Course Of Conduct By The Parties Weighed Heavily In Construing Their Conduct.
North County Communications of Arizona v. Qwest Corporation, No. 14-35254 (9th Cir. May 31, 2016) (Scannlain, Silverman, Bea) involves two communications carriers, North County and Qwest, in a messy billing dispute, construction of their “interconnection agreement” (ICA), and the panel’s skillful avoidance of having to interpret the Telecommunications Act of 1996 (“Act”). The issue making the case blog-worthy was whether Qwest could compel arbitration of the billing dispute between the two carriers.
At first blush, it appeared which party initiated the arbitration could be significant On its face, the Act allowed competitive local exchange carriers (CLECs) to initiate negotiations and to compel arbitration. However, the Act did not explicitly state that incumbent local exchange carriers (ILECs) that had a monopoly on local phone service in a particular geographic area prior to the Act could initiate the negotiation/arbitration process. Qwest is an ILEC, and North County is a CLEC, and it was Qwest that sought to compel arbitration.
Allowing Qwest to initiate the arbitration would have required deft interpretation of the Act. The panel would have had to conclude that the language of the Act was not determinative, that an obscure FCC footnote no. 2,087 in a 659 page document should be given great interpretive weight, and that any other interpretation would be contrary to the purpose of the Act – a process that the late Justice Scalia once colorfully characterized as “interpretive jiggery-pokery.”
So the Court took a simpler route. It looked to the language of the ICA – the agreement between the parties – finding there guidance that the parties intended either side could initiate arbitration (though the particular provision relied upon did not actually mention arbitration). More persuasive was the parties’ course of conduct, for North County agreed to a series of extensions of the time to file an arbitration, specifically agreeing to extend “the period during which either party may file for arbitration” under the Act. The repeated conduct of the parties was given great weight in interpreting their contractual intent as intent to allow either party to initiate arbitration.