Gulf Power Co. v. U.S.

• Decision Date: 09 September 1999
• Docket Number: No. 98-2403,98-2403
• Parties: (11th Cir. 1999) GULF POWER COMPANY, Alabama Power Company, an Alabama corporation, et al., Plaintiffs-Appellants, Cross-Appellees, v. UNITED STATES of America, Federal Communications Commission, Defendants-Appellees, Cross-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1324

187 F.3d 1324 (11th Cir. 1999)

GULF POWER COMPANY, Alabama Power Company, an Alabama corporation, et al., Plaintiffs-Appellants, Cross-Appellees, v. UNITED STATES of America, Federal Communications Commission, Defendants-Appellees, Cross-Appellants.

No. 98-2403.

United States Court of Appeals,

Eleventh Circuit.

Sept. 9, 1999.

[Copyrighted Material Omitted] Appeals from the United States District Court for the Northern District of Florida. (No. 3:96cv381/LAC), Lacey Collier, Judge.

Before EDMONDSON and CARNES, Circuit Judges, and WATSON^*, Senior Judge.

CARNES, Circuit Judge:

The plaintiffs-Gulf Power Co., Alabama Power Co., Georgia Power Co., Mississippi Power Co., Ohio Edison Co., Duke Power Co., and Florida Power Corp.-are electric utility companies who brought suit against the United States and the Federal Communications Commission seeking a declaration that the 1996 amendment to the Pole Attachment Act, as codified at 47 U.S.C. 224(f), is facially unconstitutional because it effects a taking of their property without an adequate process for securing just compensation, in violation of the Fifth Amendment. The district court agreed that the amendment effected a taking of property, but granted summary judgment in favor of the defendants after concluding the amendment did not deny the utilities an adequate process for securing just compensation. For the reasons set forth below, we affirm the district court's judgment.

I. BACKGROUND

The plaintiffs, like other electrical utilities in this country, own vast networks of poles, ducts, conduits, and rights-of-way which are used to supply electricity to consumers. Power lines are strung across public and private lands and millions of poles support those lines.¹ Ducts and conduits-usually underground pipes encased in concrete-house electric conductors. Although the utilities were able to negotiate privately with some land-owners to secure rights-of-way, they also received substantial assistance from state governments in acquiring their networks. States routinely delegated to utilities their sovereign power of eminent domain so that they could acquire the needed rights-of-way. In addition, states allowed utilities to locate their network facilities, e.g., poles, on public rights-of-way.

As with electric utilities, cable television companies must have a physical carrier for their cables in order to supply television signals to their customers. Because "underground installation of the necessary cables is impossible or impracticable[,][u]tility company poles provide ... virtually the only practical physical medium for the installation of television cables." FCC v. Florida Power Corp., 480 U.S. 245, 247, 107 S.Ct. 1107, 1109, 94 L.Ed.2d 282 (1987). With the advent of cable television in the 1950's, it became common practice for cable companies to lease access to utility companies' poles.

Over time, however, cable companies grew upset with the access rates and complained to Congress that utilities "were exploiting their monopoly position by engaging in widespread overcharging." Id. at 247, 107 S.Ct. at 1109-10. Congress responded in 1978 by enacting the Pole Attachments Act, which was codified at 47 U.S.C. 224. In that act, Congress empowered the Federal Communications Commission ("FCC"), in those states in which access rates were not already regulated, to determine "just and reasonable" rates a utility could charge cable companies for access to its poles, ducts, conduits, and rights-of-way. See 47 U.S.C. 224(b). Congress restricted the FCC, however, to setting a rate within a statutorily defined range of minimum to maximum rates. See 47 U.S.C. 224(d)(1).² Significantly, the Pole Attachments Act, as originally enacted in 1978, did not require a utility to provide cable companies access to its property. Instead, it provided that if a utility voluntarily chose to provide access, the rate charged for that access was subject to FCC regulation.

Things stayed that way until 1996, when telecommunication carriers joined cable companies in demanding a right of access to utilities' networks of poles, ducts, conduits, and rights-of-way. Telecommunication carriers were interested in using wire communications to carry their signals and, like cable companies, needed a physical carrier for their wires. Congress responded to these demands by amending the Pole Attachments Act as part of the Telecommunications Act of 1996. For the purposes of this case, the most significant amendment is a mandatory access provision which provides that a "utility shall provide a cable television system or any telecommunications carrier with nondiscriminatory access to any pole, duct, conduit, or right-of-way owned or controlled by it." 47 U.S.C. 224(f)(1). The only exceptions to a utility's mandatory obligation to provide access are where there is insufficient capacity or some safety, reliability, or other engineering problem. See 47 U.S.C. 224(f)(2).

Although Congress amended the Pole Attachments Act to require utilities to provide access to their property, it left intact the FCC's authority to determine the compensation a utility is entitled to receive for providing that access. Hence, as before, the FCC determines the compensation a utility may receive for providing access by setting a "just and reasonable" rate within the range of minimum to maximum rates Congress set forth in the Act³; 47 U.S.C. 224(d) describes the range of rates for cable companies' access, while 47 U.S.C. 224(e) describes the range of rates for telecommunication carriers' access.

The FCC's rate order, however, is not final. If a utility believes the rate set by the FCC fails to provide adequate compensation, it may seek relief by appealing directly to a United States Court of Appeals. See 47 U.S.C. 402(a). Among other things, the court of appeals is empowered to enter "a judgment determining the validity of, and enjoining, setting aside, or suspending, in whole or in part" the FCC's order. 28 U.S.C. 2349(a).

As mentioned earlier, the plaintiffs are seven electric utility companies. Each falls within the Act's definition of a "utility"⁴ and is therefore required to provide cable companies and telecommunication carriers access to its poles, ducts, conduits, and rights-of-way under the Act's mandatory access provision. See 47 U.S.C. 224(f). The plaintiffs brought this suit in federal district court against the United States and the FCC (the "defendants") seeking a declaration that the Act's mandatory access provision is facially unconstitutional because it constitutes a taking of property without an adequate process for securing just compensation, as required by the Fifth Amendment. They also sought to permanently enjoin and restrain the defendants from enforcing the mandatory access provision.

After the plaintiffs filed suit, the Association for Legal Telecommunication Services, which is a non-profit, national trade association representing telecommunications companies, and American Communication Services, which is a telecommunications service provider, intervened as party defendants. In addition, several national and state cable television associations participated as amici curiae supporting the defendants.

The plaintiffs, defendants, and intervenors all moved for summary judgment. The district court agreed with the plaintiffs that the Act's mandatory access provision effected a taking of property under the Fifth Amendment. However, it concluded the plaintiffs' facial challenge failed because the Act provided an adequate process for securing just compensation for that taking. Accordingly, the district court denied the plaintiffs' motion for summary judgment but granted the defendants' and intervenors' motions for summary judgment. The plaintiffs appealed, contending that the district court erred in not finding that the Act's mandatory access provision was unconstitutional. The defendants cross-appealed the court's determination that the Act's mandatory access provision effected a taking of property.

II. DISCUSSION

The plaintiffs' contention that the Act's mandatory access provision is facially unconstitutional requires us to address the following two issues. First, does the Act's mandatory access provision effect a taking of property? Second, if it does, is an adequate process available to a utility to secure just compensation for that taking? We address each issue in turn, applying a de novo standard of review. See, e.g., Rodriguez ex. rel. Rodriguez v. United States, 169 F.3d 1342, 1346 (11th Cir.1999) (de novo standard applies to determination of a statute's constitutionality). In addition, we note that because the plaintiffs are bringing a facial challenge to the Act, they must "establish that no set of circumstances exists under which the Act would be valid." United States v. Salerno, 481 U.S. 739, 745, 107 S.Ct. 2095, 2100, 95 L.Ed.2d 697 (1987) (emphasis added). See also New York State Club Ass'n, Inc. v. City of New York, 487 U.S. 1, 11, 108 S.Ct. 2225, 2233, 101 L.Ed.2d 1 (1988) ("to prevail on a facial attack the plaintiff must demonstrate that the challenged law ... could never be applied in a valid manner.") (quotation and citation omitted); Jacobs v. The Florida Bar, 50 F.3d 901, 906 n. 20 (11th Cir.1995) ("[w]hen a plaintiff attacks a law facially, the plaintiff bears the burden of proving that the law could never be constitutionally applied.")

A. THE ACT'S MANDATORY ACCESS PROVISION EFFECTS A TAKING OF PROPERTY

In Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982), the Supreme Court considered whether a statute which required landlords to permit permanent, physical occupation of their property by cable companies constituted a taking. The Court held that it did and, in doing so, announced the following takings rule: "[A] permanent physical occupation authorized by government is a taking without regard to the public interests that it may...