Liberty Cable Company, Inc. Sixty Sutton Corp. Jack A. Veerman v. City of New York Ralph A. Balzano, Commissioner of Department of Information and Telecommunications, Nys Commission on Cable Television, William B. Finneran, Gerard D. Dimarco, Barbara T. Rochman, David F. Wilbur, and John Passidomo, United States of America, Time Warner Cable of New York City and Paragon Cable Manhattan, Defendants-Intervenors-Appellees

Citations: 60 F.3d 961; 1 Communications Reg. (P&F) 44; 23 Media L. Rep. (BNA) 2243; 1995 U.S. App. LEXIS 16956Docket: 2034

Court: Court of Appeals for the Second Circuit; July 12, 1995; Federal Appellate Court

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The appeal involves Liberty Cable Company, Inc. and associated plaintiffs contesting a March 14, 1995, decision by the District Court for the Southern District of New York, which partially dismissed their complaint and denied a motion for a preliminary injunction. The plaintiffs argue that the City of New York and its officials failed to fulfill their obligations to create franchising regulations for cable services, specifically regarding Liberty's non-common cable systems, which are Satellite Master Antenna Television (SMATV) facilities connecting multiple dwellings without using public property. The plaintiffs sought a declaratory judgment declaring parts of the Cable Communications Policy Act of 1984 unconstitutional, and aimed to prevent enforcement of the Act in a way that would force Liberty to either stop providing service or obtain a franchise from the City. Additionally, they sought to challenge a standstill order from the New York State Commission on Cable Television, which barred Liberty from connecting new non-common systems. The Court affirmed the lower court's decision, agreeing that the government's efforts to develop licensing rules were sufficient, thus upholding the denial of the preliminary injunction.

Appellants claimed violations of their First Amendment, due process, and equal protection rights under 47 U.S.C. Sec. 522(7) and Sec. 541(b)(1), alongside a state standstill order. Time Warner Cable and Paragon Cable Manhattan intervened to seek dismissal. Judge Preska ruled that the First Amendment and due process claims were unripe, citing precedent cases, and that the equal protection claims, although ripe, did not warrant a preliminary injunction due to lack of demonstrated likelihood of success or irreparable harm. 

Liberty argued that the inability to obtain a franchise due to a lack of available procedures constituted a "Catch-22" denial of due process. The District Court acknowledged a procedure was in place for franchise acquisition, but this was misleading since New York City lacked a finalized procedure for "off-street" franchises. The City began developing this procedure shortly after Liberty's franchise application. Liberty contended that the City cannot require franchises without an established licensing procedure, but the court disagreed, noting that Liberty was the first to seek a franchise for a non-common system, which is not widely utilized. The court concluded that the City fulfilled its due process obligations by promptly initiating a rulemaking process in response to Liberty's application, provided there are no unreasonable delays in completing this process or in processing the application thereafter.

No evidence of unreasonable administrative delay exists regarding Liberty's application for an off-street franchise. Liberty applied in October 1994, and within nine months, the City published a notice of proposed rulemaking, received public comments, held a public hearing, and began formulating final rules. Relevant case law indicates that delays of over a year in similar contexts did not violate due process rights. Liberty has not been denied due process as it had the opportunity to participate in the rulemaking process and can present constitutional claims before the New York State Court of Claims and potentially in judicial review. Participation in the administrative proceedings and the option for state-court review are crucial in affirming due process rights. The District Court's order is affirmed. Additionally, a distinction is made between "non-common" and "common" cable systems, with the latter not classified as cable systems under the Cable Act and thus not subject to its requirements.