KAKE-TV & Radio, Inc. v. City of Wichita

• Decision Date: 08 December 1973
• Docket Number: KAKE-TV,No. 47130,47130
• Parties: AND RADIO, INC., a Corporation, Appellant, v. CITY OF WICHITA, Kansas, a Municipal Corporation, et al., Appellees.
• Court: Kansas Supreme Court

Page 929

516 P.2d 929

213 Kan. 537

KAKE-TV AND RADIO, INC., a Corporation, Appellant, v. CITY OF WICHITA, Kansas, a Municipal Corporation, et al., Appellees.

No. 47130.

Supreme Court of Kansas.

Dec. 8, 1973.

Syllabus by the Court

1. Before an action can be maintained under the provisions of the declaratory judgment statute of this state (K.S.A. 60-1701) an actual, justiciable controversy must exist between adverse contending parties.

2. It is a general rule of law that the right to question the validity of a franchise is in the granting authority, and a franchise is not subject to collateral attack by a private party in the absence of a showing that he has a special interest in the matter separate and distinct from members of the public generally.

3. A party whose only injury or damage will result from lawful competition suffers no legal wrong and has no legal standing to bring an action challenging a franchise granted under a municipal ordinance.

The record is examined in an action challenging a franchise ordinance as invalid and for reasons appearing in the opinion it is held the trial court did not err in sustaining a motion to dismiss the action on the premise that the plaintiff lacked standing to maintain the lawsuit.

Charles E. Jones, Adams, Jones, Robinson & Malone, Chartered, Wichita, argued the cause, and Floyd E. Jensen, Wichita, was with him on the brief for appellant.

Robert C. Foulston, Foulston, Siefkin, Powers & Eberhardt, Wichita, argued the cause, and Rodney R. Hatter, Wichita, was with him on the brief for appellee AirCapital Cablevision, Inc.

H. E. Jones, Wichita, argued the cause, and John Dekker, City Atty., was with him on the brief for appellees City of Wichita, Kansas, The Board of Commissioners and Ralph C. Eberly.

FONTRON, Justice:

This is the third time that the City of Wichita's ongoing dispute over Cable TV (CATV) has appeared before this court. The current action is brought under the declaratory judgment statute (K.S.A. 60-1701) to determine the validity of ordinance 32-325 amending a prior ordinance (30-413) and granting a franchise to AirCapital Cablevision, Inc. to operate a cable television system in Wichita. The trial court sustained a motion to dismiss the lawsuit and the plaintiff, KAKE-TV and Radio, Inc., has appealed.

In the course of this opinion we shall refer to the appellant as KAKE or plaintiff, to the appellees collectively as defendants, to the City of Wichita and its officers as Wichita or City, and to AirCapital Cablevision, Inc., as AirCapital.

It may prove helpful at this point to sketch briefly what transpired before. Wichita's cable TV experiences originated in the passage of ordinance 28-882 which purported to fix and defined the terms, conditions and procedures under which a CATV system could be operated in that city. On June 13, 1970, this court declared ordinance 28-882 void in Community Antenna TV of Wichita, Inc. v. City of Wichita, 205 Kan. 537, 471 P.2d 360, on the premise that cable television service was a commercial enterprise of non-public utility character.

While the appeal in that case was pending in this court, the city commission adopted ordinance 30-413, granting a franchise to AirCapital, which was the successful applicant among the four who bid for the franchise. AirCapital accepted the franchise in writing and, so we are told, filed with the city clerk a surety bond and liability insurance policy as required by the city, and there the matter rested for the time being.

After our opinion went down in the Community Antenna TV appeal the district court enjoined the enforcement of ordinance 28-882. The city thereafter repealed that ordinance but did not repeal ordinance 30-413. Instead the city placed on first and second readings an ordinance, referred to as 'unnumbered', purporting to amend 30-413 and containing many, if not most, of the provisions contained in ordinance 28-882. Community Antenna TV thereupon initiated contempt proceedings against the city commissioners, which the court eventually dismissed. During those proceedings, however, the trial court entered an amended order declaring that parts of the proposed unnumbered new ordinance went beyond the city's power to enact and enjoining the city from enacting those sections. On the city's appeal from that order, this court did a bit of backtracking, after taking a look both at new legislation enacted by the Kansas Legislature, and at new rules promulgated by the Federal Communications Commission. Upon examining the recent legislation and rules we receded from the position taken in the first Community Antenna TV appeal and acknowledged that the furnishing of cable television service was a private business affected with a sufficient public interest to require reasonable municipal regulation to prevent harmful consequences to the public interest. (Community Antenna TV of Wichita v. City of Wichita, 209 Kan. 191, 495 P.2d 939.) We should mention that at the same term of court we decided Capitol Cable, Inc. v. City of Topeka, 209 Kan. 152, 495 P.2d 885, in which we also held that a CATV operation was a private business affected with such a public interest as to require city regulation.

For the the second time the Wichita case was returned to its place of origin, where the city commission promptly introduced and passed ordinance 32-325 around which the present controversy swirls. The cast has changed a bit, with KAKE taking the plaintiff's role, and with new faces on the city commission. But the burden of the plaintiff's plaint has a familiar sound: The city ordinance, now 32-325, is void and its enforcement should be enjoined.

The petition filed by KAKE contains much of what we have set out as background; challenges the validity of the ordinance on several grounds; and alleges that AirCapital's operations under the ordinance would directly compete with plaintiff's business and cause it irreparable injury. The defendants filed a motion to dismiss and for summary judgment and the district court sustained the motion to dismiss. In so doing, the court found that ordinance 32-325, amending 30-413 which granted the franchise to AirCapital was valid on its face; that the court was without authority to substitute its opinion for that of the Board of Commissioners of the City of Wichita or of the Federal Communications Commission; that plaintiff did not have such a peculiar interest in the subject matter of the litigation as to maintain this action; and that defendant's motion, so far as it sought summary judgment, was moot.

In our view, the all-important issue to be determined in this appeal is whether the plaintiff has sufficient status, or standing, to maintain the present lawsuit.

Before an action may be maintained under the declaratory judgment statute (K.S.A. 60-1701), an actual controversy must exist between the proper parties. (Fairfax Drainage District v. City of Kansas City, 190 Kan. 308, 374 P.2d 35.) The necessity of there being adverse contending parties before a justiciable controversy can exist was most recently given emphasis in Johnson County Sports Authority v. Shanahan, 210 Kan. 253, 499 P.2d 1090, an action seeking to compel the secretary of state to correct an error in the final enrolled version of a house bill passed by the legislature, and to render a declaratory judgment construing the bill as corrected. In our opinion we said:

'We also think it important to emphasize that the declaratory relief sought is not appropriate in this case since there is no justiciable controversy between adverse parties. It is of course hornbook law that there must be at least two parties who can assert rights which have developed or will arise against each other before an actual controversy can exist which is justiciable under our declaratory judgment act. (Citing cases.) In this case the defendant secretary of state has no actual interest adverse to the plaintiff in the construction or the validity of House Bill 1715. Any interest she might have is purely academic. In a declaratory judgment action there should be suitable adverse parties so that all issues pertaining to the construction or validity of a statute may properly be raised to avoid multiplicity of litigation.' (p. 259, 499 P.2d at p. 1096.)

KAKE is a radio and television broadcaster operating in Wichita and other areas of this state. Its principal broadcasting studio and facilities are berthed in Wichita. The company beams its programs over the public airways as opposed to the CATV system of capturing from the public airways the broadcasts of such companies as KAKE and others in that category. As we have said before, KAKE alleges that AirCapital's CATV operation will compete with and damage its business. Hence KAKE insists it has such a peculiar and particular interest in the subject matter of the litigation, different from that of citizens generally, as would permit it to maintain this action. The defendants challenge that position and thus the battle is joined.

All parties appear to be in agreement as to the general rule that the right to question the validity of a franchise is in the granting authority and that a franchise is not subject to collateral attack by a private party absent a showing that he has a special interest or suffers some peculiar injury distinct from that of citizens generally. (36 Am.Jur.2d Franchises, § 20, p. 741; § 67, p. 797.) The rule which denies a third party the right to question the validity of a franchise ordinance is stated in 6 McQuillin, Mun.Corp. (3rd Ed.) § 20.20, p. 53:

'A taxpayer or citizen or any third party ordinarily cannot attack the validity of an ordinance granting or relating to a franchise or privilege, at least where the ordinance has been accepted, acted upon, and become a contract. . . .'

In volume 12, § 34.84 of the same work at page 2502 we find the rule further discussed:

'The validity of a franchise granted by a municipal corporation is not...