Sprint Pcs Assets v. City of Palos Verdes Estates

583 F.3d 716

SPRINT PCS ASSETS, L.L.C., a Delaware limited liability company, wholly-owned by Sprint Telephony PCS, LP, a Delaware limited partnership, Plaintiff-Appellee, v. CITY OF PALOS VERDES ESTATES, a California municipality; City Council of the City of Palos Verdes Estates, its governing body; Joseph Sherwood, in his official capacity as Mayor Pro Tem of the City of Palos Verdes Estates; John Flood, in his official capacity as Councilmember of the City of Palos Verdes Estates; Rosemary Humphrey, in her official capacity as Councilmember of the City of Palos Verdes Estates; Dwight Abbott, in his official capacity as Councilmember of the City of Palos Verdes Estates; James F. Goodhart, in his official capacity as Councilmember of the City of Palos Verdes Estates, Defendants-Appellants.

No. 05-56106.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 6, 2009.

Filed October 14, 2009.

Scott J. Grossberg, Richard R. Clouse, Amy R. von Kelsch-Berk, and Angelica A. Arias of Cihigoyenetche, Grossberg & Clouse, Ranco Cucamonga, CA, and Daniel P. Barer of Pollak, Vida & Fisher, Los Angeles, CA, for the appellants.

John J. Flynn III, Gregory W. Sanders, and Michael W. Shonafelt of Nossaman, Guthner, Knox & Elliott, LLP, Irvine, CA, for the appellee.

Appeal from the United States District Court for the Central District of California, Alicemarie H. Stotler, District Judge, Presiding. D.C. No. CV-03-00825-AHS.

Before: BARRY G. SILVERMAN, KIM McLANE WARDLAW, and JAY S. BYBEE, Circuit Judges.

WARDLAW, Circuit Judge:

The City of Palos Verdes Estates ("City") appeals the grant of summary judgment in favor of Sprint PCS Assets, L.L.C. ("Sprint"). We must decide whether the district court erred in concluding that the City violated the Telecommunications Act of 1996 ("TCA"), Pub.L. No. 104-104, 110 Stat. 56 (codified as amended in various sections of U.S.C. titles 15, 18, and 47), when it denied Sprint permission to construct two wireless telecommunications facilities in the City's public rights-of-way. Specifically, we must decide (1) whether the City's denial is supported by substantial evidence, as required by 47 U.S.C. § 332(c)(7)(B)(iii), and (2) whether the City's denial constitutes a prohibition on the provision of wireless service in violation of 47 U.S.C. §§ 253(a) and 332(c)(7)(B)(i)(II). Because the City's denial is supported by substantial evidence, and because disputed issues of material fact preclude a finding that the decision amounted to a prohibition on the provision of wireless service, we reverse and remand.

I. FACTUAL AND PROCEDURAL BACKGROUND

The City is a planned community, about a quarter of which consists of public rights-of-way that were designed not only to serve the City's transportation needs, but also to contribute to its aesthetic appeal. In 2002 and 2003, Sprint applied for permits to construct wireless telecommunications facilities ("WCF") in the City's public rights-of-way. The City granted eight permit applications but denied two others, which are at issue in this appeal. One of the proposed WCFs would be constructed on Via Azalea, a narrow residential street, and the other would be constructed on Via Valmonte, one of the four main entrances to the City. Sprint acknowledged that it already served four thousand customers in the City with its existing network but stated that the proposed WCFs were nonetheless needed to replace its existing infrastructure.

A City ordinance ("Ordinance") provides that WCF permit applications may be denied for "adverse aesthetic impacts arising from the proposed time, place, and manner of use of the public property." Palos Verdes Estates, Cal., Ordinances ch. 18.55.040(B)(1). Under the Ordinance, the City's Public Works Director ("Director") denied Sprint's WCF permit applications, concluding that the proposed WCFs were not in keeping with the City's aesthetics. The City Planning Commission affirmed the Director's decision in a unanimous vote.

Sprint appealed to the City Council ("Council"), which received into evidence a written staff report that detailed the potential aesthetic impact of the proposed WCFs and summarized the results of a "drive test," which confirmed that cellular service from Sprint was already available in relevant locations in the City. The Council also heard public comments and a presentation from Sprint's representatives. The Council issued a resolution affirming the denial of Sprint's permit applications. It concluded that a WCF on Via Azalea would disrupt the residential ambiance of the neighborhood and that a WCF on Via Valmonte would detract from the natural beauty that was valued at that main entrance to the City.

Denied permits by the Director, the Commission, and the Council, Sprint took its case to federal court, seeking a declaration that the City's decision violated various provisions of the TCA. The district court concluded that the City's decision was not supported by substantial evidence and thus violated 47 U.S.C. § 332(c)(7)(B)(iii). This determination was premised on a legal conclusion that California law prohibits the City from basing its decision on aesthetic considerations. The district court also concluded that the City violated 47 U.S.C. §§ 253 and 332(c)(7)(B)(i)(II) by unlawfully prohibiting the provision of telecommunications service, finding that the City had prevented Sprint from closing a significant gap in its coverage. The City timely appeals.

II. JURISDICTION AND STANDARD OF REVIEW

The district court exercised jurisdiction pursuant to 28 U.S.C. § 1331. We have jurisdiction pursuant to 28 U.S.C. § 1291. "We review summary judgment de novo." Nelson v. City of Davis, 571 F.3d 924, 927 (9th Cir.2009) (citation omitted). Summary judgment is appropriate only if the pleadings, the discovery, disclosure materials on file, and affidavits show that there is no genuine dispute 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). All justifiable factual inferences must be drawn in the City's favor, and we must reverse the grant of summary judgment if any rational trier of fact could resolve a material factual issue in the City's favor. See Nelson, 571 F.3d at 927.

III. DISCUSSION

The tension between technological advancement and community aesthetics is nothing new. In an 1889 book that would become a classic in city planning literature, Vienna's Camillo Sitte lamented:

[T]here still remains the question as to whether it is really necessary to purchase these [technological] advantages at the tremendous price of abandoning all artistic beauty in the layout of cities.

The innate conflict between the picturesque and the practical cannot be eliminated merely by talking about it; it will always be present as something intrinsic to the very nature of things.

Camillo Sitte, City Planning According to Artistic Principles 110 (Rudolph Wittkower ed., Random House 1965) (1889).

The TCA attempts to reconcile this "innate conflict." On the one hand, the statute is intended to "encourage the rapid deployment of new telecommunications technologies." Pub.L. No. 104-104, 110 Stat. 56. On the other hand, it seeks "to preserve the authority of State and local governments over zoning and land use matters." T-Mobile USA, Inc. v. City of Anacortes, 572 F.3d 987, 992 (9th Cir.2009) (citation omitted). The TCA seeks a balance by placing certain limitations on localities' control over the construction and modification of WCFs. See 47 U.S.C. §§ 253(a), 332(c)(7)(B). This appeal involves a challenge to the district court's conclusion that the City exceeded those limitations.

A. Section 332(c)(7)(B)(iii)

One of the limitations that the TCA places upon local governments is that "[a]ny decision ... to deny a request to place, construct, or modify personal wireless service facilities shall be in writing and supported by substantial evidence contained in a written record." 47 U.S.C. § 332(c)(7)(B)(iii). As we have explained, "The upshot is simple: this Court may not overturn the [City's] decision on `substantial evidence' grounds if that decision is authorized by applicable local regulations and supported by a reasonable amount of evidence." MetroPCS, Inc. v. City & County of S.F., 400 F.3d 715, 725 (9th Cir.2005).¹ Thus, we must determine (1) whether the City's decision was authorized by local law and, if it was, (2) whether it was supported by a reasonable amount of evidence. Both requirements are satisfied here.

1. The City's decision was authorized by local law.

"[W]e must take applicable state and local regulations as we find them and evaluate the City decision's evidentiary support (or lack thereof) relative to those regulations." MetroPCS, 400 F.3d at 724. As noted above, the Ordinance authorizes the denial of WCF permit applications on aesthetic grounds. Also relevant for our purposes is the California Public Utilities Code ("PUC"), which provides telecommunications companies with a right to construct WCFs "in such manner and at such points as not to incommode the public use of the road or highway," Cal. Pub. Util. Code § 7901, and states that "municipalities shall have the right to exercise reasonable control as to the time, place, and manner in which roads, highways, and waterways are accessed." Id. § 7901.1. The district court erred in concluding that the City's consideration of aesthetics was invalid under the PUC.² The California Constitution gives the City the authority to regulate local aesthetics, and neither PUC § 7901 nor PUC § 7901.1 divests it of that authority.

i. California's Constitution

The California Constitution authorizes local governments to "make and enforce within [their] limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws." Cal. Const. art. XI, § 7. California's Supreme Court has explained that a "`city's police power under this provision can be applied only...