Callais Cablevision, Inc. v. Houma Cablevision, Inc.

• Decision Date: 05 March 1984
• Docket Number: No. 83,83
• Citation: 451 So.2d 6
• Parties: CALLAIS CABLEVISION, INC. v. HOUMA CABLEVISION, INC., et al. CA 0220.
• Court: Court of Appeal of Louisiana — District of US

Page 6

451 So.2d 6

CALLAIS CABLEVISION, INC. v. HOUMA CABLEVISION, INC., et al.

No. 83 CA 0220.

Court of Appeal of Louisiana, First Circuit.

March 5, 1984.

Rehearing Denied April 10, 1984.

Ashton R. Hardy, New Orleans, for plaintiff and appellant.

Christopher Siegrist, Sidney C. Sundbery, Houma, Edward J. Gay, III, New Orleans, for defendant and appellee.

Before SHORTESS, LANIER and CRAIN, JJ.

SHORTESS, Judge.

This suit is brought by Callais Cablevision Company (Callais) for injunctive relief against Houma Cablevision, Inc. (HCI), and relief declaratory of its rights vis-a-vis those of HCI to operate cable television systems in Terrebonne Parish. Callais presently is providing cable service to the residents of the unincorporated areas of Terrebonne Parish under a nonexclusive franchise granted it in 1978 by the Parish Police Jury, pursuant to the power granted in La.R.S. 33:4361. HCI is also providing service to customers in this same area, and it has been doing so since the 1960's. HCI, however, is not operating under a La.R.S. 33:4361 franchise. For that reason Callais seeks to have HCI's operation declared an unlawful infringement on Callais' franchise rights and permanently enjoined or, alternatively, restricted in scope.

The trial court found for HCI and dismissed Callais' suit, prompting this appeal.

HCI is the successor to a line of companies that have provided cable service in Terrebonne Parish since the early 1960's. The first of these companies, Mohana's Electrical Construction Company (Mohana) was granted a city franchise in 1962 to provide cable service in the City of Houma but not in the unincorporated areas of the Parish. Mohana later requested and received a "letter of no objection" from the Terrebonne Parish Police Jury in response to its request for permission to use the privately-owned utility poles of South Central Bell to install a "community antenna television system" (cable system) in the unincorporated portion of the Parish. HCI claims and the trial court found that the transfers of interest from Mohana to subsequent companies included this "permit" to operate a cable system in the Parish. Callais claims that the transfers were insufficient to convey the "permit" and that HCI is therefore unlawfully operating because it is without benefit of a permit or a franchise.

We find, however, that regardless of the status of the permit, HCI lawfully commenced its operations in 1966 pursuant to the State law then in effect. La.R.S. 45:781 ¹ provides that corporations "formed for the purpose of transmitting intelligence" may construct lines necessary to do so "along all public roads or public works." This language was interpreted by the Third Circuit Court of Appeal in KAOK-CATV, Inc. v. Louisiana Cable TV, Inc., 195 So.2d 297 (La.App.3rd Cir.1967), to be broad enough to include a cable system company as one formed to "transmit intelligence," thus entitling the company to use the public ways for its lines. We agree that the broad language of La.R.S. 45:781 encompasses cable television companies.

KAOK-CATV further held that it was not necessary for the defendant cable system operator to obtain a franchise from the policy jury. It examined the powers granted police juries in La.R.S. 33:1236 (general powers) and La.R.S. 33:4361 ² (activities subject to police jury franchise) and found that no provision of our law required a cable company to obtain a franchise from a police jury in order to conduct its business. These two statutes have undergone extensive amendment since that time, however, particularly relating to cable television operations. We must now determine whether HCI is lawfully operating today in the face of these legislative amendments.

La.R.S. 33:1236 sets forth in detail the powers of a police jury. Being a political subdivision of the State, a police jury has only those powers that are conferred on it by the Constitution and laws of this State. La. Const. of 1974, art. VI, Sec. 5(E) and 7(A); Rollins Environmental Services of Louisiana, Inc. v. Iberville Parish Police Jury, 371 So.2d 1127 (La.1979); KAOK-CATV, 195 So.2d at 298 (and authorities cited therein). We find no change in La.R.S. 33:1236 since KAOK-CATV which would allow a police jury to require cable television companies to get a franchise.

La.R.S. 33:4361 ³ was amended by Louisiana Acts 1976, No. 573, Sec. 1, to allow police juries to "grant franchises over the public ... roads ... of [the] parishes ... to any person for ... the construction, maintenance, and operation of ... lines and cables ... for transmitting television signals ...." Also in that act, La.R.S. 45:781 was amended to add subsection B providing that nothing in that statute shall "affect the right granted to parish governing authorities to grant franchises for the regulation of cable television outside municipalities." (Other changes, not material here, were also made.) However, no specific provision was made for companies such as HCI which were already operating cable systems but without franchises. It is therefore unclear just how the status of companies such as HCI was affected by these 1976 amendments. Callais urges that the 1976 amendments had the effect of imposing upon HCI the requirement of getting a Parish franchise in order to operate. It argues persuasively that under Gulf States Utilities Co. v. Dixie Electric Membership Corporation, 185 So.2d 313 (La.App. 1st Cir.1966) and Town of Coushatta v. Valley Electric Membership Corporation, 139 So.2d 822 (La.App. 2nd Cir.1962) a non-exclusive franchise holder has a right to operate free from non-franchised competition and that when Callais was granted its franchise, that right became exclusive as to HCI. It therefore claims that it is entitled to injunctive relief against HCI to prevent an irreparable trammeling of its rights. Consequently, in order to determine whether Callais is actually entitled to such relief, we must first determine the effect, if any, of the 1976 amendments to La.R.S. 33:4361 and La.R.S. 45:781 on HCI.

HCI began its operations under the legal sanction of La.R.S. 45:781. The State in Acts 1880, No. 124, Sec. 1, offered to companies "transmitting intelligence" the right to "construct and maintain telegraph, telephone or other lines necessary ... along all public roads or public works ... and along the streets of any city, with the consent of the city council or trustees." HCI and its predecessors accepted this offer by investing in the equipment necessary to construct a fledgling cable television service. Callais now argues that Act 573 of 1976 requires HCI to obtain a franchise from the police jury to operate and that its operations without one are infringing upon Callais' franchise rights. We disagree and find that Callais' asserted construction of Act 573 would render it unconstitutional, in violation of the Contract Clauses, La. Const. art. I, Sec. 23, and the United States Const., art. I, Sec. 10. ⁴

In Russell v. Sebastian, 233 U.S. 195, 34 S.Ct. 517, 58 L.Ed. 912 (1914), the U.S. Supreme Court considered a provision of the California State Constitution of 1879, as amended in 1885, which gave "any individual, or any company duly incorporated for such purpose ... the privilege of using the public streets and thoroughfares [of certain municipalities] and of laying down pipes ... and connections ... as may be necessary for ... supplying such city ... with gaslight ... or with fresh water ...." Sebastian, 34 S.Ct. at 517, quoting California Const. of 1879, art. 11, Sec. 19.

In 1911, this section was amended to provide, in pertinent part, that "[p]ersons or corporations may establish and operate works for supplying the inhabitants with such services upon such conditions and under such regulations as the municipality may prescribe under its organic law ...." Sebastian, 34 S.Ct. at 517-18. (Emphasis added.)

Approximately two weeks later, the municipality of Los Angeles passed two ordinances, one providing that "no one should exercise any franchise or privilege to lay or maintain pipes or conduits in the streets for conveying gas, water, etc., without having obtained a grant from the city ...," and the other making it unlawful to make any excavation in the street for any purpose without written permission from the city. Sebastian, 34 S.Ct. at 518. The plaintiff was arrested four months later for violation of this latter ordinance and sued out a writ of habeas corpus alleging that the city ordinances and the 1911 constitutional amendment unconstitutionally impaired the company's contract with the state, in violation of U.S. Const. art. I, Sec. 10.

The facts set forth in the opinion were that the plaintiff's employer, the Economic Gaslight Company, was organized in 1909, so that the constitutional provision (before the 1911 amendment) applied to it; that it acquired a plant and extended its system to serve 3,500 customers; and that its intent was to supply the entire city, and to that end it had constructed a plant capable of serving a much larger area than that served on the date of the 1911 amendment. It was further established that the company had applied to the Board of Public Works for permission to excavate in the streets, in compliance with the city ordinance but was refused this permission until and unless it first obtained a franchise in accordance with the recent constitutional amendment. The company defied the city and proceeded with its expansion, resulting in the plaintiff's arrest.

The court characterized the central issue of the case not as the right of the city to supervise the work or regulate the gas rates but, rather, as "the nature and extent of the right acquired by the company prior to the constitutional amendment ...." Sebastian, 34 S.Ct. at 519. The court noted that the grant embraced "any [qualified] city" in the state, and "when as to such a city the offer was accepted, the grant became as effective as if it had been made specially to the...