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BEFORE THE SUPRElVIE COURT OF THE STATE OFIiIDwiIO CO~1MISSION
JOSEPH B. MCNEAL, D!B! A P AGEDA T A Supreme Court Docket No. 31844
Petitioner-Appellant IPUC Docket No. QWE-O3-
, '! .
IDAHO PUBLIC UTILITIES COMl\tIISSION
And QWEST CORPORATION
Res ondents.
REPLY BRIEF OF RESPONDENT QWEST CORPORATION
APPEAL FROM THE IDAHO PUBLIC UTILITIES COMMISSION
Petitioner! Appellant Pro Se
WILLIAM J. BATI, ISB No. 2938
BA TI & FISHER, LLP
S. Bank Plaza, Suite 500
101 S. Capitol Boulevard
Post Office Box 1308
Boise, ID 83701
JOSEPH B. McNEAL
D/B/A PAGEDATA
6610 Overland Road
Boise, ID 83702
ADAM SHERR
QWEST COMMUNICATIONS, INC.
1600 7th Avenue - Room 3206
Seattle, W A 98191
(206) 398-2507
Attorneys for Respondent
(Qwest Corporation)
DONOY AN E. WALKER
DEPUTY A TIORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
472 West Washington
Boise, ID 83702,
Attorneys for Respondent
(Idaho Public Utilities Commission)
(C(Q)(P1(
T ABLE OF CONTENTSSTATEMENT OF THE CASE .
.................................................................................................
I. NATURE OF THE CASE
............................ ............................ ............ .................................
II. COURSE OF PROCEEDINGS ............................................................................................
III. STATEMENT OF FACTS ..
...............................................................................................
A. The Opt-In Agreement...............................................................................................
B. PageData s Complaint.........................................................................................,......
C. Qwest's Limited Response................
.........................................................................
D. PageData s Reply.......................................................................................................
E. Commission Order No. 29687 ...................................................................................
F. Petition for Reconsideration......... ..... .........................................................................
G. Order on Reconsideration, Order No. 29726.............................................................
1. Unconscionability......................................
........................................................ .....
2. Filed Arbitration Decisions.....................................................................................
ISSUES PRESENTED ON ApPEAL.................................. ........................................................
ARGUlVlENT .......................................................................................................................... 8I. STANDARD OF REVIEW ..................................................................................................
A. The Commission regularly pursued its authority and made sufficient findings when
it declined to exercise its jurisdiction and dismissed PageData s Complaint without
prejudice. ...........................
....................... .............. .... ..................... ............................ ..
B. The Commission regularly pursued its authority and made sufficient findings to
justify its decision to not hold a hearing on PageData s demand for a hearing pursuant
to Idaho Code ~ 28-302. .............................................................................................
C. After affirming the Commission s Orders, the Respondent Qwest Corporation
contends that the Court should award Attorney Fees. ...................................................
CONCLUSION........... ....................... ...... ........
........... ..... ........................... .... ..... ............ .... .
CASES
Afton v. Idaho Power Co., 111 Idaho 925 , 929, 729 P .2d 400, 404 (1986) ......................
Boise Water Corp. v. Idaho Public Utilities Commission 128 Idaho 534, 537, 916 P.
1259, 1262 (1996)........................ ..........................
............ ............. ...........................
, 14
Driver v. SI Corporation 139 Idaho 423, 426, 80 P .3d 1024, 1027 (2003)........................
Durrant v. Christensen 117 Idaho 70, 74, 785 P .2d 634, 638 (1990) ..............................
Excel Leasing Co. v. Christensen 115 Idaho 708, 712, 769 P.2d 585 589 (Ct. App. 1989)
.................................................. ................ ........................ .......................................... ...
Hayden Pines 111 Idaho at 336, 723 P .2d at 880 (1986) quoting Idaho State Ins. Fund
Hunnicutt 110 Idaho 257, 261 , 715 P .2d 927, 931 (1985) ................. ..........................1 0
In the Matter of PageData s Petitions for Arbitration GNR- T -04-, GNR- T -04-, 2004
Ida. PUC LEXIS 66 (2004) .............................................................................................
In the Matter of Review of the Section 251 Unbundling Obligations of Incumbent Local
Exchange Carrier, CC Docket No. 01-338, 19 FCC Rcd 13494 (reI. July 13 , 2004).....
In the Matter of Starpower Communications, LLC, Petition for Preemption of
Jurisdiction of the Virginia State Corporation Commission Pursuant to Section
252(e)(5) of the Telecommunications Act of 1996, CC Docket No. 00-Memorandum
Opinion and Order, FCC 00-216 (reI. June 14 2000) ........................................, 12, 13
In the matter of the Applications of PageData and Wavesent LLC, for Approval of
Amendments to Interconnection Agreements QWE- T -03-, QWE- T -03- 7, 2004 Ida.
PUC LEXIS 244 (2004)...........................................................................
..................... ...
Industrial Customers of Idaho Power v. Idaho PUC 134 Idaho 285 , 288 , 1 P .3d 786, 789
(2000) .............. ................... ..... ...........
.......... ......... ................. ........ ........................ ......
, 9
International Assoc. of Firefighters Local 672 v. City of Boise 136 Idaho 162, 168, 30
3d 940, 946 (2001) ................................................................................................., 11
Joseph B. McNeal d/b/a PageData, et al v. Qwest Corporation, et aI, Case No. CIV03-
473-MHW ................ ........... ............................... ................... .......... .............................
Lemhi Tel. Co. v. Mountain States Tel. Tel. Co.98 Idaho 692, 696, 571 P.2d 753 , 757
( 1977) ......... .... .......
.................................... ...........................................................
, 13, 14
Lethrud v. State of Idaho, Industrial Special Indemnity Fund 126 Idaho 560, 563, 887
P .2d 1067 , 1070 (1995) .................................................................................................1 0
Lewis v. CEDU Educ. Serv., Inc.135 Idaho 139, 144, 15 P.3d 1147 1152 (2000).........
Lovey v. Regence Blue Shield of Idaho 139 Idaho 37, 45 , 72 P.3d 877 885 (2003)....
Minich v. Gem State Developers, Inc., 99 Idaho 918, 591 P.2d 1078 1085 (1979) .........
Murphy v. Mid- West National Life Insurance Co.139 Idaho 330, 332, 78 P.3d 766, 768
(2003)... ....
... .......... .... .............. ......
...................... ..................... .................................. 7, 15
Natatorium Co. v. Erb 34 Idaho 209 , 200 P. 348 (1921) .................................................
Northwest Pipeline Corp., v. Forest Weaver Farm, Inc., 103 Idaho 180, 183 646 P.
422, 425 (1982)............................................................................................................. .
Opportunity, L.C. v. Ossewarde 136 Idaho 602, 605, 38 P.3d 1258, 1261 (2002).......
Robert Ryder dba Radio Paging Service, Joseph B. McNeal dba PageData and Interpage
of Idaho, Inc. and Tel-Car, Inc. v. Idaho Public Utilities Commission and Qwest
Corporation Supreme Court Docket No. 29175.............................................................
Rosebud Enterprises, Inc. v. Idaho Public Utilities Commission 128 Idaho 609, 618 , 917
P .2d 766, 775 (1996) ................................................................................................., 10
United States v. Utah Power Light Co., 98 Idaho 665 570 P.2d 1353 (1977) .............
S T A TUTES
47 C.R. ~ 51.809.....................................................................................................
47 U.C. ~ 151....................................................................................................................
47 U.C. ~ 252...................................................................................................., 6, 13, 15
62-615( 1) ...................................................................................... ............ ...........................
R. 41 ........................................... ..................... ...........................
..................... ........ ....
Idaho Code ~ 12-121 .........................................................................................................
Idaho Code 9 61-629 ....................................................................................................., 10
Idaho Code ~ 62-614 ......................................................................................................., 5
Idaho Uniform Commercial Code ~ 28-302........................................., 8 , 13, 14, 16, 17
Newton s Telecom Dictionary, at p. 380 (18th Ed. 2002) ....................................................
CONSTITUTIONAL PROVISIONS
Article V, Section 9 of the Idaho Constitution ....................................................................
STATEMENT OF THE CASE
I. NATURE OF THE CASE
This Appeal arises from two final Orders of the Idaho Public Utilities Commission (the
Commission) in which it declined to exercise its jurisdiction over PageData s Complaint
regarding a contract dispute between Qwest and PageData.The Commission dismissed
PageData s Complaint against Qwest without prejudice.l R.
at 218. See also R. at 331-337
345-350.
II. COURSE OF PROCEEDINGS
On October 31 , 2003 , PageData filed a "formal" Complaint alleging Qwest was not in
compliance with the tenus of an interconnection agreement between PageData and Qwest (the
Agreement). R. at 218-227. On November 26 2005 Qwest filed a Limited Response asserting
that the Commission should decline to exercise jurisdiction over the Complaint because it
concerned a contract billing dispute covered by the Agreement'arbitration clause.See
Agreement, Section 13.Dispute Resolution;" R. at 230-41.PageData filed a Reply to
Qwest's Limited Response and a Request for Summary Judgment in response.R. at 242-80.
During the next several months the Commission put this case on hold as the parties
unsuccessfully attempted to settle issues in other cases PageData had filed against Qwest before
the Commission, the Federal Communications Commission (the FCC), and in federal district
court.2 R. at 292-, 302-03. On January 19, 2005, the Commission issued Order No. 29687
I An interconnection agreement is an agreement between telecommunications carriers that in general allows their
subscribers to dial each other and may also cover issues such as the sharing of revenues and the provisioning of
equipment and services. See generally Newton s Telecom Dictionary, at p. 380 (1 8th Ed. 2002).
2 PageData s flfSt litigation against Qwest was filed with the Commission in 1999. That case is now on appeal
before this Court. See Robert Ryder dba Radio Paging Service, Joseph B. McNeal dba PageData and Interpage
Idaho, Inc. and Tel-Car, Inc. v. Idaho Public Utilities Commission and Qwest Corporation Supreme Court Docket
No. 29175. PageData has filed Petitions for Arbitration against Qwest in Case Nos. GNR-04-5 and GNR-05-
and challenged matters decided in Case Nos. QWE- T -03-6 and QWE- T -03- 7. In the Matter of PageData IS Petitions
for Arbitration, GNR-04-, GNR-04-, 2004 Ida. PUC LEXIS 66 (2004). In the matter of the Applications of
BRIEF OF RESPONDENT QWEST CORPORATION, P. 1
declining to exerCIse its jurisdiction and dismissing the Complaint without prejudice.The
Commission found the Agreement contained a dispute resolution provision which was the "first
and foremost" method for resolving disputes. R. at 331 , 336 & 345. On February 9, 2005
PageData filed a Petition for Reconsideration.R. at 338-345.The Commission denied
PageData s Petition, R. at 345-350, and on April 19, 2005, PageData filed a Notice of Appeal.
R. at 351-355.
III. STATEMENT OF FACTS
The Opt-in Agreement
Under the Telecommunications Act of 1996, 47 U.C. ~ 151 et. seq. (the Act) state
commissions are tasked with approval or rejection of interconnection agreements. See 47 U.
252(e).In 2000, the Commission approved an interconnection agreement that is the
underlYing agreement" for the PageData-Qwest agreement from which the dispute in this matter
arose. The underlYing agreement was negotiated between Qwest and Arch Paging, Inc. and
Mobile Communications Corporation of America (Qwest-Arch Interconnection Agreement). R.
at 53-55. Under the Act, Qwest, as an incumbent local exchange carrier must "make available
any interconnection, service, or network element provided under an agreement approved under
this section to which it is a party to any other requesting telecommunications carrier upon the
same terms and conditions as those provided in the agreement" 47 U.C. ~ 252(i); See also
R. ~ 51.809. Competitive carriers such as PageData use these provisions to "opt-" to the
existing, approved interconnection agreements (so-called "underlYing agreements ) between
incumbent local exchange carriers (such as Qwest) and other competitive carriers. That
PageData and Wavesent LLC,for Approval of Amendments to Interconnection Agreements QWE-03-, QWE-03-2004 Ida. PUC LEXIS 244 (2004). PageData has also pursued a complaint procedure involving some of the
same issues involved in this case at the FCC. On Halloween, 2003 PageData also filed an action against Qwest in
the United States District Court for the District of Idaho which was dismissed without prejudice. Joseph B. McNeal
d/b/a PageData, et al v. Qwest Corporation, et ai Case No. CIV03-473-MHW.
BRIEF OF RESPONDENT QWEST CORPORATION, P. 2
exactly what PageData did in this case, and in so doing, it bound itself to the provisions of that
contract, including the arbitration clause.
In 2002, PageData informed Qwest it wished to opt into all of the terms of the Qwest
Arch-Interconnection Agreement 3 R. at 73-74. Subsequently, Qwest and PageData filed a joint
Application with the Commission requesting approval of PageData s adoption of the entire
Qwest-Arch Interconnection Agreement (as amended). R. at 70-72. The parties' Application
signed by PageData, stated that PageData s adoption of the Qwest-Arch Agreement was
reached through voluntary negotiations R. at 70 (emphasis added).The parties also
represented that approval of the Agreement was in the public interest. R. at 71.
In approving this Agreement the Commission found it "was consistent with the public
interest, convenience and necessity and (did) not unfairly discriminate." R. at 75-80.
PageData s Complaint
PageData s Complaint alleged that Qwest had not complied with the reciprocal
compensation provisions of the Agreement. R. at 218. PageData sought an Order from the
Commission requiring Qwest to remit cash payments for reciprocal compensation or, at a
minimum, to issue credits for the same. R. at 219.
Owest's Limited Response
Qwest asserted that the Commission should not exercise its jurisdiction over PageData
Complaint and should dismiss it because: 1) the parties' voluntary negotiated interconnection
agreement set out detailed procedures for resolving disputes through arbitration, R. at 230; See
also R. at 34; and, 2) resolution of this contract dispute depended on one narrow factual issue
3 It is important to note that when PageData made its opt-in request 47 C.R. ~ 51.809 allowed a carrier two
options, either to opt-into all of the terms of an existing agreement or only certain provisions of it. PageData chose
the later course. Today parties can only opt-into entire agreements. In the Matter of Review of the Section 251
Unbundling Obligations of Incumbent Local Exchange Carrier CC Docket No. 01-338, 19 FCC Rcd 13494 (reI.
July 13 , 2004)(FCC adoption of "all or nothing" rule).
BRIEF OF RESPONDENT QWEST CORPORATION, P. 3
the intent of the contracting parties. R. at 230. Qwest also stated that resolution of this contract
dispute was not important to questions of telecommunications law, nor would it affect other
Idaho telecommunications carriers or the telecommunications industry as a whole. Id.
Qwest also stated that the FCC had stated a state commission may not have responsibility
to decide a dispute under an interconnection agreement if the parties had contractually agreed to
a dispute resolution c1ause.
Qwest also asserted that as a general matter, the construction and enforcement of contract
rights in Idaho lies in the jurisdiction of the courts and not the Commission. R. at 236. Qwest
argued that where the courts and Commission have concurrent jurisdiction over a contract
dispute, the Commission must exercise restraint and should detennine whether assertion of its
jurisdiction is in the public interest. R. at 236-37.
Qwest requested the Commission deny the relief requested by PageData and dismiss the
Complaint
PageData s Reply
PageData urged the Commission to reject Qwest's Limited Response and its assertions
insisting the Commission had jurisdiction to resolve disputes concerning interconnection
agreements pursuant to Idaho Code ~~ 62-614 and 62-615(1). R. at 246-49. PageData argued
In the Matter of Starpower Communications, LLC the FCC stated:
We note that, in other circumstances, parties may be bound by dispute resolution clauses in their
interconnection agreement to seek relief in a particular fashion, and, therefore, the state
commission would have no responsibility under section 252 to interpret and enforce an existing
agreement. In this case, however, the relevant interconnection agreements do not expressly specify
how the disputes shall be resolved.
In the Matter of Starpower Communications, LLC, Petition for Preemption of Jurisdiction of the Virginia State
Corporation Commission Pursuant to Section 252(e)(5) of the Telecommunications Act of 1996, CC Docket No. 00-
, Memorandum Opinion and Order, FCC 00-216 (reI. June 14 2000).
BRIEF OF RESPONDENT QWEST CORPORATION, P. 4
that Section 13.14 of the Interconnection Agreement provided three methods of dispute
resolution and Qwest was bound by PageData s selected method. R. at 250.
Commission Order No. 29687
On January 19, 2005, the Commission issued Order No. 29687 declining to exercise its
jurisdiction over PageData s Complaint R. at 331-337. The Commission found Qwest and
PageData had voluntarily agreed to adopt the entire Qwest-Arch Paging Interconnection
Agreement which included a dispute resolution provision. R. at 335. The Commission found
that Section 13.14 of the parties' Agreement , contained detailed procedures for utilizing the
AAA arbitration rules to resolve disputes and as such "the parties clearly contemplated utilizing
arbitration when they cannot resolve their dispute informally.R. at 336. The Commission
stated Idaho case law has recognized there is a strong public policy in favor of arbitration and
that arbitration "is a favored remedy" for resolving disputes citing International Assoc. of
Firefighters Local 672 v. City of Boise 136 Idaho 162, 168, 30 P.3d 940, 946 (2001) and Driver
v. SI Corporation 139 Idaho 423 , 426 , 80 P.3d 1024, 1027 (2003). Id.
Based on the foregoing, the Commission found that although the dispute resolution
provision did not limit the parties' right to seek relief from it, the arbitration process was the
first and foremost" method for resolving disputes.Id. In closing the Commission commented:
Even though the Commission declines jurisdiction in this case, PageData is not
without a remedy. As PageData recognized, it may submit this dispute to
arbitration or the FCC under Section 13.14.
R. at 336.
5 The Commission also addressed what it called PageData s misplaced reliance on Idaho Code ~ 62-614 fmding it
was not applicable to PageData because it was not a Title 61 LEC providing local exchange service but rather a
telephone corporation providing radio paging services and thus was "exempt from any requirements of title 61 , or
chapter 6, title 62, Idaho Code.Id.
BRIEF OF RESPONDENT QWEST CORPORATION, P. 5
Petition for Reconsideration
On February 9, 2005, PageData filed a Petition for Reconsideration asserting primarily
that the Commission had erred in declining to resolve its Complaint because its Order No. 29687
had made the dispute resolution clause in the parties' Agreement unconscionable. R. at 338.
PageData requested that the Commission hold a hearing pursuant to Idaho Code ~ 28-302 to
investigate Section 13.14. R. at 340.
PageData also alleged 47 U.C. ~ 252(i) of the Act requires that "the resolution of a
reciprocal compensation dispute be filed. . . and available for adoption by other carriers." R.
347. Finally, PageData asserted that there was "no mechanism in Idaho statutes" to incorporate a
private arbitration decision into an interconnection agreement thus his billing dispute with Qwest
should be resolved by the Commission. Id.
Order on Reconsideration. Order No. 29726
On March 9 , 2005 , the Commission issued Order No. 29726 denYing PageData s Petition
for Reconsideration. R. at 345-350. In its findings the Commission addressed two primary
issues raised by PageData: (1) whether the dispute resolution clause was unconscionable, and (2)
the filing of arbitration decisions.
Unconscionability
The Commission noted that Idaho Code ~ 28-302, part of the Idaho Uniform
Commercial Code, did not confer jurisdiction upon the Commission. R. at 348. Rather, the
Commission stated the plain text of the statute provided that arguments and evidence of
unconscionability must be presented to a court - not the Commission. Id. Accordingly, the
Commission found his request for a hearing was without merit.
The Commission also found, as it did in Order No. 29687, there is a strong public policy
in favor of arbitration and arbitration clauses. R. at 349. Thus, it was declining to exercise its
BRIEF OF RESPONDENT QWEST CORPORATION, P. 6
jurisdiction when the parties had "voluntarily negotiated" the adoption of an interconnection
agreement which included a dispute resolution provision that was clearly the "first and foremost"
method selected by the parties to resolve their disputes. Id.
The Commission also found the construction and enforcement of contracts is generally "
matter which lies in the jurisdiction of the courts and not with it citing Lemhi Tel. Co.
Mountain States Tel. Tel. Co.98 Idaho 692, 696, 571 P.2d 753 , 757 (1977). R. at 348. The
Commission recognized there were exceptions to this general rule but none were applicable. Id.
The Commission also addressed PageData s unconscionability argument substantively.
The Commission reasoned that to be voided as unconscionable an arbitration provision had to be
both procedurally and substantively unconscionable. R. at 348. The Commission noted that the
Idaho Supreme Court has recognized that an arbitration clause "may be unenforceable if large
arbitration costs preclude the party from effectively vindicating the party s federal statutory
rights in the arbitral forum.Murphy v. Mid- West National Life Insurance Co.139 Idaho 330
332, 78 P.3d 766, 768 (2003) quoting Lovey, 139 Idaho at 45, 72 P.3d at 885. The Commission
stated that in Murphy, the arbitration clause required: 1) each party to pay for its own arbitrator;
2) equally share the expenses of a third arbitrator; pay for all other expenses of arbitration; and 4)
pay for their attorney fees and expenses for witnesses. R. at 349. The Commission found that
the arbitration provision in Murphy stood in "stark contrast" to the dispute resolution provision
contained in Section 13.14 which provided for a single arbitrator and the prevailing party "shall
be entitled to an award of a reasonable attorney s fees and costs.R. at 349. Based on the
foregoing, the Commission did not find the tenns of Section 13.14 to be unenforceable. Id.
Filed Arbitration Decisions
The Commission found PageData s argument regarding the filing of arbitration decisions
with state commissions unpersuasive because it was unaware of any impediment to either party
BRIEF OF RESPONDENT QWEST CORPORATION, P. 7
filing an arbitration decision with the Commission to amend or clarify their interconnection
agreement. R. at 349.
Following the issuance of this Order PageData filed its Notice of Appeal.
ISSUES PRESENTED ON ApPEAL
The Commission regularly pursued its authority and made sufficient findings
when it declined to exercise its jurisdiction and dismissed PageData s Complaint without
prejudice.
The Commission regularly pursued its authority and made sufficient findings to
justify its decision to not hold a hearing on PageData s demand made pursuant to Idaho Code
28-302.
After affirming the Commission s Orders, the Respondent Qwest Corporation
contends that the Court should award Attorney Fees.
ARGUMENT
I. ST ANDARD OF REVIEW
Article V, Section 9 of the Idaho Constitution provides the Supreme Court shall have
jurisdiction to review on appeal any order of the Commission. Boise Water Corp. v. Idaho Pubic
Utilities Commission 128 Idaho 534, 537, 916 P.2d 1259, 1262 (1996). Idaho Code ~ 61-629
defines the scope of the Supreme Court's limited review and states in relevant part:
The review on appeal shall not be extended further than to determine whether
the commission has regularly pursued its authority, including a determination
of whether the order appealed from violates any right of the appellant under
the constitution of the United States or of the state of Idaho.
Idaho Code ~ 61-629. See also Industrial Customers of Idaho Power v. Idaho PUC, 134 Idaho
285, 288, 1 P .3d 786, 789 (2000).In Industrial Customers the Court stated review of
BRIEF OF RESPONDENT QWEST CORPORATION, P. 8
Commission determinations as to "questions of law" is limited to a determination of whether the
Commission has regularly pursued its authority and whether the constitutional rights of the
appellant have been violated. Industrial Customer 134 Idaho at 288, 1 P.3d at 789. PageData
has not alleged its constitutional rights were violated, thus the question is whether the
Commission regularly pursued its authority in this matter. Regarding "questions of fact " the
Court stated that where the Commission s findings are supported by substantial competent
evidence in the record, the Court must affirm those findings and the Commission s decision. Id.
The Commission s findings of fact are to be sustained unless it appears that the clear
weight of the evidence is against its conclusions or that the evidence is strong and persuasive that
the Commission abused its discretion. Industrial Customers 134 Idaho at 288 , 1 P.3d at 789.
The Court will not displace the Commission s findings of fact when faced with conflicting
evidence
, "
even though the Court would have made a different choice had the matter been before
it de novo." Rosebud Enterprises, Inc. v. Idaho PUC 128 Idaho 609, 618, 917 P.2d 766 775
(1996). Thus, the Commission s findings of fact in this case are entitled to a presumption of
coITectness and the burden is on PageData to show those findings are unsupported by the
evidence. Industrial Customers 134 Idaho at 292, 1 P.3d at 793.
This Court must view the facts and inferences of the Commission in the light most
favorable to the party who prevailed before the Commission.Lethrud v. State of Idaho,
6 The Court has set the test for substantial and competent evidence as follows:
The "substantial evidence rule" is said to be a "middle position" which precludes a de novo
hearing but nonetheless requires a serious review which goes beyond the mere ascertainment
of procedural regularity. Such a review requires more than a mere "scintilla" of evidence in
support of the agency s detennination, though "something less than the weight of the
evidence.
" "
Put simply , we wrote, "the substantial evidence rule requires a court to
detennine 'whether (the agency s) fmdings of fact are reasonable.
Industrial Customers 134 Idaho at 293, 1 P.3d at 794 quoting Idaho State Insurance Fund v. Hunnicutt 110 Idaho
257,260, 715 P.2d 927, 930 (1985 (citations omitted).
BRIEF OF RESPONDENT QWEST CORPORATION, P. 9
Industrial Special Indemnity Fund 126 Idaho 560, 563 , 887 P.2d 1067 1070 (1995). Simply
put, findings of the Commission must be reasonable "when viewed in the light that the record in
its entirety furnishes, including the body of evidence opposed to the (Commission s) view.
Hayden Pines 111 Idaho at 336, 723 P.2d at 880 quoting Idaho State Ins. Fund v. Hunnicutt
110 Idaho 257 , 261 , 715 P.2d 927, 931 (1985).
The Commission s findings need not take any particular form so long as they fairly
disclose the basic facts upon which the Commission relies and support the ultimate conclusions.
What is essential are sufficient findings to permit the reviewing Court to determine that the
Commission has not acted arbitrarily. Rosebud 128 Idaho at 624, 917 P.2d at 781.
If the Court finds that the Commission has not "regularly pursued its authority," then it
shall set aside the Commission s Orders in whole or in part and remand it to the Commission for
its consideration. Idaho Code ~ 61-629.
A. The Commission regularly pursued its authority and made sufficient findings
when it declined to exercise its iurisdiction and dismissed PageData s Complaint without
preiudice.
Although PageData raises multiple issues, the primary issue on appeal is whether the
Commission erred in declining to exercise its jurisdiction over PageData s Complaint and
dismissing it without prejudice.In both final Orders, the Commission focused on the dispute
resolution provision contained in Section 13.14 of the parties' Agreement. The Commission
noted that the parties had voluntarily negotiated and adopted the terms of the Qwest-Arch
Interconnection Agreement in their entirety. The record also shows that at the start of the
negotiations, PageData specifically requested that Qwest allow it to opt-into this agreement, R. at
, which included a dispute resolution provision stating in pertinent part:
7 For instance, PageData argues that the Commission elTed by granting Qwest's motion to dismiss. Qwest filed no
such pleading and even if its Limited Response were considered in that vein the Commission in its discretion was
justified in dismissing the Complaint without prejudice in the absence of Qwest's pleading.
BRIEF OF RESPONDENT QWEST CORPORATION, P. 10
If any claim. controversy or dispute between the Parties. their agents. employees.
officers. directors or affiliated agents ("Dispute ) cannot be settled through
negotiation. it shall be resolved by arbitration under the then current rules of the
American Arbitration Association ("AAA"l:.The arbitration shall be conducted by
a single neutral arbitrator familiar with the telecommunications industry and
engaged in the practice of law. . .. The Federal Arbitration Act, 9 U.C. Secs. 1-
, not state law, shall govern the arbitrability of all Disputes. . . . All expedited
procedures prescribed by the AAA rules shall apply and the rules used shall be
those for the telecommunications industry. The arbitrator s award shall be final
and binding and may be entered in any court having jurisdiction thereof. The
prevailing Party, as determined by the arbitrator, shall be entitled to an award of
reasonable attorneys' fees and costs. The arbitration shall occur at a mutually
agreed upon location. Nothing in this Section shall be construed to waive or limit
either Party s right to seek relief from the Commission or the FCC as provided by
state or federal law.
R. at 34. The Commission found that Section 13.14 had detailed procedures for utilizing the
AAA arbitration rules to resolve disputes. As such the Commission decided that "the parties
clearly contemplated utilizing arbitration when they cannot resolve their dispute informally." R.
at 336. The Commission found that the intent of this provision was consistent with Idaho case
law that recognizes there is a strong public policy in favor of arbitration and that arbitration is "
favored remedy" for resolving disputes. International Assoc. of Firefighters, Local 672 v. City of
Boise 136 Idaho 162, 168, 30 P.3d 940, 946 (2001).Lastly, the Commission found that
although Section 13.14 did not limit the parties' right to seek relief from the Commission , the
arbitration process was still the "first and foremost" method for resolving disputes under the
ICA.8 R. at 336. Accordingly, it seems clear that the Commission found that the terms of the
dispute resolution provision were unambiguous.
8 Although the FCC has held that state commissions can interpret and enforce previously approved intercOImection
agreements it also held that:
in other circumstances, parties may be bound by dispute resolution clauses in their interconnection
agreement to seek relief in a particular fashion, and, therefore, the state commission would have
no responsibility under section 252 to interpret and enforce an existing agreement.
In the Matter of Starpower Communications, LLC, Petition for Preemption of Jurisdiction of the Virginia
State Corporation Commission Pursuant to Section 252 (e) (5) of the Telecommunications Act of 1996, CC
BRIEF OF RESPONDENT QWEST CORPORATION, P. 11
When the terms of a contract are unambiguous, interpretation of the contract and its legal
effect are questions of law. Opportunity, L.C. v. Ossewarde 136 Idaho 602, 605 , 38 P.
1258 , 1261 (2002). An unambiguous contract will be given its plain meaning, which is based on
the words of the contract. Id. A contract is ambiguous if it is reasonably subject to conflicting
interpretations. Lewis v. CEDU Educ. Serv., Inc.135 Idaho 139, 144, 15 P.3d 1147, 1152
(2000). In this matter the terms of the dispute resolution provision are clearly unambiguous.
There is nothing unclear about the language "shall be resolved by arbitration" and as such the
Commission s decision to not exercise its jurisdiction in this matter are clearly reasonable
rational and not contrary to the law.
PageData argues that the Commission erred when relying on Idaho case law addressing
arbitration and arbitration provisions because they don t provide that a decision reached
arbitration be available to other parties. This argument is simply without merit as there is no
authority which prevents the Commission from consulting Idaho cases on a variety of topics for
guidance. Additionally, the language of the dispute resolution clearly shows that the parties
intended to use arbitration first to resolve disputes under their Agreement. Thus, even without
citation to these authorities Qwest believes the Commission s decision would have been the
same. Finally, this argument is moot as the Commission expressly found it was aware of no
impediment to the filing of an arbitration decision as an amendment or clarification to an existing
interconnection agreement at a state commission despite PageData s concern. R. at 349.
PageData also argues that Qwest is contractually bound to face its Complaint before the
Commission because it selected that forum. Again, this completely ignores the clear intent of the
Docket No. 00-Memorandum Opinion and Order, FCC 00-216, 15 FCC Red. 11277, 11280, n.14 (rei.
June 14 2000).9 Pagedata is not without a remedy as it can go to arbitration or the FCC, after which, the Commission implied that
PageData could file the produced result with the Commission. R. at 349.
BRIEF OF RESPONDENT QWEST CORPORATION, P. 12
dispute resolution provision in the parties' Agreement , which is that the parties shall arbitrate
disputes. Although the parties are permitted to seek relief in other forums they are contractually
bound to using arbitration first when disputes arise. The Commission s Order merely holds the
parties to their Agreement leaving open the ability to return to it, if necessary, once arbitration
has been completed.1O As noted in the FCC'
Starpower decision 11 the Commission has no
responsibility under 47 D.C. ~ 252 to interpret and enforce an existing interconnection
agreement that contains a dispute resolution clause.
B. The Commission regularly pursued its authority and made sufficient findings to
justify its decision to not hold a hearing on PageData s demand made pursuant to Idaho Code
28-302.
PageData argued in its Petition for Reconsideration that the Commission should hold a
hearing pursuant to Idaho Code ~ 28-302 to determine whether the dispute resolution provision
in the parties' Agreement was unconscionable.
As has been stated on numerous occasions by the Court, the Commission has no authority
other than that given to it by the Legislature. It exercises a limited jurisdiction and nothing is
presumed in favor of its jurisdiction. United States v. Utah Power Light Co., 98 Idaho 665
570 P.2d 1353 (1977); Lemhi Tel. Co. v. Mountain States Tel. Tel. Co., 98 Idaho 692, 571 P.
753 (1977). In this context the Commission correctly found that Idaho Code ~ 28-302 does
not confer jurisdiction to hold the type of hearing PageData demanded. The language of this
provision makes this clear as it provides that evidence of unconscionability shall be presented to
10 The Commission decision could also be interpreted as a fmding that PageData's Complaint was not ripe.
Traditional ripeness doctrine requires a party to prove 1) that the case presents definite and concrete issues, 2) that a
real and substantial controversy exists, and 3) that there is a present need for adjudication. Boundary Backpackers
Boundary County, 128 Idaho 371 , 376, 913 P.2d 1141, 1146 (1996). Here the Commission decided in essence that it
did not need to resolve this matter at this time because the parties by their Agreement made clear that they would use
arbitration first before coming to it.
11 See, In re Starpower Communications, supra 14.
BRIEF OF RESPONDENT QWEST CORPORATION, P. 13
a "court.See Idaho Code ~ 28-302.13 The Commission is a
quasi legislative body, Boise
fVater Corp. v. Idaho Public Utilities Commission, 97 Idaho 832, 838, 555 P.2d 163, 169 (1976),
and not a court of law. Natatorium Co. v. Erb 34 Idaho 209, 200 P. 348 (1921).Further, a
close review of the Commission s statutory authorities, rules and orders shows that no reference
has ever been made to Idaho Code 9 28-302 to allow for the type of hearing PageData
requests. Based on this reasoning alone the Court should affirm the Commission s decision to
deny PageData s request for a hearing.
The Commission also correctly recognized that the construction and enforcement of
contracts is generally "a matter which lies in the jurisdiction of the courts and not the public
utilities commission" unless both parties agree to let the Commission settle their dispute citing
Lemhi Telephone Co. v. Mountain States Tel. Tel. Co., 98 Idaho 692, 696, 571 P .2d 753 , 757
(1977); Afton v. Idaho Power Co., 111 Idaho 925, 929, 729 P.2d 400, 404 (1986). In this matter
not only is the Commission without jurisdiction to hold a hearing pursuant to Idaho Code ~ 28-
302, the question PageData has raised about the dispute resolution provision should not be
entertained by the Commission as both parties have not provided consent for the Commission to
interpret Section 13.14.
Finally, despite its preVIOUS findings the Commission addressed PageData
argument that the dispute resolution in the parties' Agreement was unconscionable. In
finding that the dispute resolution was not unenforceale the Commission noted the
dispute resolution provision provided for a single arbitrator and stated the prevailing
party "shall be entitled to an award of a reasonable attorney s fees and costs." R. at 349.
The Commission noted that in Lovey v. Regence Blue Shield of Idaho 139 Idaho 37, 45
13
See also Official Comment # 3 to the Text of ~ 28-302 which provides "(t)he present section is addressed to the
court, and the decision is to be made by it."
BRIEF OF RESPONDENT QWEST CORPORATION, P. 14
72 P.3d 877, 885 (2003), the Court held that an arbitration clause that required each party
to pay its own costs is not unconscionable. The Commission reasoned that this provision
stood in start contrast to provisions which the Court had invalidated.14 Based on the
foregoing, the Commission found that Section 13.14 was not unenforceable. R. at 349.
Procedurally, Section 13.14 is clearly not unconscionable.Procedural
unconscionability arises only when the contract "was not the result of free bargaining
between the parties.Northwest Pipeline Corp., v. Forest Weaver Farm, Inc., 103 Idaho
180, 183 , 646 P .2d 422, 425 (1982). Indicators of procedural unconscionability generally
fall into two areas: lack of voluntariness and lack of knowledge. Here, it is undisputed
that the Agreement was voluntarily negotiated based upon PageData s initiating request.
R. at 70-, 335. PageData could have negotiated an interconnection agreement with
terms different from the underlying Qwest-Arch Agreement or picked and chose only the
terms it wanted from that agreement pursuant to 47 C.R. ~ 51.809. See generally
C. ~ 252. If there were terms upon which Qwest and PageData could not agree, the
Act provides a method by which the Commission could resolve those issues to produce a
final binding contract. Instead, PageData chose to opt into the underlying agreement.
As to knowledge, Joseph McNeal d/b/a PageData has appeared pro se
numerous proceedings regarding paging services before the Commission, other state
commissions and participated in proceedings concerning paging before the FCC. He is
clearly knowledgeable about the services he provides and the contracts that he has
entered into with other carriers in order to provide his services to his customers. Clearly,
14 See Murphy v. Mid-West, National Life Insurance Co.139 Idaho 330, 332, 78 P.3d 766, 768 (2003) (Arbitration
provision unenforceable due to prohibitive cost that would be intUITed through requirement that: 1) each party to
pay for its own arbitrator; 2) equally share the expenses of a third arbitrator; pay for all other expenses of arbitration;
and 4) pay for their attorney fees and expenses for witnesses.
BRIEF OF RESPONDENT QWEST CORPORATION, P. 15
PageData did not suffer from a lack of knowledge when he entered into the Agreement
with Qwest.
Based on the foregoing, the Commission regularly pursued its authority and made
sufficient findings to justify its decision to not hold a hearing on PageData s demand
made pursuant to Idaho Code ~ 28-302 and to further find that Section 13.14 is not
unconscionable or unenforceable. Accordingly, the Commission s Orders should be
affirmed.
C. After affirming the Commission s Orders. the Respondent Qwest Corporation
contends that the Court should award Attorney Fees.
Qwest respectfully requests that if the Commission s Orders are affirmed it be granted an
award of attorney s fees pursuant to Idaho Code ~ 12-121 and Rule 41 of the Idaho Appellate
Rules. This Court has held an award of attorney fees may be granted to the prevailing party
pursuant to Idaho Code ~ 12-121 and I.A.R. 41. Durrant v. Christensen 117 Idaho 70, 74, 785
2d 634, 638 (1990); See also Excel Leasing Co. v. Christensen 115 Idaho 708 , 712, 769 P.
585, 589 (Ct. App. 1989). Such an award is appropriate when the Court is left with the abiding
belief that the appeal has been brought, or defended frivolously, unreasonably, or without
foundation. Id. However, attorney fees will not be awarded where the losing party brought the
appeal in good faith and where a genuine issue of law was presented. Minich v. Gem State
Developers, Inc., 99 Idaho 918 , 591 P.2d 1078, 1085 (1979).
Although proceeding pro se, PageData has negotiated several contracts with Qwest. As
such, he was undoubtedly aware that the Agreement he voluntarily entered into with Qwest
required the parties to use arbitration as the first and foremost method for resolving contractual
disputes. Once the Commission directed the parties toward arbitration in its Orders PageData
should have proceeded to that forum.Instead, PageData traveled down the current path
BRIEF OF RESPONDENT QWEST CORPORATION, P. 16
challenging the Commission s well reasoned exercise of discretion in dismissing his Complaint
without prejudice. Put simply, PageData s appeal is without foundation. As a result Qwest and
the Commission have been forced to defend this appeal and in the process incurred significant
costs. Accordingly, Qwest requests that the Court award it a reasonable amount of attorney
fees for defending this appeal.
CONCLUSION
The Commission s final orders: (1) declining to exercise its jurisdiction to resolve
PageData s Complaint and dismissed the Complaint it without prejudice; (2) declining to
hold a hearing pursuant to Idaho Code ~ 28-302; and, (3) finding that the dispute
resolution clause was no unenforceable. Accordingly, the Commission s decisions were
based upon rational, sufficient and reasonable findings which are not contrary to the law.
Consequently, the Commission has regularly pursued its authority and its decisions
should be affirmed.
DATED this 16th day of August, 2005.
Respectfull y S ubmi tted
Adam Sherr
Qwest Communications, Inc.
1600 7th Avenue - Room 3206
Seattle, W A 98191
and
Jo . Hammond, Jr.
att Fisher, LLP
ank Plaza, 5th Floor
101 South Capital Blvd.
Boise, Idaho 83702
(208) 331-1000
BRIEF OF RESPONDENT QWEST CORPORATION, P. 17
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 16th day of August, 2005 , I caused a true and
correct copy of the above and foregoing document to be served, in the manner indicated
on the following:
Joseph B. McNeal
d/b/a P AGEDATA
O. Box 15509
Boise, ill 83715
Telephone: (208) 375-9844
Donovan E. Walker
Deputy Attorney General
IDAHO PUBLIC UTILITIES COMMISSION
472 West Washington
O. Box 83720
Boise, ID 83720-0074
Telephone: (208) 334-0357
Fax: (208) 334-3762
Hand Delivery
~ U.S. Mail
Facsimile
Federal Express
~ Hand Delivery
0 U.S. Mail
Facsimile
Federal Express
BRIEF OF RESPONDENT/CROSS APPELLANT QWEST CORPORATION, P.l