Appellants' Brief: § 271 Is Not A Bill of Attainder

(March 27, 1998)  Attorneys for phone companies, AT&T, MCI, and Sprint, and related entities, filed a massive brief with the 5th Circuit Court of Appeals, arguing that District Court Judge Joe Kendall erred in ruling that § 271-275 constitute an unconstitutional Bill of Attainder.  § 271 of the Telecom Act of 1996 bars Bell Operating Companies (BOCs), like SBC, from providing in region long distance service without prior FCC approval.  Kendall's New Years Eve opinion in SBC v. FCC, if affirmed, would unravel a major component of the 1996 Act.

SBC Communications went to court against the Federal Communications Commission last July, after the FCC denied its request under § 271 to be authorized to provide long distance service in Oklahoma.  The FCC had ruled against SBC on the grounds that it had not sufficiently opened its local market to competition.  The FCC has not yet granted a single BOC's § 271 request.

Long distance phone companies, which do not generally relish the thought of competition from the BOCs, moved to intervene in the lawsuit, to oppose SBC's claims.  Some BOCs also intervened, to support SBC's claims.

District Court Opinion

The District Court ruled that § 271-275 are unconstitutional because they constitute a Bill of Attainder.

A Bill of Attainder is a legislative act that singles out an individual or group for punishment without a trial.  The Constitution of the United States, Article II, Section 9, paragraph 3 provides that: "No Bill of Attainder or ex post facto Law will be passed."

Judge Kendall's ruling was based on an application of the separation of powers, and specifically, the Bill of Attainder clause, to the text of the Telecom Act of 1996, and specifically, the Special Provisions contained in § 271-275.  There provisions name individual companies, and single them out for being barred from engaging in certain economic activity.  The Court held that this rose to the level of a punishment within the meaning of of the Bill of Attainder clause.

Appellants' Bill of Attainder Arguments

The appellants' brief argues that § 271-275 should be interpreted in the context of the legal and legislative history of the Act.

"It is not, and has never been, the law that legislation imposing burdens on named persons is presumptively invalid." ...  "Much more must be proven before legislation will be invalidated as a bill of attainder.  Specifically, legislation must single out persons or private groups in a way that is not justified by distinctive characteristics of the class that would justify the distinctive legislative treatment Congress has imposed, and it must punish those singled out -- not merely regulate them."  (Citations edited out.)

"Congress’ decision to make §§ 271-273 applicable to the BOCs by name is entirely explained by the fact that §§ 271-273 were intended to modify prospectively the terms of a judicial decree -- the MFJ -- that applied only to the BOCs to begin with, and that had effectively set forth a national regulatory structure for telecommunications markets.  Such a law plainly constitutes a legitimate form of legislative regulation."

"Furthermore, ...  it is impossible to characterize §§ 271-273 as punishment.  To be punitive, legislation must, at a minimum, deprive specified individuals of a preexisting right.  Sections 271-273, however, grant the BOCs considerable authority the MFJ had denied them, including the authority to provide long distance service originating anywhere in the country outside the BOC’s home region. To be sure, §§ 271-273 continued the core of the MFJ’s long distance and manufacturing restrictions, but that left the BOCs no worse off than if there had been no legislation. And §§ 271-273 granted longstanding BOC demands to transfer authority for lifting the restrictions to the FCC, to impose deadlines for deciding removal requests, and to set forth clear and reasonable criteria for removal. The simple fact is that the BOCs would be far worse off were the MFJ still in place. That is why the BOCs lobbied hard for the 1996 Act, ..."  (Citations edited out.)

"Sections 271-273 of the 1996 Act are not bills of attainder. ...  It has never before been applied, as the district court applied it here, to invalidate regulatory legislation simply because some large corporations ... are directly affected while others are not."

Appellants' Argument That § 601 Is Not Severable

§ 601 of the Telecom Act of 1996 terminated the Modification of Final Judgment, the 1982 judicial consent decree which broke up the Bell system, and transferred authority from a judge to the FCC.

District Court Judge Kendall ruled that § 271-173 and § 601 are severable, and thus that in overturning § 271-273, § 601 remain unaffected.

Appellants' brief argues the contrary - that § 271-273 are inseverable.   "The district court also improperly held that §§ 271-273 are severable from § 601(a) of the Act, which directed that the MFJ be terminated.  Because § 601 expressly replaces the MFJ with new "restrictions and obligations" adopted in the 1996 Act, a decision that invalidates those "restrictions and obligations" necessarily requires that § 601(a)(1) be invalidated as well. Congress made it explicit that it would not have directed that the MFJ be terminated unless the structural provisions of §§ 271-273 were in place. The district court’s severability ruling striking down §§ 271-273 without reinstating the MFJ thus completely rewrites the "compromise" struck by Congress and creates a regulatory structure that Congress expressly rejected."  (Citation edited out.)

Briefing Schedule

The brief of SBC and other BOCs is due by April 21.   All reply briefs are due by May 5.  The Court of Appeals has indicated that it will likely hear oral argument in July.   A decision might then come in late Summer or early Fall.

The brief was a large undertaking.  It  is over 100 KB of text in HTML format (over 60 pages in print).   Several pages are taken up just to list the names of twenty-five lawyers for these appellants.  In addition to presenting arguments regarding the meanings of the Bill of Attainder clause, § 271-275, and § 601, the brief contains a sweeping history of regulation, litigation, and legislation affecting telephone service over the past several decades.