Baby Bell can take rate lawsuit back to state authority, SC rules

By Legal News Line | Jun 4, 2007

Justice Phil Johnson

AUSTIN -- For Southwestern Bell, it was a case of third time lucky. The former Baby Bell finally got a break from the Texas Supreme Court in its multi-year legal dispute with several local exchanges over wholesale telephone rates. The Supreme Court agreed Friday in re: Southwestern Bell Telephone Co. (#05-0511) to grant Southwestern Bell (SWB) a writ of mandamus that abates the case and refers it to the state's Public Utility Commission (PUC). It was SWB's third attempt to have the PUC recognized as "primary jurisdiction" in the case. A trial court and the Thirteenth Court of Appeals had already refused the telephone carrier's requests. The plaintiffs, a group of competitive local exchange carriers (CLECs), originally sued SWB for charging them above rates set by the PUC in two other rulings. A state court denied SWB's move to abate the case while the Appeals Court denied SWB's writ of mandamus. But the Supreme Court ruled that the PUC has "primary jurisiction to resolve threshold questions" about agreements between SWB and the plaintiffs, wrote Justice Phil Johnson. The PUC had issued an amicus curiae brief to the Supreme Court supporting SWB's petition. The court also rejected plaintiffs' assertions that SWB waited too long to pursue the matter. "Southwestern Bell raised the issue in federal court, then raised it again in the state trial court ... less than a month after the federal court remanded the case," Johnson wrote. The Supreme Court directed the trial court to abate the case until the PUC has exercised its primary jurisdiction over the disputed agreements.

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