Time Warner Cable, Inc. v. Hudson
667 F.3d 630
5th Cir.2012Background
- Texas SB5 created a statewide cable franchise with PUC authority, replacing many municipal franchises except for incumbents in large cities.
- SB5 prohibits income-based cable discrimination and requires affidavits and license conditions to ensure redlining does not occur.
- Incumbent providers, including Time Warner, faced exclusion from the statewide franchise while overbuilders and some incumbents could opt in.
- Plaintiffs Time Warner and TCA argued SB5 violated the First and Fourteenth Amendments and was preempted by federal law; district court granted summary judgment for defendants.
- Texas SB1087 amended SB5 to let some incumbents terminate municipal franchises for statewide licenses in municipalities with populations under 215,000; Time Warner remained excluded in larger municipalities.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SB5 discriminates against incumbents in violation of the First Amendment | Time Warner urged strict scrutiny for small-group targeting | Defendants argued intermediate scrutiny sufficed | SB5's exclusion of incumbents violates the First Amendment |
| Whether SB5 is preempted by federal law | SB5 conflicts with 47 U.S.C. § 541 anti-redlining mandate | SB5 aligns with federal anti-redlining and permits PUC oversight | No conflict preemption; SB5 is not preempted |
| Whether plaintiffs have Article III standing | Injury from discriminatory treatment is cognizable standing | Standing questioned as speculative | Plaintiffs have standing; discriminatory effect suffices |
| What level of scrutiny applies to SB5 | Strict scrutiny due to targeting few incumbents | Intermediate scrutiny possible; broader interests asserted | Strict scrutiny applies; SB5 unconstitutional under strict scrutiny |
| Whether, under intermediate scrutiny, SB5 could pass | Even under less exacting review, exclusion lacks fit | State interests in competition and reliance protections | SB5 fails even under intermediate scrutiny |
Key Cases Cited
- Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622 (U.S. 1994) (must-carry rules heightened scrutiny; risk of suppression/bias in speech)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (standing requires injury, causation, redressability)
- Minneapolis Star & Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575 (U.S. 1983) (differential taxation on the press triggers strict scrutiny)
- Arkansas Writers’ Project, Inc. v. Ragland, 481 U.S. 221 (U.S. 1987) (differential treatment of the press triggers strict scrutiny)
- Leathers v. Medlock, 499 U.S. 439 (U.S. 1991) (application of strict scrutiny to targeted taxation on speech)
- Discovery Network, Inc. v. City of Cincinnati, 507 U.S. 410 (U.S. 1993) (must-carry/handling of speech vs. government interests; intermediate scrutiny)
- City of Cincinnati v. Discovery Network, 507 U.S. 410 (U.S. 1993) (intermediate scrutiny discussion of governmental interests)