9th Circuit Finds City Can Deny Access to Rights-of-Way on Aesthetic Grounds Despite Public Utilities Code Section 7901
Sprint PCS Assets L.L.C. v. City of Palos Verdes Estates1
On Oct. 14, 2009, the 9th Circuit Court of Appeals reversed a judgment of the U.S. District Court for the Central District of California finding that 47 U.S.C. § 332(c)(7) of the Telecommunications Act did not prohibit the City of Palos Verdes Estates (“City”) from denying two Sprint PCS Assets, L.L.C. (“Sprint”) applications to construct wireless facilities in the public rights-of-way based on aesthetic considerations. In reaching that holding, the court also concluded that neither California Public Utilities Code section 7901 nor 7901.1 precluded the City from denying Sprint’s permit applications based on aesthetic concerns.
Citing its decision in MetroPCS, Inc. v. City & County of S.F.,2 the 9th Circuit stated the test for determining whether the City’s denial violated 47 U.S.C. § 332(c)(7)(B)(iii)3 as: (1) whether the City’s decision was authorized by local law and, if it was, (2) whether it was supported by a reasonable amount of evidence (“MetroPCS Test”).
In considering whether the City’s decision was authorized by local law, the court examined the impact of Cal. Pub. Util. Code sections 7901 and 7901.1. Sections 7901 and 7901.1 provide (respectively) that telecommunications companies enjoy a right to construct communications facilities, which includes wireless, “in such a manner and at such points as not to incommode the public use of the road or highway”4 and that “municipalities shall have the right to exercise reasonable control as to the time, place and manner in which roads, highways and waterways are accessed.”5 The 9th Circuit held that the California Constitution gives the City authority to regulate local aesthetics and that neither section 7901 nor section 7901.1 divests it of that authority.
The 9th Circuit held that section 7901 did not prevent the City from denying wireless deployments in the public rights-of-way under a local ordinance that permitted denial based on aesthetic concerns. In doing so, the court focused on the fact that section 7901 provides telecommunications carriers rights to construct facilities in rights-of-way only to the extent such construction does not incommode the public use and upheld the City’s determination that traveling on a street that included wireless facilities would incommode the public use.
In support of its finding, the court asserted that the public rights-of-way may be employed to serve “social expressive and aesthetic functions.” In reaching this holding, however, the court failed to address contrary holdings by California courts—most notably, the California Court of Appeals’ 1961 decision in Pacific Tel. & Tel. Co. v. City and County of San Francisco, which rejected the rationale used by the 9th Circuit in holding that:
"Obviously, the Legislature in adopting section  knew that the placing of poles, etc., in a street would of necessity constitute some incommodity to the public use, but the restriction necessarily is limited to an unreasonable obstruction of the public use. [. . .] It is absurd to contend that the installation of telephone poles and lines, under the control by the city of their location and manner of construction, is such an "incommodation" as to make section  inapplicable. Such a construction of that section would make it completely inoperable."6
The 9th Circuit also held that Cal. Pub. Util. Code section 7901.1 did not prohibit the City’s consideration of aesthetics in denying Sprint’s applications. The court asserted that section 7901.1 was added in 1995 to “bolster” cities’ control over managing construction in public rights-of-way, and, based on that premise, it concluded that Section 7901.1 did not limit what the court believed was permitted under Section 7901.
The 9th Circuit did temper its decision by stating that it “did not relieve municipalities of the constraints imposed upon them by the [Telecommunications Act].” Moreover, the court continued, “[a] city that invokes aesthetics as a basis for a [wireless communications facility] permit denial is required to produce substantial evidence to support its decision, and, even if it makes that showing, its decision is nevertheless invalid if it operates as a prohibition on the provision of wireless service in violation of 47 U.S.C. § 332(c)(7)(B)(i)(II).”
With respect to the second prong of the MetroPCS Test, the 9th Circuit held that the City’s decision was “supported by such relevant evidence that a reasonable mind might accept as adequate.” Having decided the second prong of the test, the 9th Circuit reversed the District Court’s determination that the City violated 47 U.S.C. § 332(c)(7)(B)(iii) by considering aesthetics in denying Sprint’s applications.7
The impact of this decision is yet to be seen. Ninth Circuit decisions are not binding on California state courts, and, on Oct. 28, 2009, Sprint petitioned the 9th Circuit for rehearing en banc, noting that the decision disregarded and was inconsistent with existing California court decisions and other 9th Circuit decisions. Moreover, the particular facts of the Sprint applications may not exist in other rights-of-way installations.
1 No.05-56106 (9th Cir. Oct. 14, 2009).
2 400 F.3d 715 (9th Cir. 2005).
3 “Any decision … to deny a request to place, construct or modify personal wireless service facilities shall be in writing and supported by substantial evidence contained in a written record.”
4 Cal. Pub. Util. Code § 7901.
5 Cal. Pub. Util. Code § 7901.1.
6 197 Cal. App.2d 133, 146 (Cal Ct. App. 1961).
7 The 9th Circuit also held that the City’s decision did not constitute an effective prohibition under section 332(c)(7)(b)(i)(ii), finding that the District Court’s factual findings regarding the existence of a “significant gap” were insufficient to support summary judgment because they were disputed in the record below.