Satellite Cable Services, Inc. v. Northern Electric Cooperative, Inc.Satellite Cable Services, Inc. v. Northern Electric Cooperative, Inc.
- Reporters:
- , , ,
- Before:
- Konenkamp
[¶ 1.] After the circuit court enjoined an electric cooperative and its subsidiary from offering cable television service in violation of a statute, the Legislature amended the law to remove the prohibition. We therefore set aside the injunction as no longer sustainable under the amended statute, but remand the case for trial on the issue of damages incurred during the time the cooperative violated the former statute by competing in a municipality with an operating cable television service. Affirmed in part and reversed in part.
Facts
[¶2.] Northern Electric Cooperative, Inc., organized under SDCL ch 47-21, with its principal office in Bath, South Dakota, supplies electricity to rural communities in the northeastern part of the state. Northern Electric belongs to another cooperative it created, Northern Rural Cable TV, Inc., formed to bring television signals to rural areas and small towns. Northern Cable initially furnished wireless subscription service to several Pierpont, South Dakota residents through a multichannel, multipoint distribution system (MMDS). MMDS delivers programming over microwave channels beamed to subscribers who have special antennas on or near their homes.
See
[¶ 3.] In April 1994, Northern Cable began converting to a community antenna television system (CATV), offering cable service to subscribers in Pierpont. 1 Since 1988, however, Satellite Cable Services, Inc., held an exclusive franchise to provide cable television to Pierpont residents. Satellite brought suit seeking both declaratory and injunctive relief as well as damages for interference with contractual and prospective contractual relations. Shortly afterwards, Northern Cable agreed to withdraw the offending CATV system. Then, in September 1995, after obtaining a franchise from the Pierpont Board of Trustees to offer CATV, Northern Cable began reconnecting its subscribers to the same system.
[¶4.] The circuit court granted summary judgment to Satellite, holding that Northern Electric violated
Standard of Review
[¶ 5.] Under our well-versed standard for reviewing a grant or denial of summary judgment, we must decide if the moving party established the absence of any genuine issue of material fact and demonstrated entitlement to judgment on the merits as a matter of law. We view the evidence most favorably to the nonmoving party and resolve reasonable doubts against the moving party. When summary judgment is supported as provided in § 15-6-56, the nonmovant may not rest on allegations or denials in the pleadings, but must respond by affidavit or as otherwise provided in § 15-6-56, and set forth particulars showing genuine fact issues exist for trial.
Analysis and Decision
1. Effect of Statutory Amendment While Appeal Pending
[¶ 6.] At the time of the circuit court’s decision,
Cooperatives may provide television service which includes multi-channel multi-point distribution systems, including those which utilize coaxial cable, and direct broadcast satellite service, and may provide programming to customers .via a CATV system, as defined in § 9-35-16, in any municipality which does not have an operating CATV system.
The circuit court held that the activities of Northern Electric and its wholly owned subsidiary, Northern Cable, violated this enactment by providing CATV service to the city of Pierpont. After judgment, the statute was amended to broaden the authorized activities for cooperatives.
Cooperatives may be organized under this chapter for any lawful purpose except banking, securities, and insurance. Cooperatives proposing to provide local exchange telephone service in a rural telephone company’s service area may do so only in compliance with the procedures contained in section 251(f) of the Communication Act of 1934, as amended by the Telecommunications Act of 1996.
[¶ 7.] If, during an appeal, a statutory change is controlling, we see no virtue in remanding to the trial court to examine an enactment we are equally capable of interpreting.
Illinois Indep. Tel. Ass’n v. Commerce Comm’n,
183 Ill.App.3d 220, 132 Ill. Dec. 154, 539 N.E.2d 717, 722 (1988)(citing
Rios v. Jones,
63 Ill.2d 488, 348 N.E.2d 825, 828 (1976));
Haines Pipeline Const., Inc. v. MPC,
251 Mont. 422, 830 P.2d 1230, 1238 (1991),
overruled on other grounds, Porter v. Galarneau,
275 Mont. 174, 911 P.2d 1143 (1996);
State v. Board of Cty. Com’rs of Lyon Cty.,
234 Kan. 732, 676 P.2d 134, 139 (1984);
Day v. Child Support Enforce. Div.,
272 Mont. 170, 900 P.2d 296, 300 (1995);
Texas Cty. Irr. & Water Res. Ass’n v. Okl. Water Res. Bd.,
803 P.2d 1119, 1122 (Okl.1990). This principle applies whether the change was constitutional, judicial, or statutory.
Thorpe v. Housing Auth. of the City of Durham,
393 U.S. 268, 282, 89 S.Ct. 518, 526, 21 L.Ed.2d 474, 484 (1969). Because
[¶ 8.] Before its most current amendment, effective July 1, 1994,.
A cooperative may become a member of other cooperatives, corporations or organizations engaged in the production or distribution of electricity or television business, and to own stock therein.
[¶ 9.] Article VIII of Northern Cable’s Articles of Incorporation provides: “The cooperative will not commence business until consideration of the value of at least One Thousand Dollars ($1,000) has been received for the issuance of shares.” Northern Electric’s board minutes for January 20, 1989 show a resolution to purchase $5,000 worth of Northern Cable’s stock and to pay a $100 membership fee. The date of this resolution determines the time Northern Electric officially became a member of Northern Cable. Before this date, Northern Cable was a paper entity, that according to its Articles, was unable to engage in or transact any business.
[¶ 10.] Satellite Cable argues that Northern Cable was created on October 16,1987 as evidenced by the date its Articles of Incorporation were filed with the South Dakota Secretary of State. Satellite further contends that the version of
3. Northern Cable’s CATV Service to Pierpont
[¶ 11.] A. Northern Electric Acting Through Northern Cable. The circuit court ruled that Northern Electric could not bypass the prohibitions on electric cooperatives imposed in the earlier version of
[¶ 12.] We need not decide whether the “mere instrumentality” exception to the rule of corporate separateness applies to the relationship between Northern Electric and Northern Cable because there was ample evidence in the record to simply establish that an agency relationship existed between parent and subsidiary.
Glanzer v. St. Joseph Indian Sch.,
438 N.W.2d 204, 207 (S.D.1989). A parent corporation may be held accountable for the conduct of its subsidiary when an agency relationship exists between them.
Id. United States v. Reading Co.,
253 U.S. 26, 62-63, 40 S.Ct. 425, 434, 64 L.Ed. 760 (1920)(where subsidiary is the mere agent of parent, separate corporate existence of sub
[¶ 13.] Northern Cable was created to further Northern Electric’s growth and development and specifically to venture into the television subscription business. Dennis Hagny, the general manager of both entities, testified by deposition that it is the role of a rural electric company to expand the services offered to those in rural communities. The companies shared the same board of directors and the same management. Hagny controlled the day-to-day management and operations of both Northern Electric and Northern Cable. We recognize that the mere fact that one corporation owns all or a majority of the stock of another, or that two corporations have common officers or directors, will not render a parent automatically answerable for acts of its subsidiary. But here, after having reviewed the undisputed evidence and the statutory scheme existing at the time, we are convinced that Northern Electric could not circumvent our Legislature’s restriction on electric cooperatives under- the former
[¶ 14.] B. Electric Cooperatives Prohibited From Offering CATV. As we stated, the 1997 amendment to
[¶ 15.] An interpretive guide courts use to decipher uncertain statutory language is the last antecedent rule: A limiting clause remains confined to the last antecedent, unless the context or obvious purpose requires a different interpretation.
In re Tax Appeal of Black Hills Legal Services, Inc.,
1997 SD 64, ¶ 8, 563 N.W.2d 429, 431;
Nat’l Farmers Union P. & Cos. Co. v. Universal Underwriters Ins. Co.,
534 N.W.2d 63, 65 (S.D.
Conclusion
[¶ 16.] We reverse the declaratory and in-junctive relief as
[¶ 17.] Affirmed in part and reversed in part.
[¶ 18.] MILLER, C. J., and SABERS, AMUNDSON and GILBERTSON, JJ., concur.
Notes
. CATV system “means a system of coaxial cables or other electrical conductors and equipment used or to be used primarily to receive television or radio signals directly or indirectly off-the-air and transmit them to subscribers for a fee.”
.
A co-operative shall have power to become a member of other cooperatives or corporations engaged in the production or distribution of electricity or to own stock therein.
. Northern Electric argues that the restrictions on cooperatives embodied in the statutes under review here violated free speech and equal protection rights under the United States Constitution or were preempted under the Cable Act,