Net Neutrality: The Circuits are Jammed!

Verizon’s Plan C? Plan A Redux!

Judicial junkies and appellate aficionados everywhere, rejoice! The next round in the net neutrality donnybrook has started, and it’s already delivering the kind of rock ‘em/sock ‘em litigation observers could have expected. 

Leading the action is Verizon, which picked up where it left off last April . . . literally. As readers will recall, in January – just weeks after the FCC released the full text of its net neutrality order – Verizon lobbed a “notice of appeal” relative to that order into the U.S. Court of Appeals for the D.C. Circuit. (It also filed a separate motion asking that a specific three-judge panel – the same panel that had trashed the FCC in the 2010 Comcast decision – be appointed to hear its appeal.) This was an effort to secure a kind of home-court advantage, since Verizon obviously figures that the D.C. Circuit is likely to be receptive to its arguments.

But the D.C. Circuit rejected that ploy. In a terse order, the Court noted that the net neutrality order was a “rulemaking document” that, under the fine print of the FCC’s own procedural rules, could not be deemed to have been “released” until published in the Federal Register. Since the right to seek judicial review of any FCC order generally doesn’t kick in until the agency’s decision has been “released”, Verizon’s notice of appeal was premature. Court to Verizon: Concentrate and ask again later.  The Court left open – sort of – the question of whether review of the net neutrality order could or should be sought under Section 402(a) or 402(b) of the Communications Act.

That last question is of crucial importance, at least as far as Verizon and the FCC seem to think.

If an FCC action fits into certain relatively narrow categories (mainly involving exercise of the FCC’s licensing authority), anyone challenging that action can file a “notice of appeal” under Section 402(b) – BUT the only court that can hear such an appeal is the D.C. Circuit. Review of all other FCC actions can be sought in any of the federal courts of appeal (except, apparently, the Federal Circuit) under Section 402(a). Since Verizon wants the D.C. Circuit to take the case, Verizon figured that, by claiming that net neutrality falls under Section 402(b), it could lock in D.C. Circuit jurisdiction.

As noted, Verizon’s first try to tie down D.C. jurisdiction came up short. But if at first you don’t succeed, try, try again. And that’s just what Verizon has done. Now that the net neutrality order has made it to the Federal Register, Verizon has filed a second notice of appeal with the D.C. Circuit, asserting again that this is a Section 402(b) case that can be heard only by that court.

How important is this? Very, it seems. The FCC wasted no time in whacking back at Verizon’s cute little four-page notice of appeal with a rough and tough 19-page motion to dismiss (a full three pages of which are devoted to distinguishing a 53-year-old case mentioned only once in Verizon’s notice). Apparently underscoring the urgency that the FCC attaches to the jurisdictional question, the Commission’s motion was filed a scant five days after Verizon’s notice went in – even though the court’s rules give the FCC 45 days. Take that, Verizon.

Verizon will doubtless respond, and eventually the Court will rule. While the Court’s April order parrying Verizon’s first lunge strongly hinted that net neutrality may be a 402(a) matter and not a 402(b) matter (quoth the Court: the net neutrality order “is not a licensing decision ‘with respect to specific parties.’”), there’s probably little downside to Verizon’s strategy.

Meanwhile, like any prudent litigator, Verizon hedged its bets by filing, along with its notice of appeal, a separate “protective petition for review” pursuant to Section 402(a). This is a variation of what law professors call “pleading in the alternative”. (Example: I didn’t run your dog over, and anyway it was an accident, and the dog deserved it.) The goal is to cover all your bases.

Good thing that it did. It turns out that five other petitions for review of the net neutrality order were filed, none of them in the D.C. Circuit. (Other filers picked the First, Second, Third, Fourth and Ninth Circuits.) That means that, if the courts finally determine that this is a 402(a) matter rather than a 402(b) matter – and, therefore, available to any of the circuits – the question of which circuit gets the case falls to the Judicial Panel on Multidistrict Litigation (JPML). And the rules for getting into the JPML Circuit Lottery are a bit unusual. 

The deadline for petitions for review of a rulemaking order is 60 days from Register publication, so there’s still plenty of time for anyone wanting to file his or her own petition for review of the net neutrality order. But if you had a preferred court of appeals and you therefore wanted it to be in the running should a judicial lottery be necessary, you had to file your petition within 10 days of Register publication and then (still within those 10 days) have a copy of the petition (showing the court’s receipt date stamp), along with a request to be included in any judicial lottery, hand-delivered to the General Counsel’s office. 

If petitions addressed to more than one circuit roll in during the 10-day period – as, indeed, turned out to be the case – the JPML is notified, and it conducts a lottery.   (While the JPML’s rules do not appear to dictate how quickly an agency is supposed to file its notification, the FCC shipped off its notice to the JPML less than a week after the close of the 10-day period.)  The precise physical mechanism of that lottery is not entirely clear. The panel’s rules refer to pulling the winning entry “from a drum”, with each qualifying court gets only one entry/ping pong ball in the drum. So with six circuits in the running, Verizon still has a one-in-six chance of getting to the D.C. Circuit even if its Section 402(b) approach gets tossed again.

With this much excitement in just the first two weeks since the net neutrality made it into the Federal Register, you can count on a lot more to come. Check back here for updates.

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