San Juan Cable LLC v. Puerto Rico Telephone Co.

Decision Date27 May 2009
Docket NumberCivil No. 09-1322 (GAG).
Citation623 F.Supp.2d 189
PartiesSAN JUAN CABLE LLC d/b/a OneLink Communications, Plaintiff, v. PUERTO RICO TELEPHONE COMPANY, INC., Defendant.
CourtU.S. District Court — District of Puerto Rico

Jorge L. Bauermeister-Marrero, Bauermeister Law Offices PSC, Guillermo J. Ramos-Luina, San Juan, PR, PHV Dana Frix, Washington, DC, PHV Karl H. Buch, New York, NY, for Plaintiff.

Eduardo R. Guzman-Casas, Joaquin A. Marquez-Tudela, PHV Joe D. Edge, Drinker Biddle & Reath LLP, PHV Lynn Charytan, PHV Samir Jain, Wilmerhale Law Firm, Washington, DC, Frank La

Fontaine, McConnell Valdes, San Juan, PR, for Defendant.


GUSTAVO A. GELPÍ, District Judge.

Plaintiff San Juan Cable LLC d/b/a OneLink Communications ("OneLink") brought this action against the Puerto Rico Telephone Company, Inc. ("PRTC") seeking injunctive and declaratory relief for alleged violations of the Cable Communications Policy Act, 47 U.S.C. §§ 521 et seq. ("Cable Act"), and orders issued by the Federal Communications Commission ("FCC"). OneLink also alleges violations of the Puerto Rico Telecommunications Act, P.R. Laws Ann. tit. 27, §§ 265 et seq. Presently before the court is PRTC's motion to dismiss OneLink's amended complaint for failure to state a claim upon which relief can be granted (Docket No. 28). OneLink timely opposed the motion (Docket No. 35), PRTC replied (Docket No. 40), and OneLink surreplied (Docket No. 42). After reviewing the pleadings and pertinent law, the court GRANTS PRTC's motion to dismiss (Docket No. 28).

I. Standard of Review

Under Rule 12(b)(6), a defendant may move to dismiss an action against him for failure to state a claim upon which relief can be granted. See Fed.R.Civ.P. 12(b)(6). When considering a motion to dismiss, the court must decide whether the complaint alleges enough facts to "raise a right to relief above the speculative level." See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007). The court accepts as true all well-pleaded facts and draws all reasonable inferences in the plaintiff's favor. Parker v. Hurley, 514 F.3d 87, 90 (1st Cir.2008). However, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Ashcroft v. Iqbal, 556 U.S. ___, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged— but it has not `show[n]'`that the pleader is entitled to relief.'" Id. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)).

II. Relevant Background as Alleged in the Amended Complaint

On February 6, 2008, PRTC filed an "Application to Operate in Telecommunications Service" with the Telecommunications Regulatory Board of Puerto Rico ("Board"), through its affiliate Corporation d/b/a Claro TV ("Coqui.Net"). Coqui.Net sought a franchise from the Board to authorize the construction of a cable system and to provide cable television service throughout Puerto Rico. The Board published a "Notice for Franchise Request" in the local press, inviting any interested parties to submit comments on Coqui.Net's application to the Board. OneLink submitted comments opposing the application, as did other franchised cable providers. The Board held a hearing at which OneLink was heard in opposition to Coqui.Net's application. At this hearing, the General Manager of Coqui.Net, Carlos García, allegedly revealed that the construction of PRTC's cable system was already in an advanced stage, such that they could receive part of the signal at their facilities. On October 10, 2008, the Board denied Coqui.Net's franchise application. This decision was ratified in an October 29, 2008 resolution and order in which the Board allegedly stated that PRTC's construction of the proposed system before obtaining the franchise violated P.R. Laws Ann. tit. 27, § 269h(a)(1). Notwithstanding the Board's decision, in November and December of 2008 PRTC continued to construct its cable system, including activities such as excavations, laying of cement, and the installation of specialized equipment cabinets ("IPTV Terminals") containing "Video Ready Access Devices" ("VRADs"). The IPTV Terminals are necessary components of PRTC's cable system and are designed to allow PRTC to provide cable service.

On December 11, 2008, PRTC submitted a second franchise application, "Application for Authorization to Provide Video Service," this time applying on its own behalf rather than through an affiliate. In its application, PRTC requested that nine of the attached exhibits be treated as confidential and that the proceedings be held in an expedited manner. PRTC also requested "special temporary authority to provide video service" in a separate application ("STA Request"). The STA Request sought authority to continue to construct and operate its cable system and to provide cable service to the homes of up to 200 PRTC employees as part of a beta test, until such time as the Board granted its second franchise application. In a resolution and order dated December 17, 2008, the Board granted PRTC's STA Request. Subsequently, the Board also granted PRTC's request that the exhibits be designated as confidential, as well as its request for expedited review of the franchise application. On January 13, 2009, OneLink filed with the Board a motion to intervene in the proceedings regarding PRTC's second franchise application, and requested that the STA order be stayed until OneLink and other interested parties had an opportunity to present their opposition. On January 30, 2009, OneLink filed a motion for the Board to vacate or stay its confidentiality determinations.

On February 10, 2009, while its motions were pending before the Board, OneLink filed a verified complaint and application for a temporary restraining order and preliminary injunction with this court against PRTC and the Board. See Civil No. 09-1119(GAG), Docket No. 1. The complaint sought an order preliminarily enjoining and restraining the effect of the STA order, and the Board from authorizing PRTC to provide cable service or construct a cable system over public rights-of-way unless and until the Board issued its final decision granting PRTC's franchise request. On February 18, 2009, this court issued an Opinion and Order finding that there had been a violation of section 621 of the Cable Act, 47 U.S.C. § 541(b)(1), which states that a cable operator cannot provide cable services without a franchise, because PRTC's beta test constituted the provision of cable service prior to the adjudication of such franchise authority. See Civil Case No. 09-1119(GAG), Docket No. 48 at 3-4, San Juan Cable LLC v. Telecommunications Regulatory Bd. of Puerto Rico, 598 F.Supp.2d 233, 236 (D.P.R.2009). The court noted that, therefore, OneLink had a strong likelihood of success on the merits, and ordered the Board and PRTC to show cause why a preliminary injunction should not issue under the remaining three injunction factors. Id. The following day, PRTC submitted to the Board a "Request to Discontinue Special Temporary Authority," and, on February 20, 2009, PRTC and the Board filed a joint response to the order to show cause, as well as a motion to dismiss, claiming that OneLink's complaint and TRO application were effectively moot because the Board would soon issue an order granting PRTC's request to discontinue the STA order. Accordingly, on February 23, 2009, the Board filed its resolution and order discontinuing PRTC's special temporary authority. OneLink then opposed the motion to dismiss, arguing that the Board's grant of PRTC's request was insufficient to undo the STA order in its entirety because it might still permit PRTC to construct its cable system over public-rights-of-way without a franchise. On February 24, 2009, PRTC and the Board filed separate papers in support of their motion to dismiss. The Board stated that as a result of the February 23, 2009 resolution and order PRTC could no longer conduct the beta test of IPTV, build its network, or provide cable service, unless and until the franchise was granted. Meanwhile, PRTC represented to the court that the activity authorized by the STA order had been discontinued. Later that day, this court issued an order dismissing OneLink's complaint and TRO application as moot, and judgment was entered accordingly. See Civil Case No. 09-1119(GAG), Docket Nos. 61 & 62.

On March 2, 2009, the Board denied OneLink's motions to intervene in its consideration of PRTC's second franchise application, as well as the motion for reconsideration of its confidentiality determinations. OneLink appealed these decisions to the Puerto Rico Court of Appeals in an action titled San Juan Cable LLC v. Junta Reglamentadora de Telecomunicaciones, Case No. KLRA200900260 (P.R.App.Ct.), on March 3, 2009. The Court of Appeals then issued on order staying all proceedings as to the second franchise application, pending resolution of the appeal. On March 31, 2009,1 the Court of Appeals affirmed the resolution of the Board regarding the request for intervention,2 stating that OneLink's right to intervene would arise once the permit or franchise request was granted. See Judgment by the Puerto Rico Court of Appeals, Docket No. 31-2 at 17. OneLink subsequently filed a motion for reconsideration, which was denied on April 24, 2009. On May 20, 2009, the Supreme Court of Puerto Rico granted OneLink's petition for certiorari to review the Court of Appeal's decision and ordered the Board to stay all proceedings.

Meanwhile, on February 25 and 26, 2009, within two days of this court's order and judgment dismissing OneLink's federal complaint and TRO request, employees and/or agents of...

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3 cases
  • P.R. Tel. Co. v. San Juan Cable Co.
    • United States
    • U.S. District Court — District of Puerto Rico
    • July 25, 2016
    ...this Court and the First Circuit concluded that OneLink lacked standing to bring its claims. PRDSMF ¶ 61; San Juan Cable LLC v. P.R. Tel. Co., 623 F.Supp.2d 189, 195 (D.P.R.2009) ; San Juan Cable LLC v. P.R. Tel. Co., 612 F.3d 25, 29, 32 (1st Cir.2010). The Court adjusts the record to incor......
  • San Juan Cable LLC D/b/a Onelink Commc'ns v. P.R. Tel. Co. Inc
    • United States
    • U.S. Court of Appeals — First Circuit
    • July 15, 2010 held that section 541(b)(1) of the Cable Act did not give rise to an implied private right of action. See San Juan Cable LLC v. P.R. Tel. Co., 623 F.Supp.2d 189, 196 (D.P.R.2009). On the second question, it deemed itself bound by circuit precedent and therefore ruled that the cable opera......
  • San Juan Cable LLC v. Telecommunications Regulatory Bd. of Puerto Rico
    • United States
    • U.S. District Court — District of Puerto Rico
    • February 2, 2012
    ...not a monopoly as Plaintiffs argue; (c) Plaintiffs lack standing, as decided by this Court in San Juan Cable LLC v. P.R.T.C., 623 F. Supp. 2d 189 (D.P.R. 2009), affirmed by San Juan Cable LLC v. P.R.T.C., 612 F.3d 25, 32 (1st Cir. 2010); (d) Plaintiffs lack proprietary rights to request int......

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