The Court addressed whether the Rule 20.11(b) of the Code of Federal Regulations (which was the basis upon which the plaintiffs believed they were entitled to reasonable compensation for termination charges for intraMTA traffic) preempted the state law statute of limitations and remedies, such as a right to recovery under a quasi-contract or quantum meruit theories. The Court held that both field preemption—where federal law is sufficiently comprehensive to make the reasonable inference that Congress left no room for supplementary regulation—and conflict preemption—where either (1) complying with both federal law and state law is impossible or (2) the state law creates an unacceptable obstacle to the accomplishment and execution of the full purposes and objectives of Congress—applied because a sufficiently comprehensive federal regulatory scheme for inter-carrier compensation existed and allowing state law remedies for essentially the same claims would frustrate congressional objectives. Thus, the Court held that Rule 20.11(b) preempted – but only in part – state law remedies for recovery of termination charges.
The Court went on to find that the plaintiffs had a right to reasonable compensation under Rule 20.11(b) and any state law remedy that would accomplish the same is preempted. Rule 20.11(b), however, did not set the amount of compensation owed. In order to determine compensation owed, 47 U.S.C § 414 could be supplemented with state law remedies in establishing reasonable compensation in the absence of a rate determination by a state commission. Lastly, the two-year statute of limitations contained in 47 U.S.C § 415 was applied to the plaintiffs’ recovery of charges.
WL Cite: Feldman Liquidating Trustee of UPH Liquidating Trust v. T-Mobile USA, Inc. (In re UPH Holdings, Inc.), 516 B.R. 873 (Bankr. W.D. Tex. 2014).