Medlock v. Pledger

Decision Date28 February 1990
Docket NumberNo. 89-89,89-89
PartiesDaniel L. MEDLOCK et al., Appellants, v. James C. PLEDGER et al., Appellees.
CourtArkansas Supreme Court

Eugene G. Sayre, Little Rock, for appellants.

Joseph Morphew, Frank J. Wills, III, Asst. Atty. Gen., Little Rock, James N. McCord II, Fayetteville, Robert Parker, Benton, Larry D. Vaught, Little Rock, for appellees.

NEWBERN, Justice.

The question in this case is whether the imposition of a sales tax on cable television service is an unconstitutional, and thus illegal, exaction because the tax does not apply to other mass communications media. We hold that, for a time, the tax was illegal because it was not levied on other, similar services, such as satellite television programming. Now that the tax has been made to apply to all similarly situated businesses however, its illegality has been cured. We remand the case to the chancellor so that the taxes illegally collected may be refunded to those who paid them.

By Act 188 of 1987 the general assembly added to the services to be subject to the sales tax:

Cable television services provided to subscribers or users. This shall include all service charges and rental charges whether for basic service or premium channels or other special service, and shall include installation and repair service charges and any other charges having any connection with the providing of cable television services.

By Act 769 of 1989, the language was changed to the following:

Service of cable television, community antenna television, and any and all other distribution of television, video, or radio services with or without the use of wires provided to subscribers or paying customers or users, including all service charges and rental charges, whether for basic service, premium channels, or other special service, and including installation and repair service charges and any other charges having any connection with the providing of the said services.

Act 769 was signed by the governor on March 21, 1989, and in accordance with its emergency clause, became law on July 1, 1989. The act is now codified as Ark.Code Ann. § 26-52-301(3)(D)(i) (Supp.1989).

Act 188 was promptly challenged by the appellants, Daniel L. Medlock, Community Communications Co., and the Arkansas Cable Television Association, Inc., on behalf of themselves and all other similarly situated taxpayers. The appellees are James C. Pledger, Commissioner of Revenues, and various state, county, and city officials, Pulaski County, the City of Benton, and all other similarly situated counties and cities. The City of Fayetteville intervened.

As Act 769 had not become law when the chancellor made his ruling, the sole question before him was the constitutionality of Act 188. The taxpayers challenged it as being in violation of their rights of freedom of speech and freedom of the press guaranteed by the First Amendment, their right to equal privileges and immunities guaranteed by U.S. Const., art. 4, § 2, and Ark. Const. art. 2, § 18, and their right to equal protection of the laws guaranteed by the Fourteenth Amendment and Ark. Const. art. 2, § 3. They also claimed protection under 47 U.S.C. § 542 and the Supremacy Clause. All of the counts in the complaint boiled down to a claim of discrimination against the cable television medium, and that is the essence of the arguments on appeal, although they are segmented as was the complaint.

1. Public rights of way

In his order ruling against the taxpayers, the chancellor distinguished the cable medium from others on the ground that it required use of a public right of way in addition to the fact that there are no gross proceeds to be taxed in the case of, for example, broadcast television. There was uncontradicted testimony to the effect that a cable television enterprise pays a franchise fee for the use of the right of way. It is true that the use of public rights of way by cable television may subject it to more regulation as has been suggested in some cases. See City of Los Angeles v. Preferred Communications, Inc., 476 U.S. 488, 106 S.Ct. 2034, 90 L.Ed.2d 480 (1986); Central Telecommunications, Inc. v. TCI Cablevision, Inc., 800 F.2d 711 (8th Cir.1986); Omega Satellite Products v. City of Indianapolis, 694 F.2d 119 (7th Cir.1982); Community Communications v. City of Boulder, 660 F.2d 1370 (10th Cir.1981). However, those cases involve regulation related to access to or use of the rights of way rather than a tax which has no relationship to the acquisition of the privilege of using public property. We thus find the fact that cable television uses public property and must obtain a franchise to do so should not control the result in this case.

2. The First Amendment

We need not indulge in a long explanation of the history of cable television and the cases which have gradually recognized the entitlement of such enterprises to First Amendment protection. A good discussion of it is found in Quincy Cable TV, Inc. v. F.C.C., 768 F.2d 1434 (D.C.Cir.1985).

The Supreme Court has left no doubt about the matter. In City of Los Angeles v. Preferred Communications, Inc., supra, it was held that the complaint of a cable television company alleging violation of the company's rights guaranteed by the First Amendment should not have been dismissed for failure to state a claim upon which relief could be granted. The court made it clear that the complaint implicated the First Amendment and facts should be developed to determine how to balance the First Amendment protection to which a cable television company was entitled against the city's right to regulate the company's use of public property.

3. Discrimination

Entitlement to protection under the First Amendment does not mean entitlement to absolute freedom from regulation by...

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5 cases
  • Leathers v. Medlock Medlock v. Leathers
    • United States
    • United States Supreme Court
    • April 16, 1991
    ...and satellite services violated the Equal Protection Clause must be addressed by the State Supreme Court on remand. P. 453. 301 Ark. 483, 785 S.W.2d 202 (1990), affirmed in part, reversed in part, and O'CONNOR, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, STE......
  • Hearst Corp. v. Iowa Dept. of Revenue and Finance, 89-1863
    • United States
    • United States State Supreme Court of Iowa
    • September 19, 1990
    ...not on decoders for unscrambling satellite television broadcasts was held to violate first amendment protections. Medlock v. Pledger, 301 Ark. 483, 785 S.W.2d 202, 204 (1990). Here the court also declined to apply first amendment principles so broadly as to hold that all mass media must be ......
  • Medlock v. Leathers
    • United States
    • Supreme Court of Arkansas
    • November 23, 1992
    ...satellite businesses were similarly situated because they ended in substantially the same result--video programming. Medlock v. Pledger, 301 Ark. 483, 785 S.W.2d 202 (1990), aff'd in part, rev'd in part, Leathers v. Medlock, 499 U.S. 439, 111 S.Ct. 1438, 113 L.Ed.2d 494 (1991). The case has......
  • Bosworth v. Pledger
    • United States
    • Supreme Court of Arkansas
    • June 3, 1991
    ...reh'g denied, 287 Ark. 155, 698 S.W.2d 802 (1985), rev'd, 481 U.S. 221, 107 S.Ct. 1722, 95 L.Ed.2d 209 (1987); and Medlock v. Pledger, 301 Ark. 483, 785 S.W.2d 202 (1990), rev'd sub Medlock v. Leathers, 499 U.S. 439, 111 S.Ct. 1438, 113 L.Ed.2d 494 (1991). Minneapolis Star, supra, involved ......
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