INDUSTRIAL COMMUNICATIONS AND ELECTRONICS, INC. v. TOWN OF ALTON, NEW HAMPSHIRE (United States Court of Appeals for the First Circuit, May 19, 2011).
A couple (the "Neighbors") owned property in the Town of Alton, New Hampshire ("Alton" or the "Town"). Industrial Communications and Electronics, Inc. ("Industrial Communications") wanted to construct a cell phone tower in Alton for two wireless companies. Claiming that only one site was suitable, Industrial Communications filed an application in September 2005 to construct the tower in Alton. Apparently, the site is "200 feet or less" from the border of Neighbors' property and according to the Neighbors, the tower would "stand[] prominently in the line of sight of the panoramic view . . . of Lake Winnipesaukee and the surrounding mountains" that the Neighbors currently enjoy from their property. The Neighbors considered the property's "stunning views" to be its "most recognizable asset," and they colorably asserted that the construction would cause them economic as well as aesthetic harm by diminishing the property's value.
The Town's zoning ordinance limits cell phone towers to ten feet above the average tree canopy in a particular area; according to calculations by the Town's forester, Industrial Communications' tower would thus be limited to seventy-one feet above ground level. Because Industrial Communications determined that the tower needed to be 120 feet above ground level to be effective, it applied to the Town's Zoning Board of Adjustment ("Board") for a variance to construct the tower. Numerous hearings were held before the Board in which the Neighbors participated. Ultimately, the Board denied the variance, finding in its final written decision that Industrial Communications failed to meet the criteria for a variance under New Hampshire law. Apparently, Industrial Communications made no attempt to overturn the Board's decision in state court as "illegal or unreasonable" under New Hampshire state law.
Instead, Industrial Communications and the two wireless providers then filed a lawsuit in the federal district court against the Town under section 704(a) of the Telecommunications Act of 1996 ("the Act"). 47 U.S.C. § 332(c)(7). The Appellate Court stated that this statute allows, in defined circumstances, an aggrieved person or entity to bring a suit and permits courts to enter judgments overriding state or local restrictions, but only if the court finds that the state or local action or refusal to act violates one of the Act's grounds for relief. Apparently, Industrial Communications invoked two of the stated grounds, and the Appellate Court stated that the more pertinent of the two required a showing that the denial of the variance would effectively "prohibit[] the provision of personal wireless services." 47 U.S.C. § 332(c)(7)(B)(i)(II). Industrial Communications and the carriers set forth extensive evidence as to their efforts to secure other sites and reasons why these efforts were fruitless. According to the Appellate Court, the claim was at least a colorable one, but as the case proceeded, it had not been resolved on the merits.
When the federal action was brought, the Town initially defended the case. The Neighbors intervened with the permission of the court and then stood silent as the Town handled the defense. The Town then began to negotiate a settlement with Industrial Communications and its co-plaintiffs, which the Neighbors opposed. On March 5, 2010, the wireless providers and the Town filed an "Agreement for Entry of Consent Decree." According to the Appellate Court, the agreement proposed that a decree be entered to settle the case, to vacate the Board's decision denying a variance and to permit a 100 foot tower without further meetings, hearings or decisions of the Board. Thereafter, the district court concluded that the Neighbors did not raise any claims a federal court was empowered to address and, refusing to consider the Neighbors' challenge to the Town's authority to act for the Board, entered as a judgment (with a minor modification) the consent decree proposed by the plaintiffs.
The Neighbors appealed. The Appellate Court stated that the parties debated whether the Neighbors have standing to pursue the case and whether they are entitled to make claims on their own behalf under the Act. The Appellate Court stated that the answer to the latter issue is no: the Act empowers those "adversely affected" by state or local action "inconsistent with" 47 U.S.C. § 332(c)(7)(B) the right to sue to overturn it; the only actions "inconsistent" with that subparagraph are denials of requests to construct wireless facilities, so the Neighbors, offended by the grant, had no claim of their own under the Act.
The Appellate Court, citing federal law, also stated that whether the Neighbors can prevent the Town from abandoning its defense and seeking to settle is a different question to which the answer is also ordinarily "no." Usually, a government entity is free as a defendant to decline to defend or to settle on the best terms it can get. However, the Appellate Court stated this does not resolve the yet further question whether the Neighbors can carry on as defendants in the lawsuit in the absence of the Town. Again, citing federal law, the Appellate Court stated that the majority of circuits have held that an intervenor can continue to litigate after dismissal of the party who originated the action, but the intervenor's ability to do so is contingent upon a showing by the intervenor that he fulfills the requirements of Art. III of the U.S. Constitution.
To have Article III standing to act as independent litigants, the Neighbors must have suffered an "injury in fact" that is causally connected to the complained of conduct and that will likely be redressed by a favorable federal court decision. The Appellate Court held that the Neighbors colorably claimed protectable economic and other interests that would be directly impaired by the construction of a tower; and, if the Neighbors prevailed, the plaintiffs would still lack authority to build the tower. The Appellate Court stated that what was at issue is not merely a private settlement between parties (say, a release in exchange for money) but, by virtue of the court's adoption and entry of a consent decree, a legally operative judgment that overrides state law and the Neighbors' rights under state law that would prevail unless overridden by the decree. Thus, the Neighbors were entitled to resist the entry of a decree that terminates their protectable rights without a violation of the Act being proven.
Although Industrial Communications claimed that the denial of the variance did violate the Act, the district court did not make this finding; rather, the district court deemed itself no longer entitled to decide that question because the original defendant no longer choose to defend the variance. The Appellate Court stated that the Neighbors were prepared to do defend the denial of the variance, the Neighbors were parties to the case, and the Neighbors had independent interests to protect that were threatened by the decree.
The Appellate Court stated that its decision does not mean that the Neighbors can force the Town to defend the case or prevent it from switching sides, and nothing the Appellate Court said was intended to suggest that a district court, faced with a proposed consent decree and no opposition, is obliged to conduct hearings and make supported findings. However, the Appellate Court stated that it is one thing to resolve a case by agreement of all parties; it is another when a party to the case is protesting and the court's authority to wipe out the rights of the protesting party depends on findings that the court has not made. The judgment of the district court was vacated and the matter was remanded for further proceedings consistent with the Appellate Court’s decision.
Anthony Dorland
DorlandA@moss-barnett.com
(612) 877-5258