State of Tennessee Ex Rel. Wireless Income Properties, LLC v. City of Chattanooga and William C. McDonald in His Capacity as Administrator of Public Works

Citations: 403 F.3d 392; 2005 U.S. App. LEXIS 5601Docket: 03-6608

Court: Court of Appeals for the Sixth Circuit; April 7, 2005; Federal Appellate Court

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Wireless Income Properties, LLC (Wireless) appealed a district court decision that partially granted and denied motions for summary judgment in its case against the City of Chattanooga and its Public Works Administrator, William C. McDonald. Wireless sought permits to construct monopole communication towers but faced a moratorium imposed by the City for reviewing zoning ordinances. After the moratorium, Wireless's applications no longer met the new zoning requirements. The company filed a federal lawsuit for mandamus relief and alleged violations of the Telecommunications Act of 1996 (TCA) and 42 U.S.C. § 1983. The district court ordered the City to act on the pending applications within sixty days but did not require the City to apply the zoning ordinances in effect at the time of the applications. Wireless raised three main arguments on appeal: 

1. The sixty-day order for the City to act on the applications was erroneous.
2. The City should have applied the zoning ordinances effective at the time the applications were submitted.
3. A violation of the TCA should give rise to a cause of action under § 1983.

The appeals court reversed the sixty-day order, recommending appropriate injunctive relief to compel the City to grant the permits, but affirmed the dismissal of Wireless's § 1983 claims based on a recent Supreme Court ruling. Background details included that Wireless filed seven permit applications between December 2001 and January 2002, conforming to existing zoning ordinances, before the City imposed a moratorium from January to April 2002 to reconsider zoning regulations for communication towers.

On March 19, 2002, the City Council enacted Ordinance No. 11253, modifying the standards for communication tower locations, with the changes effective April 3, 2002. This included a new requirement for Board of Appeals approval for all applications. On March 26, 2002, the Council also resolved to end a moratorium on these applications on the same effective date. The amendments rendered Wireless's applications defective, preventing them from qualifying for permits. Wireless claims it never received written notification of the approval or denial of its applications, with the City acknowledging only a March 20, 2002, phone call in which a city employee indicated the need for a special exceptions permit, leading to the belief that the applications were on hold. Wireless did not take steps to rectify the application defects.

On December 10, 2002, Wireless sued the City and its Public Works Administrator in federal court for mandamus relief to compel permit issuance, alleging violations of the Telecommunications Act (TCA), 42 U.S.C. § 1983, and substantive due process rights. Wireless filed for partial summary judgment on February 6, 2003, focusing on TCA violations, while the City sought a summary judgment dismissing the claims on June 30, 2003.

On October 20, 2003, the district court partially granted and denied the motions. It found the City's inaction on Wireless’s applications violated the TCA, ordering a decision within sixty days. However, it denied Wireless's request to enforce pre-April 3, 2002 zoning laws and concluded that a TCA violation did not support a § 1983 claim, granting summary judgment for the City on that issue. Wireless appealed the court’s judgment on November 18, 2003.

The court reviews summary judgment grants de novo, as established in Walls v. Amerisure Mut. Ins. Co. While a denial of summary judgment is typically an interlocutory order not immediately appealable, jurisdiction exists when an appeal of a denial is combined with a grant of summary judgment. Denials on purely legal grounds are reviewed de novo, whereas those based on genuine issues of material fact are reviewed for abuse of discretion. A grant of summary judgment is appropriate when, viewing the facts favorably to the non-movant, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. A district court's decision to grant injunctive relief is also reviewed for abuse of discretion.

In the case at hand, Wireless argues that the district court incorrectly ordered the City to act on permit applications within sixty days instead of requiring the City to issue the permits due to violations of the Telecommunications Act (TCA). The City contends Wireless’s claim is not ripe for review, asserting that the applications are still pending and no final action has been taken, as required by the TCA. The City cites Nextel Partners Inc. v. Kingston Township to support its position, but this case is distinguished as it involved a plaintiff who had not filed a permit application. The court ultimately rejects the City’s ripeness argument and agrees with Wireless that the district court erred in its ruling regarding the issuance of permits.

The Third Circuit interpreted Nextel's complaint as claiming that the township's inaction on its proposed facility violated the Telecommunications Act (TCA). The court referenced 47 U.S.C. § 332(c)(7)(B)(v), which allows aggrieved parties to challenge a 'failure to act,' in conjunction with § 332(c)(7)(B)(iii), which requires timely action from local governments on requests for wireless facility approvals. The court found that since Nextel had not submitted a building permit application or any request for construction, the township's inaction did not qualify as a 'failure to act' under the TCA, rendering Nextel's claims non-actionable.

In contrast, Wireless had properly submitted applications to the City, and thus there was no dispute regarding the request. The district court ruled that the City violated the TCA by failing to act on Wireless's applications within a reasonable timeframe, particularly noting the nine-month delay after the moratorium was lifted. The court determined that this inaction constituted a violation of the TCA's requirements and ordered the City to act on Wireless's applications within sixty days.

Additionally, the City’s handling of Wireless's applications was characterized as a functional denial. The City employee responsible for processing applications communicated to Wireless that its submissions did not comply with new regulations and indicated that no action would be taken until the necessary amendments were submitted. During the nine months following the moratorium's expiration, the City did not take further action on Wireless’s applications, adhering to a practice of not formally denying applications as mandated by the TCA.

The City’s actions constituted an informal denial of Wireless's applications, as evidenced by a telephone call indicating that the applications would not be granted without amendment, followed by the absence of a written decision. Such informal denial contradicts the substantive and procedural requirements of the Telecommunications Act (TCA), which mandates that local governments act on permit applications within a reasonable time and provide a written decision supported by substantial evidence.

The court agreed with the district court that the informal process violated the TCA, specifically noting that the City failed to provide a written decision. For a decision to meet the TCA's "in writing" requirement, it must be distinct, articulate the reasons for denial, and allow for judicial review of the supporting evidence. The City’s reliance solely on a phone call did not fulfill this requirement.

Additionally, the City violated the TCA's stipulation that denials must be supported by substantial evidence in a written record, as no such documentation was provided. The term "substantial evidence" refers to adequate evidence that a reasonable mind would accept to support a conclusion; in this case, the lack of written support rendered the decision invalid.

Having established these violations, the court turned to appropriate relief. It concurred with the district court that injunctive relief is warranted for TCA violations but disagreed on the nature of that relief. The district court's order requiring the City to act on Wireless's applications within sixty days was deemed ineffective since the City had already informally denied the applications. Thus, the court concluded that the proper remedy is an injunction compelling the City to grant the requested permits.

The TCA does not outline a specific remedy for its violations, but established case law indicates that when a permit application is denied without adherence to the TCA's requirements for a written decision and substantial evidence, the appropriate remedy is injunctive relief to compel the issuance of the permit. The court noted that affirming the district court's order for the City to act on the permit applications within sixty days would lead to further litigation, as the City would likely deny the applications again. This situation conflicts with the Congressional intent of the TCA to minimize repeated litigation. Therefore, the court determined that injunctive relief was necessary and concluded that the district court erred in not providing this remedy.

Additionally, Wireless's claim under 42 U.S.C. § 1983 was dismissed by the district court, which held that the TCA's comprehensive remedial scheme precluded such a claim. Wireless contended this was incorrect, but the Supreme Court's ruling in City of Rancho Palos Verdes v. Abrams affirmed that the TCA's provisions create a distinct judicial remedy that excludes § 1983 claims. Consequently, the court upheld the district court's summary judgment in favor of the City regarding the § 1983 claim.

The district court's sixty-day order is reversed, and the case is remanded for the issuance of appropriate injunctive relief requiring the City to grant Wireless the requested permits. The dismissal of Wireless’s § 1983 claims is affirmed, referencing the Supreme Court's decision in Rancho Palos Verdes. The properties in question were appropriately zoned for the construction of communication towers, with five zoned C-2 (convenience commercial), one M-3 (warehouse and wholesale), and one M-1 (manufacturing). At the time of application, constructing monopole communication towers was permitted in these zones according to the City’s zoning ordinances. Wireless was aware of an impending moratorium and filed its last application just before its enactment. Wells, aware of the new ordinance requirements and having participated in City Council meetings, did not amend his applications under the belief they would be grandfathered under the prior ordinance. The City’s reliance on APT Tampa/Orlando, Inc. v. Orange County is deemed inapplicable, as that case required a permit application for claims to be ripe. The court acknowledges that the ruling may favor Wireless, considering the City’s authority to amend regulations under the Telecommunications Act (TCA). However, the City failed to provide a written decision backed by substantial evidence, effectively denying Wireless’s applications through moratoria and communication from the City, leading to the City bearing the consequences of noncompliance with the TCA.