Southern Walk at Broadlands Homeowner's Ass'n v. OpenBand at Broadlands, LLC

713 F.3d 175, 58 Communications Reg. (P&F) 22, 2013 WL 1364270, 2013 U.S. App. LEXIS 6925
CourtCourt of Appeals for the Fourth Circuit
DecidedApril 5, 2013
Docket12-1331, 12-2083
StatusPublished
Cited by685 cases

This text of 713 F.3d 175 (Southern Walk at Broadlands Homeowner's Ass'n v. OpenBand at Broadlands, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southern Walk at Broadlands Homeowner's Ass'n v. OpenBand at Broadlands, LLC, 713 F.3d 175, 58 Communications Reg. (P&F) 22, 2013 WL 1364270, 2013 U.S. App. LEXIS 6925 (4th Cir. 2013).

Opinion

No. 12-1331 affirmed in part and vacated and remanded in part; No. 12-2083 affirmed by published opinion. Judge MOTZ wrote the opinion, in which Judge WILKINSON and Judge THACKER joined.

OPINION

DIANA GRIBBON MOTZ, Circuit Judge:

Southern Walk at Broadlands Homeowners Association brought this action seeking a declaratory judgment against OpenBand at Broadlands, the corporation with which it had contracted in 2001 for wire-based video services. Southern Walk alleges that the 2007 Exclusivity Order issued by the Federal Communications Commission renders “null and void” Open-Band’s exclusive rights under the 2001 contracts to provide such wire-based video services to Southern Walk homeowners. In these cross appeals, Southern Walk challenges the district court’s dismissal of its action with prejudice, and OpenBand challenges the court’s refusal to award it attorneys’ fees. For the reasons that follow, we affirm the judgment of the district court to the extent it held that Southern Walk failed to allege facts supporting standing in this case, but vacate that judgment to the extent it dismissed the case with prejudice, and remand with instructions to dismiss without prejudice. We affirm the court’s denial of attorneys’ fees to OpenBand.

I.

A.

Southern Walk at Broadlands (the “community”) is a planned residential development consisting of over 1100 individually owned properties. In 2001, the developer of the community, Broadlands Associates, incorporated Southern Walk at Broadlands Homeowners Association, Inc. (“Southern Walk”) as a Virginia non-stock corporation. Southern Walk’s articles of incorporation state that its purposes are to “assure maintenance, preservation and architectural control” of, and “provide, or cause to provide for, the installation and maintenance of an exclusive private utility system” within, the community.

In November 2001, shortly after being incorporated, Southern Walk executed a Telecommunications Services Agreement (“TSA”) with OpenBand for the provision of certain “platform” telephone, internet, and video services for the community’s member households. 1 The TSA requires that each household in the community purchase platform services from OpenBand, regardless of whether the household actually uses the services. Households pay for OpenBand’s services through their homeowners’ association assessments. If any household defaults on its assessments, *180 Southern Walk must pay OpenBand for the services. The TSA allows individual households to obtain additional (but not replacement) platform services from alternative providers. However, Southern Walk itself may “not engage any other provider of Platform Services” for the community.

Also in November 2001, Broadlands Communications — a Broadlands Associates subsidiary — conveyed to OpenBand an “Easement[] for the Exclusive Provision of Telecommunications Services for Southern Walk at Broadlands.” This perpetual easement grants OpenBand “the exclusive right to Operate Utilities on, under and across [the community] such that, no other person or entity other than [OpenBand] ... shall be entitled to Operate any Utilities on, under or across [the community] without the written consent of [Open-Band].” “Utilities” include both above- and below-ground infrastructure “necessary for the collection, provision, distribution and transmission of video, telephonic, [and] internet ... services.”

As further protection for OpenBand’s exclusive right, Broadlands Communications, Broadlands Associates, and Broad-lands Association, Inc., all covenanted that “they shall not grant any easement other than [this] Easement to Operate any Utilities on, under or across” the community. Southern Walk itself covenanted that it “shall not take any action inconsistent with the terms of this Easement Deed and the rights herein granted.” OpenBand, however, retained the ability to transfer or assign its rights and grant sub-easements. Soon thereafter, OpenBand began providing platform services to Southern Walk’s member households pursuant to the TSA and its easement; OpenBand remains the only provider of platform services for Southern Walk’s member households today.

B.

In 2007, nearly seven years after the execution of the TSA and the easement, the FCC issued the Exclusivity Order. See In the Matter of Exclusive Service Contracts for Provision of Video Services in Multiple Dwelling Units and Other Real Estate Developments, 22 FCC Red. 20235 (2007). The Exclusivity Order addresses “the need to regulate contracts containing clauses granting one multichannel video programming distributor ... exclusive access for the provision of video services (‘exclusivity clauses’) to multiple dwelling units ... and other real estate developments.” Id. ¶ 1.

Of particular concern to the FCC were contractual clauses between multiple dwelling unit or real estate development owners and wire-based cable television providers that “prohibit any other [provider] from any access whatsoever to the premises of the [multiple dwelling unit] building or real estate development.” Id. ¶ 1 n. 2. The FCC found that “contractual agreements granting such exclusivity ... harm competition and broadband deployment and that any benefits to consumers are outweighed by the harms of such clauses.” Id. at ¶ 1. Lack of choice for consumers, stagnation in innovation and services due to lack of competition, and the inefficient use of existing telecommunications infrastructure topped the list of harms the FCC identified. Id. ¶¶ 17-23.

As a result of its findings, and pursuant to its authority under 47 U.S.C. § 548, the FCC ordered that

no cable operator ... shall enforce or execute any provision in a contract that grants it the exclusive right to provide any video programming service (alone or in combination with other services) to a [multiple dwelling unit]. Any such exclusivity clause shall be null and void.

*181 Id. ¶ 31 (codified at 47 C.F.R. § 76.2000). For the purposes of the order, a “multiple dwelling unit” includes “centrally managed residential real estate developments.” Id. ¶ 7. The District of Columbia Circuit upheld the Exclusivity Order in 2009. See Nat’l Cable & Telecomm. Ass’n v. FCC, 567 F.3d 659, 661 (D.C.Cir.2009).

After publication of the Exclusivity Order, Southern Walk began exploring opportunities “to allow other Loudoun County franchisees of cable [television] to have access to the Southern Walk at Broadlands community” and thereby provide its member households expanded choices in wire-based video services. On October 5, 2010, Southern Walk wrote a letter to OpenBand stating its belief that the TSA and easements created an “overall scheme” of wire-based video service exclusivity that violates the Exclusivity Order.

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Bluebook (online)
713 F.3d 175, 58 Communications Reg. (P&F) 22, 2013 WL 1364270, 2013 U.S. App. LEXIS 6925, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-walk-at-broadlands-homeowners-assn-v-openband-at-broadlands-ca4-2013.