       RECOMMENDED FOR FULL-TEXT PUBLICATION
            Pursuant to Sixth Circuit Rule 206
   ELECTRONIC CITATION: 2000 FED App. 0025A (6th Cir.)
               File Name: 00a0025a.06


UNITED STATES COURT OF APPEALS
              FOR THE SIXTH CIRCUIT
                _________________


                               ;
                                
MICHIGAN BELL TELEPHONE
                                
COMPANY, d/b/a Ameritech
                                
Michigan,
                                
                                      No. 98-1315
          Plaintiff-Appellee,
                                
                                 >
           v.                   
                                
                                
                                
CLIMAX TELEPHONE

                   Defendant, 
COMPANY,
                                
                                
                                
                                
JOHN G. STRAND, JOHN C.

                                
SHEA, and DAVID A.

                                
SVANDA, Commissioners of
                                
the Michigan Public Service
                                
Commission (In Their
Official Capacities and not as 
                                
      Defendants-Appellants, 
Individuals),

                                
UNITED STATES OF AMERICA, 
                                
FEDERAL COMMUNICATIONS          
                                
                  Intervenors. 
COMMISSION,

                               1



                           1
2     Michigan Bell Telephone v. Climax        No. 98-1315
      Telephone Co., et al.

         Appeal from the United States District Court
    for the Western District of Michigan at Grand Rapids.
       No. 97-00197—Gordon J. Quist, District Judge.
                  Argued: April 29, 1999
            Decided and Filed: January 18, 2000
    Before: JONES, BOGGS, and COLE, Circuit Judges.
                    _________________
                        COUNSEL
ARGUED: David A. Voges, OFFICE OF THE ATTORNEY
GENERAL, PUBLIC SERVICE DIVISION, Lansing,
Michigan, for Appellants. John E. Muench, MAYER,
BROWN & PLATT, Chicago, Illinois, for Appellee. Susan
Pacholski, U.S. DEPARTMENT OF JUSTICE, CIVIL
DIVISION, APPELLATE STAFF, Washington, D.C., for
Intervenors. ON BRIEF: David A. Voges, David M.
Gadaleto, OFFICE OF THE ATTORNEY GENERAL,
PUBLIC SERVICE DIVISION, Lansing, Michigan, for
Appellants. John E. Muench, Robert M. Dow, Jr., Theodore
A. Livingston, MAYER, BROWN & PLATT, Chicago,
Illinois, Jeffrey V. Stuckey, Joseph A. Fink, John M.
Dempsey, Edward R. Becker, DICKINSON WRIGHT,
Lansing, Michigan, for Appellee. Susan Pacholski, Mark B.
Stern, U.S. DEPARTMENT OF JUSTICE, CIVIL
DIVISION, APPELLATE STAFF, Washington, D.C., for
Intervenors.
  BOGGS, J., delivered the opinion of the court, in which
JONES, J., joined. COLE, J. (p. 13), delivered a separate
opinion concurring in part and dissenting in part.
No. 98-1315         Michigan Bell Telephone v. Climax         3
                                  Telephone Co., et al.

                 ______________________
                  AMENDED OPINION
                 ______________________
   BOGGS, Circuit Judge. Climax Telephone Company
expanded its local exchange service into the service territory
of Michigan Bell Telephone Company, d/b/a/ Ameritech
Michigan (“Ameritech”). Climax petitioned the Michigan
Public Service Commission (the “PSC”) for arbitration of the
terms, conditions, and prices for interconnection and related
arrangements from Ameritech, under Section 252 of the
federal Telecommunications Act of 1996 (the “FTA” or the
“Act”), 47 U.S.C. § 252, and “the procedure adopted by the
[PSC’s] Order dated July 16, 1996, in Case No. U-11134.”
An arbitration panel rendered its decision, to which both
parties objected. The PSC rejected the objections, adopted
the arbitration panel’s decision, and approved an
interconnection agreement between the parties based on the
arbitration panel’s decision.
   Ameritech sued Climax and the Commissioners of the PSC
in their official capacities, seeking declaratory and injunctive
relief against enforcement of the interconnection agreement.
The Commissioners moved to dismiss the complaint against
them, citing provisions of the Act, the doctrine of sovereign
immunity, and the Tenth and Eleventh Amendments. The
district court denied the motion, and the Commissioners
appeal its decision. We granted the Federal Communications
Commission (“FCC”) intervenor status, and now affirm the
judgment of the district court. Only the interlocutory appeal
is before us—the merits of the case have not yet been
considered below.
                               I
   Climax is an established local exchange carrier (“LEC”)
serving the Climax, Michigan area. On July 30, 1996, Climax
filed an application with the PSC to provide local exchange
service in the greater Battle Creek and Kalamazoo, Michigan
4       Michigan Bell Telephone v. Climax                No. 98-1315        No. 98-1315         Michigan Bell Telephone v. Climax        13
        Telephone Co., et al.                                                                                 Telephone Co., et al.

area, where Ameritech is the incumbent provider. The                         _____________________________________________
application showed that Climax intended to establish a local
calling area covering the geographical area served by four                   CONCURRING IN PART, DISSENTING IN PART
Ameritech local calling areas. In late 1996, Climax and                      _____________________________________________
Ameritech began negotiating an interconnection agreement
and reached resolution on all but seven issues.
                                                                              R. GUY COLE, JR., concurring in part and dissenting in
   On March 10, 1997, just before the end of the statutory                  part. I am in complete agreement with the majority’s
period for timely filing of petitions for arbitration, see 47               disposition of the Commissioners’ Eleventh Amendment
U.S.C. § 252(b)(1), Climax petitioned for arbitration.                      claim. I write separately because I do not believe that this
Pursuant to the procedures established in its opinion in case               court has jurisdiction to consider the interlocutory appeal of
number U-11134, the PSC assigned the matter to an                           the Commissioners’ other claims.
arbitration panel composed of two technical staff people and
one administrative law judge. See Case No. U-11134, 1996                      The Commissioners’ Eleventh Amendment claim is clearly
WL 467772 (Mich. P.S.C. July 16, 1996). The panel                           appealable under the collateral order exception. See Sault Ste.
addressed the five open issues; on May 21, 1997, it adopted                 Marie Tribe of Chippewa Indians v. Michigan, 5 F.3d 147,
Climax’s proposed resolution as to three issues, Ameritech’s                149 (6th Cir. 1993). However, the Commissioners’ Tenth
proposed resolution as to one issue, and found that the fifth               Amendment and § 252 claims are not appealable collateral
issue was not properly raised.                                              orders because those claims are not “effectively unreviewable
                                                                            on appeal from a final judgment.” See Coopers & Lybrand v.
  On June 25, 1997, the PSC adopted the decision of the                     Livesay, 437 U.S. 463, 468-69 (1978). In addition, those
arbitration panel and ordered      the parties to file the                  claims do not fall under the doctrine of pendent appellate
interconnection agreement.1 One commissioner dissented.                     jurisdiction because they are not “inextricably intertwined”
On July 11, 1997, the parties filed the agreement. On July                  with the Eleventh Amendment claim, such that the Eleventh
25, 1997, Ameritech moved for a rehearing, which the PSC                    Amendment claim could not be determined without first
denied on August 13.                                                        addressing the nonappealable claims. See Chambers v. Ohio
                                                                            Dep’t of Human Servs., 145 F.3d 793, 797 (6th Cir.), cert.
  On September 12, 1997, Ameritech filed a complaint in                     denied, 119 S. Ct. 408 (1998).
federal district court against Climax and the PSC
Commissioners in their official capacity. Ameritech seeks                     Accordingly, I would affirm the district court’s denial of the
declaratory determinations that (1) certain sections of the                 Commissioners’ motion to dismiss based on the Eleventh
                                                                            Amendment, but dismiss the Commissioners’ other claims for
                                                                            lack of jurisdiction.
    1
   The terms of the agreement are not important for purposes of the case
now before us. The primary dispute in the case underlying the present
appeal involves a term of the agreement that requires Ameritech to charge
Climax local rates to terminate calls originating within Climax’s large
local area (but outside Ameritech’s smaller local area), for which
Ameritech would otherwise charge toll rates. Ameritech argues that this
term is contrary to §§ 251 and 252 of the Act.
12    Michigan Bell Telephone v. Climax            No. 98-1315      No. 98-1315         Michigan Bell Telephone v. Climax          5
      Telephone Co., et al.                                                                           Telephone Co., et al.

the scope of a federal court’s inquiry, but it does not limit the   agreement violate the Act, the implementing regulations, state
proper parties for suit.                                            law, and the United States Constitution, and (2) the PSC lacks
                                                                    jurisdiction to decide one of the issues. Ameritech also seeks
                              III                                   to enjoin enforcement of those sections of the agreement, and
                                                                    to reform the agreement.
   On de novo review, the Commissioners’ claims in this
interlocutory appeal lack merit as a matter of law. The               On November 24, 1997, the Commissioners moved to be
Eleventh Amendment does not bar Ameritech’s suit because            dismissed as defendants, on grounds that (1) the district court
Ameritech is seeking injunctive relief against an ongoing           lacked personal jurisdiction over them and (2) Ameritech
violation of federal law. The Tenth Amendment does not bar          failed to state a claim on which relief can be granted. The
the suit because the federal government did not commandeer          district court heard oral argument and denied the motion. The
state resources. Michigan chose to regulate interconnection         Commissioners appeal the denial of their motion to dismiss.
agreements. Finally, the Act does not jurisdictionally bar the      This court ordered the Commissioners to show cause why the
suit. Accordingly, the district court’s denial of the               appeal should not be dismissed for lack of jurisdiction. See
Commissioners’ motion to dismiss is AFFIRMED and the                6th Circuit Docket, Case No. 98-1315, March 25, 1998. On
case is REMANDED for trial.                                         the Commissioners’ further showing, the order was
                                                                    withdrawn on the ground that district court orders denying
                                                                    dismissal on Eleventh Amendment grounds are appealable
                                                                    collateral orders. See Order, Case No. 98-1315, April 16,
                                                                    1998.
                                                                                                   II
                                                                      Where the district court bases its denial of a motion to
                                                                    dismiss for failure to state a claim purely on the legal
                                                                    sufficiency of the plaintiff’s case, we review the decision de
                                                                    novo. See Barrett v. Harrington, 130 F.3d 246, 251 (6th Cir.
                                                                    1997) (citing RMI Titanium v. Westinghouse Electric Corp.,
                                                                    78 F.3d 1125, 1134 (6th Cir. 1996)). All factual allegations
                                                                    in the complaint are accepted as true. Nishiyama v. Dickson
                                                                    County, 814 F.2d 277, 279 (6th Cir. 1987) (en banc).
                                                                       “Where a trial court’s ruling on jurisdiction is based in part
                                                                    on the resolution of factual disputes, a reviewing court must
                                                                    accept the district court’s factual findings unless they are
                                                                    clearly erroneous. However, review of the district court’s
                                                                    application of the law to the facts is de novo.” RMI Titanium
                                                                    v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir.
6     Michigan Bell Telephone v. Climax            No. 98-1315      No. 98-1315         Michigan Bell Telephone v. Climax         11
      Telephone Co., et al.                                                                           Telephone Co., et al.

1996) (internal citations removed) (citing Ynclan v. Dep’t of          The Commissioners’ Tenth Amendment argument is also
the Air Force, 943 F.2d 1388, 1390 (5th Cir. 1991)).                unavailing. The Commissioners argue that the doctrine of
                                                                    New York v. United States, 505 U.S. 144 (1992), and Printz
  Questions of statutory interpretation, like all matters of law,   v. United States, 521 U.S. 98 (1997), prohibits Ameritech’s
are reviewed de novo. See United States v. Brown, 915 F.2d          suit as a “commandeering” of state resources. Michigan
219, 223 (6th Cir. 1990).                                           chose to regulate interconnection agreements under the Act.
                                                                    It could have chosen not to participate, in which case it would
A. The Telecommunications Act of 1996                               not have arbitrated and reviewed the agreement between
                                                                    Ameritech and Climax. Michigan did, in fact, arbitrate and
   Congress enacted the FTA to promote competition in all           review the agreement, precisely the action complained of.
telecommunications markets, including the local service             The state cannot have it both ways. The United States did not
market. See H.R. Conf. Rep. No. 104-458, at 113 (1996),             compel its actions and, consequently, the Tenth Amendment
reprinted in 1996 U.S.C.C.A.N. 124. Title I, Part II of the         does not bar Ameritech’s suit. See, e.g., New York, 505 U.S.
Act provides standards and procedures to allow startup              at 167, 179 (Congress may offer the states a choice of
carriers to interconnect their networks to the incumbent            regulating activity); FERC v. Mississippi, 456 U.S. 742, 768
carrier’s network, to access the incumbent carrier’s network        (1982).
elements piece-by-piece, to purchase the incumbent carrier’s
retail services “at wholesale rates” for resale, and to access         Finally, the Commissioners argue that they are not proper
the incumbent carrier’s physical infrastructure and facilities      parties under § 252(e)(6). They point out that § 252(e)(6)
for connection purposes. 47 U.S.C. §§ 251(b)(4) and                 provides that “[i]n any case in which a State commission
251(c)(6). The Act contemplates that state public utility           makes a determination . . . , any party aggrieved by such
commissions will assume regulatory authority over                   determination may bring an action in an appropriate Federal
interconnection agreements; if a state chooses not to do so “in     district court to determine whether the agreement . . . meets
any proceeding or other matter under this section,” the FCC         the requirements of section 251 [and 252],” arguing that the
will assume regulatory authority “with respect to the               other party to the agreement is the only proper parties for suit.
proceeding or matter.” 47 U.S.C. § 252(e)(5).                       This argument misses the point. The heading of subsection
                                                                    (e)(6) is “Review of State commission actions” (emphasis
  The Act requires incumbent providers to negotiate in good         added). It is the PSC’s duty, if it chooses to regulate, not the
faith with new entrants; if the parties cannot resolve their        other party’s, to ensure that the agreement meets the
differences, either party may petition the regulatory authority     requirements of the Act both at the time of arbitration, 47
for arbitration of the unresolved issues. See 47 U.S.C.             U.S.C. § 252(c), and at the time of approval, 47 U.S.C.
§§ 251(c), 252(b). The arbitration panel “shall limit its           § 252(e)(2)(B). Furthermore, it is the PSC’s function, not the
consideration of any petition [for arbitration] (and any            other party’s, to enforce the agreement. Lacking power to
response thereto) to the issues set forth in the petition and in    enjoin the PSC from enforcing the approved agreement,
the response, if any . . . .” 47 U.S.C. § 252(b)(4)(A). The         federal courts would have little effective remedy for aggrieved
arbitration panel must ensure that its resolution meets the         plaintiffs, or would subject companies to the intolerable
requirements of § 251 and the FCC regulations implementing          prospect of conflicting commands from federal courts and
§ 251, see 47 U.S.C. § 252(c)(1), and the regulatory authority      state regulatory agencies. The language quoted above limits
may reject an arbitrated resolution only if it does not meet
10    Michigan Bell Telephone v. Climax                 No. 98-1315       No. 98-1315         Michigan Bell Telephone v. Climax         7
      Telephone Co., et al.                                                                                 Telephone Co., et al.

   The Ex parte Young doctrine operates as an exception to the            those requirements, see 47 U.S.C. § 252(e)(2)(B). When a
general rule of sovereign immunity that states may only be                state acts as the regulatory authority, “any party aggrieved by
sued with their consent. Under Ex parte Young, suits against              [its] determination may bring an action in an appropriate
state officials seeking equitable relief for ongoing violations           Federal district court to determine whether the agreement or
of federal law are not barred by the Eleventh Amendment. Ex               statement meets the requirements of section 251 of this title
parte Young, 209 U.S. at 159-60. The PSC not only approved                and this section [252].” 47 U.S.C. § 252(e)(6). The Act
the interconnection agreement, it is responsible for ongoing              expressly deprives state courts of jurisdiction to review the
enforcement of the agreement. Ameritech alleges that the                  approval or rejection of an agreement by state regulatory
agreement violates federal law, and is seeking equitable relief.          authorities. See 47 U.S.C. § 252(e)(4).
Taking the alleged facts as true, as we are required to do when
reviewing a dismissal for failure to state a claim, Ameritech             B. Issues Presented on Appeal
has stated a claim against the Commissioners, and thus
against the state of Ohio, for equitable relief from an ongoing              The Commissioners raise four issues: (1) whether they are
violation of federal law. Under Ex parte Young, Ameritech                 proper parties in a federal court action filed pursuant to 47
is entitled to proceed.                                                   U.S.C. § 252(e); (2) whether the Eleventh Amendment bars
                                                                          naming the Commissioners in this suit; (3) whether the PSC,
   Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996)               in arbitrating the agreement, waived sovereign immunity; and
and Idaho v. Coeur d’Alene Tribe, 521 U.S. 261 (1997), do                 (4) whether the Tenth Amendment bars naming the
not affect the application of Ex parte Young to § 252 cases.              Commissioners in this suit. Ameritech raises the issue of
Recently, the Supreme Court once again affirmed the vitality              whether this court has jurisdiction to conduct interlocutory
of Ex parte Young, even while strongly reaffirming states’                review of the Commissioners’ “proper parties” and Tenth
rights against suit. See Alden v. Maine, ___ U.S. ___, 119 S.             Amendment claims.
Ct. 2240, 2266-68 (1999) (sovereign immunity does not bar
certain actions against state officers for injunctive or                    Ameritech and the FCC both cite numerous district court
declaratory relief) (contrasting Ex parte Young with Seminole             cases, twenty-three altogether, each of which denies the state
Tribe and Coeur d’Alene Tribe).                                           regulatory agency’s motion to dismiss. Recently, the Seventh
                                                                          Circuit became the first appellate court to consider the issue.
  If Ameritech is correct in its claim that the agreement                 MCI Telecommunications Corp. v. Illinois Commerce
violates federal law, the PSC’s ongoing enforcement of the                Comm’n, 168 F.3d 315 (7th Cir. 1999). The panel rejected
interconnection agreement constitutes an ongoing violation of             the Commissioners’ Eleventh Amendment argument and
federal law, against which Ameritech seeks injunctive relief.             affirmed the district court’s denial of their motion to dismiss.
Therefore, under Ex parte Young, the Eleventh Amendment
does not bar Ameritech’s suit against the Commissioners.                  C. Jurisdiction to Decide the Appeal
                                                                            “Ordinarily, appellate jurisdiction is lacking to hear an
                                                                          appeal from an order denying a Rule 12(b)(6) motion to
                                                                          dismiss since such an order is interlocutory in nature.” Suarez
v. Arte Publico Press, 157 F. 3d 282 (5th Cir. 1998)). Accord Bell        Corp. Indus. v. McGraw, 125 F.3d 222, 225 (4th Cir. 1997);
Atlantic-Md., Inc., v. MFS Intelenet of Md., Inc., Civil Case No. S 99-   see also Hill v. New York, 45 F.3d 653, 659 (2d Cir. 1995) (“a
2061 (D. Md. Oct. 29, 1999).
8    Michigan Bell Telephone v. Climax            No. 98-1315      No. 98-1315            Michigan Bell Telephone v. Climax                9
     Telephone Co., et al.                                                                              Telephone Co., et al.

denial of a motion to dismiss is ordinarily considered non-        . . . only may be exercised when the appealable issue at hand
final, and therefore not immediately appealable”).                 cannot be resolved without addressing the nonappealable
                                                                   collateral issue”). Clearly, the Eleventh Amendment claim
   The Commissioners invoke the jurisdiction of this court         can be resolved without resolving either of the other claims.
pursuant to 28 U.S.C. § 1291 and the collateral order doctrine
of Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541,               All of the Commissioners’ claims are separate and
545–46 (1949). “The courts of appeals . . . shall have             independent of the issue of whether the agreement is
jurisdiction of appeals from all final decisions of the district   consistent with federal law, have been conclusively decided
courts of the United States.” 28 U.S.C. § 1291. To be              below, and would be effectively unreviewable on appeal from
appealable as a collateral order, a district court’s order must    a final judgment. We must decide the Eleventh Amendment
1) conclusively decide the disputed issue; 2) resolve an           claim in any event, and it would be a waste of judicial
important issue separate and independent from the merits of        resources not to hear the other claims now. Finally, all of the
the action; and 3) be effectively unreviewable on appeal from      Commissioners’ claims are unavailing.
a final judgment. Coopers & Lybrand v. Livesay, 437 U.S.
463, 468–69 (1978). The Commissioners assert that their            D. Discussion
Tenth and Eleventh Amendment claims were conclusively
determined by the district court, that they are completely           Although the Commissioners disagree, the case before this
separate from Ameritech’s claim that the agreement is              court is a straightforward Ex parte Young case. See Ex parte
inconsistent with federal law, and that they would be              Young, 209 U.S. 123 (1908). Most district courts that have
effectively unreviewable on appeal from a final judgment.          addressed this issue have applied the Ex parte Young doctrine
The Commissioners also argue that the Tenth Amendment              and denied     the state regulatory authorities’ motions to
claim is “inextricably intertwined” with their other claims,       dismiss.2 We now do the same.
and assert jurisdiction under the doctrine of “pendent
appellate jurisdiction.” See Chambers v. Ohio Dep’t of
Human Servs., 145 F.3d 793, 797 (6th Cir. 1998).                    2
                                                                      Similarly, the Seventh Circuit recently decided MCI
                                                                   Telecommunications Corp. v. Illinois Commerce Comm’n, 168 F.3d 315
  Ameritech concedes that this court has jurisdiction to hear      (7th Cir. 1999), against the Illinois Commissioners. Although we agree
the Commissioners’ Eleventh Amendment claim. See Puerto            with the result, we do not base our decision on the reasoning in that case
Rico Aqueduct and Sewer Authority v. Metcalf & Eddy, Inc.,         because the court reached its decision by applying the constructive waiver
506 U.S. 139, 142–48 (1993); Sault Ste. Marie Tribe of             doctrine, which has since been limited by the Supreme Court in College
                                                                   Savings Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 119
Chippewa Indians v. Michigan, 5 F.3d 147, 149 (6th Cir.            S. Ct. 2219 (1999), and did not reach the Ex parte Young issue. See MCI,
1993). Ameritech argues that this court does not have              168 F.3d at 320-23, amended 183 F.3d 558, 564-67. The Seventh Circuit
jurisdiction to hear the claim that the Commissioners are not      has subsequently granted rehearing en banc on this opinion. 183 F.3d
proper parties, nor the claim that the Act violates the Tenth      567-68.
Amendment. The district court’s order is not a proper
collateral order with respect to either claim, Ameritech               On March 29, 1999, the Middle District of Louisiana apparently
                                                                   became the first court to grant immunity to a state regulatory body. See
contends, nor is either claim “inextricably intertwined” with      AT&T Communications of South Central States v. Bellsouth
the Eleventh Amendment claim to confer jurisdiction. See           Telecommunications, Inc., 43 F. Supp. 2d 593 (M.D. La. 1999). The
Chambers, 145 F.3d at 797 (“pendent appellate jurisdiction         court considered itself bound by Fifth Circuit precedent interpreting
                                                                   Seminole Tribe as extinguishing waiver. See id. at 600-01 (citing Chavez
