Click Back Button to Return to Publication
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF
OHIO, WESTERN DIVISION
RAYMOND McGUIRE, et al.,
Plaintiffs,
vs.
AMERITECH SERVICES,INC., et al.,
Defendants.
Case No. C-3-99-661
January 15, 2003,
Decided
January 15, 2003, Filed
EXPANDED OPINION; DECISION
AND ENTRY SUSTAINING IN PART AND OVERRULING IN PART STATE DEFENDANTS' MOTION TO
DISMISS (DOC. # 41); SUSTAINING IN PART AND OVERRULING IN PART TELEPHONE
DEFENDANTS' MOTION TO DISMISS (DOC. # 42); SUSTAINING IN PART AND OVERRULING IN
PART COUNTY DEFENDANTS' MOTION TO DISMISS (DOC. # 43); THIS ACTION IS STAYED
PENDING THE RESOLUTION OF BANKRUPTCY PROCEEDINGS INITIATED BY DEFENDANT MCI
WORLDCOM NETWORK, INC., NOW KNOWN AS WORLDCOM, INC., OR UNTIL SAID DEFENDANT IS
VOLUNTARILY DISMISSED; PLAINTIFFS DIRECTED TO NOTIFY THE COURT, WITHIN 20 DAYS
OF DATE, OF WHETHER THEY DESIRE TO DISMISS SAID DEFENDANT FROM THIS LITIGATION
Plaintiffs,
representing a proposed class of family members, friends, attorneys, and
bailbondsmen of inmates at state and county correctional institutions
throughout Ohio, have filed an Amended Complaint (Doc. # 21), in which they
claim that certain telecommunication companies have conspired with the State of
Ohio and certain counties of Ohio to create exclusive contracts for inmate
telephone service, that such contracts restrict inmates' telephone privileges
to collect calls, and that, as a result, they (Plaintiffs), who bear the cost
of the collect calls, are charged excessive rates and surcharges. In so acting,
Plaintiffs claim, Defendants have violated the Sherman Antitrust Act, 15 U.S.C. § 1, et seq., the
Telecommunications Act, 47 U.S.C. § 151, et seq., n1 and certain of their
constitutional rights, violations of which are actionable under 42 U.S.C. §
1983. Plaintiffs also state a related claim under the antitrust laws of Ohio,
Ohio Rev. Code § 1331.01, et seq. ("Valentine Act"), over which the
Court has jurisdiction pursuant to 28 U.S.C. § 1367(a).
Plaintiffs named in the Amended Complaint are: Raymond McGuire,
Kim Rayford, Paul Null, Sandra Null, Thomas Short, Algie Harris, Rebia Harris,
Cindy Partida, Dennis E. Gump, George Cleere, Amanda Cleere, Mildred Lawson,
and Emmit Lawson (collectively, "Plaintiffs").
Defendants are: Ameritech Services, Inc., GTE Telecommunication
Services, Inc., Ameritel, Evercom Systems, Inc., and MCI Worldcom Network, Inc.
(collectively, "Telephone Defendants"); State of Ohio, Ohio
Department of Rehabilitation and Corrections ("ODRC"), and Reginald
A. Wilkinson, in his individual capacity, and in his official capacity as
Director of the ODRC (collectively, "State Defendants"); the Ohio
Counties of Miami, Greene, Madison, and Butler, along with their Commissioners
and Sheriffs, and the County Commissioners of Montgomery County (collectively,
"County Defendants"). n2 Plaintiffs also named as Defendants other
Unknown Counties of Ohio, and John and Jane Doe Commissioners, Sheriffs,
Telephone Companies, and Rehabilitation and Correction Institutions.
[*993]
Plaintiffs
have set forth eleven counts. In Count I, they allege that State Defendants and
Telephone Defendants have conspired to set excessive calling rates for prison
inmates in violation of the Equal Protection Clause of the Fourteenth
Amendment. Count II alleges that a similar conspiracy exists between County
Defendants and the Telephone Defendants, also in violation of the Equal
Protection Clause. Counts III and IV allege that Defendants, by their actions
of setting high calling rates, have placed an undue burden on their
(Plaintiffs') rights of association and freedom of speech, in violation of the
First Amendment. Counts V and VI allege that the actions of Defendants have
deprived Plaintiffs of their procedural and substantive due process
protections, in violation of the Due Process Clause of the Fourteenth
Amendment. Counts VII and VIII allege that Defendants' actions impair certain
contracts, in violation of Article I, § 10, of the Constitution
("Contracts Clause"). Count IX alleges that Defendants, through their
conspiratorial actions, have violated § 1 of the Sherman Antitrust Act, 15
U.S.C. § 1. Count X alleges that Telephone Defendants have violated the
Telecommunications Act, 47 U.S.C. §§ 201(b) & 202(a). Finally, in Count XI,
Plaintiffs allege that Defendants conspired in violation of Ohio's Valentine
Act, Ohio Rev. Code § 1331.01, et seq.
Currently before the Court are the Motions of the State
Defendants (Doc. # 41), Telephone Defendants (Doc. # 42), and County Defendants
(Doc. # 43) to Dismiss the Amended Complaint, pursuant to Rule 12(b)(1) &
(6) of the Federal Rules of Civil Procedure. After noting the proper standard
for review of motions to dismiss and setting forth the underlying facts, the
Court will consider the individual Motions. With the exception of Count X,
which concerns only the Telephone Defendants, to the extent the Amended
Complaint concerns agreements between Telephone and State Defendants, the Court
will consider their Motions together; likewise, to the extent the Amended
Complaint concerns agreements between Telephone and County Defendants, the
Court will consider their Motions together.
For the
reasons expressed herein, the several Motions shall be SUSTAINED in part and
OVERRULED in part.
I. Standards Governing Rule
12(b)(1) & (6) Motions to Dismiss
Pursuant to Rule 12(b)(6), the Court may only consider the
facts as pled in the Complaint in deciding whether the Plaintiffs have stated a
valid claim. See Nelson v. Miller, 170 F.3d 641, 649 (6th Cir. 1999). "A
court should not dismiss a plaintiff's complaint under Rule 12(b)(6) unless,
after construing the complaint in the light most favorable to the plaintiff and
accepting all factual allegations as true, the court determines that the plaintiff
can prove no set of facts in support of his claim that would entitle him to
relief." Id. (citation omitted); Hishon v. King & Spalding, 467 U.S.
69, 73, 81 L. Ed. 2d 59, 104 S. Ct. 2229 (1984).
Regarding motions brought under Rule 12(b)(1), in Ohio Nat'l Life
Ins. Co. v. United States, 922 F.2d 320 (6th Cir. 1990), the Sixth Circuit, at
922 F.2d 325, laid out the procedural framework for such:
Rule 12(b)(1) motions to
dismiss based upon subject matter jurisdiction generally come in two varieties.
A facial attack on the subject matter jurisdiction alleged by the complaint
merely questions the sufficiency of the pleading. In reviewing such a facial
attack, a trial court takes the allegations in the complaint as true, which is
a similar safeguard employed under 12(b)(6)
motions to dismiss. On the other hand, when a court reviews a complaint
under a factual attack, as here, no presumptive truthfulness [*994] applies to
the factual allegations. Such a factual attack on subject matter jurisdiction
commonly has been referred to as a "speaking motion." See generally
C. Wright & A. Miller, Federal Practice and Procedure § 1364, at 662-64
(West 1969). When facts presented to the district court give rise to a factual
controversy, the district court must therefore weigh the conflicting evidence
to arrive at the factual predicate that subject matter jurisdiction exists or
does not exist. In reviewing these speaking motions, a trial court has wide
discretion to allow affidavits, documents and even a limited evidentiary hearing
to resolve disputed jurisdictional facts. (Citations omitted.)
Importantly, in
considering facts that bear on its subject matter jurisdiction, the Court does
not convert a Rule 12(b)(1) motion into a motion for summary judgment, as facts
which bear on jurisdiction are not the same as fact which bear on the merits.
n3 Herein, to the extent they rely upon Rule 12(b)(1), Defendants have
presented only facial attacks on the Court's subject matter jurisdiction. As
such, be it under Rule 12(b)(1) or (6), the Court shall presume the truth of
the facts as alleged.
II. Factual Background
As just noted, for purposes of ruling on Defendants' Motions,
the Court shall draw all of its underlying facts from the allegations set forth
in Plaintiffs' Amended Complaint, accept them as true for the moment, and
construe them in a light most favorable to Plaintiffs. n4
Inmates
housed at correctional institutions operated and managed by the State of Ohio
or the counties of Ohio have a single means of calling out to their friends,
family, and attorneys and the like: by collect call. Typically, each
institution will contract on an exclusive basis with a single telephone company
for the provision of a collect calling service. In consideration for the
exclusive contract, the telephone company agrees to remit up to 50% of its
revenues therefrom to the institution with which it is contracted. The
commissions realized by the State and various counties amount to millions of
dollars a year.
The impact
of these exclusive contracts on those who most frequently communicate with
inmates, to wit, family, friends, attorneys, and so forth, as represented
herein by Plaintiffs, is obvious. Collect calling rates are higher than regular
person-to-person calling rates, the result of which is that it costs
substantially more, on average, to converse by telephone with an inmate than it
does with a non-inmate. In the case of attorneys and bailbondsmen, and others
whose businesses depend upon communicating with inmates, these high [*995]rates
increase overhead costs. For family members and friends, these high rates often
make telephone communications financially burdensome, a fact which is
especially troubling to those who live at too great a distance to visit in
person on a regular basis.
Plaintiffs
find the arrangement particularly frustrating, given that cheaper calling
services are available on the market, including 1-800 services and prepaid
debit cards, but are refused to Ohio inmates. Furthermore, Plaintiffs are prohibited
from communicating with inmates per the terms of their own residential phone
service plans. In addition, the customer service provided by the respective
Telephone Defendants for the collect calling plans they provide to the various
correctional institutions is substantially curtailed, in comparison to the
customer service provided for regular residential service, and Plaintiffs are
frequently told that complaints about service cut-offs should be directed to
the particular correctional institutions, not the telephone company servicing
the line.
The following points of law
are pertinent, and may be considered herein. The ODRC maintains and operates
Ohio's correctional institutions. n5 See Ohio Rev. Code § 5120.05; id. §
121.02(P). As its Director, Wilkinson is in charge of such operations and
management, and has the authority to prescribe all rules and regulations
related thereto. See id. § 5120.01; id. §
121.02(P). Although sheriffs administer their own county jails, see id.
§ 341.01, the ODRC's Division of Parole and Community Services
("DPCS"), see id. § 5120.06(A)(2), is vested with the authority to
investigate and supervise their operations. n6 See id. § 5120.10(D)(1). In
other words, all correctional institutions in Ohio, state prisons and local
jails alike, are either operated by or supervised by the ODRC, and its Director
has the exclusive authority to prescribe rules and regulations therefor.
Related to
inmate communications at state prisons, the ODRC has prescribed rules for
general visitation (Ohio Admin. Code § 5120-9-15), news media visitation (id. §
5120-9-16), receiving and sending mail (id. §§ 5120-9-17 & 5120-9-18), and
attorney visitation (id. § 5120-9-20). Comparable provisions are provided for
in local jails. (See id. §§ 5120:1-8-06 & -07, 5120:1-10-06 & -07, and
5120:1-12-06 & -07.) There are no allegations that inmates are denied the
benefit of any of these provisions.
There is no published
regulation specifically pertaining to inmate telephone use at state penitentiaries,
but Plaintiffs' pleadings can be accepted herein for purposes of establishing
that Ohio has implemented a collect calling phone system for inmates' use, and
that the system at each institution is serviced by a single telephone service
provider. In full service county jails, which are equipped to house inmates for
more than five days, with certain exceptions for the due process rights of
inmates [*996] who have yet to be sentenced, inmates are limited to a single
local call per week, and a single long-distance collect call per week. See Ohio
Admin. Code § 5120:1-8-08(B)(3). All moneys which the ODRC receives as
commissions from telephone contracts established for inmate use, at the institutions it operates, are
to be set aside for a "prisoner program fund," and may only be used
for purposes prescribed by law. See
Ohio Rev. Code § 5120.132(A). All such purposes are related to the general
welfare of prison inmates. See id.
There is no allegation that
Ohio inmates, either in the state prisons or the county jails, are given
inadequate access to the telephone.
The Court will consider the Motions of State Defendants and
Telephone Defendants together, as they relate to the agreements between them,
and then turn to that of County Defendants and Telephone Defendants, as they
relate to their agreements. It notes in passing that other courts across the
country have dismissed identical claims. For several recent examples, see
Miranda v. Michigan, 168 F. Supp. 2d 685 (E.D. Mich. 2001) (ruling on summary
judgment); Daleure v. Kentucky, 119 F. Supp. 2d 683, 691 (W.D.Ky. 2000) (ruling
on Rule 12(b) motion); Arsberry v. Illionis, 244 F.3d 558, 566 (7th Cir.)
(affirming Rule 12(b) dismissal), cert. denied, 534 U.S. 1062, 122 S. Ct. 661,
151 L. Ed. 2d 576 (2001).
III. Ohio and Telephone
Defendants' Motions to Dismiss (Doc. # s 41 & 42)
At the outset, it is worth noting that what Plaintiffs are
requesting is relief from what they consider exorbitant rates charged whenever
they opt to accept a collect call from an inmate. At bottom, this is a request
for relief from the internal policies of the various correctional institutions
implicated herein. The Court is thus being asked to superimpose its views upon
the business of these institutions. As the Supreme Court has stated, "the
judiciary is 'ill equipped' to deal with the difficult and delicate problems of
prison management." Thornburgh v. Abbott, 490 U.S. 401, 407-08, 104 L. Ed.
2d 459, 109 S. Ct. 1874 (1989) (citation omitted). While this principle has limited
relevance to a Rule 12(b) analysis, the Court makes note of it here to
highlight the significant burden which Plaintiffs will ultimately have to
overcome to succeed on the merits, should their claims survive the Motions
under consideration herein.
A. Ohio's Immunity from Suit
The Court
will first consider the State's immunity from suit in federal court.
The Eleventh Amendment
states: "The Judicial power of the United States shall not be construed to
extend to any suit in law or equity, commenced or prosecuted against one of the
United States by Citizens of another State, or by Citizens or Subjects of any
Foreign State." This immunity
extends to states against suits brought by their own citizens (even though the
text does not expressly state as much). See Hans v. Louisiana, 134 U.S. 1, 33
L. Ed. 842, 10 S. Ct. 504 (1890). Furthermore, the Amendment applies not only
to legal claims, but to suits seeking injunctive relief against a state. See
Cory v. White, 457 U.S. 85, 90-91, 72 L. Ed. 2d 694, 102 S. Ct. 2325 (1981)
(stating that it "would be a novel proposition indeed that the Eleventh
Amendment does not bar a suit to enjoin the State itself simply because no
money judgment is sought"). On the other hand, actions for injunctive
relief against state officials may lie in certain situations. See Ex parte
Young, 209 U.S. 123, 52 L. Ed. 714, 28 S. Ct. 441 (1908) (establishing the
doctrine that Eleventh Amendment immunity will not always apply [*997] where
plaintiff seeks prospective injunctive relief against state officials for
alleged violations of controlling constitutional or other federal law). Though
not technically
a jurisdictional issue, in that Eleventh Amendment
protections may be waived by a state, See Idaho v. Coeur d'Alene Tribe of
Idaho, 521 U.S. 261, 267, 138 L. Ed. 2d 438, 117 S. Ct. 2028 (1997), where such
is not waived, as is the undisputed case herein, the Supreme Court has treated
a state's absolute protection from suit as tantamount to a jurisdictional bar
to a federal court's ability to hear the case. See, e.g., Seminole Tribe, 517
U.S. 44, 76, 134 L. Ed. 2d 252, 116 S. Ct. 1114 (1996).
With
respect to the federal and state claims which concern it (Counts I, III, V,
VII, IX & XI), the State must be dismissed because it is immune from suit.
The ODRC must also be dismissed as it is nothing more than a sub-unit of the
State. To the extent it is sui juris, it is so through its Director, Wilkinson.
In his official capacity, Wilkinson, too, is immune from suit under the
Eleventh Amendment, insofar as Plaintiffs seek damages. See Cory v. White, 457
U.S. 85, 89, 72 L. Ed. 2d 694, 102 S. Ct. 2325 (1981); Worcester County Trust
Co. v. Riley, 302 U.S. 292, 296, 82 L. Ed. 268, 58 S. Ct. 185 (1937). As it
concerns these matters, State Defendants' Motion to Dismiss is
SUSTAINED.
Therefore,
of the State Defendants, only Wilkinson remains, and he does so only to the
extent he has been sued for damages in his individual capacity, and to the
extent Plaintiffs seek to enjoin him from engaging in ongoing unconstitutional
or unlawful conduct in his official capacity as the Director of the ODRC (under
the Ex parte Young doctrine). With this in mind, the Court shall consider the
State Defendants' Motion to Dismiss along with that of the Telephone Defendants.
B. Constitutional Claims (42 U.S.C. § 1983) (Counts I, III, V
& VII)
Plaintiffs'
constitutional claims are brought pursuant to
42 U.S.C. § 1983, which provides a civil cause of action to any citizen of
the United States against any person who, under color of state law, deprives
the citizen of "any rights, privileges, or immunities secured by the
Constitution and laws of the United States." Christy v. Randlett, 932 F.2d
502, 504 (6th Cir. 1991) (citations omitted). In order to succeed on a § 1983
claim, a plaintiff must prove two elements: (1) that he was deprived of a right
secured by the Federal Constitution or laws of the United States; and (2) that
he was subjected to this deprivation by a person acting under the color of
state law. See Searcy v. City of Dayton 38 F.3d 282, 286 (6th Cir. 1994).
"By its terms, § 1983 creates no substantive rights; it merely provides
remedies for deprivations of rights established elsewhere." Gardenshire v.
Schubert, 205 F.3d 303, 310 (6th Cir. 2000) (citing Oklahoma City v. Tuttle,
471 U.S. 808, 85 L. Ed. 2d 791, 105 S. Ct. 2427 (1985)).
Although
they have expressed their right to raise the issue at a later time, Telephone
Defendants do not, herein, address the question of whether they were acting
under color of law when they engaged in the allegedly unlawful conduct which
underlies Plaintiffs' action. (Doc. # 42 at 6 n.4.) As such, the Court will
accept for purposes of ruling on the Telephone Defendants' Motion that the
defects with Plaintiffs' Amended Complaint, should any exist, do not relate to
their invocation of § 1983 for a cause of action, but, rather, to their
reliance on the underlying constitutional rights on which the § 1983 claims are
based, and which they claim have been violated. [*998]
1. Equal Protection and First Amendment (Counts I and III)
For
reasons which will be explained below, the Court finds it beneficial to address
Plaintiffs' Equal Protection Clause and First Amendment claims together.
Plaintiffs
argue that they, as persons who frequently receive telephone calls from prison
inmates, are discriminated against as a class, in violation of the Equal
Protection Clause of the Fourteenth Amendment to the United States
Constitution. In general, equal protection claims come in two varieties. See
Vacco v. Quill, 521 U.S. 793, 799, 138 L. Ed. 2d 834, 117 S. Ct. 2293 (1997) ;
Richland Bookmart, Inc. v. Nichols, 278 F.3d 570, 574 (6th Cir.), cert. denied,
154 L. Ed. 2d 33, 123 S. Ct. 109 (2002). First, the Equal Protection Clause has
been found to protect individuals from being unfairly treated under the law on
an arbitrary basis, based solely on their status as members of a certain class
of persons (i.e., class-based discrimination). See, e.g., City of Cleburne v.
Cleburne Living Center, Inc., 473 U.S. 432, 440, 87 L. Ed. 2d 313, 105 S. Ct.
3249 (1985). Generally, where a law discriminates on the basis of certain
"suspect classifications," such as race, alienage, or national origin,
it will withstand equal protection scrutiny only if it is narrowly tailored to
serve a compelling state interest (i.e., the "strict scrutiny"
standard). See id. On the other hand, because all legislation classifies at
some level of abstraction, outside of those few well recognized "suspect
classifications," legislation will satisfy the strictures of the Equal
Protection Clause so long as the law is rationally related to a legitimate
state interest (i.e., the "rational basis" standard). See id. n7
Second, irrespective of any suspect classification, the Equal
Protection Clause has been interpreted
to protect against infringements on certain "fundamental rights"
basic to all Americans, whether or not such rights are explicitly guaranteed by
the text of the Constitution. See, e.g., Skinner v. Oklahoma, 316 U.S. 535, 86
L. Ed. 1655, 62 S. Ct. 1110 (1942) (invoking Equal Protection Clause in
striking down a law that restricted male inmates' fundamental right to
procreate); Shapiro v. Thompson, 394 U.S. 618, 22 L. Ed. 2d 600, 89 S. Ct. 1322
(1969) (invoking Equal Protection Clause in striking down a law that restricted
the fundamental right of interstate travel); Police Dept. of the City of
Chicago v. Mosley, 408 U.S. 92, 33 L. Ed. 2d 212, 92 S. Ct. 2286 (1972) (invoking
Equal Protection Clause in striking down an ordinance which impinged upon the
fundamental right to picket and therefore express one's views). n8 These same
cases demonstrate that laws which impinge on identifiable fundamental rights
are generally subject to strict scrutiny.
Whether a particular right claimed by a plaintiff is
"fundamental" is a question of law for courts to decide. In making
its determination, a court is not to make comparisons of the claimed right with
other fundamental rights which have been firmly established by prior cases. See
San Antonio Independent
School Dist. v. Rodriguez, 411 U.S. 1, 33, 36 L. Ed. 2d 16, 93 S. Ct. 1278
(1973). It must, rather, assess whether the right claimed by the plaintiff is
explicitly or implicitly guaranteed by the Constitution. See id. (emphasis
added).
[*999]
As a final comment on the proper standard of analysis where prison regulations are the subject of
a plaintiff's attack, the Supreme Court has abrogated the use of strict scrutiny
in favor of a universally applicable rational basis standard of analysis:
provided that such regulations are "reasonably related to legitimate
penological interests," they will be deemed constitutionally sound. Turner
v. Safely, 482 U.S. 78, 89, 96 L. Ed. 2d 64, 107 S. Ct. 2254 (1987). In other
words, regardless of the alleged constitutional violation, the strict scrutiny
standard will not be utilized in deciding the merits of the policies at issue
in this case.
In Count I
of their Amended Complaint, Plaintiffs do not expressly state that a
fundamental right of theirs has been denied or impinged upon. On the face of
their pleadings, it appears that the sole basis for this equal protection claim
is that they, as "persons who receive phone calls from prisoners,"
have been subjected to an "invidious and unreasonable"
classification. (Amend. Compl. PP63.) This language is indicative of a
class-based equal protection claim. Nevertheless, in their Memorandum in
Opposition (Doc. # 46), they blend the distinct Equal Protection Clause
strands, arguing not only that they have been discriminated against as a class,
but that their fundamental rights of free of speech and association have been
impinged.
Obviously,
the rights of free speech and free association are fundamental in our society.
Be that as it may, they are expressly protected by the First Amendment, and,
from a constitutional purist's perspective, it would seem that any alleged
violation of such should be stated pursuant to a First Amendment claim, not as
a claim under the Fourteenth Amendment. However, constitutional jurisprudence
has not always been so precise, and the lines between distinct protections have
often been blurred. n9 A classic example of this is Mosley, supra, wherein the
Supreme Court grafted what was essentially a First Amendment analysis onto its
Equal Protection Clause analysis, holding that a municipal ordinance which
prohibited all picketing [*1000] within 150 feet of a school, except that which
was peaceful and related to labor disputes,
violated the Equal Protection Clause "because it makes an
impermissible distinction between labor picketing and other peaceful
picketing." 408 U.S. at 94; see also id. at 99 (holding that "because
picketing plainly involves expressive conduct within the protection of the
First Amendment," any impingements upon that right are subject to strict
scrutiny under the Equal Protection Clause); Carey v. Brown, 447 U.S. 455,
461-62, 65 L. Ed. 2d 263, 100 S. Ct. 2286 (1980) ("When government regulation discriminates among speech-related
activities in a public forum, the Equal Protection Clause mandates that the
legislation be finely tailored to serve substantial state interests, and the
justifications offered for any distinctions it draws must be carefully
scrutinized."). n10
To the
extent the Plaintiffs' Equal Protection Clause claim stated in Count I is
premised on an alleged violation of their fundamental right to free speech and
association, the Court will consider it jointly with their claim arising under
the First Amendment claim stated in Count III. Before it gets to that analysis,
however, the Court will address the "class-based" aspect of the
Plaintiffs' Equal Protection Clause claim.
The starting point for
analyzing whether a law or policy violates the Equal Protection Clause by
discriminating against a particular class of persons is the determination of
whether an identifiable class has been singled out thereunder, and the litmus
test of that determination is whether "all persons similarly situated"
are treated equally thereunder. See Maharg, Inc. v. Van Wert Solid Waste Mgmt.
Dist., 249 F.3d 544, 556 (6th Cir. 2001). The alleged class-based line drawing
of which Plaintiffs complain concerns their alleged isolation as a group of
persons who regularly receive telephone calls from prison inmates. Though
surely implicated, it is not discrimination against inmates with which
Plaintiffs take issue. Indeed, not being inmates themselves, they would likely
not have standing to do so. Thus, the first question to be answered is whether
persons who receive phone calls from inmates are similarly situated to those in
the general public who do not, the argument being that if they are,
their inability to obtain competitive calling rates vis-a-vis their
communications with said inmates amounts to unequal (i.e., irrational)
treatment under the law.
While the proposed class on
which the Court must focus does not include inmates themselves, the Court
agrees with Defendants, and the cases upon which they rely [*1001] for support,
that the status of Plaintiffs' "class" cannot be viewed without
taking into account its relationship with the status of the inmates with whom
they wish to converse. The District Court of the Western District of Kentucky
has captured this point succinctly:
Plaintiffs argue that the recipients of inmate calls are similarly
situated to the recipients of non-inmate calls. The Court finds this a
questionable proposition. Because inmates initiate the calls, the recipients
are necessarily constrained by whatever security measures are appropriate to
place on the inmates themselves. The connection between the inmates and the
recipients of their calls cannot be severed. It is the relationship to
inmates alone that defines the group.
If security precautions affect the telephone services that are available to
inmates, this will inevitably impact the inmate call recipients. Thus, the real
question is whether inmates and non-inmates are similarly situated.
Daleure, 119 F. Supp. 2d at 691. Finding first that inmates are not
similarly situated to non-inmates, the Daleure court went on to find that the
corollary is also true: recipients of calls from inmates are not similarly
situated to recipients of calls from non-inmates. Id. See also Murray v. Dosal,
150 F.3d 814, 818 (8th Cir. 1998) ("Prisoners are not similarly situated
to non-prisoners."); Scher v. Chief Postal Inspector, 973 F.2d 682, 683-84
(8th Cir. 1992) (same); Hrbek v. Farrier, 787 F.2d 414, 417 (8th Cir. 1986)
(same).
This Court
agrees that because the status of inmates cannot be considered similar to that
of non-inmates, it necessarily follows that at those times when Plaintiffs
communicate via telephone with inmates, they cannot expect to be treated in
similar fashion as they and others expect to be treated at those times when
they communicate with non-inmates via telephone. The only way Plaintiffs could
state an equal protection claim under the class-based discrimination strand of
Equal Protection Clause jurisprudence would be to state that they have been
treated differently than other groups of persons who receive collect calls from
prison inmates. They have not done so. As such, on this basis, their equal
protection claim (Count I) must fail.
To the
extent Count I is based on the alleged violation of Plaintiffs' fundamental
rights of free speech and association, it dovetails with Count III, which
alleges violations of those same rights directly under the First Amendment. As
noted above, although asserting First Amendment rights under an Equal
Protection Clause cause of action would appear redundant, the right to do so
has support in the case law of the Supreme Court and the Sixth Circuit. See
Mosley, supra; Carey, supra; Lac Vieux Desert Band of Lake Superior Chippewa
Indians v. The Michigan Gaming Control Bd., 276 F.3d 876, 879 n.1 (6th Cir.
2002). Under either constitutional provision,
the analysis is the same.
Although it
is not clear how the First Amendment rights of the Plaintiffs have been
threatened in this case, n11 it would be [*1002] improper to dismiss their
First Amendment claim and the fundamental rights aspect of their equal
protection claim at this stage in the litigation. As Defendants point out,
regardless of alleged constitutional violations, prison regulations are valid if they are "reasonably related to legitimate
penological interests." Turner, 482 U.S. at 89. However, inmates do not
lose all First Amendment protections once they enter the prison gates, and as
Plaintiffs point out, prisoners are entitled to reasonable telephone access.
See Washington v. Reno, 35 F.3d 1093, 1100 (6th Cir. 1994). In Count III,
Plaintiffs allege that they are subject to "exorbitant rates" and
"are denied adequate service by the defendants." The Court must
accept the facts as plead for purposes of ruling on Defendants' Motions to
Dismiss, and it would be impossible to conclude at this stage in the litigation
that Plaintiffs can demonstrate "no set of facts" upon which relief,
under the First and Fourteenth Amendments, might be granted. For example, if
Plaintiffs could show that the costs are so exorbitant that they are unable to
communicate with their incarcerated family members, friends or clients, then
relief might be warranted.
With that said, it should
also be reiterated that Plaintiffs' burden is great. In considering the merits of Plaintiffs' claims, the Court will
give, as it must, a great deal of deference to prison administrators and their
regulations. See Thornburgh, 490 U.S. at 410; Bazzetta v. McGinnis, 124 F.3d
774, 779 (6th Cir. 1997). As the Supreme Court has noted:
Lawful incarceration brings about the necessary withdrawal or
limitation of many privileges and rights, a retraction justified by the
considerations underlying our penal system. [internal quotations and citations
omitted.] The fact of confinement and the needs of the penal institution impose
limitations on constitutional rights, including those derived from the First
Amendment, which are implicit in incarceration.
Jones v. North Carolina
Prisoners' Labor Union, Inc., 433 U.S. 119, 125, 53 L. Ed. 2d 629, 97 S. Ct.
2532 (1977). As an additional point to be noted, the allegation that the State
benefits from large commissions on the telephone contracts established for use
by inmates is not necessarily probative to the Plaintiffs' claims. The Ohio
Revised Code clearly dictates how such revenue is to be spent, at least in the
state-operated institutions. See Ohio Rev. Code § 5120.132. As it is, the
revenue is deposited into an account maintained and utilized for various
programs for the direct benefit of prison inmates. Thus, even if the setting of
arguably cost-prohibitive rates can give rise to an inference that the policy
is unreasonable under the First Amendment, this inference seems countered, not
supported, by the allegation that the State realizes a sizable income in the
form of commissions on the telephone
contracts, given that the very individuals whose interests the
Plaintiffs hold close to them, i.e., their incarcerated friends, family and
clients, are the ones who reap the financial benefit of this alleged income,
not the State's general treasury.
For the moment, though, Plaintiffs have stated a viable claim
under the Equal Protection Clause (Count I), to the extent it is premised on
violations of their fundamental [*1003] rights of free speech and association,
and under the First Amendment (Count III).
Accordingly,
with respect to Plaintiffs' equal protection claim (Count I) stemming from
alleged class-based discrimination, Ohio Defendants' and Telephone Defendants'
Motions to Dismiss are SUSTAINED. As to Count I, insofar as it stems from
alleged violations of fundamental rights of free speech and association, and as
to Count III, alleging violations under the First Amendment, the Motions are
OVERRULED.
2. Procedural and Substantive Due Process (Count V)
Plaintiffs
assert that the collect calling plans in place are violative of their
procedural and substantive rights guaranteed by the Due Process Clause of the
Fourteenth Amendment. The Court disagrees. As an initial matter, the Court
notes that the respective parties herein, as is frequently done, tend to blend
the separate concepts of procedural and substantive due process. The Due
Process Clause of the Fourteenth Amendment prohibits states from depriving any
citizen of "life, liberty, or property, without due process of law."
Procedural due process is concerned with just that, process, i.e., notice and
hearing. Board of Regents v. Roth, 408 U.S. 564, 33 L. Ed. 2d 548, 92 S.
Ct. 2701 (1972), provides an example of such a claim. Therein, the Supreme Court determined that a
non-tenured university instructor had no property or liberty interest in his
job, and, therefore, was not entitled to a hearing by the university before it
decided not to renew his contract. 408 U.S. at 578. In contrast, substantive
due process is concerned with the nature of the right at issue, irrespective of
process. See Washington v. Glucksburg, 521 U.S. 702, 721, 138 L. Ed. 2d 772,
117 S. Ct. 2258 (1997) (stating that the Due Process Clause prohibits
government from infringing upon certain fundamental liberties "no matter
what process is provided" unless the infringement is narrowly tailored to
served a compelling state interest) (citation omitted). For example, in Loving
v. Virginia, 388 U.S. 1, 18 L. Ed. 2d 1010, 87 S. Ct. 1817 (1967), the Supreme
Court held that the "right to marry" is one of the "basic civil
rights of man," which a state cannot infringe arbitrarily without
violating the Due Process Clause of the Fourteenth Amendment. 388 U.S. at 12.
The Court will address
Plaintiffs' distinct theories in turn.
a. procedural due process
Procedural due process is concerned with the sufficiency of
notice and hearings prior to adverse state action. n12 To establish that a due
process violation has occurred, Plaintiff must show that she had a property or liberty
interest as such is contemplated by the Fourteenth Amendment, and that such was
taken from her in a manner insufficient under the safeguards of the Fourteenth
Amendment. See Miller v. Lorain County Bd. of Elections, 141 F.3d 252, 259 (6th
Cir. 1998); Roth, 408 U.S. at 569. "When protected interests are
implicated, the right to some kind of prior hearing is paramount" before
that interest may be deprived by the
state. Roth, 408 U.S. at 570. See also Cleveland Bd. of Educ. v. Loudermill,
470 U.S. 532, 545-46, 84 L. Ed. 2d 494, 105 S. Ct. 1487 (1985) ("The opportunity
to present reasons, either in person or in writing, why proposed action should
not be taken is a fundamental due [*1004]process requirement."); Duchesne
v. Williams, 849 F.2d 1004, 1006-08 (6th Cir. 1988).
In Roth, the Supreme Court noted that property interests are defined under state law. 408 U.S. at
576-78. Herein, the lone property interest identified by Plaintiffs as having
been taken by Defendants is their money. (Doc. # 46 at 16.) Money is certainly
a property interest. Herrada v. City of Detroit, 275 F.3d 553, 556 (6th Cir.
2001). The problem with Plaintiffs' procedural claim is that Defendants did not
take their money in a constitutionally infirm way. The prospective recipient of
a collect call is in complete control over whether she chooses to accept the
call and thereby relinquish her money to pay for it. There is no taking of
which to speak, such as where the government confiscates property or forecloses
its commercial use by fiat or legislation, and any argument that the State has
created a property interest in free or cheap collect calls would not be well
taken.
Liberty interests are a bit more difficult to define, see Roth,
408 U.S. at 571 & 572, but they, too, may be creatures of state law, or of
the Due Process Clause itself. See Woodard v. Ohio Adult Parole Auth., 107 F.3d
1178, 1183 (6th Cir. 1997). The Court need not delve too deeply into liberty
interest doctrine because it is enough to note that Plaintiffs have failed to
give the Court anything of substance to consider. The only interest to which
they point is that which is created by the First Amendment. This argument fails
because, unlike the Equal Protection
Clause, the Due Process Clause cannot be invoked for the protection of rights
guaranteed by more specific provisions of the Constitution, such as the First
Amendment. See Albright v. Oliver, 510 U.S. 266, 273, 127 L. Ed. 2d 114, 114 S.
Ct. 807 (1994); United States v. Lanier, 520 U.S. 259, 272 n.7, 137 L. Ed. 2d
432, 117 S. Ct. 1219 (1997).
As the pleadings, even when accepted as true, do not indicate
that any liberty or property interest of Plaintiffs' was taken by Wilkinson or
Telephone Defendants, the Court finds that a procedural due process claim upon
which relief can be granted has not been stated. Accordingly, as to Count V, to
the extent they are premised on violations of procedural due process, Ohio Defendants' and Telephone Defendants'
Motions to Dismiss are SUSTAINED.
b. substantive due process
Substantive
due process rights are akin to, if not actually the same thing as, fundamental
rights arising under the Equal Protection Clause. n13 See supra note 9. The
analysis begins with the same considerations as those in the procedural due
process context, namely, an examination of whether Plaintiffs have been
deprived of a property or liberty interest. However, whereas procedural due
process is concerned [*1005] primarily with process itself, i.e., the right to
notice and the right to be heard, substantive due process is concerned
primarily with the nature of the interest at stake. n14 Thus, the emphasis of
each inquiry is distinct. The only "fundamental" or
"substantive" interests identified by Plaintiffs are those of freedom
of speech and freedom of association. n15 As already noted, because the First
Amendment is specifically concerned with such an interest, claims arising from
such but brought separately under the Due Process Clause lack merit. See
Albright, 510 U.S. at 273.
Accordingly, to the extent they relate to Plaintiffs' claim for
violations of substantive due process (Count V), Ohio Defendants' and Telephone
Defendants' Motions to Dismiss are well taken, and they are SUSTAINED.
3. Contracts Clause (Count VII)
In Count VII, Plaintiffs allege that the collect calling plans
established by Defendants violate their rights guaranteed by the
Contracts Clause, which prohibits the States from impairing the obligation of
contracts. The contracts which Plaintiffs allege are being violated are their
own individual, residential telephone service agreements with their respective
telephone service providers.
The Contracts Clause is impaired where there is a contractual
relationship, a change in law impairs that contractual relationship, and the
impairment is substantial. n16 See
Wojcik v. City of Romulus, 257 F.3d 600, 612 (6th Cir. 2001). As an
initial matter, nothing in any of the prison policies which form the basis for
Plaintiffs' suit relates to the agreements between Plaintiffs and their
residential [*1006] telephone service providers. Plaintiffs' residential
agreements are simply not impaired by the fact that inmates may only call them
by way of the collect calling plans at issue. Furthermore, nothing in the
pleadings indicates that the State of Ohio has changed the status quo from
where it was when Plaintiffs entered into their residential telephone service
agreements. It has long been settled
that a contract cannot be impaired by a law in effect at the time of the making
of the contract, for that is the law which binds the contract. See Home
Building & Loan Assn. v. Blaisdell, 290 U.S. 398, 429-430, 78 L. Ed. 413,
54 S. Ct. 231 (1934). For obvious reasons, nothing in the pleadings suggests
that any of the Plaintiffs had a contractual expectation, under the laws of
Ohio existing at the time they obtained residential telephone service, that, in
the event someone they knew might some day go to prison in Ohio, they would be
able to communicate with that individual by telephone in accordance with the
rates and service options of their choice. Indeed, given the interest of prison
administrators in regulating the conduct of prison inmates, such a right would
not appear to be one a private telephone company could give.
As to Plaintiffs' Contracts Clause claim (Count VII), Ohio
Defendants' and Telephone Defendants' Motions to Dismiss are SUSTAINED.
B. Sherman Antitrust Act (federal antitrust claim) (Count IX)
Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, states:
Every contract, combination
in the form of trust or otherwise, or conspiracy, in restraint of trade or
commerce among the several States, or with foreign nations, is hereby declared
to be illegal.
In Count IX, Plaintiffs aver
that Defendants have acted in violation of this law, unreasonably restraining
trade by depriving the market for inmate-initiated telephone calls in Ohio of
competition. 15 U.S.C. § 15(a) provides them with a cause of action. At this
juncture, the Court will only address this claim with respect the alleged
agreements between Telephone Defendants and State Defendants. The Court will
revisit this claim, as it relates to the alleged agreements between Telephone
Defendants and County Defendants, in its discussion of County Defendants'
Motion to Dismiss.
Assuming arguendo that monopolistic control of the prison inmate
collect calling market in Ohio is a restraint of trade, this claim is barred by
the state action doctrine. The Sherman
Act was not intended to restrain states from conducting their affairs as they
see fit. See Parker v. Brown, 317 U.S. 341, 351, 87 L. Ed. 315, 63 S. Ct. 307
(1943). An otherwise monopolistic restraint of trade will not give rise to a
Sherman Act violation where it stems from a clearly articulated and
affirmatively expressed state policy, and where said policy is actively
supervised by the state itself. See California Retail Liquor Dealers Assoc. v.
Midcal Aluminum, Inc., 445 U.S. 97, 105, 63 L. Ed. 2d 233, 100 S. Ct. 937
(1980). Where an actively supervised state policy is identified, the immunity
extends not only to the state, but to the private parties acting pursuant to
and in conformity with the state policy. See Southern Motor Carriers Rate
Conference, Inc. v. United States, 471 U.S. 48, 56-57, 85 L. Ed. 2d 36, 105 S.
Ct. 1721 (1985).
Both elements of the immunity exception are met here.
Regarding the State's expressed policy, Ohio Defendants direct the Court's
attention to provisions in Chapter 125 of the Ohio Revised Code, which require
that all administrative departments, of which the ODRC is one, purchase
necessary services using some [*1007]method of competitive procurement. See
Ohio Rev. Code §§ 125.05, 125.07, 125.071, & 125.072. Under such a system,
service contracts are awarded on a monopolistic basis. Ohio Defendants contend
that this provision clearly reveals that it is the policy of Ohio to install
monopolistic telephone systems in its prisons. Though they are relevant, the
Court finds it both imprudent and unnecessary to rely upon these provisions of
law. It would be imprudent because the competitive procurement process is only
required where the service to be purchased costs more than a certain dollar
figure (adjusted in relation to the consumer price index). See id. § 125.05(A)
& (D). Thus, the applicability of these provisions turns on a question of
fact, i.e., the cost of installing the collect calling systems, which the Court
may not consider when ruling on a Rule 12(b) motion to dismiss.
However, it is unnecessary to turn to these provisions because
Plaintiffs' own pleadings establish that the State has awarded monopolistic
contracts to the respective Telephone Defendants. A state cannot express its
policy in any clearer terms than by actually engaging in the practice which the
purported policy prescribes. Plaintiffs argue that "absent a clearly
articulated state policy permitting prison officials to enter into
anti-competitive telephone service agreements, the defendants are not immune
under the state action doctrine." (Doc. # 46 at 24.) This contention
overlooks the fact that the ODRC is the State of Ohio. The Director of the ODRC
is vested with total authority to prescribe the rules and regulations for all
correctional facilities in Ohio. Thus, when the ODRC establishes a collect
calling telephone system in an Ohio correctional institution, that is the clear
and articulated policy of Ohio. For the very same reason, the second prong of
the state action doctrine is also met. The policy just described is more than
merely supervised by the State of Ohio; the State is itself an active
participant. It is the State, acting through the Director of the ODRC, that
solicited, implemented, and maintains the calling plans.
The cases cited by Plaintiffs do not hold anything to the
contrary. Community Communications Co., Inc. v. Boulder, 455 U.S. 40, 70 L. Ed.
2d 810, 102 S. Ct. 835 (1982), is of no help because that case involved a
municipal ordinance enacted by the City of Boulder, Colorado, not a policy of
the State itself. Boulder had argued that its ordinance, which restricted a
cable television operator's ability to compete, had the force of a Colorado
State policy given that Colorado had granted Boulder "home rule"
authority. 455 U.S. at 54. Rejecting this argument, the Court stated that
municipalities are not themselves sovereign, id. at 50 (citing City of Lafayette
v. Louisiana Power & Light Co., 435 U.S. 389, 412-13, 55 L. Ed. 2d 364, 98
S. Ct. 1123 (1978)), and held that although Colorado had granted home rule to
Boulder, it could not be stated that the State had contemplated every
legislative action to be taken by Boulder, such that the latter's acts could be
regarded as the State's. Id. at 55 . Insofar as Plaintiffs' claim is directed
toward State Defendants, and toward Telephone Defendants' agreements with the
State of Ohio, the Boulder holding is of no moment.
In Goldfarb v. Virginia State Bar, 421 U.S. 773, 44 L. Ed. 2d
572, 95 S. Ct. 2004 (1975), the Court addressed an antitrust claim against the
Virginia State Bar Association, which had issued ethical code advisory opinions
indicating that it would impose sanctions
on attorneys who did not follow the established fee schedules of local (member)
bar associations. 421 U.S. at 776-78. The result of these opinions was that
attorneys did not waver from any such schedules, and competition [*1008] was
restrained. Id. at 778. The Supreme Court held that while the state bar
association was a state agency, there was no evidence that its ethical opinions
had the force of law or carried the imprimatur of the Virginia Supreme Court,
or that the local fee schedules were "compelled by direction of the State
acting as a sovereign." Id. at 791. The state action doctrine, therefore,
was inapplicable. By comparison, in this instance, the ODRC has not restrained
trade among competing telephone companies; rather, it has made a decision
concerning the immediate business of the State itself. Vested with absolute
authority to regulate the State's prison system, it has determined that a
monopolized collect calling telephone system is in the State's best interest.
That is the de jure policy of Ohio.
In California Liquor Dealers v. Midcal Aluminum, 445 U.S. 97, 63
L. Ed. 2d 233, 100 S. Ct. 937 (1980), the Supreme Court examined a California
law that restricted wine wholesalers from selling any brand of wine to a
retailer at a price below that established by the wine producers. Although it
had clearly expressed a policy favoring price controls (for economic reasons),
California itself did not fix the wine prices, nor did it supervise the pricing
system for reasonableness. 445 U.S. at 100. The extent of its involvement was
the enforcement of the price control after it had already been established. Id.
at 105. The Court held that this did not demonstrate active supervision, and
that a state could not override the Sherman Act's application to private
parties merely by declaring anticompetitive conduct lawful. Id. at 106; see
also Parker, 317 U.S. at 341. Similarly, 324 Liquor Corp. v. Duffy, 479 U.S.
335, 93 L. Ed. 2d 667, 107 S. Ct. 720 (1987), involved a New York State law
similar in effect to the one invalidated in Midcal, and it, too, was deemed
illegal under the Sherman Act. As was the case with California in Midcal, New
York did not actively supervise the reasonableness of the price restraints
imposed by private parties under the law. 479 U.S. at 344-45. The issue in
Federal Trade Comm'n v. Ticor Title Ins. Co., 504 U.S. 621, 119 L. Ed. 2d 410,
112 S. Ct. 2169 (1992), was whether several states could authorize title
insurance companies to fix their fees for performing title searches. 504 U.S.
at 627. The states, Wisconsin and Montana, n17 had regulatory agencies in place
to oversee the reasonableness of the fixed fees, but it was found that none
exercised their regulatory duties to any appreciable extent. Id. at 629-30.
Rejecting the analysis of the Third Circuit Court of Appeals, which had held,
in reliance on a First Circuit opinion, that a fully staffed state regulatory
agency is itself ample evidence of active supervision, see id. at 637 (citing
922 F.2d 1122, 1136 (3rd Cir. 1991) (citing New England Motor Rate Bureau, Inc.
v. FTC, 908 F.2d 1064, 1071 (1st Cir. 1990))), the Supreme Court held that the
"mere potential for state supervision is not an adequate substitute for a
decision by the State." Id. at 638. Given that Wisconsin and Montana did
not actively supervise the price fixing of the title insurance companies, as in
Midcal and 324 Liquor, state action immunity was not warranted. Id.
The Court finds that Midcal, 324 Liquor, and Ticor Title
Insurance are all inapposite. Had the State of Ohio enacted a law [*1009]
allowing telephone companies to fix collect calling rates for the general
public, with de minimis oversight, this case would be very different. That is
not what has transpired, however. Indeed, this case is not even about horizontal
conspiracy (i.e., agreement between competitors not to compete). The situation
is more complex. First and foremost, the State of Ohio, through the ODRC,
operates every prison in Ohio, which is a very particularized and unique
market. Itself being one of the principals to the activity at issue, the State,
through the ODRC, has contracted with a single telephone service provider for
each correctional institution to provide outgoing calling services. This is a
vertical agreement, and the telephone service provider with whom the ODRC
contracts acts on behalf of the State. n18 Furthermore, whomever the carrier
may be, the rate it charges must then be approved by the Public Utility
Commission of Ohio ("PUCO"). See Ohio Rev. Code § 4909.15. n19 The
result is a calling plan, at each institution, established at the request of
the State, pursuant to the State's inherent obligation to administer its
correctional facilities, which charges a rate approved by the State. This is
unquestionably legal, and the rationale of Midcal and its progeny does not
apply.
When an inmate requests to use a direct dial telephone service,
or some other alternative method of calling, it is not the telephone service
provider that tells her "no"; it is, rather, the State of Ohio that
does so. This is truly a unique monopolistic situation, the likes of which the
Supreme Court and the Sixth Circuit have not addressed. This Court finds that the state action
doctrine must apply with its greatest vigor in a case, such as this, where a state government has contracted with an
outside vendor to provide a service on behalf of the state itself. The fact
that the service rates are subject to approval by the relevant state regulatory
agency only strengthens the point. n20 The Seventh Circuit, addressing
practically identical facts and circumstances arising in Illinois, put this
type of claim in its proper perspective:
Indeed the plaintiffs' real
argument has nothing to do with any horizontal conspiracy; it is rather that a
monopolist, namely the State of Illinois (and its subdivisions), exercising as
it does an iron control over access to the inmate market, has rented pieces of
the market to different phone companies, in much the same way that an airport
will charge a high fee to concessionaires eager to sell to the captive market
represented by the airline passengers who perforce spend time in the airport.
Cf. Elliott v. United Ctr., 126 F.3d 1003 (7th Cir. 1997). The concessionaires
will pass on much of the fee to their customers, who will thus pay a higher
than competitive price. States and other public agencies do not violate the
antitrust laws by charging fees or taxes that exploit the monopoly of force
that is the definition of government. They have to get revenue [*1010] somehow,
and the "somehow" is not the business of the federal courts unless a
specific federal right is infringed. Nor do the persons with whom the states
contract violate the antitrust laws by becoming state concessionaires, provided
those persons do not collude among themselves or engage in other
anticompetitive behavior, of which charging high prices as a state
concessionaire is not a recognized species.
Arsberry, 244 F.3d at 566.
The reality of government operations is that monopolistic
control of services, whether procured by the government for its own use, or
provided for third parties on behalf of the government, produces efficiencies.
It would be pioneering indeed for a federal court to hold that Congress, in
enacting the Sherman Act, intended to prohibit states from entering into
exclusive service contracts necessary and efficient to their own operations.
The State of Ohio has exclusive control
over its prison telephone system as much as it does over its buildings, its
parks, and all other government property. If it chooses to contract out the
operation of the phone system to a private party, that does not make it any
less a phone system of the State itself. Likewise, individuals have no greater
legal right, under the Sherman Act, to question the rate that a state charges
for an inmate-initiated call than they do the rate that a state charges for
admission to a state park. This may not be the best thing for
"consumers," or competing vendors who do not win the contracts, but
it is part and parcel to the sovereign prerogative.
Plaintiffs pray for an order from the Court that they and
inmates are entitled to the benefits of the free market of telephone services.
Their request is not well taken. The Sherman Act guarantees them nothing other
than that which the State of Ohio, as sovereign, deems appropriate in this
situation.
Accordingly, as it relates to Plaintiffs' Sherman Act claim
(Count IX), to the extent that claim concerns agreements between Telephone
Defendants and State Defendants only, said Defendants' Motions to Dismiss are
SUSTAINED.
C. Valentine Act (state antitrust claim) (Count XI)
With respect to Wilkinson, the sole remaining State Defendant,
the Court will also sustain Ohio Defendants' Motion as it relates to the Valentine
Act claim. As it does with respect to the Sherman Act, the state action
doctrine precludes Plaintiffs from suing the State of Ohio, as represented by
Wilkinson, under for alleged state antitrust violations. See Thaxton v. Medina
City Bd. of Educ., 21 Ohio St. 3d 56, 21 Ohio B. 357, 488 N.E.2d 136, 137 (Ohio
1986). Accordingly, Ohio Defendants' Motion is SUSTAINED as to Plaintiffs'
claim arising under Ohio's Valentine Act (Count XI), as is Telephone
Defendants' Motion to the extent the Valentine Act claim concerns any
agreements they are alleged to have with the State of Ohio.
(With respect to Telephone Defendants' alleged agreements with
County Defendants, the Court will address the Valentine Act pleadings together
with its discussion of the of County Defendants' Motion to Dismiss.)
D. Conclusion
In sum, to the extent Plaintiffs' claims are against the State
of Ohio and the ODRC, and insofar [*1011] as Plaintiffs seek damages against
Wilkinson in his official capacity, Ohio Defendants' Motion to Dismiss is well
taken, and it is SUSTAINED as to all of the claims against them (Counts I, III,
V, VII, IX & XI), pursuant to Fed. R. Civ. P. 12(b)(1). See Seminole Tribe,
supra. Insofar as Plaintiffs seek injunctive relief against Wilkinson in his
official capacity, and damages against him in his individual capacity, Ohio
Defendants' Motion is SUSTAINED as to Counts V, VII, IX & XI, pursuant to
Fed. R. Civ. P. 12(b)(6), and OVERRULED as to Counts I and III.
Insofar as these same claims are stated against Telephone
Defendants, stemming from their alleged agreements with the State of Ohio, said
Defendants' Motion to Dismiss is well taken as to Counts V, VII, IX & XI,
and SUSTAINED pursuant to Fed. R. Civ. P. 12(b)(6).Telephone Defendants' Motion
is OVERRULED as to Counts I and III. Insofar as said claims are concerned with
the alleged agreements between Telephone Defendants and County Defendants,
the merits of each shall be discussed
below.
IV. Telephone Defendants'
Motion to Dismiss (Doc. # 43) (as it relates to Plaintiffs' Claim under the
Telecommunications Act (Count X))
47 U.S.C. § 201 states:
(a) It shall be the duty of every common carrier engaged in
interstate or foreign communication by wire or radio to furnish such
communication service upon reasonable request therefor; and, in accordance with
the orders of the Commission, in cases where the Commission, after opportunity
for hearing, finds such action necessary or desirable in the public interest,
to establish physical connections with other carriers, to establish through
routes and charges applicable thereto and the divisions of such charges, and to
establish and provide facilities and regulations for operating such through
routes.
(b) All charges, practices,
classifications, and regulations for and in connection with such communication
service, shall be just and reasonable, and any such charge, practice, classification, or regulation that
is unjust or unreasonable is declared to be unlawful: Provided, That
communications by wire or radio subject to this chapter may be classified into
day, night, repeated, unrepeated, letter, commercial, press, Government, and
such other classes as the Commission may decide to be just and reasonable, and
different charges may be made for the different classes of communications:
Provided further, That nothing in this chapter or in any other provision of law
shall be construed to prevent a common carrier subject to this chapter from
entering into or operating under any contract with any common carrier not
subject to this chapter, for the exchange of their services, if the Commission
is of the opinion that such contract is not contrary to the public interest:
Provided further, That nothing in this chapter or in any other provision of law
shall prevent a common carrier subject to this chapter from furnishing reports
of positions of ships at sea to newspapers of general circulation, either at a
nominal charge or without charge, provided the name of such common carrier is
displayed along with such ship position reports. The Commission may prescribe
such rules and regulations as may be necessary in the public interest to carry
out the provisions of this chapter.
(Underline in original.)
Section 202(a) states:
It shall be unlawful for any
common carrier to make any unjust or unreasonable discrimination in charges,
practices, classifications, regulations, facilities, or services for or in
connection with like communication service, directly or indirectly, by any
means or device, or to make or give any undue or unreasonable preference or
advantage to any particular person, class [*1012] of persons, or locality, or
to subject any particular person, class of persons, or locality to any undue or
unreasonable prejudice or disadvantage.
In Count X, Plaintiffs aver that Telephone Defendants have
violated this law ("Telecommunications Act") by imposing upon them
collect calling rates developed pursuant to "unjust,"
"unreasonable," and "illegal" agreements with the State and
County Defendants. Sections 207 and 208 provide a person harmed by violations of the Telecommunications Act the
opportunity to elect an exclusive remedy, the former providing a right to bring
suit in federal district court, the latter providing a right to file a
complaint with the Federal Communication Commission ("FCC"). There is
no indication that Plaintiffs have previously filed a complaint with the FCC,
so the Court can assume they have properly invoked § 207 in filing this claim.
Telephone Defendants raise as their defense the "filed rate
doctrine," which the Court will now address. Telephone service providers are required under federal law to
file with the FCC a schedule of all charges and the "classifications,
practices, and regulations affecting such charges." 47 U.S.C. § 203(a).
The providers may not charge any other rate other than that on file. Id. §
203(c). Under the filed rate doctrine, "deviation from [the filed rate] is
not permitted upon any pretext." See American Telephone and Telegraph Co.
v. Central Office Telephone, Inc. ("AT&T"), 524 U.S. 214, 222,
141 L. Ed. 2d 222, 118 S. Ct. 1956 (1998). This doctrine is an applicable
defense to claims brought under the Telecommunications Act. See id.
The Court agrees that the filed rate doctrine bars this claim.
Plaintiffs' Telecommunications Act claim is premised entirely on the perceived
illegality of the collect calling agreements. There are no allegations that the
Telephone Defendants are not providing rates or services in conformity with
their filed schedules of rates and the like, only that they are not providing
services in conformity with such rates and terms to Plaintiffs' liking.
Plaintiffs have merely repackaged the entirety of their other pleadings under a
Telecommunications Act cause of action. This will not lie, and Plaintiffs have
failed to state a claim under 47 U.S.C. § 207.
That section allows a party to challenge a carrier's compliance with its
rate schedule; it does not allow the party to challenge the rate itself, or to
bring a cause of action for constitutional or antitrust violations. n21 Given
that all Plaintiffs seek is a modification of the rates they are charged for
accepting collect calls, the claim is barred by the filed rate doctrine, as
this Court does not have the authority to override the dictates of 47 U.S.C. §
203(c).
As further support of its argument, Telephone Defendants aptly
note that the FCC has considered this very issue (i.e., the cost of
inmate-initiated collect calls), within
the broader context of the high cost of operator-assisted calls in general.
Because its findings and rulings are pertinent to the facts of this case, they
are worthy of the Court's consideration. In 1990, Congress addressed numerous
consumer complaints of the high cost of operator-assisted telephone services,
and the lack of information available to consumers on how such costs were
calculated and incurred. See Pub. L. 101-435 § 2 (Congressional Statement of
Findings), reprinted at 47 U.S.C.A. § 226 (2001), Historical and Statutory
[*1013]Notes. n22 Congress was principally concerned with contracts between
businesses which make telephones available to the public for operated-assisted
use, such as hotels, hospitals, airports, and the like (denominated in the law
as "aggregators"), and the telephone operators who service those
phones and provide the gateway to connecting telephone signal carriers. See id.
The primary complaint was that the operators were preventing, or
"blocking," consumers from accessing the long-distance carrier of
their choice in order to charge their own high rate, which benefitted the
amenable aggregator in the form of larger commissions. See id. In response,
Congress enacted the Telephone Operator Consumer Services Improvement Act, Pub.
L. 101-435, 104 Stat. 987 (codified as amended at 47 U.S.C. § 226)
("TOCSIA"), which, among other things, outlawed blocking, see 47
U.S.C. § 226(c)(1)(B), and directed the FCC to promulgate rules to further
protect consumers of such services.
In In the Matter of Amendment of Policies and Rules Concerning
Operator Serv. Providers and Call Aggregators, 11 F.C.C.R. 4532 (March 5, 1996)
("First Report"), the FCC addressed, among other topics, how, or if,
the TOCSIA should be applied to the collect calling phone systems at the
nation's state prisons. In response to its request for feedback, the regulating
bodies of three states advocated for treating prisons as aggregators, to be
regulated with all others. First Report P27. However, the majority of commentators
disfavored treating prisons as aggregators, generally contending that the
"exceptional circumstances" surrounding prison administration made
the issue unique. Id. P28. The FCC decided not to classify prisons as
aggregators, but expressed deep concern for the high rates paid by those who
accept collect calls from inmates, such as Plaintiffs herein. n23 Id. PP29
& 30. n24
In a separate proceeding, In the Matter of Billed Party
Preference for lnterLATA O + Calls, 11 F.C.C.R. 7274 (June 6, 1996)
("Second Report"), the FCC considered whether inmates should be
allowed to access the long-distance carriers of their choice and/or whether
rate caps should be imposed on collect calls. Recognizing that prisons
typically block inmates' access to long-distance carriers other than the ones
with which they have contracted on a monopolistic basis and having already
determined that the TOCSIA was not applicable to prisons, the FCC questioned
the viability of providing consumers with a choice of carriers within the prison
context. Second Report PP48 & 49. Instead, it invited comment on
alternative remedies. Id. P49. In its follow-up report, 13 F.C.C.R. 6122 (Jan.
29, 1998) ("Third Report"), "persuaded by comments of the United
States Attorney General, other federal officials, and nearly all who have
commented on this issue," the FCC reiterated that consumer choice of
carriers was not an option within the prison context. Third Report P57. n25 The
FCC also rejected, as it had done with [*1014] operator-assisted phone calls in
general, imposing rate caps or price benchmarks for the carriers to follow. Id.
P59. On this point, it stated that the existing obligation to set just and
reasonable rates, imposed upon carriers by 47 U.S.C. § 201, along with its
concern that price caps would be adopted by carriers as price floors, made this
option undesirable. Id.
In the end, the FCC adopted a rule requiring operators servicing
inmate-initiated calls to identify themselves orally to any potential recipient of an interstate collect call, and
then give the potential recipient the option to obtain billing information,
broken down on a per minute basis, prior to accepting the call. Id. P60. The
optional service is free-of-charge and the potential recipient is not billed
for any phone connection time prior to her actual acceptance of the collect
call. Id. By giving a potential recipient the option of learning in advance the
exact cost breakdown, on a minute-by-minute basis, of the call he or she is
being asked to accept, the FCC expressed the hope that some of the
"abusive practices that have led to complaints," notably, general
consumer ignorance as to the billing structure, could be eliminated. Id. In the
event progress was not made, the agency retained the right "to proceed on
a case-by-case basis, should the rules we adopt herein not lead to reasonable
rates for calls from inmate phones." Id. P59. n26 Indeed, the FCC
investigation into inmate-initiated calls across the country, and the notice
and comment process related thereto, has been extensive. See Implementation of
the Pay Telephone Reclassification and Compensation Provisions of the
Telecommunication Act of 1996, 67 Fed. Reg. 17009 (Apr. 9, 2002) (Final Rule).
n27
The importance of this history should be self-evident. Rate
setting and related relief is the
bailiwick of the FCC. The Telecommunications Act cannot, in any logical sense,
be understood as providing a means for striking down or enjoining the rates
imposed upon Plaintiffs as a result of their accepting collect calls from Ohio
inmates. Their remedy lies with the FCC, or Congress itself. n28 Accordingly,
as it relates to [*1015] Plaintiffs' claim under the Telecommunications Act
(Count X), Telephone Defendants' Motion to Dismiss is SUSTAINED.
V. County Defendants' Motion
to Dismiss (Doc. # 43)
A. Individual Counties
As noted by the Court in its entry dismissing Montgomery County
as a Defendant, counties, as political
entities, are not sui juris; they are held accountable through their elected
representatives, to wit, their commissioners. (Doc. # 52 at 2.) For the reasons
stated with respect to its order dismissing Montgomery County from this case
(Doc. # 52), the Counties of Miami, Greene, Madison, and Butler, as well as all
other Unknown Counties, are hereby dismissed. With respect to them, County
Defendants' Motion to Dismiss (Doc. # 43) is well taken, and is hereby
SUSTAINED, pursuant to Fed. R. Civ. P. 12(b)(1).
The same result holds for the several county sheriffs named
herein in their official capacities. The claims against them are not for
individual actions, but for policies implemented by the departments they run,
pursuant to their obligations to operate their respective county jails. Such
claims implicate the counties they serve. Because law enforcement agencies, too, are not sui juris, being no more than arms of the government of which
they are a part, the sheriffs must be dismissed from this action. See, e.g.,
Jones v. Marcum, 197 F. Supp. 2d 991, 997 (S.D. Ohio 2002). With respect to
them, County Defendants' Motion to Dismiss (Doc. # 43) is well taken, and is
hereby SUSTAINED, pursuant to Fed. R. Civ. P. 12(b)(1).
Accordingly, references hereinafter to County Defendants will
imply only the respective Boards of County Commissioners.
B. Due Process and Contracts Clause Claims (Counts VI &
VIII)
The Court's previous discussion on the merits of Plaintiffs' due
process and Contracts Clause claims apply with equal force to the identical
claims related to the agreements between County Defendants (now limited to the
county commissioners) and Telephone Defendants (Counts VI & VIII). As they
relate to those claims, arising under 42 U.S.C. § 1983, County Defendants' and
Telephone Defendants' Motions to Dismiss are SUSTAINED, pursuant to Fed. R. Civ.
P. 12(b)(6).
C. Equal Protection and First Amendment Claims (Counts II &
IV)
To the extent Plaintiffs attempt to state an equal protection
claim against County and Telephone Defendants on the basis of class-based discrimination
(Count II), it is without merit for the reasons previously discussed. As they
relate to such a claim, County and Telephone Defendants' Motions to Dismiss are
SUSTAINED, pursuant to Fed. R. Civ. P. 12(b)(6).
To the extent Plaintiffs base their equal protection claim as to
these Defendants (Count II) on alleged infringements of their fundamental
rights of free speech and association, and as to their First Amendment claim
against these Defendants [*1016] (Count IV), and insofar as the County and
Telephone Defendants' Motions to Dismiss relate to same, the Motions are
OVERRULED. For the reasons already stated above in the Court's discussion of
the identical claims stemming from the alleged relationships between State and
Telephone Defendants, the Court finds that it would be more appropriate to
consider the viability of these claims pursuant to arguments for and against
summary judgment. Again, Plaintiffs have a significant burden to overcome, but
it would be premature to find that they cannot do so. n29 Accordingly, as to
these claims (Counts II & IV), County Defendants' and Telephone Defendants'
Motions to Dismiss are OVERRULED.
- - - - - - - - - - - - - -
- - - -Footnotes- - - - - - - - - - - - - - - - - -
n29 It
should also be noted that the State and counties may have different reasons for
operating their collect calling systems in the manner they do, and the
individual Defendants should be prepared, should they submit motions for
summary judgment, to demonstrate how their respective systems are reasonable.
- - - - - - - - - - - - - -
- - -End Footnotes- - - - - - - - - - - - - - - - -
D. Sherman Act (federal antitrust claim) (Count IX)
Regarding the Sherman Act claim, as it relates to telephone
service agreements between County Defendants and Telephone Defendants, given
that the individual county officials were named in their official capacity
only, to the extent Plaintiffs seek damages, interest on damages, costs, or
attorney's fees, the Sherman Act claim against the county officials is barred
by the Local Government Antitrust Act, 15 U.S.C. § 35(a). That same Act bars
Plaintiffs from collecting damages, interest on damages, and costs or
attorney's fees from Telephone Defendants, to the extent Telephone Defendants
acted at the direction of the county officials. Id. § 36(a).
To the extent Plaintiffs seek injunctive relief against the
individual County Defendants and Telephone Defendants, on account of the
alleged agreements between the two parties, further review of the state action
doctrine is required.
On their own, local governments are not sovereign, and their
independent actions are not exempt from federal antitrust laws. See City of
Lafayette, 435 U.S. at 412-13. Thus, whether conduct of a local government that
would typically qualify as anticompetitive for federal antitrust purposes
actually gives rise to antitrust liability depends, as it does with respect to
private parties, on whether the local government "engages in the
challenged activity pursuant to a clearly expressed state policy." Hallie
v. Eua Claire, 471 U.S. 34, 40, 85 L. Ed. 2d 24, 105 S. Ct. 1713 (1985). By
"clearly expressed," it is not meant that the Court must find that
the Ohio General Assembly "stated explicitly that it expected [the County
Defendants] to engage in conduct that would have anticompetitive effects,"
only that the authority of the County Defendants to act as they have was
contemplated, and that their conduct is a logical result of the broad authority
given to them. Id. at 42, 44. "No legislature can be expected to catalog
all of the anticipated effects of a statute of this kind." Id. at 43.
County Defendants need not show that they were compelled by the State of Ohio
to engage in the conduct they did. See id. at 45. Moreover, whereas a private
party must be able to show that a state actively supervised its conduct in
order to avail itself of state action doctrine immunity, County Defendants need
not. See id. at 46. This is because the posture of a local government is
substantively different than that of a private actor.
Where the actor is a
municipality, there is little or no danger that it is involved in [*1017] a
private price-fixing arrangement. The only real danger is that it will seek to
further purely parochial public interests at the expense of more overriding
state goals. This danger is minimal, however, because of the requirement that
the municipality act pursuant to a clearly articulated state policy. Once it is
clear that state authorization exists, there is no need to require the State to
supervise actively the municipality's execution of what is a properly delegated
function.
Id. at 47 (emphasis in
original).
As discussed, in Boulder, 455 U.S. at 55-56, the Supreme Court
held that where a state grants general "home rule" governing
authority to a municipality, that grant
of general authority is too vague to impute any future actions of the
municipality to the state, for purposes of invoking the state action doctrine.
Hallie provides a contrast. In that case, several unincorporated towns brought
an antitrust suit against a neighboring city, alleging that the city, operating
with a legal monopoly on sewage treatment in its area, refused to provide as
much to the unincorporated towns' sewage. The effect of this policy was that it
negated the towns' respective abilities to establish sewage lines of their own.
Nevertheless, the Court held that the anticompetitive conduct had been
authorized by the state (of Wisconsin), as was demonstrated by the fact that
the state had granted the city the discretion to not link its sewage lines to
those of the unincorporated towns. 471 U.S. at 42-43. It did not matter that
the state had not explicitly granted the city the right to monopolize sewage
treatment; it sufficed that such conduct was a logical result of granting the
city the right not to link its sewage lines to the unincorporated areas. Id. at
43-44.
This case presents a close question. Ohio has placed its county jails in the charge of the county
sheriffs. See Ohio Rev. Code § 341.01. In turn, the sheriff is to govern and
regulate the jails according to the standards established by the ODRC. See id.
The investigation and supervision of county jails rests with the DPCS, a
division of the ODRC. See id. § 5120.10. With respect to county jails equipped
to house inmates for more than five days, the ODRC allows an inmate one local
call each week to a relative, employer, friend, attorney, or clergy. Ohio
Admin. Code § 5120:1-8-08(B)(1). Additional calls to counsel are permitted for
inmates yet to be sentenced. Id. § 5120:1-8-08(B)(2). Inmates without friends
or family in the area are permitted one long-distance collect call per week.
Id. § 5120:1-8-08(B)(3). The Court finds that this latter provision expresses
the clear policy of the State of Ohio that counties are to equip their jails
with collect calling phone systems. n30 That finding, however, is not the end
of the story. It remains to be answered whether counties are required to limit
their inmate phone service systems to single operator systems.
- - - - - - - - - - - - - -
- - - -Footnotes- - - - - - - - - - - - - - - - - -
n30
Inmates at jails equipped to house inmates up to five days are allowed at least
one telephone during their period of incarceration in addition to an initial
phone call to a person of their choice, and any which they make for purposes of
retaining an attorney. Ohio Admin. Code §§ 5120:1-10-01(E)(1) & (2) and
5120:1-10-08(B). There is no specification that the call be made collect, but
the authority to establish telephone policies rests with the sheriff. Id. §
5120:1-10-08(A).
- - - - - - - - - - - - - -
- - -End Footnotes- - - - - - - - - - - - - - - - -
A county's board of commissioners is vested with the power to
provide for the operation of its jails in accordance with the standards set by
the ODRC. See Ohio Rev. Code § 307.01(A). As with the State of Ohio, county
services are generally procured [*1018]
through a competitive bidding process. See id. § 307.86. Of course, exactly how
County Defendants actually procured their inmate telephone service systems is a
question of fact which the Court may not address at this juncture. This is
significant at this stage of the litigation in light of the fact that the
counties of Ohio are not on equal sovereign footing as the State itself. As to
the latter, the Court need not concern itself with how or why the ODRC chooses
not to allow inmates and Plaintiffs a choice of telephone carriers; it is
enough to note that the State is sovereign, and that such a choice is its
sovereign right to make. With respect
to the counties, on the other hand, they enjoy no such sovereign status. The
Sherman Act applies to them, unless it is found that they are acting pursuant
to a policy contemplated by the authority vested in them by the State of Ohio.
At this stage of the litigation, questions of fact exist which
prevent the Court from making a finding that Plaintiffs cannot prevail on their
Sherman Act claim under any set of facts. The Court believes that the disposition
of the claim will turn on whether the facts come to demonstrate that this case
is more akin to Boulder or to Hallie. The question of fact presented is whether
the Ohio General Assembly or the ODRC, vested as it is with complete authority
to supervise the operations of county jails, contemplated that in giving county
commissioners the authority to provide for jails in conformity with ODRC
regulations, and county sheriffs the authority to operate the jails in
conformity with the same, the counties would, in turn, establish their collect
calling phone systems on a monopolistic basis. The Court finds that such a
determination cannot yet be made. To the extent they have entered into
agreements with the individual County Defendants, Telephone Defendants, too,
may not yet be dismissed from this case.
One final observation must be raised. 47 U.S.C. § 276(b)(1) gives the FCC authority to regulate
competition among payphone service providers. n31 Correctional institution inmate
telephone service is included within the definition of "payphone
service" under this Act. 47 U.S.C. § 276(d). The fact that a federal
agency has been given regulatory authority in the area of law directly
implicated by this case raises the question of whether the Court should abstain
from hearing this case under the "primary jurisdiction doctrine." See
United States v. Western Pac. R.R. Co., 352 U.S. 59, 63-70, 1 L. Ed. 2d 126, 77
S. Ct. 161, 135 Ct. Cl. 997 (1956), and its progeny.
- - - - - - - - - - - - - -
- - - -Footnotes- - - - - - - - - - - - - - - - - -
n31 This
provision touches upon a concern other than that contained at 47 U.S.C. § 226.
Section 226 is concerned with consumers' right to equal access of the telephone
service provider of their choice when they dial from a telephone made available
to them by a business which is providing the use of the telephone as part of
its proprietary operations (defined as an "aggregator"). Section 276,
by contrast, is concerned with competition among payphone service providers.
The FCC has ruled that it cannot, under § 226, regulate prisons as aggregators.
See In the Matter of Policies and Rules Concerning Operator Service Providers,
6 F.C.C.R. 2744 (Apr. 15, 1991) P 15; First Report, supra, P29. On the other
hand, Congress quite clearly has given the FCC the authority to regulate prison
collect calling systems as payphone services under § 276.
- - - - - - - - - - - - - -
- - -End Footnotes- - - - - - - - - - - - - - - - -
County Defendants did not address this issue; Telephone
Defendants did so only in their Reply Memorandum. n32 (Doc. # 51 [*1019] at
19-21.) As such, Plaintiffs have not had an opportunity to respond.
Accordingly, should Defendants choose to submit, as the Court expects they
will, subsequent motions for summary judgment, they are directed to address
this question in addition to any arguments on the merits of Plaintiffs' Sherman
Act claim.
- - - - - - - - - - - - - -
- - - -Footnotes- - - - - - - - - - - - - - - - - -
n32
State Defendants raised a separate primary jurisdiction argument, but such
concerned the fairness of the rates. (Doc. # 41 at 42.) Telephone Defendants
raised the same argument in a footnote. (Doc. # 42 at 32 n.15.) For purposes of
evaluating Plaintiffs' Sherman Act claim, the rate setting of a single inmate
telephone service provider, which was the subject of Plaintiffs'
Telecommunications Act claim against Telephone Defendants, is not the issue.
Rather, at issue is the ability of would-be inmate telephone service providers
to compete on an active basis for inmates' (Plaintiffs') business, and the
right of correctional institutions to ignore such concerns by offering
exclusive contracts. Obviously, a challenge to monopolistic control is ultimately
a challenge to rates, but it is so only indirectly, and it poses a separate
question for consideration.
- - - - - - - - - - - - - -
- - -End Footnotes- - - - - - - - - - - - - - - - -
For purposes of guidance, the Court finds that the following questions
should be addressed in any motions for summary judgment that Defendants may
file:
1) Under any law of Ohio or regulation of the ODRC, was it
contemplated by the State of Ohio that County Defendants would award exclusive
(i.e., monopolistic) contracts to the respective Telephone Defendants, under
which inmate access to collect calling telephone service would be limited to a
single telephone service provider? n33
- - - - - - - - - - - - - -
- - - -Footnotes- - - - - - - - - - - - - - - - - -
n33 As
the Court has already found that the State clearly intended County Defendants
to establish collect calling systems, the parties are not to address that
particular point any further. The sole issue is whether it was contemplated
that such systems would be established pursuant to exclusive contracts.
- - - - - - - - - - - - - -
- - -End Footnotes- - - - - - - - - - - - - - - - -
2) Irrespective of any state supervision of County Defendants' alleged
conduct, was the conduct of Telephone Defendants actively supervised by the
State of Ohio?
3) Inasmuch as the collect calling systems installed in the
county jails of Ohio are deemed "payphone service" under 47 U.S.C. §
276(d), is the issue of how said systems should be opened to market competition
within the primary jurisdiction of the FCC? n34
- - - - - - - - - - - - - -
- - - -Footnotes- - - - - - - - - - - - - - - - - -
n34 Of
course, nothing prevents the Court from entertaining this issue within the
context of Plaintiffs' constitutional claims, as such claims are not within the
primary jurisdiction of the FCC. See Communications Workers of America v. Beck,
487 U.S. 735, 743 n.1, 101 L. Ed. 2d 634, 108 S. Ct. 2641 (1988).
- - - - - - - - - - - - - -
- - -End Footnotes- - - - - - - - - - - - - - - - -
Subject to the limitation on damages imposed by the Local
Government Antitrust Act, 15 U.S.C. §§ 35 & 36, to the extent Defendants'
respective Motions to Dismiss relate to Plaintiffs' Sherman Act claim (Count
X), they are OVERRULED.
E. Valentine Act (state antitrust claim) (Count XI)
With respect to the issue of injunctive relief, the identical
considerations remain regarding Plaintiffs' Valentine Act claim (Count XI) against
the County and Telephone Defendants.
Accordingly, pursuant to the identical terms discussed above regarding
the Sherman Act claim, to the extent Defendants' respective Motions relate to
this claim and Plaintiffs' request for injunctive relief, they are OVERRULED.
Furthermore, because the claim is properly stated at least insofar as
Plaintiffs' seek such relief, the Court need not consider at this juncture
whether damages would be available under the Valentine Act against these
Defendants. This is an issue which can also be briefed in any subsequent
motions for summary judgment. For the time being, to the extent Plaintiffs do
seek damages thereunder, the respective Motions of the County and Telephone
Defendants, as they relate to this claim, are OVERRULED.
VI. Conclusion
A. State Defendants' Motion to Dismiss (Doc. # 41)
As it pertains to the State of Ohio and the ODRC, and as it
pertains to Wilkinson [*1020] insofar as the Plaintiffs seek damages against
him in his official capacity, State Defendants' Motion to Dismiss is SUSTAINED,
pursuant to Fed. R. Civ. P. 12(b)(1), as to all of the claims applicable to
them (Counts I, III, V, VII, IX & XI). To the extent Plaintiffs seek
injunctive relief against Wilkinson in his official capacity, and damages
against him in his individual capacity, the State Defendants' Motion is
SUSTAINED, pursuant to Fed. R. Civ. P. 12(b)(6), as to Counts V, VII, IX &
XI, and as to Count I, insofar as Plaintiffs' equal protection claim stems from
an alleged class-based violation. As to Count I, insofar as Plaintiffs' equal
protection claim against Wilkinson stems from an alleged violation of their
fundamental rights of free speech and association, and as to Count III, the
Motion is OVERRULED.
B. Telephone Defendants' Motion to Dismiss (Doc. # 42)
Regarding the Telephone Defendants' Motion to Dismiss, as it
concerns the claims related to their alleged agreements with State Defendants,
it is SUSTAINED, pursuant to Fed. R. Civ. P. 12(b)(6), as to Counts V, VII, IX
& XI, and as to Count I, insofar as Plaintiffs' equal protection claim
stems from an alleged class-based violation. Said Motion is also SUSTAINED with
respect to the due process and Contracts Clause claims relating to the alleged
agreements between them and the County Defendants (Counts VI & VIII),
pursuant to Fed. R. Civ. P. 12(b)(6). Insofar as Plaintiffs' equal protection
claim relating to the alleged agreements between Telephone Defendants and
County Defendants (Count II) is premised on an allegation of class-based
discrimination, Telephone Defendants' Motion is SUSTAINED with respect thereto,
pursuant to Fed. R. Civ. P. 12(b)(6).
To the extent Plaintiffs seek damages from the Telephone
Defendants under the Sherman Act (Count IX) for actions taken at the direction
of County Defendants, pursuant to their alleged agreements with County
Defendants, the Telephone Defendants' Motion is SUSTAINED pursuant to Fed. R.
Civ. P. 12(b)(6). It is also SUSTAINED as to the Telecommunications Act claim
(Count X), pursuant to Fed. R. Civ. P. 12(b)(6).
With respect to Plaintiffs' equal protection claims relating to
the alleged agreements between Telephone Defendants and State Defendants (Count
I), and those between Telephone Defendants and County Defendants (Count II),
insofar as they are premised upon alleged infringements of Plaintiffs'
fundamental rights of free speech and association, and with respect to
Plaintiffs' First Amendment claims relating to the same alleged agreements
(Counts II & IV), Telephone Defendants' Motion is OVERRULED. Said Motion is
also OVERRULED with respect to the Sherman Act claim (Count IX), insofar as
Plaintiffs seek injunctive relief against the alleged agreements between
Telephone and County Defendants. Finally, said Motion is OVERRULED with respect
to the Valentine Act claim against them (Count XI), insofar as it concerns
their alleged agreements with the County Defendants.
C. County Defendants' Motion to Dismiss (Doc. # 43)
As to the several counties named herein, along with their
sheriffs, named in their official capacities, as they are not sui juris, County
Defendants' Motion to Dismiss is SUSTAINED as to the claims against them
(Counts II, IV, VI, VIII, IX & XI), pursuant to Fed. R. Civ. P. 12(b)(1).
As to the several county commissioners, said Motion is SUSTAINED
with respect to the due process and Contracts Clause claims against them
(Counts VI & VIII), pursuant to Fed. R. Civ. P. 12(b)(6). Said [*1021]
Motion is also SUSTAINED, pursuant to Fed. R. Civ. P. 12(b)(6), with respect to
the equal protection claim against them (Count II), insofar as said claim is
premised on alleged class-based discrimination. As well, the Motion is
SUSTAINED with respect to the Sherman Act claim (Count IX), under Fed. R. Civ.
P. 12(b)(6), insofar as Plaintiffs seek damages and associated costs and fees.
The Motion is OVERRULED with respect to the equal protection
claim against them (Count II), insofar as said claim is premised on
infringements of Plaintiffs' fundamental rights of free speech and association,
and with respect to the First Amendment claim against them (Count IV). Said
Motion is also OVERRULED with respect to the Sherman Act claim against them
(Count IX), insofar as Plaintiffs seek injunctive relief, and with respect to
the Valentine Act claim against them (Count XI).
D. Remaining Viable Claims
To summarize, the following claims remain viable: 1) Count I, to
the extent it states a claim under the Equal Protection Clause premised on
alleged infringements of Plaintiffs' fundamental rights of free speech and
association arising out of the alleged agreements between State and Telephone
Defendants; 2) Count II, to the extent it states a claim under the Equal
Protection Clause premised on alleged infringements of Plaintiffs' fundamental
rights of free speech and association arising out of the alleged agreements
between County and Telephone Defendants; 3) Count III, which states a claim
under the First Amendment arising out of the alleged agreements between State
and Telephone Defendants; 4) Count IV, which states a claim under the First
Amendment arising out of the alleged agreements between County and Telephone
Defendants; 5) Count IX, which states a claim under the Sherman Act, 15 U.S.C.
§ 1, to the extent Plaintiffs seek injunctive relief against County and
Telephone Defendants; and 6) Count XI, which states a claim under Ohio's
Valentine Act against County and Telephone Defendants for injunctive relief and
damages.
In the event Telephone and County Defendants should submit
motions for summary judgment, they are directed to address the questions posed
by the Court in Part V of this Decision and Entry, concerning the applicability
of the primary rate doctrine to Plaintiffs' Sherman Act claim (Count IX), in
addition to any other arguments they may submit.
E. WorldCom Bankruptcy
As a final matter, the Court must make mention of the fact that
Defendant MCI Worldcom Network, Inc., now known as Worldcom, Inc.
("WorldCom"), n35 filed for Chapter 11 bankruptcy on July 21, 2002.
See In re WorldCom, Inc., Case No. 02-13533 (Bankr. S.D.N.Y. July 21,
2002). Such a filing operates as an
automatic stay on these proceedings. See 11 U.S.C. § 362(a). Accordingly,
before any further actions can be taken in this litigation, Plaintiffs must
notify the Court whether they desire to dismiss WorldCom from this litigation,
and proceed vis-a-vis the remaining Defendants, or otherwise comply with the
stay of proceedings until WorldCom's bankruptcy action is resolved. See id. §
362(c).
- - - - - - - - - - - - - -
- - - -Footnotes- - - - - - - - - - - - - - - - - -
n35
Telephone Defendants notified the Court of this corporate name change in their
Motion to Dismiss. (Doc. # 42 at 1 n.1.)
- - - - - - - - - - - - - -
- - -End Footnotes- - - - - - - - - - - - - - - - -
Accordingly, Plaintiffs are to notify the Court, within 20 days
of date, of their intentions with regard to this matter. In the meantime, with
the exception of Plaintiffs' [*1022] compliance with the Court's directive to
notify, this action is stayed until further notice, and parties are not to
proceed with any action related thereto, including the filing of motions for
summary judgment, until such time. If Plaintiffs indicate that they intend to
dismiss WorldCom and proceed with this litigation, the Court shall schedule a
conference call to discuss further proceedings.
January 15, 2003
WALTER HERBERT RICE, CHIEF JUDGE
UNITED STATES DISTRICT COURT
n1
Plaintiffs erroneously cite 21 U.S.C. § 151, et seq., in their jurisdictional
pleadings as the "Telecommunications Act." (Amend. Compl. P4.) Title
21 of the United States Code is concerned with Food and Drug matters, and § 151
in particular is concerned with the sale or barter of worthless or harmful
products for domestic animals, a subject that does not appear to be at issue
herein.
n2
Montgomery County was also named, but has since been dismissed. (See Doc. #
52.)
N3 For example,
were diversity asserted as the basis for the Court's original jurisdiction, see
28 U.S.C. § 1332, and the diverse citizenship of one of the defendants
disputed, the Court would be required to make factual findings on the
citizenship issue pursuant to a motion to dismiss brought pursuant to Rule
12(b)(1), given that it would bear on its jurisdiction. In doing so, nothing
would require it to consider the merits of the underlying allegations, as it
would were it ruling on a motion for summary judgment.
n4
Contrary to the suggestion of Plaintiffs, this does not mean that all of the pleadings must be accepted as true; the
rule only applies to allegations of fact. Where the pleadings state conclusions
of law, whether they are correct is for the Court to decide on its own. In
other words, a conclusion of law is not presumed true merely because Plaintiffs
state it in their Amended Complaint as if it were a fact. For example, the
"allegations" that the agreements at issue "constitute a confiscation
of plaintiff's property" (Amend. Compl. P78), and that Defendants have
"unreasonably restrained trade" (id. P90), are conclusions of law,
and the Court need not give them any deference in ruling on Defendants' Motions
to Dismiss.
n5 Ohio Rev. Code § 2967.01 defines
"state correctional institution" as "any institution or facility
that is operated by the [ODRC] and that is used for the custody, care, or
treatment of criminal, delinquent, or psychologically or psychiatrically
disturbed offenders." The discretion to name and operate such facilities
is that of the ODRC. Ohio Rev. Code § 5120.05.
n6 "Full service jails" are local
jails which may detain persons for more than five days. Ohio Admin. Code §
5120:1-7(A)(1). "Five-day facilities" are local jails which may
detain persons for a maximum of five days. Id. § 5120:1-7(A)(2).
"Eight-hour holding facilities" may detain persons up to eight hours.
Id. § 5120:1-7(A)(3). In addition, non-violent misdemeanants who have been
sentenced may be held in "minimum security misdemeanant jails,"
without respect to duration. Id. § 5120:1-7(A)(4).
n7
Gender-based classifications are subject to an "intermediate
scrutiny" standard, and will be upheld only if the law "substantially
relates" to a "sufficiently important" government interest. See
Cleburne, 473 U.S. at 441 .
n8 The
Mosley Court recognized that while it analyzed the question under the Equal
Protection Clause, it was obviously interrelated with the fundamental First
Amendment right of free speech. 408 U.S. at 95 & 96.
n9 As
once observed by Justice Brennan, "claims of interference with enjoyment
of fundamental rights have ... occupied a rather protean position in our
constitutional jurisprudence." Maher v. Roe, 432 U.S. 464, 484, 53 L. Ed.
2d 484, 97 S. Ct. 2376 (1977)(Brennan, J., dissenting). At times, claims of
violations of fundamental rights have been entertained under the Due process
Clause of the Fourteenth Amendment, under the guise of "substantive"
due process. See Washington v. Glucksburg, 521 U.S. 702, 720-21, 138 L. Ed. 2d
772, 117 S. Ct. 2258 (1997) (citing cases and observing "that the Due
Process Clause specially protects those fundamental rights and liberties which
are, objectively, deeply rooted in this Nation's history and tradition")
(internal quotation and citation omitted). At other times, as noted, alleged
violations of fundamental rights have been entertained under the Equal
Protection Clause of the Fourteenth Amendment. See, e.g., Harper v. Virginia
State Bd. of Elections, 383 U.S. 663, 670, 16 L. Ed. 2d 169, 86 S. Ct. 1079
(1966) (citing cases and stating that "we have long been mindful that
where fundamental rights and liberties are asserted under the Equal Protection
Clause, classifications which might invade or restrain them must be closely scrutinized
and carefully confined."). To add to the muddle, the Privileges or
Immunities Clause has recently been invoked as the guarantor of the fundamental
right to travel, see Saenz v. Roe, 526 U.S. 489, 143 L. Ed. 2d 689, 119 S. Ct.
1518 (1999), even though thirty years earlier, in Shapiro v. Thompson, supra,
the Court reached the identical result, on indistinguishable facts, under an
Equal Protection Clause analysis. In truth, whether invoked under the Equal
Protection Clause, the Due Process Clause, the Privileges or Immunities Clause,
or a more explicit provision of the Constitution, the fundamental rights
analysis is the same. This history has led some to observe that the Supreme
Court's Fourteenth Amendment jurisprudence is in disarray. See, e.g., Saenz,
526 U.S. at 527 (Thomas, J., dissenting).
n10 In
contrast to its equal protection jurisprudence, the Supreme Court has held that
the Due Process Clause may not be invoked to prosecute an alleged violation of
a fundamental right if such right has explicit constitutional protection under
a more specific provision. See Albright v. Oliver, 510 U.S. 266, 273, 127 L.
Ed. 2d 114, 114 S. Ct. 807 (1994). Sixth Circuit cases reinforce this
superficial distinction. For example, the Sixth Circuit recently stated that
"fundamental rights are incorporated against the states" via the "substantive component" of the
Fourteenth Amendment's Due Process Clause. Brandenburg v. Housing Auth. of
Irvine, 253 F.3d 891, 900 (2001) (citing Beckwith v. City of Daytona Beach Shores,
58 F.3d 1554, 1562 (11th Cir.1995)). Citing Albright, the Brandenburg court,
proceeding under the substantive due process rubric, held that one could not
bring a § 1983 claim under the Due Process Clause for an alleged violation of a
right explicitly protected by the First Amendment. In contrast, in Lac Vieux
Desert Band of Lake Superior Chippewa Indians v. The Michigan Gaming Control
Bd., 276 F.3d 876, 879 n.1, the Sixth Circuit recognized that where an alleged
First Amendment violation "implicates a constitutionally protected
fundamental right, the right to freedom of speech," an Equal Protection
Clause claim will also lie.
n11 The
only issue here is the cost of one particular form of communication. There is
nothing in the pleadings indicating that the right to physically visit inmates
has been hampered, save for the inconvenience of travel itself (a factor which
in no way can be attributed to any of the Defendants). Nor is there is anything
in the pleadings indicating that the right to correspond by mail has been
hampered, or that the collect calling plans have hampered attorneys' abilities
to provide their clients with adequate access to judicial process. Finally,
there is no content-based restriction on what inmates and Plaintiffs may
discuss over the phone. See Bell v. Wolfish, 441 U.S. 520, 551, 60 L. Ed. 2d
447, 99 S. Ct. 1861 (1979). While higher calling rates may give rise to a
cognizable "economic injury" for purposes of demonstrating standing,
see, e.g., Linton v. Commissioner of Health and Environment, State of
Tennessee, 973 F.2d 1311, 1316 (6th Cir. 1992), Plaintiffs still must assert a
viable legal theory on which relief can be obtained in order to prevail on the
merits, and it is questionable whether the First Amendment presents a viable theory
under these facts. Cf. Washington v. Reno, 35 F.3d 1093, 1100 (6th Cir. 1994)
(holding that the First Amendment protects reasonable, not unlimited, telephone
access).
n12 The
Court will reiterate here that Telephone Defendants have not raised their
non-governmental status as a defense to Plaintiffs' theories of recovery, so
the Court does not concern itself here with state action, or the lack thereof,
with respect to them.
n13 For
example, in Skinner, the Supreme Court held that the right to procreate is a
fundamental right, the outright denial of which violates the Equal Protection
Clause. 316 U.S. at 541. Chief Justice Stone, concurring, rejected the equal
protection argument, contending that it would have been more appropriate for
the Court to reach the same result under the Due Process Clause. Id. at 545
(Stone, C.J., concurring). Later, in Glucksburg, the Court characterized
Skinner as a substantive due process case, holding that the right to have
children is a "'liberty' specially protected by the Due Process
Clause." 521 U.S. at 720 (citing Skinner, supra). Cf. Harper, 383 U.S. at
675 (Black, J., dissenting) (accusing the majority using the Equal Protection
Clause as a replacement for the "old 'natural-law-due-process formula'"
in holding that a poll tax unconstitutionally infringed upon the fundamental
right to vote).
n14 To
add to the due process soup, there is yet another strand of substantive due
process, concerning "executive acts" (as compared to legislative
acts). See County of Sacramento v. Lewis, 523 U.S. 833, 846, 140 L. Ed. 2d
1043, 118 S. Ct. 1708 (1998). As with
substantive due process concerning legislative acts, where an executive act is
at issue, the analysis begins with the identification of a particular
fundamental right, and proceeds to assess the manner by which such right was
deprived. Whereas the test generally employed with respect to legislative
deprivations of substantive due process is whether the legislation is
"narrowly tailored to serve a compelling state interest," Glucksburg,
521 U.S. at 721 (citation omitted), the test of whether an executive act
violates substantive due process is whether it "shocks the
conscience." Lewis, 523 U.S. at 846-47; Rochin v. California, 342 U.S.
165, 172, 96 L. Ed. 183, 72 S. Ct. 205 (1952). Of course, determining whether
conduct "shocks the conscience" presents one more amorphous test, for
which no easy definition or bright line rule exists. See Lewis, 523 U.S. at
847-55. Defendants contend that the establishment of the collect calling plans
was the product of executive, not
legislative, action. Plaintiffs, for their part, argue that it is legislative
in effect, and therefore should be treated as such. Suffice it to say that even
if the Court were to treat the actions at issue as executive in nature, it
would find that the claim is barred by Albright, supra, which held that alleged
violations of specific provisions of the Constitution, such as the First
Amendment in this case, cannot be repackaged under the Due Process Clause.
n15 Plaintiffs
also allege that the collect calling plan agreements operate to deprive them of
their "right to consult with counsel." (Amend. Compl. P78.) This
makes no sense. Plaintiffs are not inmates themselves, as all parties to this
dispute tend to lose sight of with some frequency.
n16 The strictures of the Contracts Clause apply
to legislative acts of government. See Barrows v. Jackson, 346 U.S. 249, 260,
97 L. Ed. 1586, 73 S. Ct. 1031 (1953). As noted supra note 14, Defendants
contend that the actions of which Plaintiffs complain are actions of the
executive branch of government, not the legislature; Plaintiffs contend the
opposite is true. The Court need not probe this issue, as the claim fails
either way.
n17 The
regulatory regimes of two other states, Arizona and Connecticut, were also
implicated, but to the extent the Supreme Court addressed the question of whether the states had demonstrated active
supervision, it focused only on the regimes of Wisconsin and Montana. 504 U.S.
at 632.
n18
Short of developing its own telecommunication system, this service must be
contracted out.
n19 On
the public utility rate fixing process, see generally Chapter 4909 of the Ohio
Revised Code. On the powers and authority of PUCO vis-a-vis the enforcement and
supervision of the filed rate system, see Chapter 4905.
n20
Indeed, unlike in Midcal and the other cases involving horizontal agreements,
the oversight involvement of the regulatory agency in this case is really an
irrelevant point. The PUCO regulation is purely a creature of state law. Other
than the First Amendment, which would probably bar a cost prohibitive calling
rate, nothing in federal law prevents a state from allowing a true monopolistic
calling rate (i.e., an unregulated rate). Thus, what demonstrates the
"active supervision" in this case is not the involvement of the PUCO,
but the fact that the State itself is a principal participant to the vertical
agreement.
n21
Plaintiffs argue that the filed rate doctrine is not concerned with the
monopolistic contracts which prisons offer to the various Telephone Defendants.
This may be true, but it is irrelevant, as the Telecommunications Act is also
not a surrogate for the Sherman Antitrust Act. For the same reason, it is also
irrelevant that, as Plaintiffs argue, the filed rate doctrine is no defense to
constitutional violations, as it is 42 U.S.C. § 1983 that provides Plaintiffs
with a vehicle to raise such violations, not 47 U.S.C. § 207.
n22 As Congress noted, the historical
predicate to this problem was the breakup of AT&T.
n23 As
the Court has previously remarked, Ohio has established a fund for prisoner
services into which all moneys received from phone plan commissions must be deposited. Ohio Rev. Code §
5120.132. While this does not lessen the financial impact on Plaintiffs, it
does weaken their argument that the large revenues taken in by the correctional
facilities are motivated by avarice.
n24 The
FCC had actually ruled in 1991 that prisons are not within the definition of
"aggregator." See In the Matter of Policies and Rules Concerning
Operator Service Providers, 6 F.C.C.R. 2744 (Apr. 15, 1991) P 15. In its Report
of March 5, 1996, it was actually reaffirming its previous decision.
n25 The
FCC noted that Florida allows its prisoners to use pre-paid debit cards. Third
Report P57. However, there was no indication that this actually reduces the
cost of the phone calls.
n26 The
rule, in its final form, is published at 47 C.F.R. § 64.710 (2002)
("Operator services for prison inmate phones").
n27 Somewhat
ironically, in the ongoing FCC notice and comment proceedings, the FCC has
faced pressure from the providers of prison telephone services in states where
state-imposed caps on rates have limited, allegedly, the operators' abilities
to recoup their operating expenses. See Implementation of the Pay Telephone
Reclassification and Compensation Provisions of the Telecommunications Act of
1996, 11 F.C.C.R. 21233 (Nov. 8, 1996) (Order on Reconsideration). The basis
for the telephone company complainants' grievance is 47 U.S.C. § 276, which, in
general, prohibits Bell telephone service providers that also provide payphone
services from discriminating against competing payphone service providers
(i.e., a Bell system carrier cannot deny service to calls originating from a
payphone owned by another company), and requires the FCC to establish equitable
rates and access to yet-to-be established payphone markets. Prison inmate
telephone services are considered payphones for the purpose of the Act. 47
U.S.C. § 276(d). The FCC has twice rejected the carriers' argument that § 276
preempts a state's right to set its own caps, or, in the alternative, that it
allows the carriers to charge a surcharge to recoup what it loses on each call
on account of the rate cap. See 11 F.C.C.R. 21233 (Nov. 8, 1996) (Order on
Reconsideration); 17 F.C.C.R. 3248 (February 21, 2002) (Order on Remand and
Notice of Proposed Rulemaking).
n28 As
made clear by the FCC, its rulings only apply to "interstate" calls.
At the state level, concerning "intrastate" calls, Ohio also requires
that all telephone calling rates be "just and reasonable," as fixed
by the PUCO. Ohio Rev. Code § 4909.15. The relief provided to consumers who
feel rates are unjust or unreasonable is the right to file a complaint with the
PUCO. Id. §§ 4909.24 & 4909.25. As a matter of state law, Plaintiffs have
no separate remedy to challenge the reasonableness of intrastate calling rates
in this Court. Their reliance on AT&T Communications of Ohio, Inc. v.
Public Utility Comm'n of Ohio, 88 Ohio St. 3d 549, 728 N.E.2d 371 (Ohio 2000),
is misplaced, as that case involved a direct appeal to the Ohio Supreme Court
from a final order of the PUCO. Only the Ohio Supreme Court may review PUCO
orders. See Ohio Rev. Code § 4903.12; State ex rel. Cleveland Elec.
Illuminating Co. v. Cuyahoga County Court of Common Pleas, 88 Ohio St. 3d 447,
2000 Ohio 379, 727 N.E.2d 900, 903-04 (Ohio 2000).
Click Back Button to Return
to Publication