Time Warner Entertainment Advance/Newhouse Partnership v. Town of Landis
| Decision Date | 17 March 2016 |
| Docket Number | 10 CVS 1172 |
| Citation | 2014 NCBC 25 |
| Parties | TIME WARNER ENTERTAINMENT ADVANCE/NEWHOUSE PARTNERSHIP, Plaintiff, v. TOWN OF LANDIS, NORTH CAROLINA, Defendant. |
| Court | Superior Court of North Carolina |
Brooks, Pierce, McLendon, Humphrey & Leonard, LLP by Reid L. Phillips; Hogan Lovells, LLP by Gardner F. Gillespie and Paul A. Werner, III for Plaintiff.
Poyner Spruill, LLP by David M. Barnes and Andrew H. Erteschik for Defendant.
The Bussian Law Firm, PLLC by John A. Bussian for the North Carolina Cable Telecommunications Association, Amicus Curiae.
Nelson Mullins Riley & Scarborough, LLP by Joseph W. Eason, Christopher J. Blake, and Phillip A. Harris for the North Carolina Association of Electric Cooperatives, Amicus Curiae.
ElectriCities of North Carolina, Inc. by W. Mark Griffith, Amicus Curiae.
{1} THIS MATTER came before the Court for trial without a jury on July 18, 2011, to resolve claims asserted by Plaintiff Time Warner Entertainment Advance/Newhouse Partnership ("Plaintiff") against Defendant Town of Landis ("Defendant") pursuant to N.C. Gen. Stat. section 62-350 ("§ 62-350"). The various claims relate to the rates, terms, and conditions Defendant seeks to impose on Plaintiff to attach its communications infrastructure to Defendant's utility poles. After the bench trial concluded, the Court requested additional briefing on certain constitutional questions related to § 62-350. Having considered the evidence presented by the parties at trial, the parties' pre- and post-trial briefs, the briefings of amici, and the arguments and contentions of counsel, the Court finds, concludes, and orders as follows:
I.
{2} On April 19, 2010, Plaintiff filed its Verified Complaint to resolve a dispute with Defendant concerning the rates, terms, and conditions of Plaintiff's attachment of its telecommunications transmission cables to utility poles owned by Defendant. Specifically, Plaintiff alleged that: (1) Defendant refused to negotiate in good faith the terms of a new pole attachment agreement between the parties; (2) Defendant's proposed attachment terms violate § 62-350's nondiscrimination requirement; and (3) the specific terms of Defendant's proposed new attachment agreement are "unjust and unreasonable."
{3} Pursuant to § 62-350(c), Plaintiff contests three terms in Defendant's proposed new attachment agreement, and asks the Court to determine whether: (a) Defendant's proposed rental rate of $18.00 per attachment is an unjust and unreasonable rate; (b) Defendant's proposal to charge Plaintiff the $18.00 rental rate separately for "any one cable that is physically attached to a pole by means of a through bolt" is unjust and unreasonable; and (c) Defendant's proposed $15.00-per-day fine for safety violations caused by Plaintiff's non-compliant pole attachments existing after Defendant provides 30-days' notice of such violations is unjust and unreasonable.
{4} The case was designated as a mandatory complex business case on April 21, 2010, and assigned to the Court on April 22, 2010.
{5} On June 4, 2010, Defendant filed its Answer, praying, in part, that the Court declare Defendant's proposed rates, terms, and conditions reasonable.
{6} On June 22, 2010, the North Carolina Association of Electric Cooperatives ("NCAEC") moved to intervene in this action pursuant to Rule 24 of the North Carolina Rules of Civil Procedure. The Court denied NCAEC's Motion to Intervene on August 17, 2010, instead permitting NCAEC to submit briefs as amicus curiae.
{7} ElectriCities of North Carolina, Inc. ("ElectriCities") moved for permission to participate in the case as amicus curiae on August 25, 2010, which the Court granted on September 21, 2010.
{8} The North Carolina Cable Telecommunications Association ("NCCTA") moved for permission to participate in the case as amicus curiae on January 26, 2011, which the Court granted on February 15, 2011.
{9} On December 20, 2010, Defendant filed its Motion for Partial Summary Judgment as to Plaintiff's claims for failure to negotiate and for discrimination. After briefing and oral argument, the Court granted Defendant's Motion for Partial Summary Judgment as to Plaintiff's claim for failure to negotiate, and denied the Motion as to the discrimination claim. See Time Warner Entm't Advance/Newhouse P'ship v. Town of Landis, 2011 NCBC 19 ¶ 66 (N.C. Super. Ct. June 30, 2011), http://www.ncbusinesscourt.net/ opinions/2011_NCBC _19.pdf.
{10} From July 18 to July 21, 2011, the Court conducted a bench trial on the remaining claims. At the close of all evidence, Plaintiff attempted to withdraw its discrimination claim, purporting to leave only the disputed terms of the proposed attachment agreement for the Court to resolve.
{11} On June 19, 2012, the Court notified the parties of the Court's concerns about two questions of law: namely, the justiciability of the remaining claims, and the constitutionality of § 62-350 with respect to certain requirements it imposed upon the Court. The parties, and amici curiae NCCTA and NCAEC, briefed the Court on these two matters, and the Court conducted a hearing on July 17, 2012.
{12} On September 21, 2012, the Court entered its Order and Opinion dismissing the remaining claims for lack of a justiciable controversy to confer subject matter jurisdiction on the Court. See Time Warner Entm't Advance/Newhouse P'ship v. Town of Landis, 2012 NCBC 48 (N.C. Super. Ct. Sept. 21, 2012), http://www.ncbusinesscourt.net/opinions/2012_NCBC_48.pdf. Thereafter, Plaintiff timely appealed the Court's Order.
{13} By its Order dated August 6, 2013, the North Carolina Court of Appeals reversed the Court's decision, concluding that the Court does have subject matter jurisdiction to resolve the claims. See Time Warner Entm't Advance/Newhouse P'ship v. Town of Landis, 747 S.E.2d 610 (2013).
{14} Upon remand, the Court allowed supplemental briefing to address the remaining question regarding the constitutionality of § 62-350 and additional arguments related to final judgment.
II.
POLE ATTACHMENT REGULATION UNDER § 62-350[1]
{15} As enacted in July 2009, § 62-350 mandates that municipalities and membership corporations organized under Chapter 117 of the North Carolina General Statutes "shall allow any communications service provider to utilize [their] poles, ducts, and conduits at just, reasonable, and nondiscriminatory rates, terms, and conditions adopted pursuant to negotiated or adjudicated agreements." N.C. Gen. Stat. § 62-350(a) (2013). Included in the definition of "communications service provider" are those that provide "cable service over a cable system as those terms are defined in Article 42 of Chapter 66 of the General Statutes." § 62-350(e).
{16} The statute further provides that:
Following receipt of a request from a communications service provider, a municipality or membership corporation shall negotiate concerning the rates, terms, and conditions for use of or attachment to the poles, ducts, or conduits that it owns or controls. Following a request from a party to an existing agreement made pursuant to the terms of the agreement or made within 120 days prior to or following the end of the term of the agreement, the communications service provider and the municipality or membership corporation which is a party to that agreement shall negotiate concerning the rates, terms, and conditions for the continued use of or attachment to the poles, ducts, or conduits owned or controlled by one of the parties to the agreement. . . . Upon request, a party shall state in writing its objections to any proposed rate, terms, and conditions of the other party.
N.C. Gen. Stat. § 62-350(b) (2014).[2]
{17} However, if "the parties are unable to reach an agreement within 90 days . . . or if either party believes in good faith that an impasse has been reached . . ., either party may bring an action in Business Court . . ., and the Business Court shall have exclusive jurisdiction over such actions." § 62-350(c). In that event, the statute directs the Business Court to do the following:
resolve any dispute identified in the pleadings consistent with the public interest and necessity so as to derive just and reasonable rates, terms, and conditions, taking into consideration and applying such other factors or evidence that may be presented by a party, including without limitation the rules and regulations applicable to attachments by each type of communications service provider under section 224 of the Communications Act of 1934, as amended, and [] apply any new rate adopted as a result of the action retroactively to the date immediately following the expiration of the 90-day negotiating period or initiation of the lawsuit, whichever is earlier. If the new rate is for the continuation of an existing agreement, the new rate shall apply retroactively to the date immediately following the end of the existing agreement.
{18} The North Carolina Court of Appeals interpreted "§ 62-350 to establish several judicially-enforceable statutory rights." Time Warner Entm't Advance/Newhouse P'ship v. Town of Landis, 747 S.E.2d 610, 616 (2013). "For instance, . . . § 62-350 creates a statutory right for both communications service providers and municipalities to establish 'just, reasonable, and nondiscriminatory' pole attachment rates within 90 days of a request to negotiate." Id. (quoting § 62-350(c)). The court also held that "the statute expressly creates a private cause of action to enforce these rights." Id. (citation omitted).
{19} Prior to commencement of an action, the attaching entity must pay any undisputed fees owed to a municipal or cooperative pole owner under an existing agreement, and the Court "may resolve any existing disputes regarding fees alleged to be owing under a preexisting agreement or regarding safety compliance arising under subsection [62-350](d)." Id.[3] This statute does not apply to utilities...
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