Spectrum Ne. LLC v. Frey, 1:20-cv-00168-JDL

• Decision Date: 07 October 2020
• Docket Number: 1:20-cv-00168-JDL
• Citation: 496 F.Supp.3d 507
• Parties: SPECTRUM NORTHEAST LLC, et al., Plaintiffs, v. Aaron FREY, in his official Capacity as Attorney General of the State of Maine, Defendant.
• Court: U.S. District Court — District of Maine

496 F.Supp.3d 507

SPECTRUM NORTHEAST LLC, et al., Plaintiffs,

v.Aaron FREY, in his official Capacity as Attorney General of the State of Maine, Defendant.

1:20-cv-00168-JDL

United States District Court, D. Maine.

Signed October 7, 2020

Howard J. Symons, Pro Hac Vice, Jonathan Alexander Langlinais, Pro Hac Vice, Matthew Hellman, Pro Hac Vice, Jenner & Block LLP, Washington, DC, Joshua D. Dunlap, Pierce Atwood LLP, Portland, ME, for Plaintiffs.

Christopher C. Taub, Paul E. Suitter, Office of the Attorney General, Augusta, ME, for Defendant.

ORDER ON MOTION TO DISMISS

JON D. LEVY, CHIEF U.S. DISTRICT JUDGE

On March 18, 2020, the Maine Legislature enacted Public Law 2020, ch. 657, "An Act To Require a Cable System Operator To Provide a Pro Rata Credit When Service Is Cancelled by a Subscriber" (the "Pro Rata Law"). Spectrum Northeast, LLC, and Charter Communications, Inc. (collectively, "Charter"), assert in their complaint filed May 11, 2020 that the Pro Rata Law is preempted by federal law and seek a declaratory judgment and an injunction prohibiting Maine Attorney General Aaron Frey from enforcing the law against them (ECF No. 1). The Attorney General contends that the Pro Rata Law is not preempted and moves to dismiss Charter's complaint (ECF No. 12). A hearing on the motion to dismiss was held on July 21, 2020. For the reasons explained below, I deny the motion.

I. FACTUAL BACKGROUND

The complaint alleges the following facts, which I treat as true on a motion to dismiss. Spectrum Northeast, LLC, is a franchised cable operator that provides cable television, internet, and telephone services to customers in Maine. Charter Communications, Inc., is the parent company of Spectrum Northeast and provides certain billing and other services to Spectrum Northeast in support of its provision of cable service. Charter offers cable service to subscribers for a fixed dollar amount on a monthly basis and requires subscribers to pay in advance for the ensuing month's cable service. This is known as a "whole-month billing" policy. Consistent with this policy and with Charter's Terms of Service, a subscriber who chooses to cancel service in the middle of the billing period does not receive a rebate, but may continue to receive service for the balance of the month if he or she so elects.

On March 18, 2020, Maine's Pro Rata Law was enacted. See P.L. 2020, ch. 657. Section 1 of the Pro Rata Law provides that when a cable subscriber cancels her cable service more than three working days before the end of a monthly billing period, her cable provider must grant her "a pro rata credit or rebate for the days of the monthly billing period after the cancellation of service." P.L. 2020, ch. 657, § 1 (to be codified at 30-A M.R.S.A. § 3010(1-A) ). Section 2 of the Pro Rata Law requires that cable providers notify consumers of the right to proration as set forth in section 1. Id. § 2 (to be codified at 30-A M.R.S.A. § 3010(2-A) ). Charter's whole-month billing policy does not provide for pro rata credits or rebates and is therefore incompatible with the Pro Rata Law.¹

II. LEGAL STANDARD

To survive a motion to dismiss, the complaint "must contain sufficient factual matter to state a claim to relief that is plausible on its face." Rodríguez-Reyes v. Molina-Rodríguez , 711 F.3d 49, 53 (1st Cir. 2013) (quoting Grajales v. P.R. Ports Auth. , 682 F.3d 40, 44 (1st Cir. 2012) ). Courts apply a "two-pronged approach" to resolve a motion to dismiss. Ocasio-Hernandez v. Fortuño-Burset , 640 F.3d 1, 12 (1st Cir. 2011). First, the court must identify and disregard statements in the complaint that merely offer legal conclusions couched as factual allegations. Id. (citing Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ). Second, the court "must determine whether the remaining factual content allows a reasonable inference that the defendant is liable for the misconduct alleged." A.G. ex rel. Maddox v. Elsevier, Inc. , 732 F.3d 77, 80 (1st Cir. 2013) (quotation marks omitted). The court must accept all well-pleaded facts as true and draw all reasonable inferences in the plaintiff's favor. Rodríguez-Reyes , 711 F.3d at 52-53. Determining the plausibility of a claim is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 53 (quoting Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ).

III. DISCUSSION

Charter's complaint asserts that Maine's Pro Rata Law is preempted by the Cable Communications Policy Act of 1984, 47 U.S.C.A. §§ 521 - 573 (West 2020) (the "Cable Act"). The Attorney General contends that Charter's complaint does not state a plausible claim for relief because Maine's Pro Rata Law is not preempted by the Cable Act. Any preemption inquiry begins with the Supremacy Clause of the United States Constitution, which "mandates that federal law is the ‘supreme Law of the Land.’ " Tobin v. Fed. Exp. Corp. , 775 F.3d 448, 452 (1st Cir. 2014) (quoting U.S. Const. art. VI, cl. 2 ). Under the Supremacy Clause, "[a]ny state law that contravenes a federal law is null and void." Id. (citing Gibbons v. Ogden , 22 U.S. (9 Wheat.) 1, 210-11, 6 L.Ed. 23 (1824), and Brown v. United Airlines, Inc. , 720 F.3d 60, 63 (1st Cir. 2013) ). "Preemption may be express or implied." Id. (citing Brown , 720 F.3d at 63 ). "Express preemption occurs when congressional intent to preempt state law is made explicit in the language of a federal statute." Id. (citing Grant's Dairy--Me., LLC v. Comm'r of Me. Dep't of Agric., Food & Rural Res. , 232 F.3d 8, 15 (1st Cir. 2000) ).

The Cable Act contains two express preemption provisions relevant here. Title 47 U.S.C.A. § 556(c) states that "any provision of law of any State ... which is inconsistent with this chapter shall be deemed to be preempted and superseded." Additionally, 47 U.S.C.A. § 543(a)(2) provides that "rates for the provision of cable service ... shall not be subject to regulation ... by a State," so long as the Federal Communications Commission ("FCC") has found that the cable system providing the service is subject to effective competition. In 2015, the FCC promulgated a regulation presuming that all cable systems are subject to effective competition. 47 C.F.R. § 76.906 (West 2020). It is undisputed that, pursuant to this regulation, the FCC has found that Charter is subject to effective competition in Maine. Thus, under § 543(a)(2) of the Cable Act, Maine may not regulate the rates that Charter charges for the provision of cable service. Accordingly, under § 556(c), any Maine statute that attempts to regulate rates for the provision of cable service is preempted by the Cable Act.

The parties dispute whether Maine's Pro Rata Law falls within the scope of the Cable Act's express preemption provisions. Specifically, they dispute whether the Pro Rata Law regulates "rates for the provision of cable service" within the meaning of § 543(a)(2) of the Cable Act. I begin by explaining the legal standards that guide my analysis of the parties' arguments.

A. Standards Governing the Analysis of Express Preemption Provisions

"Congressional intent is the touchstone of any effort to map the boundaries of an express preemption provision." Tobin , 775 F.3d at 452 (citing Cipollone v. Liggett Grp., Inc. , 505 U.S. 504, 516, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992), and Grant's Dairy--Me. , 232 F.3d at 14 ). To determine Congress's intent, a court must begin "with the text and context of the provision itself." Id. at 452-53 (citing Mass. Ass'n of Health Maint. Orgs. v. Ruthardt , 194 F.3d 176, 179-80 (1st Cir. 1999) ). The inquiry into congressional intent is also "informed by the statutory structure, purpose, and history." Id. at 453 (citing Brown , 720 F.3d at 63, and DiFiore v. Am. Airlines, Inc. , 646 F.3d 81, 86 (1st Cir. 2011) ). However, the text remains "the best evidence" of congressional intent. Puerto Rico v. Franklin Cal. Tax-Free Tr. , ––– U.S. ––––, 136 S. Ct. 1938, 1946, 195 L.Ed.2d 298 (2016) (quoting Chamber of Commerce of U.S. v. Whiting , 563 U.S. 582, 594, 131 S.Ct. 1968, 179 L.Ed.2d 1031 (2011) ). Accordingly, where the text is sufficiently clear, the analysis begins and ends there. See id.

Additionally, when Congress has "legislated in a field traditionally occupied by the States," such as consumer protection, courts apply a presumption against preemption.

Altria Grp., Inc. v. Good , 555 U.S. 70, 77, 129 S.Ct. 538, 172 L.Ed.2d 398 (2008) (citing Medtronic, Inc. v. Lohr , 518 U.S. 470, 485, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996) ); see also N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co. , 514 U.S. 645, 654-55, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995) (collecting authorities). Accordingly, if an express preemption clause "is susceptible of more than one plausible reading" after an analysis of the statutory text, context, and purpose, "courts ordinarily ‘accept the reading that disfavors pre-emption.’ "² Altria Grp. , 555 U.S. at 77, 80, 129 S.Ct. 538 (quoting Bates v. Dow Agrosciences LLC , 544 U.S. 431, 449, 125 S.Ct. 1788, 161 L.Ed.2d 687 (2005) ); see also Coventry Health Care of Mo., Inc. v. Nevils , ––– U.S. ––––, 137 S. Ct. 1190, 1197-98 & n.3, 197 L.Ed.2d 572 (2017) (indicating that the presumption against preemption does not apply where Congress's intent is apparent from the statutory text, context, and purpose); CSX Transp., Inc. v. Healey , 861 F.3d 276, 286 (1st Cir. 2017) (same). The presumption against preemption applies not only when determining whether Congress generally intended to preempt state law but also when delineating the scope of an express preemption provision.³ See Medtronic , 518 U.S. at 485, 116 S.Ct. 2240 ; accord Brown , 720 F.3d at 63 (citing Medtronic , 518 U.S. at 484, 116 S.Ct. 2240, and Ruthardt , 194 F.3d at 179 ).

B. Maine's Pro Rata Law and the Cable Act's Express Preemption Provisions

As noted above, § 543(a)(2) of the Cable Act provides, in pertinent part, that "rates for the...