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Municipal Communications Law Update

To: Moss & Barnett Clients and Interested Parties

From: Brian T. Grogan, Esq.

Date: February 25, 1997

Ócopyright 1997, Moss & Barnett, A Professional Association

Denial of Franchise Renewal Upheld by Sixth Circuit

On February 24, 1997 the City of Sturgis, Kentucky’s decision to deny Union CATV’s proposal for renewal of its cable television franchise was upheld by the United States Court of Appeals for the Sixth Circuit. The Sixth Circuit found that the Cable Act “provides for limited judicial review” of a franchising authority’s identified cable-related community needs and interests and that the preponderance of the evidence supported the City’s determination that Union’s proposal for franchise renewal was not reasonable to meet those needs and interests.

As co-counsel for the City of Sturgis, I believe that cities will now have the ability to defend their interests the next time a cable operator tells them that franchise renewal is automatic and guaranteed. The decision also clarifies that City officials, not the cable operator, are the best qualified to identify a community’s future cable related needs and interests. Judge Kennedy reasoned that “it would be inappropriate for a federal court to second-guess the City in its identification of ... needs and interests.”

On July 10, 1995 the City adopted a Resolution denying Union’s renewal proposal on the grounds that it failed to meet the identified cable-related community needs and interests. Union filed a complaint in Federal District Court alleging that the City’s denial was not supported by a “preponderance of the evidence” as required by the Cable Act. On December 29, 1995 the Federal District Court granted the City’s motion for summary judgment. On appeal Union claimed that the District Court erred in refusing to conduct any review of the City’s identification of its needs and interests.

The Sixth Circuit found that the granting of a cable franchise is a legislative act traditionally entitled to considerable deference from the judiciary. The Court stated the “the City Council’s knowledge of a community gives it an institutional advantage in identifying a community’s cable needs and interests. A Court should defer to the franchising authority’s identification of the community’s needs and interests except to the extent necessary to weigh the needs and interests against the cost of implementing them.” The Court also found that the judicial review in such cases is similar to the review of a jury verdict on a motion for a judgment as a matter of law. In that situation the Court must not substitute its judgment for that of a jury, but instead “must view evidence in a light most favorable to the nonmoving party.” Likewise, the Sixth Circuit concluded that Congress intended that courts would give a franchising authority a degree of deference comparable to that owed a jury.

A copy of this decision can be obtained on the Internet at http://www.law.emory.edu/6circuit/feb97/97a0075p.06.html or we can provide you with a copy upon your request. If you should have any questions regarding this important decision please feel free to call.

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Brian T. Grogan is an attorney with the Minneapolis law firm of Moss & Barnett specializing in cable television, telephone and communications law. Mr. Grogan represents municipalities throughout the country on franchise renewals, transfers of ownership, telecommunications planning, rate regulation, zoning and tower site issues, First Amendment issues, right-of-way regulation, litigation and other related communications matters. Mr. Grogan is a frequent presenter at state and national conferences regarding cable and telecommunications.

The materials in this Municipal Communications Law Update have been compiled from a variety of sources and address only a portion of the relevant issues contained within hundreds of pages of regulations and decisions. We have not addressed many important points which may apply to your situation. You should consult with legal counsel before taking any action on matters covered by this Municipal Communications Law Update.

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