Cable Holdings of Battlefield, Inc. v. Cooke
| Decision Date | 09 July 1985 |
| Docket Number | No. 84-8445,84-8445 |
| Citation | 764 F.2d 1466 |
| Parties | CABLE HOLDINGS OF BATTLEFIELD, INC., Plaintiff-Appellant, v. William J. COOKE, Lookout Cable Services, Inc., the Town of Fort Oglethorpe, Georgia, the City of Chickamauga, Georgia, and Walker County, Georgia, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Sam F. Little, Dalton, Ga., Howard Graff, New York City, for plaintiff-appellant.
Ronald C. Goulart, Ft. Oglethorpe, Ga., for Town of Ft. Oglethorpe, Ga.
Joseph E. Willard, Rossville, Ga., for Wm. Cooke.
Larry D. Ruskaup, Rossville, Ga., for Lookout Cable.
William Ralph Hill, LaFayette, Ga., for City of Chickamauga.
Appeal from the United States District Court for the Northern District of Georgia.
Before KRAVITCH and JOHNSON, Circuit Judges, and TUTTLE, Senior Circuit Judge.
This case involves the efforts of the plaintiff cable television company to enforce what it alleges to be valid, "exclusive" franchises to operate cable television systems within certain areas in north Georgia. Plaintiff commenced an action in federal district court against a competing company, its principal owner, and three local governmental entities, seeking a declaratory judgment that plaintiff's franchises are indeed valid and "exclusive," injunctive relief, and actual and punitive damages. The defendants counterclaimed, asserting various contract, tort, antitrust, securities, and Sec. 1983 claims. Before us is plaintiff's interlocutory appeal from an order that, inter alia, granted partial summary judgment in favor of three of the five defendants, granted a motion filed by three of the defendants to dissolve a preliminary restraint, and denied plaintiff's motion for a preliminary injunction.
We hold that 28 U.S.C. Sec. 1292(a)(1) confers upon this court jurisdiction to review those portions of the order dissolving the preliminary restraint and denying the preliminary injunction. In addition, under the circumstances of this case, we choose to exercise our pendent jurisdiction and review the grant of partial summary judgment in favor of the three defendants. We vacate the grant of partial summary judgment and the dissolution of the preliminary restraint, affirm the denial of the preliminary injunction, and remand for further proceedings.
Battlefield Cablevision Inc. ("Battlefield") is a corporation organized under the laws of Georgia for the purpose of operating cable television (CATV) systems. 1 In June, 1971, Walker County, Georgia, granted Battlefield the "exclusive" right to construct and operate a CATV system within the county for a period of 15 years, with a 10-year renewal option. In September, 1972, the town of Fort Oglethorpe and the city of Chickamauga, both Georgia municipalities, granted Battlefield similar "exclusive" rights. Battlefield operated CATV systems within the three areas until 1980. On June 3, 1980, Battlefield, and the "exclusive" franchises held by it, were acquired by Cable Holdings of Battlefield, Inc. ("Cable Holdings"). Walker County and Fort Oglethorpe enacted ordinances approving this change of ownership.
In 1983, William Cooke, who previously had been a part owner of Battlefield, formed Lookout Cable Services, Inc. ("Lookout"), a Georgia corporation organized for the purpose of operating CATV systems. In April of that year, Lookout submitted to Fort Oglethorpe a proposed ordinance granting Lookout the right to construct and operate a CATV system in the town, in competition with Cable Holdings' system. The ordinance was read and approved by the town's mayor and council members. 2 Lookout also applied to Walker County for a CATV franchise. On June 8, 1983, the county granted the application. One week later, Lookout applied to Chickamauga for a CATV franchise. In mid-July, the city denied the application, believing that such a franchise would contravene the terms of Cable Holdings' "exclusive" franchise.
Meanwhile, on June 7, 1983, Cable Holdings filed an eleven-count lawsuit against Lookout, Cooke, and Fort Oglethorpe in the United States District Court for the Northern District of Georgia. Cable Holdings sought (1) a declaration of rights under its "exclusive" franchise with Fort Oglethorpe and federal antitrust laws, (2) an order requiring Fort Oglethorpe to abide by the terms of the franchise agreement, (3) an injunction preventing Fort Oglethorpe from granting a competing CATV franchise to Cooke or Lookout, (4) unspecified actual damages, and (5) $1,000,000 in punitive damages. Cable Holdings also moved for a preliminary injunction preventing Fort Oglethorpe from granting a CATV franchise to Cooke or Lookout. On June 22, before the district court could act on the motion, Cable Holdings, Cooke, Lookout, and Fort Oglethorpe stipulated that the town would not pass an ordinance allowing Lookout to construct or operate a CATV system within its boundaries until the court made a "final adjudication" of Cable Holdings' lawsuit. The parties also stipulated that Lookout and Cooke would not attempt to obtain a CATV franchise from the town until the "final adjudication" of the lawsuit. This preliminary restraint, entered as an order by the district court, mooted Cable Holdings' motion for a preliminary injunction.
On June 24, Cable Holdings moved for a temporary restraining order preventing Lookout and Cooke from attempting to obtain a CATV franchise from Chickamauga or Walker County. After a hearing, the district court denied the motion because Cable Holdings had not demonstrated a sufficient likelihood of success on the merits. Cable Holdings also amended its complaint, seeking a declaration of the validity of its "exclusive" franchises with Chickamauga and Walker County, and moved for a preliminary injunction preventing Lookout and Cooke from attempting to obtain a CATV franchise from Chickamauga or Walker County.
On July 20, Lookout, Cooke, and Fort Oglethorpe answered Cable Holdings' complaint. Lookout raised twenty-one defenses and five counterclaims based on tort law, antitrust law, and Sec. 1983. Cooke asserted twenty-three defenses and five counterclaims based on antitrust law, federal securities law, Sec. 1983, and contract law. Fort Oglethorpe's answer contained thirteen defenses and four counterclaims based on tort law, antitrust law, and contract law. On August 29, Cable Holdings moved to dismiss three of Lookout's counterclaims, four of Cooke's counterclaims, and three of Fort Oglethorpe's counterclaims.
At a hearing on September 6, Cable Holdings renewed its request for a temporary restraining order preventing Lookout and Cooke from attempting to obtain a CATV franchise from Walker County. 3 The district court denied the request because Cable Holdings had failed to demonstrate the existence of an irreparable injury, and because the public interest would not be served by such an order. On September 27, Cable Holdings made yet a third request for a temporary restraining order preventing Lookout and Cooke from seeking a CATV franchise from Walker County. The district court again denied the motion, this time holding that Cable Holdings had failed to demonstrate either the existence of irreparable injury or a substantial likelihood of success on the merits.
On October 5, Lookout and Cooke filed a motion to dissolve the order, entered on the stipulation of the parties, preventing Fort Oglethorpe from issuing a CATV franchise to Lookout and Cooke. The next day, Fort Oglethorpe also moved to dissolve this preliminary restraint, and requested partial summary judgment on the issue of the validity of Cable Holdings' "exclusive" franchise. On October 11, Lookout and Cooke moved for summary judgment on all issues raised by Cable Holdings' complaint.
On November 3, 1983, Cable Holdings requested a ruling on its June 24 motion for a preliminary injunction preventing Lookout and Cooke from attempting to obtain a CATV franchise from Walker County. On November 14, Cable Holdings moved to disqualify a law firm that had been representing Lookout and Cooke. On December 8, Cable Holdings moved to dismiss several of Fort Oglethorpe's counterclaims, and to deposit funds into the registry of the district court. 4
On December 9, Cable Holdings moved to stay an action that had been filed by Lookout in the Superior Court of Walker County, Georgia. The superior court action involved (1) whether Lookout had the right to obtain CATV franchises from Fort Oglethorpe, Chickamauga, and Walker County, and (2) whether the three governmental entities had acted ultra vires in granting "exclusive" franchises to Cable Holdings. The district court, relying on the Younger doctrine, declined to stay the superior court action. 5
On February 16, 1984, the district court announced that it would treat Cable Holdings' motion to dismiss as a motion for summary judgment, and asked the parties to submit any materials they wanted the court to consider in ruling on the motion. On February 27, the court added Chickamauga and Walker County as party-defendants. The city and county filed answers on April 2 and April 5, respectively. The county's answer included a counterclaim based on Cable Holdings' alleged failure to pay required franchise fees.
On April 30, Lookout and Cooke notified the district court of a declaratory judgment that had been entered in the superior court action. See Lookout Cable Services, Inc. v. Cable Holdings of Battlefield, Inc., Civ. No. 28,866 (Sup.Ct. April 26, 1984). The superior court ruled, inter alia, that Chickamauga, Fort Oglethorpe, and Walker County lacked the authority to grant "exclusive" CATV franchises, stating:
Cities and Counties in Georgia have no power or authority to grant an exclusive franchise unless such power or authority is expressly granted by the General Assembly. See, e.g. Macon Ambulance Service, Inc. v. Snow Properties, Inc., 218 Ga. 261 (1962). This Court cannot locate such an express...
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