Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-96-05133/USCOURTS-caDC-96-05133-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 6, 1997 Decided November 21, 1997 

No. 96-5050

AMERICABLE INTERNATIONAL, INC.,

APPELLANT

v.

DEPARTMENT OF NAVY, ET AL.,

APPELLEES

No. 96-5131

AMERICABLE INTERNATIONAL, INC.,

APPELLANT

v.

DEPARTMENT OF NAVY, ET AL.,

APPELLEES

-

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No. 96-5132

AMERICABLE INTERNATIONAL, INC.,

APPELLANT

v.

DEPARTMENT OF NAVY, ET AL.,

APPELLEES

No. 96-5133

AMERICABLE INTERNATIONAL, INC.,

APPELLANT

v.

DEPARTMENT OF NAVY, ET AL.,

APPELLEES

Appeals from the United States District Court 

for the District of Columbia 

(No. 94cv02096) 

(No. 95cv00282) 

(No. 95cv02214) 

(No. 95cv02114)

Robert P. Parker argued the cause for the appellant. 

Warren B. Rudman, Carl W. Hampe and G. Lindsay Simmons were on brief.

Keith V. Morgan, Assistant United States Attorney, argued 

the cause for the appellees. Mary Lou Leary, United States 

Attorney, and R. Craig Lawrence, Assistant United States 

Attorney, were on brief.

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Before: WALD, HENDERSON and GARLAND, Circuit Judges.

Opinion for the court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: Americable 

International, Inc. (Americable), a cable television operator, 

appeals the district court's summary judgments in four actions to enjoin the Department of the Navy (Navy) from 

operating an "in-house" cable television system in four Navyowned communities previously served by Americable. In 

each action, Americable asserted violations of federal procurement law, the Cable Communications Policy Act of 1984, 47 

U.S.C. §§ 521 et seq., (Cable Act) and the First Amendment 

to the United States Constitution. For the reasons set out 

below, we affirm the district court's judgments on the Cable 

Act and First Amendment claims and reverse the judgments 

on the procurement claims.

In 1986 Americable won a competitive bid to build and 

maintain a cable system serving various Navy facilities in the 

San Diego area under a nonexclusive franchise agreement. 

Under the agreement Americable provided service to a number of Navy residential complexes within the franchise area 

and received compensation therefor from common funds derived from each facility's rental payments. In 1988 service 

was extended, at the Navy's request, to its nearby Marine 

Corps Recruit Depot (MCRD).

In 1991 the Navy solicited bids for development of a 

satellite/master antenna television system (SMATV) to provide cable service to its enlisted quarters at MCRD.1 The 

new system began service in 1992 and Americable's group 

subscriptions at the affected MCRD residences were canceled 

at that time. The Navy later decided to contract for similar 

SMATV service at the "bachelor quarters," high-density resi-

__________

1

"[A]n SMATV system typically receives a signal from a satellite 

through a small satellite dish located on a rooftop and then retransmits the signal by wire to units within a building or complex of 

buildings." FCC v. Beach Communications, Inc., 113 S. Ct. 2096, 

2100 (1993) (citing In re Definition of a Cable Television System, 5 

F.C.C. Rcd. 7638, 7639 (1990)).

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dential facilities housing temporarily assigned unmarried 

Navy personnel, located at three other San Diego area sites: 

North Island, the Long Beach Naval Station and the San 

Diego Naval Submarine Base, all of which were then served 

by Americable's system. No contracts have yet been entered 

for those locations.2

Americable filed four actions in the district court seeking 

declaratory, injunctive and mandamus relief on the grounds 

that the conversion to SMATV at each of the four locations 

violated, inter alia, federal procurement regulations, the Cable Act and Americable's First Amendment right of free 

speech. By order and memorandum opinion filed February 

8, 1996 the district court granted the Navy's motion to 

dismiss or in the alternative for summary judgment in the 

action challenging the cable conversion at North Island. Americable Int'l, Inc. v. United States Dep't of the Navy, 931 

F. Supp. 1 (D.D.C. 1996). On April 17, 1996 the court issued 

unpublished memorandum opinions and judgments granting 

similar motions in the other three actions. Americable filed 

appeals in each action. Because the parties submitted evidence and statements of material facts pursuant to Local 

Rule 108(h) 3and because the district court expressly cited 

__________

2

In fact, it appears that no SMATV systems will be installed at 

these locations and that the actions involving them are therefore 

moot. See Appellant's Br. at 10 n.2 (acknowledging Long Beach 

Naval Base has closed and Americable has acquired cable system at 

Submarine Base); Appellee's Br. at 5 (asserting Navy has abandoned plans for SMATV system at North Island).

3 Rule 108(h) provides in part:

Each motion for summary judgment shall be accompanied by a 

statement of material facts as to which the moving party 

contends there is no genuine issue, which shall include references to the parts of the record relied on to support the 

statement. An opposition to such a motion shall be accompanied by a separate concise statement of genuine issues setting 

forth all material facts as to which it is contended there exists a 

genuine issue necessary to be litigated, which shall include 

references to the parts of the record relied on to support the 

statement.

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the absence of record evidence in its North Island memorandum opinion, 931 F. Supp. at 3, we construe the district 

court's decision in that action as having granted summary 

judgment. In addition, as the district court dismissed the 

complaints in the other three actions "for each of the reasons 

set forth in" the North Island opinion,4 we construe the other 

three decisions in like manner.5 Accordingly, in reviewing all 

four decisions, we "must grant the appellant[ ] the benefit of 

all reasonable evidentiary inferences that can be drawn in 

[its] favor and can uphold the summary judgment only where 

there is no genuine issue of material fact, and, viewing the 

evidence in the light most favorable to the nonmoving party, 

the movant is entitled to prevail as a matter of law." Beckett 

v. Air Line Pilots Ass'n, 59 F.3d 1276, 1279 (D.C. Cir. 1995) 

__________

D.D.C. R. 108(h).

4

See Americable Int'l, Inc. v. United States Dep't of the Navy,

No. 95cv00282, mem. order at 1-2 (D.D.C. filed Apr. 17, 1996); 

Americable Int'l, Inc. v. United States Dep't of the Navy, No. 

95cv002114, mem. order at 1-2 (D.D.C. filed Apr. 17, 1996); Americable Int'l, Inc. v. United States Dep't of the Navy, No. 95cv002214, 

mem. order at 1-2 (D.D.C. filed Apr. 17, 1996).

5 We therefore reject Americable's assertion that we should review the district court's decisions as dismissals for failure to state a 

claim under Federal Rule of Civil Procedure 12(b)(6). Given that 

the motions were in the alternative for summary judgment and that 

the parties had the opportunity to submit and submitted materials 

in support and in opposition, it is not unfair to Americable to treat 

the decisions as summary judgments. See Tele-Communications 

of Key West, Inc. v. United States, 757 F.2d 1330, 1334 (D.C. Cir. 

1985) ("[T]he reviewing court must assure itself that summary 

judgment treatment would be fair to both parties in that the 

procedural requirements of the applicable rules were observed."). 

In any event, we would also affirm dismissal of the Cable Act and 

First Amendment claims under Rule 12(b)(6) because, as our discussion below illustrates, the allegations of the complaint, construed 

in the light most favorable to Americable, reveal that Americable 

can prove no set of facts that would entitle it to relief on the two 

claims. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on 

other ground by Davis v. Scherer, 468 U.S. 183 (1984).

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(internal quotations omitted). We apply this standard to each 

of Americable's claims in turn.

First, Americable asserts that the Navy's SMATV conversion at each location violates statutory and regulatory procurement requirements. The Congress has directed that

the Secretary of Defense shall procure each supply or 

service necessary for or beneficial to the accomplishment 

of the authorized functions of the Department of Defense 

(other than functions which the Secretary of Defense 

determines must be performed by military or Government personnel) from a source in the private sector if 

such a source can provide such supply or service to the 

Department at a cost that is lower (after including any 

cost differential required by law, Executive order, or 

regulation) than the cost at which the Department can 

provide the same supply or service.

10 U.S.C. § 2462(a). To implement this mandate the Department of Defense has promulgated a regulation requiring:

When performance by a commercial source is permissible, a comparison of the cost of contracting and the cost 

of in-house performance shall be performed to determine 

who shall provide the best value for the Government, 

considering price and other factors included in the solicitation.

32 C.F.R. § 169a.4(d). Americable asserts that the Navy 

violated both the statute and the regulation by failing to 

conduct a cost comparison before deciding to establish an "inhouse" cable system. The Navy maintains that it never 

moved the cable service "in-house" but simply entered into 

private contracts for the installation and operation of the 

SMATV system. If the Navy is correct, there may well be no 

genuine issue of material fact with respect to the applicability 

§ 2462 to this case. On the other hand, Americable contests 

the Navy's characterization of the conversion, asserting that 

substantial Navy personnel will be required to operate and 

maintain the programing delivery system now operated and 

maintained by Americable. Unfortunately, neither we nor 

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the district court are in a position to decide as a matter of law 

whether there is a genuine dispute here because the district 

court did not permit Americable any discovery before issuing 

its ruling. Although Americable cited the need for discovery, 

inter alia, to "find out what the nature of the service is going 

to be," Tr. of 2/27/95 hearing at 48; see also id. at 30-31, 36, 

the district court granted summary judgment without permitting any. As a consequence, there is no evidence in the 

record as to who will perform those functions that may be 

necessary to "operate" and "maintain" the new system and 

any inferences that exist must be construed in the appellant's 

favor.

Under these circumstances, it was inappropriate for the 

district court to grant summary judgment without first giving 

Americable a chance to conduct discovery to determine precisely what services Defense Department personnel would be 

performing after acquiring the SMATV system and whether 

those services were sufficiently substantial to invoke the 

mandate of § 2462(a). As we have stated before, summary 

judgment ordinarily "is proper only after the plaintiff has 

been given adequate time for discovery." First Chicago Int'l 

v. United Exch. Co., 836 F.2d 1375, 1380 (D.C. Cir. 1988); see 

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (summary 

judgment appropriate only "after adequate time for discovery); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 

(1986) (plaintiff must have "a full opportunity to conduct 

discovery"). If after discovery the district court determines 

that the relevant services are no more than those asserted by 

the Navy in this court, summary judgment may well be in 

order. If something more turns out to have been envisioned, 

more difficult line-drawing may be required. But neither is 

appropriate, or possible, at this stage of the proceedings.

Americable next asserts that the Navy's conversion to 

SMATV violates section 541(a)(1) and section 541(a)(4)(A) of 

the Cable Act, which, Americable maintains, were intended to 

prevent cable providers from "cherry-picking" only the most 

lucrative portions of a cable franchise area. We do not agree 

with Americable's construction of either provision's meaning. 

Section 541(a)(4)(A) does not, as Americable contends, require 

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that cable providers extend service "throughout the franchise 

area," see Appellant's Br. at 31, but instead imposes a specific 

duty on the franchising authority that "[i]n awarding a 

franchise, [it] shall allow the applicant's cable system a reasonable period of time to become capable of providing cable 

service to all households in the franchise area." 47 U.S.C. 

§ 541(a)(4)(A). There is no evidence, and Americable has 

never claimed, that the Navy afforded it too little time to 

develop its cable system throughout the San Diego franchise 

area. Nor can we accept Americable's contention that the 

Navy violated section 541(a)(1) of the Cable Act, which provides that "a franchising authority may not grant an exclusive 

franchise and may not unreasonably refuse to award an 

additional competitive franchise." Id. § 541(a)(1). Americable neither alleged nor demonstrated that the Navy did 

either. Accordingly, there was no violation of the plain 

language of either cited provision.6

Finally, Americable asserts that the conversion to SMATV 

infringes its First Amendment right "to provide cable service 

within its franchise area" because it "foreclose[s] Americable's opportunity to speak to a portion of the audience within 

its franchise area." Appellant's Br. at 36. In City of Los 

Angeles v. Preferred Communications, Inc., 476 U.S. 488 

(1986), the United States Supreme Court recognized that the 

provision of cable television service "plainly implicate[s] First 

__________

6 Even were the meaning of the statutory language not plain, 

Americable's claims would be foreclosed by the legislative history of 

the Cable Act which makes it clear that each section was intended 

to protect the interests of new franchise applicants and not existing 

cable operators such as Americable. See S. Rep. No. 102-92, at 91 

(1991), reprinted in 1992 U.S.C.C.A.N. 1133, 1224 (section 

541(a)(4)(A) "requires local franchising authorities to grant the 

second or third cable system in a community sufficient time actually 

to construct its system and provide service" and "is intended to 

ensure that the purpose of [section 541(a)(1)] is not thwarted"); 

S. Rep. No. 102-92, at 91 (1991), reprinted in 1992 U.S.C.C.A.N. 

1133, 1224 ("This section amends section 621(a)(1) of the 1934 Act to 

add a new provision prohibiting franchising authorities from unreasonably refusing to award additional franchises.") (emphasis added).

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Amendment interests" because "through original programming or by exercising editorial discretion over which stations 

or programs to include in its repertoire" a cable operator 

"seeks to communicate messages on a wide variety of topics 

and in a wide variety of formats." 476 U.S. at 494. Americable seizes on this language and on our opinion in TeleCommunications of Key West, Inc. v. United States, 757 

F.2d 1330 (D.C. Cir. 1985), (TCI) to argue that the SMATV 

installation works a violation of its First Amendment rights. 

Neither case helps Americable's challenge. In TCI we acknowledged the First Amendment interests implicated in the 

provision of cable television services and thus held that the 

plaintiff cable operator, which had been providing cable service for some years at a Florida Air Force base, had stated a 

First Amendment claim sufficient to withstand a motion to 

dismiss by alleging that the Air Force had awarded a new 

exclusive franchise to another operator and denied the plaintiff access to "facilities essential to operating on the base." 

757 F.2d at 1335. Here, by contrast, Americable has produced no evidence to show that the SMATV installation will 

impair its ability to deliver programming anywhere in the 

franchise area. In fact, the Navy's evidence affirmatively 

established the contrary. See Affidavit of Joseph F. Calcara 

(Naval Housing Acquisitions Division Director in San Diego, 

California) at 1 (stating "Americable's cable and rights of way 

are unaffected by the SMATV system installation" and "Americable remains free to offer a programming/cost structure 

and solicit individual and government subscribers at North 

Island without restriction").

Because the installation and operation of SMATV will not 

prevent Americable from providing its cable service throughout the franchise area, we conclude that Americable has failed 

to establish a First Amendment injury arising from the 

Navy's proposed actions. See Warner Cable Communications, Inc. v. City of Niceville, 911 F.2d 634, 636-41 (11th Cir. 

1990). Americable asserted only that the SMATV service 

would "displace Americable entirely as the provider of cable 

TV services" because it will no longer receive bulk subscription payments from the Navy for providing basic cable serUSCA Case #96-5133 Document #310521 Filed: 11/21/1997 Page 9 of 10
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vice. Hermanowski Declaration at 4, 6. Americable remains 

free, however, to market its cable service in whatever packages it chooses to individual residents. Whether the residents choose to purchase Americable's service is beyond the 

scope of our inquiry. The First Amendment does not require 

that the Navy itself pay for Americable's service or ensure 

that it is free from economic competition. See Warner Cable 

Communications, Inc., 911 F.2d at 637-38; cf. Regan v. 

Taxation With Representation of Washington, 461 U.S. 540, 

544-45 (1983) (government not required to subsidize constitutionally protected lobbying through tax exemption or deductions).

For the preceding reasons, we affirm the district court's 

dismissals of the Cable Act and First Amendment claims and 

reverse the court's dismissals of the procurement law claims.

So ordered.

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