Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-04056/USCOURTS-cand-3_05-cv-04056-7/pdf.json

Parties Involved:
Board of Appeals
Defendant
Board of Supervisors
Defendant
City and County of San Francisco
Defendant
Department of Public Works
Defendant
GTE Mobilnet of California Limited Partnership
Plaintiff
Verizon Wireless
Plaintiff

Document Text:

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States District C

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For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

GTE MOBILNET OF CALIFORNIA LIMITED

PARTNERSHIP,

Plaintiff,

 v.

CITY AND COUNTY OF SAN FRANCISCO,

et al.,

Defendants.

 /

No. C 05-04056 SI

ORDER GRANTING PLAINTIFF’S

MOTION FOR SUMMARY JUDGMENT,

AND DENYING DEFENDANTS’

MOTION FOR PARTIAL SUMMARY

JUDGMENT

On December 1, 2006, the Court heard arguments on cross-motions for summary judgment

brought by plaintiff GTE Mobilnet of California and defendants City and County of San Francisco, et

al. Having considered the arguments of counsel and the papers submitted, the Court hereby GRANTS

plaintiff’s motion and DENIES defendants’ cross-motion for the reasons discussed below.

BACKGROUND

I. Factual Background

The facts of this case are not in dispute. Plaintiff GTE Mobilnet of California, doing business

as Verizon Wireless (“Verizon”), is a wireless telecommunications carrier that provides

telecommunications services in San Francisco pursuant to a license issued by the Federal

Communications Commission. See Compl. ¶ 18. Since 2004, Verizon has served tens of thousands of

customers in San Francisco and earned annual gross revenues in the tens of millions of dollars. See

Stipulation for Discovery Purposes on Verizon Wireless’ Section 253 Claim. To provide these services,

Verizon has constructed a network of facilities on private property. See Ionin Decl. ¶ 3 and Ex. A.

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1The Court hereby grants Verizon’s request that the Court take judicial notice of the City’s Public

Works Code and associated “Information & Requirements” documents.

2

Verizon sought to expand its service by installing antennas in public rights-of-way—on existing utility

poles and small equipment boxes placed on the existing poles—in San Francisco. See Compl. ¶ 18. On

or around January 14, 2005, NextG Networks, on behalf of Verizon, submitted minor encroachment

permit applications to install the antennas in the public rights-of-way. See id.

The City and County of San Francisco (“City”) informed Verizon that it must apply for a Utilities

Conditions Permit (“UCP”) pursuant to San Francisco Administrative Code § 11.9 in order to install its

facilities in the public rights-of-way. Verizon’s agent, NextG Networks, submitted a UCP application

to the Department of Public Works (“DPW”) on Verizon’s behalf. Administrative Record (“AR”) 258-

289. The DPW denied the application on the basis that Verizon was “not qualified” for a UCP because

it had not obtained a Certificate of Public Convenience and Necessity (“CPCN”) from the California

Public Utilities Commission (“CPUC”). See AR 291. The City then informed Verizon that it must

apply for a “major encroachment permit” pursuant to San Francisco Public Works Code § 786.1 et seq.

to install its facilities. See AR 136-137.

To obtain a major encroachment permit, an applicant must file an application “in accordance

with the policies, rules and regulations of the Director of Public Works.” Verizon RJN, Ex. A (S.F. Pub.

Works Code § 786.1).1 The Director of Public Works requires an applicant to provide information

necessary to “assure the presentation of pertinent facts for proper consideration of the case and for the

permanent record.” Id. This information includes plans “showing the design, location, nature of the

encroachment and other pertinent information to enable the various City agencies to evaluate the effect

of the encroachment(s) as it relates to their appropriate rules and regulations.” Verizon RJN, Ex. B

(Information & Requirements for Major Encroachment). Here, the DPW requested that Verizon provide

the following information to apply for a major encroachment permit: (1) the purpose of the proposed

facilities; (2) maps and pictures showing the location of the proposed facilities; (3) drawings/pictures

of the proposed facilities; and (4) contact person information. See AR 136. Verizon refused to continue

with the major encroachment permit application process and instead initiated this lawsuit. See Pl.’s

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Reply and Opp’n to Defs.’ Mot. for Summ. J. 5:1-3.

Had Verizon continued with the process and submitted an application, the DPW would have

submitted the application to various other City agencies and persons having interest in the use of the

City’s public rights-of-way, enabling those agencies and persons to express their support for or concerns

about the proposed encroachment. See Verizon RJN, Ex. A (S.F. Pub. Works Code § 786.2). The DPW

would have also noticed a public hearing to allow the public to express their support or concerns. See

id. at §§ 786.3-786.5. Finally, the DPW would have issued a report to the Board of Supervisors

recommending the major encroachment permit for “approval, disapproval or modification including

applicable conditions.” Id. at § 786.6. The City’s Board of Supervisors has unfettered discretion to

approve, disapprove, modify, or condition the permit, unconstrained by any stated standards. See

Verizon RJN, Ex. A and B. See also AR 298.

II. Procedural Background

Verizon filed its Complaint against the City, the DPW, and the Board of Appeals on October 7,

2005. On November 17, 2005, the City filed a motion to dismiss the entire Complaint pursuant to Fed.

R. Civ. P. 12(b)(1) and 12(b)(6). Of seven original claims, the Court granted the City’s motion to

dismiss as to the Fourth (substantive due process), Fifth (§ 1983 as predicated on a violation of 47

U.S.C. § 253) and Sixth (declaratory judgment) claims.

The parties then filed cross-motions for partial summary judgment on the surviving First (47

U.S.C. § 332(c)(7)(B)(iii) - substantial evidence) and Seventh (state law mandamus - violation of Cal.

Pub. Util. Code § 7901 and San Francisco Admin. Code § 11.9) claims. The Court granted the City’s

motion on both claims, to the extent they were based on alleged violation of § 11.9, but otherwise denied

the parties’ cross-motions.

Subsequently, the parties stipulated to dismiss the following claims: (1) the First claim, to the

extent that Verizon alleged that the City’s actions were preempted by 47 U.S.C. § 332(c)(7)(B)(i)(I) and

47 U.S.C. § 332(c)(7)(B)(i)(II); (2) the Third claim in its entirety; and (3) the Fifth claim, to the extent

that Verizon alleged that the City deprived Verizon of certain rights, privileges, and immunities secured

by the Due Process Clause of the Fourteenth Amendment.

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Three claims remain to be decided: the 47 U.S.C. § 253 claim; the 47 U.S.C. § 332(c)(7)(B)(iii)

substantial evidence claim (limited to the preemptive effect of Cal. Pub. Util. § 7901); and the state law

claim under Cal. Pub. Util. § 7901. The parties now seek summary judgment on the 47 U.S.C. § 253

claim.

LEGAL STANDARD

Summary adjudication is proper when “the pleadings, depositions, answers to interrogatories,

and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P.

56(c). In a motion for summary judgment, “[if] the moving party for summary judgment meets its initial

burden of identifying for the court those portions of the materials on file that it believes demonstrate the

absence of any genuine issues of material fact, the burden of production then shifts so that the nonmoving party must set forth, by affidavit or as otherwise provided in Rule 56, specific facts showing that

there is a genuine issue for trial.” See T.W. Elec. Service, Inc., v. Pac. Elec. Contractors Ass’n, 809 F.2d

626, 630 (9th Cir. 1987) (citing Celotex Corp. v. Catrett, 477 U.S. 317 (1986)). Summary judgment is

also appropriate in cases where the facts controlling the application of a rule of law are undisputed, and

the parties merely raise questions of law, “the resolution of which does not involve disputed ‘material’

facts.” Delbon Radiology v. Turlock Diagnostic Ctr., 839 F. Supp. 1388, 1391 (E.D. Cal. 1993);

William W. Schwarzer, A. Wallace Tashima & James M. Wagstaffe, Federal Civil Procedure Before

Trial § 14:207 (The Rutter Group 2006).

In judging evidence at the summary judgment stage, the Court does not make credibility

determinations or weigh conflicting evidence, and draws all inferences in the light most favorable to the

non-moving party. See T.W. Electric, 809 F.2d at 630-31 (citing Matsushita Elec. Indus. Co., Ltd. v.

Zenith Radio Corp., 475 U.S. 574 (1986)); Ting v. United States, 927 F.2d 1504, 1509 (9th Cir. 1991).

The evidence presented by the parties must be admissible. See Fed. R. Civ. P. 56(e). Conclusory,

speculative testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and

defeat summary judgment. See Thornhill Publ’g Co., Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir.

1979). 

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DISCUSSION

Verizon asserts that the City has created an unlawful barrier in violation of the Federal

Telecommunications Act, by denying Verizon a UCP and requiring it to obtain major encroachment

permits for its proposed facilities constructed in the public rights-of-way. Specifically, Verizon argues

that the Major Encroachment Permit Ordinance (“MEPO”) codified in San Francisco Public Works

Code § 786.1 et seq. is preempted by 47 U.S.C. § 253(a), which provides:

No State or local statute or regulation, or other State or local legal requirement, may

prohibit or have the effect of prohibiting the ability of any entity to provide any interstate

or intrastate telecommunications service.

47 U.S.C. § 253(a) (emphasis added).

I. Verizon presents a “facial” rather than “as-applied” challenge to the MEPO

A plaintiff may make either a “facial” or an “as-applied” challenge to an ordinance such as the

MEPO. Verizon asserts that its claim is a facial challenge. The City argues that Verizon’s challenge

is actually an as-applied challenge in the guise of a facial challenge.

The City contends that because Verizon challenges the MEPO only as it applies to

telecommunications carriers like itself and does not seek invalidation of the ordinance generally,

Verizon’s claim cannot be a facial challenge. In support of this argument, the City cites dicta from the

Ninth Circuit case of Qwest Corp. v. City of Portland, 385 F.3d 1236 (9th Cir. 2004), which states:

We doubt whether [the preemption provision] can be read so broadly as to apply to

ordinances that are not specific to the telecommunications permitting process. . . . [T]o

the extent that [the plaintiff] challenges these ordinance provisions [of general

applicability], it is questionable whether § 253 even applies.

Id. at 1242.

A facial challenge, however, is no less “facial” in nature simply because it does not challenge

every possible application of the ordinance. In an analogous case from this district, a company wishing

to install radio transmitters in the City’s rights-of-way challenged the City’s permit application process

as preempted by the Federal Telecommunications Act. NextG Networks of Cal., Inc. v. City of San

Francisco, 2006 U.S. Dist. LEXIS 36101, at *1 (N.D. Cal. June 2, 2006). The City in that case relied

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on the same language from City of Portland as it does now, questioning the applicability of the

preemption provision to ordinances of general applicability. As the court in NextG explained, however,

All district courts in this circuit considering this passage from City of Portland have

either rejected it as dicta or otherwise distinguished it. . . . 

. . . Other courts have rejected the language in City of Portland for good reason.

If a city could circumvent the requirements of section 253(a) simply by enacting

regulations that apply to all utilities, then federal law would fail to provide any

meaningful special protection to telecommunications providers. Under the City’s

proposed construction, it could enact a regulation allowing the City to arbitrarily deny

any utility access to public rights-of-way without violating section 253(a). The City’s

position cannot be reconciled with the plain language of the statute or the deregulatory

purpose which it serves. 

Id. at *19-*20. This Court agrees with the NextG court’s reasoning, and finds that Verizon’s claim is

properly characterized as a “facial” challenge to the MEPO.

II. The MEPO is preempted by § 253(a)

In asserting a facial challenge to the MEPO, Verizon does not need to show that the MEPO has

had an actual prohibitive effect. As the Ninth Circuit noted in City of Portland, “[w]e do not agree that

Qwest was required to make an actual showing of a ‘single telecommunications service that it . . . is

effectively prohibited from providing.’ We have previously ruled that regulations that may have the

effect of prohibiting the provision of telecommunications services are preempted.” City of Portland,

385 F.3d at 1241 (emphasis in original). Thus a showing that an ordinance “may have” the effect of

prohibiting a protected interest is sufficient to sustain a facial challenge to the ordinance. A showing

of a particular instance of actual prohibition on service is not required. In NextG, the court rejected the

City’s argument to the contrary, noting that “the preemption analysis under section 253 focuses on the

regulation itself, and not on its application to a particular provider. The parties’ ‘as applied’ arguments

are therefore not relevant.” NextG, 2006 U.S. Dist. LEXIS 36101, at *21-*22.

Verizon contends that the MEPO contains unduly burdensome requirements, vests unfettered

discretion in City officials, is “onerous,” and has sufficient “discouraging effect” on the provision of

telecommunications services to require the Court to find the MEPO to be in violation of § 253(a) as a

matter of law. Specifically, Verizon argues that:

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[t]he Ordinance on its face imposes very substantial burdens, including that it

authorizes only a ‘revocable’ permit (§ 786); authorizes the DPW to impose

extensive application requirements through rules and regulations (§ 786.1); requires

that multiple City departments review and formally report on the application (§

786.2); requires a public hearing before the DPW with extensive notice (§§ 786.3-

786.4); requires that the DPW make a formal recommendation to the Board of

Supervisors (§ 786.6); and provides for a decision by the Board of Supervisors that

is wholly discretionary and devoid of any governing or limiting standards (§ 786.7).

Pl.’s Mot. for Summ. J. 8:12-19. The Court agrees. In particular, the wholly discretionary decisionmaking power granted to the Board of Supervisors, without any governing or limiting standards,

certainly may have a prohibitive effect on the provision of telecommunications services. The Court

therefore finds that the MEPO is preempted by § 253(a).

III. The MEPO is not saved by the safe harbor provision of § 253(b)

The City contends that even if the MEPO may have a prohibitive effect on telecommunications

carriers, the City is entitled to summary judgment because the safe harbor provision of § 253(b) saves

the ordinance from preemption as a matter of law. Section 253(b) provides:

Nothing in this section shall affect the ability of a State to impose, on a competitively

neutral basis . . . , requirements necessary to preserve and advance universal service,

protect the public safety and welfare, ensure the continued quality of telecommunications

services, and safeguard the rights of consumers.

The City asserts that the MEPO’s requirements are “competitively neutral . . . requirements necessary”

to “protect the public safety and welfare,” and are therefore protected by § 253(b).

In response, Verizon contends that while the language of § 253(b) protects the right of a State

to impose regulation to protect the public safety and welfare, it does not save local government

regulation from preemption. Verizon points out that telephone service has traditionally been recognized

as a “matter of statewide concern” and is not a municipal affair. See, e.g., Pacific Tel. & Tel. Co. v. City

and County of San Francisco, 51 Cal. 2d 766, 776 (1959). Furthermore, even if the State has properly

delegated this authority to the City, Verizon argues that the MEPO requirements fall outside the scope

of regulations that may properly be considered “necessary” to “protect the public safety and welfare.”

Section 253(b) applies to local governments to the extent that California has delegated its

authority to protect the public safety and welfare to municipalities. See Cox Communications PCS, L.P.

v. City of San Marcos, 204 F. Supp. 2d 1260, 1268 (S.D. Cal. 2002). California has delegated such

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authority to the City through the California Constitution and the California Public Utilities Code. See

Cal. Const. art. XII, § 8 (reserving to the City “power over public utilities relating to the making and

enforcement of . . . regulations concerning municipal affairs.”); Cal. Pub. Util. Code § 2902 (protecting

a municipality’s powers to regulate “matters affecting the health, convenience, and safety of the general

public, including matters such as the use and repair of public streets by any public utility [and] the

location of the poles, wires, mains, or conduits of any public utility, on, under, or above any public

streets.”). The issue, therefore, is whether the MEPO requirements fall within the scope of public safety

and welfare protections contemplated by § 253(b).

The City argues that by requiring Verizon to file an encroachment application showing the exact

nature and location of its proposed encroachments, it merely attempts to prevent proliferation of

telecommunications facilities “without regard for public convenience, the negative views of residents,

or aesthetic guidelines.” NextG, 2006 U.S. Dist. LEXIS 36101, at *27. In NextG, the court rejected an

identical argument, finding that the City

has offered no coherent explanation as to which of its permitting requirements furthers

the public safety and welfare. In particular, the court cannot conceive of how the City’s

retention of complete discretion to deny a permit altogether could fall under section

253(b).

NextG, 2006 U.S. Dist. LEXIS 36101, at *26-*27.

As in NextG, the City here fails to explain how the MEPO requirements—especially the absolute

discretion reserved to the City to deny a major encroachment permit—are “necessary” to further the

public safety and welfare. As a matter of law, the § 253(b) safe harbor does not apply in this case.

IV. The MEPO is not saved by the safe harbor provision of § 253(c)

The City argues alternatively that even if the MEPO may have a prohibitive effect on

telecommunications carriers, the ordinance is saved by the safe harbor provision of § 253(c). Section

253(c) provides:

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.

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The Federal Telecommunications Act thus allows for limited local regulation to manage the public

rights-of-way. The Ninth Circuit has explained that “the phrase ‘manage the public rights-of-way’

means ‘control over the right-of-way itself, not control over companies with facilities in the right-ofway.’” Qwest Communications, Inc. v. City of Berkeley, 433 F.3d 1253, 1258 (9th Cir. 2006) (quoting

City of Auburn v. Qwest Corp., 260 F.3d 1160, 1177 (9th Cir. 2001)). The parties here disagree as to

whether the MEPO requirements constitute “control over the right-of-way itself” or “control over

companies with facilities in the right-of-way.”

The Court finds definitive guidance from the Ninth Circuit case of City of Auburn, 260 F.3d at

1165. In that case, the telecommunications provider challenged a city’s ordinance requiring the utility,

rather than the municipality, to bear the expense of facility relocation made necessary by right-of-way

improvements. Id. In holding that the challenged ordinance was preempted by the Federal

Telecommunications Act, the Ninth Circuit found particularly problematic that the ordinance granted

unfettered discretion to the City “to insist upon unspecified franchise terms and to grant, deny, or revoke

a franchise based on unnamed factors.” Id. at 1179. Such unfettered discretion, the court explained,

went “far beyond the limits of § 253(c), encompassing anything a city deems to be in the public interest.”

Id.

Likewise here, the complete discretion left to the City to grant or deny a major encroachment

permit is problematic. The City does not dispute that the MEPO reserves such discretion. Rather, the

City attempts to distinguish City of Auburn by noting that in that case, the court’s concern was the abuse

of discretion in denying an application for a franchise—which is required to provide any service in the

community—as opposed to a mere encroachment permit, the denial of which in this case would not have

prevented Verizon from providing telecommunications services in San Francisco altogether. However,

the distinction between a franchise permit and an encroachment permit is irrelevant because denial of

either permit may prohibit the provision of service under § 253(a). The Court determines as a matter

of law, therefore, that § 253(c) cannot operate to save the MEPO from preemption.

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CONCLUSION

For the foregoing reasons and for good cause shown, the Court finds that the MEPO imposes a

burden that “may have” a prohibitive effect pursuant to § 253(a), and that the § 253(b) and § 253(c) safe

harbor provisions do not apply. The Court GRANTS Verizon’s motion for summary judgment and

DENIES the City’s cross-motion. The parties are directed to submit proposed orders as to the relief that

should be granted in light of this order. (Docket Nos. 58, 67).

IT IS SO ORDERED.

Dated: February 6, 2007

______________________

SUSAN ILLSTON

United States Distrixct Judge

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