IN RE CELL TOWER LITIGATION (United States District Court, Southern District Of California, August 5, 2011).
Plaintiff American Tower Corporation ("ATC") and Defendants City of San Diego, City Council of City of San Diego, and Development Services Department of City of San Diego (the "City") sought summary judgment on certain claims concerning the denial of a conditional use permit ("CUP") for an existing wireless communications facility located at 2222 Versus Street ("Versus"). ATC owns a 90-foot telecommunications tower and associated building at the Versus site in San Diego. The previous CUP for the Versus site was issued in 1995 for a period of ten years. The Versus CUP did not provide for extensions or renewal. The CUP specifically required all activity at the site cease and the site be returned to its original condition upon expiration if a new CUP was not approved for the site.
According to the Court, ATC's new CUP application for the Versus site sought to maintain the site with its existing height and design despite City regulations that require such facilities be designed to be minimally invasive through design, use of architecture, landscape architecture, and siting solutions. Throughout the various stages of the proceeding before the City, ATC refused to make any concessions with regard to the height or design of the tower and refused to provide any site-specific analysis of the impact on wireless coverage from lowering the tower. However, ATC did make an untimely offer with regard to landscaping at the site. Eventually, following a lengthy extension of time by the agreement of the parties, the Hearing Officer denied the application because the tower failed to comply with the regulations. ATC appealed to the Planning Commission, and the Planning Commission upheld the Hearing Officer's decision.
A. ATC moved for summary judgment on its three claims under 47 U.S.C. § 332(c)(7) of the Telecommunications ACT ("TCA"): unreasonable discrimination, effective prohibition, and lack of substantial evidence.
1. Substantial Evidence.
ATC argued that the City's denial of its application for a CUP for the Versus site was not supported by substantial evidence. The Court stated that the City appropriately considered the 90-foot tower and equipment shelter a major communications facility and evaluated the CUP under those requirements, including authorizing the City to consider the visual impact of the tower, including whether the applicant has used design, architecture, and landscape architecture to minimize its intrusion. In opposing ATC's motion for summary judgment on this claim, the City cited generally to the Reports to the Hearing Officer, the Resolutions of the Hearing Officer, and the Reports to the Planning Commission. The City found that the tower was the tallest structure in and around the area, resulting in an incongruous effect on the community landscape and that it posed an unsightly visual impact for commuters because it is situated prominently along a major transportation corridor. According to the Court, the regulations authorize the City's consideration of these facts in denial because the City is charged with requiring designs that are minimally invasive.
Additionally, the Court stated that it was clear throughout the record that ATC's consistent refusal to modify the proposal to minimize its visibility, including refusal to reduce the height by even the 23 feet of unused tower, weighed against approval of the CUP. This evidence also supported the City's denial because the regulations require designs that are minimally invasive. Reviewing the record deferentially, the Court found that the City's decision was supported by more than a scintilla of evidence. Accordingly, ATC was not entitled to summary judgment on its substantial evidence claim under § 332(c)(7)(B)(iii).
2. Unreasonable Discrimination.
ATC argued that the City's denial of its application for a CUP for the Versus site constitutes unreasonable discrimination. The TCA prohibits "regulation of the placement, construction, and modification of personal wireless service facilities . . . [that] unreasonably discriminate[s] among providers of functionally equivalent services." § 332(c)(7)(B)(i)(I). The only provider ATC claimed that the City was differentially treating was the City. According to the Court, to succeed on its unreasonable discrimination claim, ATC must prove that ATC and the City are functionally equivalent providers and that the City was unreasonably discriminating between the City and ATC.
According to the Court, the parties did not dispute that the City has two towers that are relatively comparable to the Versus tower in terms of size and that the City does not impose its regulations on its own towers. ATC argued that the City's imposition of regulations on ATC that it does not impose upon itself gives the City an unfair competitive advantage against ATC. The City countered that it does not market or advertise its towers in competition with ATC, primarily uses its towers for emergency communications and the general business of the City, and is lawfully exempt from its own land use regulations. The City admitted it generates approximately $50,000 from leases to commercial carriers, but this revenue is in sharp contrast to ATC's state rental earnings in excess of one million dollars. ATC countered that the City actually generates approximately $100,000 more from public entities co-located on the City's towers.
According to the Court, ATC and the City are not functionally equivalent providers; while the evidence presented by the parties does not provide the most comparable information for comparison, it is clear that the City's towers are used primarily for City services, including emergency services. Its minimal leases to other providers, predominately public entities, on these two towers are not comparable to ATC's tower being used entirely for commercial gain with substantially greater revenue. In reaching this conclusion, the Court stated that it was mindful that the City's use of its towers could certainly reach a point where it is more equivalent to ATC, and ATC's concerns that the City is tipping the scales in its favor as a direct competitor might have more traction. Based on the evidence provided, however, ATC and the City are not functionally equivalent providers. Accordingly, ATC was not entitled to summary judgment on its unreasonable discrimination claim under § 332(c)(7)(B)(i)(I).
3. Effective Prohibition.
As cited by the Court, ATC argued that the City's denial of its application for a CUP for the Versus site constitutes effective prohibition. Under the TCA, local government's regulation of personal wireless facilities cannot "prohibit or have the effect of prohibiting the provision of personal wireless services." § 332(c)(7)(B)(i)(II). The Court found that because ATC did not demonstrate that its proposal was the least intrusive means of filling a significant gap in service, assuming there even was a significant gap in service, ATC's effective prohibition claim could not succeed. It was ATC's burden to show that its proposal — the existing tower without any reduction in height or alteration in design — was the least intrusive means of closing a significant gap in coverage. This means that ATC had the burden of showing the lack of available and technologically feasible alternatives.
According to the Court, it was clear from the record in the case that ATC refused to make any concession with regard to the design or height of its tower and made only minor concession with regard to landscaping. Throughout the proceedings, despite repeated requests from the City for alternatives and information about coverage gaps with regard to the specific site, ATC refused to provide any re-design options, any analysis of service gaps specific to the Versus site, or any alternative to the existing tower. ATC essentially told the City that keeping its tower exactly the same, without any alteration to height or design to bring it into greater compliance with the City's regulations, was the best option, without offering any analysis of alternatives. The Court stated that ATC failed to meet its burden to show that its proposal was the least intrusive means of filling a significant coverage gap, assuming there was a coverage gap. Accordingly, ATC was not entitled to summary judgment on its §332(c)(7)(B)(i)(II) claim.
B. Dormant Commerce Clause.
ATC and the City moved for summary judgment on ATC's dormant commerce clause claim. "The negative or dormant implication of the Commerce Clause prohibits state . . . regulation . . . that discriminates against or unduly burdens interstate commerce and thereby impedes free private trade in the national marketplace." ATC argued that the City's zoning regulations were excessive in relation to the local benefits because the City imposes the regulations on ATC's towers, but does not impose the regulations upon its own towers.
Essentially, according to the Court, ATC's claim was based on the City's exemption of the City from zoning regulations. The Court stated that while it is mindful of ATC's speculation that the City could, theoretically, directly compete in the wireless market and regulate the market to the City's benefit, there is no basis in the evidence for that speculation and the regulations do not require that result. The City is imposing zoning regulations on all wireless providers that require minimizing the intrusiveness of wireless sites. It simply requires providers to submit proposals that are minimally invasive on the community. Such an even-handed regulation will not violate the commerce clause unless its burdens so outweigh the putative benefits as to make the statute unreasonable or irrational. The Court stated that ATC has not established that the regulations themselves are unreasonable or irrational or even that the City's exemption of itself, a markedly different entity, from those regulations is unreasonable or irrational. Accordingly, the City was entitled to summary judgment on ATC's dormant commerce clause claim.
C. Fifth Amendment Taking.
The City moved for summary judgment on ATC's claim that imposition of the City regulations constitutes an impermissible regulatory taking under the Fifth Amendment. The City argued that ATC's claim cannot survive because ATC has not sought and been denied just compensation.
ATC argued on summary judgment that it is not required to follow state compensation procedures because it is not alleging a regulatory taking, but rather a private taking, i.e., the City took the property by denying the permit to further its monopoly of the tower market in San Diego. The Court stated that ATC has not provided evidence, or even allegations, that the City took its property for private use. ATC speculated that the City could corner the market for tall towers in San Diego, but has not provided evidence it has done so or intends to do so. Additionally, ATC has not cited any authority suggesting that such conduct would constitute a private taking when the regulatory effect is not for private use. Accordingly, the Court stated that ATC's regulatory taking claim under the Fifth Amendment cannot succeed because ATC has not followed the requisite procedures to obtain compensation. The City was entitled to summary judgment on ATC's Fifth Amendment claim.
D. Permit Streamlining Act.
ATC and the City move for summary judgment on ATC's Permit Streamlining Act ("PSA") claim. ATC argued that the City violated the time limits of the Permit Streamlining Act and that ATC's CUP application for Versus must be approved as a matter of law. The City did not dispute that it did not grant or deny ATC's CUP for the Versus site within the applicable sixty day period, leaving the Court to determine whether ATC's claim is precluded because: (1) ATC failed to plead this basis for its PSA claim; (2) the City's public notice was not sufficient; (3) ATC failed to exhaust administrative remedies; or (4) the parties agreed to extend the time for approval or denial of the Versus application. After a lengthy discussion, the Court held that ATC's Versus application was not approved within the time limits prescribed by the PSA and accordingly must be deemed approved. ATC was entitled to summary judgment on its PSA claim.
Anthony Dorland
DorlandA@moss-barnett.com
(612) 877-5258