Sprint’s Fight Over Iowa Utility Charge Escalates

WASHINGTON (CN) - The Supreme Court said Wednesday that it will decide whether state interest in utility regulation required a federal judge to abstain from Sprint's fight against Iowa.

Sprint Communications had filed a federal complaint and a petition in state court after the Iowa Utilities Board (IUB) ordered it to pay another company called Windstream intrastate access charges for Voice over Internet Protocol calls.

A federal judge in Des Moines, Iowa, abstained pursuant to the U.S. Supreme Court decision Younger v. Harris from 1971 and dismissed the action.

In the 1982 decision Middlesex County Ethics Committee v. Garden State Bar Association, the Supreme Court said Younger abstention applies when there is an ongoing state judicial proceeding that implicates important state interests and gives the challenger an adequate opportunity to raise constitutional issues.

Finding that these three factors applied to the Sprint case, the 8th Circuit decided in September 2012 that abstention was appropriate.

"The IUB is not attempting to establish a rate for the future, but rather is seeking to enforce the status quo that existed before Sprint ceased paying the intrastate access charges," the decision stated. "The IUB's order attempts to enforce liabilities based on present facts and existing laws, and thus it constitutes a judicial proceeding that is entitled to Younger abstention."

The appellate judges said nevertheless that the lower court should have stayed the action since "there is a possibility that the parties will return to federal court."

The court did not reach the merits of Sprint's claims that only the Federal Communications Commission has authority to classify the VoIP traffic.

In the decision, the caption identifies the three board member defendants as Elizabeth Jacobs, Swati Dandekar and Darrell Hanson.

As is its custom, the Supreme Court issued no comment Monday in taking up the case.

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