*1 рression. In this we regard, point out that parties have indicated that this case is NEW JERSEY PAYPHONE ASSOCIA
indeed without precedent direct that TION, INC, profit a not corpora awaiting other cases are our disposition.23 organized under the laws of New argument, however, This sway does not us Jersey,
for this case does ques- not involve novel v. tions of but law rather is concerned with the application of well-settled principles of TOWN OF NEW WEST taxation to determine whether certain ex- YORK, Appellant. penditures made by corporations close No. 01-1917. deductible as ordinary necessary busi- expenses ness or taxable as constructive United States Court of Appeals, dividends. While the setting which Third Circuit. principles these have come to bear is no doubt VEBAs, with unusual C-group Argued: March 2002. policies, credits, and conversion the law July Filed: 2002. was pellucid nevertheless taxpayers that should have endeavored to verify the valid-
ity of their deductions before claiming Moreover,
them.24 they have should been
apprehensive they when examined the
scheme, for experience shows that when
something good seems too to be true that
probably Overall, is the case. we are sat- taxpayers
isfied that now must abide the
consequenсes of the Commissioner’s audit Court, sustained the Tax including
the finding of liability accuracy-related
penalties under section 6662.
IV. CONCLUSION
For reasons, the foregoing we will af-
firm the decisions of Tax Court. 23. The Court 2000-145, Tax observed that (C.C.H.) this case is a (recogniz- T.C.M. test case with the resolving result other cases ing exception impression case of first involving plans SC and NJ VEBA VEBA involving application the unclear of an parties in 19 pending other cases Code); amendment Internal Revenue before the agreed Tax Court have to be bound Comm’r, 711, 720, Hitchins 103 T.C. by the decision here. Neonatology, (1994) (first WL 711926 impression exception T.C. at 44. applies to previously issue not considered the court statutory where the language recognize We courts have overlooked clear). negligence entirely penalties But nothing in cases impres- hing- of first this case sion that involve es statutory language. interpretation unclear vague statutory See, Comm’r, e.g., Mitchell v. T.C. Memo. text. *2 Mariniello, Mariniel- (argued), R.
Joseph N.J., Lee, P.C., Mariniello, Fort lo & appellant. Donner, A.
Jeffrey (argued), Stryker I. Dill, LLP, Newark, Tams N.J., & ap- This appeal concerns the lawfulness оf pellee. an ordinance adopted on February *3 the Town of York, West New New ALITO, RENDELL, BEFORE: and (the “Town”) Jersey regulating the place- HALL,1 Judges. Circuit pay ment of telephones public in rights of way. Plaintiff-Appellee, the New Jersey HALL, Judge. Circuit (the Payphone Association “Payphone As- sociation”) is a not-for-profit organization The Town of West New appeals York whose operate members payphones in the the District grant Court’s of summary Town. The Payphone Association chal- judgment finding an ordinance of the town lenged the (the Town’s Ordinance 26/99 preempted by Section 253 of the Telecom- “Ordinance”) on a of grounds, number al- munications Act of codified leging that it violates Section 253 of the § U.S.C. 253. The ordinance permits the (the Telecommunications Act of 1996 town to grant an exclusive franchise to one “TCA”), U.S.C.'§ 253; New Jersey or pay two telephone providers to provide law; statutory and the United Statеs and telephone public service on rights way. Jersey New Constitutions. The franchise tois be pursuant awarded Citing the need to control the placement a formal auction process and is to be based pay telephones on public rights of way criteria, on several primarily the amount of in order to ensure the safe passage compensation offered to the town vehicular pedestrian traffic pro- bidder. The town denies that the ordi- mote an aesthetically pleasing environ- nance has the effect of prohibiting pay ment, the Ordinance requires prospective telephone providers from providing pay payphone operators to obtain local per- telephone service in violation of 47 U.S.C. mit for each pay telephone specifying its 253(a). § It also claims the alternative exact location. Historically, any service that it falls within thе Section safe provider could obtain a permit such sub- harbor protecting municipal regulation of ject payment of a small fee and satisfac- way from preemptive certain minimum requirements as 253(a). effect of We affirm the maintenance, location, to the specifica- ruling of the District Court. tions of payphones. their In the current Ordinance, however, The District original Court had subject Section Three speci- fies: jurisdiction matter pursuant to 28 U.S.C. § 1331. This jurisdiction Court has pursu- The Town right reserves the to award a
ant to 28 § U.S.C. 1291. Although the Contract replacement operation or appeal was not initially timely, the District [payphones] in right-of-way of Court granted an extension of time to file the Town Town owned property. pursuant 4(a)(5). to Fed.R.App.P. That If the Town exercises no extension has not appealed been and this permits other or renewals for the opera- appeal is within thе extended period time tion of [payphones] be shall issued and granted by the District Court. any previously installed [payphones] 1. Hall, Cynthia Honorable Holcomb designation. Cir- Circuit, Judge cuit for the sitting by Ninth any companies Three public right- from the without awards. be removed
shall thirty days. proposals. purchasing of-waywithin submitted testified that the three bids were agent J.A. at except compen- largely equivalent Three of Ordi- to Section Pursuant per-call offered to the Town and the sation a document entitled nance, issued the town public. to the He determined that cost Telephones Pay Public “Franchise for methods between the billing differences New York” the Town West throughout light bidding companies inadequate Notice”), (the inviting bids for “Franchise long specifications on the treatment bid J.A. at provide payphones. contracts to service created difficulties in eval- distance Franchise Notice informs 76-111. The *4 he uating Accordingly, the bids. recom- split has into the Town been bidders that rejected that all be the mended bids and with a bidding purposes for two zones in redrawn order to conduct specifications each zone. Bidders auction for separate auction anew. After initiation this between 75 and 100 the required to install suit, parties agreed each zone locations to be the to take no further payphones for Public by the Director of Safe- pending determined action of the lawful- determination the successful bid- ty in consultation with and ness the Ordinance Franchise No- provides Notice also The Franchise der. tice. compensated based the Town is be by percentage generated revenue an opin The District Court issued addition, bidders must payphones.
the granting summary judgment for the ion ability provide the securi- demonstrate Payphone and the denying Association ty per proposed telephone, deрosit of $250 summary judg Town’s cross-motion for $18,750. or at least on the basis that Section Three of ment 47 preempted by the Ordinance was U.S.C. the
The Franchise Notice also sets out § Payphone v. by evaluating Jersey Town in 253. New Town criteria used the (D.N.J. York, bids New bids. Town to evaluate based West 2001). including: on a list seven factors the It grant found the of an specifically ability the the applicant, experience preempted by exclusive franchise pay to maintain the tele- applicant the separately and found the cri selection efficiency of the service phones, the used in also awarding teria franchises willingness the appli- the provided, to be grant violated this section. In addition to telephones historically provide cant to ing summary judgment, the District Court pri- residential areas lacking under-served enjoined the en permanently Town from telephones, applicant’s history the vate forcing Sеction Three of the Ordinance Town, within the maintaining payphones Notice, including the Franchise mak and public. the of calls to the Also on cost any of an ing award exclusive franchise criteria the amount the list evaluation providing telephone service in the pay by Town compensation offered the Town based on amount of compensa the purchasing agent applicant. paid. Because District Court forthrightly Town testified affidavit preemption fully found that re compensation that he considered dispute, it declined reach solved important factor Town to be most alternative constitutional and state law evaluating J.A. at 138-139. bids. Payphone claims raised Association. Preemption of Section Three of Ordi attempt initial happened, As it Franchise for the two zones ended nance Notice auction service correspondingly provide any 253 of the TCA is the sole interstate or intrastate tele- on appeal.2 issue raised communications service.
(b) State regulatory authority
II.
Nothing in this section shall affect the
ability of a
impose,
compet-
State to
on a
Background
A.
Considerations
itively neutral basis and consistent with
Section 253
Title
of the
section,
section 254 of this
requirements
provides
United
relevant
States Code
necessary to preserve and advance uni-
part:
service, protect
versal
public safety
(a)In
welfare,
ensure the
general
quali-
continued
ty
services,
of telecommunications
regulation,
No
or
State
local statute or
safeguard
of consumers.
or
local legal require-
other State or
(c)
ment, may prohibit or have the effect
government
State and local
authori-
ability
any
prohibiting
entity
ty
fact,
111, 120,
Despite
the concurrence would
U.S.
L.Ed.2d
*5
(1965);
ground affirming the District Court in state
see also Morales v. Trans World Air
lines,
374, 383,
2031,
rather
law
than federal
on the basis of the
Inc. 504 U.S.
112 S.Ct.
jurisprudential principle
(1992) ("[l]he
that federal courts
question,
thority payphone entry into tively prohibiting or way public manage the proving market, the burden compensa- and reasonable require fair safe harbor within comes regulation providers, telecommunications from mu- defendant on the falls nondis- Section neutral competitively aon State Petition In re nicipality. basis, use of criminatory 21697, n. 26 Minnesota, F.C.C.R. nondiseriminatory aon way (1999). required is compensation basis, if the government, quite such 253 is disclosed much is clear:
publicly This a fair has created inartfully drafted (d) Preemption reason, we For confusion. amount opportunity If, notice after underbrush legal some briefly clear out deter- comment, Commission main issue. getting to before government or local a State mines that statute, any imposed or permitted has question one applying that vio- requirement legal or regulation, wheth struggled is have courts with which sectiоn, (a) (b) of this or subsection lates of action right a private er there en- preempt shall Commission preempted challenge ordinances statute, or regulation, of such forcement is court. This in federal directly section neces- the extent requirement legal by the structure confusing made sue incon- or violation sary to correct language the section sistency. from with, not clear 253(d). it is begin To (d) any state subsection (a) placement of text and preempts expressly Subpart *6 by prohibi- preemption Congress with its intended inconsistent whether law or local text, Commission opening by their Communications the Federal As indicated tion. of en “FCC”) means (c) structurally (the sav- the sole (b) to be and are subparts or, 253(a) (b), if a local and the listed clauses, Sections excepting forcing ings to effect action enforce of exists cause preemptive private from the functions state See Cablevi Inc. these subsections. (a). Boston of either Cablevision subpart of of In Boston, at 98. Comm’n, 184 F.3d 184 F.3d sion Improvement v. Public of (c) (d)’s be could time, ease, of omission Cir.1999). (1st former At same 88, 98 action right of (c) private (b) to mean that defines read between the division court, in directly to a federal regula- retained addressed body’s each boundaries sole is available jurisdiction, of FCC stead permitted with states authority, tory legislation purporting challenge local toly respect broadly with regulate thereby po way and regulate govern- issues, and local safety and other 253(c).3 This implicating Section tentially their delegated powers ments limited Sixth reached the conclusion was rights of their management states which, Circuits, pri based and Eleventh Cablevision, 12 F.C.C.R. TCI way. In re it found that history, 1997). legislative on marily 19, ¶ 102-104, (Sept. 21396, allow munici Congress intent of was the regula- a local dispute over of a the case pre against themselves to defend рalities seek- the party way, once tion travel than locally rather emption suits burden sustains ing preemption merely harbor. a safe if it is enforced reading subsec- is that tension in separately (c) or be "violated” not can 253(c). Washington D.C. to be heard before the consistent with Section Confusion Dearborn, again FCC. Detroit v. because TCG arises of inconsistencies (6th Cir.2000); 618, Bell 206 F.3d within the structure statute. Al- (c) Telecommunications, 253(b) though South Inc. Town Sections are framed Beach, clauses, 253(d) savings Palm 252 F.3d 1189-91 as speaks (11th (b) Cir.2001); Cong.Rec. see also 141 “violation” suggesting that it must (June 1995) (final impose text of S8305-02 some sort of substantive limitation 253(d) (a). § designed rights-of-way independent to leave This also raises local 253(c), issues to federal courts and allow the possibility that Section which is preempt only.) similarly FCC to “core” issues phrased, parallel contains a limi- legislative history tation. The of the TCA opinion While Eleventh Cir- gives suggestion also some Congress, reasoned, cuit in particular is well we need 253(c), enacting may in- have adopt not decide whether to it at this time tended to a separate create enforceable because resolution of this issue is be- requirement that municipal acts be “com- In ruling summary judgment, fore us. on petitively neutral and nondiseriminatory.” the District Court found that there is a 4,1995) Cong.Rec. (Aug. H8460-01 private right implied of action in Section (debate on current language which was ruling 253. 130 at 636. That adopted to allow localities retain author- challenged appeal. has not been ity long to set fees they own so were Therefore, for the of this case purpose neutral). competitively only, private assume there we is a rights-of- remedy court local split While there is a circuit on this way ordinances that preempted issue,4 the facts of present case are Supreme TCA. held that Court has again such that no there need to resolve private whether a federal statute creates a it the Third Circuit at this time. As jurisdictional claim ques- for relief is not a below, operation discussed of Section Airlines, 253(a) County tion. Northwest Inc. v. preempt is sufficient to the Ordi- Kent, Michigan, 510 U.S. it nance this case and fall does not (1994) 855, 127 L.Ed.2d (adjudicating within safe harbor. We *7 private the by plaintiff claims raised a on ruling limit our therefore to preemption assuming 253(a). certiorari while a private right of under Section action the under federal Anti-Head Tax Exclusivity
Act). B. Consequently, required we are not to private right address the of action issue Supremacy The clause the of parties. when it has not raised been United States Constitution invalidates
A
question
second
with which courts
with
con
state laws that “interfere
or are
scope
trary
have struggled
preemption
Ogden,
is the
of
to”
law.
v.
9
Gibbons
(N.D.Tex.1998).
a
The Sixth Circuit
number
district
of
The Eleventh Circuit has
(c)
(a)
courts have found that Subsection
con
only
found that subsection
contains the
separate
raising
a
tains
limitation
a cause of
Beach,
substantive limitation. Town Palmof
Detroit,
618,
action.
TCG
206
F.3d
623-
Wheat. providers.) consti- its subjects within acting on When empowered to Congress is power, tutional that protests Town nevertheless includ- ways, in several law state preempt because preempted is not Ordinance to do its intention stating by expressly ing is itself to use it wishes process auction Co., 430 U.S. Packing Rath Jones so. that Ordi- argues also It competitive. 1305, L.Ed.2d burden a create substantial nance does expressly case, (1977). In this providers other because competition on statutes, regula- or local state preempts telephones pay place compete may still prohibit that requirements tions, or other public to the property near private on market prohibiting the effect or have these both way. We find 253(a). § entry. U.S.C. com- bidding A unconvincing. arguments Court the District whether deciding In is determined where winner petition summary judgment correctly granted with monopoly profit a to share willingness on the issue Association Payphone compe- kind of clearly not the is the Town legal determina review we preemption, an Even if TCA. by the intended tition Inc., v. CBS Gritzer de novo. tions on solely awarded were franchise exclusive Cir.2002). (3d begin, as We F.3d cost of services nominal of the the basis Court, exclusive with the District did the a under such consumer, run auction Three that Section of the franchises nature sub- imperfect highly a still be rule would Franchise Notice and the of the Ordinance competition. market for actual stitute exclusivity find that create. We would case, of such an ordinance effect either would the Town that franchises of the mat- a losing entities as prohibit is still 253(a). There can violates grant cus- private for competing law from ter of single designating question be no language tomers, plain of the a violation pay provide authorized company 253(a). way in in the phones currently is which area geographical large private on telephones pay placing toAs and which companies, multiple served evidence no provides the Town property, at least 75-100 accommodating capable proposition inherently implausible for the competition reduces telephones, separate other allow would installations entry. a barrier constitutes patron- compete fully providers the Town scarcity by creation deliberate a payphone requiring use people age with directly odds case located travelling or otherwise while The District the TCA. spirit letter pay- parlance, In economic places. that, “it is well-rec noted correctly Court would, vari- property private phones *8 a sea marked the [TCA] that ognized of inconvenience as reasons such ous telephone of the regulation in the change lack of or their phones travelling to such rejected the Congress in which industry way, imper- of rights be visibility from the were monopolies that premise long-held in the actually phones fect substitutes universal ser reliable necessary to competi- availability of way. of rights (quoting at Ca F.Supp.2d 636 130 vice.” not save thus does locations tion from such 97). Sec blevision, Because F.3d of prohibitions from the the Ordinance act to would of Ordinance Three 253(a). it monopolies, just recreate Three claims that Section (di Town also § 47 U.S.C. also preempted. by Section is protected the Ordinance of pro- rules to to establish FCC recting the 253(c). It claims that the Ordinance is only tenuously linked to rights-of-way within the safe harbor purpose because its management, see City Qwest Auburn v. of is to orderly ensure the flow of traffic Corp., (9th 260 F.3d 1178-79 Cir. unimpeded by the placement 2001), (financial random reporting requirements public payphones in unsafe locations as regulations on ownership related to well prevent as to such telephones from fitness and stability of service providers becoming points the focal of various crimi- struck down as “more than necessary” to nal activities and ensure that they are manage rights way and on the basis that adequately maintained. It thus claims permitting them on such a tenuous connec that it properly an exercise of its re- tion would leave no limiting principle on power served to manage rights 253(c)); § Plains, White way. F.Supp.2d аt 1309 (reporting and inspec tion requirements are outside the scope While we are extremely skeptical about “reasonable” regulations of the rights of the proposition that managing pat traffic way), or that merely act as conditions on terns requires and crime an fran exclusive access to way as a “hook” to chise, we deny do not that there may be a achieve other regulatory purposes, see rational relationship between the two. BellSouth Telecommunications v. City The purchasing agent’s candid admission Coral Springs, that the compensation amount of offered to (S.D.Fla.1999) part rev’d in on other the Town was the primary criterion in grounds (excluding reporting require selecting the winning bid certainly sug ments, financial, legal technical and qual gests that preserving the safety of the ifications); Town Beach, Palm rights way was not the real or Of primary F.Supp.2d at we will assume that the purpоse Ordinance. It has obvious qualifies Ordinance “manage[ment of] use aas tool for revenue generation and rights way” for the purposes regulation of the telecommunications ser 253(c). of Section vices provided public. However, to the it is at plausible least the Ordinance However, this does not end the inquiry could ease the burden of policing the scope as the of the Section safe rights of way by limiting the number of harbor is limited use the terms providers of payphones that the Town “competitively neutral” and “nondiscrimi- required would be to monitor to one. natory.” Un The use of these terms der resources, conditions of limited such a section is immediately obvious but reduction in the cost of monitoring could poses rather something an interpretive possibly have a material bearing challenge of its own. The FCC reads Town’s ability police placement and them as straightforward limits on both the maintenance of Thus, payphones.5 al power to manage the ways re- though other courts have been willing to served for governments local in general strike down legal local requirements that and their to impose freedom fees for use 5. We to note hasten presented the facts problem tail the through traditional methods by the Town do not demonstrate inability had met with a substantial measure of suc- police *9 rights the way of under current (J.A. 132-136, cess. at Joseph certification of Indeed, conditions. provided an affidavit Nevertheless, Pelligio). the Ordinance ra- is the Deputy Director of police the Town's tionally management to public related of the force certified that the Town had previously rights way of in that may it reduce the cost of proliferation suffered from a of unlicensed such policing. payphones, but indicated that efforts cur- power the limiting both as phrase vant Tele re In Classic See way. of the and to ¶ inway general rights of 39; the manage TCI Inc., 11 F.C.C.R.
phone, a ¶ Although such 108; compensation. 21,396, In demand Cablevision, 12 F.C.C.R. is, unfortunately, awkward, it is Minnesota, reading 14 F.C.C.R. re State of the available than more so significantly that have not ¶ of courts majority 61. 253(c) sim- is the because followed have also alternatives issue on this ruled rather, is, It written drafted. comment. well ply not without FCC of lead the of 593; problems TCG as to make Dallas, way a such City of read- Dearborn, F.Supp. of the regardless unavoidable syntax Detroit of F.3d (E.D.Mich.1997) ing. 836, 840-41 aff'd Circuit, Cir.2000). First (6th following immediately example, For rea reading, this however, questioned has above, cited already language syntax, of a matter as soning that public of 253(c) “for use phrase uses the and neutral competitively a “on phrase ba- nondiscriminatory on rights way appears it as nondiscriminatory basis” of that reading phrase A natural sis.” 253(c) only modi can of Section middle that telecom- that it means suggest might reason fair and require “to phrase fy the public must use providers munications immediately preceding compensation” able man- non-discriminatory in a way rights of manage the “to and not the text it in iton However, reading a ner. —odd Boston 184 way.” Cablevision context, be- nonsensical own terms —is reading, itsOn at 100-101. F.3d har- in a safe is located phrase cause rights-of-way” use “for phrase and for state powers preserves that bor and neutral competitively a “on following with does deal and governments local matter as a must nondiscriminatory basis” themselves. providers of service regulation thereby “compensation,” modify logic term “nondiscrimi- use This second neutral competitively a “on trapping signify be meant may therefore natory” on the same nondiscriminatory basis” per- requirements compensation that In other as level itself. grammatical management rights-of-way general haps that the reasоns words, First Circuit so, the But if nondiscriminatory. be are to making by text followed is phrase relevant partially duplicative is at least term only that clause a subordinate part it previous phrase. in the used term same compensa a condition sense makes to choose between forced are thus We requirements.6 “nondiscriminato- the term uses of illogical text of Section of the appraisal own Our ry.” the function is that in isolation read out the intention to ferret trying nondis- neutral competitively “on it conclude we therefore Congress, While ambiguous. basis” criminatory much too place proper not be would is most Circuit the First reading of the niceties on the weight interpretive it syntax which with consistent ineon- 253(c), given syntax rele- read the possible it also points, nondiscriminatoiy issue, competitively neutral Nevertheless, deciding the without whole, 253(c) as a apply to Section an examination noted that basis" аlso Circuit First way and rights of statutory management some- section can both of a since the context linguisti- equally “that to decide could interfere compensation courts schemes lead times interpretation best reflects competition open implausible goal of cally the TCA's with It rea- Id. at 101. intent.” legislature's providers. Id. among telecommunication "on a intended Congress likely soned *10 sistencies the section aas whole. The unrelated to the competition to provide most that we can safely conclude looking telecommunications services to public at the text of this section in isolation is and in a manner consistent with that com- that there multiple readings possible, petition. several of require which rights-of-way Further evidence that the contrary management to be at least nondiscrimina- could not have been Congress’ intent is tory and require others which it to be 253(b). found in Section seсtion, This both nondiscriminatory and competitively which is largely parallel to 253(c), neutral. includes general requirement However, in for looking the mean regulation state be “on a competitively ing statutory language, we must basis,” neutral indicating that Congress look to the statutory context in which that understood quite well that a broader language is and the used broader context carve-out of state authority permit would of the statute as a whole as well as the states to use the areas in which their language itself. See Estate Cowart v. regulatory authority preserved was to un- Co., Nicklos Drilling 469, 477, 505 U.S. dermine competitive framework estab- 112 S.Ct. (1992); L.Ed.2d lished by the TCA as a whole. In this Bronson, McCarthy v. 136, 139, 500 U.S. context, it would make no sense regula- (1991); L.Ed.2d 194 tion of the rights ways, access to which Ventures,
Rosenberg v. XM 274 F.3d critical the ability of service providers (3d. Cir.2001). 141-42 instance, In this potential customers, reach to be ex- the statutory framework indicates that empted from requirement that is other- Congress permissible intended manage wise generally applied to state protect- law ment of way to be limited to ing public safety and welfare. Section those local statutes or regulations that are 253(b) Congress demonstrates balance nondiscriminatory and competitively neu chose necessary to effectuate its intent 253(c) tral. A reading of Section placing to enhance competition and eliminate local no limit management public rights of monopolies while leaving room for reason- way compensation outside of requirements able regulation of of particular issues state would demonstrably be at odds with the and local concern. Congressional expressed intent in Section 253(a) Thus, in competition. looking foster the statutory We can find no language context, reasonable basis in light of we find the over that the more arching logical rеading 253(c) scheme of requires TCA conclude Congress management intended to reserve way be states and power competitively localities the neutral and discrimi nondiscriminato against nate ry. Nevertheless, certain 253(c) since telecommunications providers service facially regulating rights ambiguous, we also look to the way while generally legislative otherwise history. preempting While most of the Con local laws burdening entry. gressional market Rath discussion of Section 253 was on er, a more reading subjects reasonable of the sec tangential to those of concern here, context is that Congress e.g., simply Cong.Rec. see H8460-01 preserve intended to power 4, 1995) (statements local to regu (August by Congress late the rights of way for purposes Stupak Barton),7 men such commen- 7. Section began Stupak- (identical life as the language tatives was into inserted Barton Represen- amendment in the House the Senate version of the TCA in committee *11 man- to government a local authority of this issue touching on available is tary as to ac- way of rights or public age the the example, For reading. this support compensation reasonable fair and quire recon- committee conference the of report nondis- neutral and competitively on a of versions and Senate House ciling the criminatory basis. a local of authority “the *12 nondiscriminatory” requirement petitors may tral and who not have similar re- management to the applies sources. compensation. well
way as Because Section Three of the Ordinance deciding up sets an whether Ordinance exclusive franchise that is inher- ently we must protected discriminatory under Section and creates competi- competitively inequalities, whether it is tive it is protected by thus determine not 253(c). nondiscriminatory. find neutral and We facially The that it is not. Ordinance is
discriminatory permits in that it the Town C. Selection Criteria provider one service allowed to choose In addition to the creation of an exclu- provide pay telephone service itself, sive franchise the District Court also to the exclusion of all others based evaluated the selection in specified criteria by determined it rather than the criteria the Franchise for consistency Notice their course, make may, market. The Town However, with Section 253. such evalu- ap distinctions that result in de facto case, necessary ation in is not this we since plication of different rules to different ser already have attempt found that the set providers long vice so as the distinctions up an exclusive franchise preempt- is itself can, It on valid considerations. based 253(a) by ed not by saved for example, policies for have different 253(c). We therefоre decline to wishing up companies dig the streets separately rule on whether the use of such conduit, lay order to new from those who note, criteria would be permissible. We do convert do not existing wish to conduit and however, that several of the criteria which dig need cannot up the streets. What it apply rejected the Town would have been a do is what it has tried to do: create set in connection with non-exclusive franchise purpose of rules the is to select which jurisdictions. schemes considered other company preferential one over others for Auburn, 1178; City at City F.3d treatment. Plains, 91-93; White at F.Supp.2d attempt to create zones of exclusive Dallas, 592-94; City F.Supp.2d at also fails the of competitive franchise test Springs, Coral at neutrality. required accord- Bidders are ing to Section Three and the Franchise compete Notice to service two zones CONCLUSION a requiring payрhones. minimum of 75-100 reasons, For the foregoing District integral part requirement As an of that Granting As- Payphone Court’s Order they ability must demonstrate the to ser- Summary Motion for Judgment sociation’s required
vice such zones
are also
denying
the Town’s Cross-Motion
pay
deposit
pay-
a
tied to the number of
Summary Judgment is AFFIRMED.
phones they will install. The Ordinance
with the re-
larger companies
thus favors
ALITO,
Judge,
concurring
Circuit
sources
service the zones as defined
judgment.
cannot,
Town
Town. The
consistent
requirement
competitively
challenge
with the
to be
This
under fed-
case involves
neutral,
companies
force
into a
eral and state law to a local ordinance
competition
public rights-of-way
larger
regulating
terms
which favor
telecom-
use
ma-
companies
payphone
providers.
munications
with the
service
resources
law,
com-
jority
to meet
demands over smaller
its decision on
bases
Telecom
Federаl
court held
trict
be-
is invalid
the ordinance
holding that
local ordi
preempted
Act
munications
Tele-
Federal
by the
preempted
it is
cause
county-
the use
regulated
nance
I
of 1996. While
Act'
communications
by telecommunica
rights-of-way
owned
in question
ordinance
agree that
doing business
companies
tions
for dif-
conclusion
invalid,
I arrive
address
court did
The district
county.
reasons.
ferent
appeal,
raised. On
issues
the state-law
*13
that,
possi
when
established
well
It is
court
the district
held that
Circuit
Fourth
base
generally
should
courts
ble, federal
by decid
error
reversible
had committed
rather
non-constitutional
decisions
their
preemp
question
constitutional
ing the
See Harmon
grounds.
constitutional
than
ques
the state-law
considering
tion before
433,
579, 581, 78 S.Ct.
Brucker, 355 U.S.
v.
have been
might
the case
upon which
tions
(“In
our
(1958)
keeping with
503
2 L.Ed.2d
Inc.
Maryland,
Bell Atlantic
See
decided.
ques
deciding constitutional
avoid
duty to
212
Maryland,
County,
George’s
v. Prinсe
proper
essential
unless
presented
tions
Cir.2000).
Cir
(4th
Fourth
863
F.3d
peti
case,
first
we look
of a
disposition
(1)
should
courts
as follows:
cuit reasoned
re
claim that
nonconstitutional
tioners’
un
questions
deciding
avoid
constitutional
grant
powers
in excess of
spondent acted
of'
disposition
to the
they are essential
less
v.
Ashwander
Congress.”);
him
ed
a
(2)
federal
case;
determining whether
a
466, 80
288, 347,
S.Ct.
56
TVA, 297 U.S.
con
statute
a
a state
preempts
statute
J.,
(Brandéis,
concurring)
(1936)
688
L.Ed.
Su
implicating the
question
stitutional
upon constitu
pass
(“The
will not
Court
(3)
Clause;
disposition
premacy
present
although properly
question
tional
by Bell Atlantic
raised
questions
state-law
present
record,
is also
if there
ed
(4)
case;
there
disposed of
could have
case
which the
upon
ground
other
some
revers
court committed
fore, the district
of.”);
v.
States
United
disposed
may be
constitutional
deciding the
error
ible
(3d Cir.
812,
n. 7
815
F.3d
167
Serafini,
considering
before
preеmption
question
fed
calls
1999)
practice
(“Longstanding
at
id.
865-66.
questions.
the state-law
all non-constitution
explore
judges
eral
this reason
reiterated
The Fourth Circuit
addressing
before
of decision
grounds
al
County
Inc. v.
Group,
MediaOne
ing in
United
(quoting
ones.”
(4th
constitutional
356
Cir.
Henrico,
F.3d
Virginia, 257
(7th
649,
Bloom,
F.3d
653
149
v.
States
took
2001),
Circuit
Eleventh
and the
Indeed, reaching
Cir.1998))).
constitution
Telecommu
in BellSouth
approach
similar
Beach,
of non-constitutional
advance
issues
Palm
nications,
al
v. Town
Inc.
See, e.g.,
Cir.2001).
error.
may
(11th
be reversible
ones
F.3d 1169
252
Athletic
High School
v. Indiana
Crane
pre-
opinion addresses
majority
(7th
1315, 1319
Cir.
Association, 975 F.2d
reach
and does
fust
question
emption
1992)
v. Oakland
(citing Schmidt
Unified
The District
arguments.
the state-law
595,
594,
District,
102
457 U.S.
School
Circuit
the Fourth
acknowledged
Court
(1982)); WJW-
2612, L.Ed.2d 245
73
S.Ct.
but
Atlantic-Maryland,
in Bell
decision
Cleveland, 878 F.2d
TV,
Inc. v.
Jersey
New
approach.
disagreed with
Hudson,
Cir.1989);
(6th
v.
Beeson
n. 4
910
Inc. v. Town
Payphone Association
Cir.1980).
(8th
622, 627
F.2d
York,
F.Supp.2d
New
West
reasoned
(D.N.J.2001).
Court
The District
Inc.
Atlantic-Maryland,
Bell
to address
appropriate
it was
Maryland,
County,
George’s
Prince
preemption
because
first
issue
very
(D.Md.1999),
preemption
a case
only in
indirect
issue
us,
is a constitutional
the dis-
before
now
to the one
similar
authority
sense that
for preemption
in constitutional interpretation or declaring
rests on
Supremacy
Clause. See id. at
rights.
constitutional
634-35.
Nevertheless,
the limitation on Article
III
adjudication
courts to
of actual cases or
clear, however,
It is
preemption
ais
controversies counsels us to dispose of
constitutional issue. See Chicago & North
cases on the
possible
narrowest
ground,
Western Transportation
v. Kalo
Co.
Brick
which in this case is the
ground.
state-law
Co.,
311, 317,
& Tile
450 U.S.
Indeed,
this seems to be the basis for
(1981) (“[Determin
is “within N. J. Irvington, Town
Gilbert (1956) (holding that 114, 117 120 A.2d revenue-raising general lacks
municipality fees license may it collect but
power, lim reasonable within at least may,
“which costs”). This regulatory
its, exceed however, case, in this claim a plausible
not tied in the Ordinance the fees
because generated revenue
explicitly is, That provider. service
payphone proportion earn will
municipality can therefore, scheme the fee
profits, at to be an considered honestly be expenses. regulatory defray
tempt in violation
Thus, Ordinance 54:30-124(a). §
N.J.Stat judgment, concur in I
Accordingly, rath- law in state grounded for reasons
but *15 federal law. than
er America, STATES
UNITED WILLIAMS, Appellant. P.
Shawn
No. 01-3351. Appeals, Court States
United Circuit.
Third 14, 2002.
Argued: June July
Filed notes the TCA rights-of- and nondis- manage neutral “Competitively government-to competi- final- nondiscriminatory Then we said criminatory and basis.” a way in a do it on places. indeed, they if do not several ly, manner” tively neutral (Febru- *178, *179, *180 or 104-230, neutral nondiscrimina- competitively S.Rep. 1996). an come basis, the FCC to During floor debate we want 1, tory ary Feinstein by injunction. Senator brought there in amendment of Section version prior to eliminate 12, (June S8134-01, *S8174 Cong.Ree. to authority 253(d) the FCC giving 1995). one of the authors Similarly, regula- rights-of-way municipal (cid:127)preempt 253(c) it “does not let that noted histo- the described tions, Hollings Senator entry of prohibit city governments the follows: ry of section as the providers service telecommunications the the removal is
Notes
[253] to providing service through or pass exactly the that and entry, H460- Cong.Rec. barriers community.” 141 their we are 1995) (statement Congress.... What 4, the intent of (August *8460 now, games the Barton). let say, those Finally, to do trying Congressman the States want we do not and of the House begin, on the floor statements having or prohibiting on the issue and the local folks that touched Representatives ability of the prohibiting Report any effect on the during debate Conference intra- or un to enter interstate reflected any entity accompany the TCA also services. to be municipalities were derstanding telecommunications state that, nec- competi the States and nondiscriminatory provided we limited When management. ... have way said we tively rights came and essarily neutral *H1150, safety H1145, *H1173 over 142 Cong.Rec. responsibilities (statements 1996) of Con (February welfare.... Pelo Congresswoman Goss said, gressman ... we So about that? what So si). in this “Nothing well, point: right ability of State cursory, shall this evidence section affect Though somewhat neutral ba- reading of competitively on a impose supports intent legislative there.... key words adopted are the FCC sis”—those with In combination jurisdictions. they said other ... and mayors came provid- the context history, legislative we have way and our we have parts of Section ed other must con- every mayor to control—and as a whole the statute then we the structure way. rights of So trol neu- “competitively us that persuades affect the Nothing shall in there: wrote rights of users of the Hutchison). or other l'esources was local amendment Senator (August Cong.Rec. H8427 way. Representative Dan Schae- See replace written 1995). accompany have would "parity provision" which comments fer's The authors' upon a tele any imposed fees required were their amendment ing the introduction pub provider for use gov providing communications local concerned with primarily have been way would have to lic charges flexibility vary ernments with to which regardless of the exactly equal extent way. rights of the use based on upon impose any particular provider would