United States District Court, E.D. Virginia, Newport News Division
ORDER AND OPINION
matter comes before the Court on a three-count Complaint
filed by Crown Castle NG Atlantic LLC ("Crown
Castle") seeking declaratory judgment and injunctive
relief against the City of Newport News ("City").
Compl.. ECF No, 1. The parties' dispute concerns the
terms and enforcement of a franchise agreement granting Crown
Castle use of the public rights-of-way within the City of
Newport News. On August 28, 2015. Crown Castle filed its
Complaint alleging that the actions taken by the City to
enforce its understanding of the franchise agreement: (1)
Count I, violate the franchise agreement; (2) Count II.
violate the Code of Virginia § 56-462(C): and (3) Count
III. violate 47 U.S.C. § 253. The City filed its Answer
on September 23, 2015 and cross-motions for summary judgment
were fully briefed by the parties by May 9, 2016. After a
hearing on the cross-motions for summary judgment, the Court
determined there were material facts in dispute and therefore
conducted a three-day bench trial from June 7, 2016 to June
result of the testimony and evidence presented a trial, and
for the reasons set forth herein, the Court GRANTS
declaratory judgment in favor of Crown Castle on Counts I and
It of the Complaint The Court does not reach Crown
Castle's claims presented in Count III pursuant to
Bell Atlantic Maryland, Inc. v. Prince George's
County, Maryland. 212 F.3d 863 (4th Cir. 2000).
Accordingly, the Court FINDS that: (I) the City's actions
requiring Crown Castle to obtain zoning or building approval
for its four Node installations beyond the Right-of-Way and
Electrical Permits already acquired are in violation of the
Franchise Agreement; and (2) the City's actions requiring
Crown Castle to obtain zoning approval beyond the
Right-of-Way and Electrical Permits already acquired are in
violation of the Code of Virginia § 56-462(C).
Court has original subject matter jurisdiction over this
action pursuant to 28 U.S.C. § 1331, as Count III of
Crown Castle's Complaint alleges a violation of the
Communications Act of 1934, as amended by the
Telecommunications Act of 1996 (the "Telecommunications
Act"). Compl. at ¶¶ 69-74, ECF No. 1. The
Court has supplemental jurisdiction over the state law claims
found in Counts I and II of the Complaint because they relate
to and form part of the same case or controversy arising from
Count III. See 28 U.S.C. § 1367(a).
trial had concluded and initial post-trial briefs were filed,
the City, for the first time, presented an argument in its
Post-Trial Reply Memorandum that the Court should dismiss
Crown Castle's federal claim and thereafter decline to
exercise supplemental jurisdiction over the remaining state
law claims raised in Co tints I and II of the Complaint.
See Def.'s Post-Trial Reply at 12-14, ECF No.
51: Def.'s Reply to Sur-Reply, FCF No. 57. In support of
this request, the City accurately contends that the Court has
discretion under 28 U.S.C. § 1367(c) to decline
supplemental jurisdiction over a claim if it "raises a
novel or complex issue of state law" or "the
district court has dismissed all claims over which it has
original jurisdiction." 28 U.S.C. § 1367(e)(1),
(3)- The City also argues that the Fourth Circuit
has demonstrated a strong preference that suite law issues,
particularly those involving questions regarding land use and
zoning, be resolved by state courts. See Arrington v.
City of Raleigh. 369 F.App'x 420, 423-24 (4th Cir.
2010) (unpublished) ("[O]ur precedents evince a strong
preference that state law issues be left to state courts in
absence of diversity or federal question jurisdiction ....
That is to say, although we have consistently acknowledged
that district courts enjoy wide latitude in determining
whether or not to retain jurisdiction over state claims when
all federal claims have been extinguished ... at the same
time, we have taken heed of the Supreme Court's teaching
. . . that a federal court should consider and weigh in
each case, and at every stage of the litigation, the
value of judicial economy, convenience, fairness, and comity
in order to decide whether to exercise jurisdiction over a
case brought in that court involving pendent state-law
claims.") (emphasis in original) (internal quotations
and citations omitted); Fralin & Waldron, Inc. v.
City of Martinsville. Va, 493 F.2d 481. 482-83 (4th Cir.
1974) ("[T]he courts of Virginia have extensive
familiarity and experience with . . . matters . . .
[involving municipal zoning ordinances, the correct
construction of local land use law. and the delineation of
the proper scope and exercise of local administrative
discretion], and we believe that they should have the initial
opportunity to pass upon them.").
contrast, Crown Castle contends that Fourth Circuit precedent
requires the Court to resolve Crown Castle's state law
claims before resolving its federal claim. See Bell
Atlantic Maryland, Inc. v. Prince George's
County Maryland, 212 F.3d 863 (4th Cir. 2000). Crown
Castle also asserts that declining to exercise supplemental
jurisdiction would constitute an abuse of discretion at this
stage in the litigation as significant resources have been
expended by both the parties and the Court during discovery,
summary judgment motions, trial, and post-trial briefing.
Finally, Crown Castle argues that the City waived this
argument by waiting to raise it until after trial.
the "discretionary aspect to supplemental jurisdiction
is waivable, " Doe by Fein v. D.C., 93 F.3d
861, 871 (D.C. Cir. 1996), the cases cited by Crown Castle
supporting this proposition merely establish that an
objection to discretionary supplemental jurisdiction may be
waived on appeal if not brought before the district court. At
this point, the City has not waived any argument or objection
related to supplemental jurisdiction before this Court;
however, the Court dismisses the City's argument and
chooses to exercise supplemental jurisdiction over the state
law claims for the following reasons.
Court has proper supplemental jurisdiction over the two state
law claims asserted by Crown Castle under 28 U.S.C. §
1367(a). Both claims are related to and form pan of the same
controversy that provides this Court with original
jurisdiction over this matter. The Court has discretion to
decline to exercise proper supplemental jurisdiction if the
claims '"raise  a novel or complex issue of state
law, " if the state law claims substantially predominate
over the federal law claim over which the Court has original
jurisdiction, if "the district court has dismissed all
claims over which it has original jurisdiction." or
"in exceptional circumstances, [where] there are other
compelling reasons for declining jurisdiction." 28
U.S.C. § 1367(c). While "trail courts enjoy wide
latitude in determining whether or not 10 retain jurisdiction
over state law claims when all federal claims have been
extinguished." the Court informs this discretionary
decision by considering the "convenience and fairness to
the parties, the existence of any underlying issues of
federal policy, comity, and considerations of judicial
economy." Shanaghan v. Cahill 58 F.3d 106. 110
(4th Cir. 1995); see also Peter Furrell Supercars, Inc.
v. Monsen. 82 F.App'x 293. 297 (4th Cir. 2003);
Semple v. City of Moundsville, 195 F.3d 708, 714
(4th Cir. 1999).
litigation has been pending before this Court for nearly one
year and the parties and Court have expended substantial
resources throughout the various stages of the litigation.
including extensive discovery, fully briefed and argued
cross-motions for summary judgment, a three-day bench trial,
and post-trial briefing. The City's arguments
unquestionably come late in the litigation and although
Counts I and II may present novel or potentially complex
issues of state law, the Court finds the well-established
principles of contract law and statutory interpretation
sufficient to guide its efforts in resolving the claims
presented. In addition. Crown Castle's federal claim has
not been extinguished and at least one underlying issue of
federal policy appears to counsel against declining
Bell Atlantic Maryland, Inc. v. Prince George's
County. Maryland, 212 F.3d 863 (4th Cir. 2000), the
plaintiff challenged the validity of a Prince George County
ordinance on numerous state and federal grounds, including 47
U.S.C. § 253-the same provision of the
Telecommunications Act Crown Castle asserts is violated by
the City in this matter. Without reaching any of the
plaintiffs state law claims, the district court found that 47
U.S.C. § 253 preempted the Prince George County
ordinance and granted judgment on the pleadings in favor of
the plaintiff. See Bell Atlantic. 212 F.3d at
864-65. On review, the Fourth Circuit vacated the judgment
and remanded the case. The Fourth Circuit explained that the
district court erred by reaching the constitutional question
of preemption under 47 U.S.C. § 253 before deciding
state law questions that provided alternate bases for
granting the plaintiff the relief! I sought and that could
have fully disposed of the case. Id. In particular,
the Fourth Circuit noted that "courts should avoid
deciding constitutional questions unless they are essential
to the disposition of a case" and that
''determining whether a federal statute preempts a
slate statute, is a constitutional question."
Id. at 865.
Fourth Circuit's ruling in Bell Atlantic is
directly relevant to the instant action. Here. Crown Castle
seeks declaratory judgment and injunctive relief under state
law and 47 U.S.C. § 253. The state law claims, if
resolved in Crown Castle's favor, provide alternate bases
for granting Crown Castle the relief it seeks without
reaching the constitutional question of preemption under 47
U.S.C. § 253. As a result. Bell Atlantic, as
discussed, articulates a relevant federal policy that when
applied to the instant action favors retention of
supplemental jurisdiction over the stale law claims raised by
Crown Castle. In addition, many of the fourth Circuit
decisions favoring a district court's declination of
supplemental jurisdiction arc premised on the fact that all
federal claims were dismissed. As already noted, the federal
claim in this case has not been dismissed and the Court
endeavors to follow the process and principles described in
Bell Atlantic. If the Court initially declined to
exercise jurisdiction over the state law claims or considered
the federal claim before the state law claims, the
Court's actions would in and of themselves violate
consideration of 28 U.S.C. if 1367(c), the convenience and
fairness to the parties, the existence of any underlying
issues of federal policy, comity, and considerations of
judicial economy, the Court finds it appropriate to retain
supplemental jurisdiction over Crown Castle's state law
claims and consider them before reaching the constitutional
question presented by 47 U.S.C. § 253.
parties stipulated to a number of relevant facts as set forth
in the final Pretrial Order entered by the Court on May 31.
2016. See Final Pretrial Order at 1-7. FCP No. 36.
In addition to recounting relevant stipulated facts, the
Court makes additional factual findings based on the evidence
and testimony presented at trial.
City of Newport News is a municipal corporation that
operates, in relevant part, under the direction of the City
Council. City Mayor, and City Manager.
Castle is a corporation that provides telecommunications
services and does so in the Commonwealth of Virginia pursuant
to a Certificate of Public Convenience and Necessity
("CPCN") issued by the Virginia State Corporation
Commission ("Commission"). Stip. Facts at
¶¶ 1-2, ECF No. 36. The Commission originally
granted Crown Castle, then known as NextG Networks Atlantic.
Inc., a CPCN to furnish local exchange and interexchange
telecommunication services on June 16, 2004. Id. at
¶ 2; Pl's Ex. 1. At some point thereafter. Crown
Castle NG Atlantic Inc. became Crown Castle NG Atlantic LLC
and on October 22. 2014 the Commission cancelled Crown
Castle's existing CPCN and reissued it in the name of
Crown Castle NG Atlantic LLC. Stip. Facts at ¶ 2;
Pl's Ex. 1.
Crown Castle's service and network incorporates wireless
reception devices. Crown Castle is not a wireless provider.
Stip. Facts at § 4. Instead, Crown Castle acts as an
intermediary for wireless carriers-transporting carriers'
communication signals between designated endpoints of die
carriers' choosing. Id. at ¶¶ 3-4: Day
1 Trial Tr. 53:23-54:23. Crown Castle, under the CPCN,
provides this telecommunications service by creating and
using networks generally referred to as Distributed Antenna
Systems ("DAS"). Stip. Facts ¶ 3. Crown
Castle's typical DAS consist of: (I) "Nodes, "
which are typically located on utility or streetlight poles
in the public rights of way and consist of small, low-power
antennas. lasers, and electronic equipment that convert Radio
Frequency format communication to light signals: (2) fiber
optic cables; (3) "Flubs." which are central
locations typically located on private property and contain
routers, switches, and signal conversion equipment: and (4)
other equipment. Id.: see also Day 1 Trial
Tr. 58:20-59:13, The telecommunications service typically
provided by Crown Castle allows carriers' to hand off
communication signals to Crown Castle at either the Nodes or
Hubs, at which point Crown Castle transports the
communication signals to a distant point- typically another
Crown Castle-operated Node or Hub, Stip. Facts at ¶ 3;
Day 1 Trial Tr. 58:20-59:13, Thereafter, Crown Castle hands
the communication signals back to the carrier. See
Day 1 Trial Tr. 53:23-54:23; 58:20-59:13.
B. The Parties' Negotiations tor a Franchise
December 11, 2012, Crown Castle's Director of Government
Relations, at the lime Mr. Christopher Sinclair, submitted a
letter with attachments to the City Manager of Newport News,
with courtesy copies to the City Attorney. City Clerk, and
Director of Public Works. regarding "Formal Application
to Access The Public Right of Way for the Provision of
Telecommunications Services"' ("Formal
Application"). Stip. Facts at ¶ 5: Stip. Ex. 3: Day
1 Trial Tr. 59:23-66:21. The Formal Application submitted by
Crown Castle included a request to access the public
rights-of-way within the City o\' Newport News
and guidance on the City's process for allowing Crown
Castle to place and maintain communications facilities in the
public way. Stip. Ex. 3 at CITY000196-97. The Formal
Application also included a brief description of Crown Castle
and its services, hi. Lastly, the application
package contained three attachments, consisting of a reprint
of an article entitled "Providing Wireless Coverage
Where Towers Are Not Welcome, " a "We Arc
Solutions: Focal Officials Guide." and a copy of the
CPCN issued by the Commission to Crown Castle. See
Stip. Ex. 3; Day 1 Trial Tr. 60:13-19.
letter and attachments included as part of the Formal
Application are straight forward and speak for themselves.
Among the relevant topics and descriptions contained in the
application letter. Crown Castle noted its Nodes are
"typically attached to existing infrastructure, such as
a utility distribution pole or street light pole, where
available" and that deployment of its services "is
not premised on the construction of new towers or
monopoles." Slip. Ex. 3 at CITY000196. The Local
Officials Guide, a thirteen-page document attached to the
letter application, slated among many features that
"Crown Castle will generally seek to collocate its
facilities on existing utility or streetlight poles,
typically located in the public rights of way, " but
that "if there is no available infrastructure, or if the
Municipality docs not wish to allow Crown Castle to attach to
its streetlight or traffic signal poles. Crown Castle may
need to install its own utility poles." Stip. fix. 3 at
CITY000193-94. This attachment to the letter application also
indicated that if such a circumstance arises, "Crown
Castle will comply with all lawful local regulations
governing such installations." Id. It is
important to note that this attachment and language contained
therein was not incorporated into the Franchise Agreement
which was subsequently executed by the City and the
January 15, 2013, Deputy City Attorney Joseph DuRant
responded to Crown Castle's Formal Application by sending
a letter and draft franchise agreement to Mr. Sinclair. Stip.
Facts at ¶ 6; Stip. Ex. 10. Mr. DuRant's letter
indicated that the draft franchise agreement was enclosed
pursuant to Virginia Code §56-462 and that the draft
"references the permitting section of the City Code and
includes a hyperlink to the City's permitting
application." Stip. Ex. 10. In order to expedite the
application process, Mr. DuRant provided Crown Castle an
editable electronic copy of the draft franchise agreement.
See Slip. Fix. 77; Day 2 Trial Tr. 377:7-378:4. On
April 30. 2013, Mr. Sinclair, acting on behalf of Crown
Castle, sent Mr, DuRant proposed edits to the draft franchise
agreement and a copy of "Exhibit A, :'
which he proposed lo be included as an exhibit to the
franchise agreement. Stip. Facts at ¶ 7: Stip. Ex. 4,
Among Crown Castle's edits to the draft franchise
agreement was a lengthy addition to the first paragraph
detailing the types of equipment Crown Castle intended to
deploy on the public rights of way and its intent to place
equipment on facilities owned by Crown Castle or utility
companies. See Stip. Ex. 4 at ¶ 1. In the
second paragraph, Crown Castle added language indicating the
City agreed, as prescribed in Virginia Code §
56-462(C)(ii). not to impose any requirements, fees, or
processes regarding Crown Castle's use of public rights
of way that are not functionally equivalent to the
requirements, fees, or process imposed on other
telecommunications services providers. Id. at ¶
2. The attached Exhibit A included a number of depictions and
descriptions of Crown Castle equipment that, as Mr, Sinclair
explained at trial and as Exhibit A itself indicates,
"'arc intended to be representative in nature"
and "[a]etual installations may differ somewhat [from
the depictions and descriptions contained in Exhibit A] based
upon various factors, including, but not limited to. the
coverage and/or capacity objective, final equipment
selection. Held and pole conditions, existing pole
attachments, utility construction standards, and future
changes in technology." Stip. Ex. 4 at ¶ 000206;
see also Day 1 Trial Tr. 78:8-79:22.
DuRant responded to Mr. Sinclair's proposed edits on May
14, 2013. Stip, Facts at ¶ 7; Stip. Ex. 5. In its
response, the City proposed deleting the web links to Chapter
38 of the Newport News City Code and the City's
Department of Engineering website. Stip. Ex. 5 at CC000168;
Day 1 '['rial Tr. 81:17-22. In place of the deleted
link to the Department of Engineering, the City added a
commenting indicating that information regarding application
for the right-of-way permit may be obtained "from the
Permits Office of the City's Department of
Engineering." Stip. Ex. 5 at CC000168. The City also
deleted the language added to Paragraph 1 in Crown
Castle's previous edit allowing Crown Castle to install
equipment on facilities owned by utility companies,
Id. As Mr. DuRant explained in his written comment,
he believed the City could not "contract as to the
rights of non-City owned utilities not a party to the
franchise [agreement]." Id. Finally, although
the City made a number of additional comments and edits. the
last edit relevant to this litigation was the City's
proposal to strike the entirely of Crown Castle's
additions to the final sentence of the second paragraph
regarding Virginia Code §§ 56-462(C)(ii) and
56-45$(D). Id. In explaining this proposed edit, Mr.
DuRant indicated the language was "superfluous as the
state law sets the standards" and "the addition was
unnecessary, ., because it essentially requoted the statutes
involved." In addition to the City's proposed
edits and comments. Mr. DuRant attached "Exhibit B"
to the draft franchise agreement. which detailed certain
insurance requirements for permits, and requested a second
copy of Exhibit A. Stip. Ex. 5. That same day, Mr. Sinclair
provided Mr. DuRant with another copy of Exhibit A.
See Stip. Facts at ¶ 7: Slip. Ex. 6: Day 1
Trial Tr. 83:8-14; Day 2 Trial Tr. 386:22-387:15.
Sinclair responded to the City's comments and edits in an
itemized email on July 1, 2013. Stip. Facts at ¶ 7;
Stip. Ex. 7. In relevant part, Mr. Sinclair's email
requested to retain the language in Paragraph One regarding
use of utility-owned facilities. Stip. Ex. 7 at CC000151, Mr.
Sinclair also requested that the final sentence of Paragraph
2 regarding Virginia Code §§ 56-458 and 56-462 be
retained "to avoid confusion in the future for
individuals involved in the administration of the
agreement." Id. On July 22. 2013, Mr. DuRant
responded to Mr. Sinclair's suggested changes and
accepted and incorporated the edits relevant to this ease.
Stip. Ex. 61; Day 2 Trial Tr, 397:6-398:5. Mr. Durant and Mr,
Sinclair exchanged additional email communications regarding
proposed changes to the draft franchise agreement.
See Stip. Exs. 60. 62; Def. Ex. 3. These
communications ultimately led to the finalization of a draft
franchise agreement, with Exhibit A and Exhibit B attached,
to be submitted to the City Council for approval. Def. Ex. 3.
C. The Franchise Agreement
public meeting on November 26. 2013. the City Council passed
Ordinance No. 7014-13. granting Crown Castle a franchise
agreement to construct, maintain and operate a
telecommunications system in the City of Newport News,
Virginia. Slip. Facts at ¶ 8; Slip. Ex. 89. In
preparation for the public hearing, the City Council received
a package containing, among other materials, an agenda for
the meeting, the finalized franchise agreement and attached
exhibits, and a memorandum from the City Manager dated
November 20. 2013 regarding the proposed franchise agreement.
Slip. Facts at ¶ 8; Stip. Ex. 15. A Crown Castle
representative attended the public hearing in order to
respond to any questions posed regarding the franchise
agreement, though no questions or comments were directed to
the representative by the City Council. Day 2 Trial Tr.
to the City Council passing Ordinance No. 7014-13. Crown
Castle and the City executed the Franchise Agreement For Use
of Public Right s-of-Way In the City of Newport News.
Virginia ("Franchise Agreement"), which became
effective on December 17. 2013. Stip. Facts at ¶ 9:
Stip. Ex. 9. The Franchise Agreement consists of the main
agreement and attached ...