[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED ___________________________ U.S. COURT OF APPEALS ELEVENTH CIRCUIT No. 98-2403 09/09/99 ___________________________ THOMAS K. KAHN D.C. Docket No. 3:96cv381/LAC CLERK
GULF POWER COMPANY, ALABAMA POWER COMPANY, an Alabama corporation, et al., Plaintiffs - Appellants, Cross-Appellees,
versus
UNITED STATES OF AMERICA, FEDERAL COMMUNICATIONS COMMISSION,
Defendants - Appellees, Cross-Appellants.
____________________________
Appeals from the United States District Court for the Northern District of Florida ____________________________ (September 9, 1999)
Before EDMONDSON and CARNES, Circuit Judges, and WATSON*, Senior Judge.
_____________________ * Honorable James L. Watson, Senior Judge, U.S. Court of International Trade, sitting by designation.
CARNES, Circuit Judge: The plaintiffs–Gulf Power Co., Alabama Power Co., Georgia Power Co.,
Mississippi Power Co., Ohio Edison Co., Duke Power Co., and Florida Power
Corp.–are electric utility companies who brought suit against the United States and
the Federal Communications Commission seeking a declaration that the 1996
amendment to the Pole Attachment Act, as codified at 47 U.S.C. § 224(f), is
facially unconstitutional because it effects a taking of their property without an
adequate process for securing just compensation, in violation of the Fifth
Amendment. The district court agreed that the amendment effected a taking of
property, but granted summary judgment in favor of the defendants after
concluding the amendment did not deny the utilities an adequate process for
securing just compensation. For the reasons set forth below, we affirm the district
court’s judgment.
I. BACKGROUND
The plaintiffs, like other electrical utilities in this country, own vast
networks of poles, ducts, conduits, and rights-of-way which are used to supply
electricity to consumers. Power lines are strung across public and private lands
and millions of poles support those lines.1 Ducts and conduits–usually
1 For example, plaintiff Duke Power owns 1.8 million distribution poles located on 74,134 miles of public and private rights-of-way. 2 underground pipes encased in concrete–house electric conductors. Although the
utilities were able to negotiate privately with some land-owners to secure rights-of-
way, they also received substantial assistance from state governments in acquiring
their networks. States routinely delegated to utilities their sovereign power of
eminent domain so that they could acquire the needed rights-of-way. In addition,
states allowed utilities to locate their network facilities, e.g., poles, on public
rights-of-way.
As with electric utilities, cable television companies must have a physical
carrier for their cables in order to supply television signals to their customers.
Because “underground installation of the necessary cables is impossible or
impracticable[,] [u]tility company poles provide . . . virtually the only practical
physical medium for the installation of television cables.” FCC v. Florida Power
Corp., 480 U.S. 245, 247, 107 S. Ct. 1107, 1109 (1987). With the advent of cable
television in the 1950's, it became common practice for cable companies to lease
access to utility companies’ poles.
Over time, however, cable companies grew upset with the access rates and
complained to Congress that utilities “were exploiting their monopoly position by
engaging in widespread overcharging.” Id. at 247, 107 S. Ct. 1109-10. Congress
responded in 1978 by enacting the Pole Attachments Act, which was codified at 47
U.S.C. § 224. In that act, Congress empowered the Federal Communications
3 Commission (“FCC”), in those states in which access rates were not already
regulated, to determine "just and reasonable" rates a utility could charge cable
companies for access to its poles, ducts, conduits, and rights-of-way. See 47
U.S.C. § 224(b). Congress restricted the FCC, however, to setting a rate within a
statutorily defined range of minimum to maximum rates. See 47 U.S.C. §
224(d)(1).2 Significantly, the Pole Attachments Act, as originally enacted in 1978,
did not require a utility to provide cable companies access to its property. Instead,
it provided that if a utility voluntarily chose to provide access, the rate charged for
that access was subject to FCC regulation.
Things stayed that way until 1996, when telecommunication carriers joined
cable companies in demanding a right of access to utilities’ networks of poles,
ducts, conduits, and rights-of-way. Telecommunication carriers were interested in
using wire communications to carry their signals and, like cable companies, needed
2 Section 224(d)(1) provides: “[a] rate is just and reasonable if it assures a utility the recovery of not less than the additional costs of providing pole attachments, nor more than an amount determined by multiplying the percentage of the total usable space, or the percentage of the total duct or conduit capacity, which is occupied by the pole attachment by the sum of the operating expenses and actual capital costs of the utility attributable to the entire pole, duct, conduit, or right-of- way.” 47 U.S.C. § 224(d)(1). As the Supreme Court has explained, “[t]he minimum measure is thus equivalent to the marginal cost of attachments, while the statutory maximum measure is determined by the fully allocated cost of the construction and operation of the pole to which the cable is attached.” FCC v. Florida Power Corp. 480 U.S. at 253, 107 S. Ct. at 1113. 4 a physical carrier for their wires. Congress responded to these demands by
amending the Pole Attachments Act as part of the Telecommunications Act of
1996. For the purposes of this case, the most significant amendment is a
mandatory access provision which provides that a "utility shall provide a cable
television system or any telecommunications carrier with nondiscriminatory access
to any pole, duct, conduit, or right-of-way owned or controlled by it." 47 U.S.C. §
224(f)(1). The only exceptions to a utility’s mandatory obligation to provide
access are where there is insufficient capacity or some safety, reliability, or other
engineering problem. See 47 U.S.C. § 224(f)(2).
Although Congress amended the Pole Attachments Act to require utilities to
provide access to their property, it left intact the FCC’s authority to determine the
compensation a utility is entitled to receive for providing that access. Hence, as
before, the FCC determines the compensation a utility may receive for providing
access by setting a “just and reasonable” rate within the range of minimum to
maximum rates Congress set forth in the Act3; 47 U.S.C. § 224(d) describes the
range of rates for cable companies’ access, while 47 U.S.C. § 224(e) describes the
range of rates for telecommunication carriers’ access.
3 For convenience, we will hereinafter use the term “Act” to refer to the Pole Attachments Act as amended in 1996. 5 The FCC’s rate order, however, is not final. If a utility believes the rate set
by the FCC fails to provide adequate compensation, it may seek relief by appealing
directly to a United States Court of Appeals. See 47 U.S.C. § 402(a). Among other
things, the court of appeals is empowered to enter “a judgment determining the
validity of, and enjoining, setting aside, or suspending, in whole or in part” the
FCC’s order. 28 U.S.C. § 2349(a).
As mentioned earlier, the plaintiffs are seven electric utility companies.
Each falls within the Act’s definition of a “utility”4 and is therefore required to
provide cable companies and telecommunication carriers access to its poles, ducts,
conduits, and rights-of-way under the Act’s mandatory access provision. See 47
U.S.C. § 224(f). The plaintiffs brought this suit in federal district court against the
United States and the FCC (the “defendants”) seeking a declaration that the Act’s
mandatory access provision is facially unconstitutional because it constitutes a
taking of property without an adequate process for securing just compensation, as
required by the Fifth Amendment. They also sought to permanently enjoin and
restrain the defendants from enforcing the mandatory access provision.
4 The Act defines “utility” as “any person who is . . . an electric . . . public utility, and who owns or controls poles, ducts, conduits, or rights-of-way used in whole or in part, for any wire communications.” 47 U.S.C. § 224(a). 6 After the plaintiffs filed suit, the Association for Legal Telecommunication
Services, which is a non-profit, national trade association representing
telecommunications companies, and American Communication Services, which is
a telecommunications service provider, intervened as party defendants. In
addition, several national and state cable television associations participated as
amici curiae supporting the defendants.
The plaintiffs, defendants, and intervenors all moved for summary judgment.
The district court agreed with the plaintiffs that the Act’s mandatory access
provision effected a taking of property under the Fifth Amendment. However, it
concluded the plaintiffs’ facial challenge failed because the Act provided an
adequate process for securing just compensation for that taking. Accordingly, the
district court denied the plaintiffs' motion for summary judgment but granted the
defendants' and intervenors' motions for summary judgment. The plaintiffs
appealed, contending that the district court erred in not finding that the Act’s
mandatory access provision was unconstitutional. The defendants cross-appealed
the court’s determination that the Act’s mandatory access provision effected a
taking of property.
II. DISCUSSION
The plaintiffs’ contention that the Act’s mandatory access provision is
facially unconstitutional requires us to address the following two issues. First,
7 does the Act’s mandatory access provision effect a taking of property? Second, if
it does, is an adequate process available to a utility to secure just compensation for
that taking? We address each issue in turn, applying a de novo standard of review.
See, e.g., Rodriguez ex. rel. Rodriguez v. United States, 169 F.3d 1342, 1346 (11th
Cir. 1999) (de novo standard applies to determination of a statute’s
constitutionality). In addition, we note that because the plaintiffs are bringing a
facial challenge to the Act, they must “establish that no set of circumstances exists
under which the Act would be valid.” United States v. Salerno, 481 U.S. 739, 745,
107 S. Ct. 2095, 2100 (1987) (emphasis added). See also New York State Club
Ass’n, Inc. v. City of New York, 487 U.S. 1, 11, 108 S. Ct. 2225, 2233 (1988) (“to
prevail on a facial attack the plaintiff must demonstrate that the challenged law . . .
could never be applied in a valid manner.”) (quotation and citation omitted);
Jacobs v. The Florida Bar, 50 F.3d 901, 906 n.20 (11th Cir. 1995) (“[w]hen a
plaintiff attacks a law facially, the plaintiff bears the burden of proving that the law
could never be constitutionally applied.”)
A. THE ACT’S MANDATORY ACCESS PROVISION EFFECTS A TAKING OF PROPERTY
In Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S.
Ct. 3164 (1982), the Supreme Court considered whether a statute which required
landlords to permit permanent, physical occupation of their property by cable
8 companies constituted a taking. The Court held that it did and, in doing so,
announced the following takings rule: “[A] permanent physical occupation
authorized by government is a taking without regard to the public interests that it
may serve.” Id. at 426, 102 S. Ct. at 3171. Among other arguments the Court
rejected in announcing that rule was the argument that the statute was merely a
“permissible regulation of the use of real property.” Id. at 439, 102 S. Ct. at 3178.
The Court held that although property is subject to broad regulatory power, a
regulation becomes a taking when the government authorizes permanent physical
occupation by a third party. Id. at 439-40, 102 S. Ct. at 3178-79.
We agree with the district court that Loretto dictates the conclusion that the
Act’s mandatory access provision, 47 U.S.C. § 224(f), effects a taking of a utility’s
property. Under § 224(f), a utility has no choice but to permit a cable company or
telecommunication carrier to permanently occupy physical space on its poles,
ducts, conduits and rights-of-way. See 47 U.S.C. § 224(f)(1) (“[a] utility shall
provide a cable television system or any telecommunication carrier with
nondiscriminatory access to any pole, duct, conduit, or right-of-way owned or
controlled by it.") (emphasis added). Such a permanent, physical occupation of
property falls squarely within the Loretto rule.
Our conclusion in that regard is consistent with FCC v. Florida Power Corp.,
480 U.S. 245, 107 S. Ct. 1107 (1987), in which the Supreme Court unanimously
9 reversed this circuit’s holding in Florida Power Corp. v. FCC, 772 F.2d 1537 (11th
Cir. 1985), that the pre-1996 version of this Act effected a taking of property under
Loretto. In reaching that result, the Supreme Court stressed that unlike the statute
in Loretto where the landlord was required to submit to permanent physical
occupation, the pre-1996 version of the Act did not require a utility to give a third
party access to its property. Without the “element of required acquiescence,” there
was no taking under Loretto. FCC v. Florida Power Corp., 480 U.S. at 252, 107 S.
Ct. at 1112. The Court went on to note, however, that it was not deciding “what
the application of [Loretto] would be if the FCC in a future case required utilities,
over objection to enter into . . . pole attachment agreements.” Id. at 251-52 n. 6,
107 S. Ct. at 1111-12 n.6. Today, that “future case” is before us: the “element of
required acquiescence” lacking in the pre-1996 version the of the Act is now
present in § 224(f). Because § 224(f) requires a utility to acquiesce to a permanent,
physical occupation of its property, we conclude that the Act’s mandatory access
provision effects a per se taking of a utility’s property under the Fifth Amendment.
We are unconvinced by the defendants’ attempt to distinguish Loretto. In
contending the mandatory access provision does not effect a taking, the defendants
do not deny that § 224(f) compels a utility to submit to a permanent, physical
occupation of its property. Instead, their primary contention is that there is no
taking because the utilities covered by the Act, including the plaintiffs, never had
10 an absolute right to exclude permanent, physical occupation of their poles, ducts,
conduits, and rights-of-way where that permanent occupation is for a public
purpose authorized by the sovereign.
The defendants’ argument in support of this contention that the utilities’
bundle of rights never included the power to exclude, runs as follows. Utilities
obtained the rights-of-way on which they constructed their poles, ducts, and
conduits via the eminent domain power which states had conferred upon them.5
Necessary to the utilities' ability to obtain property via eminent domain was that a
public purpose was being served. That is so because private property may only be
taken under the eminent domain power for a “public use.” See, e.g., Hawaii
Housing Auth. v. Midkiff, 467 U.S. 229, 245, 104 S. Ct. 2321, 2331 (1984).
Because the utilities took the property with the understanding that they would have
to put it to a public use, they were necessarily on notice that, in the future, the
sovereign could require them to allow permanent occupation of their property by
another entity also serving the public interest.6
5 The defendants concede some of the rights-of-way were obtained without resort to eminent domain, but argue these were acquired in the shadow of eminent domain because private parties knew that utilities could resort to eminent domain if their efforts to negotiate an agreement failed. So, we should treat all the rights-of- way as though obtained through the use of eminent domain, the defendants reason. 6 In addition, the defendants argue that the Act’s provision for payment to a utility for the permanent, physical occupation of its property somehow makes that occupation less of a taking. Although the fact of payment is, of course, relevant to 11 We find that argument unpersuasive. The Supreme Court has expressly
recognized that the fact property was taken for a public use to begin with does not
mean that it may be taken again for another public use without the payment of just
compensation to its owner. In Western Union Telegraph Co. v. Pennsylvania R.R.
Co., 195 U.S. 540, 573, 25 S. Ct. 133, 142 (1904), the Supreme Court stated: “The
“right of way of a railroad is property devoted to a public use, and . . . as such is
subject, to a certain extent, to state and Federal control. . . . But it has always been
recognized . . . that a railroad right of way is so far private property as to be
entitled to that provision of the Constitution which forbids its taking, except under
the power of eminent domain and upon payment of [just] compensation.” The
Court has also noted that “the property of a public utility, although devoted to the
public service and impressed with a public interest, is still private property, and
neither the corpus of that property nor the use thereof constitutionally can be taken
for a compulsory price which falls below the measure of just compensation.”
United Rys. & Elec. Co. v. West, 280 U.S. 234, 249, 50 S. Ct. 123, 125 (1930),
overruled on other grounds by, Federal Power Comm’n v. Hope Natural Gas Co.,
320 U.S. 591, 64 S. Ct. 281 (1944).
the just compensation issue, we fail to see how it makes the taking any less a taking. By analogy, a tort is not any less a tort because some compensation will be paid for the injury suffered. 12 Consistent with these principles, we conclude that the fact a utility gained its
property knowing it would be subject to extensive regulation for the public use
does not means its property may be taken for a public purpose without payment of
just compensation, however laudable that public purpose might be. See also GTE
Northwest, Inc. v. Public Utility Commission, 900 P.2d 495, 504 (Or. 1995) (en
banc) (“[t]he facts that an industry is heavily regulated, and that a property owner
acquired the property knowing that it is heavily regulated, do not diminish a
physical invasion to something less than a taking.”). The defendants’ position that
a property owner who initially obtained his property for public use should
henceforth be on notice that the sovereign can authorize permanent occupation of
his property without payment of just compensation has it backwards. A property
owner is entitled to expect that the property it acquired via eminent domain, and
paid just compensation for, came with the right all property has – not to be subject
to government-coerced, permanent physical occupation without just compensation.
We also find unpersuasive the three arguments raised by the amici in support
of the defendants’ position that the mandatory access provision does not effect a
taking of property. First, the amici argue the mandatory access provision should be
viewed merely as part of Congress’ broad power to regulate property being used
for the public interest. Because a utility’s rights-of-way are regularly used for
serving the public, a utility may not exclude others whom Congress has determined
13 require access, amici argue. That argument fails because it ignores the Loretto rule
that “[a] permanent physical occupation authorized by government is a taking
without regard to the public interests that it may serve.” Loretto, 458 U.S. at 426,
102 S. Ct. at 3171 (emphasis added).
Next, amici point out that the Supreme Court in Duquesne Light Co. v.
Barasch, 488 U.S. 299, 307, 109 S. Ct. 609, 615 (1989), recognized that a utility
has a “partly public, partly private status.” That status, they argue, distinguishes a
utility from the purely private property owner who suffered the taking in Loretto.
Because a utility has a “partly public” status, the argument goes, a utility lacks a
right to exclude others whom Congress has determined must have access to serve
the public. But Duquesne’s discussion of utilities was not in the context of a
takings case dealing with the permanent occupation of property. Nothing in
Duquesne suggests a utility’s property is less subject to protection against
permanent, physical occupation than anyone else’s property. It is not. Put
differently, we do not believe that Duquesne carved out an exception to the Loretto
rule for the property of utilities.
Third, amici characterize the mandatory access provision as a simple
regulatory condition designed to prevent utilities from exercising monopoly control
over their network of poles, ducts, conduits, and rights-of way, and which is
thereby intended to promote the Telecommunications Act of 1996's general goal of
14 fostering competition in the communications market. Such a regulation is
particularly necessary, they say, because the Telecommunications Act of 1996,
among its other provisions, made it easier for electric utilities to enter and compete
in the communications market. This argument is meritless. Characterizing the
mandatory access provision as a regulatory condition, even one allegedly designed
to foster competition, cannot change the fact that it effects a taking by requiring a
utility to submit to a permanent, physical occupation of its property. However
laudatory its motive, Congress’ power to regulate utilities does not extend to taking
without just compensation the right of a utility to exclude unwanted occupiers of
its property.
Finally, we reject the intervenors’ argument that the mandatory access
provision is not a taking because electric utilities, such as the plaintiffs, could
avoid the effect of the Act by refraining from using their poles, ducts, conduits, and
rights-of-way for wire communications. This argument is made possible because
the Act’s definition of a “utility” subject to the mandatory access provision covers
only electric utilities who use their poles, ducts, conduits, and rights-of-way for
wire communications. See 47 U.S.C. § 224(a). We see the point, but we think this
argument is foreclosed by Loretto. The protection against a permanent, physical
occupation of one’s property does not hinge on the choice of use for that property.
See Loretto 458 U.S. at 439 n.17, 102 S. Ct. at 3178 n.17 (“A landlord’s ability to
15 rent his property may not be conditioned on his forfeiting the right to compensation
for a physical occupation. [This] broad ‘use-dependency’ argument proves too
much. . . . The right of a property owner to exclude a stranger’s physical
occupation of his land cannot be so easily manipulated.”). Put another way, the
bundle of rights that a utility has in its property includes the right to permit its use
for wire communications, and exercise of that right may not be conditioned on
being forced to submit to a permanent, physical occupation of its property without
payment of just compensation.
In sum, we agree with the district court’s holding that the mandatory access
provision effects a per se taking of property under the Fifth Amendment, which
leads us to the issue of whether the Act provides an adequate process for obtaining
just compensation for the taking.
B. THE ACT PROVIDES AN ADEQUATE PROCESS FOR OBTAINING JUST COMPENSATION FOR THE TAKING EFFECTED BY THE MANDATORY ACCESS PROVISION
The fact that the Act’s mandatory access provision effects a taking of
property does not, by itself, make it unconstitutional. “The Fifth Amendment does
not proscribe the taking of property; it proscribes taking without just
compensation.” Williamson County Regional Planning Com’n v. Hamilton Bank,
473 U.S. 172, 194, 105 S. Ct. 3108, 3120 (1985). The Supreme Court has made
the requirements clear: “[A]ll that is required is that a reasonable, certain, and
16 adequate provision for obtaining compensation exist at the time of the taking. If
the government has provided an adequate process for obtaining compensation, and
if resort to that process yields just compensation, then the property owner has no
claim against the Government for a taking.” Id. at 194-95, 105 S. Ct. at 3120-21
(internal citation and quotations omitted).
The plaintiffs contend the Act fails to provide a constitutionally adequate
process for obtaining just compensation, for two reasons. First, they argue the
process is constitutionally inadequate because it violates separation of power
principles by delegating to the FCC, instead of a court, the initial task of
determining the compensation a utility receives. Second, they argue the Act’s
provision limiting the FCC to awarding a “just and reasonable” rate within the
range of rates set by Congress, see 47 U.S.C. § 224(b), will prevent a utility from
receiving the constitutionally required rate of just compensation. We address each
argument in turn.
1. Whether the Act Violates Separation of Power Principles
In support of their argument that the Act’s process for providing
compensation violates separation of power principles, the plaintiffs rely primarily
on Monongahela Navigation Co. v. United States, 148 U.S. 312, 13 S. Ct. 622
(1893). In that case, the Supreme Court had before it a statute in which Congress
had imposed limits on the amount of compensation a property owner could receive
17 after Congress had authorized the taking of his property. The property owner
contended that under Congress’ limitations, he had not received just compensation.
The Supreme Court agreed, rejecting the notion Congress could both authorize a
taking and conclusively determine the level of just compensation due. The Court
stated:
By this legislation [C]ongress seems to have assumed the right to determine
what shall be the measure of compensation. But this is a judicial, and not a
legislative, question. The legislature may determine what private property is
needed for public purposes; that is a question of a political and legislative
character. But when the taking has been ordered, then the question of
compensation is judicial. It does not rest with the public, taking the
property, through [C]ongress or the legislature, its representative, to say
what compensation shall be paid, or even what shall be the rule of
compensation. The [C]onstitution has declared that just compensation shall
be paid, and the ascertainment of that is a judicial inquiry.
Id. at 327, 13 S. Ct. at 626. The Court went on to note that “[t]he right of the
legislature . . . to apply the property of the citizen to the public use, and then to
constitute itself the judge of its own case, to determine what is the ‘just
compensation’ it ought to pay therefor, . . . cannot for a moment be admitted or
18 tolerated under our [C]onstitution.” Id. at 327-28, 13 S. Ct. at 627 (internal
quotation and citation omitted).
According to the plaintiffs, Monongahela requires us to hold that the Act
fails to provide a utility an adequate process to obtain just compensation for the
taking of its property. That is so, they argue, because under the Act, the FCC has
the initial task of determining the compensation a utility receives for the taking of
its property by setting a “just and reasonable” rate within the range of minimum to
maximum rates established by Congress. The plaintiffs assert that such a
legislative delegation of power to the FCC usurps their right, as recognized in
Monongahela, to a judicial ascertainment of just compensation.
The plaintiffs also seek to support their position by citing our opinion in
Florida Power Corp. v. FCC, 772 F.2d 1537 (11th Cir. 1985), a decision which was
reversed by the Supreme Court, see, FCC v. Florida Power Corp., 480 U.S. 245,
107 S. Ct. 1107 (1987). As mentioned earlier, we held in Florida Power that an
FCC rate order issued pursuant to the pre-1996 version of the Act constituted a
taking under Loretto. That holding led us to also address whether the utility had
received just compensation for that taking. The pre-1996 version of the Act was
identical to the current Act insofar as it assigned to the FCC the initial task of
setting the compensation a utility received for providing access to its property.
19 We said in Florida Power that this process was unconstitutional under
Monongahela because it “does not allow for a judicial determination of what
constitutes just compensation.” Id. 772 F.2d at 1546. It was our view at the time
that Congress had prescribed in the Act “a ‘binding rule’ in regard to the
ascertainment of just compensation” and therefore had “usurped what has long
been held an exclusive judicial function.” Id. The plaintiffs concede that in light of
the Supreme Court’s reversal of our Florida Power decision, our statements
concerning the adequacy of the process for obtaining just compensation are not
binding under the prior panel precedent rule.7 Nonetheless, they argue our
reasoning in that prior decision supports their position that the Act’s process for
providing just compensation is constitutionally inadequate.
Although the concerns raised by the plaintiffs and discussed in our opinion
in Florida Power merit consideration, we are unpersuaded that the Act’s process
7 The plaintiffs are correct to concede that our Florida Power decision is not binding. For any part of a decision to be binding under the prior panel precedent rule, the decision must not have been vacated or reversed by the Supreme Court--it must have survived the possibility of Supreme Court review. Our statements about the constitutional adequacy of the process for obtaining just compensation do not meet that test, because the Supreme Court had no occasion to address the issue in light of its holding that the pre-1996 version of § 224 did not result in a taking of a utility’s property. See FCC v. Florida Power Corp., 480 U.S. at 254 n.8, 117 S. Ct. at 1113 n.8 ( “Our disposition of the takings question makes it unnecessary to review on the merits the Court of Appeals’ holding that Congress may not establish standards under which the initial determination of compensation will be made by an administrative authority subject to final judicial review.”). 20 for providing a utility with compensation amounts to an impermissible invasion of
the judicial branch’s realm. True, it is ultimately the responsibility of the judicial
branch to ensure that the compensation awarded for a taking satisfies the
constitutional standard of just compensation. See Monongahela, 148 U.S. at 327,
13 S. Ct. at 626. Thus, if Congress (or the executive branch) attempts to impose a
limitation on the measure of compensation for a taking, a court must evaluate that
standard to see if it is consistent with the constitutionally mandated level of just
compensation, and a court is not bound to follow that standard in making judicial
determinations of the compensation due if the standard fails to secure just
compensation.
However, the fact that our constitutional scheme dictates that the judicial
branch is entrusted with the ultimate responsibility for ensuring that just
compensation is awarded does not mean the other branches of government must be
excluded from the process of determining the proper level of just compensation.
Nothing in Monongahela or any other Supreme Court precedent compels such a
conclusion. To the contrary, the Supreme Court has stated that “all that is required
is that a reasonable, certain, and adequate provision for obtaining compensation
exist at the time of the taking. If the government has provided an adequate process
for obtaining compensation, and if resort to that process yields just compensation,
then the property owner has no claim against the Government for a taking.”
21 Williamson County, 473 U.S. at 194-95, 105 S. Ct. at 3120-21 (citation and
quotation omitted). While a process in which the judicial branch does not make
the final determination of what constitutes just compensation may be
constitutionally inadequate, we see no constitutional problem with a process that
employs an administrative body, such as the FCC, to determine just compensation
in the first instance. Indeed, use of an administrative body with some technical
expertise over the subject matter of the property to be valued likely will aid the
judiciary in arriving at a more reliable determination of the proper level of just
compensation. So long as an administrative body’s decision concerning the level
of compensation owed for a taking remains subject to judicial review to ensure just
compensation, use of an administrative body can be a valid part of “provid[ing] an
adequate process for obtaining compensation.” Id.
Our conclusion that an administrative body may participate in the process of
determining just compensation where its decision is subject to judicial review is
consistent with the Seventh Circuit’s decision in Wisconsin Central Limited v.
Public Service Commission of Wisconsin, 95 F.3d 1359, 1369 (7th Cir. 1996). In
that case, some railroads argued that the procedures Wisconsin had provided for
obtaining just compensation for a taking were constitutionally inadequate because
the Wisconsin legislature had authorized an administrative body to set the level of
compensation in the first instance. But the administrative determination was
22 subject to judicial review in the Wisconsin courts. The Seventh Circuit decided
that: “The railroads are quite correct that a decision concerning the just
compensation owed one whose property is taken is the province of judicial -- not
legislative -- determination. However, as Williamson County illustrates, this
requirement is satisfied by the availability of judicial review. The Fifth
Amendment does not require a judicial determination of just compensation in the
first instance on each occasion of a taking of private property.” Id. at 1369.
Accordingly, we conclude that the fact that the Act assigns to the FCC, an
administrative body with some special expertise in the technical aspects of pole
attachments, the task of initially determining a utility’s compensation does not, by
itself, render the process for providing compensation constitutionally inadequate.
The more relevant issue is whether the judicial review of the FCC’s determination
that is available ensures that the final and conclusive determination of the just
compensation owed to a utility is made by the judicial branch. We turn now to that
issue.
A utility that believes the rate ordered by the FCC fails to provide just
compensation for the taking of its property may appeal the FCC’s rate order
directly to a federal appeals court. See 47 U.S.C. § 402(a) (providing generally for
appeals from FCC orders). The appeals court has jurisdiction to enter a judgment
concerning the validity of the FCC’s order and may enforce its judgment with an
23 injunction. See 28 U.S.C. § 2342(1) (“The court of appeals . . . has exclusive
jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the
validity of . . . all final orders of the [FCC] made reviewable by [47 U.S.C. §
402(a)]”; 28 U.S.C. § 2349(a) (“The court of appeals . . . has exclusive jurisdiction
to make and enter . . . a judgment determining the validity of, and enjoining, setting
aside, or suspending, in whole or in part, the order of the agency.”). In addition, 5
U.S.C. § 706(2)(B) provides:
To the extent necessary to decision and when presented, the reviewing
court shall decide all relevant questions of law, interpret constitutional
and statutory provisions, and determine the meaning or applicability
of the terms of an agency action. The reviewing court shall . . . hold
unlawful and set aside agency action, findings, and conclusions found
to be . . . contrary to constitutional right, power, privilege, or
immunity . . .
(emphasis added). The issue of whether the rate ordered by the FCC provides a
utility just compensation for a taking effected by the Act is, of course, a
constitutional issue. Thus, the federal appeals court to which an appeal is taken has
jurisdiction to decide that an FCC rate order is constitutionally invalid because it
does not provide just compensation. Under the statutory scheme, it is the judicial
24 branch which will, consistent with Monongahela, make the ultimate determination
of just compensation due for a taking of a utility’s property under the Act.
To be sure, an appellate court is not the usual forum in which factual issues
such as the proper level of just compensation are resolved, and is not the forum we
would have chosen. But Congress has the right to specify the process so long as it
is adequate for a judicial determination of just compensation. An appellate court
has at least five means at its disposal to gather the information needed to determine
just compensation, and those means are sufficient to provide a utility with a full
and fair opportunity to submit for judicial consideration all relevant evidence
bearing on the question of just compensation. The five means are as follows:
1) The court may rely on the evidentiary submissions in the record
from the FCC proceeding when they are sufficient for the task.
2) If the court determines the record from the FCC proceeding is
insufficient, it may remand the case and direct the FCC to supplement
the record. See 28 U.S.C. § 2347(c) (the court of appeals may “order .
. . additional evidence . . . to be taken by the agency” where requested
to do so by one of the parties).
25 3. The court may transfer the case to the district court for a full
hearing pursuant to 28 U.S.C. § 2347(b)(3).8
4. The court may appoint a special master pursuant to F.R.A.P. 48 to
hold hearings and gather any additional information the court needs to
decide the just compensation issue.
5. The court may fashion any other "appropriate modes of procedure" to
gather the evidence it needs to conduct its factual inquiry pursuant to its
authority under the All Writs Act, 28 U.S.C § 1651. See Harris v. Nelson,
394 U.S. 286, 299, 89 S. Ct. 1082, 1090-91 (1969) (recognizing that courts
may rely on their authority under the All Writs Act "in issuing orders
appropriate to assist them in conducting factual inquiries.").
Depending on the particular facts of a case, one or some combination of those five
means will provide the appellate court with a sufficient basis to determine the
proper level of just compensation owed to a utility. That part of the process is
adequate.
8 We note that the option of transferring the case to the district court for a hearing is available only when the FCC has not conducted a formal hearing prior to issuing its rate order. See 28 U.S.C. § 2347(b)(3). Of course, if the FCC has conducted a hearing, we would expect the record available to the appellate court to be more complete and hence there would be less need for transferring the case to the district court for a hearing. Any incompleteness in the FCC hearing record could also be rectified by a remand to the FCC. 26 Once the appellate court has made a determination of the proper level of just
compensation owed, it is positioned to resolve a utility’s appeal of the FCC rate
order and ensure that the utility does not suffer a taking without just compensation.
If the court, based on its determination of the proper level of just compensation,
concludes the rate awarded by the FCC provides just compensation, then it will
simply affirm the FCC’s rate order. See Ruckelshaus v. Monsanto Co., 467 U.S.
986, 1013, 104 S. Ct. 2862, 2878 (1984) (where statutory arbitration procedure for
providing compensation for a taking of property results in payment of just
compensation, property owner has no claim against the government for a taking
without just compensation).
On the other hand, if the court determines the FCC rate fails to provide just
compensation and the rate which would do so falls within the range of rates
specified in 47 U.S.C. § 224(d)-(e) which the FCC is authorized to award, then the
court will set aside the FCC rate order and order (or as the relevant statutory
provision says, “enjoin”) the FCC to enter a new rate order designed to provide
that the utility receives just compensation calculated from the date the cable
company or telecommunication carrier first obtained access under the Act’s
mandatory access provision. See 28 U.S.C. § 2349(a) (“The court of appeals . . .
has exclusive jurisdiction to make and enter . . . a judgment determining the
validity of, and enjoining, setting aside, or suspending, . . the [FCC’s] order . . . .”)
27 Directing the FCC to issue a rate order providing that a utility receive the just
compensation rate from the date it was first required to provide access under the
mandatory access provision will ensure a utility receives just compensation both
prospectively and in the period prior to the court’s determination of the just
compensation rate. Cf. Multimedia Cablevision, Inc. v. Southwestern Bell Tel.
Co., 11 FCC Rcd. 11202, 11216 (1996) (in the event “the recomputed rates are in
excess of that paid by [the attacher], we require [the attacher] to pay the difference,
with interest, to [the utility].”). Such an order ensures that a utility is not forced to
continue to provide mandatory access to its property unless it receives just
compensation, as determined by a court, for the taking. See Williamson County,
473 U.S. at 194, 105 S. Ct. at 3120 (“[t]he Fifth Amendment does not proscribe the
taking of property; it proscribes taking without just compensation.”)
Nonetheless, the plaintiffs contend that even if the court can guarantee the
award of just compensation in some cases, there might be cases in which it could
not do so. Specifically, they raise the possibility that the just compensation rate
might exceed the statutory maximum rate, as defined in 47 U.S.C. § 224(d)-(e),
which the FCC is authorized to award. Were that to occur, they assert that the
court could not order the FCC to award a rate above the maximum rate specified in
the Act and that a utility would therefore not receive the just compensation rate.
28 Accordingly, they argue that because the process fails to ensure that a utility
receives just compensation in those situations, the Act is unconstitutional.
That argument does not fit in this lawsuit, because this is a facial challenge.
“A facial challenge to a legislative Act is, of course, the most difficult challenge to
mount successfully, since the challenger must establish that no set of circumstances
exists under which the Act would be valid.” United States v. Salerno, 481 U.S.
739, 745, 107 S. Ct. 2095, 2100 (1987) (emphasis added). See also New York
State Club Ass’n, Inc. v. City of New York, 487 U.S. 1, 11, 108 S. Ct. 2225, 2233
(1988) (“[t]o prevail on a facial attack the plaintiff must demonstrate that the
challenged law . . . could never be applied in a valid manner.”); Jacobs v. The
Florida Bar, 50 F.3d 901, 906 n.20 (11th Cir. 1995) (“[w]hen a plaintiff attacks a
law facially, the plaintiff bears the burden of proving that the law could never be
constitutionally applied.”)
The plaintiffs have not carried that burden in this case. As we have already
discussed, there are a readily identifiable set of circumstances in which the Act
provides a constitutionally adequate process for ensuring a utility receives just
compensation. Specifically, where the court determines that the rate awarded by
the FCC provides just compensation, the court can affirm the FCC rate order.
Conversely, if the FCC rate does not provide just compensation, the court can
direct the FCC to enter a new order providing the just compensation rate, at least in
29 those circumstances where the just compensation rate falls within the statutory
range specified in 47 U.S.C. § 224(d)-(e).
Even if the plaintiffs are correct in stating that the court could not direct the
FCC to award a rate exceeding the statutory maximum -- an issue we need not
decide here -- the plaintiffs have identified, at most, one hypothetical set of
circumstances in which the Act would not provide an adequate process to ensure a
utility receives just compensation. But conjuring up one hypothetical set of
circumstances in which the Act could operate in an unconstitutional manner does
not suffice to establish that the Act is facially unconstitutional.9
In sum, we reject the plaintiffs’ contention that the Act fails to provide an
adequate process for a utility to obtain just compensation because it violates
9 We use the word “hypothetical” because the plaintiffs have not pointed to any evidence demonstrating that the just compensation rate will ever exceed the statutory maximum rate. Their failure to do so is significant for another reason as well. Three Supreme Court Justices have recently questioned Salerno’s “no set of circumstances” formulation of the facial challenge standard and suggested that a plaintiff can prevail on a facial challenge by merely showing the Act is unconstitutional in most cases. See City of Chicago v. Morales, – U.S. –, –, 119 S. Ct. 1849, 1858-59 n.22 (1999) (plurality op.) (Stevens, J., Souter, J., and Ginsburg, J.); Janklow v. Planned Parenthood, 517 U.S. 1174, 1175 & n.1, 116 S. Ct. 1582, 1583 & n.1 (1996) (Memorandum respecting the denial of certiorari.) (Stevens, J.). See also Florida League of Professional Lobbyists, Inc. v. Meggs, 87 F.3d 457, 459 (11th Cir. 1996) (recognizing disagreement among the Justices concerning “how high the threshold for facial invalidation should be set.”). Because the plaintiffs have not shown the just compensation rate will ever fall outside the statutory range, let alone that it will do so in most cases, their facial challenge fails even under the more permissive formulation suggested by Justices Stevens, Souter, and Ginsburg. 30 separation of power principles. Had the Act eliminated all possibility of judicial
review and made the FCC the final arbiter of a utility’s compensation, we would be
faced with a different situation, but the Act does not do that. Instead, as we have
explained, the Act merely provides that the FCC has the first cut at fashioning the
compensation a utility receives for the taking of its property. Allowing an
administrative body, such as the FCC, a role in the process of determining just
compensation for a taking is permissible so long as its order is subject to judicial
review to ensure that a court makes the ultimate determination of just
compensation. That is what we have here: the FCC’s rate order is subject to
review by an appellate court which has the power both to determine the proper
level of just compensation and to ensure that the utility receives just compensation,
at least where the just compensation rate falls within the statutory range of rates
specified in 47 U.S.C. § 224(d)-(e).
2. Whether Limiting the FCC to Awarding a “Just and Reasonable” Rate Makes the Act’s Process for Awarding Just Compensation Constitutionally Inadequate
We turn now to the plaintiffs’ alternative argument in support of their
position that the Act fails to provide a constitutionally adequate process for a utility
to obtain just compensation. They argue the Act’s provision limiting the FCC to
awarding a “just and reasonable” rate within the range of rates set by Congress, see
47 U.S.C. § 224(b), will prevent the FCC from awarding a utility the
31 constitutionally required rate of just compensation. The plaintiffs begin by noting
that the Act’s “just and reasonable” rate formula is the same formula the FCC was
required to apply in calculating compensation for access to a utility’s property
before the mandatory access provision was added to the Act. Hence, a utility’s rate
of compensation for forced access to its property (a taking) is governed by the
same standard as when it voluntarily provided access. The plaintiffs say that fact
renders the process for awarding just compensation for the taking constitutionally
inadequate.
According to the plaintiffs, because a utility’s property is now being taken,
the rate it was able to collect when it was voluntarily providing access is no longer
appropriate. That is so, they argue, because the standard for determining just
compensation for a taking should be more rigorous than that for determining a rate
for providing voluntary access. Citing Duquesne Light Co. v. Barasch, 488 U.S.
299, 307, 109 S. Ct. 609, 615 (1989), the plaintiffs point out that the rate a utility is
entitled to receive for providing access voluntarily must only be “not so unjust as
to be confiscatory.” In contrast, they say, the Supreme Court has defined “just
compensation” more expansively. (citation and quotation omitted). For example,
in United States v. Miller, 317 U.S. 369, 374, 63 S. Ct. 276, 280 (1943), the Court
defined just compensation as “fair market value,” which is "what it fairly may be
believed that a purchaser in fair market conditions would have given.” (citation and
32 quotation omitted). Thus, the plaintiffs contend, by providing that a utility receive
the same rate for forced access as it received for voluntary access, the Act fails to
provide an adequate process for a utility to obtain just compensation. Cf.
Consolidated Gas Co. v. City Gas Co., 912 F.2d 1262, 1314-19 (11th Cir. 1990) (en
banc) (Tjoflat, C.J., dissenting) (endorsing the proposition that the “just
compensation price” a utility receives for a taking should satisfy a “more stringent
standard” than the standard that applies in setting rates, because in one instance the
utility is acting under compulsion while in the other instance it has “voluntarily
undertaken to operate in a regulated industry”), vacated, City Gas Co. v.
Consolidated Gas Co., 499 U.S. 915, 111 S. Ct. 1300 (1991).
As an initial matter, we do not believe this issue is ripe for decision. Shorn
of its packaging about the regulatory price versus the just compensation price, the
issue comes down to whether the Act is unconstitutional because it says the FCC
shall order a “just and reasonable” rate instead of saying it shall order a rate that
provides “just compensation.” At this point, however, we are merely dealing with
abstractions and not with concrete facts; it would require sheer speculation for us
to conclude that the actual rates ordered by the FCC will fail to provide just
compensation. Even the plaintiffs seem to concede this point when they note in
their reply brief that they are not challenging the Act’s “formula” for providing
compensation. In light of the speculative nature of the inquiry, this issue is not
33 “fit[] . . . for judicial decision” at this juncture. Abbott Laboratories v. Gardner,
387 U.S. 136, 148-49, 87 S. Ct. 1507, 1515 (1967) (“basic rationale” of the
ripeness requirement is “to prevent the courts, through avoidance of premature
adjudication, from entangling themselves in abstract disagreements”).
We do not mean to imply that if this issue were ripe for decision we would
be persuaded by plaintiffs’ argument. The Duquesne decision they rely upon was
not interpreting any aspect of this Act, either before or after its 1996 amendment.
Instead, that decision merely held that in a regulated industry the level of
compensation set by the government must not be so low as to be confiscatory. See
Duquesne, 488 U.S. at 307, 109 S. Ct. at 615. There is nothing in Duquesne, or in
the record before us, which indicates that the rate of compensation provided in this
Act ( before its amendment) for voluntarily provided access was just above
confiscation. We have no reason to assume that the rate under the prior version of
the Act was only minimally adequate to meet constitutional requirements for
voluntary access, and thus, in the plaintiffs’ view, constitutionally inadequate
under the current Act for forced access situations. Indeed, for all we know, it is
just as likely that the earlier rate formula gave the utilities industry more than the
constitutional minimum.
In any event, as we have explained, the FCC’s determination of the
compensation a utility receives is not conclusive under the Act. A utility that
34 believes the FCC’s rate order fails to provide just compensation may appeal that
order to the court of appeals. The court will then make a judicial determination of
the proper level of just compensation and ensure that the utility is not required to
provide access to its property at a rate that does not provide just compensation.10
That said, we decide nothing about the relationship between the “just and
reasonable” rate specified in the Act and just compensation required by the
Constitution, because that issue is not ripe for decision.
III. CONCLUSION
To sum up, we conclude the Act’s mandatory access provision effects a
taking of a utility’s property but that the Act is not facially unconstitutional under
the Fifth Amendment, because, at least in most cases, it provides a constitutionally
adequate process which ensures a utility does not suffer that taking without
obtaining just compensation. Accordingly, the district court’s judgment in favor of
the defendants is AFFIRMED.
10 As with our discussion of the first argument, we are assuming here that the just compensation rate falls within the statutory range specified in 47 U.S.C. § 224(d)-(e) and, in the absence of any evidence that the just compensation rate will ever fall outside that range, we leave for another day the issue of what happens if it does. 35