Cable Alabama Corp. v. City of Huntsville, Ala.
| Citation | 768 F. Supp. 1484 |
| Decision Date | 06 August 1991 |
| Docket Number | No. CV-91-N-0640-NE.,CV-91-N-0640-NE. |
| Parties | CABLE ALABAMA CORPORATION, Plaintiff, v. CITY OF HUNTSVILLE, ALABAMA, Jim Putnam, in his official capacity as a member of the Huntsville City Council, Jimmy Wall, in his official capacity as a member of the Huntsville City Council, Bill Kling, Jr., in his official capacity as a member of the Huntsville City Council, Richard Showers, Sr., in his official capacity as a member of the Huntsville City Council, Chuck Saunders, in his official capacity as a member of the Huntsville City Council, and Steve Hettinger, Defendants. |
| Court | U.S. District Court — Northern District of Alabama |
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James A. Harris, Jr., Sirote and Permutt P.C., Birmingham, Ala., David Overlock Stewart, Michael K. Fee, Raymond C Ortman, Jr, Ropes & Gray, Washington, D.C., Roderic G. Steakley, John P. Burbach, Joe H. Ritch, Sirote and Permutt P.C., Huntsville, Ala., for plaintiff.
Clyde A Blankenship, Kerri Johnson Wilson, Huntsville City Attorney's Office, Huntsville, Ala., for defendants.
On March 21, 1991 Cable Alabama Corporation (Cable Alabama) filed its complaint against the City of Huntsville, Alabama (Huntsville or the City), its mayor and the five members of its council. Cable Alabama states claims under the Cable Communications Policy Act of 1984, Pub.L. No. 98-549, 98 Stat. 2779, 47 U.S.C. ? 521 et seq. (the Cable Act) (Claims One and Two); the First and Fourteenth Amendments to the United States Constitution (Claim Three);1 the Due Process Clause of the Fourteenth Amendment (Claim Four); the Takings Clause of the Fifth Amendment as made applicable to state officials by the Fourteenth Amendment (Claim Five); the Equal Protection Clause of the Fourteenth Amendment (Claim Six); and Alabama contract law (Claim Seven). By way of relief, the plaintiff seeks (1) a declaration that Section 14 of its franchise agreement with the defendants is void as being violative of 47 U.S.C. ? 533(d), the First Amendment, the Due Process and Equal Protection Clauses of the Fourteenth Amendment, and the Takings Clause of the Fifth Amendment; (2) a permanent injunction to bar the defendants from enforcing the provisions of Section 14 to prevent the transfer of its franchise to Comcast, or taking any action pursuant to the terms of Section 14; (3) damages; and (4) its costs of bringing this action, including its attorneys fees. Cable Alabama has moved the court for partial summary judgment directed to Claims One, Three and Four. Defendants have each moved to dismiss the complaint for failure to state a claim upon which relief can be granted and for summary judgment on all the plaintiff's claims.
The motions have been briefed and orally argued to the court. The parties agree that there is no genuine dispute as to any material issue and that the matter should be resolved on the motions for summary judgment.2 The defendants' motions to dismiss and for summary judgment will be denied in all respects. The plaintiff's motion will be granted on Claims One, Three and Four and the court will fashion appropriate declaratory and injunctive relief on those counts. The court will set a date for the trial of the demand for damages on Claims One, Three and Four and on the merits of Claims Two, Five, Six and Seven at a later time.
Until 1986 the City of Huntsville, Alabama, like the overwhelming majority of communities in the United States, was served by a single cable television system, Group W Cable (Group W). Because of significant public dissatisfaction with the services provided by Group W, the City invited other cable service providers to "overbuild" the Huntsville market in competition with Group W.3 At the time of the City's invitation, Cable Alabama operated cable systems in three nearby communities: Redstone Arsenal, a military base adjacent to the City of Huntsville; the City of Madison, an incorporated community located west of Huntsville; and unincorporated areas of Madison County, Alabama.4 Only Cable Alabama responded to Huntsville's invitation and, on March 11, 1986, the City and Cable Alabama entered into a comprehensive franchise agreement. (Declaration of William G. Jackson, Exhibit E) The City subsequently enacted the agreement as a city ordinance. Huntsville implicitly recognized that Cable Alabama's entry into the Huntsville cable television market and its continued economic viability in that market would be dependent upon its ability to attract the subscriptions of at least 30 customers for every mile of cable it built.5
Of critical importance to the issues in this case are certain provisions of the franchise agreement respecting restrictions on the right of Cable Alabama to sell, assign or otherwise transfer its rights under that agreement and rights granted to the City to approve or disapprove any proposed sale, assignment or transfer. In pertinent part, Section 14 of the agreement provides:
Upon its initial entry into the Huntsville market, Cable Alabama offered a basic service consisting of forty-one channels at a price of $8.95 per month. This compared favorably with the services and prices of its then competitor, Group W, which offered a basic package of twenty-four channels at a price of $13.50 per month. The plaintiff has represented, the defendants have not denied, and the evidence demonstrates that Cable Alabama offered a system that was technically superior to Group W's system. Cable Alabama initially signed up as many as seventy households per cable mile.
In the second half of 1986, Group W, which had no transfer restrictions in its franchise agreement with the City, sold its Huntsville operations to Comcast Cable Television (Comcast).6 Events following the acquisition of Group W's system by Comcast were described by the City in its comments to the FCC.
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