The Communications Act of 1934 requires long-distance carriers to file with the Federal Communications Commission (FCC) a "schedule," known as a "tariff," that contains the charges for their interstate services and all "classifications, practices and regulations affecting such charges." the legal doctrine known as the "filed-rate doctrine" forbids long-distance carriers from offering rates different from those in its filed tariff. This doctrine prevents common carriers from discriminating either for or against certain customers and has the legal effect of preempting all state-law claims based on the rates a common carrier charges.
This case raised the issue of whether the Communication Act preempts state-law claims based on the services a common carrier provides, as well as claims based on the rates it charges. Plaintiff, Central Office Telephone, Inc., brought several state law breach-of-contract and tort claims, alleging that AT&T Corp., a common carrier, failed to provide certain services and billing procedures that it had voluntarily agreed to furnish. AT&T responded that because these services were different than those called for by its tariffs filed with the FCC, the filed-rate doctrine preempted Central Office Telephone's claims.
Reversing the Ninth Circuit, the Supreme Court ruled for AT&T. The Court rejected the argument, accepted by the Ninth Circuit, that the filed-rate doctrine applies only to the rates charged by common carriers but not to the provision of services and billing procedures. Instead, the Court reasoned that "[r]ates . . . Do not exist in isolation" and ruled that because any claim for excessive rates could be expressed as a claim for inadequate servcies and vice-versa, the filed-rate doctrine applies to both rates and services. Therefore, the Court ruled that the Communication Act preempted Central Office Telephone, Inc.'s state-law claims for failure to provide the services that AT&T allegedly promised to furnish, as well as the derivative state-law tort claims.