Nextg Networks of Cal. v. County of Los Angeles

522 F.Supp.2d 1240

NEXTG NETWORKS OF CALIFORNIA, INC., Plaintiff, v. The COUNTY OF LOS ANGELES, CALIFORNIA, Defendant.

No. CV 07-2425 ABC (CTx).

United States District Court, C.D. California, Western Division.

June 20, 2007.

COPYRIGHT MATERIAL OMITTED

Robert L. Delsman, NextG Networks Inc, San Jose, CA, T. Scott Thompson, Davis Wright Tremaine, Washington, DC, Wendy Wu, William F. Bly, Davis Wright Tremaine, Los Angeles, CA, for Plaintiff.

Dawn A. McIntosh, Deborah J. Fox, Meyes, Nave, Riback, Silver & Wilson, Elaine M. Lemke, Richard D. Weiss, Office of the County Counsel, Los Angeles, CA, for Defendant.

ORDER GRANTING IN PART PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

AUDREY B. COLLINS, District Judge.

On April 19, 2007, Plaintiff NextG Networks of California, Inc. ("Plaintiff") filed the instant motion for a preliminary injunction. Defendant County of Los Angeles (the "County") opposed on May 21, 2007, and Plaintiff replied on May 29, 2007. The hearing on this matter was held on June 18, 2007. Based on the arguments of the parties and the pleadings in this case, the Court hereby GRANTS IN PART the motion for a preliminary injunction.

I. INTRODUCTION

Title 22 of the Los Angeles County Municipal Code, the County's zoning ordinance, has been in effect since 1927. However, that ordinance has now come into conflict with the federal Telecommunications Act (the "TCA"), 47 U.S.C. § 253 (1996), and the Court must decide which law prevails.

Plaintiff is a telecommunications company seeking to utilize the rights-of-way in the County for its telecommunications services. The County seeks to, manage the rights-of-way for the ten-million-plus people in Los Angeles County. To do that, the County has imposed on Plaintiff the Conditional Use Permits Ordinance ("CUP"), section 22.56 of the County Code, a process through which Plaintiff can gain approval for erecting its equipment on public property. Plaintiff claims the process is so cumbersome so as to erect a barrier to its entry into the telecommunications market.

In the TCA, Congress anticipated this precise conflict and determined that any state or local laws erecting such barriers must be preempted. The Court finds that, in this case, this Congressional mandate trumps and section 22.56 must be preempted.

II. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff is a communications service provider and a "telephone corporation" as defined by California law. Specifically, Plaintiff holds a "Certificate of Public Convenience or Necessity" from the California Public Utilities Commission, which authorizes it to operate as a telephone corporation under California law. (Declaration of Patrick S. Ryan ("Ryan Decl.") ¶ 4.) Plaintiff provides the "transport" of voice and data communications between points designated by customers without altering the communications. (Declaration of Nicole Mason ("Mason Decl.") ¶ 5.) Plaintiffs customers are not end-users, but are typically providers of retail wireless services which in turn provide services to end-users. (Id.)

Plaintiffs typical telecommunications service offering involves a communication signal handed off from Plaintiffs customer to Plaintiff, which Plaintiff then transports over a network of fiber optic facilities. (Id. ¶ 5.) These handoffs take place via equipment called "nodes" located on utility or streetlight poles in public rights-of-way or in private utility easements. (Id. ¶ 6.) These nodes, which include, inter alia, antenna, fiber optic lines, and a power supply, are all owned, operated, and maintained by Plaintiff. (Id.) Plaintiff s equipment also includes a fiber optic network that carries signals to a "base station," a structure often on private property, which is where Plaintiff then returns the signal to the customer. (Id. ¶ 7.)

To construct the nodes and lay the fiber optic cabling, Plaintiff must have access to County rights-of-way. (Id. ¶ 8.) Timing of this access has become critical to Plaintiff because it has undertaken contractual obligations that impose strict timelines on providing service. (Id. ¶ 11.) For example, under its current contracts, Plaintiff must have both' the fiber optics and the nodes ready for one customer by November 30, 2007 and for another customer, by December 31, 2007. (Id.) This is apparently no easy task, requiring Plaintiff to undertake at least the following steps:

• Coordinating with other utilities using any right-of-way, which can take anywhere from sixty to ninety-plus days;

• Securing a[CUP] under the County's ordinances;

• Securing an encroachment permit once a CUP is approved;

• Constructing the nodes on existing utility poles, which takes at least 20 days;

• Obtaining electric services once the nodes are installed;

• Testing and optimizing the newly installed equipment, which itself takes two to three weeks minimum; and

• Engineering and installing fiber optics aerially and/or underground, which entails a multi-step process of route selection, design, and field surveys.

(Declaration of Todd Schultz ("Schultz Decl.") ¶¶ 8-9.) Plaintiff asserts that the only way to meet its current contractual deadlines is to initiate construction of the nodes and fiber optics by September 30, 2007. (Id. ¶ 11.)

Plaintiff has worked with the County on these projects in the past. (Declaration of Patrick S. Ryan ("Ryan Decl.") ¶ 3.) For example, in August 2005, Plaintiff sought three encroachment permits from the County, which the County summarily rejected, forcing Plaintiff instead to undertake the more cumbersome CUP process set forth in section 22.56 of the County's zoning code. (Id) Plaintiff claims that, although its proposed installations are similar to many other facilities that are located in the rights-of-way pursuant to encroachment permits, the County insisted on imposing the CUP process on it. (Id.) Plaintiff submitted CUP applications in January 2006, which the County approved in November 2006 and issued some two months later. (Id.)

Similarly, in early 2006, Plaintiff sought approval for another significant project. (Id. ¶ 4.) Plaintiff informed the County, that it qualified as a telephone corporation under California law and must be treated nondiscriminatorily, but the County still required Plaintiff to proceed via the CUP process. (Id.) Because the parties disputed the application of the CUP process to Plaintiffs activities, the County agreed to "expedite" treatment of Plaintiffs CUP applications. (Id. ¶ 7.) Plaintiff then successfully deployed that project, which took six months. (Mason Decl. ¶ 20.)

For the projects arising from Plaintiffs current contractual obligations, Plaintiff applied for CUPs on March 1, March 15, and April 3, 2007. (Id. ¶ 18.) The County has not agreed to expedite the consideration of these applications, however. (Id. ¶ 19.) Plaintiff fears the CUP approval process will delay commencing construction beyond its September 30, 2007 deadline. (Id.) Plaintiff asserts that this delay will result not only from the statutory terms of the CUP process, but also from unwritten requirements, such as approval from the "Altadena Town Council," which requires Plaintiff to submit information beyond that which is required by section 22.56, such as photo simulations, details regarding service area coverage, details regarding antenna engineering, and aesthetic concerns. (Ryan Decl. ¶ 8.)

Plaintiff asks the Court to enjoin the County from enforcing section 22.56, claiming that its provisions are cumbersome and thus preempted by the TCA, 47 U.S.C. § 253. Moreover, Plaintiff complains that the County must be enjoined because complying with the CUP process will cause irreparable harm to its reputation and business goodwill should such compliance cause Plaintiff to breach its contracts with its customers.

III. STANDING

Although the parties did not raise the issue of Plaintiffs standing to seek an injunction in their original briefing, the Court has an independent obligation to do so whenever it appears that standing may be lacking. See Amer. Civil Liberties Union of Nev. v. Lomax, 471 F.3d 1010, 1015 (9th Cir.2006) ("Although neither party raises the justiciability issues of standing and mootness on appeal, we have an`independent obligation' to consider them sua sponte."). On June 6, 2007, the Court ordered the parties to submit simultaneous briefing addressing the issue of standing. Both parties filed these briefs on June 12, 2007. Having considered all the briefing by the parties, the Court holds that Plaintiff has standing to seek a preliminary injunction.

"Standing is an`essential component' of the case and controversy requirement of Article III, § 2 of the United States Constitution." Id. "The irreducible constitutional minimum of standing contains three parts: (1) injury in fact; (2) causation; and (3) likelihood that the injury will be redressed by a favorable decision." Id. (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). Because Plaintiff has not sought and been denied a permit, it must demonstrate that it faces an imminent threat of future enforcement to seek a preliminary injunction. See San. Diego Cty. Gun Rights Committee v. Reno, 98 F.3d 1121, 1126 (9th Cir.1996); see also Thomas v. Anchorage Equal Rights Comm'n, 220 F.3d 1134, 1139 (9th Cir. 2000) (en banc). The three factors to consider in finding the threat of future enforcement are "whether the plaintiffs have articulated a`concrete plan' to violate the law in question, whether the prosecuting authorities have communicated a specific warning or threat to initiate proceedings, and the history of past prosecution or enforcement under the challenged statute." Id.

There is little question that Plaintiff faces imminent enforcement of section 22.56. Plaintiff is a party to current contracts requiring it to construct nodes and fiber optic networks along the County's rights-of-way on a tight timeline. Plaintiffs current plan could not be...