NextG Networks of NY, Inc., v. City of New York, et al., No. 06-5696 (2d Cir. 2008)

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06-5696-cv NextG Networks of NY, Inc., v. City of New York, et al. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ------------August Term, 2007 (Argued: October 17, 2007 Decided: January 15, 2008) Docket No. 06-5696-cv - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X NEXTG NETWORKS OF NY, INC., Plaintiff-Appellant, - against CITY OF NEW YORK, CITY OF NEW YORK DEPARTMENT OF INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS and PAUL J. COSGRAVE, in his official capacity, Defendants-Appellees. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X Before: KEARSE and HALL, Circuit Judges, and RAKOFF, District Judge.* Plaintiff NextG Networks of NY, Inc. appeals from a judgment of the United States District Court for the Southern District of New York (Berman, J.), entered March 7, 2006, granting defendants motion for summary judgment. We hold that * The Honorable Jed S. Rakoff, United States District Judge for the Southern District of New York, sitting by designation. -1- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 a telecommunications provider may not bring a cause of action for money damages under 42 U.S.C. § 1983 for violation of Section 253 of the Telecommunications Act of 1996. We also hold that NextG s claims for declarative and injunctive relief on the basis that Section 253 prohibits or preempts the City s laws and regulations governing the provision of telecommunications services via the public rights-of-way are not moot and should be considered by the District Court on remand. Affirmed in part, reversed in part, and remanded. 22 RAKOFF, District Judge. 23 T. SCOTT THOMPSON (David M. Shapiro on the brief), Davis Wright Tremaine LLP, Washington, D.C. for PlaintiffAppellant. KAREN M. GRIFFIN, Assistant Corporation Counsel (Francis F. Caputo, Bruce Regal, Diana M. Murray on the brief), for Michael A. Cardozo, Corporation Counsel of the City of New York, New York, N.Y. for Defendants-Appellees. Plaintiff-appellant NextG Networks of NY, Inc. ( NextG ) 24 appeals from a judgment of the United States District Court for 25 the Southern District of New York (Berman, J.), granting summary 26 judgment in favor of the defendants-appellees (collectively, 27 the City ). 28 Broadly speaking, this case concerns whether the City has 29 impeded NextG s access to the New York City telecommunications 30 market by unlawfully denying NextG the use of City-owned poles. 31 NextG, a wholesale provider of telecommunications services, 32 offers other wireless carriers a method for extending wireless -2- 1 coverage to "dead spots." It does this, among other ways, by 2 constructing a continuous grid of low-level antennas ( nodes ) 3 mounted at heights of no more than approximately 30 feet from 4 the ground. 5 proposes to install nodes and node equipment on City-owned 6 utility poles and streetlight poles in the public 7 rights-of-way.1 8 entity can use the "inalienable property" of the City, including 9 City poles, it must first obtain a franchise. To construct such a network in New York City, NextG Under the New York City Charter, before any Such a franchise 10 is available only if the City s Department of Information 11 Technology and Telecommunications ("DoITT") makes an initial 12 determination of the need for franchises of a particular type, 13 and the New York City Council then adopts a resolution 14 authorizing the granting of such franchises. 15 DoITT issues a Request for Proposals ( RFP ) pursuant to which 16 an individual entity may apply for such a franchise. 17 approves the application, the franchise is subject to a public 18 hearing, approval by the Mayor, and review and approval by the 19 Franchise and Concession Review Committee, before it can finally 1 Once this is done, If DoITT While NextG claims, and the City disputes, that NextG has no reasonable alternative to such use of City-owned property, we do not reach that issue here. -3- 1 2 be granted. In connection with the provision of mobile 3 telecommunications services, the City Council, beginning in 4 1994, 5 issue franchises for the installation of telecommunications 6 equipment and facilities on, over, and under the inalienable 7 property of the City. 8 NextG first brought this action was Resolution No. 957, which 9 took effect on August 11, 1999. passed three successive resolutions authorizing DoITT to The resolution that was in place when Even though, under Resolution 10 No. 957, no entity could apply for or obtain a franchise unless 11 and until DoITT issued an RFP, for the first four-and-a-half 12 years after the enactment of Resolution No. 957 DoITT did not 13 issue an RFP. 14 the City about obtaining a franchise to deploy its equipment on 15 City-owned poles, it was told, in effect, that it would have to 16 await the issuance of an RFP, which it was assured would issue 17 shortly. 18 submitted an application for a franchise, to which the City did 19 not respond in writing. 20 response, NextG, in December 2003, filed this action. 21 22 Thus, when, in March 2002, NextG first contacted When, however, no RFP issued, NextG nonetheless After waiting many months for a After the action was filed, DoITT, on February 9, 2004, finally issued an RFP (the 2004 RFP ) entitled a Request For -4- 1 Proposals For Franchises For The Installation And Use, On 2 City-Owned Street Light Poles, Traffic Light Poles And Highway 3 Sign Support Poles, Of Telecommunications Equipment And 4 Facilities, Including Base Station And Access Point Facilities, 5 In Connection With The Provision Of Mobile Telecommunications 6 Services. 7 pursuant to the 2004 RFP was April 16, 2004. 8 eight other companies duly submitted applications. 9 applicants then withdrew their proposals. The deadline for submitting franchise applications NextG and Two On April 30, 2004, 10 DoITT sent letters to the remaining applicants, stating, in 11 effect, that no franchise would be granted to any applicant who 12 did not commit to various requirements. 13 commit to a number of the requirements, including a commitment 14 to pay a minimum annual zone compensation fee of $100,000 and 15 a minimum bid of $250 per pole per month for the zone 16 encompassing Manhattan; an agreement to accept a priority 17 rating for a particular zone based on an entity s per pole bid; 18 and an agreement to a system whereby if there were competing 19 requests for use of the same pole, the requesting company with 20 the highest priority rating in that zone would have first option 21 to utilize the pole for a certain period of time. 22 the City refused to grant NextG a franchise. -5- NextG declined to Accordingly, It did, however, 1 grant franchises to the other six applicants, who agreed to 2 these conditions. 3 Meanwhile, on March 2, 2004, NextG amended its complaint to 4 seek a declaration that the City s rules, regulations and 5 requirements embodied in the City Charter, in Resolution No. 6 957, and in the 2004 RFP violated Section 253 of the 7 Telecommunications Act of 1996, 47 U.S.C. § 253. 8 requested an order enjoining the City from enforcing these rules 9 and regulations. 10 11 It also Finally, it sought damages under 42 U.S.C. § 1983 for the City s alleged violations of Section 253. On August 11, 2004, Resolution No. 957 expired, by its own 12 terms. 13 was enacted on March 23, 2005, no RFP was issued pursuant to 14 Resolution No. 519 until July 19, 2007. 15 Although a new, similar resolution, Resolution No. 519, In the interim, on March 6, 2006, the District Court 16 granted the City s motion for summary judgment. 17 and Order, the District Court concluded that it would be 18 inappropriate to issue a declaratory judgment with respect to 19 the [City] Charter, Resolution No. 957, and 2004 RFP because (i) 20 Resolution No. 957 and the 2004 RFP have expired and (ii) NextG 21 has an available claim for money damages under Section 1983." 22 In a footnote, the District Court noted that NextG does not -6- In its Decision 1 appear to have requested that the Court declare that the City s 2 new franchise scheme under Resolution No. 519 is preempted by 3 Section 253. 4 appear to be a real and immediate controversy regarding 5 Resolution No. 519. 2 6 In any event, on this record, there does not The District Court also found that injunctive relief was 7 not warranted because, given its prior ruling that an action for 8 damages was available, NextG had not established that it 9 suffered or is likely to suffer irreparable injury. 10 Finally, with regard to NextG s claim for money damages, 11 the District Court held that, because NextG had offered no 12 evidence as to the actual economic effect on NextG of the City s 13 requirements that NextG was challenging, NextG s claim for 14 damages must be dismissed. 15 We review a district court s grant of summary judgment de 16 novo. Physicians Comm. for Responsible Med. v. Johnson, 436 17 F.3d 326, 331 (2d Cir. 2006). 18 District Court that NextG s claim for damages under 42 U.S.C. § To begin with, we agree with the 2 On March 17, 2006, NextG moved for leave to amend its complaint to challenge the legality of Resolution No. 519. The district court denied plaintiff's motion to amend its complaint, finding that Resolution No. 519 had not been previously litigated in the case and that allowing plaintiff to amend would be prejudicial at this stage. -7- 1 1983 must be dismissed, but for a different reason than that 2 given by the District Court.3 3 telecommunications provider may not bring a cause of action for 4 damages under Section 1983 for violations of Section 253 of the 5 Telecommunications Act of 1996. 6 Specifically, we conclude that a Only rights, not the broader or vaguer benefits or 7 interests may be enforced through § 1983. Gonzaga Univ. v. 8 Doe, 536 U.S. 273, 283 (2002) (internal quotation marks omitted) 9 (emphasis in original). See also Blessing v. Freestone, 520 10 U.S. 329, 340 (1997) ( In order to seek redress through § 1983, 11 . . . a plaintiff must assert the violation of a federal right, 12 not merely a violation of federal law ) (emphasis in original). 13 The determination of whether a particular federal statute 14 creates a federal right of the kind enforceable by an action for 15 damages under § 1983 requires inquiry into whether or not 16 Congress intended to confer individual rights upon a class of 17 beneficiaries. 18 & Auto Ctr., Inc. v. Town of Woodbury, 445 F.3d 136, 149-50 (2d Gonzaga, 536 U.S. at 285. 3 See also Loyal Tire A Court of Appeals may, of course, affirm the district court s judgment on any ground appearing in the record, even if the ground is different from the one relied on by the district court. ACEquip Ltd. v. Am. Eng'g Corp., 315 F.3d 151, 155 (2d Cir. 2003). -8- 1 2 Cir. 2006). The District Court believed that such rights were conferred 3 on telecommunications providers by Section 253, primarily 4 because, in the District Court s view, Section 253 is phrased 5 in terms of persons (entities) benefitted, i.e. 6 telecommunications providers. 7 which the District Court referred in support of this analysis 8 simply states, in relevant part, that No State or local statute 9 or regulation, or other State or local legal requirement, may 10 prohibit or have the effect of prohibiting the ability of any 11 entity to provide any interstate or intrastate 12 telecommunications service. 13 language as intended to place limits on state and local 14 governments, rather than as intended to benefit an identified 15 class of putative plaintiffs. But the statutory language to 47 U.S.C. § 253(a). We read this 16 This reading is further confirmed by the additional 17 statutory language that Nothing in this section affects the 18 authority of a State or local government to manage the public 19 rights-of-way or to require fair and reasonable compensation 20 from telecommunications providers, on a competitively neutral 21 and nondiscriminatory basis, for use of public rights-of-way on 22 a nondiscriminatory basis, if the compensation required is -9- 1 publicly disclosed by such government. 47 U.S.C. § 253(c). In 2 other words, the purpose of Section 253 is to impose some limits 3 on the ability of state and local governments to regulate 4 telecommunications but not to interfere with the right of such 5 governments to impose reasonable charges for the concomitant use 6 of public property. 7 although not definitive on this issue, shows that Congress was 8 concerned with requirements to be placed on state and local 9 governments and not with benefits to be conferred on Similarly, the legislative history, 10 telecommunications providers. 11 (daily ed. June 12, 1995), 141 Cong. Rec. S8308 (daily ed. June 12 14, 1995) (discussion of where local governments would be 13 permitted to defend preemption challenges to local ordinances). 14 See, e.g., 141 Cong. Rec. S8170 The two other Circuits that have addressed this issue 15 directly have similarly held that there is no private damages 16 action under Section 1983 for a violation of Section 253. 17 Sprint Telephony PCS, L.P. v. County of San Diego, 490 F.3d 700, 18 716-17 (9th Cir. 2007) (no cause of action for damages under § 19 1983 for violation of § 253 because § 253 is phrased in terms of 20 the parties restricted, i.e. states and local governments); 21 Qwest Corp. v. City of Santa Fe, 380 F.3d 1258, 1265-67 (10th 22 Cir. 2004) (no cause of action under § 1983 for violation of § -10- See 1 253 because § 253 grants no private rights to any identifiable 2 class ) (internal quotation marks omitted). 3 District Court appeared to believe that a contrary view had been 4 expressed by two other Circuits, in TCG Detroit v. City of 5 Dearborn, 206 F.3d 618, 622-23 (6th Cir. 2000) and BellSouth 6 Telecomms., Inc. v. Town of Palm Beach, 252 F.3d 1169, 1189-91 7 (11th Cir. 2001), these cases, which preceded the Supreme 8 Court s decision in Gonzaga, concerned, not the existence of a 9 right enforceable by an action in damages under § 1983, but Although the 10 rather whether a private cause of action existed directly under 11 § 253 to assert preemption of a state or local statute or 12 regulation.4 Neither case expressed any view on the availability 4 In TCG Detroit, the Sixth Circuit declined to hold that it had jurisdiction to adjudicate a claim for preemption under the Supremacy Clause and instead analyzed whether § 253(c) created a private right of action in federal courts. 206 F.3d at 622-23. After holding that § 253(c) was not a safe harbor provision but instead an independent basis for municipal liability under § 253, the Court held that § 253(c) authorized a private right of action in federal court for telecommunications providers aggrieved by municipal action. Id. at 624. In addition to not presenting the issue now before this Court, the TCG Detroit decision is directly contradicted by our decision in TCG New York, Inc. v. City of White Plains, 305 F.3d 67, 77 (2d Cir. 2002), which concluded that § 253(c) is a savings clause, and by our decision in W. Air Lines, Inc. v. Port Auth., 817 F.2d 222, 225-26 (2d Cir. 1987), which held that a private right of action is not required where a party seeks to enjoin the enforcement of a local rule or regulation on the ground that the regulation is preempted by federal law. Similarly, in BellSouth, 252 F.3d at 1189-91, the Eleventh Circuit did not consider possible jurisdiction under the Supremacy Clause and instead held that because Congress clearly -11- 1 2 of damages under § 1983. From our conclusion that § 253 does not create a private 3 right of action for damages, it follows that we do not agree 4 either with the portion of the District Court s decision that 5 denied injunctive relief on the ground that NextG had an 6 adequate remedy in damages and could not establish irreparable 7 harm or with the correlative portion of the District Court s 8 decision that found that the availability of an action for 9 damages under § 1983 weighed against the granting of declarative 10 relief. But the District Court also suggested that it would be 11 inappropriate to grant such relief in light of the expiration 12 of Resolution No. 957 and the 2004 RFP. 13 constrained to disagree. 14 Amended Complaint was that the City s entire approach to the 15 granting of franchises for the purposes here sought is 16 prohibited or preempted by Section 253. 17 expiration of Resolution No. 957 and the 2004 RFP (and their 18 replacement by Resolution No. 519 and the 2007 RFP) renders this 19 issue moot. Again, we are The gist of NextG s claims in the Nothing in the See County of Los Angeles v. Davis, 440 U.S. 625, intended that local governments be permitted to defend preemption challenges in their local district courts, a private cause of action in federal district court exists under § 253 to seek preemption of state or local regulations. -12- 1 631 (1979). 2 A dispute usually becomes moot if the defendant can 3 demonstrate that (1) there is no reasonable expectation that 4 the alleged violation will recur and (2) interim relief or 5 events have completely and irrevocably eradicated the effects of 6 the alleged violation. 7 Orange, 303 F.3d 450, 451 (2d Cir. 2002) (per curiam) (internal 8 quotation marks omitted). 9 local ordinances that expire by their own terms, expiration will 10 not moot a challenge if there is a reasonably concrete basis to 11 anticipate that the expired rule will be reenacted in a form 12 that will raise the same questions. 13 F.3d 99, 107 (2d Cir. 2001) (internal quotation marks omitted). 14 Granite State Outdoor Adver. v. Town of Specifically, with regard to state or Catanzano v. Wing, 277 Here, the expiration of Resolution No. 957 and the 2004 RFP 15 did not obviate appellant s claims or completely eradicate the 16 effects of the City s regulatory scheme. 17 Amended Complaint challenged not only Resolution No. 957 and the 18 2004 RFP, but also the provisions of the City Charter on which 19 the Resolution and RFP were predicated. 20 minimum, NextG s claim that these provisions of the City Charter 21 are preempted by the Telecommunications Act of 1996 is not moot. 22 See Lamar Adver. of Penn, LLC. v. Town of Orchard Park, New -13- For one thing, NextG's Therefore, at a 1 York, 356 F.3d 365, 379 (2d Cir. 2004). 2 Furthermore, the gravamen of NextG s complaint was that the 3 City s regulatory scheme as a whole violated Section 253 of the 4 Telecommunications Act of 1996 because the City assumes that it 5 has the unfettered discretion and power to determine who may or 6 may not provide telecommunications services. 7 not mooted by the expiration of Resolution No. 957 or the 2004 8 RFP. 9 the Resolution and the RFP expired because the expirations This claim was On the contrary, it applied with even greater force after 10 worked to prevent, perhaps indefinitely, any entity from using 11 City poles to provide telecommunications services. 12 Further still, even NextG s more specific claims regarding 13 Resolution No. 957 and the 2004 RFP were not mooted when the 14 Resolution and the RFP expired because there was a reasonable 15 basis on which to anticipate that the ordinances would be 16 reenacted in a form that would raise the same questions, see 17 Catanzano, 277 F.3d 99 at 107-08. 18 itself was essentially identical to its predecessor, Resolution 19 No. 438 of 1994, so also, well before the District Court 20 rendered its judgment in this case, the City enacted, on March 21 23, 2005, a successor resolution, Resolution No. 519, that, 22 again, was substantially similar to Resolution No. 957 in many -14- Just as Resolution No. 957 1 of the respects challenged by NextG s complaint. 2 practice, moreover, it was predictable that the 2007 RFP, though 3 issued after the District Court rendered its decision, would be 4 substantially similar to the 2004 RFP - as indeed proved to be 5 the case.5 6 From this past Accordingly, while we affirm the dismissal of NextG s claim 7 for damages, we reverse the dismissal of its claims for 8 declarative and injunctive relief and remand to the District 9 Court for consideration, inter alia, of NextG s claims that the 10 City s regulatory scheme is in material respects prohibited or 11 preempted by the Telecommunications Act of 1996. 12 13 14 15 16 5 Without disturbing the District Court s December 2006 Order denying NextG s motion to amend the complaint, we conclude that it would be appropriate on remand for the District Court to permit NextG to amend its complaint to challenge Resolution No. 519 and the 2007 RFP. -15-

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