Qwest Communications Corp. v. City of Greensboro

• Decision Date: 25 July 2006
• Docket Number: No. 1:04CV903.,1:04CV903.
• Court: U.S. District Court — Middle District of North Carolina
• Parties: QWEST COMMUNICATIONS CORP., Plaintiff, v. CITY OF GREENSBORO, Defendant.

440 F.Supp.2d 480

QWEST COMMUNICATIONS CORP., Plaintiff, v. CITY OF GREENSBORO, Defendant.

No. 1:04CV903.

United States District Court, M.D. North Carolina.

July 25, 2006.

COPYRIGHT MATERIAL OMITTED

Cathleen M. Plaut, Bailey & Dixon, Raleigh, NC, Stephen D. Gurr, Willie E. Shepherd, Kamlet Shepherd & Reichert, LLP, Denver, CO, for Plaintiff.

Alan W. Duncan, Manning A. Connors, III, Smith Moore, L.L.P., Greensboro, NC, for Defendant.

ORDER ADOPTING MAGISTRATE JUDGE'S RECOMMENDATION

TILLEY, District Judge.

On February 24, 2005 Magistrate Judge Wallace W. Dixon filed his Recommendation [Doc. # 16] recommending that the Defendant's motion to dismiss be granted in part and denied in part. Plaintiff Qwest Communications Corporation filed its objections on March 11, 2005 [Doc. # 18]. Having reviewed de novo the Recommendations in light of the objections, it is determined that the Recommendation should be accepted. Thus, for the reasons set out in the Recommendation, Defendant's motion to dismiss Plaintiffs section 1983 action based on a violation of section 253(c) of the FTA and a violation of Plaintiffs due process rights under the Fourteenth Amendment is GRANTED, and Defendant's motion to dismiss Plaintiffs dormant Commerce Clause claim is DENIED.

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

DIXON, United States Magistrate Judge.

This matter is before the court on Defendant's motion to dismiss Plaintiff's action brought under 42 U.S.C. § 1983, alleging a violation of (1) 47 U.S.C. § 253(c); (2) "the dormant Commerce Clause of the United States Constitution; and (3) Plaintiff's due process rights under the Fifth and Fourteenth Amendments [docket no. 7]. Since there has been no consent, the court must deal with the motion by way of a recommended disposition. Plaintiff has responded in opposition to Defendant's motion, and the matter is ripe for disposition. For the reasons discussed herein, I will recommend that the court grant the motion to dismiss in part and deny the motion in part.

Background

The following allegations by Plaintiff are assumed to be true for purposes of Defendant's motion to dismiss:

Plaintiff Qwest Communications is a telecommunications corporation that is organized and exists under the laws of Delaware, with its principal place of business in Denver, Colorado. Compl. ¶¶ 1, 3. Defendant City of Greensboro ("the City") is a municipal corporation organized and existing pursuant to the laws of North Carolina and is a political subdivision of North Carolina. Compl. ¶ 13. Plaintiff provides telecommunications services throughout the nation, including in Greensboro. Compl. ¶ 12. Plaintiff and other telecommunications providers in Greensboro traditionally provide services to consumers by installing telecommunications facilities in the City's public rights-of-way. Compl. ¶ 2. Like other telecommunications providers, Plaintiff operates in the City's public rights-of-way pursuant to the terms of a Franchise Agreement with the City. The Franchise Agreement is authorized under Ordinance Chapter 28.1 of the City's Code of Ordinances ("the Ordinance"). Compl. ¶ 3. Plaintiff has been operating under the terms of the Franchise Agreement since July 21, 1998. Compl. ¶ 3. In this suit Plaintiff alleges that the terms of the Ordinance and the Franchise Agreement violate section 253 of the Federal Telecommunications Act of 1996 ("the FTA"), 47 U.S.C. §§ 151 et seq., which states generally that a local government may not "prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service," see section 253(a), but that a local government may manage the public rights-of-way or require "fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis," see section 253(c). Plaintiff contends that certain terms of the Franchise Agreement and the Ordinance have the effect of prohibiting Plaintiff's ability to provide telecommunications services to the City and that the fees imposed against Plaintiff are discriminatory and not competitively neutral. For instance, under the Franchise Agreement Plaintiff is required to pay non-costbased fees to the City, while at least one other telecommunications provider is not required to pay those fees; Plaintiff is required to install, at its own expense, "conduit and pull tape" for the City's ownership and use; and Plaintiff is required to furnish a $15,000 bond to guarantee the faithful performance of its obligations under the Franchise Agreement. Compl. ¶¶ 32, 43. Furthermore, the Ordinance gives the City unfettered discretion to approve or deny the renewal of any franchise; gives the City the right to regulate Plaintiffs employment practices and procurement activities; and gives the City the right to install communications facilities and maintain them free of charge upon the poles or other above-ground facilities owned by Plaintiff. Compl. ¶¶ 5, 6. Plaintiff is attacking the Franchise Agreement and Ordinance in two differing ways: by arguing that they are void as preempted by section 253 pursuant to the Supremacy Clause of the United States Constitution (Claim I) and by bringing a section 1983 action alleging a violation of section 253 (Claim II).¹ Plaintiff also alleges that the Franchise Agreement and Ordinance, as applied to Plaintiff, violate the so-called "dormant Commerce Clause" of the United States Constitution as well as Plaintiffs due process rights under the Fifth and Fourteenth Amendments. Plaintiff seeks, among other things, declaratory relief invalidating the Franchise Agreement and the Ordinance as well as damages based on section 1983 and attorneys fees under the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988.² In response, the City has alleged a counter-claim for breach of contract, and the City now brings this motion to dismiss Plaintiffs claim for a violation of section 253 as well as Plaintiffs Commerce Clause and due process claims.

DISCUSSION

In ruling on a motion to dismiss for failure to state a claim, it must be recalled that the purpose of a 12(b)(6) motion is to test the sufficiency of the complaint, not to decide the merits of the action. Schatz v. Rosenberg, 943 F.2d 485, 489 (4th Cir. 1991); Food Lion, Inc. v. Capital Cities/ABC, Inc., 887 F.Supp. 811, 813 (M.D.N.C.1995). At this stage of the litigation, a plaintiffs well-pleaded allegations are taken as true and the complaint, including all reasonable inferences therefrom, are liberally construed in the plaintiff's favor. McNair v. Lend Lease Trucks, Inc., 95 F.3d 325, 327 (4th Cir. 1996).

Dismissal under 12(b)(6) is generally regarded as appropriate only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); McNair, 95 F.3d at 328 (noting that the proper question is whether in the light most favorable to the plaintiff, the complaint states any valid claim for relief); Food Lion, 887 F.Supp. at 813. Stated differently, the issue is not whether the plaintiff will ultimately prevail on his claim, but whether he is entitled to offer evidence to support the claim. See, e.g., Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974), overruled on other grounds by Davis v. Scherer, 468 U.S. 183, 104 S.Ct. 3012, 82 L.Ed.2d 139 (1984).

Generally, the court looks only to the complaint itself to ascertain the propriety of a motion to dismiss. See George v. Kay, 632 F.2d 1103, 1106 (4th Cir.1980). A plaintiff need not plead detailed evidentiary facts, and a complaint is sufficient if it will give a defendant fair notice of what the plaintiffs claim is and the grounds upon which it rests. See Bolding v. Holshouser, 575 F.2d 461, 464 (4th Cir.1978). Nonetheless, the requirement of liberal construction does not mean that the court can ignore a clear failure in the pleadings to allege any facts which set forth a claim.

Defendant's Motion to Dismiss the Section 1983 Action Alleging a Violation of Section 253

Here, Plaintiff is attempting to invalidate the Ordinance and Franchise Agreement in two ways. In Claim I, Plaintiff alleges that the Ordinance and Franchise Agreement are preempted by section 253 pursuant to the Supremacy Clause. In Claim II, Plaintiff alleges a suit directly under 47 U.S.C. § 253 based on Defendant's alleged violation of subsection (c) of that section. Furthermore, Plaintiff is attempting to enforce its alleged rights under subsection (c) through 42 U.S.C. § 1983.³ The City has not challenged Plaintiff's preemption claim in its motion to dismiss. Instead, the City contends that section 253 of the FTA does not provide for a private right of action; therefore, Plaintiff may not recover for a violation of section 253(c) through section 1983. It is appropriate to note here that there is a distinction between allowing a suit in federal court based on a preemption argument only and allowing a suit to be brought directly under a federal statute alleging a violation of the statute. A federal statutory private right of action is not required where a party seeks to enjoin the enforcement of a state or local law on the ground that the law is preempted by a federal law. See Wright Elec., Inc. v. Minnesota State Bd. of Electricity, 322 F.3d 1025, 1028 (8th Cir.2003). In other words, "[a] claim under the Supremacy Clause simply asserts that a federal statute has taken away local authority to regulate a certain activity. In contrast, an implied private right of action is a means of enforcing the substantive provisions of a federal law." Western Air Lines, Inc. v. Port Auth. of N.Y. & N.J., 817 F.2d 222, 225 (2nd Cir.1987). Furthermore, if a private right of action is available under section 253, then the right is presumptively enforceable through section 1983, and the plaintiff may...