Chicago Cable Communications v. Chicago Cable Com'n, 88-1195
| Citation | 879 F.2d 1540 |
| Decision Date | 19 July 1989 |
| Docket Number | No. 88-1195,88-1195 |
| Parties | CHICAGO CABLE COMMUNICATIONS, South Chicago Cable, Inc., and Communications and Cable of Chicago, Inc., Plaintiffs-Appellants, v. CHICAGO CABLE COMMISSION and City of Chicago, a municipal corporation, Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
James E. Betke, McDermott, Will & Emery, Chicago, Ill., for plaintiffs-appellants.
Joel D. Stein, Craig J. Hanson, Judson H. Miner, Ruth Moscovitch, Law Dept., Chicago, Ill., for defendants-appellees.
Before CUMMINGS, COFFEY and KANNE, Circuit Judges.
The Chicago Cable Commission (the "Commission"), pursuant to Chapter 113.1 of the Municipal Code of Chicago, regulates the franchising of all cable television services for the City of Chicago. Plaintiffs in this case are three affiliated cable television service corporations, Chicago Cable Communications, South Chicago Cable, Inc., and Communications and Cable of Chicago, Inc. (collectively herein "CCTV" for "Chicago Cable TV"). They were fined $60,750 collectively by the Commission for allegedly violating the "local origination" ("LO") provisions of their identical franchise agreements with the City. They sought restitution of this fine through review in the district court, which ultimately affirmed the administrative agency's actions. 678 F.Supp. 734, 736 (N.D.Ill.1988). On appeal, CCTV contends that the City and particularly the Commission violated its rights to (1) due process by giving it inadequate notice or opportunity to be heard on the charges that it violated the franchise agreement, (2) equal protection by treating CCTV differently from another cable company which was not fined, and (3) free expression under the First Amendment due to impermissible content regulation. 1 We affirm.
The parties largely agree with the statement of facts provided by the district court 2 regarding LO programming 3 and the Commission's regulatory efforts. 678 F.Supp. at 736-739. This Court therefore will not restate this summary in detail, but instead will focus on the Commission's imposition of sanctions to determine whether a due process, equal protection, or First Amendment violation occurred. In so doing we are guided by the district court's factual findings unless they are erroneous. Cf. Fed.R.Civ.P. 52(a); Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985); Evanston Bank v. Brink's, Inc., 853 F.2d 512, 516 (7th Cir.1988).
Chapter 113.1 of the Municipal Code created five separate areas for cable services for the City of Chicago. CCTV was granted the franchises for Areas 1, 4 and 5, while a different company, Group W Cable (not a party to this litigation), was awarded the franchises for Areas 2 and 3. The franchise agreements between the City and grantees CCTV and Group W required the grantees both to produce and program a certain amount of LO programming per week, with each grantee to produce in Chicago one-half of the total required programming according to an agreed schedule. The grantees were to pledge up to $6,000,000 to produce this programming for 15 years and jointly to equip an LO production facility with staff consisting of local residents used for both full and part-time internship purposes. During the period involved here, CCTV and Group W Cable were obliged to transmit a total of nine hours local programming per week, and they divided this obligation evenly.
The Commission was created within the Mayor's office to supervise this regulation and to enforce the terms of the franchise agreements against the cable companies. After its initial July 1986 meeting, Commission Chairperson Robin Charleston requested Group W and CCTV to submit monthly reports on their LO scheduling, and in August, Group W responded for both, reporting that CCTV was "presently considering contracting its program production efforts to a third party [Cablenet, a suburban affiliate of CCTV] who would supply all necessary production manpower." This progress report was reiterated in Group W's monthly statement for September 1986.
In October, both grantees began to transmit their four and one-half hours apiece of LO programming. The Commission congratulated them on meeting the initial requirements for scheduling. The November meeting proceeded without problems; yet at the December meeting, the Commission, upon noticing that CCTV's monthly report on LO scheduling was less descriptive than Group W's report, asked CCTV for a sample of its LO programming.
Controversy between all concerned arose at the January 13, 1987, meeting when Chairperson Charleston requested the Commission's authorization to issue a "Notice of Violation" of the franchise agreement against CCTV allegedly because:
1. CCTV has not demonstrated how their current programming is actually local origination in that it is actually locally produced (within the City of Chicago) and is [instead] solely under the control of TCI [Telecommunications, Inc., Mt. Prospect, Illinois, affiliate of CCTV].
2. CCTV has not provided documentation on the provision of one full-time non-alphanumeric [video] channel and two alphanumeric channels in each Area.
3. No documentation of efforts to establish internship programs for local residents and ongoing relationships with local schools.
4. CCTV has not documented its [one-half] share of the nine hours required weekly in Year 1 for L.O. programming.
5. No documentation or proof of joint participation with other [Chicago] area grantees in centralized L.O. studio and mobile equipment has been provided by CCTV.
678 F.Supp. at 740. This action was done pursuant to Section 29 of the franchise agreement, which sets forth the procedure by which the Commission may enforce the terms of the agreement. The first step in any enforcement proceeding is the issuance of a notice of violation in writing setting forth the specific nature of the violation. The grantee then has 30 days (or less if the Commission determines the violation is so serious that a shorter time period is warranted) either to remedy the violation or to respond in writing contesting the notice of violation with supporting documentation indicating either that the violation did not occur or it was beyond the grantee's control, and requesting an opportunity to be heard. If after contesting the violation, the grantee fails to prove a violation did not occur, the Commission then may penalize the grantee. The Commission may fine the grantee up to $750 per day per violation, and must notify the grantee of the violation and fine by issuing a "Notice of Assessment." 678 F.Supp. at 739 n. 10.
CCTV responded to the January 15, 1987, notice of violation, stating that of the total nine hours of LO programming per week required of it and Group W, 4.5 hours came from Group W in Chicago and 4.5 hours came from CCTV's affiliated companies in the surrounding suburban area. CCTV also stated that it selected shows from a pool of all available suburban shows it believed would be interesting to its Chicago customers. However, it did not demonstrate that the 4.5 hours were geared to Chicago as required by the franchise agreements.
At its February 10, 1987, meeting, Chairperson Charleston recommended that CCTV be fined for violating the franchise agreements. The Commission heard testimony from Diane Minor, a staff member, as well as from Michael Green, CCTV's general manager. After this hearing, the Commission found a violation and fined CCTV $750 for each day for each of the three areas it was to serve. The notice of assessment sent to CCTV stated in pertinent part:
THE CHICAGO CABLE COMMISSION FINDS AS FOLLOWS:
1. Based on the submission by CCTV/TCI, the programming shown over CCTV/TCI's local origination channels and claimed by CCTV/TCI to satisfy its local origination obligations as Grantees for Areas 1, 4, and 5 "is acquired through [CCTV/TCI's] affiliated TCI companies in the surrounding Chicagoland area" instead of being produced by CCTV/TCI itself. Furthermore, based on the submission by CCTV/TCI, the subjects of the programming are, for the most part, geared to the broad City-suburban Chicagoland areas rather than the communities that CCTV/TCI serves.
678 F.Supp. at 741. CCTV quickly filed a petition for rescission of this violation and assessment while raising numerous legal challenges. In response, Charleston requested evidence that CCTV produced the requisite LO shows and did so within Chicago, while CCTV claimed that Group W was to be in charge of all production concerns. At the March meeting, the Commission voted to deny CCTV's petition and assessed fines of $750 per day, for 27 days for the three areas, totaling $60,750. The Commission also decided that in the meantime CCTV had subsequently remedied its past violation through an arrangement with Group W.
CCTV argues on appeal that its due process rights were compromised because the Cable Commission adopted a new definition for the term "local origination" at the February 10 meeting and then found CCTV in violation. CCTV submits that local origination had previously only referred to physical production in Chicago, which was the stated reason for the notice of violation, but that the February 10 notice of assessment cited CCTV both for failing to provide locally produced programming as well as community-specific programming. CCTV asserts that its due process rights were compromised when the Commission changed the standards governing local origination without notice and therefore fined CCTV. It also contends that the January 15 notice of violation charged it only with a failure to document compliance and not with a specific failure to comply. CCTV further asserts that before the Commission's January 13, 1987, meeting, CCTV was not advised that the Commission might authorize issuance of a violation...
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