Channel One Systems, Inc. v. Connecticut Department of Public Utility Control

639 F. Supp. 188, 61 Rad. Reg. 2d (P & F) 99, 1986 U.S. Dist. LEXIS 26852
CourtDistrict Court, D. Connecticut
DecidedApril 11, 1986
DocketCiv. 86-150(AHN)
StatusPublished
Cited by8 cases

This text of 639 F. Supp. 188 (Channel One Systems, Inc. v. Connecticut Department of Public Utility Control) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Channel One Systems, Inc. v. Connecticut Department of Public Utility Control, 639 F. Supp. 188, 61 Rad. Reg. 2d (P & F) 99, 1986 U.S. Dist. LEXIS 26852 (D. Conn. 1986).

Opinion

MEMORANDUM OF DECISION

NEVAS, District Judge.

This action for declaratory and injunctive relief seeks an interpretation and application of the recently-enacted Cable Communications Policy Act of 1984 (the “Cable Act”). Plaintiff-Channel One Systems, Inc. (“Channel One”) requests declaratory relief by this court that a state agency authorized by the Cable Act and by state statute *190 to regulate operators of cable systems is, in this case, prohibited from regulating a Channel One facility which provides cable service in Southbury, Connecticut. Channel One also seeks to permanently enjoin the state agency from enforcing its decision concerning Channel One’s facility and from preventing the continuing rehabilitation of the facility.

Defendants contend that this court lacks jurisdiction to entertain the action. Before addressing these asserted jurisdictional infirmities, a discussion of the procedural background is appropriate.

Procedural Background

Channel One commenced this action on January 13,1986, against the State of Connecticut’s Department of Public Utility Control (“DPUC”). Channel One waited until February 13, 1986, to pursue a temporary restraining order. Mid-Connecticut Cablevision Company (“Mid-Connecticut”), a cable operator holding a certificate of public convenience and necessity to provide cable service in certain Connecticut towns including Southbury, moved to intervene as a defendant pursuant to Rule 24, Fed.R. Civ.P. (Filing no. 7). On February 28,1986, the court conducted a hearing on the request for a temporary restraining order. At the start of the hearing, Mid-Connecticut’s motion to intervene was granted without objection. (Feb. 28, 1986 transcript (“Tr.”) at 4, filing no. 16). Mid-Connecticut actively participated with the other parties in the hearing. Through the offering of exhibits and the testimony of Channel One’s president, Fred Hopengarten, Channel One met its burden of showing “(a) irreparable harm and (b) either (1) likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward [Channel One].” Bell & Howell: Mamiya Co. v. Mosel Supply Co., 719 F.2d 42, 45 (2d Cir.1983) (quoting Jackson Diary, Inc. v. HP. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir.1979) (per curiam)). (Feb. 28 Tr. at 73-76). An order restraining the DPUC from acting against Channel One for ten days was then issued. (Temporary restraining order, filing no. 14). In addition, Channel One was ordered to join as a party the association with which it contracted to provide cable service. (Feb. 28 Tr. at 73). The Heritage Village Master Association (“HVMA”) was joined as a defendant on March 7, 1986. (Filing no. 23). 1

On March 10, 1986, a preliminary injunction hearing was held during which the parties participated fully by offering exhibits, testimony, and legal memoranda. Recognizing this matter’s importance and the need for an immediate ruling, the court rendered its decision from the bench on March 11, 1986, enjoining the DPUC from interfering with Channel One’s activities at Heritage Village pending a final resolution of this action. (Mar. 11, 1986 Tr. at 3-12, filing no. 69; preliminary injunction order, filing no. 29). In its ruling, the court stated that the DPUC’s decision of January 14, 1986, 2 clearly indicated the agency’s intent to enforce state law against Channel One, otherwise the decision would be an empty gesture. Therefore, at that time, a “present and concrete” controversy between the parties was perceived to exist. Public Utilities Commission of California v. United States, 355 U.S. 534, 538-39, 78 S.Ct. 446, 449-50, 2 L.Ed.2d 470 (1958). Also, Channel One was not required to exhaust all available administrative remedies before seeking relief in this court since its complaint was grounded on federal preemption. Housatonic Cable Vision Co. v. Department of Public Utility Control, 622 F.Supp. 798, 803-04 (D.Conn.1985) (Blumenfeld, J.) (and cases cited therein).

Channel One was found to have met its burden for the obtaining of a preliminary injunction. Irreparable harm was proved by the testimony of Channel One’s president that Channel One would suffer a substantial loss of good will with potential customers because of its inability to sell subscriptions and because it was being “portrayed as a law breaker.” (Feb. 28 Tr. at 24). He also testified about the possibility of Channel One going out of business were an injunction not to issue. (Id. at 35, 47). The court found that if Channel One were unable to continue installation, it *191 would lose incalculable and unrecoupable revenues, it would risk being in default of a loan agreement due to a failure to meet installation schedules, and it would risk the termination of its agreement with HVMA. (Mar. 11 Tr. at 8-9). At the hearing, Channel One demonstrated that the DPUC decision created a “cloud” of uncertainty concerning its ability to provide cable service. (Mar. 10, 1986 Tr. at 18, 35-36, filing no. 30). Cf. Satellite Television of New York v. Finneran, 579 F.Supp. 1546, 1551 (S.D.N.Y.1984) (in a pre-Cable Act case, an injunction issued to permit a private cable company to continue construction of a cable facility solely on private property).

During the hearing, Channel One also sufficiently satisfied the second part of the standard for injunctive relief, that is a showing of “sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward [Channel One].” Bell & Howell: Mamiya Co. v. Masel Supply Co., 719 F.2d at 45. At that time, a serious question existed concerning the new Cable Act’s preemptive effect on the DPUC’s authority to issue a decision indicating an intent to regulate Channel One’s facility which at that time was alleged to be solely on private property. Furthermore, Channel One presented letters it had received from the Federal Communications Commission, raising serious questions concerning the accuracy of the DPUC’s recent decision. (See attachments to: the complaint; Channel One’s supplemental memorandum in support of temporary restraining order, filing no. 11; Mid-Connecticut’s supplemental memorandum opposing preliminary injunction, filing no. 25).

The balance of hardships were found to tip decidedly in Channel One’s favor because it was the only party that could be injured if there were no order maintaining the status-quo until trial. Mid-Connecticut would continue to be free to solicit customers and provide cable service at Heritage Village. Without minimizing the DPUC’s important role in regulating State cable operators and assuring that residents of Connecticut receive cable services, the relatively short time taken to hear this matter has not caused undue hardship.

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Bluebook (online)
639 F. Supp. 188, 61 Rad. Reg. 2d (P & F) 99, 1986 U.S. Dist. LEXIS 26852, Counsel Stack Legal Research, https://law.counselstack.com/opinion/channel-one-systems-inc-v-connecticut-department-of-public-utility-ctd-1986.