CABLE TV FUND 14-A v. Property Owners Ass'n, Civ. No. H-89-17.

• Court: United States District Courts. 4th Circuit. United States District Court (Maryland)
• Writing for the Court: ALEXANDER HARVEY, II
• Citation: 706 F. Supp. 422
• Parties: CABLE TV FUND 14-A, LTD. d/b/a Jones Intercable, Plaintiff, v. PROPERTY OWNERS ASSOCIATION CHESAPEAKE RANCH ESTATES, INC. and Chesapeake Ranch Water Company, Defendants, and North Star CATV Services, Inc. and North Star Cable Television Company of Maryland, Inc., Intervening Defendants.
• Docket Number: Civ. No. H-89-17.
• Decision Date: 14 February 1989

706 F. Supp. 422

CABLE TV FUND 14-A, LTD. d/b/a Jones Intercable, Plaintiff,
v.
PROPERTY OWNERS ASSOCIATION CHESAPEAKE RANCH ESTATES, INC. and Chesapeake Ranch Water Company, Defendants,
and
North Star CATV Services, Inc. and North Star Cable Television Company of Maryland, Inc., Intervening Defendants.

Civ. No. H-89-17.

United States District Court, D. Maryland.

February 14, 1989.

706 F. Supp. 423

Brent N. Rushforth, and Dow, Lohnes & Albertson, Washington, D.C., and Michael A. Pace, Dow, Lohnes & Albertson, Annapolis, Md., for plaintiff.

William D. Coston, Mark J. Palchick, and Bishop, Cook, Purcell & Reynolds, Washington, D.C., and John C. Prouty, Huntington, Md., for defendants and intervening defendants.

MEMORANDUM AND ORDER

ALEXANDER HARVEY, II, Chief Judge.

The essential dispute in this civil action is between two competing cable television companies which seek to provide cable service to residents of a development in Calvert County, Maryland. Plaintiff Cable TV Fund 14-A, Ltd. (hereinafter "Cable TV Fund") has filed a complaint seeking declaratory and injunctive relief pursuant to § 621(a)(2) of the Cable Communications Policy Act of 1984 (hereinafter "the Cable Act"), 47 U.S.C. § 541(a)(2) (Supp. III 1985). Plaintiff is here asking this Court to grant relief which would permit plaintiff to construct and operate a cable television service within the residential community known as the Chesapeake Ranch Estates.

Plaintiff Cable TV Fund is a Colorado limited partnership with its principal place of business in Denver, Colorado. It provides cable television service to consumers in the State of Maryland and in Calvert County as Jones Intercable, Inc. (hereinafter "Jones Intercable"). Jones Intercable, which is the general partner of Cable

706 F. Supp. 424

TV Fund, is a diversified telecommunications company that has its headquarters and its principal place of business in Denver, Colorado

Two parties are named as defendants in the complaint. Defendant Property Owners Association Chesapeake Ranch Estates, Inc. (hereinafter "the Property Owners Association") is a Maryland corporation with its principal place of business in Calvert County. The Property Owners Association is the developer of the Chesapeake Ranch Estates (hereinafter "the Estates"), a private residential community of approximately 900 homes in the southern part of Calvert County. The Property Owners Association owns all the common areas, including all roads and byways, within the Estates. Defendant Chesapeake Water Company (hereinafter "the Water Company") is a corporation organized under the laws of Maryland with its principal place of business in Calvert County. The Water Company's major business is the operation of the water system within the Estates.

Two additional parties have been permitted to intervene.¹ Defendants North Star CATV Services, Inc. (hereinafter "North Star") and North Star Cable Television Company of Maryland, Inc. (hereinafter "North Star-Maryland") are both Tennessee corporations qualified to do business within the State of Maryland. North Star-Maryland is owned by the controlling stockholder of North Star and was organized specifically to build, own and operate cable television systems in Maryland.

On January 4, 1989, plaintiff filed its complaint in this Court together with a motion for a temporary restraining order. By that motion, plaintiff sought to enjoin the Property Owners Association and the Water Company from taking any action to prevent Jones Intercable from gaining access to the Estates for the purposes of constructing, marketing and operating a cable television system therein. Plaintiff is not in this suit asking that it have the exclusive right to provide cable service to residents of the Estates. Rather, it is asking merely that it be permitted to compete with North Star-Maryland within the development.

A brief hearing was held on January 4, 1989 before Senior Judge Herbert N. Maletz who granted plaintiff's motion for a temporary restraining order and required plaintiff to file a bond of $10,000. Pursuant to Rule 65(c), F.R.Civ.P., the temporary restraining order entered by Judge Maletz was to expire ten days later on January 14, 1989.

The case was then assigned to the undersigned judge who held a status conference on January 12, 1989. After hearing from counsel, the Court granted the motion of defendant Property Owners Association to dissolve the temporary restraining order which had previously been entered in the case. In order that the status quo might be maintained until the Court had ruled on plaintiff's motion for a preliminary injunction, the dissolution of the temporary restraining order was subject to the proviso that defendants and intervenors would not perform any work for the purpose of constructing a cable system in the Estates until further Order of Court. A briefing schedule was established and a hearing date set in connection with plaintiff's request for a preliminary injunction.

Pursuant to the schedule set by the court on January 12, 1989, plaintiff filed a motion for a preliminary injunction.² Plaintiff also filed a motion for leave to file a motion for summary judgment, a motion for shortening of filing times, and a proposed motion for summary judgment. Defendants in turn filed a motion to dismiss for lack of standing and a motion to dismiss for failure to join an indispensable party. The Court granted plaintiff's motion for leave to file a motion for summary judgment but

706 F. Supp. 425

denied plaintiff's motion for the shortening of time for defendants to respond to that motion. The Court reserved ruling on the motion for summary judgment until full briefing had been completed. Presently before the Court for decision are defendants' motions to dismiss and plaintiff's motion for a preliminary injunction

Extensive memoranda as well as accompanying exhibits and affidavits in support of and in opposition to the pending motions have been submitted by the parties. A hearing has been held in open Court on January 31, 1989. For the reasons to be stated herein, defendants' motions to dismiss will be denied, and plaintiff's motion for a preliminary injunction will be granted.

I

Factual Background

This case has a long and complex history which spans almost five years. Plaintiff obtained whatever rights it now asserts through a predecessor-in-interest. The Board of County Commissioners of Calvert County (hereinafter "the County Commissioners"), is the applicable governing body of the County. Although not a party here, the County Commissioners have been involved in prior litigation with some of the parties to this civil action or their predecessors.

On April 1, 1984, Rite Cable Company of Maryland, Ltd. (hereinafter "Rite Cable") filed an application with the County Commissioners seeking a franchise to construct and operate a cable television system for all unincorporated areas of the County. When Rite Cable submitted its application, one of the maps included as a part of the application contained every street within the Estates development. On July 31, 1984, Rite Cable received a non-exclusive franchise³ from the County Commissioners to construct and operate a cable system within the unincorporated areas of the County. Rite Cable began construction of a cable system in Calvert County in the fall of 1984, and cable television service was begun in April of 1985.

In 1987, Rite Cable transferred its entire interest in the cable franchise to Jones Intercable. The County Commissioners approved this transfer on April 14, 1987. Later in 1987, Jones Intercable transferred its interest in the franchise to plaintiff Cable TV Fund, and this transfer was likewise later approved by the County Commissioners. Based on these facts, plaintiff asserts that it now has a non-exclusive franchise to construct and operate a cable system in all unincorporated portions of the County, including the area comprising the Estates.

The Estates is a private residential community of approximately 900 homes in Lusby, Maryland, which is located in the southern part of Calvert County. The Estates was developed by Chesapeake Ranch Club, Inc. (hereinafter "Chesapeake Ranch Club"), the predecessor in interest of defendant Property Owners Association. The Estates consists of approximately 7000 lots, only some of which are presently occupied by private residences. All common areas, including roads and byways, continue to be owned, managed and controlled by defendant Property Owners Association.

In the fall of 1984, Rite Cable commenced negotiations with the Chesapeake Ranch Club in an effort to secure the developer's assistance in laying cable wire in and providing service to the development. These negotiations were not successful. Rite Cable was informed in June of 1985 that the Chesapeake Ranch Club would not permit it to enter the Estates to offer cable service and that the Chesapeake Ranch Club intended to build and operate its own cable system. In a letter dated June 11, 1985 addressed to a County Commissioner, a representative of Rite Cable noted that the Chesapeake Ranch Club would not permit Rite Cable to enter its property and stated that Rite Cable respected the owner's right to deny access to the property. However, Rite Cable questioned the right

706 F. Supp. 426

of any other cable company to provide cable service in the County without a franchise and requested a clarification concerning what non-franchised cable companies could do in the County

At or around that time, Chesapeake Ranch Club had established its own entity, Chesapeake Shores Cablevision, Inc., in order to facilitate the installation of a cable system within the confines of the Estates. Chesapeake Shores Cablevision, Inc. entered into a partnership with a cable company known as Laxton CATV, Inc. for purposes of installing and operating a cable system in the Estates. In 1985, work was begun by these entities for the laying of cable...