vs.

INDUSTRIAL TELECOMMUNICATIONS ASSOCIATION, INC., a Virginia Corporation; EWA, INC., a Virginia Corporation, DBA Enterprise Wireless Alliance,
Third-party-defendants. On Appeal From The U.S. District Court District of Arizona (Phoenix Division) CASE NO. O7-CV-01 3 1 I-NVW

APPELLANT TELESAURUS VPC'S REQUEST FOR PANEL REHEARING, OR IN THE ALTERNATIVE REHEARING EN BANC

NOSSAMAN LLP PATRTCK J. RICHARD (SBN 13t046) prichard @ nossaman. coln TAMIR DAMARI tclamari @ nossaman. com 50 Califomia Street, Thirty-Fourth Floor S an Francisco, Californ ia 9 41 1 I -41 07 Telephone: (415) 398-3600 Facsimile: (415) 398-2438
Attorneys for Appellant TELESAURUS VPC, LLC.

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I.INTROpUCTTON ANp STATEMENT PURSUANT TO FRAP 3s(bx1)
Appellant Telesaurus VPC LLC ("Telesaurus") requests panel rehearing or

in the alternative rehearing en banc. Telesaurus seeks review of this Court's
determination in its opinion dated October 8, 2010r (the "Opinion") that Telesaurus's state law claims against appellees Randy Power, Patricia Power and

Radiolink Corporation (collectively "Radiolink") are preempted by the Federal
Communications Act, at 47 USC $332(cX3XA).'
Federal Rule of Appellate Procedure 40(a)(2) authorizes panel

reconsideration where a panel has overlooked or misapprehended a point of law or

fact. As described below, there are factual

and legal errors in the Opinion

which appear to have formed the basis for this Court's preemption finding. To
summarize:

First, the Opinion's preemption conclusion was informed by its incorrect
threshold determination that Radiolink operated "under a valid FCC license," with respect to the VPC frequencies at issue in this case (the "VPC

Frequencies"). In actuality, the record reflects that Radiolink's purported
rights to the VPC Frequencies were void ab initío, and thus "defective" and ' This opinion is attached hereto as Exhibit

I.

2 In light of the Opinion's reversal of the trial court's dismissal of Telesaurus's claims under 41 U.S.C. $$206-207, Petitioner does not address the scope of the Opinion in that regard, other than as it may impact the Court's decision as to

federal preemption.

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invalid from the start, afact which the FCC itself recognized in the
administrative proceedings which preceded this lawsuit.
Second, the Opinion incorrectly characterizes Telesaurus's state-law claims
as amounting to a "collateral challenge" of the FCC's grant of a license to

Radiolink. In fact, there is nothing about Telesaurus's claims which
challenges an FCC determination. To the contrary, Telesaurus's claims are
based, in part, upon the FCC's determination that "the Radiolink application

should not have been granted to the extent that it requested VPC frequencies," and that "the grant of a license [to Radiolink] was defective to
the extent that 0085.

it included authorization to use VPC frequencies." ER 0084-

Third, the Opinion incorrectly determined that adjudication of Telesaurus's
claims would be "equivalent to second-guessing the FCC's issuance of the

license." Id., at 17024. This legal conclusion is not consonant with $332
preemption jurisprudence from this Court and other Federal Circuits.3

government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service" (emphasis added) restricts the authority of a fudetøl court sitting in diversity to adjudicate a state-law claim. For the reasons discussed below, Telesaurus respectfully submits that this broad view of $332 preemption is not consonant with precedent from the United States Supreme Court. Nonetheless, given the other errors in the Opinion's preemption analysis, the Court need not resolve this collateral issue in order the grant the relief requested herein.

'The Court also assumes that $332(cX3Xa)'s admonition "no State or local

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Telesaurus respectfully submits that rehearing and reversal by the panel with
respect to the preemption issue is warranted in view of these errors.

Concurrently, Telesaurus requests en banc review and reversal with respect to the panel's preemption determination. FRAP 35(a) authorizes en banc review
where "the panel decision conflicts with a decision of the United States Supreme

Court or of the court to which the petition is addressed" or where "the proceeding involves one or more questions of exceptional importance [including] an issue on

which the panel decision conflicts with the authoritative decisions of other United
States Courts of Appeals that have addressed the issue." For the reasons discussed

below, the framework utilized by the panel in reaching its preemption determination conflicts with the decisions of this Court and those of the U.S.
Supreme Court. See v. Levine,129 S. Ct.

Altria Group, Inc. v. Good, 129 S. Ct. 538,

543 (2008); Wyeth

1187,ll95 (2009); Cipollone v. Liggett Group,

505 U.S. 504,

5I8, 522-23 (1992); Shroyer v. New Cingular Wireless Services,606 F.3d 658 (9th
Cir. 2010). Likewise, the panel's conclusion that Telesaurus's claims are
preempted (as purportedly comprising an indirect regulation of "market entry")

conflicts with decisions from both the FCC and other Federal Circuits as to the
scope of $332 preemptio

n.

See In

Re Wireless Consumers Alliance, Inc.,15 FCC

Rcd 17021, 11026-34 (2000); Pinney v. Nokia,402F.3d 430,450 (4th Cir. 2005); GTE 18 Mobilnet Ohio v.

Johnson,Ill F.3d 469,479 (6'h Cir.

1997); Smith v.,

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GTE,236F.3d1292 (11th Cir.2001); Marcus v. AT&T Corp.,138 F.3d 46,53- 55
(2d Cir.1998); Fedor v. Cingular Wireless, 355 F.3d 1069 (7th Cir. 2004). In the alternative, in the event the Court is disinclined to definitively hold
that Telesaurus's state-law claims are cognizable,

it should nonetheless: (i) vacate

the trial court's dismissal on preemption grounds; (ii) remand this case to permit the parties to obtain further FCC guidance (in the form of a declaratory ruling)

with respect to the preemption issue; and (iii) stay further adjudication of the
preemption issue, pending further FCC guidance on this matter.

II. ARGUMENT
The issue here is whether the issuance of a federal telecommunications license bars subsequent state law causes of action against the licensee, under circumstances where: (i) the defendant licensee is alleged by the plaintiff to have

wrongfully procured the license by virtue of false certifications under oath that the
subject frequencies were not already licensed; and (ii) the rights conferred by the license have been subsequently nullified by the issuing federal agency as defective
and invalid at all times. Telesaurus maintains that the answer to this question is:

"No." The panel's answer to this question was, in effect: "Yes. Due to $332
preemption." The gravamen of this Court's preemption determination is found on page
17024 of its Opinion:

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[A]t all times relevant to Telesaurus's complaint Radiolink operated under a valid FCC license granting it the authority to use those
frequencies. Although the FCC subsequently modified the license to delete the VPC Frequencies, Telesaurus's tort claims amount to a collateral challenge to the validity of the license initially granted to Radiolink by the FCC . . . Because an adjudication of Telesaurus's tort claims would be necessarily equivalent to second-guessing the FCC's issuance of a license, they are expressly preempted under the market entry prong of $ 332(cX3).

For the reasons described below, this determination is erroneous in several
crucial respects.

A. Radiolink Did Not Have a Risht to the VPC Frequencies Under A
Valid FCC License
The panel's threshold determination that Radiolink "operated under a valid FCC license" with respect to the VPC Frequencies is incorrect. The record clearly
reflects that Radiolink never had a valid license right to the VPC Frequencies. To

the contrary, as alleged in Telesaurus's Amended Complaint, in a March 4,2004
Order, the FCC stated: (i) "the Radiolink application should not have been granted

to the extent that it requested VPC frequencies . . . the subject channels were not
available for assignment to Radiolink when the application was granted because
they were previously assigned to Havens fthe predecessor of Telesaurus];" and (ii)

"the grant of a license [to Radiolink] was defective to the extent that it included
authonzation to use VPC frequencies." (emphasis added). ER 0084-0085. The

FCC's determination that "the Radiolink application should not have
granted," and that

been

"the grant of a license [to Radiolink] was defective"

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demonstrates its recognition that, as to the VPC Frequencies, Radiolink's license

was void ab

initio. In other words, this case cannot be classified in the same
in which a licensee has a valid license right which is later

category as those

forfeited due to subsequenr misconduct by the licensee.a

This distinction between a valid license right to available frequencies which

is

subsequently revoked due

to a licensee's violations of FCC law, and a

wrongfully-procured license for unavailable (e.g., already licensed) frequencies, which is later deemed to have been defective and invalid from its inception, is not

academic. The panel's incorrect determination that Radiolink "operated under

a

valid FCC license" informed the remainder of its analysis. The principal issue here

is whether Telesaurus's claims sought to "second-guess" an FCC license
determination. As discussed infra, this is a practical assessment which examines whether Telesaurus's claims may impinge upon or contradict rights granted to an

FCC licensee. The risk of such a conflict is greatly diminished where license
rights have been revoked, and virtually non-existent where the issuing agency has
ítself determined that the rights should not have been applied

for or granted in the

first place. Even those courts which have dismissed claims on $332(cX3XA)
grounds have recognized this

fact.

See, e.9., TPS Utilicom Servs. v.

AT&T Corp.,

For example, a failure of a licensee to comply with FCC law or the terms of a licenr" -uy1"ad to imposition of forfeiture, including revocation. See 4l U.S.C. $312 (aX3), (a)(4)and s03(bxlXA).

o

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223F. Supp. 2d. 1089, 1109 n. 19 (C.D. Ca.2002) ("If TPS brought the unfair
practices and tortious interference claims . . . after a determination that a party had

wrongfully participated in an FCC license auction, such claims might escape FCA
preemption").

B.

Telesaurus's Claims Do

Not Collaterallv Challenge A

License

Issuance

For similar reasons, the panel was incorrect when

it

determined that

Telesaurus's claims "collaterally challenge" a Radiolink license. Once the FCC determined that the VPC Frequencies should not have been licensed to Radiolink,

there was simply nothing left for Telesaurus to "challenge" before the FCC.
Telesaurus's claims, far from collaterally "challenging" an FCC determination, are

actually based (in part) upon the FCC's determination that Radiolink had no right
to the VPC Frequencies in the first place.s

While the analysis above should be dispositive,

if the court finds that any

question remains as to whether Telesaurus's claims are a "collateral challenge to the validity of the license," this is not the type of issue which

is resolvable on the

pleadings. When issues relating to preclusion involve factual matters that require

development

of the record, they are particularly

unsuitable

for resolution via

t Other undisputed facts in the record which support Telesaurus's claims relate to the circumstances surrounding Radiolink's wrongful procurement of the VPC Frequencies, including the fact that Radiolink applied for these frequencies (falsely certifying under oath that they were available) soon after it was outbid by Havens during the FCC auction for such frequencies.

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Federal Rule 12(bX6). See e.g., Stein v. Braum Investment and Development, Inc.,

244 Fed. Appx. 816, 818

19th

Cir. 2001) (sua sponr¿ dismissal on collateral

estoppel and res judicata grounds reversed where the trial court record was

insufficiently developed to demonstrate that the plaintiffs had a opportunity to litigate their discrimination claim

full

and fair
detainer

in a prior unlawful

proceeding); Intermodal Rail Employees Assoc. v. Burlington Northern and Santa

Fe Railway Co.,2000 U.S. App. LEXIS 963 *16-18 (9'h Cir. 2000) (dismissal
inappropriate where the evidence, argument and discovery

in the putatively

preclusive claim and the putatively precluded claim were not necessarily identical);
Whatey v. Rhydman,887 F.2d 976,978-79 (9'h Cir. 1989) (trial court dismissal on
res

judìcata

and collateral estoppel grounds reversed where factual issues existed

as

to whether the allegedly preclusive settlement agreement was signed under

duress).

In this case, it is undisputed that the FCC's grant of the VPC Frequencies on

a

Radiolink license did not directly or expressly address whether the state-law

claims asserted by Telesaurus against Radiolink were preempted. Indeed,
Telesaurus was not even a party to the proceedings pursuant to which this license grant was made. As such, there is, at a minimum, a factuøl question as to whether,

and

to what extent, the FCC's erroneous and "defective" grant of the VPC

Frequencies

to

Radiolink, relying on Radiolink's false license application

10

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statements under oath, has any preemptive effect on Telesaurus's state-law claims.

Telesaurus should have had the opportunity before the trial court.ó

to develop the record on this issue

C. Telesaurus's Claims Do Not "Second-Guess" The FCC's Issuance of a License
The gravamen of the panel's preemption decision is its determination that Telesaurus's claims are "equivalent to second-guessing the FCC's issuance of the

license." As a result of this determination, the panel concludes "because
Telesaurus's state tort claims rest on the allegation that Radiolink's FCC-licensed operation of certain frequencies was wrongful or unlawful, they are expressly
preempted under the market entry prong of $ 332(cX3XA)." Id., at 11024. Telesaurus respectfully submits that the panel's assessment of the circumstances under which a state-law claim constitutes preempted "second-

guessing" is based upon an effoneous factual assumption; i.e., its presumption that
the VPC frequency grant to Radiolink was valid in the first instance.
appears to be based

It

also

upon an unduly broad construction of ç33zpreemption which

is inconsistent with the "presumption against preemption" described in Cippolone

Moreover, as discussed infra, to the extent there is any ambiguity in the record with respect to the preemptive effect of the FCC's granting the VPC Frequencies to Radiolink, the trial court should have declined to adjudicate the motion to dismiss under the doctrine of primary jurisdiction, to permit the parties to seek the guidance of the FCC on the preemption issue. The trial court chose not to do so.

6

11

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(at page 523). In effect, the panel has held that the issuance of an FCC license is

immunity from state-law suit, even under circumstances where (as here) the license right is subsequently deemed a nullity by the issuing agency, as a result of the
licensee's false certifications under penalties of perjury as to the availability of
such frequencies. Petitioner respectfully submits that there is no legal basis for such a broad immunity. Preemption jurisprudence consistently holds that there is an "assumption that the historic police powers of the States [are] not to be superseded by the Federal

Act unless that was the clear and manifest purpose of Congress." Altria Group,
Inc. v. Good, 129 S. Ct. 538, 543 (2008). In light of the "presumption against preemption" "Congress' intent to preempt must be clear and manifest to preempt
state law in a field traditionally occupied by the states." Wyeth v. Levine,129 S. Ct.

1181,1195 (2009); Cipollone v. Ligget Group,505 U.S. 504,518,522-23 (1992):
see also

Altria Group, 129 S. Ct. at 543; ("[V/]hen the text of a pre-emption clause

is susceptible of more than one plausible reading, courts ordinarily 'accept the reading that disfavors pre-emption"') (quoting Bates v. Dow Agrosciences LLC,
544 U.S. 431 (2005). This "presumption against preemption" has also been

specifically applied within a *332 preemption context. Pínney,402F.3d at n.4
(presumption against preemption applicable to telecommunications-related claims
because "[s]tates continue to have considerable authority in the wireless

T2

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telecommunications area," and because "[t]he presumption against preemption is
even stronger against preemption of state remedies, like tort recoveries, when no

federal remedy exists.").7 Furthermore, the U.S. Supreme Court has made clear that where a

federal statute prohibits state "regulation,"
enactments

it

"most naturally refers to positive
common-law

by those [egislative or regulatory] bodies, not to

damages actions." Cipollone, 505 U.S. at 519. The Court made the same point in

Sprietsma v. Mercury Marine,537 U.S. 5L, 62-63 (2002), where

it held that the

express preemption clause of the Federal Boat Safety Act pre-empted only positive

enactments.

If "law," the Court noted "were read broadly so as to include the
it
might also be interpreted to include regulations, which would

common law,

7 Consistent with this narrow view of preemption, the President on May 20, 2009 issued a 'Memorandum for the Heads of Executive Departments and Agencies," explaining "the general policy of my Administration that preemption of State law by eiecutive departments and agencies should be undertaken only with full consideration of the legitimate prerogatives of the States and with a sufficient legal basis for preemption." This Memorandum stated: (i) "agencies should not include in regulatory preambles statements that the . . . agency intends to preempt State law through the regulation except where preemption provisions are also included in the codified regulation" (ii) "agencies should not include preemption provisions in codified regulations except where such provisions would be justified under legal principles governing preemption." (iii) "agencies should review regulations issued within the past 10 years that contain statements in regulatory preambles or codified provisions intended by the . . . agency to preempt State law, in order to decide whether such statements or provisions are justified under applicable legal principles governing preemption." See http://www.whitehouse.sov/theII A I I A Q L I

pless-office/presiden tial-memorandurn-re gardin g-preemption

t3

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render the express reference to 'regulation' in the pre-emption clause superfluous."

Id. at 63. The Court further explained that limiting the preemption

clause to

positive law "does not produce anomalous results. It would have been perfectly rational for Congress not to pre-empt common-law claims, which-unlike most

administrative and legislative regulations necessarily perform an important
remedial role in compensating ... victims ." Id. at 64. (emphasis added). As noted above, $332(cX3)(A) states that "no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service." Congress' use of the
phrase "authority to regulate," instead of a broader term -- such as "enacting or

enforcing any law, rule, regulation, standard, or other provision having the force
and effect of law," which is used in the Airline Deregulation Act of 1978

("ADA")

(49 U.S.C. Appx. 1305(aXl)), or "all laws, decisions, rules, regulations, or other
State action having the effect of law, of any State," which is used in the Employee

Rerirement Income Security Act of 1974, (29 U.S.C. S 1144(a), (cXl)) -- evinces its intent only to preempt states and local governments from prescribing rates and entry rules. Indeed, the Supreme Court observed as much when construing the

ADA's preemption provisionin Morales v. Trans World Airlines, Inc.,504U.S.
374 (1992), in which the Court noted that,

if

Congress had wanted a more limited

scope of preemption in connection with the

ADA, "it would have forbidden the

t4

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States to 'regulate rates, routes, and services,"' Morales,504 U.S. at 385. This

narrow preemption language identified in Morqles is precisely the language which
is used in $332(cX3XA). Thus, $332(cX3XA) is best read as having
superseded only enactments by state legislatures or administrative agencies that

mandate particular rates or entry rules.

In any event, within the particular context of FCC licensees, numerous
courts (including this Court), have recognized that damages can be awarded against an FCC licensee for fraud and other state-law torts without running afoul of

9332(cX3)(A) prohibition upon state-law "regulation of rates." Thus, in Shroyer

v.

New Cingular Wireless Services,606 F.3d 658 (9th Cir. 2010), this Court held that
claims by a cellular customer against a service provider for failing to provide
adequate coverage were not preempted. In doing so, the Court emphasized the

distinction between claims that directly affect rates or market entry (which are
preempted), and claims which simply relate to rates or market entry (which are not preempted):

New Cingular argues that Shroyer's claims are preempted by 47 U.S.C. $332(cX3XA) because the claims challenge the quality and rates of service . . . We reject this contention with regard to Shroyer's breach of contract claim and his misrepresentation claim. In the main, Shroyer is challenging New Cingular's rates and quality of service only insofar as they are contrary to the ones to which he had contractual rights or were misrepresented; he is not askíng the court to rule on the reasonableness of a particular rate, and the quatity of service is an issue only as it relates to, or was misrepresented as satisfying, the contract on which he sues. The claims are state law

15

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claims that do not tread on the FCC's exclusive power to regulate rates and market entry.

Id., at 661-63 (emphasis added).8
Likewise, the FCC held In Re Wireless Consumers Alliance, Inc., 15 FCC

Rcd 17021, 17026-34 (2000), that (i) $ 332 generally does not preempt the award of monetary damages based on state tort claims; (ii) state courts are not, as a
general matter, prevented by $332 from awarding damages to customers based on

violations of state consumer fraud laws; and (iii) tort laws have the function of
compensating victims, which distinguishes them from the direct forms of

regulation entrusted to the FCC. Id. at 17034; see also In re: Southwestern Bell

Mobite Systems, Inc., 14 FCC Rcd 19898 *26 (1999) ("We do not agree . . . that
state . . .consumer fraud laws relating to the disclosure of rates and rate practices

have generally been preempted . . . The legislative history of section 332 clanfies

This distinction has also been utilized by state courts evaluating ç332 issues. See Spielholzv. Superior Court,86 Cal. App. 1366,1374-15 (2001) ("4 claim that does not directly challenge the rate but directly challenges some other activity, such a false advertising, and ... seeks damages arising from the activity is not an attempt to regulate rates and is not expressly preempted under Section 332(c)(3)(A).") (emphasis added). Spielholz further held that "A judicial act constitutes rate regulation only if its príncipal purpose and direct effect are to control rates." Id. at 1314 (emphasis added); see also Pacific Bell Wireless, LLC v. PUC,l40 CaL App. 4th718,734 (2006) (holding that a public utility commission's fine against a wireless phone company was not preempted by $ 332, noting that "[t]he principal purpose and direct effect of the penalties imposed by the Commission are to prevent misrepresentations by Cingular and to compensate ... wireless customers ... The effect of these penalties on Cingular's rates is incidental, and the Commission's decisions are therefore not preempted.")
8

16

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that billing information, practices and disputes - all of which might be regulated by
state contractor consumer fraud laws -

fall within 'other terms and conditions'

which states are allowed to regulate.").e Although the case law discussing the preemptive effect of $332(c)(3)(A)'s "market entry" provision is less well-developed, the published case law that exists
does not support the panel's preemption determination in this case. The seminal

"market entry" case is Fedor v. Cíngular Wireles¡ 355 F.3d 1069 (7th Cir. 2004),

in which the plaintiff alleged that delayed charges by Cingular appeared on his bills, making his monthly charges inaccurate. Id. at 1070-1071. Cingular argued
that the plaintiffs' complaint was barred by Section332's "market entry" provision
because,

if

successful, the plaintiff's claims would "necessarily require" Cingular

to alter its infrastructure by building cellular towers in areas that it did not already
have them. Id. at 1014. According to Cingular, this kind of fundamental change in

Cingular's infrastructure would have affected Cingular's actual, physical entry into

Accord Pinney v. Nokia, 402F.3d 430, 450 (4th Cir. 2005) ("there is simply no evidence that Congress intended ... to preempt completely state law claims that are based on a wireless service provider's sale and promotion of wireless telephones."); GTE 18 Mobitnet Ohio v. Johnson,lll F.3d 469,479 (6th Cir.1991) (The language of $ 332(cX3XA) "does not compel the conclusion that ... the states may no longer adjudicate individual cases involving specific allegations of anti-competitive or discriminatory conduct."); Smith v., GTE, 236 tr.3d 1292 (1lth Cir. 2001) (customer claims stemming from allegedly exorbitant telephone leasing charges not completely preempted); Marcus v. AT&T Corp., 138 F.3d 46, 53- 55 (2d Cir. 1998) (claims alleging fraudulent billing practices not completely preempted).

e

17

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the telecommunications market. Id. The Seventh Circuit disagreed, however,

holding that this stretched the allegations in the complaint "beyond recognition."

Id. According to the Court, this was "an accounting problem, not an infrastructure
problem," and, if the plaintiff succeeded, Cingular would be required only to adjust its accounting practices. Id. Put differently, the Court determined that the

plaintiff's claim did "not relate to the construction or placement of towers at all."
rd. Telesaurus respectfully submits that the logic of the foregoing authorities mandates the conclusion that Telesaurus's claims are not preempted. While

Telesaurus's claims may "relate" to market entry in some oblique sense, their

underlying purpose is unrelated to market entrt, and their adjudication will not
affect market entry (let alone, directly so). As discussed, the FCC has already determined that the license grant of VPC Frequencies to Radiolink should not have occurred and was defective, and that, to this extent, Radiolink did not properly
have "entry" into the wireless telecommunications market.l0 There is no

conceivable sense in which an adjudication of Telesaurus's claims will disturb this

conclusion. To be clear: Telesaurus' claims do not directly or indirectly challenge
Telesaurus respectfully submits that however broad the scope of $332 "market entry" preemption might be, it cannot reasonably be construed as immunizing breaches by licensees of their duty of candor to the FCC in order to obtain frequencies under false pretenses. Such a result would undermine, rather than further, the Federal Communications Act's goal of effectively regulating the telecommunications market, and promoting fair competition in that market.
t0

18

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any FCC law or decision under which the VPC Frequencies were issued to

Radiolink (neither the FCC rules and procedures involved, nor the FCC's mistaken

1icensegrant).Moreover,theseclaimsdonotdirectlyorindirectlyseektomodify
wireless infrastructure. What Telesaurus is seeking to adjudicate is not the initial
grant of the VPC Frequencies to Radiolink, but rather the damages sustained as a

result of Radiolink procuring and using for its unjust enrichment Telesaurus's
frequencies via false pretenses (after losing the competition for them in the subject

FCC auction). When conducting its preemption analysis, this Court should not view the

FCC's granting of a license to Radiolink in the first instance as ipso facto

immunity. While this fact surely has some relevance to the preemption calculus, it
is not the end of the inquiry. The inquiry can only be properly completed upon an

examination of the entirety of the administrative record, including the FCC's

determinationsthat..theRadiolinkapplicationshou1dnothavebeengrantedtothe
extent that it requested VPC frequencies" and that "the grant of a license [to

Radiolinkl was defective." (emphasis added) There are enoffnous legal and
practical differences between state law claims asserted against FCC licensees who

hold licenses that the FCC has not revoked (indicating that the license has been and
remains valid), compared to similar claims against erstwhile licensees whose license rights have been found "defective" and invalid at all times by the FCC, and

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thus revoked. In the former instance, preemption concems are potentially

implicated because the adjudicating court is required to make a "soup*to-nuts"
determination regarding the licensee's entitlement to the licensed frequencies, an adjudication which may potentially impinge upon the FCC's exclusive authority to regulate market entry. In the latter case, by contrast, the licensee's disqualification ab initio for the frequencies has already been conclusively established by the FCC

itself. As such, in this
assess the

second circumstance, the adjudicating court need only

ancillary issue of whether the licensee acted tortiously by procuring and

profiting from frequency spectrum to which it was never entitled. This assessment
is unrelated to lawful market entry, nor is there any likelihood that this assessment

will undercut a prior FCC determination.
Like an Invalidated Patent. Should Not be Accorded Preemptive Effect
1. An Invalidated License.

While there does not appear to be any published cases evaluating $332
preemption issues within the context of defective and ínvalidatedFcc licenses, courts are routinely required to adjudicate analogous issues in the patent context.
These courts have held that aparty can assert a state-law claim against a patent licensee arising out of the wrongful procurement of a patent, where it is alleged that the patent was procured by fraud or in bad

faith. The seminal

case on the issue

is The Dow Chemical Co. v. Exxon

Corp., 139 F'.3d

I4l0 (Fed. Cir. 1998), in

which the plaintiff (Dow) asserted state-law unfair competition claims against the

20

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defendant (Exxon), arising out of Exxon's inequitable conduct in procuring patents

from the U.S. Patent and Trademark Office.rr The trial court concluded that

Dow's state-law claims were preempted by federal patent law. On appeal, the
Federal, Circuit reversed, holding:

[A] state law claim is not preempted by the federal patent law, even if it requires the state court to adjudicate a question of federal patent

law, provided the . . . cause of action includes additional elements not found in the federal patent law cause of action. . . The state law cause of action at issue here does not present an obstacle to the execution and accomplishment of the patent laws. . . While it is true that . . . the state court would be required to make a determination of an issue of patent law in reaching its judgment on the underlying tort, this determination would only be ancillary to its central purpose . . . The instant case. . . concerns an allegation of bad faith enforcement of a reputedly unenforceable patent. . . the tortfeasor here allegedly knew that its patent was unenforceable when it engaged in market misconduct. . . lthus] [t]he tort claim at issue here is not premised upon bad-faith misconduct in the PTO, but rather is premised upon bad-faith misconduct in the marketplace. . . A state has every right to protect its citizens and residents in their contractual relations from acts of wrongful interference . . . by any party, including a patentee. . . Any award of damages, then, would be based on local conduct that the state has a right to regulate; proof of acts before the PTO in such a trial are merely evidence of the patentee's bad-faith.

Id., at l4l3-18.
See also, BriteSmile, Inc. v. Discus Dental,

Inc., 2005 U.S. Dist. LEXIS 30855

*16-17 (N.D. Ca. November 18, 2005) ("[I]f the patentee knows that the patent is Specifically, Dow alleged that Exxon obtained the patent by falsely claiming that its polymers were superior to the prior art, while withholding its knowledge of a group of polymers which reputedly could achieve the same or better results than the Exxon polymers and which allegedly anticipated the claims in Exxon's patent. Id. at 1412.
11

21

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invalid, [or] unenforceable . . . and it represents to the marketplace that competitor
is infringing the patent, a clear case of bad-faith representations is made out . .
.

Here, Discus alleges . . .that BrightSmile threatened Discus' customers with patent

litigation based on

a patent

BrightSmile admitted to this court had errors in the

prosecution [that] had affected the ability to enforce the . . . patent . . . Thus, Discus alleges that BrightSmile represented to Discus' customers that Discus is

infringing

a patent

BrightSmile knows is invalid, unenforceable or not infringed.

Therefore, the Court finds Discus suffîciently alleges bad-faith conduct by

BrightSmile to avoid preemption this procedural stage "); GMP Technologies, LLC
v. Zicam, LLC,2009 U.S. Dist. LEXIS 115523 *10 (N.D. Il1. December 9,2009);

Dimension One Spas, Inc. v. Coverplay, 1nc.,2008 U.S. Dist. LEXIS 69526 *48-58
(S.D. Ca. September 5, 2008) ("Dimension One asserts state law claims . . . based
on the premise that Coverplay's US Patent . . . is invalid and that Coverplay

knowingly promoted an invalid patent so as to unfairly compete and interfere with
Dimension One's business of licensing . . . Dimension One intends to show that the

invalidity of the 599 Patent was so obvious that fdefendant's] knowledge of the invalidity when he made the allegedly tortious statements could be inferred . . .
Based on the foregoing, Dimension One has raised a genuine issue of fact fas to]

whether the 599 Patent is valid. This fact is material because invalidity is the basis

for Dimension One's intended showing that ldefendant] knew at the time of the . ..

22

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allegedly tortious statements to Dimension One's licensees and potential licensees
that the 599 patent is invalid."); Landmark Graphics Corp. v. Seismic Micro Technology, lnc.,410 F. Supp. 2d.751,759 (S.D. Tex.2007) ("SMT's unfair

competition counterclaim alleges that Landmark has sought to enforce the 570
Patent against SMT with knowledge that the patent is unenforceable due to

inequitable conduct. This counterclaim does not rest entirely on actions before the
PTO but alleges 'marketplace misconduct.'. . . The motion to dismiss the state law

unfair competition counterclaim is denied.").
These cases should inform this Court's decision. Indeed, their logic applies

with even greater force to this case. Unlike the foregoing cases, in which the
adjudicating courts were concededly required to resolve "ancillary" issues of
patent law, the District Court in the case sub judice need not have adjudicated any

FCC licensing issues. The issue in this case, as in the above-cited authorities, is whether the putative tortfeasor asserted a federally-conferred right in bad faith

which it knew it could not assert. As in the case of Dow Chemical, the allegations
contained in the four corners of Telesaurus' complaint are premised upon "bad-

faith misconduct in the marketplace," and proof of acts before the FCC at trial,
any, would simply be evidence of Radiolink's bad-faith.l2

if

Supreme Court has recognized that an action is cognizable against apafiy for abusing a federally-conferred right. For example, under the so-called "sham exception" to the Noerr-Pennington

'' Outside of a preemption context, the U.S.

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2. In the Alternative, Remand is Proper to Permit the Parties to Seek a Declarator]¡ Ruling from the FCC

Finally, in the alternative, if this Court is disinclined to definitively hold that
Telesaurus's state-law claims are cognizable,

it should direct the trial court, under

the doctrine of primary jurisdiction, to: (i) vacate its grant of Radiolink's motion to dismiss, to permit the parties to request guidance from the FCC (in the form of a

declaratory ruling) as to the scope of preemption; and (ii) stay further adjudication

of the preemption issue, pending further FCC guidance on this matter.
The doctrine of primary jurisdiction permits both trial courts and appellate
courts to stay the adjudication of cases, in order to permit an administrative agency

to address a legal issue within its unique expertise. See e.g., Syntek Semiconductor
Co. Ltd. v. Microchip Technology, \nc.,307 F.2d775 (9'h Cir. 2002) (vacating trial

doctrine, apafiy can be liable under antitrust law for misusing the federal administrative process. Thus, in Californía Motor Transport Co. v. Trucking Unlimited,404 U.S. 508 (1971), the Supreme Court held that a concerted action by petitioners to institute state and federal proceedings to defeat applications by respondent to acquire operating rights was potentially actionable under the Clayton Act. The Court noted that where "the alleged conspiracy is a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor," application of the Sherman Act is justified. Id., at 51 1. The Court concluded "the machinery of the agencies . . . was effectively closed to respondents, and petitioners indeed became the regulators of the grants of rights, transfers and registrations to respondents - thereby depleting and diminishing the value of the businesses of respondents." Id. As a result, "abuse of those processes produced an illegal result." Id., at 513. The Court further determined that "actions of that kind cannot acquire immunity" and that "if the end result is unlawful, it matters not that the means used in violation may be lawful." Id., at 513, 515.

24

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court grant of summary judgment and remanding with instructions to stay

copyright action pursuant to the primary jurisdiction doctrine, to allow the parties to seek guidance from the Register of Copyrights as to whether a copyright
registration was invalid); U.S. v. Henri, 828 F.2d 526, 528 n.3 (9'h Cir. 1987); see
also Ass'n of

Int'l Automobile Manufacturers, Inc. v. Commissioner,

Massachusetts Dept. of Environmental Protection,196F.3d302 (1" Cir. 1999);

Fontan-De-Maldonado v. Lineas Aerèas Costarrícenses,936F.2d 630 (1't Cir.

l99l)

(vacating trial court grant of summary judgment and remanding with

instructions to stay action to permit appellant to challenge tariff before the Department of Transportation). The Federal Communications Commission is
expressly vested with the authority to resolve issues within its expertise via

declaratory rulings. See 5 U.S.C. $55a(e) ("The agency, with like effect as in the
case of other orders, and in its sound discretion, may issue a declaratory order to

terminate a controversy or remove uncertainty"); 47 C.F.R. $ 1.2 ("The Commission may, in accordance with section 5(d) of the Administrative Procedure

Act, on motion or on its own motion issue a declaratory ruling terminating

a

controversy or removing uncertainty."). The FCC has utilized this authority in the
past to make determinations with respect to the FCA's preemptive effect over state

law claims. In fact, the FCC's determination in In Re Wireless Consumers

25

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Alliance, Inc., supra, was precipitated by just such a request for a declaratory ruling in the case of Spiethtozv. Superior Court, 86 Cal. App. 4'h 1366 (2001).
Indeed, the unique aspects of this case may render it particularly suitable for
a remand

with instruction to the trial court to stay proceedings and thereby allow

the parties to obtain FCC input as to the applicability of preemption to this matter

(particularly, since the Court has already chosen to remand in any event). First,
this case appears to be unique among ç332 preemption cases to the extent it

involves actions undertaken by the defendant under a void ab initío license (which,
as discussed, makes this case analogous to cases

involving wrongfully prosecuted

patents in which courts have found that preemption does not bar state-law claims).

The FCC, as the body which granted the VPC Frequencies to Radiolink, the body

which ultimately revoked them, and the body uniquely qualified to address the
scope

of $332 preemption, may be in a singular position to assess the extent to

which the revocation of the VPC Frequencies relates to the preemption issue. Moreover, unlike virtually all of the preemption authorities cited in the Court's Opinion, this case involves preemption based exclusively upon the $332 "market entry" provision.t' While the Court concludes in its Opinion that the logic of these authorities (in particular, the logic in the In re Wireless decision) applies

t' See Opinion, atpage 17021(noting that neithet Shroyer, Wireless, involved the "market entry" prohibition of $332).

rLot

In re

26

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equally to cases involving purported market entry preemption,l* the FCC (which,
after all, was the body which decided In re Wireless) may take a different view. On

this additional basis, a remand with instructions to the trial court to stay
proceedings to allow the parties to obtain FCC input as to the applicability of preemption may be approPriate.

III.

CONCLUSION

For each of the foregoing reasons, Telesaurus respectfully requests that this
matter be reheard by the panel oÍ en banc, that the Opinion be vacated to the extent

it held Telesaurus's state-law claims to be preemptedby 47 U.S.C. $332 and that
the judgment of the trial court with respect to preemption be reversed. In the

alternative, the Court should vacate the trial court's dismissal to permit the parties, under the doctrine of primary jurisdiction, to seek further FCC guidance with
respect to the preemption issue.

Dated: October 29, 2010

NOSSAMAN LLP

lsl PATRICK J. RICHARD (SBN 131046)
prichard
@

nossaman.com

TAMIR DAMARI
tdamari@nossaman.com 50 California Street, Thirty-Fourth Floor
to

Opinion, at pages t1021-22.

21

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San Francisco, California 941 I 1 -41 07

Telephone: (415) 398-3600 Facsimile: (al5) 398-2438 Attorneys for Appellant TELESAURUS VPC, LLC

28

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CERTIFICATE OF COMPLIANCE WITH CIRCUIT RULE 40-1(a)
Pursuant to Circuit Rule 40-1(a), Appellant, Telesaurus, VPC, LLC, reports

to the Court that the brief is proportionately spaced, utilizing 14 point Times New
Roman typeface and containing 6,487 words, as indicated by the computenzed

word count of counsel's word processing system.

Dated: October

29,2010

NOSSAMAN LLP

By:

/s/
Patrick J. Richard

Attorneys for Appellant TELESAURUS VPC, LLC.

29

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CERTIFICATE OF SERVICE

I hereby certify that on October 29,2010,I electronically filed the foregoing
with the Clerk of the Court for the United States Court of Appeals for the Ninth
Circuit by using the appellate CMFÆCF system.

I certify that all participants in the case are registered CMÆCF
that service will be accomplished by the appellate CMIECF system.

users and

Dated: October

29,2010

NOSSAMAN LLP

By:

lsl
Patrick J. Richard

Attorneys for Appellant TELESAURUS VPC, LLC.

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PROOF OF SERVICE
The undersigned declares

:

I am employed in the County of San Francisco, State of California. I am
over the age of 18 and am not a party to the within action; my business address is c/o Nossaman LLP, 50 California Street, Thirty-Fourth Floor, San Francisco,

California

941 I I -41 07

.

On October 29,2010,I served the foregoing APPELLANT

TELESAURUS VPC, LLC'S REQUEST FOR PANEL REHEARING AND

REHEARING EN BANC on parties to the within action

as

follows:

(By U.S. Mail) On the same date, at my said place of business, a true copy
thereof enclosed in a sealed envelope, addressed as shown on the attached
service

list

was placed for collection and mailing following the usual

business practice of my said employer.

I am readily familiar with my said

employer's business practice for collection and processing of correspondence

for mailing with the United States Postal Service, and, pursuant to that
practice, the correspondence would be deposited with the United States
Postal Service, with postage thereon fully prepaid, on the same date at San

Francisco,

C

alifornia.

32

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Counsel for Defendants/Appellees Roger L. Cohen Esq. Michelle C. Lombino, Esq.
Jaburg & Wilk 3200 North Central Avenue, Suite 2000 Phoenix, AZ 85012 Phone (602) 248-1000 Fax (602) 248-0522 E-Mail: rlc @jaburswilk.corn

Counsel for 3'd-PartvDefendant/Appellees Aaron C. Schepler Esq. Greenberg Traurig, LLP 2315 E. Camelback Rd. Suite 700 Phoenix, AZ 85016 Phone (602) 445-8000 Fax (602) 445-8100 E-Mail: scheplera@ gtlaw.com

Jessica Libbey

252660_1.DOC

JJ

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EXHIBIT

1

DocumentS

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
Tsr-Eseunus VPC,

LLC,

a

Delaware Limited Liability Company,

PlaintiffAppellant,
V.

Rexov PowER, an individual; Parrucre A. PowEn, an individual; Raoror-nr CoRroRenoN,
D efen d ant s - App
V.
e I I e es,

No. 09-15446 D.C. No. 2:01-cv-0l3ttNVW
OPINION

TBlBcovn¡txIcATIoNS AssocrerroN, INC., a Virginia corporation; EWA, INC., a Virginia corporation, dlbla Enterprise Wireless Alliance, Thir d - P ar ty - D efen d ant - App e I I e es.
It rousrRrer.

Appeal from the United States District Court for the District of Arizona Neil V. Wake, District Judge, Presiding Argued and Submiued
February 11, 2010-San Francisco, California

Filed October 8, 2010
Before: John T. Noonan, Marsha S. Berzon and Sandra S. Ikuta, Circuit Judges.

Opinion by Judge Ikuta

17003

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Tples¡.unus v. PowER

17007

COUNSEL
Pakick J. fuchard, Nossaman LLP, San Francisco, California, for the appellant.

Kathi Mann Sandweiss and Roger L. Cohen, Jaburg & V/ilk, P.C., Phoenix, Arizona, for the appellees.

OPINION

IKUTA, Circuit Judge:

In this appeal, we hold that the complaint filed by Telesaurus VPC, LLC ("Telesaurus") against Radiolink Corporation ("Radiolink") did not allege facts sufftcient to establish
that Radiolink is a "common carrier" subject to suit under the Federal Communications Act of 1934 ("FCA"), 47 U.S.C. $$ 206-07. We therefore affirm the district court's dismissal

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17008

Telesnunus v. PowBR

of Telesaurus's FCA claims, but conclude that the district court erred in denying Telesaurus leave to amend. We also
hold that Telesaurus's claims under Arizona law for conversion, unjust enrichment, and intentional interference with prospective economic advantage are expressly preempted by $ 332(c)(3)(A) of the FCA, which preempts state regulation of market eîW. Id. $ 332(cX3XA) We therefore affirm the dismissal of Telesaurus's state-law claims.

I
Both Telesaurus and Radiolink provide mobile radio services to customers. In 1999, Telesaurus's predecessor in interest, Warren Havens, bid in a competitive auction and obtained licenses for five VHF Public Coast radio frequencies (the "VPC Frequencies")1 in Phoenix, Af'zona. Radiolink also participated in this auction, but lost to Havens's higher bid. Havens subsequently assigned his interest in the frequencies

to

Telesaurus.2

Three months after Telesaurus obtained the VPC Frequencies, Radiolink submitted an application to the Federal Communications Commission ("FCC") for various frequencies including the VPC Frequencies. As required by FCC rules, Radiolink's application included a report from the Industrial Telecommunications Association ("ITA"), one of the FCC's authorized frequency coordinators, which stated that the VPC Frequencies were available at no charge on a first-come, firstserved basis. See generally 47 C.F.R. $ 90.175. Telesaurus alleges that Radiolink knew these representations to be false.

The FCC subsequently granted a mobile service license to
IVHF Public Coast frequencies, or "VPC frequencies," are a set of radio frequencies in the 160 MHZ range that the FCC has reserved for wireless radio services.
zFor convenience, we refer to both Havens and Telesaurus as "Telesaurus."

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Tsles¡,r;nus v. Powpn

17009

Radiolink to use the VPC Frequencies. The license included the notation: "Regulatory Status: PMRS," indicating that Radiolink was operating a private land mobile radio service. Radiolink used these frequencies to operate its two-way mobile radio business, through which it provided customers with wireless communications in the greater Phoenix area. These operations continued until at least 2005.

After being informed by potential business partners that Radiolink was using the VPC Frequencies, Telesaurus reported Radiolink's use to the FCC. The FCC initiated proceedings sua sponte to consider whether it should modiff
Radiolink's license. In a March 4,2004 memorandum opinion and order, the FCC concluded that it should not have granted Radiolink the VPC Frequencies, and proposed to modiff Radiolink's license to remove those frequencies. The FCC noted that "a proposed modification under the circumstances presented would promote the public interest, convenience, and necessity because the subject channels were not available for assignment to Radiolink when the application was granted because they were previously assigned" to Telesaurus.
Radiolink moved for reconsideration, arguing that the coordination error resulted not from any fault on the part of Radiolink, but rather from a mistake made by the FCC and its certified frequency coordinator, ITA, which erred in selecting the frequencies for Radiolink's application. Telesaurus filed an opposition to Radiolink's motion, arguing that Radiolink's claim of innocence in the selection of the VPC Frequencies was not credible and that Radiolink was improperly pressuring Telesaurus to relinquish the VPC Frequencies. Telesaurus urged the FCC to investigate these issues and impose sanctions on Radiolink.

After issuing its March 4, 2004 order, the FCC directed ITA to f,rnd replacement frequencies for Radiolink, and then on December 21, 2004 granted Radiolink a license to use
replacement frequencies recommended by the ITA. On July 7,

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17010

Tnleseunus v. PoweR

2005, the FCC issued a final modification order deleting the VPC Frequencies from Radiolink's license. The FCC concluded that "it is in the public interest to modifu Radiolink's license to delete" the VPC Frequencies, because "the frequencies were not available" for private land mobile radio licensing, and should be made available for Telesaurus's use. In addition, the FCC noted that Radiolink had already obtained replacement channels, "which will minimize the impact of this action on Radiolink's operations." The FCC did not mention Telesaurus's request for further investigation or sanctions.

Two years later, Telesaurus filed suit in federal district
court, alleging that Radiolink violated provisions of the FCA, 47 U.S.C. $$ 301,308,309,312(a) and 503(b),'and in addition was liable for conversion, unjust enrichment, and intentional interference with prospective economic advantage under Anzona law.

Radiolink sought to dismiss the complaint for failure to state a claim. See FBo. R. Cry. P. 12(bX6). In response to Telesaurus's federal claims, Radiolink argued that the FCA provides a private cause of action only against "common carriers," 47 U.S.C. $$ 206-207, not against private mobile service providers such as Radiolink. Second, it argued that Telesaurus could not bring a claim for violation of $$ 301, 308, 309, 3I2(a) and 503(b) of the FCA, because those provisions impose duties only on the FCC, not on licensees. With respect to Telesaurus's state claims, Radiolink sought dismissal on the grounds that Telesaurus had no property right in the VPC Frequencies or, in the alternative, that the claims
$ 301 prohibits radio transmission without a license; 308 sets forth the requirements for obtaining a license; 47 $ U.S.C. $ 309 describes the FCC's procedure for granting a license; 47 U.S.C. $ 312(a) outlines administrative sanctions and procedures for the revocation of a license; and47 U.S.C. $ 503(b) sets forth penalties for violations of the conditions of a license or provisions of the FCA. 3In

brie¡ 47 U.S.C.

47 U.S.C.

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Teleseunus v. Powen $ 332(cX3)(A)

17011

were either expressly or impliedly preempted by
of the FCA, 47 U.S.C. $ 332(c)(3)(A).4 The district court dismissed Telesaurus's complaint with prejudice, denying Telesaurus's motion for leave to amend. Reasoning that the FCC's designation of Radiolink as a private land mobile radio service on its license was subject to deference under Chevron U.S.A., Inc. v. NRDC, Inc.,46l U.S. 837, 842-43 (1984), the district court held that Radiolink was not a common carrier as a matter of law. The court fuither held that Radiolink's state-law claims were expressly preempted under $ 332(cX3)(A) of the FCA. Telesaurus timely
appealed.

u
We review de novo the dismissal of a complaint for failure to state a claim. Alarco Pay Television, Ltd. v. Gen. Instrument Corp., 69 F.3d 381,384-85 (9th Cir. 1995). For purposes of our review, we begin "by identiffing pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Ashcroft v. Iqbal, I29 S. Ct. 1937, 1950 (2009). We disregard "[t]hreadbare recitals of the elealn relevant part, 332(c)(3)(A) states: $

Notwithstanding sections 152(b) and 221þ) of this title, no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating the other terms and conditions of commercial mobile services. Nothing in this subparagraph shall exempt providers of commercial mobile services (where such services are a substitute for land line telephone exchange service for a substantial portion of the communications within such State) from requirements imposed by a State commission on all providversal availability
rates.

ers of telecommunications services necessary to ensure the uniof telecommunications service at affordable

,¡d

$ 332(cX3XA).

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17012

Ter-sslunus v. PownR

conclusory statements Id. at 1949. After eliminating such unsupported legal conclusions, we identiff "well-pleaded factual allegations," which we assume to be true, "and then determine whether they plausibly give rise to an entitlement to relief." Id. at 1950. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face;" that is, plaintiff must "plead[ ] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 1949 (intemal quotation marks omitted); see Evanns v. AT&T Corp., 229 F.3d 837, 839 (9th Cir. 2000).

ments

of a cause of action, supported by mere

We review the denial of leave to amend a complaint for abuse of discretion. Metzler Inv. GMBH v. Corinthian Colls-, Inc., 540 F.3d 1049, 1072 (9th Cir. 2008). A district court may deny a plaintiff leave to amend if it determines that "allegation of other facts consistent with the challenged pleading could not possibly cure the deficieîc!," Schreiber Distrib. Co. v. Serv-Well Furniture Co.,806F.2d 1393,1401 (9th Cir. 1986), or if the plaintiff had several opportunities to amend its complaint and repeatedly failed to cure deficiencies, Foman v. Davis,371 U.S. 178, 182 (1962).

III
We first consider whether the district court erred by dismissing Telesaurus's federal claims under $$ 206 and207 of the FCA, which provide a cause of action against "common carriers." As relevant here, $ 206 allows a party to bring an action for damages against "common carriers" who violate provisions of the FCA by their acts or omissions. 41 U.S.C. $ 206.u Section 207 provides that a person claiming to be
ssection 206 provides, in pertinent part:
case any common carrier shall do, or cause or permit to be done, any act, matter, or thing in this chapter prohibited or

In

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TeLesRunus

v. Pownn

17013

damaged by a common carrier may bring a complaint either before the FCC itself or as a civil suit in district court, "but such person shall not have the right to pursue both such remedies." Id. 5 207.6

[1] Radiolink argued, and the district court agreed, that it is not a "common carrier" for purposes of $ $ 206 and 207 . ln evaluating this argument, we begin with the language of the statute. Greyhound Corp. v. Mt. Hood Stages, [nc.,437 U.S. 322, 330 (T978); see McCarthy v. Bronson, 500 U.S. 136, 139 (1991). The FCA's general definition of "common carrier" appears in $ 153(10), which defines the term as: "any person engaged as a common carrier for hire, in interstate or foreign communication by wire or radio or interstate or foreign radio transmission of energy . . . |' 47 U.S.C. $ 153(10). Despite this general definition, a mobile service such as Radiolink is a common carrier only if it meets the more specific definition of "common carrief' set forth in $ 332(c)(1). This section provides that "[a] person engaged in the provision of a service that is a commercial mobile service shall, insofar as such person is so engaged, be treated as a common carrier" for purposes of the FCA. Id. $ 332(cXlXA). Any mobile service
declared to be unlawful, or shall omit to do any act, matter, or thing in this chapter required to be done, such common carrier shall be liable to the person or persons injured thereby for the full amount of damages sustained in consequence of any such violation of the provisions of this chapter, together with a reasonable counsel or attorney's fee . . . .

rd. ç206

Gsection 207 provides:

ject to the provisions of this chapter may either make complaint

Any person claiming to be damaged by any common carrier sub-

to the Commission as hereinafter provided for, or may bring suit for the recovery of the damages for which sttch common carrier may be liable under the provisions of this chapter, in any district court of the United States of competent jurisdiction; but such person shall not have the right to pursue both such remedies.

rd.5207.

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1'10t4

Tpr-esnuRus

v. PowrR

"that is not a commercial mobile service or the functional equivalent of a commercial mobile service" is defined as a "private mobile service," and therefore not a common carrier for purposes of the FCA.? 1d $$ 332(c)(2), (dX3); see In re Implementation of Sections 3Q,Q and 332 of the Communications Act Regulatory Treatment of Mobile Services: Second Report and Order, 9 F.C.C.R. I4ll, 1425-1454 (Mat- 7, 1994) (FCC regulations further defining these terms). The FCA defines "commercial mobile service" as "any mobile service . . . that is provided for prof,rt and makes interconnected service available (A) to the public or (B) to such classes of eligible users as to be effectively available to a substantial portion of the public, as specif,red by regulation by the Commission ." 47 U.S.C. $ 332(d)(1). "Interconnected service," in turn, is defined as "service that is interconnected with the public switched network . . . or service for which a request for interconnection is pending . . . ." 47 U.S.C. $ 332(dX2). In sum, a mobile service provider such as Radiolink qualifies as a "common carrier" under the FCA only to the extent it is "engaged in the provision of a service" that is: (1) for profît; (2) interconnected (or pending interconnection) with the public switched network; and (3) available to the public or other specified users. Id $$ 332(d)(l)-(2).
We thus consider whether Telesaurus's complaint alleges facts sufficient to establish that Radiolink is a common carrier. The complaint alleges: "Radiolink as a common carrier, knowingly violated 47 U.S.C. $$ 308 and 309, and other sectionfs of] the Communications Act"; that Radiolink "used the Converted Frequencies for commercial, common-carrier (as def,rned by the FCC) two-way radio service involving chargTSection 332(dX3) provides:

the term "private mobile service" means any mobile service (as defined in section 153 of this title) that is not a commercial mobile service or the functional equivalent of a commercial mobile service, as specified by regulation by the Commission. 47 U.S.C. $ 332(dX3).

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17015

ing various customers for use of mountain-top and other high radio repeater sites to provide wireless communications in the greater Phoenix region"; and that Radiolink "carried on this for-prof,rt common carrierf ] wireless service" for many years.

[2] We do not assume the truth of the complaint's bare legal conclusion that Radiolink is a common carrier, Iqbal, 129 S. Ct. at 1950, but instead consider whether the complaint's well-pleaded facts are sufficient to state a claim. Telesaurus's complaint plausibly alleges that Radiolink is a forprofit endeavor, thus satisffing one of the elements required to meet the definition of a common carrier. See 47 U.S.C. $ 332(dxl)-(2). But the complaint does not adequately allege that Radiolink's service is interconnected or pending interconnection, as defined in $ 332(d)(2), or that it is provided to the public or the other users specified in $ 332(d)(l). Id. As such, we lack "sufficient factual matter, accepted as true" to establish that Radiolink is a common carrier. Iqbal, I29 S.Ct. at
1949.

Telesaurus argues that Radiolink must be deemed to be a common carrier because it was using the VPC Frequencies, which the FCC designated for use only by commercial mobile services. We reject this tautology. As explained above, the definition of "commercial mobile services" does not tum on the nature of the frequencies being used, but rather on whether the service being provided meets certain cnteria. See 47 U.S.C. $ 332(dX1)-(2); see also S.W. Bell Tel. Co. v. FCC, 19 F.3d 1475, 1481 (D.C. Cir. 1994) ("'Whether an entity in a given case is to be considered a common carrier or a private canier turns on the particular practice under surveillance.").
Because a private cause of action under $$ 206 and 207 may be brought only against a "common carrier," and because

[3]

Telesaurus has failed to make a plausible allegation that Radiolink is such a carrier, we agree with the district court that Telesaurus has failed to state a claim under the FCA. 47 u.s.c. $$ 206-07.

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Tu.EsnuRus v. PoweR

Given this conclusion, we turn to Telesaurus's argument that the district court erred in denying it leave to amend its complaint. As noted above, the district court concluded that the "Regulatory Status: PMRS" notation on Radiolink's license was a determination by the FCC, entitled to deference under Chevron,467 U.S. at 843, that Radiolink was not a common carrier for purposes of Telesaurus's suit. Under Chevron, we defer to an agency's construction of the statute it administers if "the statute is silent or ambiguous with respect to the specific issue," and the agency's interpretation "is based on a permissible construction of the statute." See id. Moreover, even if an agency's decision does not qualiff for Chevron deference, we still give "considerable weight" to the "well-reasoned views of the agencies implementing a stafute," in proportion to "the degree of the agency's care, its consistency, formality, and relative experhress, and to the persuasiveness of the agency's position." United States v. Mead Corp.,533 U.S. 218, 227-28, 234-235 (2001) (citing Skidmore v. swift & co.,323 u.s. 134, 139-40 (1944)) (footnotes and internal quotation marks omitted).

[4] In this case, however, the parties have not identified, and we are not aware of, any authority indicating that the FCC's notation on Radiolink's license constitutes an interpretation entitled to Chevron deference. And, given the absence of any reasoned analysis by the FCC explaining the "PMRS" notation, we cannot give it significant weight under Mead and Skidmore. See Mead,533 U.S. at 228; Skidmore,323 U.S. at 140. Indeed, it is far from clear that the bare notation "PMRS" on Radiolink's license, without more, even represents the FCC's considered judgment that Radiolink is a "private mobile service" for purposes of Telesaurus's suit. See 47 U.S.C. $ 332(cX2), (dX3). Furthermore, "common carrier" status depends upon the services Radiolink is providing to its customers, an inquiry not necessarily identical to the question of regulatory status noted on a license. Id. $ 332(dX1)-(2); see S.W. Bell, 19 F.3d at 1481. In light of these considerations, the notation on Radiolink's license lacks any " 'power to per-

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17017

suade,'" Mead,533 U.S. at229 (quoting Skidmore,323 U.S. at 140), and therefore is not entitled to deference.

"PMRS" notation on Radiolink's license compelled the conclusion that, as a matter of law, Radiolink was not a common carrier for purposes of Telesaurus's suit. Because the district court's basis for denying leave to amend was incorrect, and Radiolink has not identified any other reason that amendment would be futile, we conclude that the district court abused its discretion by denying Telesaurus leave to amend. See Schreiber, 806 F .2d at 1402; Bonanno v. Thomas,309 F .2d 320, 322 (9th Cir. 1962).8

[5] The district court thus erred in holding that

the

IV
Telesaurus also appeals from the dismissal of its state tort claims for conversion, unjust enrichment, and intentional interference with prosp ective economic adv antage. Telesaurus alleges that Radiolink knew that Telesaurus alone was rightfully licensed to use the VPC Frequencies, but submitted a license application to the FCC that falsely charactenzed the frequencies as available. According to Telesaurus, Radiolink subsequently used the VPC Frequencies wrongfully and in violation of Telesaurus's rights. As a result, Telesaurus alleges that it lost specific economic opportunities and incurred damages. Telesaurus argues that the district court erred in holding that the FCA expressly or implicitly preempts these claims.
we affirm the dismissal of Telesaurus's complaint on this ground, we do not reach Radiolink's argument that no private right of action under 47 U.S.C. $$ 206 and207 is available for breach of 47 U.S.C. $$ 301, 308, 309, 312(a) and 503(c)(l). The district court will have the opportunity to address Radiolink's argument on this issue if Telesaurus is able to amend its pleadings to make a plausible allegation that Radiolink is a common carrier.
sBecause

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A
"The purpose of Congress is the ultimate touchstone of preemption analysis." Cipollone v. Liggett Group, lnc.,505 U.S. 504, 516 (1992) (plurality opinion) (internal quotation marks omitted). Because "Congress may indicate pre-emptive intent through a statute's express language or through its structure and purpose," Altria Group, Inc. v. Good,129 S.Ct. 538,543 (2008), we first look to the text of the FCA to determine whether Congress explicitly preempted Radiolink's common law claims. See generally Metrophones Telecom., Inc. v. Gloòat Crossing Telecom., Lnc.,423 F.3d 1056, 1071-72 (gth

Cir. 2005).
to mobile services, $ 332(cX3)(A), states in relevant part that "no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating the other terms and conditions of commercial mobile services." 47 U.S.C. $ 332(cX3)(A). Under this section, a state enactment may be preempted either because: (1) the enactment regulates the rates charged by a mobile service; or (2) because the enactment regulates the market entry of any such service.
The FCC has interpreted the scope of this preemption provision in In re Wireless Consumers Alliance, (nc.,1.5 F.C.C.R. 17021, 17026-35 (2000), an interpretation that we adopted in Shroyer v. New Cingular llireless Services, Inc. See 606 F.3d 658, 662 &. n.2, 663 (gth Cir. 2010).' In In re Wireless, the
eln the course of discussing In re Wireless's determination that certaln state tort claims were not preempted by $ 332(c)(3), Shroyer noted that "[b]ecause the FCC is authorized to issue binding legal rules, an order issued under that authority is entitled to Chevron deference." See Shroyer, 606 F.3d at 662 n.2. Shroyer did not address the Supreme Court's recent statement that it does not give Chevron deference to "an agency's conclu'

[6] The express preemption provision of the FCA relevant

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17019

FCC considered a petition seeking a declaratory ruling that $ 332(c)(3)(A) precluded state courts from awarding monetary relief against commercial mobile radio service providers for a range of state tort and contract actions. 15 F.C.C.R. at IT02L Commenters argued that such actions were preempted because the adjudication of monetary damage claims would per se "require[ ] the [state] court to regulate rates" in contravention of $ 332(c)(3xl) Id. at 17024-25.

In a thorough and well-reasoned opinion, the FCC rejected this per se approach, adopting instead a case-by-case analysis for preemption of state tort actions under $ 332(c)(3)(I). Id. at 17022. First, the FCC determined that'Judicial action can constitute state regulatory action for purposes of Section 332," and thus may be expressly preempted under that provision. See 15 F.C.C.R. at 17027 (emphasis added). The FCC explained that "[t]his conclusion comports with the Supreme Court's determination that a judicial decision can constitute state action, as well as with the determinations of the Supreme Court and other courts that, like legislative or administrative action, judicial action constitutes a form of state regulation." Id. at 17027 & nn.39-40 (citing, inter alia, Shelley v. Kraemer, 334 U.S. I (1948) and BMll of N. Am., Inc. v. Gore,517 U.S. ssg, 572 n.l7 (1996)).
Second, the FCC determined that although "[s]ection 332 does not generally preempt the award of monetary damages by state courts based on state tort and contract claims," it
sion that state law is pre-empted," but rather accords weight to the "agency's explanation of state law's impact on the federal scheme" based on "its thoroughness, consistency, and persuasiveness." Wyeth v. Levine, 129 S.Ct. I 187, 1201 (2009) (citing Mead, 533 U.S. at 234-35; Skidmore,323 U.S. at 140). In considering In re lhireless's interpretation of $ 332(c)(3), however, application of either the Skidmore factors or Chevron deference would yield the same result. Therefore, we need not address the question whether some or all of the FCC's analysis in In re llireless is entitled to
Skidmore rather than Chevron deference.

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Tnr-psRuRus

v. Powpn

"bars state regulation of, and thus lawsuits regulating, the entry of or the rates or rate structures of fmobile service] providers." Id. at 11026, 17028. As relevant to the rate preemption alleged in In re Wireless, the FCC held that if "the award of monetary damages [is] necessarily equivalent to rate regulation," or required a court to "rule on the reasonableness of [a] . . . carrier's charges," it is preempted. Id. at 17028, 17035. The FCC emphasized that "whether a specific fclaim] is prohibited by Section 332 wlll depend on the specific details of the award and the facts and ôircumstances of a particular case." Id. at 17040.
Shroyer adopted In re Wirel¿ss's interpretation of $ 332(c) along with its analytical framework. See 606 F.3d at 662-63. ln Shroyer, a plaintiff filed a class action against a wireless service provider, alleging that his cell-phone service had been "severely degraded" following the merger of his service provider with another. Id. at 661. The plaintiff sought a declaratory judgment as well as damages for alleged breach of contract, fraud, and unfair competition. Id. The service provider argued that the plaintiffs claims were preempted by $ 332(cX3)(A) because the claims "challenge[d] the quality and rates of service, and those areas are reserved exclusively to the FCC." Id. (citing 47 U.S.C. $ 332(cX3XA)).

In considering the parties' preemption arguments, we first followed the FCC's conclusion that $ 332(c)(3)'s preemption of state regulation applies to judicial action. See id. at 662; Peck v. Cingular Wireless, LLC, 535 F.3d 1053, 1058 (9th Cir. 2008) (applying express preemption analysis under $ 332(cX3)(A) to a class action complaint alleging violation of a Washington statute); see also Pinney v. Nokia Inc., 402 F.3d 430, 455-56 (4th Cir. 2005); Bastien v. AT&T Ilireless Servs., lnc.,205 F.3d 983,959 (7th Cir.2000), distinguished on other grounds by Shroyer, 606 F.3d at 662-63. Second, we adopted In re Wireless's holding that not all common law damages actions will fall within the express scope of $ 332(cX3)(/t). Shroyer, 606 F.3d at 662-63. As in In re

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17021

Wireless, we reasoned that $ 332(c)(3)(A) preempts damage claims only if the court, in adjudicating the plaintiff s claim, would have to engage in a regulatory analysis of the "reasonableness" of a particular rate, id.; see AT8¿T Corp. v. FCC, 349 F.3d 692,702 (D.C. Cir. 2003), or, said otherwise, would be "called upon to substitute its judgment for the agency's on the reasonableness of a tate," Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 299 (1976). Because plaintiffs contract and misrepresentation claims in Shroyer did not "ask[] the court to rule on the reasonableness of a particular rate," we concluded that the claims were not preempted. Shroyer,606 F.3d at 661. Contrariwise, we held that "[e]lements of Shroyer's unfair competition claim" were preempted because they "depend[ed] on the assessment of the public benefit of the merger." Id. at 663; see id. at 666. We concluded that $ 332(c)(3)(A) precluded any reexamination of the merger issue, a regulatory determination already made by the FCC. Id. at 663.

[7] Neither Shroyer nor In re ílireless articulated a corresponding test for preemption under the "market entry" prong of $ 332(c)(3XA) However, the logic of these cases provides substantial guidance. See Shroyer, 606 F.3d at 662-63; In re Ií/ireless, 15 F.C.C.R. at 17034. Just as $ 332(cX3XA) preempts claims that require a court to substitute its judgment for the agency's with respect to the reasonableness of a particular rate, $ 332(cX3XA) also preempts claims that require a court to substitute its judgment for the agency's with regard to a market-entry decision. Cf Shroyer, 606 F.3d at 66I-63; In re Wireless, 15 F.C.C.R. at 17035; see also Pinney, 402 F.3d at 456. ln other words, $ 332(c)(3XA) preempts a state tort action that would require a court to engage in an assessment or reexamination of the FCC's regulatory determination regarding a mobile service's entry into the market.
has long been recognized as the FCC's core tool in the regulation of market entry. See generally 47 U.S.C. $ 301; Red Lion Broadcasting Co. v. FCC,395 U.S. 361,376,

[8] Licensing

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n022

Trleseunus v. Pow¡R

379-80 (1969). Accordingly, section 332 of the FCA outlines the FCC's duty to manage the spectrum available to mobile services through a licensing system. 47 U.S.C. $ 332. Such licensing directly involves agency determinations of public interest, safety, eff,tciency, and adequate competition, all inquiries specially within the expertise of the FCC. Id. $ 332(a)(1)-(4); see td. $ 301 (noting the express purpose of the FCA: "to maintain the control of the United States over all the channels of radio transmission; and to provide for the use of such channels, but not the ownership thereof, by persons for limited periods of time, under licenses granted by Federal authority ."). Accordingly, $ 332(c)(3)(A) preempts state tort actions that require a court "to substitute its judgment for the agency's" with regard to a licensing decision. Nader, 426 U.S. at 299.

B

We apply these principles to Radiolink's contention that Telesaurus's common law claims for conversion, unjust
enrichment, and intentional interference with prospective eco-

nomic advantage are preempted under either the "rates" or "market entry" prongs of $ 332(c)(3XA).
Under Arizona law, conversion "is an intentional exercise of dominion or control over a chattel which so seriously interferes with the right of another to control it that the actor may justly be required to pay the other the full value of the chattelJ' Miller v. Hehlen, 104 P.3d 193,203 (Anz. App. 2005) (internal quotation marks omitted). The elements of unjust enrichment are "(1) an enrichment; (2) an impoverishment; (3) a connection between the enrichment and the impoverishment; (4) absence of justif,rcation for the enrichment and the impoverishment[;] and (5) an absence of a remedy provided by law." Cmty. Guardian Bank v. Hamlin,898 P.2d 1005, 1008 (Ariz. App. 1995). Finally, to establish a claim for tortious interference with prospective economic advantage, Telesaurus must prove "the existence of a valid contractual

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relationship or business expectancy; the interferer's knowledge of the relationship or expectancy; intentional interference inducing or causing a breach or termination of the relationship or expectancy; and resultant damage to the parly whose relationship or expectancy has been disrupted." Wallace v. Casa Grande Union High Sch. Dist. No. 82 Bd. of Governors,909 P.2d 486, 494 (Ariz. App. 1995). To state a claim, Telesaurus must establish that the interference was improper, as determined under a seven-factor test that Arizona courts have adopted from the Restatement of Torts. Bar J Bar Cattle Co. v. Pace,763 P.2d 545, 547-48 (Ariz. App.
1e88).

authority to regulate rates, Radiolink argues that Telesaurus's claims are preempted because they "implicitly seek to set a value on the frequencies at issue, using state-law principles to usurp the rate setting function that is the exclusive province of the FCC." We disagree. This case involves a suit brought by one mobile-service provider against another, alleging damages to its business interests from allegedly improper use of certain frequencies. Although a court adjudicating Telesaurus's state-law claims would have to determine whether Telesaurus was damaged by Radiolink's use of the VPC Frequencies, and the extent of any such damage, this determination would not require the court to pass judgment on the reasonableness of Radiolink's charges in order to provide compensation for Telesaurus's alleged injury. In re Wireless, 15 F.C.C.R. at 17035. At most, it might be "appropriate for [the court] to take the [rate] into consideration in calculating damages." 1d. Such consideration of a rate as a fact informing damages calculations does not infringe on the FCC's area of exclusive authority to regulate the rates applicable to mobile service providers. Because a court considering Telesaurus's state tort actions would not have to engage in a regulatory analysis of the reasonableness of a particular rate, or to "substitute its judgment for the agency's on the reasonableness of arate," Nader,426U.S. at299, we conclude that Telesaurus's

[9] Tuming first to $ 332(c)(3)(A)'s preemption of

state

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21

17024

Teleseunus v. Powen

damages claims are not expressly preempted as attempts to regulate a rate.47 U.S.C. $ 332(cX3XA).

[10] Turning next to $ 332(c)(3)(A)'s preemption of state authority to regulate market entry, Radiolink argues that because Telesaurus's state tort claims rest on the allegation that Radiolink's FCC-licensed operation of certain frequencies was "wrongful" or "unlawful," they are expressly preempted under the market entry prong of $ 332(c)(3)(A). W" agree. Each of Telesaurus's state-law claims requires adjudication of whether Radiolink's use of the VPC Frequencies
was improper, and,

from such allegedly wrongful use. Under the facts of this
case, such allegations would require the court to substitute its judgment for the FCC's with regard to a licensing decision, a core determination regarding market entry.

if

so, whether Telesaurus suffered damage

[11] Although Telesaurus alleges that Radiolink's operation of the VPC Frequencies was wrongful, at all times relevant to Telesaurus's complaint Radiolink operated under a valid FCC license granting it the authority to use those frequencies. Although the FCC subsequently modified the license to delete the VPC Frequencies, Telesaurus's tort claims amount to a collateral challenge to the validity of the license initially granted to Radiolink by the FCC. As we
stated in Shroyer, state tort law may not be used to reexamine

or reassess the FCC's determinations. ,S¿e Shroyer,606 F.3d at 663. Indeed, here, there is an irreconcilable conflict between the FCC's exclusive licensing authority, i.e. its power to regulate market entry, and Telesaurus's allegations that Radiolink "wrongfully" or "unlawfully" operated under its FCC license. See Nader, 426 U.S. at 299; 47 U.S.C. $ 332(c)(3)(A). Because an adjudication of Telesaurus's tort claims would be necessarily equivalent to second-guessing the FCC's issuance of a license, they are expressly preempted under the market entry prong of $ 332(c)(3)(A). 47 U.S.C. $ 332(c)(3)(A).

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17025

[12] Telesaurus argues that even if a court's adjudication of its tort claims would require reconsideration of the FCC's licensing determination, its state tort claims are saved from preemption under 47 U.S.C. $ 414, the FCA's savings clause. This section provides that nothing in the FCA's provisions governing wire or radio communication "shall in any way abridge or alter the remedies now existing at common law or by statute," but rather "are in addition to such remedies." Id.
tical claim in In re Wireless, reasoning that "[u]nder accepted principles of statutory construction . . . the savings clause cannot preserve state law causes of action or remedies that contravene express provisions of the Telecommunications Act." 15 F.C.C.R. at 17040. We agree. As the Supreme Court has explained, the savings clause of the Communications Act, ç 414, preserves only those rights that are "not inconsistent" with statutory requirements elsewhere in the FCA. Am. Tel. & Tel. Co. v. Cent. Office Tel., Inc., 524 U.S. 214, 221-28 (1998). Accordingly, the Supreme Court concluded that the savings clause could not be construed to preserve "a common law right, the continued existence of which would be absolutely inconsistent with the provisions of the act. In other words, the act cannot be held to destroy itself." Id. at 228 (internal modifications omitted) (citing Tex. & Pac. R. Co. v. Abilene Cotton Oil Co.,204 U.S. 426, 446 (1907)). Indeed, to read $ 414 expansively would "abrogate the very federal regulation of mobile telephone providers that the [FCA] intended to create." Bastien, 205 F.3d at 987. Section 332(c)(3)(A) does not as a general matter preempt state tort and contract actions, thus ensuring that S 414 has effect. See In re NOS Commc's, 495 F.3d 1052, 1058 (9th Cir.2007) ("[S]ection 414 evidences Congressional intent to allow some state law claims to proceed.") (discussing Marcus v. AT&T Corp., T38
losection
$ 414 provides:

$ 414.'0 The FCC addressed and rejected a substantially iden-

Nothing in this chapter contained shall in any way abridge or
alter the remedies now existing at common law or by statute, but the provisions of this chapter are ìn addition to such remedies.

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TeLrs¡uRus v. PoweR

F.3d 46,54 (2d Cir. 1998)). Nevertheless, actions that have the effect of regulating rates and market entry are expressly preempted by $ 332(cX3XA) and thus beyond the scope of ç 4r4.

[13] Telesaurus's state-law claims, in effect, call upon the court to deem "wrongful" actions that the FCC, under its
Section 332(c)(3)(A) prohibits us from substituting our judgement for that of the agency's under the guise of a state-law tort claim. See Shroyer,606 F.3d at 662-63. We therefore conclude that Telesaurus's claims are expressly preempted, and affirm their dismissal.

licensing authority, expressly authorized.

V
We conclude that the district court properly dismissed Telesarus's claims under the FCA, but erred in denying leave to amend. See 47 U.S.C. $$ 206-07. We affirm the dismissal of Telesaurus's claims under Anzona law for conversion, unjust enrichment, and intentional interference with prospective economic advantage, because such claims are expressly preempted by section $ 332(c)(3)(A) of the FCA. Id. $ 332(cX3XA).

AFFIRMED
REMANDED.

IN PART &

REVERSED

IN

PART;