N.Y. State Telecomms. Ass'n v. James, 2:21-cv-2389 (DRH) (AKT)

CourtUnited States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
Writing for the CourtHURLEY, Senior District Judge
PartiesNEW YORK STATE TELECOMMUNICATIONS ASSOCIATION, INC., CTIA - THE WIRELESS ASSOCIATION, ACA CONNECTS - AMERICA'S COMMUNICATIONS ASSOCIATION, USTELECOM - THE BROADBAND ASSOCIATION, NTCA - THE RURAL BROADBAND ASSOCIATION, and SATELLITE BROADCASTING & COMMUNICATIONS ASSOCIATION, on behalf of their respective members, Plaintiffs, v. LETITIA A. JAMES, in her official capacity as the Attorney General of New York, Defendant.
Decision Date11 June 2021
Docket Number2:21-cv-2389 (DRH) (AKT)

NEW YORK STATE TELECOMMUNICATIONS ASSOCIATION, INC.,
CTIA - THE WIRELESS ASSOCIATION, ACA CONNECTS - AMERICA'S COMMUNICATIONS ASSOCIATION,
USTELECOM - THE BROADBAND ASSOCIATION, NTCA - THE RURAL BROADBAND ASSOCIATION, and
SATELLITE BROADCASTING & COMMUNICATIONS ASSOCIATION, on
behalf of their respective members, Plaintiffs,
v.
LETITIA A. JAMES, in her official capacity as
the Attorney General of New York, Defendant.

2:21-cv-2389 (DRH) (AKT)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

June 11, 2021


MEMORANDUM AND ORDER

APPEARANCES

MOLOLAMKEN LLP
Attorneys for Plaintiff ACA Connects - America's Communications Association
600 New Hampshire Ave. N.W., Suite 500
Washington, D.C. 20037
By: Jeffrey A. Lamken, Esq.
Rayiner I. Hashem, Esq.

KELLOGG, HANSEN, TODD, FIGEL & FREDERICK, P.L.L.C.
Attorneys for Plaintiffs New York State Telecommunications Association, Inc.,
CTIA - The Wireless Association, USTelecom - The Broadband Association,
and NTCA - The Rural Broadband Association
1615 M Street, N.W., Suite 400
Washington, D.C. 20036
By: Scott H. Angstreich, Esq.
Joseph S. Hall, Esq.
Andrew E. Goldsmith, Esq.

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HARRIS, WILTSHIRE & GRANNIS LLP
Attorneys for Plaintiff Satellite Broadcasting & Communications Association
1919 M Street, N.W.
The Eighth Floor
Washington, D.C. 20036
By: Jared Marx, Esq.
Michael Nilsson, Esq.

LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK
Attorney for Defendant Letitia A. James
300 Motor Parkway, Suite 230
Hauppauge, N.Y. 11788
By: Patricia M. Hingerton, Esq.
Susan M. Connolly, Esq.

HURLEY, Senior District Judge:

INTRODUCTION

On May 6, 2021, the captioned Plaintiffs, a group of trade associations whose members provide broadband internet service to New Yorkers, moved this Court under Federal Rule of Civil Procedure 65(a) for a preliminary injunction barring New York State Attorney General Letitia A. James from enforcing the Affordable Broadband Act, N.Y. Gen. Bus. Law § 399-zzzzz, which would require them by June 15, 2021 to offer qualifying low-income costumers high-speed broadband service at or below certain price ceilings. For the reasons set forth below, Plaintiffs' motion is GRANTED.

BACKGROUND

Internet access has transcended beyond mere luxury to modern necessity. So integrated has the Internet become with contemporary American life that our nation adapted to—if not survived—the COVID-19 pandemic by relying on how easily it

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facilitates access to our fundamental needs: e.g., healthcare ("telehealth"), education ("remote learning"), employment ("work from home"), camaraderie ("social networking"). Def. Mem. in Opp. at 5 [DE 19] ("Def. Opp."). But the Internet's promise of access is only as promising as its accessibility - which depends in part on whether individuals can afford it.

The New York State Affordable Broadband Act's (the "ABA") stated purpose is to ensure all New Yorkers have access to affordable Internet. Signed into law April 16, 2021, the ABA regulates every New York "broadband service," defined as

[a] mass-market retail service that provides the capability to transmit data to and receive data from all or substantially all internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service provided by a wireline, fixed wireless or satellite service provider, . . . [excluding] dial-up service.

N.Y. Gen. Bus. Law § 399-zzzzz(1). The ABA covers every broadband service provider operating in New York except those serving "no more than twenty-thousand households" whose compliance, as determined by the New York State Public Service Commission (the "PSC"), "would result in unreasonable or unsustainable financial impact." Id. § 399-zzzzz(5). Plaintiffs are trade associations whose members provide "wireline, fixed wireless, or satellite broadband service"; they are "broadband service" providers. Compl. ¶¶ 12-18, 26.

The ABA mandates such providers offer, by June 15, 2021, all qualifying low-income households at least two Internet access plans: (i) download speeds of at least 25 megabits-per-second at no more than $15-per-month, or (ii) download speeds of at least 200 megabits-per-second at no more than $20-per-month. N.Y. Gen. Bus. Law §§ 399-zzzzz(2)-(4). A household qualifies if it:

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(a) is eligible for free or reduced-priced lunch through the National School Lunch Program; or (b) is eligible for, or receiving the supplemental nutrition assistance program benefits; or (c) is eligible for, or receiving Medicaid benefits; or (d) is eligible for, or enrolled in senior citizen rent increase exemption; or (e) is eligible for, or enrolled in disability rent increase exemption; or (f) is a recipient of an affordability benefit from a utility.

Id. § 399-zzzzz(2). These qualifications cover approximately "[7] million New Yorkers and 2.7 million households,"1 the latter of which exceeds one-third of all New York State households.2

Providers may raise prices only according to a statutory formula and only once every five years (for the $15 monthly plan) or two years (for the $20 monthly plan). Id. §§ 399-zzzzz(3)-(4). These Internet plans must be offered "on the same terms and conditions . . . as for the regularly priced offerings for similar service[s]" and on a standalone basis, i.e., separate from any "bundled cable and/or phone services." Id. §§ 399-zzzzz(3), (5). Providers must "make all commercially reasonable efforts to promote and advertise" the plans. Id. § 399-zzzzz(7). The ABA empowers the New York State Attorney General, Defendant Letitia A. James, to seek injunctive relief against and civil penalties up to a $1000 per violation from any noncompliant providers. Id. § 399-zzzzz(10).

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Plaintiffs brought this action on April 30, 2021, [DE 1], and on May 6, 2021 moved for a preliminary injunction barring Defendant from enforcing and giving effect to the ABA, Pls. Mem. in Support [DE 16] ("Pls. Mem."). Declarations from six executives at Plaintiffs' member organizations accompany Plaintiffs' briefs. See Declaration of Jim Baase ("Empire Tele. Decl."), Ex A. to Pls. Mem. [DE 16-1]; Declaration of Matthew Kramer Coakley, ("Verizon Decl."), Ex. B. to Pls. Mem. [DE 16-2]; Declaration of Glen Faulkner ("Heart of the Catskills Decl."), Ex. C to Pls. Mem. [DE 16-3]; Declaration of Jennifer Manner ("Hughes Network Decl."), Ex. D to Pls. Mem. [DE 16-4]; Declaration of Jason Miller ("Delhi Tele. Decl."), Ex. E to Pls. Mem. [DE 16-5]; Declaration of Mark T. Webster ("Champlain Tele. Decl."), Ex. F to Pls. Mem. [DE 16-6].

Defendant opposed on May 17, 2021 and advised that the PSC scheduled a hearing for May 19, 2021 to address pending exemption applications. Def. Opp. at 10. At the hearing, the PSC granted "temporary exemption[s] to allow for the orderly review and evaluation of the exemption requests" to several companies, four of whose executives submitted declarations in support of Plaintiffs' motion. Order Granting Temporary Exemptions attached to Def.'s May 20, 2021 Ltr. [DE 21] ("PSC Order"). The PSC issued a "Notice Soliciting Comment" on May 28, 2021, inviting public comment "on the criteria and factors that may be considered by the [PSC] in evaluating" the ABA's "unreasonable or unsustainable financial impact" exemption criteria. Ex. B to Pls. June 1, 2021 Ltr. [DE 24-2].

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Plaintiffs submitted their Reply brief on May 21, 2021. Pls. Reply in Support [DE 23] ("Pls. Reply"). Oral argument was held on June 3, 2021.

DISCUSSION

"To obtain a preliminary injunction against government enforcement of a statute, [a plaintiff] must establish (1) that it is likely to succeed on the merits, (2) that it is likely to suffer irreparable harm if the injunction is not granted, (3) that the balance of the equities tips in its favor, and (4) that the injunction serves the public interest." SAM Party of New York v. Kosinski, 987 F.3d 267, 273-74 (2d Cir. 2021).

First, the Court will address irreparable injury. "[T]he moving party must first demonstrate that such injury is likely before the other requirements for the issuance of an injunction will be considered," Grand River Enter. Six Nations, Ltd. v. Pryor, 481 F.3d 60, 66 (2d Cir. 2007), for imminent, irreparable injury is "the single most important prerequisite for the issuance of a preliminary injunction." Yang v. Kosinski, 960 F.3d 119, 128 & n.32 (2d Cir. 2020)

Second, the Court analyzes Plaintiffs' likelihood of success on the merits, despite Plaintiffs' availment also of the alternative "serious questions" standard. Pls. Mem. at 6-7, 24. The Second Circuit "ha[s] repeatedly stated that the serious-questions standard cannot be used to preliminarily enjoin governmental action," Trump v. Deutsche Bank AG, 943 F.3d 627, 637 (2d Cir. 2019), rev'd on other grounds sub nom., Trump v. Mazars USA, LLP, 140 S.Ct. 2019, 207 L.Ed.2d 951 (2020), and the ABA is the product of New York State's legislative process, see Able v. United

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States, 44 F.3d 128, 131 (2d Cir. 1995) (instructing not to apply serious-questions standard to "governmental policies implemented through legislation or regulations developed through presumptively reasoned democratic processes [because they] are entitled to a higher degree of deference and should not be enjoined lightly").

Third, the Court balances the equities and weighs the public interest. Pharaohs GC, Inc. v. U.S. Small Bus. Admin., 990 F.3d 217, 225 (2d Cir. 2021) (quoting Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008)). The Court finishes by addressing Federal Rule of Civil Procedure 65(c).

I. Imminent, Irreparable Harm

In the context of a preliminary injunction motion, irreparable harm must be "actual and imminent," not "remote," not "speculative," and not capable of remedy should "a court wait[] until the end of trial to resolve" the matter. Grand River Enter. Six Nations, Ltd., 481 F.3d at 66. If redressable through monetary damages, an injury ordinarily will not justify preliminary injunctive...

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