IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
May 20, 2008
No. 07-20320 Charles R. Fulbruge III
Clerk
SOUTHWESTERN BELL TELEPHONE, LP, doing business as AT&T Texas
Plaintiff-Appellant
v.
CITY OF HOUSTON
Defendant-Appellee
Appeal from the United States District Court
for the Southern District of Texas
Before JOLLY, BARKSDALE, and BENAVIDES, Circuit Judges.
RHESA HAWKINS BARKSDALE, Circuit Judge:
Southwestern Bell Telephone, L.P. (AT&T), contests the dismissal of its
claims that a City of Houston, Texas, ordinance violates the Federal
Telecommunications Act of 1996 (FTA), 47 U.S.C. § 151 et seq. Primarily at
issue are FTA §§ 253(a) and 253(c). Section 253(a) proscribes state and local
governments from prohibiting the ability of any entity to provide
telecommunications service. On the other hand, FTA § 253(c) is a safe-harbor
provision preserving a government’s power to manage its public rights-of-way.
AT&T maintains: FTA § 253 provides a private right enforceable under 42
U.S.C. § 1983; and the ordinance is preempted by the FTA. AFFIRMED.
I.
No. 07-20320
As part of its providing local service in the City, AT&T installed
telecommunications facilities in the public rights-of-way. In April 2005, the City
adopted Ordinance 2005-0371, requiring owners of facilities located in those
rights-of-way to bear the cost of relocating their equipment to accommodate
public-works projects. HOUSTON CODE OF ORDINANCES § 40-393. The ordinance
does not specifically target telecommunications equipment, instead defining
“facility” as “any structure, device, or other thing whatsoever that is installed or
maintained in, on, within, under, over or above a public right-of-way within the
city”. Id. § 40-391.
Relying on the ordinance, the City notified AT&T it would be required to
remove its public-rights-of-way facilities in connection with a drainage-
improvement project. AT&T relocated its facilities at a cost of approximately
$420,000.
In this action, AT&T seeks to recover, inter alia, those relocation costs,
asserting a claim under the FTA through § 1983, a federal preemption claim, a
federal takings claim, and various state-law claims. The City moved to dismiss
pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The motion
concerning the § 1983 and preemption claims was under Rule 12(b)(6), the City’s
maintaining: there is no Congressional intent to allow actions under § 1983 for
violations of FTA § 253; and the FTA specifically excludes preemption of a
municipality’s right to maintain its rights-of-way.
The district court held no private right exists under FTA § 253 that may
be enforced under § 1983. It also held the ordinance resided within FTA § 253’s
safe-harbor provision and, therefore, is not preempted. Because it was not ripe,
the federal-takings claim was dismissed without prejudice. The court declined
to exercise supplemental jurisdiction over the state-law claims.
II.
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No. 07-20320
AT&T appeals the district court’s holding: FTA § 253 provides no private
right enforceable pursuant to § 1983; and the ordinance is not preempted. A
Rule 12(b)(6) dismissal for failure to state a claim is reviewed de novo. E.g., Fin.
Acquisition Partners LP v. Blackwell, 440 F.3d 278, 286 (5th Cir. 2006). As part
of our determining whether AT&T stated a claim sufficient to avoid dismissal,
the facts alleged in its complaint are taken as true, with those allegations being
construed in the light most favorable to AT&T, the non-movant. E.g.,
Muhammad v. Dallas County Cmty. Supervision & Corr. Dep’t., 479 F.3d 377,
379 (5th Cir. 2007). A plaintiff must plead “enough facts to state a claim to relief
that is plausible on its face”. Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1974
(2007). “Factual allegations must be enough to raise a right to relief above the
speculative level, on the assumption that all the allegations in the complaint are
true (even if doubtful in fact).” Id. at 1965 (citations and footnote omitted).
A.
AT&T maintains Congress implicitly created a private right in FTA § 253,
enforceable pursuant to § 1983. Although three other circuits have held to the
contrary, as discussed infra, this is an issue of first impression for our circuit.
To pursue a claim under § 1983, a “plaintiff[] must (1) allege a violation of
rights secured by the Constitution or laws of the United States and (2)
demonstrate that the alleged deprivation was committed by a person acting
under color of state law”. Resident Council of Allen Parkway Vill. v. HUD, 980
F.2d 1043, 1050 (5th Cir. 1993) (emphasis added) (citation omitted). In other
words, “[§] 1983 confers no substantive rights, but merely provides a remedy for
the violation [, by a person acting under color of state law,] of rights secured
under the Constitution and laws of the United States”. Kirchberg v. Feenstra,
708 F.2d 991, 1000 (5th Cir. 1983) (emphasis added) (citations omitted).
It is presumed Congress did not intend to create a private enforceable
right; the burden is on the plaintiff to show otherwise. E.g., Acara v. Banks, 470
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No. 07-20320
F.3d 569, 571 (5th Cir. 2006) (per curiam). Regarding showing such a right’s
being enforceable through § 1983,
[i]t is essential to a private enforcement action under § 1983 . . . that
the federal statute in question unambiguously give rise to privately
enforceable, substantive rights. The inquiry in this context is
virtually the same as that involved in private rights of action implied
directly from a federal statute rather than by way of § 1983.
Johnson v. Hous. Auth. of Jefferson Parish, 442 F.3d 356, 359 (5th Cir. 2006)
(footnotes omitted) (first emphasis in original).
As clarified by the Supreme Court, that analysis requires courts to “first
determine whether Congress intended to create a federal right”. Gonzaga Univ.
v. Doe, 536 U.S. 273, 283 (2002) (emphasis in original). “For a statute to create
such private rights, its text must be phrased in terms of the persons benefited.”
Id. at 284 (citation and internal quotation marks omitted). “Accordingly, where
the text and structure of a statute provide no indication that Congress intends
to create new individual rights, there is no basis for a private suit, whether
under § 1983 or under an implied right of action”. Id. at 286 (emphasis added).
For this action, that determination focuses on whether “the [FTA] creates
an individually enforceable right in the class of beneficiaries to which [AT&T]
belongs”. City of Rancho Palos Verdes, Cal. v. Abrams, 544 U.S. 113, 120 (2005)
(citing Gonzaga, 536 U.S. at 285); see also Johnson, 442 F.3d at 359 (requiring
the statute to unambiguously give rise to private enforceable rights). As dictated
by the plain language of § 1983, only “rights, not the broader or vaguer ‘benefits’
or ‘interests’, . . . may be enforced under” that section. Gonzaga, 536 U.S. at 283
(emphasis in original). “The [Supreme] Court’s approach to § 1983 enforcement
of federal statutes has been increasingly restrictive; in the end, very few statutes
are held to confer rights enforceable under § 1983.” Johnson, 442 F.3d at 360.
Section 253(a) of the FTA provides: “No State or local statute or
regulation, or other State or local legal requirement, may prohibit or have the
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No. 07-20320
effect of prohibiting the ability of any entity to provide any interstate or
intrastate telecommunications service”. 47 U.S.C. § 253(a). The safe-harbor
provision, § 253(c), states:
Nothing in this section affects the authority of a State or local
government to manage the public rights-of-way or to require fair
and reasonable compensation from telecommunications providers,
on a competitively neutral and nondiscriminatory basis, for use of
public rights-of-way on a nondiscriminatory basis, if the
compensation required is publicly disclosed by such government.
47 U.S.C. § 253(c).
Five circuits are split three to two on whether FTA § 253 creates a
privately enforceable right. The Sixth and Eleventh Circuits hold it does.
BellSouth Telecomms., Inc. v. Town of Palm Beach, 252 F.3d 1169, 1191 (11th
Cir. 2001); TCG Detroit v. City of Dearborn, 206 F.3d 618, 624 (6th Cir. 2000).
(Although obviously not determinative for deciding whether a privately
enforceable right is created, neither decision incorporated § 1983.) Those two
decisions, however, were rendered prior to the Supreme Court’s above-described
clarification in Gonzaga.
As discussed infra, the more persuasive reasoning is found in the Second,
Ninth, and Tenth Circuits’ holding, post-Gonzaga, that FTA § 253(a) does not
create a private right enforceable under § 1983. NextG Networks of NY, Inc. v.
City of New York, 513 F.3d 49, 52-54 (2d Cir. 2008) (agreeing with Ninth and
Tenth Circuits that “§ 253 does not create a private right of action for damages”
that may be enforced through § 1983); Sprint Telephony PCS, L.P. v. County of
San Diego, 490 F.3d 700, 717-18 (9th Cir. 2007) (stating Ҥ 253(a) does not
designate companies like [AT&T] as the ‘identifiable class’ required for an
enforceable § 1983 right”); Qwest Corp. v. City of Santa Fe, N.M., 380 F.3d 1258,
1265 (10th Cir. 2004) (ruling “nothing in the text or structure of § 253 indicates
an intention to create a private right” that may be enforced through § 1983).
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No. 07-20320
These three decisions are consistent with our court’s requiring, as discussed
supra, the federal statute to “unambiguously give rise to privately enforceable,
substantive rights”. Johnson, 442 F.3d at 359 (emphasis in original) (footnote
omitted).
1.
Neither FTA section at issue focuses on rights granted to
telecommunications providers. Section 253(a) is couched entirely in prohibitions
on what the state or local government cannot do, rather than on a right for
telecommunications companies. It states that “[n]o State or local statute or
regulation, or other . . . legal requirement, may prohibit”. 47 U.S.C. § 253(a).
The section is not “phrased in terms of the persons benefited”, see Gonzaga, 536
U.S. at 284 (citation and internal quotation marks omitted); rather, it prohibits
state and local governments’ conduct. As held by the Tenth Circuit, FTA §
253(a) “is not focused on the benefits granted to the telecommunications
providers [but] focuses on restricting the type of telecommunications regulations
a local authority may enforce”. Qwest, 380 F.3d at 1265.
On the other hand, if the FTA safe-harbor provision “benefits” anyone, it
is state and local governments, whose rights “to manage the public rights-of-
way” are protected. 47 U.S.C. § 253(c). The benefit to these governmental
entities is not the type of benefit required to imply a private right on behalf of
a telecommunications provider, such as AT&T.
2.
Even were our court to determine these FTA sections create an
individually enforceable right, only a rebuttable presumption would be
established; it may be overcome with “the statute’s creation of a comprehensive
enforcement scheme”. Rancho Palos Verdes, 544 U.S. at 120 (citation and
internal quotation marks omitted). Restated, the existence of such an
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No. 07-20320
enforcement scheme in the statute counsels that Congress did not intend also to
provide a private right enforceable through § 1983. Id.
Pursuant to FTA § 253(d), the Federal Communications Commission is
charged with “preempting the enforcement” of laws violating FTA § 253(a). This
comprehensive enforcement scheme further supports our concluding Congress
did not intend to create a private right enforceable under § 1983. See Middlesex
County Sewerage Auth. v. Nat’l Sea Clammers Ass’n, 453 U.S. 1, 20-21 (1981).
Accordingly, because the FTA does not unambiguously establish a private
enforceable right, and, in the alternative, because FTA § 253(d) contains a
comprehensive enforcement scheme, Congress did not intend to create a private
right, enforceable under § 1983, for claimed violations of FTA § 253(a).
B.
For its other issue on appeal, AT&T maintains the City’s ordinance is
preempted by the FTA. A plaintiff’s seeking relief from a state regulation on the
ground of preemption by a federal statute “presents a federal question which the
federal courts have jurisdiction under 28 U.S.C. § 1331 to resolve”. Shaw v.
Delta Air Lines, Inc., 463 U.S. 85, 96 n.14 (1983) (citations omitted); see also
Planned Parenthood of Houston and Se. Tex. v. Sanchez, 403 F.3d 324, 331 (5th
Cir. 2005) (“It is well-established that the federal courts have jurisdiction under
28 U.S.C. § 1331 over a preemption claim seeking injunctive and declaratory
relief.” (footnote omitted)). In sum, as held in 2004 in the above-discussed Tenth
Circuit decision in Qwest, “[a] party may bring a claim under the Supremacy
Clause that a local enactment is preempted even if the federal law at issue does
not create a private right of action”. 380 F.3d at 1266.
As noted above, FTA § 253(a) proscribes the City from, inter alia,
prohibiting the ability of any entity to provide interstate or intrastate
telecommunications service. 47 U.S.C. § 253(a). Ordinances satisfying the FTA
§ 253(c) safe-harbor provision, however, are exempt from that prohibition. As
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No. 07-20320
quoted earlier, FTA § 253(c) provides, in relevant part: “Nothing in [§ 253]
affects the authority of a State or local government to manage the public rights-
of-way”. 47 U.S.C. § 253(c) (emphasis added).
1.
En route to the safe harbor, these sub-issues raised by AT&T must be
navigated. None blocks entry.
a.
For starters, AT&T maintains the voyage cannot begin because it was
entitled to discovery prior to the district court’s dismissal-ruling. To the
contrary, when deciding, under Rule 12(b)(6), whether to dismiss for failure to
state a claim, the court considers, of course, only the allegations in the
complaint. E.g., Norris v. Hearst Trust, 500 F.3d 454, 464 (5th Cir. 2007).
b.
Getting underway, AT&T contends FTA § 253(c) incorporates the separate
law of each State by preserving whatever powers, as well as any limitations on
them, a city possessed when the FTA was enacted. AT&T, however, did not
raise this issue in opposition to the City’s motion to dismiss. Therefore, it was
not addressed by the district court.
“This Court will not consider an issue that a party fails to raise in the
district court absent extraordinary circumstances”. Leverette v. Louisville
Ladder Co., 183 F.3d 339, 342 (5th Cir. 1999) (citation omitted). Among other
considerations, no such extraordinary circumstances exist here. This issue is
waived.
c.
Approaching the safe harbor, AT&T insists the district court was required
first to determine whether the ordinance violates FTA § 253(a), rather than
assuming a violation and proceeding with the FTA § 253(c) safe-harbor analysis.
The court did not err in that regard.
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No. 07-20320
Assuming, arguendo, the ordinance violates FTA § 253(a), it is explicitly
not preempted if it falls within the safe harbor. To say the least, requiring a
FTA § 253(a) analysis, notwithstanding an ordinance’s meeting the safe-harbor
provision, would be an exercise in futility.
2.
Finally reaching the safe harbor, the parties dispute only whether the
ordinance is competitively neutral and nondiscriminatory. Accepting, as
required, AT&T’s allegations as true, the district court held the complaint failed
to allege discrimination. AT&T maintains complaint paragraph 32 satisfies this
requirement:
Moreover, the Ordinance and the Utility Relocation Program go far
beyond requiring fair and reasonable compensation from AT&T
Texas on a competitively neutral and nondiscriminatory basis for
use of the public rights-of-way. As a facilities-based [FTA
Incumbent Local Exchange Carrier] with provider of last resort
obligations under state law, AT&T Texas will be forced to bear
substantial costs of relocation to accommodate “public works
projects” that the City will not impose upon telecommunications
providers who do not own and maintain poles, wires, and similar
facilities. As such, the Ordinance and the Utility Relocation
Program and the City’s imposition and collection of relocation costs
violates the FTA, 47 U.S.C. § 151, et seq., in particular, 47 U.S.C. §
253(a),(c).
(Emphasis added.)
Accepting, as we must, the allegations in the complaint, AT&T alleges only
that the City will not impose relocation costs on telecommunications owners who
do not maintain facilities in the City’s rights-of-way. AT&T’s status as the
primary and, therefore, largest telecommunications provider in the City means
it maintains facilities in the rights-of-way and necessarily correlates into a
greater chance it, as opposed to other such providers, will be required to relocate
equipment pursuant to the ordinance. Requiring only such facility owners to
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No. 07-20320
bear relocation costs is, as required by FTA § 253(c), “competitively neutral and
nondiscriminatory”, notwithstanding AT&T’s status as provider of last resort.
47 U.S.C. § 253(c).
Accordingly, the ordinance is sheltered by the safe harbor. There is no
preemption.
III.
For the foregoing reasons, the judgment is AFFIRMED.
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