Community Communications Co. v. City of Boulder, Civ. A. No. 80-M-62.

• Decision Date: 05 September 1980
• Docket Number: Civ. A. No. 80-M-62.
• Citation: 496 F. Supp. 823
• Parties: COMMUNITY COMMUNICATIONS COMPANY, INC., Plaintiff, v. CITY OF BOULDER et al., Defendants.
• Court: U.S. District Court — District of Colorado

496 F. Supp. 823

COMMUNITY COMMUNICATIONS COMPANY, INC., Plaintiff, v. CITY OF BOULDER et al., Defendants.

Civ. A. No. 80-M-62.

United States District Court, D. Colorado.

September 5, 1980.

Stephen M. Brett, Robert E. Youle, Sherman & Howard, Denver, Colo., Harold R. Farrow, Thomas A. Seaton, H. Wayne Goodroe, Farrow, Schildhause & Wilson, Oakland, Cal., for plaintiff.

Joseph N. de Raismes, Alan E. Boles, Jr., Boulder, Colo., for City of Boulder.

John A. Purvis, Steve C. Briggs, Hutchinson, Black, Hill, Buchanan & Cook, Boulder, Colo., for other defendants.

MEMORANDUM OPINION AND ORDER

MATSCH, District Judge.

For a second time I have found it necessary to use the power of a preliminary injunction to protect Community Communications Company, Inc. (CCC) from irrevocable injury pending the final resolution of the dispute between the plaintiff and the City of Boulder. In an earlier Memorandum Opinion and Order, entered on March 17, 1980, and reported as Community Communications Company, Inc. v. City of Boulder, 485 F.Supp. 1035 (D.Colo.1980) I described the circumstances giving cause for the complaint which first brought the parties into this Court. As there indicated, on December 19, 1979 the Boulder City Council passed an emergency ordinance which restricted the rights granted in a 1964 ordinance by prohibiting CCC from extending service to new customers for three months. The purpose of that moratorium was to limit the growth of the business of CCC while the City sought to negotiate with CCC, and other companies, for a new contract to service the City's residents in a manner which the City Council might consider appropriate. In the view of the City Council the presence of CCC operating a community antennae service in a small area of the city created such a threat of a monopolistic advantage as to require that restriction to permit other companies to come in with competing proposals.

In issuing that first injunction, I recognized that the period of limitation was about to expire without accomplishment of the City's objectives and that the very fluid facts of the case were still developing. Accordingly, while I decided that the antitrust implications controlled the question of a preliminary order, I also sought to caution the City about the possibilities of First Amendment involvement and other questions of possible constitutional concern.

The moratorium had already expired when the City's appeal of that injunctive order was argued to a three-judge panel of the Tenth Circuit Court of Appeals. Acting entirely on its own motion, and without any explanation, that panel went beyond the moratorium ordinance and entered its own order preventing CCC from expanding its service area until further order of the appellate court. On May 28, 1980, an opinion for two judges of the panel was filed, directing the reversal of my order, remanding the case, and terminating the stay order. It was further noted that Judge Markey¹ would be submitting a separate opinion.

He filed a vigorous dissent on July 1, 1980. On that same day, the Boulder City Council took new action against the plaintiff by passing Ordinance No. 4515 on first reading. The Council had earlier enacted emergency ordinances on June 3 and June 24, providing for additional periods of temporary restrictions of the plaintiff's expansion plans while the Council attempted to determine its position on the future of cable television in that community. I denied new motions for temporary restraining orders during that time, to enable the Boulder City Council to go forward with its legislative process. A motion for reconsideration filed in the Court of Appeals by CCC on June 25, 1980 has not yet been determined. Accordingly, I have not yet received a mandate from the Court of Appeals.

The questions presented by Ordinance No. 4515 are far different from what was before me earlier and now before the Court of Appeals. Because time is a critical element, it has been necessary to go forward on the plaintiff's amended complaint and second motion for preliminary injunction without waiting for further action by the appellate court. Additionally, the City also filed its own motion for a preliminary order to prevent the plaintiff from violating the restrictions of the new ordinance.

Before turning to the questions presented, it is appropriate again to recognize that the case is not yet presented on the merits. While the evidence before me is extensive, and while the City has presented what purports to be the complete legislative record, I do not now know what further proof the plaintiff may submit to establish conspiratorial conduct among the named defendants.

Ordinance No. 4515, finally adopted on July 22, 1980, with an effective date of August 21, 1980, places a permanent geographic limitation on the plaintiff's pre-existing contract right to establish and operate a cable television communications system throughout the City of Boulder. More particularly, that right has now been reduced to a permission to provide service to a prescribed area encompassing only one-third of the City's residents. That area includes the portion of the city in which CCC has historically functioned as a community antennae system, plus the area it had expanded into prior to July 1, 1980.

The impasse which has developed between CCC and Boulder must be broken by granting one of their motions for a preliminary injunction. Thus, either the plaintiff must be prohibited from violating or the City must be prevented from enforcing Ordinance No. 4515. Recognizing the complexity of the legal issues and the absence of controlling precedent, an appropriate analysis should begin with a comparison of the competing claims of irreparable injury in the absence of injunctive relief.

The City's claim is that it is seeking advanced, state-of-the-art communications services for its citizens and that while other companies have expressed an interest in providing such services on terms to be negotiated, all of them have declined to proceed unless CCC is excluded from the market area. Thus, it is argued that unless the plaintiff is prohibited from expanding into the area to be made available to other companies, the negotiating process will be seriously disrupted.

Conversely, CCC contends that the City's revocation of the right to conduct business in two-thirds of the city, simply to benefit other companies, constitutes an unlawful restraint of trade in violation of Section 1 of the Sherman Act; that it infringes rights protected by the First Amendment; that it denies equal protection of the law; that it constitutes an inverse condemnation of the plaintiff's property; and that it otherwise is an unconstitutional infringement of contractual and property rights.

The test for whether irreparable injury exists, requiring the equitable remedy of injunction, is the inadequacy of the recognized legal remedy if the party seeking the preliminary injunction ultimately prevails. In this case, with conflicting claims of such irreparable injury, the question becomes one of the comparative capacity of the Court to right the wrong to the party who finally wins on the merits.

If enforcement of the ordinance is now enjoined, but the City's position is later determined to be correct, the only apparent loss is the time it may take to complete the negotiating process with other companies, free from the inhibiting influences of the plaintiff's market position and this lawsuit. The mere stringing of cables is not a significant concern because this Court obviously has the authority to require the plaintiff to remove those cables and to make any necessary adjustments with customers who are later determined to be outside of CCC's authorized service area.

Alternatively, if the plaintiff is compelled to abide by an ordinance which is later invalidated, the foreseeable injuries may, by their very nature, be irreversible. To the extent that First Amendment rights are infringed, irreparable injury is presumed. Elrod v. Burns, 427 U.S. 347, 373, 96 S.Ct. 2673, 2689, 49 L.Ed.2d 547 (1976) (Brennan, J.); Westinghouse Broadcasting Co. v. Dukakis, 409 F.Supp. 895 (D.Mass. 1976); Borreca v. Fasi, 369 F.Supp. 906 (D.Haw.1974). Similarly, injunctions are often granted in favor of private antitrust plaintiffs when there is a threat of injury and the prevailing public interest in competitive market conditions will be served. Zenith Corp. v. Hazeltine, 395 U.S. 100, 89 S.Ct. 1562, 23 L.Ed.2d 129 (1969).

Finally, in considering the public interest, there is the apparent difficulty of measuring the plaintiff's economic loss in money damages coupled with the devastating impact of a large judgment on the defendant municipality and its citizens. And there should be concern for those persons who may want to subscribe to the services provided by CCC while this case is pending. (Exhibit I-2e, pp. 1540-42). Accordingly, it is my judgment that the relative risks of irreversible injury to the parties, as well as the public interest, compel the conclusion that enforcement of the ordinance must now be enjoined.

The questions of law which are presented in this case are difficult and novel. In ruling on a motion for a preliminary injunction, the probabilities of final success on the merits must be considered; but "it is not necessary that the plaintiff's right to a final decision, after a trial, be absolutely certain. * * * (I)t will ordinarily be enough that the plaintiff has raised questions going to the merits so serious, substantial, difficult and doubtful, as to make them a fair ground for litigation and thus for more deliberate investigation." Continental Oil Co. v. Frontier Refining Co., 338 F.2d 780, 781-82 (10th Cir. 1964). There is no doubt in this case that plaintiff has met such a standard and is entitled to injunctive relief from enforcement of the new ordinance.

The facts now before me are markedly different from those involved in the preliminary...