Schloss v. City of Indianapolis

• Decision Date: 04 October 1988
• Docket Number: No. 41A04-8801-CV-13,41A04-8801-CV-13
• Citation: 528 N.E.2d 1143
• Parties: Robert E. SCHLOSS, individually and as representative of a class, Appellant (Plaintiff Below), v. CITY OF INDIANAPOLIS, Appellee (Defendant Below).
• Court: Indiana Appellate Court

Page 1143

528 N.E.2d 1143

Robert E. SCHLOSS, individually and as representative of a class, Appellant (Plaintiff Below), v. CITY OF INDIANAPOLIS, Appellee (Defendant Below).

No. 41A04-8801-CV-13.

Court of Appeals of Indiana Fourth District.

Oct. 4, 1988.

Rehearing Denied Dec. 1, 1988.

Henry J. Price, Jerry A. Garau, Price & DeLaney, P.C., Indianapolis, for appellant.

James B. Burroughs, City-County Legal Div., Indianapolis, for appellee.

CONOVER, Presiding Judge.

Plaintiff-Appellant Robert E. Schloss (Schloss) appeals a circuit court order granting a motion to dismiss his complaint for declaratory, injunctive, and monetary relief made by Defendant-Appellee City of Indianapolis (City).

We affirm.

Schloss asks this court to decide three issues of law. Rephrased, they are:

1. whether he has standing to assert and pursue the claims;

2. whether IND. CODE 36-1-3-8(5) as applied to cable franchise fees was preempted by the Cable Communications Policy Act of 1984, Public Law 98-549, 98 Stat. 2779, codified at 47 U.S.C. Secs. 521-559; and

3. whether section 8 1/2-80(A) of the Municipal Code of Indianapolis is contrary to IND. CODE 36-1-3-8(5).

Schloss filed a two count complaint against the City. Count I asserted Schloss is a resident of the City and receives cable (television) services authorized under chapter 8 1/2 of the municipal code. It further asserted the City's grant of cable franchises includes a requirement the franchisee pay a franchise fee of 3% of its yearly gross revenue to the City which it then passed on to subscribers. Schloss also alleged the franchise fee exceeded a limitation imposed by IND. CODE 36-1-3-8(5). ¹ Schloss claimed he was injured thereby and prayed for declaratory and injunctive relief. He also sought attorney's fees and costs. (R. 5-7).

In Count II Schloss asked the court to certify the case as a class action under Ind. Rules of Procedure, Trial Rule 23. Count II prayed for declaratory and injunctive relief, compensatory damages for each member of the class, and for costs and attorneys fees under Ind. Rules of Procedure, Trial Rule 23(D). (R. 7-9).

The City's answer admitted it granted cable franchises and imposed the 3% fee. The City asserted it was without knowledge or belief about whether the fee was passed to subscribers, but did not deny the allegation. The City asserted IND. CODE 36-1-3-8(5) was not applicable, denied the 3% fee was contrary to law, and denied Schloss was injured by imposition of the fee. (R. 10-11). The answer opposed class certification. (R. 11-12).

The City moved to dismiss the complaint. It asserted Schloss and the purported class lacked standing to prosecute the cause and therefore the court lacked jurisdiction. (R. 14-21). Schloss argued to the contrary. (R. 23-27). Only memoranda were submitted in support of and in opposition to the motion to dismiss.

Later, for purposes of class certification, the parties stipulated the facts. (R. 30-33). Included is a stipulation the 3% franchise fee is passed to and paid by customers and the fee is included in the costs of all goods and services sold by the cable companies. (Stipulation 13, R. 32).

Schloss moved for partial summary judgment claiming Municipal Code Sec. 8 1/2-80(A) is "illegal". (R. 35-36). He supported his summary judgment motion with only a memorandum. (R. 38-42). The City did not file a response nor did the court rule on the summary judgment motion.

The day after Schloss moved for partial summary judgment the court entered an order granting the City's motion to dismiss Schloss's complaint with prejudice. (R. 44). The court found 47 U.S.C., not IND. CODE 36-1-3-8(5), is the controlling legislation; 47 U.S.C. does not require reimbursement of subscribers if the franchisee is reimbursed for excess franchise fees. Therefore, the court concluded, Schloss lacked standing to bring the suit and the court lacked jurisdiction. We note these are conclusions of law.

The court denied Schloss's timely filed motion to correct errors. (R. 69-70) He appeals.

The issues presented are issues of law. Cf. Marsym Development Corp. v. Winchester Economic Development Commission (1983), Ind.App., 447 N.E.2d 1138, 1142 (standing and statutory construction are interrelated legal issues). When reviewing allegations a trial court misapplied the law our task is to apply the law to the undisputed facts. Babcock v. Babcock (1986), Ind.App., 498 N.E.2d 986, trans. denied. We determine whether the court erred in its application of the law. Indiana and Michigan Electric Co. v. Terre Haute Industries, Inc. (1984), Ind.App., 467 N.E.2d 37, 42, n. 2.

As noted, the parties stipulated certain facts were accurate. The City refused to stipulate the facts were relevant. (R. 32). Relevance is a legal determination to be made by the court. Generally discussed in the context of evidence, relevance is simply the logical tendency of evidence to prove material facts. E.g. Engle v. State (1987), Ind., 506 N.E.2d 3, 5; Mers v. State (1986), Ind., 496 N.E.2d 75, 80; and Jochem v. Kerstiens (1986), Ind.App., 498 N.E.2d 1241, 1244. We are not called upon to determine whether the court erred by admitting evidence. The allegations of the complaint, admissions in the answer, and stipulations by the parties provide facts from which we can determine whether the facts are relevant and whether they show Schloss can pursue these claims. Cf. Board of Trustees v. City of Ft. Wayne (1978), 268 Ind. 415, 421-422, 375 N.E.2d 1112, 1116-1117 (Questions of standing ... depend upon factual issues. ... [A] a court must first determine that a party with standing has brought the cause and that he brings a justiciable issue before the court.)

The judicial doctrines of justiciability and standing exist to ensure litigation will be actively and vigorously contested, thus eliminating the possibility of collusion or attempts to obtain advisory opinions. State ex rel. State Board of Tax Comm'rs. v. Marion Superior Court (1979), 271 Ind. 374, 392 N.E.2d 1161, 1164 quoting Indiana Education Employment Relations Board v. Benton Community Schools (1977), 266 Ind. 491, 365 N.E.2d 752. Our Supreme Court says:

The jurisdictional element of standing addresses the question of whether the complainant is the proper party to invoke the power of the court. It is a restraint on the exercise of a court's jurisdiction in that the court has no authority to proceed with the cause of action or decide any issues in the case unless there is a demonstrable injury to the complaining party. (Citation omitted).

(our emphasis) State ex rel. State Board of Tax Commissioners v. Marion Superior Court (1979), 271 Ind. 374, 392 N.E.2d 1161, 1164; and

... to invoke a court's jurisdiction, a plaintiff must demonstrate a personal stake in the outcome of the lawsuit and must show that he or she has sustained or was in immediate danger of sustaining, some direct injury as a result of the conduct at issue. However, Indiana cases recognize certain situations in which public rather than private rights are at issue and hold that the usual standards for establishing standing need not be met. This Court so held in Zoercher v. Agler, (1930) 202 Ind. 214, 172 N.E. 186, reh. denied 202 Ind. 214, 172 N.E. 907, and Hamilton v. State ex rel. Bates, (1852) 3 Ind. 452. This Court held in those cases that when a case involves enforcement of a public rather than a private right the plaintiff need not have a special interest in the matter nor be a public official.

(our emphasis) Higgins v. Hale (1985), Ind., 476 N.E.2d 95, 101. Cf. 13 Wright, Miller, and Cooper, Federal Practice and Procedure, Jur.2d 3531 (1984).

The issue here is whether Schloss has alleged a demonstrable injury sufficient to seek the court's exercise of jurisdiction. The parties stipulated the franchise fee exacted by the City from the franchisee is passed to and paid by consumers of cable television services. (R. 32). They also stipulated the franchise fees collected by the City from 1982 to 1986 exceeded the City's expenditures and encumberances as documented by the City's budget. (R. 32). Thus, a determination of entitlement to injunctive relief or money damages depends upon whether IND. CODE 36-1-3-8(5) provides a basis upon which to predicate regulation of franchise fees.

Schloss argues Congress did not preempt franchise fee regulation when it enacted that part of the Cable Communications Act of 1984 codified as 47 U.S.C. Sec. 542. ² Schloss notes 47 U.S.C. Sec. 556 ³ permits state and local regulation consistent with the Act and preempts only those state laws and regulations inconsistent with relevant provisions of the Act. Schloss argues IND. CODE 36-1-3-8(5) is totally consistent with 47 U.S.C. Sec. 542.

The City concedes IND. CODE 36-1-3-8(5) and 47 U.S.C. Sec. 542 can be interpreted to allow imposition of a lesser franchise fee than is permitted by 47 U.S.C. Sec. 542. The City argues, however, such an interpretation would obstruct the purpose of the statutory scheme set out in 47 U.S.C. Sec. 521(1), (2), (3), and (4). ⁴ The City opines Congress abandoned the notion franchise fees must be related to the cost of cable regulation. (Appellee's Brief, 8). The City opines 47 U.S.C. Sec. 542(g) ⁵ makes clear the franchise fee is based solely upon the franchisee's status as such and need not be related to costs of regulating the franchise. The City argues state regulation would frustrate a national policy of permitting municipalities to contract fees up to 5%, 47 U.S.C. Sec. 521(1); would frustrate a national policy of establishing procedures and standards responsive to the needs and interests of the local community, 47 U.S.C. Sec. 521(2); would obstruct the policy of establishing a specific guideline for the exercise of federal, state, and local authority for regulation of cable systems, 47 U.S.C. Sec. 521(3); and would upset the policy of providing the widest possible diversity of information sources and services...