At & T Commun. of the Southwest v. City of Dallas

• Decision Date: 17 May 1999
• Docket Number: No. CIV.A.3:98-CV-0003-R.,CIV.A.3:98-CV-0003-R.
• Parties: AT & T COMMUNICATIONS OF THE SOUTHWEST, INC., et al., Plaintiffs, v. CITY OF DALLAS, TEXAS, Defendant.
• Court: U.S. District Court — Northern District of Texas

52 F.Supp.2d 763

AT & T COMMUNICATIONS OF THE SOUTHWEST, INC., et al., Plaintiffs, v. CITY OF DALLAS, TEXAS, Defendant.

No. CIV.A.3:98-CV-0003-R.

United States District Court, N.D. Texas, Dallas Division.

May 17, 1999.

COPYRIGHT MATERIAL OMITTED

George Harmon Tarpley, Sheinfeld Maley & Kay, Dallas, TX, Andrew William Austin, Sheinfeld Maley & Kay, Austin, TX, for AT&T Communications of Southwest, Inc.

Richard L. Crozier, Davidson & Troilo, Austin, TX, for Taylor Communications, Inc., USLD Communications, Inc., Caprock Communications Corp., Golden Harbor of Texas, Inc., Westel Inc.

Michael Anthony Shaunessy, Bickerstaff Heath Smiley Pollan Kever & McDaniel, Austin, TX, Diane M. Barlow, Casey Gentz & Sifuentes, Austin, TX, for Teligent, Inc.

E. Russell Nunnally, Sally Christine Helppie, Tammy Sue Wood, Bell Nunnally & Martin Dallas, TX, Anthony V. James, Irving, TX, Steven Gill Bradbury, Theodore W. Ullyot, John P. Frantz, Kirkland & Ellis, Washington, DC, for GTE Southwest Inc.

Weston C. Loegering, Robert Edwin Davis, Hughes & Luce, Dallas, TX, David Randall Johnson, Dallas, TX, for Southwestern Bell Telephone Co.

Lionel M. Schooler, Gilpin Paxson & Bersch, Houston, TX, for Sprint Communications Co., L.P.

Ronald D. Stutes, Dallas City Attorney's Office, Dallas, TX, Richard Thomas Urbis, Michael Charles Fayz, Carl Hermann von Ende, Thomas G. Parachini, Miller Canfield Paddock & Stone, Detroit, MI, for City of Dallas.

Emily Williams, Washington, DC, for Association of Local Telecommunications Services.

MEMORANDUM OPINION AND ORDER

BUCHMEYER, Chief Judge.

Before this Court are Motions for Summary Judgment filed by consolidated Plaintiffs AT & T Communications of the Southwest, Inc. ("AT & T"), and Teligent, Inc. ("Teligent"), seeking final declaratory and permanent injunctive relief against Defendant City of Dallas ("City").¹ For the reasons stated below, both motions are GRANTED. Thus, the City's Amended Counterclaim against AT & T is DISMISSED, and AT & T's Motion to Strike or Dismiss Amended Counterclaim of the City of Dallas is DENIED AS MOOT. In addition, Teligent's equal protection, due process, ultra vires, and other claims raised in Counts Four, Six, Seven, Eight, and Nine of its Complaint for Declaratory Relief are DISMISSED AS MOOT.

I. BACKGROUND

On April 9, 1998 and July 7, 1998, this Court issued preliminary injunctions sought by AT & T and Teligent, respectively, against the City. See AT & T Communications of the Southwest, Inc. v. City of Dallas, 8 F.Supp.2d 582 (N.D.Tex.1998) ("City of Dallas I"); AT & T Communications of the Southwest, Inc. v. City of Dallas, 52 F.Supp.2d 756 (N.D.Tex.1998) ("City of Dallas II"). These injunctions enjoined the City from requiring AT & T and Teligent to obtain a franchise from the City to provide telecommunications services in Dallas. The injunctions were granted because the federal Telecommunications Act of 1996 ("FTA") § 101(a), 47 U.S.C.A. § 253(a) (West Supp.1998), and the Texas Public Utilities Regulatory Act ("PURA"), TEX. UTIL. CODE ANN. §§ 52.002, 14.008 (West 1998), largely preempted the City's authority to regulate telecommunications providers except for the City's authority to manage or control its public rights-of-way and to require fair and reasonable compensation from telecommunications providers for use of the City's public rights-of-way.

The injunction granted for AT & T enjoined the City from interfering with AT & T's plan to offer its AT & T Digital Link ("ADL") service in a City right-of-way. AT & T already has a franchise under City Ordinance 18613, which permits AT & T to use the City's rights-of-way to offer long-distance telephone service. When AT & T approached the City and requested permission to use a specific right-of-way already covered by Ordinance 18613 to offer ADL, a local service, the City refused and informed AT & T that it may offer ADL in the right-of-way only if AT & T agreed to a new franchise agreement to replace the one granted by Ordinance 18613. AT & T brought this case because offering ADL in the right-of-way without a franchise would have subjected AT & T to criminal prosecution for offering telecommunications services without a franchise under Dallas City Code § 43-117. Because this Court agreed with AT & T that the City's refusal to grant AT & T permission to use the right-of-way for ADL without a new franchise, and that the City's proposed franchise requirements both violated the FTA and PURA, the City was enjoined from requiring AT & T to agree to a new franchise before offering ADL and from criminally prosecuting AT & T for offering ADL without agreeing to a new franchise. See City of Dallas I, 8 F.Supp.2d at 595. In offering ADL, AT & T was limited to the specific right-of-way governed by Ordinance 18613, and was ordered to comply with its conditions.

Similarly, the injunction granted for Teligent enjoined the City from requiring Teligent to obtain a franchise before offering local service in Dallas. While both AT & T and Teligent offer local service to Dallas customers, Teligent is different from AT & T because Teligent provides its service using wireless technology involving microwave transmission and base stations placed on private property. While Teligent may lease from a carrier certain facilities located in the City's rights-of-way, Teligent does not, and has no plans to, own or occupy any City right-of-way. Despite this distinction, the City refused to permit Teligent from offering its services and refused to enter into a 9-1-1 agreement with Teligent without Teligent first obtaining a franchise. Without a franchise from the City, Teligent is precluded from obtaining a 9-1-1 agreement, which is required under the terms of the certificate of operating authority issued to Teligent by PUC. See City of Dallas II at ___, 1998 WL 386168, *2. Per City Resolution 961121, the City has refused to enter into a 9-1-1 agreement with non-franchised service providers. Because of these circumstances, Teligent reluctantly agreed to the franchise, which was granted per Ordinance 23325, and then brought this action against the City. In granting the injunction, this Court held that Teligent did not "use" the City's rights-of-way, and that the City's franchise requirements violated federal and state law. See City of Dallas II at ___, 1998 WL 386168, *4-5. The City was enjoined from requiring Teligent to apply for and obtain a franchise before offering telecommunications services in Dallas, requiring Teligent to obtain a franchise before entering into a 9-1-1 agreement with the City, and enforcing Ordinance 23325, by which the City had granted Teligent a franchise to provide telecommunications services in the City.

AT & T and Teligent now seek final declaratory and permanent injunctive relief against the City based on the preliminary injunctions. AT & T seeks to prevent the City from requiring a new franchise agreement covering ADL or any other service it may offer in the right-of-way. Teligent seeks to invalidate Ordinance 23325 and enjoin the City from requiring Teligent to agree to any franchise agreement at all. Because the factual records of both cases have not changed since the injunctions were granted, the Court will not revisit the facts and will address the arguments raised by the parties in relation to the motions for summary judgment.

II. ANALYSIS

A. Summary Judgment Standard

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Rule 56(c) "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). The moving party bears the initial burden of identifying those portions of the record that may demonstrate the absence of a genuine issue of material fact. See id. at 323, 106 S.Ct. 2548. Once this burden is met, the party opposing summary judgment "may not rest upon the mere allegations or denials of his pleading, but ... must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (quoting First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 88 S.Ct. 1575, 1583, 20 L.Ed.2d 569 (1968)) (internal quotation marks omitted) (alteration in original). In considering a motion for summary judgment, a court must view the facts and draw all reasonable inferences in favor of the party opposing the motion. See Walker v. Sears Roebuck, 853 F.2d 355, 358-59 (5th Cir.1988). However, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Liberty Lobby, 477 U.S. at 247, 106 S.Ct. at 2510, 91 L.Ed.2d 202 (emphases in original).

The City initially argues in its response to AT & T's motion that AT & T's motion should be denied or held in abeyance until the City's requested discovery is completed.² See City's Resp. at 2. The City claims under Fed.R.Civ.P. 56(f)³ that the factual record is incomplete on several essential issues relating to AT & T's claims and the City's defenses, and that discovery will test the accuracy of AT & T's representations and arguments. Specifically, the City argues that AT & T has failed to provide a "precise or complete description of AT & T's use of the right-of-way," City's Resp. at 4, and that "the...