City of Thousand Oaks v. Verizon Media Ventures, Inc.
Docket: No. 02-55798, 02-55816; D.C. No. CV-02-02553-ABC
Court: Court of Appeals for the Ninth Circuit; June 13, 2003; Federal Appellate Court
The district court's injunction on the asset purchase transaction was deemed an abuse of discretion. Section 4.1 of the franchise ordinance pertains solely to the sale of a franchise or associated rights and obligations, which only includes the permit to operate a cable system as defined by 47 U.S.C. 522(9). The City and County did not argue that the asset purchase agreement involved a transfer of Verizon’s permit, meaning the court could only have enjoined that specific element of the transaction if it had been the case. The provision regarding the transfer of franchise fees post-closing did not breach section 4.1 since these fees originated from Adelphia’s franchise, not Verizon’s. This arrangement did not transfer any liabilities from Verizon’s franchise to Adelphia; instead, it ensured that Verizon would not be responsible for fees under Adelphia’s franchise. Additional assets and liabilities, such as bulk customer agreements and advertising agreements, do not constitute rights or obligations under the franchise but are merely business assets authorized by the franchise. Consequently, the asset purchase transaction was not categorized as an "arrangement for the management of the [cable] system" under section 4.11, as a sale represents a change in ownership rather than management. The appellees forfeited their argument regarding a violation of section 4.2 by not presenting it as an alternative ground for affirmance in their opening brief on appeal. Furthermore, the transaction was not a maneuver to circumvent the Ordinance’s restrictions; transferring a cable system to an existing franchise holder presents fewer regulatory issues than transferring to a non-franchise holder. The decision was reversed, and the disposition is not subject to publication or citation per Ninth Circuit Rule 36-3. The dissenting view was countered, noting that the district court’s reliance on the management arrangement theory did not equate to a change of control violation as alleged by the plaintiffs, and their failure to address this on appeal constituted a waiver.