Sprint Pcs Assets v. City of La Canada

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

SPRINT PCS ASSETS, L.L.C., a 
Delaware limited liability
company, wholly-owned by SPRINT
TELEPHONY PCS, L.P., a Delaware
limited partnership,
Plaintiff-Appellant,
v.
CITY OF LA CAÑADA FLINTRIDGE, a
public entity; STEPHEN A. DEL
GUERCIO, in his official capacity as No. 05-55014
Mayor of the City of La Cañada D.C. No.
Flintridge; LAURA OLHASSO, in her
official capacity as Mayor Pro  CV-03-00039-DOC
ORDER AND
Tem of the City of La Cañada
AMENDED
Flintridge; ANTHONY J.
OPINION
PORTANTINO, in his official
capacity as Council Member of
the City of La Cañada Flintridge;
GREGORY BROWN, in his official
capacity as Council Member of
the City of La Cañada Flintridge;
DAVID A. SPENCE, in his official
capacity as Council Member of
the City of La Cañada Flintridge,
Defendants-Appellees.

Appeal from the United States District Court
for the Central District of California
David O. Carter, District Judge, Presiding

Argued and Submitted
October 19, 2005—Pasadena, California

5627
5628 SPRINT PCS v. LA CAÑADA FLINTRIDGE
Filed January 17, 2006
Amended May 23, 2006

Before: Cynthia Holcomb Hall, Diarmuid F. O’Scannlain,
and Richard A. Paez, Circuit Judges.

Opinion by Judge O’Scannlain
 SPRINT PCS v. LA CAÑADA FLINTRIDGE 5629

COUNSEL

John J. Flynn, III, Nossaman, Guthner, Knox & Elliott, LLP,
Irvine, California, argued the cause for the appellants. Greg-
ory W. Sanders and Michael W. Shonafelt were on the briefs.

Scott J. Grossberg, Cihigoyenetche, Grossberg & Clouse,
Rancho Cucamonga, California, argued the cause for the
appellees. Richard R. Clouse, Amy von Kelsch-Berk, and
Angelica Arias were on the brief.
5630 SPRINT PCS v. LA CAÑADA FLINTRIDGE
ORDER

The opinion filed on January 17, 2006, slip op. 733, and
appearing at 435 F.3d 933 (9th Cir. 2006), is hereby amended
in its entirety, and the amended opinion shall be filed concur-
rently with this order.

With the filing of this order and amended opinion, the
panel votes to deny the petition for rehearing. Judges
O’Scannlain and Paez vote to deny the petition for rehearing
en banc, and Judge Hall so recommends. The full court has
been advised of the petition for rehearing en banc and no
judge of the court has requested a vote on whether to rehear
the matter en banc. Fed. R. App. P. 35.

The petition for rehearing and petition for rehearing en
banc are therefore DENIED. No further petitions may be
filed.

All other pending motions are DENIED as moot.

OPINION

O’SCANNLAIN, Circuit Judge:

This case requires us to determine whether a city can, con-
sistent with federal law, deny a telecommunications company
a permit to construct and to install a wireless antenna based
solely on a city ordinance which is preempted by state law.1

I

Sprint PCS is a wireless telecommunications company
seeking to install two wireless telecommunications facilities
1
This opinion is to be filed with the concurrently transmitted memoran-
dum disposition.
 SPRINT PCS v. LA CAÑADA FLINTRIDGE 5631
in the city of La Cañada Flintridge (“the City”). The City
rejected Sprint’s applications pursuant to portions of its local
wireless ordinance. After the City denied two of Sprint’s five
applications, Sprint brought two actions against the City—one
for each permit application denied—alleging violations of the
federal Telecommunications Act of 1996, Pub. L. No. 104-
104, 110 Stat. 56 (codified as amended in scattered sections
of 15, 18, & 47 U.S.C.) (“Telecom Act”), and the California
Public Utilities Code, Cal. Pub. Util. Code §§ 7901, 7901.1
(“Utilities Code”). The district court concluded that the city
ordinance provided “substantial evidence” supporting the per-
mit denial. Sprint appeals from the grant of summary judg-
ment in favor of the City, arguing that the denials violate state
and federal law. In a separate, concurrently-filed memoran-
dum disposition we considered Sprint’s argument that state
law preempts provisions of the city ordinance. See Sprint v.
City of La Cañada Flintridge, No. 05-55014 (filed May 23,
2006). Because we agreed with Sprint and held that state law
preempts the provisions of the city ordinance relied upon by
the City, see id. at 7, the only remaining question is whether,
as the City argues, portions of a municipal ordinance pre-
empted by state law can constitute substantial evidence sup-
porting a permit denial under federal law.

II

In October 2001, the City enacted Ordinance 324, “An
Urgency Ordinance of the City Council of the City of La Cañ-
ada Flintridge Adopting a Moratorium on the Issuance of Any
Demolition, Grading, Utility, Excavation or Other Permits
Relating to Above-Ground Structures Along City Public
Rights-of-Way” (“Ordinance 324” or “the city ordinance”),
setting forth criteria that applicants for a Public Right-of-Way
Above Ground Construction permit (“permit”) must satisfy.2
2
Again, in a separate memorandum disposition, we conclude that por-
tions of the ordinance relied on by the City were preempted by state law.
See Sprint v. City of La Cañada Flintridge, No. 05-55014 (filed May 23,
2006) at 7.
5632 SPRINT PCS v. LA CAÑADA FLINTRIDGE
Sprint applied for five permits shortly after the City enacted
its ordinance. The City granted two of the permit applications,
Sprint withdrew one application, and the City rejected two of
the applications, which now form the bases for Sprint’s com-
plaint.

Sprint intended to construct wireless facilities along Figue-
roa Street and Descanso Drive, and applied for permits in
December 2001 and July 2002, respectively. After a variety
of appeals through the City Public Works and Traffic Com-
mission, Sprint ended up in the City Council, which held
hearings and denied both of Sprint’s applications based on the
city ordinance.

Sprint brought suit under the Telecom Act, which requires
that permit denials be supported by “substantial evidence.”
The actions for the Figueroa Street facility and the Descanso
Drive facility were consolidated and the district court found
that substantial evidence supported the permit denials based
on provisions of the city ordinance that we have determined
in a separate memorandum disposition are preempted by state
law. Ruling on cross-motions for summary judgment, the dis-
trict court ruled against Sprint on two of its critical claims.
The parties thereafter consented to dismissal of Sprint’s
remaining claims, and the district court entered summary
judgment for the City.

III

A

The interpretation of the statutory provisions of the Tele-
com Act and the Utilities Code presents questions of law
which receive de novo review. Carson Harbor Vill., Ltd. v.
Unocal Corp., 270 F.3d 863, 870 (9th Cir. 2001) (en banc).
However, if this Court reviews the evidence relied upon by
the City in denying the permits, the City must satisfy the sub-
stantial evidence standard. See 47 U.S.C. § 332(c)(7)(B)(iii).
 SPRINT PCS v. LA CAÑADA FLINTRIDGE 5633
We have described the substantial evidence standard as “def-
erential.” See MetroPCS, Inc. v. City & County of San Fran-
cisco, 400 F.3d 715, 725 (9th Cir. 2005); see also id. at 723
(holding that “substantial evidence” implies “the traditional
standard used for judicial review of agency decisions” (inter-
nal quotation omitted)).

B

1

[1] The Telecom Act requires that the City’s permit denials
be supported by substantial evidence. Specifically, 47 U.S.C.
§ 332(c)(7)(B)(iii) states that “[a]ny decision by a State or
local government or instrumentality thereof to deny a request
to place, construct, or modify personal wireless service facili-
ties shall be in writing and supported by substantial evidence
contained in a written record.”

The interpretation of “substantial evidence” in the context
of the Telecom Act was the focus of extended analysis in
MetroPCS, which held that “the substantial evidence inquiry
does not require incorporation of the substantive federal stan-
dards imposed by the [Telecom Act].” 400 F.3d at 723.
Rather, courts should consider whether the denial is based on
“substantial evidence in the context of applicable state and
local law.” Id. at 724. Consequently, the Telecom Act “ ‘does
not affect or encroach upon the substantive standards to be
applied under established principles of state and local law.’ ”
Id. (quoting Cellular Tel. Co. v. Town of Oyster Bay, 166 F.3d
490, 494 (2d Cir. 1999)); see also id. (concluding that the sub-
stantial evidence standard “does not create a substantive fed-
eral limitation upon local land use regulatory power”)
(internal quotation omitted)). MetroPCS accords with the
decisions of other circuits in this respect. See id. at 723 (not-
ing that “there appears to be universal agreement among the
circuits as to the substantive content of [the substantial evi-
dence] requirement”); see, e.g., Preferred Sites, LLC v. Troup
5634 SPRINT PCS v. LA CAÑADA FLINTRIDGE
County, 296 F.3d 1210, 1219 (11th Cir. 2002); Oyster Bay,
166 F.3d at 494.

The substantial evidence standard is “essentially ‘deferen-
tial,’ ” and courts may not “ ‘engage in [their] own fact-
finding nor supplant [a city’s] reasonable determinations.’ ”
MetroPCS, 400 F.3d at 725 (quoting Oyster Bay, 166 F.3d at
494) (first alteration in original)). Substantial evidence
implies “less than a preponderance, but more than a scintilla
of evidence.” MetroPCS, 400 F.3d at 725 (internal quotation
omitted).

[2] Thus, to be valid, the grounds for denial must receive
at least some weight under state and local law. If not, the
denial is deemed “invalid even before the application of the
[Telecom Act’s] federal standards.” MetroPCS, 400 F.3d at
724.

2

[3] Section 332(c)(7)(A) of the Telecom Act provides that
“[e]xcept as provided in this paragraph, nothing in this Chap-
ter shall limit or affect the authority of a State or local gov-
ernment or instrumentality thereof over decisions regarding
the placement, construction, and modification of personal
wireless service facilities.” 47 U.S.C. § 332(c)(7)(A) (empha-
sis added).

[4] If the City’s local ordinance were valid under the Tele-
com Act, despite being preempted by state law, as we have
concluded in a separate memorandum disposition, then the
Telecom Act effectively would provide a measure of sover-
eign authority to cities, which their own state constitutions
and statutes deny them. The language of subsection (c)(7)(A),
however, does not imply that local law should be valid to the
exclusion of state law, but merely that local law itself may not
be ignored. Thus, if the local law itself is invalid—for exam-
ple, because it conflicts with state law—then subsection
 SPRINT PCS v. LA CAÑADA FLINTRIDGE 5635
(c)(7)(A) will not save it. If the Telecom Act intended to grant
such authority to local laws—even those that are preempted
by state laws—it might have preserved the authority of “State
and local government[s],” rather than the disjunctive.

Further, the City argues that the plain language of the
statute—preserving the authority of “State or local
government”—mandates City autonomy. Under this reading
of the statutory text, the Telecom Act does not limit state rules
or local rules. Thus, since there is a local rule, whether or not
valid, the Telecom Act must recognize it, goes the argument.

We are not persuaded. The disjunctive language implies
that state or local authority is preserved, not that both are nec-
essarily preserved regardless of other constraints. Further,
even if we followed the City’s argument and held that the lan-
guage of subsection (c)(7)(A) preserves local authority, there
is no local authority here in the first place—State law has
already preempted local authority. The “state or local govern-
ment” language, in context, affirms preexisting authority—
“nothing in this chapter shall limit or affect the authority”—it
is not a positive grant of authority where none rightly exists.
The City’s reading ignores the plain statutory mandate that
“nothing . . . shall . . . affect the authority,” since the Telecom
Act would affect local authority by expanding local regulatory
power. (Given that the plain language of the statute is clear,
it is not necessary to address public policy arguments. In any
event, public policy also supports this interpretation. The
City’s proffered interpretation uses the Telecom Act to grant
broad regulatory authority to cities or municipalities that
would otherwise be constrained by state law. In other words,
the City’s reading of the “State or local government” lan-
guage would set cities free to regulate to the extent of their
traditional police power. This result would be antithetical to
the purpose of the Telecom Act, whose goal is “to promote
competition and higher quality in American telecommunica-
tions services and to ‘encourage the rapid deployment of new
telecommunications technologies.’ ” City of Rancho Palos
5636 SPRINT PCS v. LA CAÑADA FLINTRIDGE
Verdes v. Abrams, 125 S. Ct. 1453, 1455 (2005) (quoting the
Telecom Act).

C

[5] The Telecom Act requires permit denials be supported
by substantial evidence. 47 U.S.C. § 332(c)(7)(B)(iii) (2005).
Because the City overstepped its regulatory authority under
state law, its wireless ordinance is not viable, and no evidence
supports the City’s permit denials. The district court’s conclu-
sion that substantial evidence supported the City’s permit
denials must be reversed.

IV

In light of our disposition of this case, we need not reach
Sprint’s additional claims that the city discriminated against
it in violation of 47 U.S.C. § 332(c)(7)(B)(i)(I).

REVERSED.