Cable Holdings of Georgia, Inc. v. McNeil Real Estate Fund VI, Ltd.

• Decision Date: 12 February 1992
• Docket Number: No. 91-8032,91-8032
• Citation: 953 F.2d 600
• Parties: CABLE HOLDINGS OF GEORGIA, INC., Plaintiff-Appellee, v. McNEIL REAL ESTATE FUND VI, LTD., Woodsong Apartments d/b/a Lakes Apartments, Robert A. McNeil Corporation, ODC Communications Corporation, Woodsong Associates, Ltd., Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 600

953 F.2d 600

113 A.L.R.Fed. 817

CABLE HOLDINGS OF GEORGIA, INC., Plaintiff-Appellee, v. McNEIL REAL ESTATE FUND VI, LTD., Woodsong Apartments d/b/a Lakes Apartments, Robert A. McNeil Corporation ODC Communications Corporation, Woodsong Associates, Ltd., Defendants-Appellants.

No. 91-8032.

United States Court of Appeals Eleventh Circuit.

Feb. 12, 1992.

Sidney Oslin Smith, Jr., Alston & Bird, John I. Spangler, III, Joseph William Watkins, Long Weinberg Ansley & Wheeler, Benjamin Louis Weinberg, Jr., Ronald Ray Coleman, Atlanta, Ga., Mark J. Tauber, Piper & Marbury, Deborah C. Costlow, Winston & Strawn, Thomas C. Power, Washington, D.C., for defendants-appellants.

Stephen Edmund O'Day, Hurt Richardson Garner Todd & Cadenhead, Terrence B. Adamson, Dow Lohnes & Albertson, Peter Crane Canfield, Atlanta, Ga., Howard Graff, Baer Marks & Upham, Neal S. Barlia, New York City, for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Georgia.

Before BIRCH, Circuit Judge, TUTTLE, Senior Circuit Judge, and FULLAM ^*, Senior District Judge.

BIRCH, Circuit Judge:

In this case we interpret Section 621(a)(2) of the Cable Communications Policy Act of 1984, 47 U.S.C. §§ 521-559 (1988) (the "Cable Act"). Section 621(a)(2) grants cable companies which have been franchised by a governmental franchising authority a right to access "public rights-of-way" and "easements ... which have been dedicated for compatible uses." 47 U.S.C. § 541(a)(2) (1988). Below, appellee Cable Holdings of Georgia, Inc., d/b/a Smyrna Cable TV ("Smyrna Cable"), a franchised cable company in Cobb County, Georgia, brought an action pursuant to Section 621(a)(2) in the United States District Court for the Northern District of Georgia. Smyrna Cable sought to compel access to the interiors of the multi-unit apartment buildings then owned and operated by appellants McNeil Real Estate Fund VI, Ltd., The Robert A. McNeil Corporation, and Woodsong Associates, Ltd. (collectively, "McNeil"). Smyrna Cable reasoned that because McNeil had privately agreed to grant interior access to a telephone company, an electric company, and a competing video programming services provider, McNeil had "dedicated" compatible easements which were accessible by Smyrna Cable under Section 621(a)(2). The district court agreed with Smyrna Cable, ordering McNeil to allow the cable company to access and occupy the interior of McNeil's apartment buildings so that Smyrna Cable could maintain a cable system capable of serving the residents of those buildings.

We disagree with the district court's construction of the Cable Act. Initially, the district court's reading of Section 621(a)(2) violated a fundamental canon of statutory construction: courts must avoid any statutory interpretation which creates substantial constitutional difficulties. In ruling that Section 621(a)(2) authorized Smyrna Cable's physical occupation of McNeil's private property for which McNeil need not be compensated, the district court adopted a construction of the Cable Act which raises serious concerns under the Takings Clause of the Fifth Amendment. Congress does not have the constitutional power to authorize such a permanent physical occupation of an owner's private property. That principle would seem to apply even when a property owner has privately allowed other occupations which are "compatible" with a government-sanctioned invasion. Because the district court's construction of Section 621(a)(2) created this difficult Fifth Amendment issue, we are reluctant to accept it.

Of course, if the district court's interpretation was required by the text and legislative history of the Cable Act, we would be required to reach the constitutional question. However, our independent review of the relevant sources indicates that the admittedly ambiguous legislation at issue in this case is capable of being construed constitutionally: Section 621(a)(2) authorizes a franchised cable company's access to easements on private property only when the private property owner has dedicated those easements for the general use of any utilities. We adopt this reading of Section 621(a)(2) because it is consistent with our prior precedent and because it avoids the constitutional problems arising under the district court's interpretation of the Cable Act. Since it is clear that the private property owner in this case has not dedicated easements within its buildings for the general use of all utilities, Section 621(a)(2) does not afford Smyrna Cable with a right to access and occupy McNeil's private apartment buildings. Accordingly, we REVERSE the judgment in favor of Smyrna Cable and REMAND the case so that the district court may enter judgment in favor of the appellants.

I. BACKGROUND

A. Factual Background

When this litigation began, McNeil owned and operated the Lakes Apartments and the Woodsong Apartments, two private complexes in Cobb County, Georgia. These complexes are comprised of separate multi-unit residential buildings and surrounding land. In 1980, McNeil entered into two contracts with Smyrna Cable for the provision of cable programming services to the residents of these complexes. Smyrna Cable constructed its cable system and provided cable television services to McNeil's residents through the summer of 1985.

When Smyrna Cable's contracts expired, McNeil reached an agreement with a competing video programming services provider--appellant ODC Communications Corporation ("ODC"). Unlike Smyrna Cable, ODC is not a franchised cable company. Because all of ODC's equipment is located on private property and ODC's systems do not use or cross public rights-of-way, ODC is able to provide cable television services without obtaining a franchise from Cobb County. Of course, because the services provided by ODC and Smyrna Cable are substantially similar, the two companies compete for the same television subscribers. In this case, those subscribers are the occupants of McNeil's apartment buildings.

The contracts between McNeil and ODC specify that ODC is allowed to construct on McNeil's property a satellite dish receiver and a local television antenna. In addition, ODC is permitted to construct a cable system across and into McNeil's property. Currently, ODC's cable system is completely contained on McNeil's private property: the system runs from the satellite dish and antenna, to the apartment buildings, and eventually inside each building to the individual residential units. In addition, the residents of McNeil's apartments are also linked to electricity and telephone service. Both Georgia Power Company and Southern Bell Telephone and Telegraph Company have wiring which crosses McNeil's land in order to reach and access the interiors of McNeil's buildings.

B. Procedural Background

In August 1985, Smyrna Cable filed this action in order to regain access to the residents of McNeil's apartment buildings. Although Smyrna Cable's complaint asserted several theories in support of its alleged right to continue installing and operating its cable facilities at the Lakes Apartments and the Woodsong Apartments, the only remaining claim is Smyrna Cable's potential remedy under Section 621(a)(2) of the Cable Act. This section of the Cable Act provides:

Any franchise shall be construed to authorize the construction of a cable system over public rights-of-way, and through easements, which is [sic] within the area to be served by the cable system and which have been dedicated for compatible uses....

47 U.S.C. § 541(a)(2) (1988). Smyrna Cable's complaint argued that McNeil had privately granted exterior and interior easements to three entities--ODC, Georgia Power, and Southern Bell. In addition, Smyrna Cable claimed that these easements were granted for uses which were compatible with the construction of its cable system because Smyrna Cable's wires and equipment could directly trace--"piggyback"--any of the other cables or wires already present on McNeil's property. Therefore, Smyrna Cable argued, Section 621(a)(2) provided it with a right to access and permanently occupy McNeil's property, without McNeil's consent, in order to compete with ODC for the potential television subscribers living in McNeil's buildings.

After discovery, the parties filed cross-motions for summary judgment. Smyrna Cable submitted briefing and evidence in support of the arguments pressed in its complaint. McNeil's defense to these allegations primarily consisted of two arguments. First, McNeil denied the existence of any easements on or within its property. McNeil claimed that ODC and the local utilities were permitted to access McNeil's property in order to provide services, but McNeil's permission did not take the legal form of an "easement" which would be accessible under the language of Section 621(a)(2). Second, McNeil asserted that even if there were easements in favor of ODC and the utilities, those easements were privately granted to particular entities, not dedicated to utility use in general. McNeil's position was that the Cable Act did not mandate access to such private easements. Alternatively, McNeil stressed that if Section 621(a)(2) did provide such a right of access, the provision must be declared unconstitutional because it would effectively authorize a taking of McNeil's private property without providing for just compensation.

In a series of orders, the district court ruled in favor of Smyrna Cable. First, the court found that private easements did exist on McNeil's property. Although the contracts between McNeil and ODC expressly denied the existence of any interior easements in favor of ODC, the court ruled that the physical presence of ODC's cable wires created easements under Georgia law. In addition, the court implicitly found easements in favor of Southern Bell and Georgia Power, ruling that Smyrna Cable could "piggyback its cable along easements that are actually occupied by telephone and...