Northwest Public Communications Council v. Qwest

The FCC has made clear that “consistent with section 276 and the Commission’s Payphone Orders, states may, but are not required to, order refunds for any period after April 15, 1997, that a BOC does not have NST-compliant rates in effect.” Clarification Order at ¶ 47 (italics in original). Moreover, the PUC has broad regulatory authority consisting of “powers and duties.” ORS 756.040(1). Within these powers and duties, the PUC can order refunds to “correct legal errors that lead to ‘unjust and unreasonable exactions.’” Gearhart v. PUC, 356 Or 216, 244, 339 P3d 904 (2014) (Gearhart II) (quoting ORS 756.040(1) and ORS 756.062(2)).

Northwest Public Communications Council sought judicial review of a final order from Oregon Public Utilities Commission (PUC), which denied its motion to order Qwest to issue refunds for payphone rates charged between 1996 and 2003 that were non-NST-compliant. On review, NPCC argued that PUC erred in denying the motion to order Qwest to pay the requested refunds because PUC relied on factual findings that were not supported by substantial evidence. In response, PUC and Qwest argued that PUC's prior orders do not require PUC to order Qwest to pay the requested refunds. The FCC has made clear that “consistent with section 276 and the Commission’s Payphone Orders, states may, but are not required to, order refunds for any period after April 15, 1997, that a BOC does not have NST-compliant rates in effect.” Clarification Order at 47 (italics in original). Moreover, PUC has broad regulatory authority consisting of “powers and duties.” ORS 756.040(1). Within these powers and duties, PUC can order refunds to “correct legal errors that lead to ‘unjust and unreasonable exactions.’” Gearhart v. PUC, 356 Or 216, 244, 339 P3d 904 (2014) (Gearhart II) (quoting ORS 756.040(1) and ORS 756.062(2)). The Court concluded that PUC cannot ignore NPCC's allegations that Qwest's 1996-2003 payphone rates violate federal law. In the event that the PUC finds that Qwest's pre-2003 payphone rates exceeded what was permitted by federal law and constituted "unjust and unreasonable exactions," or if it finds the pre-2003 rates did not meet NST requirements, it must provide some appropriate remedy to ratepayers, including NPCC members. Reversed and Remanded.