Extenet Sys., Inc. v. City of Cambridge, Civil Action No. 19-cv-11836-ADB

481 F.Supp.3d 41

EXTENET SYSTEMS, INC., Plaintiff,

v.The CITY OF CAMBRIDGE, MASSACHUSETTS ; City of Cambridge Pole and Conduit Commission, and Nicole Murati Ferrer, Stephen Lenkauskas, and Terrence James Shea, each in their official capacity as members of the City of Cambridge Pole and Conduit Commission, Defendants.

Civil Action No. 19-cv-11836-ADB

United States District Court, D. Massachusetts.

Signed August 26, 2020

Haran C. Rashes, Pro Hac Vice, Regulatory Affairs for ExteNet Systems, Inc., Lisle, IL, William A. Worth, Caitlin A. Romasco, Prince Lobel Tye LLP, Boston, MA, for Plaintiff.

Gerard Lavery Lederer, Pro Hac Vice, John Gasparini, Pro Hac Vice, Joseph VanEaton, Pro Hac Vice, Best, Best and Krieger, LLP, Washington, DC, Paul S. Kawai, City of Cambridge Office of the City Solicitor, Cambridge, MA, for Defendants.

MEMORANDUM AND ORDER ON DEFENDANTS’ MOTION TO DISMISS

BURROUGHS, D.J.

Plaintiff ExteNet Systems, Inc. ("ExteNet") alleges that the City of Cambridge, Massachusetts ("Cambridge"), City of Cambridge Pole and Conduit Commission ("P&C Commission"), and Nicole Murati Ferrer, Stephen Lenkauskas, and Terrence James Shea, each in their official capacity as members of the P&C Commission, (collectively "Defendants") violated the Telecommunications Act of 1996 ("TCA") by denying ExteNet's applications to install small wireless facilities. [ECF No. 20 ("Am. Compl.")]. ExteNet claims that (1) the P&C Commission's denials of its applications were improper because it should have received timely notice that its applications were incomplete, (2) the denials have effectively prohibited the provision of wireless services, and (3) the denials unreasonably discriminate against Plaintiff in violation of 47 U.S.C. §§ 332(c)(7)(B)(i)(II), 332(c)(7)(B)(i)(I), 332(c)(7)(B)(ii), 253(a), 47 C.F.R. § 1.6003, and various orders from the Federal Communications Commission ("FCC"). See [Am. Compl.]. ExteNet also brings a facial challenge against Cambridge's Policy Regarding Small Cell Wireless Installations on Public Ways ("Small Cell Wireless Policy" or "Policy"), arguing that the TCA preempts the Policy. See [id. ]. Currently before the Court is Defendants’ motion to dismiss. [ECF No. 35]. For the reasons stated herein, the motion, [ECF No. 35], is GRANTED.

I. BACKGROUND

A. Factual Background

The following facts are drawn from ExteNet's amended complaint, [Am. Compl.], and viewed in the light most favorable to ExteNet. Ruivo v. Wells Fargo Bank, N.A., 766 F.3d 87, 90 (1st Cir. 2014) (citation omitted). "[The Court] may augment these facts and inferences with data points gleaned from documents incorporated by reference into the complaint, matters of public record, and facts susceptible to judicial notice." Grajales v. P.R. Ports Auth., 682 F.3d 40, 44 (1st Cir. 2012) (quoting Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011) ).

ExteNet is a "wholesale, facilities-based telecommunications services" provider that operates in Massachusetts. [Am. Compl. ¶¶ 28–29]. Wireless service providers, such as Verizon, AT&T, and Sprint, pay ExteNet to use its fiber optic cables and support equipment network to provide wireless coverage. [Id. ¶¶ 31–32]. Currently, ExteNet has a contract with AT&T to install five Small Wireless Facilities¹ in Cambridge.

[Id. ¶ 40–41]. Under the contract, ExteNet is responsible for obtaining the permits to install the Small Wireless Facilities, while AT&T is responsible for providing power and the necessary fiber and data. [Id. ¶¶ 44–45]. ExteNet plans to install these Small Wireless Facilities on several Cambridge streetlight poles, which would require removing and replacing the existing structures. [Id. ¶¶ 47–48].

ExteNet submitted its first application under the contract to the P&C Commission on April 3, 2019; the remaining four applications were submitted on April 4, 2019. [Am. Compl. ¶¶ 38–40]. The P&C Commission did not request additional information and did not notify ExteNet regarding whether its applications were complete. [Id. ¶ 54].

At the time of ExteNet's application, Defendants had a Pole and Conduit Siting Policy, adopted in 2000, which required applicants working on a proposed project with other companies to designate a lead company for the application. [ECF No. 17-13 at 7]. The lead company would have responsibility for coordinating the applications, permitting, constructions, wiring, and operation and would act as the P&C Commission's point of contact. [Id. ]. On May 16, 2019, the P&C Commission held a hearing on ExteNet's applications. [Am. Compl. ¶ 59]. Additionally, the P&C Commission provided notice to ExteNet of and held a hearing on an initial draft of its Small Cell Wireless Policy, which if adopted would provide further guidance for applications pertaining to projects involving multiple companies, like ExteNet's. [Id. ¶¶ 59–61]. The P&C Commission informed ExteNet that it needed more time to review its applications in light of the potential new rules. [Id. ¶ 62]. ExteNet agreed to a tolling agreement that gave the P&C Commission until July 30, 2019 to make a final determination on its applications and allowed ExteNet to submit comments on the proposed policy during the rulemaking process. [Id. ¶ 63]. ExteNet submitted extensive written comments and participated in subsequent public hearings to help shape the Small Cell Wireless Policy. [Id. ¶¶ 65–70].

On June 10, 2019, Defendants held a final public hearing regarding the Policy and subsequently released and adopted their Small Cell Wireless Policy. [Am. Compl. ¶¶ 71–73]. The P&C Commission then denied ExteNet's applications on July 30, 2019, in part because the applications failed to specify how ExteNet intended to supply power and "fiber/data" to the Small Wireless Facilities, [id. ¶ 92], and in part because the applications violated the newly implemented Small Cell Wireless Policy and Defendants’ Siting Policy, [ECF No. 17-7 at 6]. ExteNet declined to toll the application review deadline by an additional month, which would have allowed AT&T to file a supplemental application demonstrating how it would power and provide data to the Small Wireless Facilities in question. [Id. ].

B. Procedural Background

ExteNet filed its initial complaint against Defendants on August 28, 2019, claiming that the Defendants’ denials of its applications were improper under 47 U.S.C. § 332(c)(7), § 253(a), and corresponding FCC guidance. [ECF No. 1]. After Defendants moved to dismiss the initial complaint, [ECF No. 17], ExteNet amended the complaint on February 11, 2020, [Am. Compl.]. Defendants moved to dismiss the amended complaint on March 17, 2020, [ECF No. 35], and ExteNet opposed, [ECF No. 37].

II. LEGAL STANDARD

In reviewing a motion to dismiss under Rule 12(b)(6), the Court must accept as true all well-pleaded facts, analyze those facts in the light most favorable to the plaintiff, and draw all reasonable factual inferences in favor of the plaintiff. See Gilbert v. City of Chicopee, 915 F.3d 74, 80 (1st Cir. 2019). "[D]etailed factual allegations" are not required, but the complaint must set forth "more than labels and conclusions," Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and must contain "factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory," Gagliardi v. Sullivan, 513 F.3d 301, 305 (1st Cir. 2008) (quoting Centro Médico del Turabo, Inc. v. Feliciano de Melecio, 406 F.3d 1, 6 (1st Cir. 2005) ). The alleged facts must be sufficient to "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570, 127 S.Ct. 1955.

"To cross the plausibility threshold a claim does not need to be probable, but it must give rise to more than a mere possibility of liability." Grajales, 682 F.3d at 44–45 (citing Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ). "A determination of plausibility is ‘a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.’ " Id. at 44 (quoting Iqbal, 556 U.S. at 679, 129 S.Ct. 1937 ). "[T]he complaint should be read as a whole, not parsed piece by piece to determine whether each allegation, in isolation, is plausible." Hernandez-Cuevas v. Taylor, 723 F.3d 91, 103 (1st Cir. 2013) (quoting Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 14 (1st Cir. 2011) ). "The plausibility standard invites a two-step pavane." A.G. ex rel. Maddox v. Elsevier, Inc., 732 F.3d 77, 80 (1st Cir. 2013) (citing Grajales, 682 F.3d at 45 ). First, the Court "must separate the complaint's factual allegations (which must be accepted as true) from its conclusory legal allegations (which need not be credited)." Id. (quoting Morales-Cruz v. Univ. of P.R., 676 F.3d 220, 224 (1st Cir. 2012) ). Second, the Court "must determine whether the remaining factual content allows a ‘reasonable inference that the defendant is liable for the misconduct alleged.’ " Id. (quoting Morales-Cruz, 676 F.3d at 224 ).

When reviewing a motion to dismiss, the Court may consider documents outside of the pleadings, " ‘the authenticity of which are not disputed by the parties,’ making narrow exceptions to the general rule ‘for official public records; for documents central to plaintiffs’ claim; or for documents sufficiently referred to in the complaint.’ " Álvarez-Maurás v. Banco Popular of P.R., 919 F.3d 617, 622–23 (1st Cir. 2019) (quoting Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993) ).

III. DISCUSSION

The TCA aims to develop wireless infrastructure by removing regulatory barriers that restrict service providers at every level of state government. Telecommunications Act of 1996, 110 Stat. 56. Specifically, the TCA limits local authorities through five provisions:

[L]ocal governments may not ‘unreasonably discriminate among providers of functionally equivalent services,’ 47 U.S.C. § 332(c)(7)(B)(i)(I), take actions that ‘prohibit or have the effect

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