NEPSK, Inc. v. Town of Houlton

283 F.3d 1, 2002 U.S. App. LEXIS 3872, 2002 WL 373056
CourtCourt of Appeals for the First Circuit
DecidedMarch 13, 2002
Docket01-1787
StatusPublished
Cited by129 cases

This text of 283 F.3d 1 (NEPSK, Inc. v. Town of Houlton) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
NEPSK, Inc. v. Town of Houlton, 283 F.3d 1, 2002 U.S. App. LEXIS 3872, 2002 WL 373056 (1st Cir. 2002).

Opinion

LIPEZ, Circuit Judge.

This suit arises out of a dispute over a cable franchise for the Town of Houlton, Maine (“Town”). In early 1999, the Town decided not to renew the franchise held by NEPSK, Inc., d/b/a Houlton Cable (“Houl-ton Cable”). Instead, it sought competitive proposals for a new cable franchise, and eventually awarded the franchise to Houlton Cable’s competitor, Pine Tree Ca-blevision Associates (“Pine Tree”). Houl-ton Cable then commenced this suit against the Town, alleging multiple violations of the Cable Communications Policy Act of 1984, as amended by the Cable Television Consumer Protection and Competition Act of 1992 and the Telecommunications Act of 1996 (codified in pertinent part at 47 U.S.C. §§ 521-573) (the “Act”). The district court granted the Town’s motion for judgment on the pleadings as to two counts of the complaint, based on *3 Houlton Cable’s failure to respond to the motion as required by District of Maine Local Rule 7(b). Several months later, the court entered summary judgment for the Town on the remaining count of the complaint. Houlton Cable challenges both decisions. We affirm.

I.

On April 23, 1984, the Town entered into a cable franchise agreement with Houlton Cable’s predecessor, Houlton CATV, Inc. 1 The franchise ran .for a period of 15 years, and was set to expire in April of 1999. Under federal law, 47 U.S.C. § 546(a)-(g), Houlton Cable was entitled to initiate formal renewal procedures by submitting a written request to the Town between April and October, 1996. If neither Houlton Cable nor the Town took action within that six-month window, the renewal process would be governed by the informal procedures set out in § 546(h).

Houlton Cable submitted a renewal proposal in November, 1997, well after the expiration of the six-month period for initiation of formal procedures. For several months, the Town took no action on the proposal. Then, in April of 1998, the Town Council voted to “invite new applications for the Houlton Cable franchise.” Consistent with the informal renewal procedures prescribed by § 546(h), the Town scheduled a public hearing to address the cable franchise issue. Following that hearing, in February of 2000, the Town Council decided not to renew Houlton Cable’s franchise and to solicit bids from other providers. Minutes from the public hearing and the Town Council’s subsequent meeting indicate that Houlton Cable’s refusal to provide high-speed Internet access to its subscribers was a major factor in the Town’s decision to reject the renewal proposal.

On March 31, 2000, the Town issued a Request for Proposals (“RFP”) soliciting proposals for a new, ten-year cable franchise. As the RFP made clear, the Town did not believe it could support more than one franchise. Although it had not undertaken any detailed analysis of the issue, the Town was aware that no municipality in Maine — including those much larger than Houlton — was served by more than one cable company. Accordingly, the Town explained in the RFP that it planned to award only one franchise:

The Town of Houlton recognizes that it cannot award an exclusive cable television franchise to any applicant. Nevertheless, the Town also recognizes that the Town of Houlton can only feasibly support one cable television franchise at one time. Accordingly, the Town intends to award only one cable television franchise during the next ten year period, which will be the franchise as a result of this RFP process.

The Town received proposals from two parties, Houlton Cable and Pine Tree. After considering both proposals, the Town determined that Pine Tree’s “most closely [met] the needs of the Town as determined by public surveys and [the earlier] public hearing.” At a meeting in May, 2000, the Town Council voted to reject Houlton Cable’s proposal, and to pursue negotiations with Pine Tree.

Houlton Cable then initiated this suit against the Town. Count I of its complaint alleged that the Town violated the Act by failing to comply with the formal renewal procedures set forth in § 546(a)-(g). Count II alleged that the Town had conditioned the - renewal of Houlton Cable’s franchise on Houlton Cable’s willingness to provide high speed internet service to its *4 subscribers. Such a demand, Houlton Cable maintained, violated 47 U.S.C. § 541(b)(3)(D), which prohibits franchising authorities from requiring cable operators to provide certain “telecommunication ser-viee[s]” as a condition of a franchise award, and 47 U.S.C. § 544(e), which states that “[n]o State or franchising authority may prohibit, condition, or restrict a cable system’s use of any type of ... transmission technology.” Finally, Count III alleged that the Town unreasonably refused to award Houlton Cable a “second” franchise, in violation of 47 U.S.C. § 541(a)(1).

After answering the complaint, the Town moved under Fed.R.Civ.P. 12(c) for judgment on the pleadings as to Counts I and II. With respect to Count I, the Town argued that, since neither Houlton Cable nor the Town had initiated formal renewal procedures during the six-month window, the renewal process properly was governed by the informal procedures authorized by § 456(h). In response to Count II, the Town contended that the Act did not apply retroactively to invalidate the terms of the 1984 Franchise Agreement, which provided that the decision as to renewal was committed to the Town’s discretion, and would be based in part on “the development of cable services.” In the alternative, the Town argued that high-speed internet access is neither a “telecommunication service” nor a “transmission technology,” and therefore is not governed by §§ 541(b)(3)(D)(a) and 544(e) of the Act.

Pursuant to Local Rule 7(b) of the District of Maine, Houlton Cable was obligated to respond to the Town’s motion within ten days. 2 Houlton Cable did not so respond, and, accordingly, was deemed to have consented to the motion. Thus, on December 7, 2000 — one day after the ten-day period had expired' — the district court entered judgment for the Town on Counts I and II “per Local Rule 7(b).”

Houlton Cable filed a motion under Fed. R.Civ.P. 59(e), asking the court to reconsider and vacate its December 7 judgment. It argued that the district court could not enter judgment on the pleadings without first satisfying itself that the Town was in fact entitled to judgment as a matter of law. The court granted the motion for reconsideration, but reaffirmed its initial judgment.

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283 F.3d 1, 2002 U.S. App. LEXIS 3872, 2002 WL 373056, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nepsk-inc-v-town-of-houlton-ca1-2002.