COMCAST OF MAINE/NEW HAMPSHIRE, INC., et al. v. JANET MILLS, et al.
Docket No. 1:19-cv-410-NT
ORDER ON PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
This year, Maine enacted LD 832, which requires cable operators to allow cable subscribers to purchase cable channels and programs individually. Maine is the first state in the nation to enact such an a la carte mandate. Plaintiff Comcast of Maine/New Hampshire (“Comcast“) currently bundles most of its channels, requiring subscribers who wish to view specific programming
LEGAL STANDARD
In determining whether to grant a preliminary injunction, I must consider:
- the movant‘s likelihood of success on the merits of its claims;
- whether and to what extent the movant will suffer irreparable harm if the injunction is withheld;
- the balance of hardships as between the parties; and
- the effect, if any, that an injunction (or the withholding of one) may have on the public interest.
Corp. Techs., Inc. v. Harnett, 731 F.3d 6, 9 (1st Cir. 2013).
The Plaintiffs bear the burden of establishing that these factors weigh in their favor. Esso Standard Oil Co. (P.R.) v. Monroig-Zayas, 445 F.3d 13, 18 (1st Cir. 2006). “[T]he burdens at the preliminary injunction stage track the burdens at trial.” Reilly v. City of Harrisburg, 858 F.3d 173, 180 (3d Cir. 2017), as amended (June 26, 2017) (internal quotation marks omitted). In the context of a
DISCUSSION
I. Likelihood of Success
A party seeking a preliminary injunction must establish that it is likely to succeed on the merits of its claims. The likelihood of success on the merits prong has been described as the sine qua non of the four factors for establishing a preliminary injunction. New Comm Wireless Servs., Inc. v. SprintCom, Inc., 287 F.3d 1, 9 (1st Cir. 2002) (“[I]f the moving party cannot demonstrate that he is likely to succeed in his quest, the remaining factors become matters of idle curiosity.“) The Plaintiffs argue that the a la carte mandate is preempted by the federal Cable Act,
A. Preemption
because the States are independent sovereigns in our federal system, we have long presumed that Congress does not cavalierly pre-empt state law causes of action. In all pre-emption cases . . . we “start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.”
Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)).
Congress may preempt state law either directly—through an express preemption provision in a federal statute—or implicitly. Grant‘s Dairy—Me., LLC v. Comm‘r of Me. Dep‘t of Agric., Food & Rural Res., 232 F.3d 8, 15 (1st Cir. 2000). The Plaintiffs maintain that the federal Cable Act does both.
1. Express Preemption
“Congressional intent is the touchstone of any effort to map the boundaries of an express preemption provision.” Tobin v. Fed. Express Corp., 775 F.3d 448, 452 (1st Cir. 2014) (citations omitted). Because there exists a “presumption against the preemption of state police power regulations,” the Supreme Court has instructed lower courts to narrowly interpret express preemption provisions. Medtronic, 518 U.S. at 485 (quoting Cipollone, 505 U.S. at 518).
The Plaintiffs contend that provisions of the Cable Act—
a. Section 544(f)
i. Interpreting § 544(f)
(I). The Plain Meaning of § 544(f)
[a]ny Federal agency, State, or franchising authority may not impose requirements regarding the provision or content of cable services, except as expressly provided in [the Cable Act].
The Supreme Court has recently explained the relevant rules of statutory construction:
If the statutory language is plain, we must enforce it according to its terms. Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 251 (2010). But oftentimes the “meaning—or ambiguity—of certain words or phrases may only become evident when placed in context.” [FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132 (2000).] So when deciding
whether the language is plain, we must read the words “in their context and with a view to their place in the overall statutory scheme.” Id. at 133 (internal quotation marks omitted). Our duty, after all, is “to construe statutes, not isolated provisions.” Graham County Soil and Water Conservation Dist. v. United States ex rel. Wilson, 559 U.S. 280, 290 (2010) (internal quotation marks omitted).
King v. Burwell, 135 S. Ct. 2480, 2489 (2015) (parallel citations omitted).
(II). Section 544(f) in Context
“Interpretation of a word or phrase depends upon reading the whole statutory text, considering the purpose and context of the statute, and consulting any precedents or authorities that inform the analysis.” Dolan v. U.S. Postal Serv., 546 U.S. 481, 486 (2006). Taking into account the context of
Additionally, as the State points out,
(III). Legislative History
Plain meaning ” ‘sometimes must yield if its application would bring about results that are antithetical to Congress‘s discernible intent.’ ” United States v. Gordon, 875 F.3d 26, 34 (1st Cir. 2017) (quoting In re Hill, 562 F.3d 29, 32 (1st Cir. 2009)). Because the term “provision or content of cable services,” considered in the broader context of the Cable Act, is ambiguous, it is appropriate to look to the legislative history to attempt to understand Congress‘s intent. Miner v. Dep‘t. of Navy, 562 U.S. 562, 572 (2011) (“[C]lear evidence of congressional intent may illuminate ambiguous text.“).
In the 1984 Cable Act, Congress sought to establish a national policy that clarified the then-existing system of local, state, and federal regulation of cable television. H.R. Rep. No. 98-934, reprinted in 1984 U.S. Code Cong. & Admin. News (“House Report” or “H. Rep.“) 4655, 4656. Congress recognized the fundamental importance of developing a “robust marketplace of ideas” containing a “wide variety of perspectives from many different types of program providers.” Id. To accomplish these goals, it required cable companies to make space for public access channels and third-party commercial access. See
The House Report shows that Congress was concerned about the
(IV). Cases Interpreting § 544(f)
The cases that have addressed the meaning of
This historical context supports the Commission‘s belief that when Congress forbade “requirements regarding the provision or content of cable services,” its concern was with rules requiring cable companies to carry particular programming.
Id. at 1188. The examples provided in the House Report “suggest that the key is
The House report suggests that Congress thought a cable company‘s owners, not government officials, should decide what sorts of programming the company would provide. But it does not suggest a concern with regulations of cable that are not based on the content of cable programming, and do not require that particular programs or types of programs be provided. Such regulations are not requirements “regarding the provision or content” of cable services.
Syndex is clearly different from a requirement or prohibition of the carriage of a particular program or channel. Although it will certainly affect the content of cable programming, it is content-neutral. The basis on which syndex forbids carriage of certain programs is not their content, but ownership of the right to present them. Syndex itself does not require carriage of any particular program or type of program, nor does it prevent a cable company from acquiring the right to present, and presenting, any program.
The Plaintiffs argue that United Video is distinguishable and urge me to reject it. They contend that United Video involved the reasonableness of an agency‘s action and not a state preemption claim. It is true that the syndex rules were a requirement imposed by the FCC and that the D.C. Circuit was required to uphold the rules unless they were arbitrary or capricious. The Plaintiffs write: “Applying Chevron, and relying almost exclusively on a single piece of legislative history, the court upheld as reasonable the FCC‘s determination that [
The Plaintiffs also claim that the D.C. Circuit, in dealing with the syndex rules, did not “directly address the manner in which cable services are provided.” Reply 4. Although the syndex rules involved the relationship between the supplier of a syndicated program and a broadcast television station, the rules permitted broadcast stations with exclusive rights to a syndicated program to “forbid any cable television station from importing the program into its local broadcast area from a distant station.” United Video, 890 F.2d at 1176.
Subsequent cases have followed United Video. In Storer Cable Communications v. City of Montgomery, a district court found that
In Morrison v. Viacom, Inc., the California Court of Appeal agreed with both United Video and Storer that
The authorities cited by the Plaintiffs do not convince me that I should reject United Video or adopt a broader interpretation of
Two other cases cited by the Plaintiffs also involved requirements regarding the content—rather than the provision—of cable services. The district court in Time Warner Cable of New York City v. City of New York, held that New York City‘s effort to place Fox News on one of its public access channels violated
Likewise, in Lafortune v. City of Biddeford, the plaintiff challenged a requirement that producers of programs shown on a public access station had to obtain a written release from any person mentioned in a program who was not a public official. No. 01-250-P-H, 2002 WL 823678, at *8 (D. Me. Apr. 30, 2002), report and recommendation adopted, 222 F.R.D. 218 (D. Me. 2004), aff‘d, 142 F. App‘x 471 (1st Cir. 2005). The ordinance would have effectively shut down a local, live call-in program.7 The court stated:
A franchising authority which endows [individuals mentioned on the show] with such a veto power has “impose[d] requirements regarding the . . . content of cable services” in violation of
47 U.S.C. § 544(f)(1) . It has also imposed an unconstitutional prior restraint on the plaintiff‘s
freedom of speech, by giving private individuals the effective power of censorship.
Id. at *8 (ellipsis in original). Biddeford‘s ordinance ran afoul of
The only case cited by the Plaintiffs that found a regulation to be preempted as a “requirement[] regarding the provision . . . of cable services” is MediaOne Group, Inc. v. County of Henrico. 97 F. Supp. 2d 712, 716 (E.D. Va. 2000). There, a county ordinance conditioned approval of a merger between MediaOne and AT&T on a requirement that MediaOne provide access to its cable modem platform, at favorable rates, to any internet service provider that requested it. The MediaOne merger in 1999 was part of AT&T‘s “major effort to establish a foothold in broadband markets around the country” when internet access through cable modems was emerging as a faster alternative than dial-up modems. See MediaOne Grp., Inc. v. Cty. of Henrico, 257 F.3d 356, 359 (4th Cir. 2001). MediaOne provided both traditional cable television services and a cable modem platform through a company called “Road Runner.” Id. The district court in MediaOne concluded that
(V). Is “Provision” Superfluous?
The Plaintiffs argue that the word “provision” becomes superfluous if
ii. Analysis
Having determined that
I agree with the State that LD 832 is content-neutral. LD 832 requires cable operators to offer access to cable channels and programs individually. It does not require or prohibit cable operators from carrying any particular channel or program. Nor does anything in the limited legislative history behind LD 832 suggest that the Maine legislature was at all concerned with the content of particular programming. The sponsor of LD 832 was focused on rising prices for cable services and on the fact that consumers were “forced to purchase cable TV packages which include dozens of channels the consumer
The Plaintiffs contend that the practical effect of LD 832 will be a reduction in the content available to consumers, because cable programmers will prevent cable operators from acquiring the right to present certain programming. At the outset, I note that the D.C. Circuit rejected the argument that an effect on content necessarily makes a provision content-based and subject to preemption under
Moreover, there are two contradictory reports from the FCC on the topic of a la carte mandates, and they reach different conclusions about the impact on content. In their Complaint, the Plaintiffs cite the 2004 Report, which concluded that an a la carte mandate would lead to the failure of many programming networks, thus diminishing program diversity. FCC, REPORT ON THE PACKAGING AND SALE OF VIDEO PROGRAMMING SERVICES TO THE PUBLIC (“2004 Report“) (Nov. 18, 2004) (available at https://docs.fcc.gov/public/attachments/DOC-254432A1.pdf) (last visited Dec. 20, 2019). But a report released in 2006 criticized the 2004 Report, questioned the data upon which it was based, and suggested that programming diversity would improve under an a la carte scheme. FCC, FURTHER REPORT ON THE PACKAGING AND SALE OF VIDEO PROGRAMMING SERVICES TO THE PUBLIC 4–5 (“Further Report“) (Feb. 9, 2006) (available at https://docs.fcc.gov/public/attachments/DOC-263740A1.pdf) (last visited Dec. 20, 2019).10
While the cable operators have established that they are not interested in the a la carte model and compliance with it will be costly, they have not convinced me that
Finally, the Plaintiffs contend that LD 832 imposes requirements regarding the content of cable services because the law imposes a burden on cable operators but not other multichannel video programming distributors (“MVPDs“), such as satellite operators and online television streaming providers (e.g., SlingTV). But a law that singles out cable operators, though speaker-based, is not necessarily based on content. Turner Broad. Sys., Inc. v. FCC (“Turner I“), 512 U.S. 622, 658–59 (1994) (finding no evidence that Congress preferred broadcasters over cable programmers based on content of their programming and applying intermediate scrutiny). The Plaintiffs have made no showing that LD 832 applies only to cable operators based on the content of their programming. See id.
I recognize that LD 832 is a first-in-the-nation law that would significantly change how cable operators do business in Maine. But just because the law is novel does not mean it is preempted. See Whalen v. Roe, 429 U.S. 589, 597 n.20 (1977) (“Denial of the right to experiment may be fraught with serious consequences to the Nation. It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.“) (quoting New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting)). I must presume that the State acted within its authority when it enacted LD 832, unless it was the “clear and manifest purpose of Congress” in enacting
b. Sections 544(a) and (b)
The Plaintiffs contend that LD 832 is preempted by
The Plaintiffs do not develop their argument that
to states. Congress clearly knew how to restrict the regulatory authority of states, as it did so in
2. Conflict Preemption
“[C]onflict pre-emption exists where compliance with both state and federal law is impossible, or where the state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Oneok, Inc. v. Learjet, Inc., 575 U.S. 373, 377 (2015) (quotation marks omitted). “[A] court should not find pre-emption too readily in the absence of clear evidence of a conflict.” See Geier v. Am. Honda Motor Co., 529 U.S. 861, 885 (2000). The Plaintiffs argue that both types of conflict preemption—impossibility and obstacle—are present.
a. Impossibility
The Plaintiffs argued in their opening brief that they would be unable to comply with the à la carte mandate and comply with the federal requirement that cable operators include all stations that elect must-carry status on the basic tier. Mot. 9-10. In response, the State indicated that it does not interpret LD 832 “as allowing consumers to purchase à la carte channels and programs without first subscribing to the mandatory basic tier.” Opp‘n 14. The State bases its interpretation on the use of the term “subscribers” in LD 832, and it argues that one must first become a “subscriber” by purchasing the basic tier in order to then be able to purchase additional programming on an à la carte basis. Opp‘n 15. I am required to consider the narrowing construction offered by the State. Nat‘l Org. for Marriage v. McKee, 649 F.3d 34, 66 (1st Cir. 2011) (citing Vill. of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 494 n.5 (1982)) (“In evaluating a facial challenge to a state law, a federal court must . . . consider any limiting construction that a state court or enforcement agency has proffered.“). Under the State‘s limiting construction, I find that LD 832 does not make compliance with the Cable Act‘s must-carry and basic tier requirements impossible.
b. Obstacle
The Plaintiffs also argue that LD 832 stands as an obstacle to the accomplishment of the Cable Act‘s purposes and objectives and frustrates the effectiveness of federal law. Mot. 10-11. The Plaintiffs posit that “Congress made clear that its goals for regulating cable service were to establish and maintain ‘a national policy concerning cable communications’ that ‘minimize[s] unnecessary regulation that would impose an undue economic burden on cable systems.’ ” Mot. 10 (quoting
Because I find that no provision of the Cable Act expressly preempts LD 832 and because the Plaintiffs have not established conflict preemption, I go on to address the Plaintiffs’ First Amendment claims.
B. First Amendment
The Plaintiffs argue that LD 832 violates their First Amendment rights and should be subject to strict scrutiny. They contend that the State has failed to meet its burden of showing that LD 832 can withstand either strict or intermediate scrutiny because the State has not provided evidence that LD 832 will further an important State interest. Mot. 11-15. The State responds that the Plaintiffs do not have a First Amendment right to bundle content in the first place. Alternatively, the State argues that if First Amendment interests are at stake, then intermediate rather than strict scrutiny would apply and LD 832 would survive intermediate scrutiny. Opp‘n 16, 21.
1. Plaintiffs’ Constitutional Rights
As a threshold matter, the Plaintiffs are required to demonstrate that LD 832 infringes on their First Amendment rights. They make arguments that touch upon two different doctrines of First Amendment law. First, citing Turner I, 512 U.S. at 636, they contend that a decision “exercising editorial discretion” over how to provide programming is protected speech. Mot. 11. Second, they contend that because LD 832 singles out cable operators for disfavored treatment but leaves other multichannel video programming distributors unregulated, it violates the First Amendment‘s prohibition on speaker-based regulations as discussed in Minneapolis Star and Tribune Co. v. Minnesota Commissioner of Revenue, 460 U.S. 575 (1983), and Arkansas Writers’ Project, Inc. v. Ragland, 481 U.S. 221, 227 (1987). Reply 7-8. I address each argument in turn.
a. Editorial Discretion under Turner I
In Turner I, the Supreme Court addressed whether the must-carry provisions of the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. 102-385, 106 Stat. 1460, which required cable operators to carry the signals of certain local broadcast television stations, violated the First Amendment rights of cable operators and programmers. 512 U.S. at 636-37. The Supreme Court wrote that “there can be no disagreement” that:
Cable programmers and cable operators engage in and transmit speech, and they are entitled to the protection of the speech and press provisions of the First Amendment. Through original programming or by exercising editorial discretion over which stations or programs to include in its repertoire, cable programmers and operators seek to communicate messages on a wide variety of topics and in a wide variety of formats.
Id. at 636 (quotation marks, citations, and alterations omitted). The Court determined that the must-carry provisions “regulate cable speech in two respects: The rules reduce the number of
The Plaintiffs argue that, like the cable operators and programmers in Turner I, they enjoy First Amendment protection for their decisions regarding how to package and sell their video programming. They consider their bundling decisions to fall within their “editorial discretion.” The State counters that, unlike the must-carry provisions at issue in Turner I, LD 832 does not infringe on the cable operators’ rights to decide what programs and channels to show. The cable operators and programmers are free, according to the State, to choose whatever content they wish to provide and bundle it in whatever packages they see fit. They simply must, in addition, offer that same programming to consumers on an à la carte basis. The State points out that the Plaintiffs cite no case supporting the notion that they have a First Amendment right to bundle channels and programs. Opp‘n 2. The State contends that Turner I does not control if there is no impingement on the right to choose programming, and it argues that the Plaintiffs have failed to meet their initial burden of demonstrating that LD 832 infringes on their First Amendment rights.
There is no question that Turner I is distinguishable from the instant case. In Turner I, the Government‘s must-carry provisions forced cable operators to carry particular channels and impinged on programmers by increasing the competition for the remaining channels. Here, LD 832 requires no such addition of content, and it does not shrink the space remaining for programmers. Nor does LD 832 prohibit the Plaintiffs from packaging programming in bundles; it merely requires them to also provide channels and programming individually.
The Plaintiffs simply do not address these distinctions. They rely exclusively on the broad language in Turner I, and they do not explain why cable operators’ editorial discretion to choose what channels or programs to offer, which is protected by the First Amendment, should extend to cable operators’ discretion in how to sell that programming.11 Nor do the Plaintiffs make any attempt to distinguish the cable operators’ rights from the video programmers’ rights under the First Amendment. I find that the Plaintiffs have failed to carry their burden at the preliminary junction stage that they are likely to succeed on the merits of their claim that they have First Amendment rights to require consumers to purchase bundles of programming.
b. Speaker-based Laws
In addition to concluding that cable operators had First Amendment rights in exercising editorial discretion when choosing
In addressing the cable operators’ speaker-based argument in Turner I, the Court cited Minneapolis Star and Arkansas Writers’ Project, two cases relied on by the Plaintiffs. In Minneapolis Star, the Supreme Court considered the constitutionality of a Minnesota law aimed at publishers that imposed a use tax on paper and ink. 460 U.S. at 578. In Arkansas Writers’ Project, the Supreme Court considered a general interest magazine‘s challenge to Arkansas‘s sales tax, which exempted religious, professional, trade, and sports magazines. 481 U.S. at 224-25, 227. In both of those cases, the Court found that because the laws singled out the press, or a component of the press, they were unconstitutional under the First Amendment. Id. at 229.
The fact that the Supreme Court has historically viewed cable operators as part of the press and that it found in Turner I that cable operators’ rights fall within the ambit of cases like Minneapolis Star and Arkansas Writers’ Project, suggests to me that the Plaintiffs do have First Amendment interests at stake. LD 832 clearly singles out cable operators for differential treatment. Under Turner I, this means some level of heightened scrutiny applies. 512 U.S. at 640-41. Because I find that the Plaintiffs have met their burden of establishing that the law implicates their First Amendment rights, I address which level of scrutiny applies, and whether it is likely that the State can meet its burden of showing that LD 832 withstands that scrutiny.
2. Level of Scrutiny
a. Strict Scrutiny
The Plaintiffs contend that strict scrutiny should apply citing Reed v. Town of Gilbert, 135 S. Ct. 2218, 2226, 2230-31 (2015) and Rosenberger v. Rector & Visitors of the University of Virginia, 515 U.S. 819, 828 (1995). Mot. 12. In Reed, the Court struck down a municipality‘s signage regulations because they were content-based and failed to withstand strict scrutiny. 135 S. Ct. at 2231-32. In Rosenberger, the Court held that a University of Virginia regulation restricting student activity funds from being used to support a student group endeavoring to publish a Christian magazine
“Content-based laws—those that target speech based on its communicative content—are presumptively unconstitutional” and are subject to strict scrutiny. Reed, 135 S. Ct. at 2226 (citing R.A.V. v. City of St. Paul, 505 U.S. 377, 395 (1992)). “Government regulation of speech is content based if a law applies to particular speech because of the topic discussed or the idea or message expressed.” Id. at 2227. Because I have concluded that LD 832‘s à la carte mandate is not content-based, strict scrutiny does not apply on this basis.
“[S]peaker-based laws demand strict scrutiny when they reflect the Government‘s preference for the substance of what the favored speakers have to say (or aversion to what the disfavored speakers have to say).” Turner I, 512 U.S. at 658 (citations omitted). As the Court in Turner I framed it: “The question here is whether Congress preferred broadcasters over cable programmers based on the content of programming each group offers. The answer . . . is no.” Id. 658-59. The Plaintiffs make no attempt to explain how the Maine legislature is singling out cable operators as opposed to other MVPDs based on the content of the programming.
Strict scrutiny “is unwarranted when the differential treatment is ‘justified by some special characteristic of’ the particular medium being regulated.” Id. at 660-61 (quoting Minn. Star, 460 U.S. at 585). In Turner I, the Court found that the “special characteristics of the cable medium: the bottleneck monopoly power exercised by cable operators and the dangers this power poses to the viability of broadcast television” justified the must-carry provisions and made strict scrutiny unwarranted. Id. at 661. The Plaintiffs contend in their reply brief that the finding of a “bottleneck monopoly” that justified singling out the cable operators in Turner I no longer exists and cannot be used to justify treating cable operators differently from other multichannel video programming distributors. Reply 8. The Plaintiffs cite an FCC report that suggests cable subscribers only totaled 55.2% of subscriptions to MVPDS in 2017. See In re Commc‘ns Marketplace Report, FCC 18-181, 2018 WL 6839365 (Dec. 26, 2018) (“Communications Marketplace Report“). Because the special circumstances that justified the must-carry provisions are absent here, the Plaintiffs contend that strict scrutiny should apply.
It is true, as the Plaintiffs point out, that much has changed since the Turner cases were decided and that the justifications for the must-carry provisions do not necessarily apply to the à la carte mandate. But the Plaintiffs only develop this argument in their reply brief. Neither party has addressed whether the cable industry‘s market share of multichannel video programming in Maine is different from that of the nation as a whole. Further, the sponsor of LD 832 was concerned about cable pricing and ensuring that Maine citizens have access to affordable cable programming. The evidentiary record is weak at this point, but the record does contain evidence that cable pricing has greatly exceeded the
b. Intermediate Scrutiny
Under intermediate scrutiny, LD 832 “will be sustained if ‘it furthers an important or substantial governmental interest; if the governmental interest is unrelated to the suppression of free expression; and if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.’ ” Turner I, 512 U.S. at 662 (citing United States v. O‘Brien, 391 U.S. 367, 377 (1968)).
The Plaintiffs do not dispute that Maine has an important interest in making sure that its citizens have access to cable television services at affordable rates. Rather, they contend that the State has shown no evidence that there is an absence of consumer choice, excessive pricing, or a lack of à la carte options in the marketplace. They also argue that the State has failed to establish that the à la carte mandate will solve any of the problems that the State recites because it has not shown that LD 832 will actually lead to lower costs or greater consumer choice. The Plaintiffs are correct that the State bears the burden of showing that the problems LD 832 seeks to remedy “are real, not merely conjectural, and that [LD 832] will in fact alleviate these harms in a direct and material way.” Asociación de Educación Privada de P.R., Inc. v. García-Padilla, 490 F.3d 1, 18 (1st Cir. 2007).
To establish that there is an absence of consumer choice and excessive pricing caused by bundled programming, the State points to a comment made by the Office of the Public Advocate that cable consumers have expressed frustration with bundled channels. Tr. Oral Argument at 56; see Testimony of the Office of the Public Advocate (ECF No. 69-3) (“[A] great deal of consumers experience a high level of frustration with their cable providers. They feel that they lack choices and being able to select the channels they want and not have to pay for channels they do not watch and do not want would be highly favorable.“). This evidence of consumer complaints in Maine is buttressed by the 2004 Report, which stated it is “undeniable that many Americans are frustrated with year over year increases in their pay-television bills.” 2004 Report at 3. The record also demonstrates that increases in rates for cable television services, which have significantly out-paced inflation, continued from 2013 through 2017. See Communications Marketplace Report ¶ 71. This may be sufficient to conclude that the State is likely to be able to show that containing cable costs in Maine is a real concern, but the State stumbles when it comes to demonstrating a likelihood of success on
The State references the Further Report, which concluded “that à la carte could be in consumers’ best interests.” Further Report 3. But the Further Report‘s purpose is really to tear down the conclusions of the 2004 Report by pointing out what it claims is flawed analysis and industry bias. The Further Report speaks in terms of what “could” happen, not what will happen, if à la carte programming is mandated, and it recommends further consideration of à la carte and other alternatives to bundling. The report even acknowledges that prices for some consumers could rise by up to 4% under an à la carte scheme. Id. at 4. Further, the report seems to focus on an à la carte channel scheme and does not address the à la carte programming scheme that LD 832 mandates.13 The Legislature did not undertake any further investigation, hear from expert witnesses, or commission a Maine-specific study to determine what impact LD 832 would actually have on access to cable services. The State has not accounted for the significant transactional costs resulting from upending the cable market in Maine or the likelihood that these costs will be passed onto consumers. Decl. of Rick Rioboli 4-5. Finally, there is no mechanism in the law that would stop cable operators from pricing individual channels at the same price as an entire tier. The only constraint on cable operators’ pricing would be market forces and consumer good will.
At this initial stage, I cannot conclude that the State has carried its burden of showing that LD 832 will, in fact, be likely to reduce prices and increase affordable access to cable. The State candidly conceded at oral argument that “there may well not be enough in the . . . factual record at this point for us to have met our burden.”14 Tr. Oral Argument at 56. Because I agree that there is not sufficient evidence to show that the State will likely be able to demonstrate that LD 832 will remedy the problems associated with rising cable prices, I conclude that the Plaintiffs are likely to succeed on their First Amendment claim. I note that a likelihood of success determination on a motion for preliminary injunction should “be understood only as [a] probable outcome” based on “the present state of the record.” Maine Educ. Ass‘n Benefits Trust v. Cioppa, 695 F.3d 145, 158 (1st Cir. 2012).
II. Remaining Factors
“Likelihood of success is the main bearing wall of the four-factor framework” for preliminary injunctions. Ross-Simons of Warwick, Inc. v. Baccarat, Inc., 102 F.3d 12, 16 (1st Cir. 1996). Nonetheless, the remaining factors for a preliminary injunction—whether the Plaintiffs will suffer irreparable harm, the balance of hardships, and the public interest—also weigh in the Plaintiffs’ favor. See Harnett, 731 F.3d at 9. A plaintiff who has shown a likelihood of success on the merits of a First Amendment claim has satisfied the irreparable injury component of the preliminary injunction analysis as well, given the loss of First Amendment freedoms. Sindicato Puertorriqueño de Trabajadores v. Fortuño, 699 F.3d 1, 15 (1st Cir. 2012) (citing Elrod v. Burns, 427 U.S. 347, 373 (1976)).
The balance of hardships and public interest also weigh in favor of the Plaintiffs. The affidavit of Comcast Chief Information Officer Rick Rioboli suggest that it will take significant resources for Comcast to implement an à la carte ordering system and that implementation costs will be passed on to consumers. Decl. or Rick Rioboli 4-5. Because the State has not established that LD 832 is likely to improve access to cable services or lower costs, I cannot conclude that granting the preliminary injunction will create a countervailing hardship on the State. The public interest is served by protecting First Amendment rights from likely unconstitutional infringement. See Yes for Life Political Action Comm. v. Webster, 74 F. Supp. 2d 37, 43 (D. Me. 1999).
CONCLUSION
For the reasons stated above, I DENY the Plaintiffs’ motion for preliminary injunction (ECF No. 14) on their preemption claim (Count I). I GRANT Plaintiffs’ motion for a preliminary injunction on their First Amendment claim (Count II). Although I had anticipated consolidating the preliminary injunction hearing with the trial on the merits, pursuant to
SO ORDERED.
/s/ Nancy Torresen
United States District Judge
Dated this 20th day of December, 2019.