Alpine PCS, Inc. v. United States
878 F.3d 1086 (Fed. Cir. 2018)
Authored by Nicole Monteith
Statement of Facts: Following a spectrum-license auction in 1996, the Federal Communications Commission (“FCC”) awarded plaintiff-appellant Alpine PCS, Inc. (“Alpine”) two 10-year licenses for the provision of wireless telecommunications services. In exchange for the licenses, Alpine issued promissory notes to the FCC assuring quarterly payments of the contract amount. Additionally, Alpine executed security agreements designating the licenses as collateral. The terms of the finance instruments provided that the Communications Act of 1934 (the “Communications Act”), as amended, FCC Orders and Regulations, as amended, and federal law should govern each instrument.
In January 2002, Alpine defaulted on its payment obligations to the FCC. At the time of default, the applicable regulations provided licensees a 90-day non-delinquency period, followed by an additional 90-day grace period, during which time a licensee could redeem its license. 47 C.F.R. § 1.2110(g)(4)(i)–(ii) (2000). If any licensee failed to pay the total amount due by the end of the grace period, the FCC would declare the licensee in default and cancel the license(s) at issue. Id. § 1.2110(g)(4)(iii)–(iv).
Following the 180-day grace period, the FCC unilaterally canceled Alpine’s spectrum licenses. In January 2016, Alpine filed suit against the United States under the Tucker Act, 28 U.S.C. § 1491(a)(1) (the “Tucker Act”), in the United States Court of Federal Claims. Alpine asserted: (1) the FCC’s regulatory taking of property in canceling its license under the amended regulations constituted a violation of the Fifth Amendment of the United States Constitution (the “takings claim”) and (2) various breach of contract claims.
Procedural History: The Court of Federal Claims (the “claims court”) dismissed each claim for lack of jurisdiction. Having determined that the takings claim was filed outside of the time allotted by the six-year statute of limitations set forth in 28 U.S.C. § 2501, the claims court dismissed the takings claim as untimely. The claims court additionally determined that the Communications Act preempts the Tucker Act for breach of contract claims. The Communications Act explicitly directs licensees harmed by FCC license modifications and revocations to seek judicial relief from the United States Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit”). Alpine appealed to the Federal Circuit.
Questions Presented: First, whether Alpine’s contract claims fall within the purview of § 402(b) of the Communications Act, effectively preempting the Tucker Act and rendering the trial and appellate courts without jurisdiction to hear and decide Alpine’s breach of contract claims. Second, whether the taking, if any, occurred within the six-year statute of limitations, giving rise to a claim for just compensation under the Tucker Act.
Holdings: Yes. Alpine’s breach of contract claims challenging the FCC’s ability to revoke the spectrum licenses falls “squarely within” § 402(b) of the Communications Act, thus limiting judicial review of the FCC’s decision to the D.C. Circuit. The court did not decide the second question presented. While the parties’ appellate briefs contested the timeframe for when the taking occurred, the Federal Circuit determined that the Communications Act displaced the Tucker Act jurisdiction with regards to the takings issue, thus rendering any examination of timeliness moot for the purposes of this appeal. The Federal Circuit affirmed the claims court.
Reasoning: In rendering its decision, the Federal Circuit examined the purpose of the Tucker Act, as well as the United States Supreme Court’s interpretation of the Act. Foundationally, the Tucker Act provides the Court of Federal Claims jurisdiction over claims against the United States, which are based upon either constitutional or contractual challenges. Notwithstanding this relatively broad jurisdictional power, in United States v. Bormes, the Supreme Court limited the scope of the Tucker Act to serve only a “gap filling role” by allowing only claims “not otherwise judicially enforceable” to be brought under the Tucker Act. 568 U.S. 6, 12–13 (2012). Thus, where Congress provides a specific and comprehensive scheme for review of administrative and judicial decisions, the Court of Federal Claim’s jurisdiction under the Tucker Act is displaced.
Ultimately, the Federal Circuit determined that Alpine’s takings and breach of contract claims were preempted by the Communications Act, because such claims fell squarely within § 402(b) of the Act. The Communications Act § 402(b)(5) explicitly provides that FCC “decisions and orders” be appealed to the D.C. Circuit. Though Alpine argued that it was contesting the breach of contract that resulted in the revocation of its licenses, rather than the revocation itself, the Federal Circuit found this distinction unpersuasive. Provided the explicit and comprehensive scheme for relief found in § 402(b), the Federal Circuit held that the D.C. Circuit had exclusive jurisdiction over issues pertaining to both the FCC’s licensing determinations and the applicable rules it consults when rendering such licensing decisions.
After concluding that Alpine’s contractual claims were preempted by the Communications Act, the Federal Circuit, acting sua sponte, similarly determined that Alpine’s taking claims were preempted on the same grounds. The Federal Circuit determined that though the parties raised the issue of timeliness in their appellate briefs, the court need not decide the issue due to displacement by the Communications Act. Instead, the Federal Circuit held that the Communications Act encompasses a “comprehensive statutory scheme” through which “Alpine could have raised a constitutional takings claim; the FCC had the authority to grant relief; and the D.C. Circuit had jurisdiction to review whether a taking occurred and, if so, whether the FCC decision yielded just compensation.” Alpine PCS, Inc., 878 F.3d 1086 at 1098 (citing Williamson County, 473 U.S. 172, at 194 (1985)).