Qwest Corp. v. City of Santa Fe, New Mexico

• Citation: 380 F.3d 1258
• Decision Date: 24 August 2004
• Docket Number: No. 02-2269.,No. 02-2258.,02-2258.,02-2269.
• Parties: QWEST CORPORATION, a Colorado corporation, Plaintiff-Appellant/Cross-Appellee, v. CITY OF SANTA FE, NEW MEXICO, Defendant-Appellee/Cross-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

380 F.3d 1258

QWEST CORPORATION, a Colorado corporation, Plaintiff-Appellant/Cross-Appellee, v. CITY OF SANTA FE, NEW MEXICO, Defendant-Appellee/Cross-Appellant.

No. 02-2258.

No. 02-2269.

United States Court of Appeals, Tenth Circuit.

August 24, 2004.

Appeal from the United States District Court for the District of New Mexico, M. Christina Armijo, J.

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David R. Goodnight and John H. Ridge, Stoel Rives, L.L.P., Seattle, Washington (Yana D. Koubourlis, Sarah E. Heineman, Dorsey & Whitney, LLP, Seattle, WA, Roy A. Adkins, Qwest Corporation, Denver, CO, William R. Richardson, Jr., Lynn R. Charytan, Wilmer, Cutler & Pickering, Washington, D.C., with him on the briefs), for Plaintiff-Appellant/Cross-Appellee.

Joseph Van Eaton, Miller & Van Eaton, P.L.L.C., Washington, D.C. (William Malone, Mitsuko R. Herrera, Miller & Van Eaton, P.L.L.C., Washington, D.C., Nann Houliston, Of Counsel, Albuquerque, NM, Bruce Thompson, City Attorney, City of Santa Fe, Santa Fe, NM, with him on the briefs), for Defendant-Appellee/Cross-Appellant.

Before MURPHY, PORFILIO, and HARTZ, Circuit Judges.

MURPHY, Circuit Judge.

I. INTRODUCTION

The City of Santa Fe, a political subdivision of the State of New Mexico, adopted an ordinance (the "Ordinance") which established new procedures for telecommunications providers seeking access to city-owned rights-of-way. Qwest Corporation ("Qwest") provides telecommunications services in Santa Fe and utilizes the rights-of-way. Qwest brought suit in federal district court seeking a declaration that the Ordinance is preempted by state and federal law, an injunction to prevent the enforcement of the Ordinance, and attorney's fees. Qwest argued that the Federal Telecommunications Act of 1996, 47 U.S.C. § 253 ("TCA"), and state law preempted the Ordinance. Further, Qwest argued that it was entitled to attorney's fees under 42 U.S.C. § 1988 if it prevails.

The district court concluded several sections of the Ordinance were preempted by § 253, but ruled that an action under 42 U.S.C. § 1983 was not available and, therefore, Qwest could not seek attorney's fees under § 1988. Qwest appeals, and the City cross-appeals. This court exercises jurisdiction pursuant to 28 U.S.C. § 1291 and agrees with the district court's articulate decision in substantially all respects. This court, nevertheless, reverses in part.

II. BACKGROUND

The Ordinance enacted by Santa Fe placed several new requirements on telecommunications operations in Santa Fe. Under the Ordinance, providers are required to register with the City and obtain a lease agreement for the use of a right-of-way. In order to register with the City, Qwest must provide information regarding its affiliates, the location of existing telecommunications facilities, a description of the services provided, and "such other information as the city may reasonably require." In addition, the Ordinance also requires payment of a cost-based registration fee.

To obtain a lease, Qwest must submit a lease application requiring a variety of information including preliminary engineering plans and "such other and further information as may be required by the city." Qwest must also obtain an appraisal of the rental value of the right-of-way from a city-approved appraiser. The rental price for the right-of-way is based on this appraisal. Additional requirements pertain to the installation of underground conduit. The Ordinance requires the installation of excess capacity equal to 100% of what the installer plans to use. In addition, any conduit must be dedicated in fee simple to the city.

After the City receives a lease application, the Ordinance requires the City's governing body to hold a public hearing within sixty days regarding whether or not the city should enter into the lease. Before entering into the lease, the City is required to find that the lease is "in the best interest of the public." The City must consider the effect on public health, safety, and welfare; the disruption to public and private facilities; and the availability of alternate routes or locations for the proposed facility.

Qwest sought to install a four-by-four foot utility cabinet on a twelve-by-eighteen foot concrete pad on a city-owned right-of-way located on Bishop's Lodge Road in Santa Fe. In addition to the installation costs, Qwest paid $4000 in survey costs for the appraisal. The proposed annual rent was $6000. Within Santa Fe, Qwest has more than 365 such cabinets, and thousands of smaller ones. It also has an extensive network of conduit and other facilities. Qwest estimates that the excess conduit capacity required under the Ordinance would increase its costs by 59%, while the City estimates a cost increase of between 30% and 50%. It has approximately 120 planned or ongoing projects which involve City owned rights-of-way in Santa Fe. Santa Fe has advised Qwest that it will be required to enter into a similar lease or leases for any use of the City's rights-of-way. Qwest voluntarily withdrew its lease application before the process was completed.

Qwest brought suit in federal district court arguing that the Ordinance was preempted by 47 U.S.C. § 253. In pertinent part, § 253 provides as follows:

§ 253

(a) In general

No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.

(b) State regulatory authority

Nothing in this section shall affect the ability of the State to impose, on a competitively neutral basis and consistent with section 254 of this section, requirements necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers.

(c) State and local government authority

Nothing in this section affects the authority of a State or local government to manage the public rights-of-way or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for use of public rights-of-way on a nondiscriminatory basis, if the compensation required is publicly disclosed by such government.

(d) Preemption

If, after notice and an opportunity for public comment, the Commission determines that a State or local government has permitted or imposed any statute, regulation, or legal requirement that violates subsection (a) or (b) of this section, the Commission shall preempt the enforcement of such statute, regulation, or legal requirement, to the extent necessary to correct such violation or inconsistency.

47 U.S.C. § 253.

The district court concluded several sections of the Ordinance were preempted by the federal statute, but ruled that some provisions of the Ordinance could remain in effect. The district court also ruled that § 253 did not create a private right of action enforceable through § 1983 and, therefore, Qwest could not seek attorney's fees. Qwest appeals, arguing that the district court erred when it concluded that certain provisions of the Ordinance are not preempted by § 253. Santa Fe cross-appeals, asserting that the district court erred in concluding that any provision of the Ordinance is preempted by § 253.

III. DISCUSSION

A. Subject Matter Jurisdiction

This court reviews a challenge to subject matter jurisdiction de novo. Morris v. City of Hobart, 39 F.3d 1105, 1108 (10th Cir.1994). The City argues that the district court lacked subject matter jurisdiction because federal question jurisdiction cannot be based on Qwest's argument that the Ordinance is preempted and diversity of citizenship was never established by Qwest.

The existence of federal question jurisdiction must appear on the face of the plaintiff's well pleaded complaint. ANR Pipeline Co. v. Corporation Comm'n of Okla., 860 F.2d 1571, 1576 (10th Cir.1988). Relying on Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96 n. 14, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983), this court has concluded that federal district courts have jurisdiction over actions seeking to enjoin the enforcement of a state regulation. ANR Pipeline, 860 F.2d at 1576.

Santa Fe argues that Shaw applies in situations only where there is complete preemption of state regulation by a federal scheme. Whether a federal statute completely preempts or only partially preempts local enactments can only affect the federal question analysis in a case involving removal jurisdiction.¹ This case does not involve removal jurisdiction. As the Supreme Court stated in Shaw:"A plaintiff who seeks injunctive relief from state regulation, on the ground that such regulation is pre-empted by a federal statute which, by virtue of the Supremacy Clause of the Constitution, must prevail, thus presents a federal question which the federal courts have jurisdiction under 28 U.S.C. § 1331 to resolve." Shaw, 463 U.S. at 96 n. 14, 103 S.Ct. 2890. Our conclusion that the nature of the preemptive effect of the TCA is not relevant here is further supported by Verizon Maryland, Inc. v. Public Service Commission, 535 U.S. 635, 122 S.Ct. 1753, 152 L.Ed.2d 871 (2002). In that case, concerning a claim of preemption under another section of the TCA, the Court stated that federal question jurisdiction exists "if the right of petitioners to recover under their complaint will be sustained if the Constitution and laws of the United States are given one construction and will be defeated if they are given another" unless the claim is made only to obtain jurisdiction or is insubstantial and frivolous. Verizon, 535 U.S. at 643, 122 S.Ct. 1753 (quotation omitted). Given the language of § 253, Qwest's claim of preemption is not wholly insubstantial or frivolous. Accordingly, we conclude that the district court had federal question jurisdiction over Qwest's claim of preemption. Because we...