Rcn Telecom Services v. Deluca Enterprises, Civ.A. 04-264.

• Decision Date: 12 July 2005
• Docket Number: No. Civ.A. 04-264.,Civ.A. 04-264.
• Citation: 413 F.Supp.2d 464
• Parties: RCN TELECOM SERVICES, INC., Plaintiff v. DELUCA ENTERPRISES, INC., d/b/a Hanover Crossing North, Defendant v. Jaindl Land Company, Third-Party Defendant and Service Electric Cable Television, Inc., Party Needed for Just Adjudication
• Court: U.S. District Court — Eastern District of Pennsylvania

413 F.Supp.2d 464

RCN TELECOM SERVICES, INC., Plaintiff v. DELUCA ENTERPRISES, INC., d/b/a Hanover Crossing North, Defendant v. Jaindl Land Company, Third-Party Defendant and Service Electric Cable Television, Inc., Party Needed for Just Adjudication

No. Civ.A. 04-264.

United States District Court, E.D. Pennsylvania.

July 12, 2005.

COPYRIGHT MATERIAL OMITTED

Henry S. Perkin, Lehigh County Solicitor County of Lehigh Dept. of Law, Allentown, PA, for Plaintiff.

Dwayne F. Stanley, Drinker Biddle & Reath Llp, Philadelphia, PA, for Defendant.

Richard F. Stevens, Stevens & Johnson, Allentown, PA, for Third-party Plaintiff.

OPINION

STENGEL, District Judge.

RCN Telecom Services, Inc., a cable service provider, filed this suit against De-Luca Enterprises, Inc., a residential land developer, alleging a violation of section 621(a)(2) of the Cable Communications Policy Act of 1984 ("Cable Act"), 47 U.S.C. 541(a)(2). The threshold questions are whether there is an implied private right of action pursuant to the Cable Act and if the Act bars an exclusive agreement between a developer and a cable company that precludes rival cable companies from providing services in a given residential development.

The parties' cross-motions for summary judgment frame the issues. Because I find that there is a private right of action, that the Act applies, and that there is no genuine issue of material fact regarding liability, I will deny DeLuca's motion for summary judgment and grant RCN's cross-motion for partial summary judgment. In the absence of a more complete factual record, however, I will deny RCN's request for permanent injunctive relief.

I. The Parties and the Nature of the Dispute

A. Service Electric's Exclusive Agreement

RCN Telecom Services, Inc. ("RCN") and Service Electric Cable Television, Inc. ("Service Electric") are telecommunications service providers offering cable television services to residents of Hanover Township, Pennsylvania. DeLuca Enterprises, Inc. ("DeLuca") and Jaindl Land Company ("Jaindl") are residential developers. Jaindl owned a 130.93 acre tract of land in Hanover Township and prepared plans to develop the property into a subdivision known as "Monocacy Farms." On May 15, 2002, Jaindl sold the property to DeLuca. In the Agreement for Purchase of Real Estate, DeLuca acknowledged that Jaindl had "contractually arranged for [Service Electric] to be the provider of cable television service" for the property, and agreed that it would not permit any other cable company to provide service without Jaindl's express consent. See Agreement for Purchase of Real Estate, Pl.'s Motion for Partial Summ. J., Ex. 4, at 12. In August 2002,¹ Jaindl and Service Electric entered into a "TV Service Contract," which provided Service Electric the "sole and exclusive right to install, maintain and use cable television facilities to provide [cable television services]" to Monocacy Farms. See TV Cable Service Contract (Subdivision), Pl.'s Motion for Partial Summ. J., Ex. 5, at I. Service Electric paid Jaindl $183,000.00 for the exclusive right to provide these services to the property.

DeLuca submitted a plan (the "Subdivision Plan" or "Plan") to the Hanover Township Board of Supervisors to develop the property as a residential subdivision called "Hanover Crossing North." The Subdivision Plan designates general utility easements on each of the lots in the subdivision. The Hanover Township Board of Supervisors granted final approval of the Subdivision Plan on April 22, 2003, and the Plan was recorded in the Northampton County Recorder of Deeds Office on April 14, 2004.²

B. RCN's Request to Install Cable Equipment

During the development and construction in Hanover Crossing North, DeLuca excavated trenches to permit various utility companies-specifically, PPL (electric service), UGI (natural gas service), Verizon (telephone service), and Service Electric (cable television service)—to install their equipment in the utility easements. DeLuca closed the trenches as construction in the development progressed. This process began in October 2003. That same month, RCN requested permission from DeLuca to install cable television equipment in the utility easements designated on the Subdivision Plan. DeLuca requested written consent from Jaindl, but did not receive it. Therefore, DeLuca denied RCN's request, citing the provision in the Agreement for Purchase of Real Estate which required Jaindl's express consent in order to allow any cable company other than Service Electric to provide cable services. When RCN advised DeLuca of its intention to file suit in federal court to gain access to the excavated trenches, DeLuca informed RCN that it could have access to the utility easements, but not the excavated trenches. RCN rejected this proposal. As of March 2005, a substantial majority of the excavated trenches had been filled in and closed.

C. RCN's Claim Against DeLuca

RCN filed this suit, alleging that DeLuca violated section 621(a)(2) of the Cable Act and interfered with prospective contractual relations in violation of Pennsylvania state law. DeLuca then filed this motion for summary judgment. DeLuca denies that it violated the Cable Act and disputes whether RCN can bring a private cause of action under the Act. DeLuca also raises unclean hands and estoppel as defenses, alleging that RCN had proposed a similar exclusive service agreement with respect to one of DeLuca's other properties in June 2001, and that DeLuca relied on RCN's position that such exclusive agreements are valid and legal when it entered the Agreement for Purchase of Real Estate with Jaindl. RCN also filed a cross-motion for partial summary judgment on its claim that DeLuca violated the Cable Act by denying RCN access to the general utility trenches.

II. Standard for Summary Judgment

Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment will be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact. . . ." FED. RULE CIV. PROC. 56(c). The moving party bears the initial burden of showing that there is no genuine issue of material fact. Highlands Ins. Co. v. Hobbs Group LLC, 373 F.3d 347, 350-51 (3d Cir.2004). Once the moving party has carried its burden, the nonmoving party must come forward with specific facts to show that there is a genuine issue for trial. Williams v. West Chester, 891 F.2d 458, 464 (3d Cir.1989). A fact is "material" if its resolution will affect the outcome under the applicable law, and an issue about a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The court must draw all justifiable inferences in favor of the nonmoving party. Highlands, 373 F.3d at 351.

If the party moving for summary judgment is the defendant, or the party without the burden on the underlying claim, the moving party has no obligation to produce evidence negating the nonmoving party's case. Nat'l State Bank v. Fed. Reserve Bank, 979 F.2d 1579, 1581-82 (3d Cir.1992). The moving party only has to point to the lack of sufficient evidence to support the nonmoving party's claim. Id. at 1582. However, where the moving party is the plaintiff, or the party bearing the burden of proof at trial, the standard is more stringent. Id. The moving party must support its motion with credible evidence that would entitle it to a directed verdict if not controverted at trial. See id. In other words, when the moving party has the burden of proof at trial, that party must establish, on all of the essential elements of its case, that no reasonable jury could find for the nonmoving party. In re Bressman, 327 F.3d 229, 238 (3d Cir.2003). If the moving party makes such an affirmative showing, it is entitled to summary judgment unless the nonmoving party responds with probative evidence demonstrating the existence of a triable issue of fact. Id.

III. DeLuca's Motion for Summary Judgment

RCN challenges the validity of the JaindVService Electric exclusive service contract under section 621(a)(2) of the Cable Act. In its motion for summary judgment, DeLuca argues that the Cable Act does not provide for a private cause of action, nor does it apply to this case. In relevant part, the Act provides:

Any franchise shall be construed to authorize the construction of a cable system over public rights-of-way, and through easements, which is within the area to be served by the cable system and which have been dedicated for compatible uses, except that in using such easements the cable operator shall ensure—

(A) that the safety, functioning, and appearance of the property and the convenience and safety of other persons not be adversely affected by the installation or construction of facilities necessary for a cable system;

(B) that the cost of the installation, construction, operation, or removal of such facilities be borne by the cable operator or subscriber, or a combination, or both; and

(C) that the owner of the property be justly compensated by the cable operator for any damages caused by the installation, construction, operation, or removal of such facilities by the cable operator.

47 U.S.C. § 541(a)(2).

The first question to consider is whether the easements identified on the Subdivision Plan are "dedicated for compatible uses" within the meaning of section 621(a)(2). If the easements are "dedicated," the Cable Act applies. The next question is whether RCN has a private right of action under the Act.

A. Are the Easements "Dedicated for Compatible Uses"?

In order for section 621(a)(2) of the Cable Act to apply, the land in question must be "dedicated for compatible uses." In this case, the land is an easement across a residential development, in which the utility...