United States Court of Appeals
For the First Circuit
No. 01-1787
NEPSK, INC., D/B/A HOULTON CABLE,
Plaintiff, Appellant,
v.
TOWN OF HOULTON,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Gene Carter, U.S. District Judge]
[Hon. Margaret J. Kravchuk, U.S. Magistrate Judge]
Before
Torruella, Lynch, and Lipez, Circuit Judges.
Roy T. Pierce, with whom Bruce C. Gerrity, and Preti,
Flaherty, Beliveau, Pachios & Haley, LLC were on brief, for
appellant.
Patrick J. Scully, with whom Joseph J. Hahn, Kate S. Debevoise
and Bernstein, Shur, Sawyer & Nelson, P.A. were on brief, for
appellee.
March 13, 2002
LIPEZ, Circuit Judge. This suit arises out of a dispute
over a cable franchise for the Town of Houlton, Maine ("Town"). In
early 1999, the Town decided not to renew the franchise held by
NEPSK, Inc., d/b/a Houlton Cable ("Houlton Cable"). Instead, it
sought competitive proposals for a new cable franchise, and
eventually awarded the franchise to Houlton Cable's competitor,
Pine Tree Cablevision Associates ("Pine Tree"). Houlton Cable then
commenced this suit against the Town, alleging multiple violations
of the Cable Communications Policy Act of 1984, as amended by the
Cable Television Consumer Protection and Competition Act of 1992
and the Telecommunications Act of 1996 (codified in pertinent part
at 47 U.S.C. §§ 521-573) (the "Act"). The district court granted
the Town's motion for judgment on the pleadings as to two counts of
the complaint, based on Houlton Cable's failure to respond to the
motion as required by District of Maine Local Rule 7(b). Several
months later, the court entered summary judgment for the Town on
the remaining count of the complaint. Houlton Cable challenges
both decisions. We affirm.
I.
On April 23, 1984, the Town entered into a cable
franchise agreement with Houlton Cable's predecessor, Houlton CATV,
Inc.1 The franchise ran for a period of 15 years, and was set to
expire in April of 1999. Under federal law, 47 U.S.C. § 546(a)-
1
With the exception of certain services not relevant here, "a
cable operator may not provide cable service without a franchise."
47 U.S.C. § 541(b).
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(g), Houlton Cable was entitled to initiate formal renewal
procedures by submitting a written request to the Town between
April and October, 1996. If neither Houlton Cable nor the Town
took action within that six-month window, the renewal process would
be governed by the informal procedures set out in § 546(h).
Houlton Cable submitted a renewal proposal in November,
1997, well after the expiration of the six-month period for
initiation of formal procedures. For several months, the Town took
no action on the proposal. Then, in April of 1998, the Town
Council voted to "invite new applications for the Houlton Cable
franchise." Consistent with the informal renewal procedures
prescribed by § 546(h), the Town scheduled a public hearing to
address the cable franchise issue. Following that hearing, in
February of 2000, the Town Council decided not to renew Houlton
Cable's franchise and to solicit bids from other providers.
Minutes from the public hearing and the Town Council's subsequent
meeting indicate that Houlton Cable's refusal to provide high-speed
Internet access to its subscribers was a major factor in the Town's
decision to reject the renewal proposal.
On March 31, 2000, the Town issued a Request for
Proposals ("RFP") soliciting proposals for a new, ten-year cable
franchise. As the RFP made clear, the Town did not believe it
could support more than one franchise. Although it had not
undertaken any detailed analysis of the issue, the Town was aware
that no municipality in Maine -- including those much larger than
Houlton -- was served by more than one cable company. Accordingly,
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the Town explained in the RFP that it planned to award only one
franchise:
The Town of Houlton recognizes that it cannot
award an exclusive cable television franchise
to any applicant. Nevertheless, the Town also
recognizes that the Town of Houlton can only
feasibly support one cable television
franchise at one time. Accordingly, the Town
intends to award only one cable television
franchise during the next ten year period,
which will be the franchise as a result of
this RFP process.
The Town received proposals from two parties, Houlton
Cable and Pine Tree. After considering both proposals, the Town
determined that Pine Tree's "most closely [met] the needs of the
Town as determined by public surveys and [the earlier] public
hearing." At a meeting in May, 2000, the Town Council voted to
reject Houlton Cable's proposal, and to pursue negotiations with
Pine Tree.
Houlton Cable then initiated this suit against the Town.
Count I of its complaint alleged that the Town violated the Act by
failing to comply with the formal renewal procedures set forth in
§ 546(a)-(g). Count II alleged that the Town had conditioned the
renewal of Houlton Cable's franchise on Houlton Cable's willingness
to provide high speed internet service to its subscribers. Such a
demand, Houlton Cable maintained, violated 47 U.S.C.
§ 541(b)(3)(D), which prohibits franchising authorities from
requiring cable operators to provide certain "telecommunication
service[s]" as a condition of a franchise award, and 47 U.S.C.
§ 544(e), which states that "[n]o State or franchising authority
may prohibit, condition, or restrict a cable system's use of any
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type of . . . transmission technology." Finally, Count III alleged
that the Town unreasonably refused to award Houlton Cable a
"second" franchise, in violation of 47 U.S.C. § 541(a)(1).
After answering the complaint, the Town moved under Fed.
R. Civ. P. 12(c) for judgment on the pleadings as to Counts I and
II. With respect to Count I, the Town argued that, since neither
Houlton Cable nor the Town had initiated formal renewal procedures
during the six-month window, the renewal process properly was
governed by the informal procedures authorized by § 456(h). In
response to Count II, the Town contended that the Act did not apply
retroactively to invalidate the terms of the 1984 Franchise
Agreement, which provided that the decision as to renewal was
committed to the Town's discretion, and would be based in part on
"the development of cable services." In the alternative, the Town
argued that high-speed internet access is neither a
"telecommunication service" nor a "transmission technology," and
therefore is not governed by §§ 541(b)(3)(D)(a) and 544(e) of the
Act.
Pursuant to Local Rule 7(b) of the District of Maine,
Houlton Cable was obligated to respond to the Town's motion within
ten days.2 Houlton Cable did not so respond, and, accordingly, was
deemed to have consented to the motion. Thus, on December 7, 2000
-- one day after the ten-day period had expired -- the district
2
Rule 7(b) has since been amended to permit response "within
twenty-one (21) days after the filing of a motion."
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court entered judgment for the Town on Counts I and II "per Local
Rule 7(b)."
Houlton Cable filed a motion under Fed. R. Civ. P. 59(e),
asking the court to reconsider and vacate its December 7 judgment.
It argued that the district court could not enter judgment on the
pleadings without first satisfying itself that the Town was in fact
entitled to judgment as a matter of law. The court granted the
motion for reconsideration, but reaffirmed its initial judgment.
Rule 12(c), the court noted, does not prescribe any particular
standard of decision; therefore, it does not prohibit the entry of
judgment on the basis of noncompliance with a local waiver rule,
without consideration of the merits of the motion. Given the
absence of a direct conflict between Federal Rule 12(c) and Local
Rule 7(b), the court concluded that it was entitled to enforce its
local rule strictly.
The Town then moved for summary judgment on Count III of
Houlton Cable's complaint, arguing that the provisions of
§ 541(a)(1) governing applications for a second, competitive
franchise did not apply to the Town's choice to award an initial
franchise to one provider rather than another. The court3 agreed,
and entered judgment for the Town on Count III. Houlton Cable
filed a timely notice of appeal, challenging the district court's
3
After the district court dismissed Counts I and II of
Houlton Cable's complaint, the parties consented to further
proceedings in the case before a magistrate judge. See Fed. R.
Civ. P. 73(b). For the sake of simplicity, we refer to both the
magistrate judge and the district court judge as the "district
court" or the "court."
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December 7 grant of judgment on the pleadings as to Counts I and
II, its refusal to rescind that judgment under Rule 59(e), and its
grant of summary judgment on Count III.
II.
We turn, first, to the district court's decisions with
respect to Counts I and II. In granting the Town's motion for
judgment on the pleadings, the court relied on District of Maine
Local Rule 7(b), which then provided:
Unless within ten (10) days after the filing
of a motion the opposing party files written
objection thereto, incorporating a memorandum
of law, the opposing party shall be deemed to
have waived objection.
Houlton Cable conceded that it did not comply with that rule, and
that its failure to file a timely response did not constitute
"excusable neglect," permitting reconsideration under Fed. R. Civ.
P. 60(b)(1). Thus, Houlton Cable sought relief under Fed. R. Civ.
P. 59(e) on the ground that the district court's judgment was based
on an error of law. See Acevedo-Villalobos v. Hernandez, 22 F.3d
384, 390 (1st Cir. 1994) (explaining that Rule 59(e) is the proper
vehicle for a party seeking to overturn a judgment on the basis of
alleged legal errors). Maintaining that Rule 12(c) requires a
decision on the merits, it argued that the district court erred as
a matter of law when it granted the Town's motion for judgment on
the pleadings solely on the basis of a local "deemed waiver" rule
like Rule 7(b).
Houlton Cable renews that argument on appeal. We review
the district court's initial application of its local rule for
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abuse of discretion. CMM Cable Rep, Inc. v. Ocean Coast Props.,
Inc., 97 F.3d 1504, 1528 (1st Cir. 1996). We apply the same
standard to the district court's denial of a Rule 59(e) motion to
alter or amend the judgment. See Williams v. Poulos, 11 F.3d 271,
289 (1st Cir. 1993). However, the court's interpretation of Rule
12(c) of the Federal Rules of Civil Procedure presents a legal
question, which we review de novo. See Sec. & Exch. Comm'n v.
Sargent, 229 F.3d 68, 79 (1st Cir. 2000).
Local Rule 7(b) and its predecessor, District of Maine
Local Rule 19(c), have been in existence for almost 20 years.4
Courts in the District of Maine routinely apply such rules in
situations where the opposing party fails to file an objection to
a motion, regardless of whether the motion is dispositive. See,
e.g., Cardente v. Fleet Bank, 796 F. Supp. 603 (D. Me. 1992) (Rule
12(b)(6) motion to dismiss); United Transp. Union v. Me. Cent. R.R.
Co., 107 F.R.D. 383, 383-84 (D. Me. 1985) (motion to dismiss for
lack of personal jurisdiction and improper venue); Gideon v. Adm'r,
United States Small Bus. Admin., 102 F.R.D. 604 (D. Me. 1984)
(motion to dismiss for lack of subject matter jurisdiction); see
also Desjardins v. Van Buren Cmty. Hosp., 969 F.2d 1280 (1st Cir.
1992) (affirming, against First Amendment challenge, district
court's order requiring defendant to make a public apology, on
ground that district court properly relied on Local Rule 19(c) to
find that defendant waived objection to plaintiff's motion to
4
Local Rule 19(c) provided: "Unless within 10 days after the
filing of a motion the opposing party files a written objection
thereto, he shall be deemed to have waived objection."
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compel apology). Other districts throughout the country have
adopted similar rules5 to "ensure the orderly, efficient, and
expeditious management of the extensive motion practice" of the
district courts. McDermott v. Lehman, 594 F. Supp. 1315, 1319 (D.
Me. 1984).
We have recognized that "[d]istrict courts enjoy broad
latitude" in adopting and administering such local rules. Air Line
Pilots Ass'n v. Precision Valley Aviation, Inc., 26 F.3d 220, 224
(1st Cir. 1994); see also, e.g., Ramsdell v. Bowles, 64 F.3d 5, 7
(1st Cir. 1995) (acknowledging the district court's "great leeway
in the application and enforcement of its local rules"). In
exercising that discretion, district courts may, where appropriate,
"demand adherence to specific mandates contained in the rules."
Air Line Pilots Ass'n, 26 F.3d at 224. For example, in Corey v.
Mast Road Grain & Bldg. Materials Co., Inc., 738 F.2d 11 (1st Cir.
1984) (per curiam), the defendants moved for dismissal under Fed.
5
See, e.g., D. Ariz. LR 1.10(i) ("If a motion does not
conform in all substantial respects with the requirements of this
Rule, or if the opposing party does not serve and file the required
answering memoranda, . . . such non-compliance may be deemed a
consent to the denial or granting of the motion and the Court may
dispose of the motion summarily."); C.D. Ill. LR 7.1(B)(1) ("If no
response memorandum is filed within [14 days after service of a
motion], the presiding judge will presume there is no opposition
and may rule on the motion without further notice to the
parties."); N.D. Ind. LR 7.1(a) ("Failure to file a response
[within 15 days after service of a motion] may subject the motion
to summary ruling."); D.N.H. LR 7.1(b) ("The court shall deem
waived any objection not filed in accordance [within 10 days from
the date the motion was filed]."); D.N.M. LR-Civ. 7.5(b) ("Failure
to serve (or file, if required by these rules) a response in
opposition to any motion constitutes consent to grant the
motion."); D. Nev. LR-Civ. 7-2(d) ("The failure of an opposing
party to file points and authorities in response to any motion
shall constitute a consent to the granting of the motion.").
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R. Civ. P. 12(b) for lack of personal jurisdiction. The district
court granted the motion on the basis of the plaintiff's failure to
file a timely response, as required by Local Rule 12 of the
District of Massachusetts. It later denied the plaintiff's Rule
60(b)(1) motion for relief from the judgment. We affirmed, stating
that "[t]he district court was entitled to insist upon compliance
with its local rule in these circumstances." Id. at 12 (citing In
re Harbour House Operating Corp., 724 F.2d 1, 2-3 (1st Cir. 1983)
(strictly applying Rule 3(b) of the First Circuit Rules governing
bankruptcy appeals)). Given plaintiff's failure to establish that
her tardiness was caused by excusable neglect, we concluded that
"the court could properly decline to excuse plaintiff's
noncompliance with the local rule." Id.; accord Stanciel v.
Gramley, 267 F.3d 575, 579 (7th Cir. 2001) (affirming district
court's grant of motion to dismiss on the basis of noncompliance
with local rule requiring response within 14 days); Tobel v. City
of Hammond, 94 F.3d 360, 361-62 (7th Cir. 1996) ("Plaintiffs'
lawyers admit that they were not aware of the Local Rule. This is
the end of the matter because the district court clearly has
authority to enforce strictly its Local Rules, even if a default
results."); Ghazali v. Moran, 46 F.3d 52, 53 (9th Cir. 1995)
("Failure to follow a district court's local rules is a proper
ground for dismissal.").
We reached a similar result in United States v. Proceeds
of Sale of 3,888 Pounds of Atlantic Sea Scallops, 857 F.2d 46 (1st
Cir. 1988). There, the government had filed a forfeiture action in
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Rhode Island district court, hoping to obtain title to the value of
certain sea scallops it had seized. Roughly one month later, the
defendant filed a combined "answer and claim," which the government
moved to strike as untimely. The district court granted the motion
to strike, based on the defendant's failure to respond within ten
days as required by Local Rule 12(a)(2). The government then moved
for a default judgment on the ground that the defendant's claim and
answer had been stricken. The district court granted that motion
as well, reaffirming its decision on the defendant's Rule 60(b)
motion for reconsideration.
Again, we affirmed. As in Corey, we concluded that the
district court did not abuse its discretion in refusing to grant
favorable reconsideration under Rule 60(b)(1) in the absence of a
showing of excusable neglect. See id. at 49 (finding that
defendant's alleged reliance on erroneous advice from local counsel
did not excuse untimely filings). We continued: "We also agree
with the district court that a default judgment may stand even
where there has been no showing of substantial prejudice to the
party benefitting from the default. A district court simply may
insist upon compliance with its local rules." Id.
As our holdings in Corey and Sea Scallops make clear, it
is within the district court's discretion to dismiss an action
based on a party's unexcused failure to respond to a dispositive
motion when such response is required by local rule, at least when
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the result does not clearly offend equity.6 See Pinto v.
Universidad de Puerto Rico, 895 F.2d 18, 19 & n.1 (1st Cir. 1990)
("We do not agree with defendant that a court may, without notice,
take a failure to respond to a motion to dismiss as a default,
warranting dismissal irrespective of substantive merit. . . . To be
distinguished is where a court had ordered a memorandum, and, of
course, cases where a response was required by rule." (citing Sea
Scallops and Corey)). It is equally clear, however, that a
district court cannot enforce its local rules in a way that
conflicts with the Federal Rules of Civil Procedure. See Fed. R.
Civ. P. 83(a)(1); Jaroma v. Massey, 873 F.2d 17, 20 (1st Cir. 1989)
("Local district court rules cannot be construed in such a way as
6
We have cautioned that this discretion "is not unbridled."
United States v. Roberts, 978 F.2d 17, 20 (1st Cir. 1992). In
Roberts, we held that the district court abused its discretion in
denying the government's motion to reconsider an order granting the
defendant's motion to suppress certain evidence as unopposed under
Maine's Local Rule 19(c) (the predecessor to Rule 7(b)). Unlike
Houlton Cable, the government in Roberts argued that its failure to
comply with the local rule was caused by excusable neglect. We
found that argument persuasive, and concluded that "the lower court
probably undervalued the worth of the [government's] explanation."
Id. at 22. We also noted that "it would have helped" if the
district court had considered several other factors in deciding the
government's motion to reconsider. Id. at 21-22 (listing factors
such as the degree of tardiness, the nature of the case, and "the
effect of granting (or denying) the motion on the administration of
justice").
This case does not require us to determine whether and how
Roberts might apply where, as here, the tardy party failed to offer
a "credible explanation of what [went] wrong." Id. at 25. Houlton
Cable does not argue that the district court erred by failing to
take into account equitable considerations like those we outlined
in Roberts. Instead, in both the district court and on appeal,
Houlton Cable has argued only that the court's strict application
of Local Rule 7(b) creates an impermissible conflict with Federal
Rule 12(c). As we explain below, the district court did not err in
rejecting that argument.
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to render them inconsistent with applicable provisions of the
Federal Rules of Civil Procedure.").
As Houlton Cable points out, we have identified such a
conflict in the context of motions for summary judgment filed under
Fed. R. Civ. P. 56. Rule 56(e) specifies that, if such a motion
is unopposed, the district court may grant summary judgment "if
appropriate." "Under this provision it is clear that '[w]here the
evidentiary matter in support of the motion does not establish the
absence of a genuine issue, summary judgment must be denied even if
no opposing evidentiary matter is presented.'" Jaroma, 873 F.2d at
20 (quoting Stepanischen v. Merchants Despatch Transp. Corp., 722
F.2d 922, 929 (1st Cir. 1983)). Thus, a district court may not
automatically grant a motion for summary judgment simply because
the opposing party failed to comply with a local rule requiring a
response within a certain number of days. Rather, the court must
determine whether summary judgment is "appropriate," which means
that it must assure itself that the moving party's submission shows
that "there is no genuine issue as to any material fact and that
the moving party is entitled to judgment as a matter of law." Fed.
R. Civ. P. 56(c); see also Advisory Committee Note to Rule 56
("Where the evidentiary matter in support of the motion does not
establish the absence of a genuine issue, summary judgment must be
denied even if no opposing evidentiary matter is presented.").
Given the potential tension between Rule 56(e) and local
rules such as the District of Maine's Rule 7(b), we have recognized
the need to interpret local waiver rules "so as to preserve [their]
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scope and validity without running afoul of the requirements of
Rule 56." Jaroma, 873 F.2d at 20. To that end, in the summary
judgment context we read the "deemed waiver" provision of the local
rules to extend only to waiver of objection to the moving party's
factual assertions. By failing to file the required response
within the time prescribed by the applicable local rule, the non-
moving party
waives the right to controvert the facts
asserted by the moving party in the motion for
summary judgment and the supporting materials
accompanying it. The court will accept as
true all material facts set forth by the
moving party with appropriate record support.
If those facts entitle the moving party to
judgment as a matter of law, summary judgment
will be granted.
Jaroma, 873 F.2d at 21 (emphasis added); see also McDermott, 594 F.
Supp. at 1321 (same).
Houlton Cable argues that the district court's obligation
to address the merits of a motion for summary judgment should
extend as well to Rule 12(c) motions for judgment on the pleadings.
It emphasizes that a party seeking judgment on the pleadings under
Rule 12(c) will make precisely the same arguments as a party
seeking summary judgment under Rule 56; namely, that "no material
issue of fact remains to be resolved and that he is entitled to
judgment as a matter of law." 5A Charles Alan Wright & Arthur R.
Miller, Federal Practice & Procedure § 1368, at 518 (2d ed. 1990);
Lefebvre v. Comm'r, 830 F.2d 417, 419 (1st Cir. 1987) (per curiam)
(describing standard for Rule 12(c)). The only difference is that
a Rule 12(c) motion must be filed at the close of pleadings, and
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must be based solely on the factual allegations in the complaint
and answer, whereas a motion for summary judgment may be filed at
any time, and may be supported by additional materials such as
affidavits, depositions, and the like. Compare Fed. R. Civ. P.
12(c) with Fed. R. Civ. P. 56. Such procedural differences,
Houlton Cable maintains, should not obscure the fundamental
similarity between the substance of a Rule 12(c) motion on the one
hand, and a Rule 56 motion on the other. Given that similarity,
Houlton Cable insists that the district court cannot rely on its
local rule to grant a Rule 12(c) motion, when it could not do the
same if the motion had been filed under Rule 56.
Although that argument is not without force, it ignores
an important -- and, in our view, dispositive -- difference between
the two federal rules. Unlike Rule 56, nothing in the text of Rule
12(c) compels the court to apply any particular standard when
deciding whether to grant or deny a motion for judgment on the
pleadings. Rule 12(c) provides that, "[a]fter the pleadings are
closed but within such time as not to delay the trial, any party
may move for judgment on the pleadings." As the district court
observed, the rule "poses no standard or regime by which the Court
shall decide the issues generated by the motion." By contrast,
Rule 56(c) specifically states that summary judgment "shall" be
granted "if the pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law."
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Moreover, Rule 56 explicitly addresses the possibility that the
non-moving party will not respond to the motion, and provides that
summary judgment may be entered in such circumstances only "if
appropriate." Fed. R. Civ. P. 56(e). Rule 12(c), on the other
hand, does not require the court to make any such determination
before granting the motion.
Given Rule 12(c)'s silence on the subject, we cannot
conclude that the district court's strict enforcement of Local Rule
7(b) creates an impermissible conflict with federal Rule 12(c). As
the district court put it, "[t]here is simply no reason contained
in [Rule 12(c)] or its intendment to prevent an otherwise
appropriate and enforceable rule of default, i.e. Local Rule 7(b),
from operating on a motion under Rule 12(c) without consideration
by the court of its merits." Accord Tobel, 94 F.3d at 362-63
(affirming grant of motion for judgment on the pleadings based on
opposing party's failure to respond as required by local rule);
Ghazali, 46 F.3d at 54 (reasoning that standards governing summary
judgment motions do not apply to motions to dismiss, and holding
that district court did not abuse its discretion in granting motion
to dismiss for noncompliance with a local rule specifying
requirements for response). We agree, and hold that the district
court did not abuse its discretion in insisting on compliance with
its local rule and in rejecting Houlton Cable's assertion of legal
error under Rule 59(e).
III.
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We turn to Houlton Cable's claim that the district court
erred in granting summary judgment to the Town on Count III of the
complaint. As noted, Count III asserted a claim for relief based
on an alleged violation of 47 U.S.C. § 541(a)(1), which provides:
A franchising authority may award, in
accordance with the provisions of this
subchapter, 1 or more franchises within its
jurisdiction; except that a franchising
authority may not grant an exclusive franchise
and may not unreasonably refuse to award an
additional competitive franchise. Any
applicant whose application for a second
franchise has been denied by a final decision
of the franchising authority may appeal such
final decision pursuant to the provisions of
section 555 of this title for failure to
comply with this subsection.
Section 555, in turn, authorizes "[a]ny cable operator adversely
affected by any final determination made by a franchising authority
under section 541(a)(1)" to appeal that decision to the federal
district court in the district in which the cable system is
located. 47 U.S.C. § 555(a).
As far as we can tell, the question whether § 541(a)(1)
creates a cause of action for a cable provider that lost out in a
competitive bidding process for a single franchise is one of first
impression. By its terms, § 541(a)(1) governs only applications
for a "second" franchise. Thus, the parties agree that § 541(a)(1)
does not speak to the Town's decision to award the initial
franchise to Pine Tree instead of Houlton Cable. Houlton Cable
argues, however, that once the Town decided to award a franchise to
Pine Tree, it was obligated to determine whether it also should
award Houlton Cable an "additional competitive" franchise. Because
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the Town readily admits that it never even considered that
question, Houlton Cable maintains that the outright denial of its
franchise proposal was "unreasonabl[e]" within the meaning of
§ 541(a)(1).
The difficulty with that argument is that Houlton Cable
never submitted an application for a "second" franchise. Hence,
the Town never refused such an application, unreasonably or not.
The RFP made clear that the Town was soliciting bids for a single
franchise. Houlton Cable's proposal -- submitted in response to
the RFP -- was, therefore, an application for that first, single
franchise. Nowhere in its proposal did Houlton Cable indicate
that, if the Town decided to grant the initial franchise to Pine
Tree, Houlton Cable wished to be considered for a second,
competitive franchise.
Houlton Cable concedes as much. However, it maintains
that such a desire can be assumed whenever two or more providers
submit applications for a single franchise. In Houlton Cable's
view, the losing co-applicant necessarily must be considered as an
applicant for a second franchise, whether or not it explicitly
asked for such treatment. We disagree. It is one thing to apply
for a single franchise; it is quite another to apply for a second,
competitive franchise. The latter may be far less profitable and,
therefore, far less attractive. As a result, it cannot be presumed
that an applicant for a first franchise also wishes to be
considered for a second, competitive franchise.
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Moreover, as the district court aptly observed, the
information a franchising authority -- and a reviewing court --
would consider in assessing an application for a second franchise
might be very different from the type of information needed to
weigh the strengths and weaknesses of competing applications for a
first franchise. The choice of one provider over another
implicates questions such as which provider offers the better
package of services, and at the best price. By contrast, the
decision whether to award a second franchise (once one has been
established) raises a different set of concerns: Could the
municipality's infrastructure support two cable grids? Would it be
technically feasible for a second provider to build its own system
over the existing one? Cf. City of Los Angeles v. Preferred
Communications, Inc., 476 U.S. 488, 495 (1986) (noting that factors
such as "the present uses of the public utility poles and rights-
of-way and how [the cable operator] proposes to install and
maintain its facilities on them" were relevant to the question
whether the City violated the First Amendment by refusing to grant
more than one cable franchise).
Of course, both sets of questions could be addressed at
once, in the initial selection process. But it does not follow
that they must be, or that the Town is obligated to raise the issue
of a second franchise sua sponte. Rather, if an applicant like
Houlton Cable wishes to be considered for a second franchise in the
event it is not chosen for the first, it must make that desire
explicit in its proposal. Unless and until Houlton Cable submits
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-- and the Town refuses -- an actual "request" for a "second"
franchise, it has no cause for complaint under § 541(a)(1). See I-
Star Communications Corp. v. City of East Cleveland, 885 F. Supp.
1035, 1042 (N.D. Ohio 1995) (dismissing § 541(a)(1) claim based on
plaintiff's failure to allege submission, and denial, of an
application for a second competitive franchise); cf. City
Communications, Inc. v. City of Detroit, 685 F. Supp. 160, 162-63
(E.D. Mich. 1988) (holding that unsuccessful applicant for single
franchise could not bring First Amendment challenge to City's
decision to award only one franchise until it actually submitted an
application for a second franchise, accompanied by a feasibility
study, and such application was denied), aff'd on other grounds,
888 F.2d 1081 (6th Cir. 1989).
IV.
For the reasons set forth above, we affirm the judgment
of the district court on Counts I, II, and III.
So ordered.
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