throbber
No. 21-719
`In the Supreme Court of the United States
`
`
`
`SANDWICH ISLES COMMUNICATIONS, INC., PETITIONER
`v.
`UNITED STATES OF AMERICA
`
`
`ON PETITION FOR A WRIT OF CERTIORARI
`TO THE UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`
`
`BRIEF FOR THE UNITED STATES IN OPPOSITION
`
`
` ELIZABETH B. PRELOGAR
`Solicitor General
`Counsel of Record
`BRIAN M. BOYNTON
`Principal Deputy Assistant
`Attorney General
`PATRICIA M. MCCARTHY
`L. MISHA PREHEIM
`SHARI A. ROSE
` Attorneys
`Department of Justice
`Washington, D.C. 20530-0001
`SupremeCtBriefs@usdoj.gov
`(202) 514-2217
`
`
`
`
`
`
`

`

`QUESTION PRESENTED
`Whether petitioner’s takings claim, which challenges
`orders of the Federal Communications Commission re-
`garding the amount of federal subsidy funding that pe-
`titioner is eligible to receive, may proceed in the Court
`of Federal Claims under the Tucker Act, 28 U.S.C.
`1491(a)(1), or instead must be presented through the
`judicial-review scheme of the Communications Act of
`1934, 47 U.S.C. 402(a).
`
`
`(I)
`
`

`

`TABLE OF CONTENTS
`
`Page
`Opinions below .............................................................................. 1
`Jurisdiction .................................................................................... 1
`Statement ...................................................................................... 2
`Argument ....................................................................................... 8
`Conclusion ................................................................................... 15
`
`TABLE OF AUTHORITIES
`
`
`
`Cases:
`Alabama Power Co. v. FCC,
`311 F.3d 1357 (11th Cir. 2002), cert. denied,
`540 U.S. 937 (2003).............................................................. 13
`Alpine PCS, Inc. v. United States:
`878 F.3d 1086 (Fed. Cir.), cert. denied,
`139 S. Ct. 78 (2018) .................................................... 14
`139 S. Ct. 78 (2018) ............................................................ 8
`Cablevision Sys. Corp. v. FCC,
`570 F.3d 83 (2d Cir. 2009), cert. denied,
`560 U.S. 918 (2010).............................................................. 13
`Connect Am. Fund, In re,
`28 FCC Rcd 6553 (2013) ................................................... 4, 5
`FCC v. ITT World Commc’ns, Inc.,
`466 U.S. 463 (1984).............................................................. 10
`FCC 11-161, In re,
`753 F.3d 1015 (10th Cir. 2014), cert. denied,
`575 U.S. 995, and 575 U.S. 996 (2015) ......................... 12, 13
`Horne v. Department of Agric.,
`569 U.S. 513 (2013)............................................................ 7, 9
`Rural Tel. Coal. v. FCC,
`838 F.2d 1307 (D.C. Cir. 1988) ........................................... 13
`Sandwich Isles Commc’ns, Inc. v. FCC,
`741 Fed. Appx. 808 (D.C. Cir. 2018)................................ 3, 4
`
`(III)
`
`

`

`IV
`
`Page
`
`Cases—Continued:
`Sandwich Isles Commc’ns, Inc. v. FCC,
`No. 19-1056, 2019 WL 2564087
`(D.C. Cir. May 17, 2019) ....................................................... 6
`Sandwich Isles Commc’ns, Inc., In re:
`31 FCC Rcd 12,999 (2016), recons. denied,
`34 FCC Rcd 577 (2019), pet. dismissed,
`No. 19-1056, 2019 WL 2564087
`(D.C. Cir. May 17, 2019) ...................................... 2, 5, 6
`34 FCC Rcd 577 (2019), pet. dismissed,
`No. 19-1056, 2019 WL 2564087
`(D.C. Cir. May 17, 2019) .............................................. 6
`Sandwich Isles Commc’ns., Inc., In re,
`No. 17-1248, 2018 U.S. App. LEXIS 4139
`(D.C. Cir. Feb. 16, 2018)....................................................... 5
`Sinclair Broad. Grp., Inc. v. FCC,
`284 F.3d 148 (D.C. Cir. 2002) ............................................. 13
`United States v. Bormes, 568 U.S. 6 (2012) .......................... 9
`Verizon Commc’ns Inc. v. FCC,
`535 U.S. 467 (2002).............................................................. 12
`
`Constitution, statutes, and regulations:
`U.S. Const. Amend. V ....................................................... 6, 13
`Agricultural Marketing Agreement Act of 1937,
`7 U.S.C. 601 et seq. ................................................................ 9
`Communications Act of 1934, 47 U.S.C. 151 et seq. .............. 2
`47 U.S.C. 151 ...................................................................... 2
`47 U.S.C. 254(b)(3) ........................................................ 2, 3
`47 U.S.C. 254(b)(5) ............................................................ 2
`47 U.S.C. 254(e) ................................................................. 2
`47 U.S.C. 402 .............................................................. 10, 13
`47 U.S.C. 402(a) ............................................... 7, 10, 11, 14
`47 U.S.C. 402(b) ............................................................... 10
`
`
`
`

`

`V
`
`Page
`Statutes and regulations—Continued:
`Hobbs Act, 28 U.S.C. 2341 et seq. .......................................... 6
`Tucker Act, 28 U.S.C. 1491 et seq., 2341 et seq. .................... 7
`28 U.S.C. 1491(a)(1) ........................................................... 9
`28 U.S.C. 2342 .................................................................... 7
`28 U.S.C. 2342(1) ............................................................. 10
`26 U.S.C. 7206(1) ..................................................................... 5
`26 U.S.C. 7212(a) ..................................................................... 5
`47 C.F.R.:
`Section 54.302(a) ................................................................ 4
`Section 54.701(a) ................................................................ 2
`Section 69.601 .................................................................... 2
`Section 69.601(b) ................................................................ 3
`
`
`
`
`
`
`
`

`

`In the Supreme Court of the United States
`
`
`
`No. 21-719
`SANDWICH ISLES COMMUNICATIONS, INC., PETITIONER
`v.
`UNITED STATES OF AMERICA
`
`
`ON PETITION FOR A WRIT OF CERTIORARI
`TO THE UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`
`
`BRIEF FOR THE UNITED STATES IN OPPOSITION
`
`
`OPINIONS BELOW
`The opinion of the court of appeals (Pet. App. 1-21)
`is reported at 992 F.3d 1355. The opinion of the Court
`of Federal Claims (Pet. App. 24-42) is reported at 145
`Fed. Cl. 566.
`
`JURISDICTION
`The judgment of the court of appeals (Pet. App. 22-
`23) was entered on April 1, 2021. A petition for rehear-
`ing was denied on June 16, 2021 (Pet. App. 49-50). By
`orders dated March 19, 2020, and July 19, 2021, this
`Court extended the time within which to file any peti-
`tion for a writ of certiorari due on or after March 19,
`2020, to 150 days from the date of the lower-court judg-
`ment, order denying discretionary review, or order
`denying a timely petition for rehearing, as long as that
`judgment or order was issued before July 19, 2021. The
`petition for a writ of certiorari was filed on November
`
`(1)
`
`

`

`2
`
`12, 2021. The jurisdiction of this Court is invoked under
`28 U.S.C. 1254(1).
`
`STATEMENT
`1. Congress created the Federal Communications
`Commission (FCC), and enacted the Communications
`Act of 1934, 47 U.S.C. 151 et seq. (Communications Act
`or Act), “to make available * * * to all the people of the
`United States * * * a rapid, efficient, Nation-wide, and
`world-wide wire and radio communication service with
`adequate facilities at reasonable charges.” 47 U.S.C.
`151. The FCC must establish “specific, predictable and
`sufficient * * * mechanisms to preserve and advance
`universal service.” 47 U.S.C. 254(b)(5). That universal-
`service mandate applies to, inter alia, all “rural, insular,
`and high cost areas.” 47 U.S.C. 254(b)(3).
`To promote universal service, the FCC created the
`Universal Service Fund, which is administered by the
`Universal Service Administrative Company and overseen
`by the FCC. See 47 C.F.R. 54.701(a). The Universal Ser-
`vice Fund consists of four separate funds, including a
`high-cost support fund, which enables certain eligible tel-
`ecommunications carriers that serve rural, insular, and
`high-cost areas to recover reasonable costs of providing
`service. Telecommunications carriers that receive high-
`cost support funds must use them “only for the provision,
`maintenance, and upgrading of facilities and services for
`which the [funds are] intended.” 47 U.S.C. 254(e). Tele-
`communications carriers in high-cost areas may also re-
`ceive support from the National Exchange Carrier Asso-
`ciation (NECA) pool, which is separate from the high-cost
`support fund. See 47 C.F.R. 69.601; In re Sandwich Isles
`Commc’ns, Inc., 31 FCC Rcd 12,999, 13,006 n.42 (2016),
`recons. denied, 34 FCC Rcd 577 (2019), pet. dismissed,
`No. 19-1056, 2019 WL 2564087 (D.C. Cir. May 17, 2019).
`
`
`

`

`3
`
`2. Petitioner was formed in the mid-1990s to provide
`telecommunications services to native Hawaiians. Pet.
`App. 4. In 1997, petitioner was designated as an eligible
`telecommunications carrier for customers in the Hawai-
`ian home lands, which consist of 200,000 acres in 70 non-
`contiguous parcels on six Hawaiian islands. Ibid. Be-
`cause the Hawaiian home lands are “rural, insular, and
`high cost areas,” 47 U.S.C. 254(b)(3), petitioner re-
`ceived high-cost support funds and participated in the
`NECA pool, Pet. App. 4.
`a. Petitioner initially served the Hawaiian home
`lands by leasing capacity on an existing underwater ca-
`ble for $1.9 million annually. Pet. App. 4, 29 n.1. Around
`2007, petitioner entered into an exclusive, 20-year lease
`of an underwater cable owned by Paniolo, LLC. Id. at
`4. The new lease was a variable lease for which the con-
`tractually required payments began at $15 million an-
`nually and rose to $24 million annually by 2018. Id. at
`4-5. Petitioner is a wholly owned subsidiary of Waimana
`Enterprises, a Hawaiian corporation, and Paniolo is an-
`other corporate vehicle of Waimana. Id. at 4.
`Petitioner sought inclusion of the lease in its “reve-
`nue requirement,” 47 C.F.R. 69.601(b), so that it could
`receive reimbursement from the NECA pool for the
`cost of the lease. Sandwich Isles Commc’ns, Inc. v. FCC,
`741 Fed. Appx. 808, 809 (D.C. Cir. 2018) (per curiam). In
`2010, the FCC’s Wireline Competition Bureau issued a
`declaratory ruling that permitted 50% of petitioner’s
`lease expenses to be included in the revenue require-
`ment, based on the Bureau’s finding that this amount
`was justified in part by the potential for future growth.
`Id. at 809-810. On application for review, the FCC
`found that, because the projected growth had not mate-
`rialized, reimbursement of 50% of petitioner’s lease
`
`
`
`

`

`4
`
`costs was unjustified. Id. at 810. The FCC determined
`that petitioner was entitled to recover from the NECA
`pool only $1.9 million annually—the amount petitioner
`had spent under its previous lease—but that petitioner
`could retain the funds it had received at the 50% rate
`during the pendency of the appeal. Ibid. The D.C. Cir-
`cuit denied petitioner’s petition for review. Id. at 809-
`811.
`b. In 2011, the FCC comprehensively reformed its
`regulatory system governing telephone service. Pet.
`App. 5. As part of those reforms, the FCC capped pay-
`ments from the high-cost support fund at $250 per
`month per covered line, effective July 2014. 47 C.F.R.
`54.302(a); see Pet. App. 5-6. The FCC permits a carrier
`to seek a waiver of the payment cap if the carrier
`demonstrates that the reduction in high-cost support
`funds would put consumers at risk of losing service.
`Pet. App. 6; see In re Connect Am. Fund, 28 FCC Rcd
`6553, 6555 (2013).
`Before the 2011 reforms, petitioner received more
`than $1150 per month per covered line. Pet. App. 5-6.
`Petitioner sought a payment-cap waiver, which the
`FCC’s Wireline Competition Bureau denied in May
`2013. In re Connect Am. Fund, 28 FCC Rcd at 6553.
`The Bureau found that petitioner had “failed to show
`good cause for a waiver at th[at] time” because the re-
`quested waiver “would allow it to retain a number of sig-
`nificant and wasteful expenses, totaling many millions
`of dollars, including significant payments to a number
`of affiliated and closely-related companies.” Ibid. The
`Bureau also noted that petitioner’s “corporate expenses
`[we]re 623 percent greater than the average for compa-
`
`
`
`

`

`5
`
`nies of similar size with the highest corporate opera-
`tions expenses.” Ibid. Petitioner did not petition for
`review of that order. Pet. App. 6.
`c. In 2015, Albert Hee, who was then the manager
`of both petitioner and Waimana, and who had previ-
`ously been the president of petitioner and the sole
`owner of Waimana, was convicted on six counts of tax
`fraud and one count of corruptly impeding the admin-
`istration of internal revenue laws. Pet. App. 4, 6, 32; see
`26 U.S.C. 7206(1), 7212(a). Those convictions were based
`on Hee’s longstanding practice of categorizing personal
`expenses as business expenses and failing to report
`personal-expense payments as income. Pet. App. 6. Be-
`tween 2002 and 2012, Hee received more than $4 million
`from Waimana for his personal expenses. Id. at 6-7.
`After Hee’s conviction, the Universal Service Admin-
`istrative Company, at the FCC’s direction, “suspended
`high-cost funding to [petitioner] pending completion of
`further investigation and/or other ameliorative mea-
`sures to ensure that any funding provided is used solely
`in a manner consistent with Commission rules and poli-
`cies.” In re Sandwich Isles Commc’ns, 31 FCC Rcd at
`13,012. In 2015, petitioner petitioned the FCC to re-
`scind that suspension; that petition remains pending.
`Pet. App. 7. In 2017, petitioner asked the D.C. Circuit
`to issue a writ of mandamus ordering the FCC to rein-
`state petitioner’s high-cost support funds; the court de-
`nied the mandamus petition in 2018. In re Sandwich
`Isles Commc’ns, Inc., No. 17-1248, 2018 U.S. App.
`LEXIS 4139 (Feb. 16, 2018) (per curiam).
`d. An audit by the Universal Service Administrative
`Company determined that, from 2002 to 2015, petitioner
`had received more than $27 million of high-cost support
`funds that it should not have received. In re Sandwich
`
`
`
`

`

`6
`
`Isles Commc’ns, 31 FCC Rcd at 13,012-13,014. In 2016,
`the FCC ordered petitioner to repay that amount and
`continued the suspension of petitioner’s high-cost sup-
`port funds. Id. at 13,043-13,044. Petitioner sought re-
`consideration of that order, which the FCC denied in
`2019. In re Sandwich Isles Commc’ns, Inc., 34 FCC
`Rcd 577, 579 (2019). The D.C. Circuit dismissed peti-
`tioner’s petition for review as untimely. Sandwich Isles
`Commc’ns, Inc. v. FCC, No. 19-1056, 2019 WL 2564087
`(May 17, 2019) (per curiam).
`3. a. In January 2019, petitioner filed this suit in the
`Court of Federal Claims (CFC). Pet. App. 8. Petitioner
`alleged that the cumulative effect of the reductions of
`its subsidies was to take petitioner’s property without
`just compensation, in violation of the Fifth Amendment.
`Id. at 8-9. The CFC dismissed petitioner’s complaint.
`Id. at 24-42. The court explained that the Communica-
`tions Act and the Hobbs Act, 28 U.S.C. 2341 et seq., pre-
`vented it from exercising jurisdiction over a challenge
`to an FCC decision or order. See Pet. App. 37-38. Be-
`cause petitioner’s Fifth Amendment takings claim was
`“targeted at invalidating * * * FCC orders,” the CFC
`held that it lacked jurisdiction over that claim. Id. at 42.
`Petitioner filed a motion for reconsideration, which
`the CFC denied. Pet. App. 45-48. The court reiterated
`its prior conclusion that “the true nature of [petitioner’s]
`case was a challenge to FCC orders,” so that the case
`was “outside of th[e] [c]ourt’s jurisdiction.” Id. at 46-
`47. The court also stated that, because petitioner “ha[d]
`not yet received a decision regarding its 2015 petition
`challenging the suspension of its high-cost subsidies,
`any takings claim, to the extent that one even exists, re-
`main[ed] unripe.” Id. at 48.
`
`
`
`

`

`7
`
`b. The court of appeals affirmed. Pet. App. 1-21.
`The court explained that “a claim for just compensation
`under the Takings Clause must be [brought to] the
`[CFC] in the first instance, unless Congress has with-
`drawn the Tucker Act grant of jurisdiction in the rele-
`vant statute.” Id. at 15 (quoting Horne v. Department
`of Agric., 569 U.S. 513, 527 (2013)). The court noted that
`Tucker Act, 28 U.S.C. 1491 et seq., 2341 et seq., jurisdic-
`tion is displaced in part by the Communications Act and
`the Hobbs Act, which provide (with exceptions for cer-
`tain claims that must be brought in the D.C. Circuit)
`that the regional courts of appeals “have ‘exclusive ju-
`risdiction’ to ‘enjoin, set aside, suspend (in whole or in
`part), or to determine the validity of ’ all final orders of
`the Commission” in “ ‘[a]ny proceeding to enjoin, set
`aside, annul, or suspend any order of the Commission.’ ”
`Pet. App. 12 (quoting 28 U.S.C. 2342 and 47 U.S.C.
`402(a)) (brackets in original).
`The court of appeals explained that petitioner’s tak-
`ings claim was “based on its disagreement with FCC de-
`cisions regarding the amount of subsidies [petitioner]
`could receive from the [Universal Service Fund] and
`NECA pools,” and on its disagreement with the FCC’s
`denial of its request “for waiver of the $250 per-line,
`per-month cap on high-cost universal service support.”
`Pet. App. 17. Because petitioner’s “allegations take aim
`at FCC orders and seek to ‘enjoin, set aside, annul, or
`suspend’ them,” the court found that “the statutory
`scheme set forth in the Communications Act displaces
`the [CFC’s] Tucker Act jurisdiction” over those claims.
`Ibid. (quoting 47 U.S.C. 402(a)). The court explained
`that, “if [petitioner] wanted to challenge the FCC or-
`ders, it was required to do so within the comprehensive
`statutory scheme established by the Communications
`
`
`
`

`

`8
`
`Act—that is, by first filing an appeal with the FCC be-
`fore pursuing a judicial remedy” in the appropriate re-
`gional court of appeals. Id. at 18.
`The court of appeals also rejected petitioner’s argu-
`ment that petitioner could not have raised its takings
`claim in a challenge to any of the relevant FCC orders.
`Pet. App. 18-20. The court explained that petitioner
`“could have raised a constitutional takings claim [in] the
`FCC, challenging the rate; the FCC had authority to
`grant relief, including waiver of the rate it set; and if the
`FCC denied the waiver, [petitioner] could appeal that
`decision to the full commission and then to the court of
`appeals.” Id. at 19. The court noted, however, that pe-
`titioner had “not raised its takings claim before the
`FCC.” Ibid. And the court emphasized that petitioner
`“cannot, on alleged ripeness grounds, bypass the com-
`prehensive statutory scheme for judicial review estab-
`lished by Congress in the Communications Act.” Id. at
`20.
`
`ARGUMENT
`Petitioner contends (Pet. 6-15) that the CFC should
`have exercised Tucker Act jurisdiction over its takings
`claim premised on allegedly confiscatory rates. The
`court of appeals correctly rejected that contention,
`holding that the Communications Act’s judicial-review
`provision displaced the Tucker Act remedy, and its de-
`cision does not conflict with any decision of this Court
`or of another court of appeals. This Court recently de-
`nied review in another case that presented similar is-
`sues, see Alpine PCS, Inc. v. United States, 139 S. Ct.
`78 (2018) (No. 17-1507), and the same result is war-
`ranted here.
`1. The Tucker Act waives sovereign immunity and
`vests the CFC with jurisdiction over certain monetary
`
`
`

`

`9
`
`claims against the United States. 28 U.S.C. 1491(a)(1).
`The CFC’s Tucker Act jurisdiction encompasses
`“claim[s] against the United States founded either upon
`the Constitution, or any Act of Congress or any regula-
`tion of an executive department, or upon any express or
`implied contract with the United States, or for liqui-
`dated or unliquidated damages in cases not sounding in
`tort.” Ibid. “The Tucker Act’s jurisdictional grant, and
`accompanying immunity waiver, suppl[y] the missing
`ingredient for an action against the United States for
`the breach of monetary obligations not otherwise judi-
`cially enforceable.” United States v. Bormes, 568 U.S.
`6, 12 (2012). But the Tucker Act does not apply “when
`a law assertedly imposing monetary liability on the
`United States contains its own judicial remedies,” be-
`cause such a statute “supersedes the gap-filling role of
`the Tucker Act.” Id. at 12-13.
`Although a “claim for just compensation under the
`Takings Clause” generally “must be brought to the
`[CFC] in the first instance,” such a claim cannot pro-
`ceed in that forum if “Congress has withdrawn the
`Tucker Act grant of jurisdiction in the relevant statute.”
`Horne v. Department of Agric., 569 U.S. 513, 527 (2013)
`(citation omitted). In Horne, this Court held that raisin
`handlers could not bring a takings claim in the CFC be-
`cause the “comprehensive remedial scheme” estab-
`lished by the Agricultural Marketing Agreement Act
`of 1937, 7 U.S.C. 601 et seq., “afford[ed] handlers
`a ready avenue to bring takings claims against” the
`United States Department of Agriculture and thereby
`“withdr[ew] Tucker Act jurisdiction over [the handlers’]
`takings claim.” 569 U.S. at 527-528.
`2. a. In this case, the court of appeals correctly held
`that petitioner’s takings claim may not proceed under
`
`
`
`

`

`10
`
`the Tucker Act because the Communications Act pro-
`vides the exclusive path for review of that claim. The
`Communications Act provides for judicial review of
`FCC orders in 47 U.S.C. 402. Section 402(b) gives the
`D.C. Circuit exclusive jurisdiction over appeals from
`certain FCC orders that are not at issue here. 47 U.S.C.
`402(b). Section 402(a) states that “[a]ny proceeding to
`enjoin, set aside, annul, or suspend any order of the
`Commission under this chapter (except those appeala-
`ble under subsection (b) of this section) shall be brought
`as provided by” the Hobbs Act. 47 U.S.C. 402(a). The
`Hobbs Act in turn provides that “[t]he court[s] of ap-
`peals (other than the United States Court of Appeals for
`the Federal Circuit) ha[ve] exclusive jurisdiction to en-
`join, set aside, suspend (in whole or in part), or to deter-
`mine the validity of * * * all final orders of the [FCC]
`made reviewable by [S]ection 402(a).” 28 U.S.C. 2342(1).
`This Court has held that the regional courts of appeals’
`jurisdiction over claims covered by Section 402(a) is ex-
`clusive. FCC v. ITT World Commc’ns, Inc., 466 U.S.
`463, 468 (1984).
`To determine whether Section 402(a) covers a partic-
`ular claim, a court must consider the “substance” of the
`claim rather than accepting a litigant’s characterization
`of it. See ITT World Commc’ns, Inc., 466 U.S. at 468
`(finding that “[t]he appropriate procedure for obtaining
`judicial review” was a petition for review under Section
`402(a) where, “[i]n substance, the complaint * * * raised
`the same issues and sought to enforce the same re-
`strictions upon agency conduct as did [a] petition for
`rulemaking that was denied by the FCC”). The court of
`appeals correctly applied that framework here. The
`court recognized that petitioner’s allegations, although
`not framed as a direct challenge to any FCC order or
`
`
`
`

`

`11
`
`action, “take aim at FCC orders and seek to ‘enjoin, set
`aside, annul, or suspend’ them.” Pet. App. 17 (quoting
`47 U.S.C. 402(a)). The challenged agency actions in-
`clude FCC orders limiting and denying high-cost sup-
`port funds and declining to waive caps on those funds.
`See pp. 3-6, supra. The court therefore correctly held
`that petitioner’s takings claim was “governed by [Sec-
`tion] 402(a)” and could not be brought in the CFC. Pet.
`App. 17.1
`b. Petitioner argues (Pet. 6-7) that takings claims al-
`leging confiscatory rates cannot be raised within the
`Communications Act’s scheme for review because such
`claims “can only be made long after FCC appeals are
`over” when “the impacts of the FCC orders * * * have
`been manifested and experienced.” That argument re-
`flects a misunderstanding of this Court’s precedents
`and of the facts of this case.
`
`
`1 When a plaintiff asserting a takings claim assumes or concedes
`the lawfulness of the relevant government conduct, but argues that
`the lawful action has eliminated or constrained a preexisting prop-
`erty right in a manner requiring just compensation, the plaintiff ’s
`recourse ordinarily is a Tucker Act suit in the CFC. See Br. in Opp.
`at 12, 14-15, Alpine PCS, supra (No. 17-1507). That situation is not
`presented here, however, because petitioner’s takings claim rests
`on the premise that the FCC acted unlawfully in denying petitioner
`high-cost support funds. See, e.g., Pet. 8 (“The FCC’s failure to dis-
`burse or replace [Universal Service Fund] support is contrary to the
`* * * Communications Act.”); Pet. 9 (“[T]he Federal Circuit’s holding
`authorizes and encourages the FCC to violate the [Communications
`Act] by arbitrarily setting rates” and “denying * * * statutor[ily]
`mandated support.”); Compl. 25 (“The FCC violated provisions of the
`[Communications] Act[] mandating compensation through Universal
`Service Fund disbursements.”); see also Br. in Opp. at 15-16, Alpine
`PCS, supra (No. 17-1507).
`
`
`
`

`

`12
`
`This Court has recognized “the general rule * * *
`that any question about the constitutionality of rateset-
`ting is raised by” the “rates” that are set, “not [the]
`methods” of setting those rates. Verizon Commc’ns
`Inc. v. FCC, 535 U.S. 467, 525 (2002). Although that
`general rule requires a plaintiff to wait until a rate is set
`before bringing a takings claim, it does not require all
`“impacts” of the rate to “be[] manifested and experi-
`enced” before a rate-setting order can be challenged.
`Pet. 6-7; see Pet. 13.
`The orders that petitioner alleges created a confisca-
`tory taking—the 2016 order limiting petitioner’s recov-
`ery of its lease costs to $1.9 million annually from the
`NECA pool; the 2013 order denying petitioner a waiver
`of the per-line cap on high-cost support funds; the 2015
`order suspending all high-cost support funding to peti-
`tioner; and the 2016 order continuing that suspension
`and requiring petitioner to repay $27 million in high-
`cost support funds—are all analogous to final ratemak-
`ing orders, and all involve the FCC’s administration of
`pertinent federal funding provisions. Petitioner could
`have raised a takings challenge to the relevant FCC ac-
`tion in any of those administrative proceedings, and it
`could have petitioned for review in the appropriate re-
`gional court of appeals if the FCC denied relief. See
`Pet. App. 19.2 Because petitioner did not raise a timely
`
`2 In In re FCC 11-161, 753 F.3d 1015 (2014), cert. denied, 575 U.S.
`995, and 575 U.S. 996 (2015), the Tenth Circuit held that a takings
`challenge to an FCC order was not ripe because a carrier “fac[ing]
`an insufficient return” upon application of the order could “seek
`greater support” from the FCC and would have a ripe takings claim
`“[i]f the FCC impose[d] [a] confiscatory rate[].” Id. at 1136. Con-
`trary to petitioner’s suggestion (Pet. 7-8, 10-11), that approach
`would have allowed petitioner to bring a takings challenge in any of
`
`
`
`
`

`

`13
`
`takings claim with the FCC, it was not entitled to judi-
`cial review of any such claim under the exclusive review
`scheme laid out in the Communications Act. But peti-
`tioner’s failure to pursue its claims administratively
`cannot create jurisdiction in the CFC.
`The experiences of other litigants belie petitioner’s
`assertion that it could not have brought its takings claim
`under the Communications Act’s scheme for review.
`The courts of appeals have repeatedly adjudicated tak-
`ings claims where litigants first raised those claims be-
`fore the FCC and then petitioned for review under Sec-
`tion 402. See, e.g., Cablevision Sys. Corp. v. FCC, 570
`F.3d 83, 98-99 (2d Cir. 2009), cert. denied, 560 U.S. 918
`(2010); Alabama Power Co. v. FCC, 311 F.3d 1357, 1361-
`1371 (11th Cir. 2002), cert. denied, 540 U.S. 937 (2003);
`Sinclair Broad. Grp., Inc. v. FCC, 284 F.3d 148, 166-167
`(D.C. Cir. 2002); Rural Tel. Coal. v. FCC, 838 F.2d 1307,
`1313-1314 (D.C. Cir. 1988).3
`c. Petitioner’s remaining arguments lack merit. Pe-
`titioner suggests (Pet. 13) that it could not have as-
`serted its Fifth Amendment claim through the Commu-
`nications Act’s review mechanism because “[n]othing in
`the Communications Act nor [the] FCC rules provides
`for paying just compensation” for losses that have al-
`
`
`the FCC proceedings at issue here. For example, after the FCC
`denied petitioner’s request for “greater support” by declining to
`waive the cap on high-cost support funds, a claim that the denial of
`the waiver “impose[d] [a] confiscatory rate[]” would have been ripe.
`In re FCC 11-161, 753 F.3d at 1136.
`3 The government has argued that petitioner’s takings claim lacks
`merit because, inter alia, a denial of high-cost support funds does
`not effect a taking of petitioner’s property. See Pet. App. 11. The
`question presented here, however, concerns the proper forum for
`bringing such claims, not their proper resolution on the merits.
`
`
`

`

`14
`
`ready been incurred. But if petitioner had timely as-
`serted a takings claim in any of the relevant FCC pro-
`ceedings, the FCC could have awarded other relief that
`might have provided just compensation (including by
`eliminating any taking or offsetting any taking with a
`credit against the amount petitioner owed the FCC) if
`it believed that such relief was warranted. The FCC’s
`denial of any such claim would have been reviewable in
`the appropriate regional court of appeals, which could
`have determined “whether a taking occurred and, if so,
`whether the FCC decision ‘yielded just compensation.’ ”
`Alpine PCS, Inc. v. United States, 878 F.3d 1086, 1098
`(Fed. Cir.) (brackets and citation omitted), cert. denied,
`139 S. Ct. 78 (2018). If the court in such a case found
`that a taking had occurred and that the FCC had not
`provided adequate relief, the court could order the FCC
`to provide monetary compensation.
`Petitioner also suggests (Pet. 10-11) that this Court’s
`review is warranted because, in denying petitioner’s
`motion for reconsideration, the CFC stated that “any
`takings claim, to the extent that one even exists, re-
`mains unripe” because petitioner “has not yet received
`a decision regarding its 2015 petition challenging the
`suspension of its high-cost subsidies.” Pet. App. 48. But
`that passing statement was unnecessary to the court’s
`determination that it lacked jurisdiction over peti-
`tioner’s takings claim. Neither of the decisions below
`rests on a determination that petitioner’s takings claim
`is unripe. And petitioner’s speculation (Pet. 6-8) that
`hypothetical takings claims that it could have presented
`to the FCC and the appropriate regional court of ap-
`peals under Section 402(a) of the Communications Act
`would have been treated as unripe provides no basis for
`further review in this case.
`
`
`
`

`

`15
`
`CONCLUSION
`The petition for a writ of certiorari should be denied.
`Respectfully submitted.
`
` ELIZABETH B. PRELOGAR
`Solicitor General
`BRIAN M. BOYNTON
`Principal Deputy Assistant
`Attorney General
`PATRICIA M. MCCARTHY
`L. MISHA PREHEIM
`SHARI A. ROSE
` Attorneys
`
`
`MARCH 2022
`
`
`
`
`
`

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