Pacific Bell Telephone Co. v. City of Walnut Creek
| Decision Date | 13 April 2006 |
| Docket Number | No. C-05-4723 MMC.,C-05-4723 MMC. |
| Court | U.S. District Court — Northern District of California |
| Parties | PACIFIC BELL TELEPHONE COPANY, a California corporation doing business as AT & T California, Plaintiff and Petitioner v. THE CITY OF WALNUT CREEK and The City Council of the City of Walnut Creek, Defendants and Respondents. |
Robert S. Metzger, Gibson, Dunn & Crutcher LLP, Los Angeles, CA, Ronald E. Van Buskirk, Christopher R. Ball, Pillsbury Winthrop Shaw Pittman LLP, Bobby C. Lawyer, SBC West Legal Department, San Francisco, CA, for Plaintiff and Petitioner.
Paul Valle-Riestra, Senior Assistant City Attorney, Walnut Creek, CA, Kirk Edward Trost, Miller, Owen & Trost, Sacramento, CA, for Defendants and Respondents.
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS AND/OR TO ABSTAIN
Before the Court is the motion filed February 27, 2006 by defendants City of Walnut Creek and the City Council of the City of Walnut Creek (jointly, "City") seeking dismissal, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, and/or abstention. Plaintiff Pacific Bell Telephone Company, doing business as AT & T California ("AT & T") has filed opposition to the motion; the City has filed a reply. Having considered the papers filed in support of and in opposition to the motion, and the arguments of counsel at the April 7, 2006 hearing, the Court rules as follows.
In October 2004, AT & T announced plans to implement a project, titled "Project Lightspeed," to upgrade its telecommunications network. (See Compl. ¶ 20.) AT & T alleges the upgrades under Project Lightspeed will allow it to provide new and improved services to its customers, including "Internet Protocol (`IP')-based video services."
On June 7, 2005, AT & T submitted to the City an application for an encroachment permit to perform upgrades to its network under Project Lightspeed. (See id. ¶ 24.) In particular, AT & T sought permission to perform "line conditioning" work to "remove certain bridge taps on existing aerial twisted-pair copper lines along a one-block stretch of Walnut Avenue." (See id. ¶¶ 23-24.) On June 21, 2005, the City granted Permit No. EP05-0434 ("Permit") to AT & T, on the condition ("Franchise Condition") that: "[lol]y accepting th[e] permit, [AT & T] agrees on behalf of itself and its affiliates that it will not provide video programming . . . over facilities located with [sic] the City's rights-of-way to subscribers within the City without first obtaining a cable franchise or an open video system franchise from the City." (See id. ¶ 26.)
On July 1, 2005, AT & T appealed the Franchise Condition to the City Council. (See id. ¶ 31.) On October 18, 2005, AT & T's appeal was denied. (See id. ¶ 34.)
AT & T alleges the City has informed AT & T that the Franchise Condition will "be attached to any and all permits for any Project Lightspeed-related work as determined by the City, in its discretion, on a case-by-case basis." (See id. 1133.) As a result, AT & T alleges, AT & T has halted its upgrade activities that require permits in Walnut Creek. (See id.)
On November 17, 2005, AT & T filed the instant action, alleging the Franchise Condition violates federal and state law. In its first claim for relief, AT & T seeks a declaratory judgment that the Franchise Condition is preempted by the federal Telecommunications Act of 1996 ("TCA"), and, in particular, by 47 U.S.C. § 253. (See Compl. ¶¶ 36-43.) Section 253 provides: "No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service." See 47 U.S.C. § 253. AT & T alleges that the Franchise Condition either prohibits, or has the effect of prohibiting, the provision of the telecommunications services AT & T intends to provide. (See Compl. ¶ 39.)
In its second claim for relief, AT & T seeks a declaratory judgment that the Franchise Condition is preempted by the federal Communications Act of 1934 ("Cable Act"), and in particular by 47 U.S.C. § 541(b)(1). (See Compl. ¶¶ 1(d), 44-55.) Under 47 U.S.C. § 541(b)(1), subject to specified exceptions, "a cable operator may not provide cable service without a franchise." See 47 U.S.C. § 541(b)(1). AT & T contends that, under the Cable Act, cable franchise requirements apply only to cable operators that provide cable services over cable systems; AT & T further contends it is not a cable operator within the meaning of the Cable Act and that, consequently, it is not required to obtain a cable franchise prior to offering video services under Project Lightspeed. (See Compl. ¶¶ 47-50.)
In its third claim for relief, AT & T alleges the State of California has granted AT & T a franchise, pursuant to § 7901 of the California Public Utilities Code, authorizing AT & T to access the public rights of way ("PROWs") for the purpose of installing and operating its telephone lines. (See Compl. ¶ 57.) AT & T seeks a declaratory judgment that the above-referenced franchise from the state authorizes AT & T to use its telephone lines to provide any form of electronic communication, including video, without obtaining an additional franchise from the City. (See id. ¶¶ 56-63.)
In its fourth claim for relief, AT & T alleges the City has deprived AT & T of its property rights in its § 7901 franchise, without due process, in violation of the Fifth and Fourteenth Amendments to the United States Constitution. (See id. ¶¶ 64-67.)
In its fifth claim for relief, AT & T alleges the City's imposition of the Franchise Condition has unlawfully interfered with AT & T's rights under the First Amendment to the United States Constitution. (See id. ¶¶ 68-72.)
In its sixth claim for relief, AT & T asserts a claim for relief pursuant to 42 U.S.C. § 1983. (See Compl. ¶¶ 73-77.) AT & T alleges "the City's actions violate [AT & T's] rights, privileges and immunities under the Due Process Clause and the Contracts Clause of the United States Constitution, the TCA (47 U.S.C. § 253), the Cable Act and FCC rules, regulations and order promulgated pursuant thereto." (See Compl. ¶ 76.)
In its seventh claim for relief, AT & T seeks a declaratory judgment that it "has the right to access the PROWs to install, upgrade and maintain its facilities, free from the City's Franchise Condition and any requirement for a cable franchise agreement." (See Compl. ¶¶ 78-81.)
In its eighth claim for relief, AT & T seeks a declaratory judgment that § 53066(e) of the California Government Code "does not apply to [AT & T's] telephone lines and does not require [AT & T] to obtain a franchise in order to provide video services via its telephone lines." (See Compl. ¶¶ 82-92.) Section 53066(e) provides: "No person may commence the construction of a cable television system without a franchise or license granted by the city, county, or city and county in which the cable television system will operate." See Cal. Gov.Code § 53066(e). AT & T further seeks a declaratory judgment that the Franchise Condition imposes "new requirements inconsistent with a state utility franchise" pursuant to § 7901 and "violate[s] both the federal and state constitutional prohibitions on impairment of contracts." (See Compl. ¶ 86.)
In its ninth claim for relief, AT & T seeks a writ of mandate, pursuant to §§ 1085 and 1094.5 of the California Code of Civil Procedure, to set aside the City's imposition of the Franchise Condition. (See Compl. ¶¶ 93-104.)
A motion to dismiss under Rule 12(b)(6) cannot be granted unless "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. See Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir.1988).
Generally, a district court, in ruling on a Rule 12(b)(6) motion, may not consider any material beyond the pleadings. See Hal Roach Studios, Inc. v. Richard Feiner And Co., Inc., 896 F.2d 1542, 1555 n. 19 (9th Cir.1990). Material that is properly submitted as part of the complaint, however, may be considered. See id. Documents whose contents are alleged in the complaint, and whose authenticity no party questions, but which are not physically attached to the pleading, also may be considered. See Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir.1994). In addition, the Court may consider any document "the authenticity of which is not contested, and upon which the plaintiffs complaint necessarily relies," regardless of whether the document is referred to in the complaint. See Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir.1998). Finally, the Court may consider matters that are subject to judicial notice. See Mack v. South Bay Beer Distributors, Inc., 798 F.2d 1279, 1282 (9th Cir.1986).
In analyzing a motion to dismiss, the Court must accept as true all material allegations in the complaint, and construe them in the light most favorable to the nonmoving party. See NL Industries, Inc v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). The Court may disregard factual allegations if such allegations are contradicted by the facts established by reference to exhibits attached to the complaint. See Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir.1987). Conclusory allegations, unsupported by the facts alleged, need not be accepted as true. See Holden v. Hagopian, 978 F.2d 1115, 1121 (9th Cir.1992).
In its first claim for relief, AT & T seeks a declaratory judgment that the Franchise Condition is preempted by the TCA, and in particular by 47 U.S.C. § 253. (See Compl. ¶¶ 36-43.) As noted, ...
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