City Communications, Inc. v. The City of Detroit Barden Cable-Vision and MacLean

888 F.2d 1081, 1989 U.S. App. LEXIS 16291
CourtCourt of Appeals for the Sixth Circuit
DecidedNovember 1, 1989
Docket88-1965, 88-2138
StatusPublished
Cited by80 cases

This text of 888 F.2d 1081 (City Communications, Inc. v. The City of Detroit Barden Cable-Vision and MacLean) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City Communications, Inc. v. The City of Detroit Barden Cable-Vision and MacLean, 888 F.2d 1081, 1989 U.S. App. LEXIS 16291 (6th Cir. 1989).

Opinion

*1083 MILBURN, Circuit Judge.

Plaintiff-appellant City Communications, Inc., an unsuccessful bidder for a franchise to install a cable television system in the City of Detroit, appeals the multiple summary judgments of the district court dismissing its First Amendment and antitrust claims against the City of Detroit and the successful bidder, Barden Cable-Vision Company. For the reasons that follow, we affirm.

I.

A. Procedural History

In 1982, the City of Detroit issued a Request for Proposals (“RFP”) to construct, operate, and maintain a cable television system in the City. Plaintiff-appellant City Communications, Inc. (“CCI”) and defendant-appellee Barden Cable-Vision (“Barden”) of Detroit were among the bidders. In July 1983, the Detroit City Council awarded a non-exclusive franchise to Barden.

CCI filed the complaint that is the subject of this appeal on March 18, 1986. The complaint alleged violations of Sections 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. §§ 1 and 1px solid var(--green-border)">2, the First and Fourteenth Amendments to the United States Constitution, and state law. The named defendants were the City of Detroit, Barden, and Mac-Lean-Hunter Cable TV, Inc. (“MacLean-Hunter”), a Canadian corporation that is part owner of the Detroit cable franchise as the result of an assignment by Barden.

The defendants moved to dismiss under Federal Rules of Civil Procedure 12(b)(6) and 56. The district court dismissed CCI’s antitrust and Fourteenth Amendment claims against the City and the state law claims against all defendants. However, the district court left intact CCPs First Amendment claims against the City and its antitrust claims against the private parties. See City Communications, Inc. v. City of Detroit, 650 F.Supp. 1570 (E.D.Mich.1987) (City Communications I) (as the district court considered motions outside the pleadings in ordering a dismissal of these claims, the dismissal should be treated as a summary judgment). The district court later denied the defendants’ motions to reconsider or to certify for an interlocutory appeal. See City Communications, Inc. v. City of Detroit, 660 F.Supp. 932 (E.D.Mich.1987) (City Communications II).

CCI then moved for summary judgment on its First Amendment claim against the City. The City responded with a cross-motion for summary judgment, arguing, among other things, that the case should be dismissed on ripeness and standing grounds. The district court granted summary judgment in favor of the City and dismissed CCPs First Amendment claims without prejudice. See City Communications, Inc. v. City of Detroit, 685 F.Supp. 160, 164 (E.D.Mich.1988) (City Communications III).

On September 8, 1988, pursuant to Fed. R.Civ.P. 54(b), the district court entered a final judgment in favor of the City as to all of CCPs claims against it. CCI filed a timely notice of appeal to this court on September 20, 1988, which was docketed as No. 88-1965.

Meanwhile, on June 1, 1988, defendants Barden and MacLean-Hunter filed a motion for summary judgment on CCPs antitrust claims. On September 28, 1988, the district court granted summary judgment in favor of Barden and MacLean-Hunter, see City Communications, Inc. v. City of Detroit, 695 F.Supp. 911, 916 (E.D.Mich.1988) (City Communications IV), and entered its final judgment dismissing the case on October 14, 1988. On October 26, 1988, CCI filed a timely notice of appeal, which was docketed in this court as No. 88-2138. On November 28, 1988, the parties filed a joint motion and stipulation to consolidate their appeals, which was granted.

B. Facts

In April 1981, the Detroit City Council enacted ordinances aimed at establishing a cable television system for the City. One ordinance established the Detroit Cable Communications Commission to review all applications and recommend a franchise to the Mayor. In August 1982, the City is *1084 sued a Request for Proposals to provide cable television services for the City.

Three bidders responded to the RFP— plaintiff-appellant CCI, defendant-appellee Barden, and Detroit Inner-Unity Bell Cable System (“DIUB”, not a party to this action). Each bid was accompanied by a bidding fee of $10,000. The bids were evaluated for technical and financial soundness and by other objective criteria. One of the City’s prime concerns was “cream skimming,” that being the practice (in its extreme) of installing cable service in affluent subdivisions, where installation costs are low, equipment damage is minimal and customers typically order extra services and pay their bills regularly, and slighting inner-city areas. One reason the City elected to award a single, city-wide non-exclusive franchise was to ensure that the franchisee could and would provide equal services to all residents.

In July 1983, the City awarded the franchise to Barden. The non-exclusive franchise was to commence on August 31,1983, and continue for fifteen years, unless terminated or forfeited by the City. The award was conditioned upon Barden’s ability to demonstrate an unconditional financial commitment for constructing and operating the cable system by August 31, 1984.

In August 1984, Barden notified the City that it could not meet the August 31 deadline. It also sought to modify the system it had agreed to install. The City agreed to extend the deadline by a month, in order that the Commission could hold public hearings on Barden’s requested modifications. The Commission initially recommended that Barden’s franchise be terminated. However, before the City acted, Congress passed the Cable Communications Policy Act of 1984, 47 U.S.C. §§ 521-559. The Commission then retracted its recommendation of termination, and the City granted Barden additional time to secure its financing.

In 1985, Barden requested additional modifications to the system it was to install, and in May and December of that year, the City agreed to Barden’s requested modifications. These modifications included changing the proposed structure of the cable system; elimination of $38 million in proposed grants to the City; reducing the number of channels in the system from 112 to 78; increasing the construction time by three years, to a total of 5V2 years; assigning defendant-appellee MacLean-Hunter a 40 percent or greater ownership interest in the City’s system; and reducing Barden’s construction expenditures by approximately one-third.

During the course of the litigation in the district court, the City indicated it would consider awarding a second cable franchise.

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888 F.2d 1081, 1989 U.S. App. LEXIS 16291, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-communications-inc-v-the-city-of-detroit-barden-cable-vision-and-ca6-1989.