Nextg Networks of California v. Superior Court of the City & County of San Francisco (California Court of Appeals, September 29, 2011).
On September 8, 2010, the San Francisco Department of Public Works (the department) granted NextG a permit to construct a wireless service facility on an existing utility pole in a public right-of-way and related power equipment on another existing utility pole on the other side of the street. Construction of the facility began in early December and was completed on December 28. The site began carrying telecommunications traffic on December 31, 2010.
More than three months after the permit had been issued, on December 22, two residents who had not received prior notice of the permit application requested the San Francisco Board of Appeals (the board) to allow a late-filed appeal contesting issuance of the permit. On January 12, 2011, the board allowed the late appeal and on April 20, 2011 the board revoked NextG's permit. The board's April 20 order explains that the City and County of San Francisco (the city) "erroneously failed to refer the permit application to the planning department as the then-existing law required" because the city's map showing the locations that required planning department approval mistakenly omitted the relevant area. The board concluded that consequently the permit had been issued in error and therefore that NextG had not acquired a vested right in the permit. The board also explained that a new local administrative code provision governing the issuance of permits had taken effect on February 13, 2011, and that because the permit had not been properly approved under either the prior provision or the new procedure, the board could not then grant the permit. The board granted the appeal and revoked the permit previously issued, stating, however, that because of the change in the applicable law, NextG would not be barred from reapplying for a permit under the new provisions.
Following the board's denial of NextG's petition for rehearing, on May 25, 2011, the department advised NextG by letter that it must remove the newly installed equipment by June 20, 2011, and that the department "may be required to take additional action should this facility not be removed" by that date. On June 7, 2011, NextG updated its permit application and requested an extension of time to remove the equipment, so that its renewed permit application could be processed before it was required to dismantle the equipment. The department informed NextG that it would not extend the deadline for removal and repeated that if NextG did not remove its equipment the city would take any additional actions it deemed necessary to effect the removal. It offered to meet with NextG to review re-application procedures, but emphasized "this facility will be removed by June 20." On June 16, NextG stated it would remove the wireless equipment by the deadline, but noted that the power equipment across the street from the wireless equipment needed to remain in place for safety reasons. The next day the city replied that the entire facility, including "all related equipment" was to be removed by June 20. It reiterated its warning that it would take "any additional actions deemed necessary."
Without having removed its equipment, on June 21, 2011, NextG filed a petition for an immediate stay. After the Court temporarily stayed the department's directive to NextG to remove its equipment and after reviewing the briefing submitted by the parties, the Court issue a new order granting a permanent stay pending final resolution of the underlying matter of the legality of the revocation of the permit.
The Court concluded that the unusual circumstances in the case were sufficient to warrant its action. It was undisputed that the wireless service facility in question was installed pursuant to a permit issued by the department and that the error in issuing the permit was the fault of the city. Although NextG completed installation of the equipment a few days after being notified that the board was allowing a late challenge to the permit, installation was by then well under way, and there was no evidence of the feasibility of discontinuing the installation process at that point.
The Court stated that an order staying the department's directive is in effect the functional equivalent of a preliminary injunction. In deciding whether to grant a preliminary injunction, consideration must be given to two interrelated questions: (1) the relative harm the parties would suffer in the event that the injunction is granted or denied and (2) the plaintiff's reasonable probability of success on the merits. The Court stated that although the moving papers before the superior court did not quantify the expense that would be incurred and the revenue that would be lost by dismantling the equipment and later reinstalling it should NextG prevail on its petition to set aside the permit revocation or should the department reissue the permit, there was no doubt that NextG would incur needless expense and a loss of revenue in either event. Moreover, customers served by the wireless service facility would experience a loss of service and, as alleged in the verified superior court petition, "removal of the site would create a gap in which fire, police, and other first responders would encounter a dead zone and an inability to respond to emergencies or 911 calls." The city suggested no countervailing harm that will be experienced by deferring the removal of the equipment until NextG's right to maintain it has been determined.
As to the likelihood of success on the pending superior court petition, the Court expressed no view as to the proper outcome of the trial court proceedings. However, in view of the fact that the failure to obtain planning department approval resulted from two errors on the part of the city, and that without knowledge of the errors NextG relied on the permit, the Court stated that NextG's position may well have merit. The Court held that given the uncertainty created by the city's actions, and the lopsided balance of potential harm, it is appropriate to maintain the status quo until the relevant legal issues have been decided.
Anthony Dorland
DorlandA@moss-barnett.com
(612) 877-5258