Justia U.S. 10th Circuit Court of Appeals Opinion Summaries

In 2003, the Securities and Exchange Commission (SEC) sought a preliminary injunction against ClearOne Communications, Inc. based on suspicions of irregular accounting practices and securities law violations. During a hearing on the preliminary injunction, Defendant and former CEO Susie Strohm was asked if she was involved in a particular sale by ClearOne that was the focus of the SEC’s case. She said she was not and approximated that she learned of the sale either before or after the end of ClearOne’s fiscal year. Based on this testimony, Defendant was later convicted of one count of perjury. She argued on appeal to the Tenth Circuit that her conviction should be reversed because (1) the questioning at issue was ambiguous, (2) her testimony was literally true, and (3) even if false, her testimony was not material to the court’s decision to grant the preliminary injunction. The Tenth Circuit disagreed on all three points. The Court found the questions were not ambiguous and there was sufficient evidence to demonstrate Defendant knowingly made false statements. Also, Defendant's testimony was material to the preliminary injunction hearing because it related to a transaction the SEC believed demonstrated ClearOne’s accounting irregularities. The Court therefore affirmed Defendant's conviction.

Sorenson Communications, Inc. challenged the 2010-2011 rates set by the Federal Communication Commission (FCC or Commission) to compensate Video Relay Service providers, including Sorenson. Video Relay Service (VRS) is a type of telecommunication relay service (TRS), "which enables a person with a hearing disability to remotely communicate with a hearing person by means of a video link and a communications assistant." FCC regulations provide certain minimum standards that VRS providers must meet. Among these requirements, VRS providers must operate every day, twenty-four hours a day, and must answer 80 percent of all calls within 120 seconds. TRS customers do not pay to access the service. Instead, TRS providers are compensated by the TRS Fund at a rate determined by the FCC. The TRS Fund is financed by interstate telecommunications providers on the basis of interstate enduser telecommunications revenues. Until 2007, the Commission set VRS rates annually, which resulted in significant variation in compensation each year. In 2007, the FCC adopted a three-tiered rate structure for compensating VRS providers, with rates that declined as the number of minutes per month increased. Sorenson asked the FCC to stay its 2010 Order which retained the tiered structure of the 2007 order, but reduced rates on all tiers. Upon review, the Tenth Circuit denied Sorenson's petition for review because the Commission’s order was consistent with its statutory mandate and was not arbitrary or capricious.

Plaintiff Qwest Corporation (Qwest) and Defendants Colorado Public Utilities Commission (CPUC), individual commissioners, and Cbeyond Communications, LLC (Cbeyond) (together, defendants), cross-appealed the district court’s decision construing 47 C.F.R. 51.5, a Federal Communications Commission (FCC) regulation relating to local telephone service providers. In order to facilitate competition in the local telephone service market, federal law requires incumbent local exchange carriers (ILECs), such as Qwest, to lease certain parts of their telecommunications networks to competitive local exchange carriers (CLECs), such as Cbeyond. ILECs are relieved of this obligation if, among other circumstances, the number of “business lines” in a local exchange reaches a certain threshold because, in the FCC’s view, a sufficient number of business lines shows that it would be economic for CLECs to invest in their own infrastructure. The term “business line” and the method of counting business lines are defined in the regulation. The parties disagree as to which types of a particular network element—UNE loops—are included in the business line count. The district court held that UNE loops serving non-business customers are included in the business line count and that non-switched UNE loops are not included in the business line count. Upon review, the Tenth Circuit affirmed the portion of the district court ruling that the business line count includes nonbusiness UNE loops; the Court reversed the district court's decision that the business line count does not include non-switched UNE loops.