Level 3 Communications v. City of St. Louis, Mo
| Decision Date | 19 December 2005 |
| Docket Number | No. 4:04-CV-871 CAS.,No. 4:04-CV-1046 CAS.,4:04-CV-871 CAS.,4:04-CV-1046 CAS. |
| Citation | 405 F.Supp.2d 1047 |
| Parties | LEVEL 3 COMMUNICATIONS, LLC, Plaintiff, v. CITY OF ST. LOUIS, MISSOURI, Defendant. City of St. Louis, Missouri, Plaintiff, v. Level 3 Communications, LLC Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
Anthony T. Pierce, Tobias E. Zimmerman, Akin and Gump, Washington, DC, Andrew Rothschild, Theresa A. Phelps, Thomas P. Berra, Jr., Lewis and Rice, St. Louis, MO, for Plaintiff, Level 3 Communications, LLC.
Kenneth A. Brunetti, Miller & Van Eaton, LLP, San Francisco, CA, Daniel J. Emerson, Edward J. Hanlon, St. Louis City Counselor, St. Louis, MO, for Defendant, City of St. Louis, Missouri.
Plaintiff Level 3 Communications, LLC ("Level 3") filed suit against the City of St. Louis ("City") seeking a declaration that the terms, restrictions, obligations and fees established by the Communications Transmission System License Agreement ("License Agreement") between Level 3 and the City violates the Federal Telecommunications Act of 1996, ("FTA" or "Act"), 47 U.S.C. § 253, 42 U.S.C. § 1983, and state law. The City then filed a declaratory judgment action against Level 3 asserting that the compensation provisions of the License Agreement are valid and binding under state and City law, and that Level 3 must comply with that provision as long as it occupies the City's rights-of-ways.
The Court consolidated the cases into the above-styled case, and the matter is now before the Court on cross-motions for summary judgment. The motions are fully briefed. The Court will grant the motions in part and deny the motions in part for the reasons set forth below.
On March 8, 1991, the City enacted Chapter 23.64 ("chapter 23.64" or "Ordinance") for the purpose of regulating the process and procedures by which an entity seeking to construct, operate, use, replace, reconstruct or maintain telecommunications facilities that would occupy the streets, public ways and/or public places within the City. Chapter 23.64 requires all such entities to enter into a license agreement with the City of St. Louis Board of Public Service ("BPS"), and that such licenses expressly incorporate the requirements of Chapter 23.64 by reference. See 23.64.040. On April 13, 1999, Level 3 entered into the License Agreement with the City. The License Agreement contains several compensation provisions. The License Agreement incorporates by reference the terms of Chapter 23.64.
Chapter 23.64 requires in pertinent part:
A. The licensee shall submit an application for licensure to include, the name, address and telephone number of the applicant; the legal status of the applicant; the name address and telephone number of a responsible person whom the city may notify or contact at any time concerning the communications transmission system; an engineering site plan showing the proposed location of the communications transmission system, including any manholes or overhead poles, the size, type and proposed depth of any conduit or other enclosures, and the relationship of the system to all existing streets, sidewalks, poles, utilities, and other improvements within the public streets; minimal technical standards which the licensee proposes to follow in construction of the licensed system; diameter and projected length of the communication aerial or conduit; and any additional information which the Agency may require, subject to the approval of the Board of Public Service, see, 23.64.050(A) — (B);
B. The licensee shall submit an application to amend the license whenever any licensee wishes to expand its facilities, see, 23.64.050(D);
C. The licensee shall obtain any permits required to execute such construction required under City ordinances or regulations issued by any of the City's agencies or departments.
D. The license agreement shall specify that the Licensee shall provide and install in a common trench with the conduit of the Licensee a municipal service conduit(s) if requested and specified by the Board of Public Service, see, 23.64.80(G);
. . . . .
The Agency shall reduce subsequent license charges due under the license by an amount equal to the additional charge of the Licensee of the conduit, pull boxes, vaults, other materials and additional construction work, other than the cost of the trenching itself, incurred as a result of construction of the municipal service conduit, see, 23.64.80(G);
E. To maintain a performance bond for the benefit of the City, see, 23.64.120(A);
F. To obtain and maintain a liability insurance policy of at least $500,000 per incident with the city named as an additional insured party, see, 23.64.130(C);
G. To indemnify the City for all claims, including damages caused by or arising out of any act or negligent omission of the City or its agents, "arising out of or in any way connected with the installation use, operation, maintenance or condition of the Licensee's communications transmission system," see, 23.64.130(B);
H. To use only contractors who have been licensed by the City in constructing, installing, or maintaining private network facilities installed under the license, see 23.64.140(D);
I. The Licensee keep accurate, complete and current maps and records of its system and facilities which occupy the streets, public ways and public places within the City and shall furnish as soon as they are available three (3) complete copies of such maps and records to the agency, see 23.150(I);
J. A license issued pursuant hereto shall not be transferred without the prior written authorization of the Board of Public Service, see 23.64.170.
In addition, the Ordinance allows the City:
A. To revoke a license and cancel the underlying license agreement if the licensee violates the terms of that agreement or this chapter, see, 23.64.080(C); B. To establish minimum technical standards and specifications which licensees must adhere to in installing their network facilities, 23.64.140(A).
In addition to the above terms and requirements, chapter 23.64 establishes an annual license fee that Level 3 must pay to the City. The license charge is calculated on the basis of the number of linear feet of conduit installed within the City, and the number of conduits within each linear-foot that carry live (activated) fiber optic cable. In the first year of the License Agreement, Level 3 paid license charges that ranged from $1.72 to $3.45 per linear foot, depending on the number of Level 3's conduits that were in use. Each year the license charges are recalculated based on the amount of Level 3's conduit in use and are automatically adjusted by the cost of inflation, as measured by the Consumer Price Index. The fee varies depending on the type of installation — aboveground or underground — and the diameter of the installed conduit. See 23.64.090.
In addition to the conditions imposed by Chapter 23.64, which are incorporated into the License Agreement by reference, the License Agreement provides:
A. Level 3's system shall be used as a "competitive access provider" telecommunications system only, see, ¶ 2(B);
B. Level 3 shall obtain separate permits or authorizations required under any City ordinance or regulation for the construction, installation, operation, maintenance or use of its network facilities, see, ¶ 7(A);
C. Level 3 must provide and maintain a performance bond of $100,000 throughout construction and installation of its network facilities, conditioned on Level 3's faithful performance of all obligations under the License Agreement. Following construction and/or installation, Level 3 must provide and maintain a performance bond in the amount of $25,000, conditioned on Level 3's faithful performance of all obligations under the License Agreement. Such bonds to be solely for the benefit of the City and in a form approved by the City Counselor, see, ¶ 9(A);
D. Level 3 must maintain, during the term of the License Agreement, continuous uninterrupted general insurance under a policy or policies which provide coverage on all facilities installed, constructed, maintained, operated or used by or on behalf of Level 3 and on all of the activities of Level 3 and its employees or contractors within the geographic area covered by the License Agreement. Such policy or policies must provide no less than $1,000,000 per person and $1,000,000 per incident personal injury liability coverage and $1,000,000 property damage liability coverage, and must name the City as an additional insured party, see, ¶ 8(D);
E. Level 3 must provide the City with copies of all tariffs or other documents filed with the Missouri Public Service Commission or the Federal Communications Commission which pertain to the City of St. Louis or the License Agreement, and any other documents that the City might request, see, ¶ 12;
F. Level 3 obtain prior written consent of the City before any assignment or transfer of ownership in the License Agreement unless Level 3 remains solely responsible for installing, maintaining, replacing and removing all facilities in the Project, see, ¶ 13.
On or about July 28, 2003, Level 3 stopped paying the fees due under the License Agreement and stated that it would not pay the future fees required under the License Agreement.
The City claims the Level 3 owes it damages through and including the date of the Agreement, the period from July 1 2003 through June 30, 2004, plus penalty and interest charges which continue to accrue.
In support of its motion for summary judgment, Level 3 argues the City has impermissibly impaired the ability of telecommunications companies, like itself, to provide interstate and intrastate telecommunications services. Level 3 argues the burdens imposed by the City, including an excessive non-cost based fee for access to the public rights of way, far exceed the...
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