260 F.3d 1160 (9th Cir. 2001), 99-36173, City of Auburn v. Qwest Corp.

Docket Nº:99-36173, 99-36219
Citation:260 F.3d 1160
Party Name:CITY OF AUBURN; CITY OF BREMERTON; CITY OF DES MOINES; CITY OF FEDERAL WAY; A MUNICIPALITY; CITY OF LAKEWOOD; CITY OF MEDINA; CITY OF OLYMPIA; CITY OF PUYALLUP; CITY OF RENTON; CITY OF SEATAC; CITY OF TACOMA; CITY OF TUKWILA; CITY OF UNIVERSITY PLACE; CITY OF VANCOUVER, PLAINTIFFS-APPELLEES-CROSS-APPELLANTS, v. QWEST CORPORATION, DEFENDANT-APPELLAN
Case Date:April 24, 2001
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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260 F.3d 1160 (9th Cir. 2001)

CITY OF AUBURN; CITY OF BREMERTON; CITY OF DES MOINES; CITY OF FEDERAL WAY; A MUNICIPALITY; CITY OF LAKEWOOD; CITY OF MEDINA; CITY OF OLYMPIA; CITY OF PUYALLUP; CITY OF RENTON; CITY OF SEATAC; CITY OF TACOMA; CITY OF TUKWILA; CITY OF UNIVERSITY PLACE; CITY OF VANCOUVER, PLAINTIFFS-APPELLEES-CROSS-APPELLANTS,

v.

QWEST CORPORATION, DEFENDANT-APPELLANT-CROSS-APPELLEE.

No. 99-36173, 99-36219

United States Court of Appeals, Ninth Circuit

April 24, 2001

Argued and Submitted February 6, 2001

Amended July 10, 2001

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Counsel Patrick Lynch, Emily Brubaker, O'Melveny & Myers Llp, Los Angeles, California; Judith A. Endejan, Williams, Kastner & Gibbs Pllc, Seattle, Washington; and Teresa Williams Gillespie, Qwest Corporation, Seattle, Washington, for the appellant/cross-appellee.

Carol S. Arnold, Preston Gates & Ellis Llp, Seattle, Washington, for the appellee/cross-appellants.

Appeal from the United States District Court for the Western District of Washington Franklin D. Burgess, District Judge, Presiding D.C. No. CV-98-05595-FDB

Before: Pamela Ann Rymer, Sidney R. Thomas, and M. Margaret McKeown, Circuit Judges.

ORDER

The Opinion filed April 24, 2001 is amended as follows:

1. At 247 F.3d at 980, section II.C.1, second paragraph: Replace sentence reading: "A number of courts have held that various requirements imposed by local ordinances constitute a prohibition within the meaning of § 253(a)." with "A number of courts have held that certain requirements imposed by local ordinances constitute a prohibition within the meaning of § 253(a)."

2. At 247 F.3d at 981, section II.C.1, third paragraph: Replace sentence reading:

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"The ordinances at issue in the present case include several features that have the effect of prohibiting the provision of telecommunications services." with "The ordinances at issue in the present case include several features that, in combination, have the effect of prohibiting the provision of telecommunications services."

3. At 247 F.3d at 981, section II.C.1, third paragraph: Delete sentence reading: "The Counterclaim Cities require application fees ranging from an undetermined amount (in Olympia) [FN 10] to $2,500 in Auburn and $5000 (in Des Moines and Tacoma)."

4. Delete footnote 10.

5. At 247 F.3d at 981, section II.C.1, fourth paragraph: Delete first two sentences and citation, and replace with the following:

"Taken together, these requirements 'have the effect of prohibiting' Qwest and other companies from providing telecommunications services, see City of Dallas, 52 F.Supp.2d at 770, and create a substantial and unlawful barrier to entry into and participation in the Counterclaim Cities' telecommunications markets."

At the end of the same paragraph, add the following as a new footnote:

"The Sixth Circuit noted that a regulation that allows denial of a franchise does not alone constitute a prohibition within the meaning of § 253(a). See TCG Detroit v. City of Dearborn, 206 F.3d 618, 624 (6th Cir. 2000) (holding that a fee requirement is not preempted by § 253(a)). As in City of Austin, 975 F.Supp. at 939, our conclusion is based on the variety of methods and bases on which a city may deny a franchise, not the mere franchise requirement, or the possibility of denial alone. See TCG Detroit, 206 F.3d at 624 (citing City of Austin with approval)."

6. At 247 F.3d at 981-82, section II.C.2, first paragraph: Delete first two sentences, and replace with: "Of course, a franchise requirement per se is not preempted by the Telecom Act. Only regulations that do not fall within a safe harbor provision, such as § 253(c), are preempted."

7. At 247 F.3d at 982, section II.C.2, paragraph beginning "Applying these guidelines:" Delete first sentence, and replace with: "Applying these guidelines, coupled with common sense, it is apparent that the ordinances establish franchise systems that regulate the telecommunications companies themselves, not merely the rights-of-way."

8. At 247 F.3d at 985 n.19, replace "negotiation and acceptance" with "negotiations of the terms and discretionary acceptance".

With the foregoing amendments to the opinion, the panel has unanimously voted to deny appellees/cross-appellants' petition for rehearing.

The full court has been advised of the appellees/crossappellants' suggestion for rehearing en banc, and no active judge of the court has requested a vote on whether to rehear the matter en banc. Thus, the suggestion for rehearing en banc is rejected.

OPINION

McKEOWN, Circuit Judge

This case presents issues of first impression concerning the relationship between various Washington municipalities and a major telecommunications provider, Qwest Corporation. We are called upon to decide (1) whether an ambiguous tariff filed with the state utilities commission trumps the common law and statutory rule that the utility company, rather than the municipality, bears the expense for a facility relocation made necessary by right-of-way improvements, and (2) whether state law and

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the Federal Telecommunications Act of 1996 preempt certain city ordinances that establish a franchise system to manage telecommunications facilities in rights-of-way. We conclude that the tariff does not require the municipalities to shoulder the relocation costs, and that the ordinances are preempted.

In 1998, the cities of Auburn, Bellingham, Bremerton, Des Moines, Federal Way, Fife, Lakewood, Medina, Olympia, Puyallup, Renton, SeaTac, Shoreline, Spokane, Tacoma, Tukwila, University Place, and Vancouver ("the Cities") brought suit against Qwest in state court. They argued that, as a condition of Qwest's right to use the rights-of-way along city streets and roads, it was required by statutory and common law to relocate or pay for relocation of its facilities. Qwest removed the case to federal court, and filed a counterclaim against Auburn, Des Moines, Olympia, Tacoma, and University Place1 (the "Counterclaim Cities") seeking a declaratory judgment that state law and the Federal Telecommunications Act of 1996 preempt the municipal ordinances establishing franchise and fee systems.

The district court granted summary judgment to the Cities on the relocation costs claim, and dismissed as unripe Qwest's counterclaim challenging the franchise ordinances. Both the Counterclaim Cities and Qwest appealed. These consolidated appeals involve two distinct issues -relocation costs and the preemption of city ordinances -which we discuss separately.

DISCUSSION

I. RELOCATION COSTS

Under Washington common and statutory law, when city street improvements require the displacement of telecommunications equipment located in the city's right-of-way, the utility company bears the expense of relocating the equipment.2 This has been the rule in Washington since before statehood. On February 21, 1996, Qwest (then U S West), notified cities and counties in western Washington that it would no longer bear these relocation costs. In support of its announcement, Qwest took the position that its tariff of rates and services, filed with the Washington Utilities and Transportation Commission ("WUTC") in 1967 and adopted without objection in 1968, shifted the payment burden to the cities. That tariff, WN U-31, has been revised and amended over the years; the current version reads in relevant part:

When relocation or aerial to underground conversion of existing facilities is requested or required by law, the cost of constructing the new and removing the old facilities will be borne by the customer or others requesting the relocation or conversion.

WN U-31 para. 4.6.C

Relying on this language, Qwest refused to relocate or pay for relocation of its facilities to accommodate street improvement or relocation. This resulted, in at least one instance, in a Qwest-owned telephone pole standing in the middle of a newly-widened road. Later, Qwest agreed to relocate its equipment, but notified the cities of its intent to seek reimbursement for related costs.

After this appeal was filed and partially briefed, the Washington legislature passed major telecommunications legislation, entitled, "An Act relating to the use

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of city or town rights of way by telecommunications and cable television providers." Engrossed Substitute Senate Bill 6676 ("ESSB 6676"). The parties agree that ESSB 6676, codified at W ASH. REV. CODE ("RCW") §§ 35.99.010 et seq., supersedes Qwest's tariff and prospectively imposes the cost of relocating telecommunications facilities in city streets on the utility company.3 Therefore, the question before us is limited to who bears the costs of relocation prior to the effective date of the new statute. We review de novo the district court's grant of summary judgment. Weiner v. San Diego County, 210 F.3d 1025, 1028 (9th Cir. 2000).

A. STATUTORY AND COMMON LAW BACKGROUND

We begin with the principle--with which both parties agree--that under Washington common law, the utility must pay the cost of relocation if required by public necessity. This stems from the conditional nature of a utility's right to have facilities in the public right-of-way. When the government allows a telecommunications company to place facilities in that right-of-way, the facilities' presence is contingent on the company's cooperation with maintenance and improvement of the street. 12 E. MCQUILLIN, MUNICIPAL CORPORATIONS §§ 34.74.10 (3d ed. 1970) ("it is generally held that the municipality may require a change in the location of pipes or other...

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