Bellsouth Telecommuniations, LLC v. Louisville/Jefferson Cnty. Metro Gov't, Case No. 3:16-CV-124-TBR
| Decision Date | 26 July 2016 |
| Docket Number | Case No. 3:16-CV-124-TBR |
| Parties | BELLSOUTH TELECOMMUNIATIONS, LLC, Plaintiff v. LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT, Defendant |
| Court | U.S. District Court — Western District of Kentucky |
This matter is before the Court on Defendant Louisville/Jefferson County Metro Government's motion to dismiss. (DN 27). Plaintiff BellSouth Telecommunications, LLC has responded. (DN 30). Frontier Communications Corporation has filed an amicus curiae brief. (DN 31-2). Defendant has replied. (DN 36). For the following reasons, Defendant's motion to dismiss (DN 27) is DENIED.
This case arises out of a recently passed ordinance which amends regulations governing who may work on utility poles in Louisville, Kentucky. Plaintiff BellSouth Telecommunications, LLC, doing business as AT&T Kentucky ("AT&T") is a telecommunications carrier which provides service in Louisville. AT&T has invested millions of dollars to construct and maintain a communication network in Louisville. A significant portion of this network "consists of aerial telephone lines and associated equipment placed upon utility poles in the public rights-of-way." (DN 1). The majority of these utility poles are owned by Louisville Gas and Electric ("LG&E") or by AT&T itself.
Chapter 116 of the Louisville Metro Code of Ordinances contains regulations for the construction, maintenance, and operation of cable communications systems. On February 11, 2016, Defendant Louisville/Jefferson County Metro Government ("Louisville Metro") adopted an ordinance which amended these regulations. (DN 1-2). The ordinance permits a third-party, called an "Attacher,"1 to "relocate or alter the attachments or facilities of any Pre-Existing Third Party User2 as may be necessary to accommodate Attacher's Attachment." (DN 1-2). The Attacher must use contractors approved by the Pole Owner,3 which may be different from those approved by the Pre-Existing Third Party User. Furthermore, the Attacher may perform this work without prior notice to the Pre-Existing Third Party User if the work would not reasonably be expected to cause a customer outage. The Attacher must notify the Pre-Existing Third Party User within thirty days after completion of the work. The Pre-Existing Third Party User then has fourteen days to inspect the work.
AT&T raises several concerns with the effect of this ordinance. The ordinance permits an Attacher to alter AT&T's property without AT&T's consent. If this disrupted AT&T's network, AT&T may have difficulty locating and correcting the disruption because it had no prior notice of the alteration. Although this scenario is ostensibly protected against by the requirement that an Attacher give prior notice if a customer outage is expected, AT&T does not have a role in making this assessment and questions a third-party's ability to accurately do so. AT&T also notes that the fourteen-day inspection period is insufficient. If, as anticipated, aprolific Attacher such as Google Fiber began operating in Louisville, then AT&T would need to hire additional employees to handle the flood of inspections that would result. (DN 30).
Two parties have requested leave to appear in this case as amicus curiae. Frontier Communications Corporation ("Frontier") is also a telecommunications company. Although Frontier does not operate in Kentucky, it believes that other cities may enact ordinances similar to the ordinance enacted by Louisville Metro. (DN 31-2). Communications Workers of America ("CWA") is a labor organization which represents employees in the telecommunications field. CWA and AT&T are parties to a collective bargaining agreement which reserves certain work to employees represented by CWA. CWA believes the ordinance may permit third-parties to perform this work in conflict with the terms of that collective bargaining agreement. (DN 15).
AT&T asserted three claims in this action. Before the Court is Louisville Metro's motion to dismiss all three claims. (DN 27).
"When considering a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the district court must accept all of the allegations in the complaint as true, and construe the complaint liberally in favor of the plaintiff." Lawrence v. Chancery Court of Tenn., 188 F.3d 687, 691 (6th Cir. 1999) (citing Miller v. Currie, 50 F.3d 373, 377 (6th Cir. 1995)). Denial of the motion is proper "unless it can be established beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Achterhof v. Selvaggio, 886 F.2d 826, 831 (6th Cir. 1989) (citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). Nonetheless, unwarranted factual inferences or legal conclusions masquerading as fact will not prevent a motion to dismiss. Blakely v. United States, 276 F.3d 853, 863 (6th Cir. 2002). A "complaint must contain either direct or inferential allegations respecting all the materialelements to sustain a recovery under some viable legal theory." Andrews v. Ohio, 104 F.3d 803, 806 (6th Cir. 1997) (citing In re DeLorean Motor Co., 991 F.2d 1236, 1240 (6th Cir. 1993)).
AT&T has asserted three claims. First, AT&T asserts the ordinance is preempted by federal law, 47 U.S.C. § 224, and "the pole attachment regulations promulgated" by the Federal Communications Commission ("FCC" or "Commission"). (DN 1). Second, AT&T claims that Kentucky law grants the Public Service Commission of Kentucky ("PSC") exclusive authority to regulate utility pole attachments. Third, AT&T claims Louisville Metro has exceeded its authority as a first class city by passing an ordinance which conflicts with state law. (DN 1).
Louisville Metro has moved to dismiss all three of AT&T's claims. Louisville Metro argues 47 U.S.C. § 224 does not provide a private cause of action for AT&T to pursue its first claim. Louisville Metro argues this Court lacks subject matter jurisdiction over AT&T's second and third claims. (DN 27). The Court will address whether (I) federal law provides AT&T with a cause of action to assert its first claim before turning to whether (II) this Court has subject matter jurisdiction to decide AT&T's second and third claims.
AT&T's first claim is that the ordinance passed by Louisville Metro is preempted by 47 U.S.C. § 224. (DN 1). Louisville Metro moves to dismiss this claim on the grounds that 47 U.S.C. § 224 does not confer a private cause of action. AT&T responds that this Court may nevertheless exercise equitable jurisdiction over this dispute. The Court finds that (A) 47 U.S.C. § 224 does not create a private cause of action; and (B) the Court may properly exercise equitable jurisdiction to enjoin Louisville Metro's allegedly preempted conduct.
"The Pole Attachments Act, 92 Stat. 35, as amended, 47 U. S. C. § 224, was enacted by Congress as a solution to a perceived danger of anticompetitive practices by utilities in connection with cable television service." F.C.C. v. Florida Power Corp., 480 U.S. 245, 247 (1987). "Since the inception of cable television, cable companies have sought the means to run a wire into the home of each subscriber." Nat'l Cable & Telecomms. Ass'n, Inc. v. Gulf Power Co., 534 U.S. 327, 330 (2002). "They have found it convenient, and often essential, to lease space for their cables on telephone and electric utility poles." Id. "Utilities, in turn, have found it convenient to charge monopoly rents." Id. "In response to arguments by cable operators that utility companies were exploiting their monopoly position by engaging in widespread overcharging, Congress in the Pole Attachments Act authorized the Federal Communications Commission to fill the gap left by state systems of public utilities regulation." Florida Power Corp., 480 U.S. at 247-48. "The Act provides that any cable company4 operating in a State which does not regulate the rates, terms, and conditions of pole attachments may seek relief from alleged overcharging before the Commission, which is empowered to 'regulate the rates, terms, and conditions for pole attachments to provide that such rates, terms, and conditions are just and reasonable. . . .'" Id. at 248 (quoting 47 U.S.C. § 224(b)(1)).
The Pole Attachment Act does not expressly create a private cause of action. Two federal courts have previously been asked to determine whether the Pole Attachment Act impliedly creates a private cause of action. Both have found that it does not. Kan. City Power & Light Co. v. Am. Fiber Sys., Inc., 2003 WL 22757927, 2003 U.S. Dist. LEXIS 20983 (D. Kan.Nov. 5, 2003); Va. Elec. & Power Co. v. Comcast of Va., Inc., 2010 WL 916953, 2010 U.S. Dist. LEXIS 21441 (E.D. Va. Mar. 8, 2010). The Kansas City Power court first noted that a "plaintiff asserting an implied right of action under a federal statute bears the relatively heavy burden of demonstrating that Congress affirmatively contemplated private enforcement when it passed the statute." 2003 WL 22757927, at *2 (quoting Med. Supply Chain, Inc. v. U.S. Bancorp, NA, 2003 WL 21479192, at *8 (D. Kan. June 16, 2003)). It then examined the legislative history of the Pole Attachment Act to look for evidence that Congress impliedly intended to create a private cause of action. In doing so, it found the Pole Attachment Act "was intended to serve two specific purposes: (1) 'To establish a mechanism whereby unfair pole attachment practices may come under review and sanction'; and (2) 'to minimize the effect of unjust or unreasonable pole attachment practices on the wider development of cable television service to the public.'" Id. (quoting S. Rep. No. 95-580, at 14 (1978), reprinted in 1978 U.S.C.C.A.N. 109, 122). To accomplish these goals, "Congress commanded the FCC to establish a regulatory scheme to settle pole attachment disputes." Id. at *3. However, "Congress remained silent on the...
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