CROWN CASTLE FIBER, L.L.C. v. CITY OF PASADENA, TEXAS
No. 22-20454
United States Court of Appeals for the Fifth Circuit
August 4, 2023
Jerry E. SMITH, Circuit Judge
FILED August 4, 2023 Lyle W. Cayce Clerk
Appeal from the United States District Court for the Southern District of Texas USDC No. 4:20-CV-3369
Before SMITH, Higginson, and WILLETT, Circuit Judges.
Jerry E. SMITH, Circuit Judge:
This case is part of the battle between telecommunications providers that are attempting to expand next-generation wireless services (commonly called 5G) and municipalities that are resisting that expansion. Although the usual fights over installation of new technology involved local governments’ imposing hefty fees,1 the City of Pasadena used another method: aesthetic-design standards incorporating spacing and undergrounding requirements.
Congress and the Federal Communications Commission (“FCC“) anticipated those strategies and previously had passed the Federal Telecommunications Act (“FTA“) and responsive regulations. As a result, the district court decided in favor of Crown Castle, primarily basing its decision on the expansive language of the FTA and an FCC ruling interpreting the Act in light of 5G technology and associated challenges. The court determined that the City of Pasadena‘s requirements that functionally blocked the build-out of Crown Castle‘s infrastructure were preempted by the FTA. It entered summary judgment for Crown Castle and imposed a permanent injunction prohibiting the city‘s use of its Design Manual.
We agree with the district court. The FTA preempts the city‘s spaсing and undergrounding requirements, and the city forfeited its arguments relating to the safe-harbor provision in the FTA. Nor did the district court abuse its discretion in ordering a permanent injunction. We affirm.
I.
Telecommunications providers are expanding 5G networks throughout the country. But 5G requires higher radio frequencies than did previous-generation networks, thereby requiring telecommunications and mobile service providers to install new equipment and infrastructure. Previous networks used tall towers spaced far apart to provide service, as the lower-frequency waves they used could travel long distances and through objects.
In contrast, the higher radio frequencies used for 5G communications
Crown Castle entered into a contract with T-Mobile whereby Crown Castle agreed to provide T-Mobile with a small cell, distributed antenna systems (“DAS“) network in the Houston market, which includes the City of Pasadena. Crown Castle specifically offers tеlecommunications services by providing network “nodes” and “fiber.” More precisely, Crown Castle uses its infrastructure to transport its customer‘s (here, T-Mobile‘s) voice and data signals through these nodes and fiber networks, allowing T-Mobile (or any other wireless service provider it contracts with) to service a particular area with 5G. To build out a small cell network, Crown Castle must install the physical infrastructure, and the company alleged that it must have access to public rights-of-way to accomplish that task, which requires a permit.
The twist is that the city has a small cell ordinance and a Design Manual for the Installation of Network Nodes and Node Support Poles (the “Manual“). The Manual was adoрted in 2017, purportedly to comply with state law. It requires that new support poles for a network must be spaced at least 300 feet from existing utility poles or other node support poles.3
A Network Provider is prohibited from installing above ground on an existing pole a Network Node and related equipment in a public right of way in a residential area. . . . [A]ll the equipment is required to be installed underground for the safety of the residents and the aesthetics of the area.4
Almost all equipment associated with a network node must be stored underground in residential areas.
In 2017, Crown Castle and T-Mobile identifiеd 100 locations in the city‘s public rights-of-way where Crown Castle wanted to build new utility poles (otherwise known as “nodes“). Of those, 33 were in residential neighborhoods. After discussions with the city,5 Crown Castle applied for right-of-way permits for the 67 non-residential locations. Crown Castle divided the applications into 3 batches per the city‘s request. In June 2019, for the first batch, the city rejected 16 of Crown Castle‘s first 22 applications because they violated the spacing requirement. Crown Castle reviewed its remaining proposed locations and determined that they, too, would violate the spacing requirement.
The parties disagree about whether Crown Castle and T-Mobile explored alternatives, such as placing the new nodes on existing infrastructure. The city maintains that Crown Castle did not attempt to identify new
In September 2020, Crown Castle sued for declаratory and injunctive relief, alleging that the minimum spacing restriction violated, and was thus preempted by, both
After the district court denied the city‘s motion to dismiss, the city never filed an answer to the complaint. Even after the city had updated its Manual in 2021 to include the undergrounding requirement, and Crown Castle amended its complaint to allege that that requirement was also preempted, the city still did not answer the complaint. Only after nine months had passed since the deadline to file an answer did the city move for leave to file an answer, averring that the delay resulted from an “oversight” and “inadvertent mistake” by its counsel. The district court refused to accept that explanation as sufficient, denied thе city‘s motion, and decided that the city had forfeited8 affirmative defenses.
On the merits, the district court ruled that its analysis of whether densification effects were protected by
The district court also rejected the city‘s argument that
II.
We review issues of Article III standing de novo. Contender Farms, L.L.P. v. U.S. Dep‘t of Agric., 779 F.3d 258, 264 (5th Cir. 2015). “[F]ederal courts are under an indeрendent obligation to examine their own jurisdiction . . . .” FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231 (1990). The district court granted summary judgment on the basis of federal preemption, a question of law reviewed de novo. Friberg v. Kan. City S. Ry. Co., 267 F.3d 439, 442 (5th Cir. 2001).
We review a summary judgment de novo as well. Norman v. Apache Corp., 19 F.3d 1017, 1021 (5th Cir. 1994). A party is entitled to summary judgment when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
This court reviews a permanent injunction for abuse of discretion. Thomas v. Hughes, 27 F.4th 995, 1011 (5th Cir. 2022) (citing ICEE Distribs., Inc. v. J&J Snack Foods Corp., 325 F.3d 586, 594 (5th Cir. 2003)). “An abuse of discretion occurs where the trial court (1) relies on clearly erroneous factual findings . . . [,] (2) relies on erroneous conclusions of law . . . , or (3) misapplies thе factual or legal conclusions when fashioning its injunctive relief.” Id. (alterations and omissions in original) (quoting Peaches Ent. Corp. v. Ent. Repertoire Assocs., Inc., 62 F.3d 690, 693 (5th Cir. 1995)).
III.
Crown Castle‘s claims are justiciable. Because its preemption claim presents a federal question, that establishes jurisdiction. Although the city‘s theory that
A.
The city spends most of its briefing alleging that Crown Castle‘s suit is non-justiciable because
Congress enacted the FTA to “reduc[e]... the impediments imposed by local governments upon the installation of facilities for wireless communications.” City of Rancho Palos Verdes v. Abrams, 544 U.S. 113, 115 (2005). To that end,
Still, as the city notes,
Nevertheless, the city‘s reliance on Southwestern Bell is misplaced. Even though we acknowledged that the FCC is the primary caretaker and enforcer of the FTA, the actual holding was more constrained than the city believes. “[B]ecause the FTA does not unambiguously establish a private enforceable right, and, in the alternative, because . . .
But Crown Castle is not seeking a legal remedy through
It is worth discussing Southwestern Bell further. There, AT&T built various facilities in the public rights-of-way in Houston, which then enacted an ordinance requiring the owners of facilities located in the public rights-of-way to bear the costs of relocating their equipment if the city carried out a public works project in the same location. The ordinance was not targeted at telecommuniсations providers but required any facility located in a public right-of-way to be moved at the owner‘s expense. AT&T spent $420,000 relocating equipment and sued to recover the relocation costs. The company asserted a claim under the FTA through
Southwestern Bell first analyzed whether the FTA creates a private
On that note, the panel analyzed AT&T‘s federal preemption claim separately and stated that a “party may bring a claim under the Supremacy Clause that a local enactment is preempted even if the federal law at issue does not create a private right of action.” Id. at 262 (quoting Qwest Corp. v. City of Santa Fe, 380 F.3d 1258, 1266 (10th Cir. 2004)). In Southwestern Bell, AT&T‘s preemption-based arguments failed because of inadequate pleading and the inability to show that the ordinance was not “competitively neutral and nondiscriminatory.” See id. at 262–64. Houston‘s ordinance, therefore, was sheltered by the safe harbor provision of
B.
The city maintains that Crown Castle is not a telecommunications provider and is not subject to the protections of
The district court noted that “providers of ‘telecommunications service’ are equivalent to ‘common carriers,’ meaning . . . provider[s] who ‘hold[] [themselves] out indiscriminately.‘”16 Applying that definition, the court reasoned that bеcause “Crown Castle‘s services enable common carriers, like T-Mobile in this case, to provide telecommunications services to the general public, . . . Crown Castle‘s services are available to ‘classes of users as to be effectively available directly to the public.‘” We see no error.17
It is evident that Crown Castle sells its services to the public by establishing the infrastructure to enable T-Mobile to provide wireless service and to transmit T-Mobile‘s voice and data signals across its network. T-Mobile is undoubtedly a common carrier, and Crown Castle, through its network and infrastructure contract, fits neatly within the protective umbrella of
The city‘s main cited case suggesting otherwise is not applicable. The city points to Virgin Islands Telephone Corp. v. FCC, 198 F.3d 921, 930 (D.C. Cir. 1999), to urge that Crown Castle is a private network operator. That contention is inaccurate. In Virgin Islands, the D.C. Circuit found that the plaintiff was not a common carrier because it made the “bulk capacity in its system” available only to a “significantly restricted class of users,” preventing the public from being “able to make use of the cable as a practical matter.” Id. at 924–30. No such fact has ever been alleged here. Crown Castle‘s services, through T-Mobile, are available to anyone who wishes to pay. The company is a telecommunications provider under the FTA.
C.
Finally, the city asserts that Crown Castle lacks Article III standing because its claims are not ripe. We review two factors to determine ripeness: “the fitness of the issues for judicial decision” and “the hardship to the
The city avers the case is not fit for consideration: The court should wait to evaluate the issues at play because Crown Castle has not sought a permit under the city‘s new undergrounding requirement and has submitted only about a third of the planned applications, of which the city approved a few. Moreover, Crown Castle did not submit applications for the other sites. Instead, it undertook its own review and “simply decided that all 45 proposed locations to be submitted would violate the Manual‘s 300-foot spacing requirement.” The city also takes umbrage that Crown Castle never requested a variance for the denied applications. The city consequently has not taken a “final, definitive position” about the permits, and the claim is not ripe. For similar reasons, claims based on the other unsubmitted applications are not ripe either.
We go back to first principles to decide ripeness. Crown Castle‘s claims turn on a pure question of law: Is the Manual preempted by
The city has no persuasive counter-argument. The caselaw it presents primarily invokes the ripeness standard involved in takings cases.19 And we do not look to its presented ripeness test outside a takings claim. See Monk v. Huston, 340 F.3d 279, 282 (5th Cir. 2003). Without that test, the city merely states that Crown Castle was required to ask for a variance for rejected petitions, submit petitions for every other nodе despite the poor success rate, and change the design of its nodes to comply with the city‘s requirements. Those theories are divorced from caselaw and resemble exhaustion requirements more than ripeness requirements. As discussed above, Crown Castle met the requirements for ripeness by showing that the case is fit for judicial resolution and that there is ongoing harm. Nothing more is required. Crown Castle‘s claims are ripe.
IV.
Next, the merits. The city failed to challenge the merits adequately in its opening brief and did not correctly raise
A.
Tо begin, the district court clearly stated that, per the Hobbs Act,20 its analysis was bound by the FCC‘s Small Cell Order. In that order, the FCC stated that a local legal requirement constitutes an effective prohibition on the ability of an entity to provide telecommunications service where the legal requirement “materially inhibits” the “critical deployments of Small Wireless Facilities and [the] nation‘s drive to 5G. Small Cell Order, 33 FCC Rcd. at 9102-03. Per the order, a spacing requirement can create a material inhibition of wireless service in violation of
Additionally, the FCC Order indicates that spacing requirements can be unreasonable if they effectively prohibit the construction of nodes thrоugh discriminatory application.21 The FCC Order discusses similar undergrounding requirements, noting that “a requirement that all wireless facilities be deployed underground would amount to an effective prohibition given the propagation characteristics of wireless signals.” Id. at 9133. The court
Yet, on appeal in its opening brief, the city does not mention the Hobbs Act or the FCC Order once. No attempt is made to contest the notion that the district court was not bound by the ruling of the FCC, or even if it was, that the district court erred in its application of the FCC‘s ruling.
Although the city attacks the reasoning of the district court‘s approach indicating that
Parties forfeit contentions by inadequately briefing them on appeal. Rollins v. Home Depot USA, 8 F.4th 393, 397 (5th Cir. 2021); see also
In its reply brief, the city finally mentions that the district court was “bound by the FCC‘s prior ruling” but that we are not entitled to give the Order Chevron deference22 because
B.
Similarly, the district court did not err in deciding that the city‘s failure to answer Crown Castle‘s complaint indicated that it forfeited all affirmative defenses.
Notwithstanding the formal procedures, there is “play in the joints,” and “technical failure to comply precisely with
The city avers that it first raised the
Furthermore, as the district court noted, failure to answer the operative comрlaint is not excusable. A failure timely to answer or raise an affirma-
C.
Regardless, even reviewing the merits of the city‘s arguments, it still loses. Although one might challenge the constitutional validity of the Hobbs Act,23 the district court was correct to follow the FCC‘s order controlling the result. Furthermore, no party challenges the constitutionality of the Hobbs Act. As a result, there is no error in the district court‘s application of the FCC‘s Order.24 The district court correctly determined that the city‘s regulations “effectively prohibit[] Crown Castle from providing telecommunications services” and are preempted under
The city‘s primary claim against preemption is that
The city maintains that T-Mobile already provides 5G and 4G/LTE service through Pasadena, and its rejected nodes would merely “augment” the existing service. That reading is too limited, given the expansive “any” mentioned in the statute. Section 253(a) broadly protects the ability of “any” entity to provide “аny” telecommunications service.25
Furthermore, the city‘s favored reading flies in the face of common sense: Just because a provider can provide some limited level of service does not mean that it cannot improve that level, expand its capacity, or otherwise offer an upgraded or additional form of telecommunications service. All those boons seem to fall within the scope of the statute‘s text.
The same is true of the undergrounding requirement. The district court accepted Crown Castle‘s contention that requiring the burying of all nodes underground in residential areas would essentially destroy their efficacy. Per the FCC Order, a “requirement that all wireless facilities be deployed underground would amount to an effective prohibition.” Small Cell Order, 33 FCC Rcd. at 9133. The district court found that the restrictions on the construction of nodes were unreasonable and made it technically infeasible for Crown Castle to provide a telecommunications service. The city provides no persuasive evidence that the district court‘s reasoning is incorrect. Under the current regulations, no party disagrees that Crown Castle
Nor is the
The city barely offers a response, merely stating that it has almost unlimited authority to manage the public rights-of-way. For example, the city states, “[t]he City‘s authority to ‘manage the public rights-of-way’ encompasses its right to deny Crown Castle‘s applications based upon any applicable requirement contained in the City‘s design manual, including the City‘s minimum spacing and undergrounding requirements.”
That position does not grapple, however, with the district court‘s finding that the city‘s right was limited by the discriminatory targeting of the Manual on small cell nodes. And there is no plausible counterargument: As the court found, the regulations affect only small cell nodes that would permit T-Mobile to offer extensive 5G service in Pasadena. The district court was correct.
V.
Finally, the district court did not abuse its discretion in entering a permanent injunction. As the city correctly notes, a party seeking a permanent injunction must establish (1) actual success on the merits; (2) that it is likely to suffer irreparable harm in the absence of injunctive relief; (3) that the balance of equities tips in that party‘s favor; and (4) that an injunction is in the public interest. See Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20, 32 (2008).
All those factors weigh in Crown Castle‘s favor. The above analysis
Moreover, we review the district court‘s determinations on these factors for abuse of discretion. See Thomas, 27 F.4th at 1011. That is a demanding standard that the city does not satisfy.
The judgment, including the permanent injunction, is AFFIRMED.
Notes
New node support poles shall be spaced apart from existing utility poles or Node Support poles at the same distаnce as the spacing between utility poles in the immediate proximity, but no less than at a minimum 300 feet from a utility pole or another Node Support Pole to minimize the hazard of poles adjacent to road ways and to minimize
