California Supreme Court Denies City’s Appeal in Williams v. Riverside

On April 14, the California Supreme Court denied the City of Riverside’s Petition for Review in Williams Communications, LLC v. City of Riverside, et al. The City of San Francisco and other California cities had also sought to have the Court of Appeal decision “depublished” so that it could not be used as binding precedent in other cases brought against cities. The California Supreme Court denied that request as well. Unless Riverside appeals the case to the United States Supreme Court, the ruling of the California Court of Appeal—a significant victory for the telecommunications industry in its fight against unlawful municipal right-of-way fees—will be the law in California.

As we discussed in our earlier update, on Dec. 19, 2003, the California Court of Appeal for the Fourth District reversed a lower court’s ruling that the City of Riverside was entitled to collect $750,000 in license fees as “rent” for the use of the public rights-of-way. As a result of this ruling:

• Cities in California may not lawfully charge telecommunications carriers a franchise
  fee or license fee—either on a percentage of gross revenue or on a lineal foot basis.
• Cities in California may not charge a so-called “fair market” rental charge on the use of the rights of way.
• Any municipal fee imposed on a telecommunications carrier for its use of the rights of way must be based on the city’s actual costs of ROW management, and cannot be imposed for general revenue purposes.
• Cities may be liable for attorneys fees if they impose illegal ROW fees on carriers.

If you have any questions about the decision or would like a copy of the decision, please contact us.