Wednesday, December 11, 2013

federal courts - abstention

      No. 12–815. Argued November 5, 2013—Decided December 10, 2013

Sprint Communications, Inc. (Sprint), a national telecommunicationsservice provider, withheld payment of intercarrier access fees im­posed by Windstream Iowa Communications, Inc. (Windstream), a lo­cal telecommunications carrier, for long distance Voice over InternetProtocol (VoIP) calls, after concluding that the TelecommunicationsAct of 1996 preempted intrastate regulation of VoIP traffic. Wind­stream responded by threatening to block all Sprint customer calls,which led Sprint to ask the Iowa Utilities Board (IUB) to enjoin Windstream from discontinuing service to Sprint. Windstream re­tracted its threat, and Sprint moved to withdraw its complaint. Con­cerned that the dispute would recur, the IUB continued the proceed­ings in order to resolve the question whether VoIP calls are subject to intrastate regulation. Rejecting Sprint’s argument that this questionwas governed by federal law, the IUB ruled that intrastate fees ap­plied to VoIP calls.Sprint sued respondents, IUB members (collectively IUB), in Fed­eral District Court, seeking a declaration that the Telecommunica­tions Act of 1996 preempted the IUB’s decision. As relief, Sprintsought an injunction against enforcement of the IUB’s order. Sprintalso sought review of the IUB’s order in Iowa state court, reiterating the preemption argument made in Sprint’s federal-court complaintand asserting several other claims. Invoking Younger v. Harris, 401 U. S. 37, the Federal District Court abstained from adjudicatingSprint’s complaint in deference to the parallel state-court proceeding. The Eighth Circuit affirmed the District Court’s abstention decision, concluding that Younger abstention was required because the ongo­ing state-court review concerned Iowa’s important interest in regulat­ing and enforcing state utility rates.


Held: This case does not fall within any of the three classes of excep­tional cases for which Younger abstention is appropriate. Pp. 6–12.


(a) The District Court had jurisdiction to decide whether federal law preempted the IUB’s decision, see Verizon Md. Inc. v. Public Serv. Comm’n of Md., 535 U. S. 635, 642, and thus had a “virtually unflagging obligation” to hear and decide the case, Colorado River Water Conservation Dist. v. United States, 424 U. S. 800, 817. In Younger, this Court recognized an exception to that obligation for cases in which there is a parallel, pending state criminal proceeding. This Court has extended Younger abstention to particular state civil proceedings that are akin to criminal prosecutions, see Huffman v. Pursue, Ltd., 420 U. S. 592, or that implicate a State’s interest in en­forcing the orders and judgments of its courts, see Pennzoil Co. v. Texaco Inc., 481 U. S. 1, but has reaffirmed that “only exceptional cir­cumstances justify a federal court’s refusal to decide a case in defer­ence to the States,” New Orleans Public Service, Inc. v. Council of City of New Orleans, 491 U. S. 350, 368 (NOPSI). NOPSI identified three such “exceptional circumstances.” First, Younger precludes federal intrusion into ongoing state criminal prosecutions. See 491 U. S., at 368. Second, certain “civil enforcement proceedings” war­rant Younger abstention. Ibid. Finally, federal courts should refrain from interfering with pending “civil proceedings involving certain or­ders . . . uniquely in furtherance of the state courts’ ability to perform their judicial functions.” Ibid. This Court has not applied Younger outside these three “exceptional” categories, and rules, in accord with NOPSI, that they define Younger’s scope. Pp. 6–8.


(b) The initial IUB proceeding does not fall within any of NOPSI’s three exceptional categories and therefore does not trigger Younger abstention. The first and third categories plainly do not accommo­date the IUB’s proceeding, which was civil, not criminal in character, and which did not touch on a state court’s ability to perform its judi­cial function. Nor is the IUB’s order an act of civil enforcement of the kind to which Younger has been extended. The IUB proceeding is not “akin to a criminal prosecution.” Huffman, 420 U. S., at 604. Nor was it initiated by “the State in its sovereign capacity,” Trainor v. Hernandez, 431 U. S. 434, 444, to sanction Sprint for some wrongful act, see, e.g., Middlesex County Ethics Comm. v. Garden State Bar Assn., 457 U. S. 423, 433–434. Rather, the action was initiated by Sprint, a private corporation. No state authority conducted an inves­tigation into Sprint’s activities or lodged a formal complaint against Sprint. Once Sprint withdrew the complaint that commenced administra­tive proceedings, the IUB argues, those proceedings became, essen­tially, a civil enforcement action. However, the IUB’s adjudicative , authority was invoked to settle a civil dispute between two privateparties, not to sanction Sprint for a wrongful act.


In holding that abstention was the proper course, the Eighth Cir­cuit misinterpreted this Court’s decision in Middlesex to mean that Younger abstention is warranted whenever there is (1) “an ongoing state judicial proceeding, which (2) implicates important state inter­ests, and (3) . . . provide[s] an adequate opportunity to raise [federal]challenges.” In Middlesex, the Court invoked Younger to bar a feder­al court from entertaining a lawyer’s challenge to a state ethics com­mittee’s pending investigation of the lawyer. Unlike the IUB’s pro­ceeding, however, the state ethics committee’s hearing in Middlesex was plainly “akin to a criminal proceeding”: An investigation andformal complaint preceded the hearing, an agency of the State’s Su­preme Court initiated the hearing, and the hearing’s purpose was todetermine whether the lawyer should be disciplined for failing tomeet the State’s professional conduct standards. 457 U. S., at 433– 435. The three Middlesex conditions invoked by the Court of Appealswere therefore not dispositive; they were, instead, additional factors appropriately considered by the federal court before invoking Young­er. Younger extends to the three “exceptional circumstances” identi­fied in NOPSI, but no further. Pp. 8–11.


690 F. 3d 864, reversed.

GINSBURG, J., delivered the opinion for a unanimous Court