City of Huntington Beach; Crown Castle NG West

214 Cal. App.4th 566; 2013 Cal. App. LEXIS 197 (March 14, 2013)

The Court of Appeals (4th District, Division 3) affirmed the Commission’s holding that NextG Networks (a distributed antenna system, or “DAS” provider) was a “telephone corporation” within the meaning of Section 7901 but reversed those portions of the Commission decision “purporting to preempt local ordinances.”  The Court held that whether it deferred to the Commission’s construction of Section 7901 under Greyhound (Para. 71 infra) or subjected it to independent review (Hillsboro Properties) (Para. 29, infra) the Commission’s construction of Section 7901 was correct.  With respect to the Commission’s preemption of local ordinances, however, the Court reached a contrary  conclusion.  The court noted that the parties to the proceeding had agreed that any conflict between (1) NextG’s rights under Section 7901 and (2) the city’s rights to regulate its streets and highways under its general police power would be resolved in state court rather than in the proceeding before the Commission.  The Scoping Memo and the initial Commission decision concurred on that point. In its decision denying the city’s application for rehearing, however, the Commission changed course and expressly preempted the local ordinances stating that “a statewide interest in public utility service preempts this ordinance in the event of a conflict, as is the case here.”  The Court held that while the Commission may have had the power to preempt local ordinances, NextG did not initiate (and the Commission did not hold) proceedings designed to entertain the question.  The Court stated that, “we see no authority in the Commission’s rules or elsewhere for the notion that the scope of the underlying proceeding can be expanded during the reconsideration process to the detriment of a party.”  That text suggests that the Court concluded that the Commission had not proceeded in the manner required by law (Section 1757(a)(2)), and in that sense its decision is akin to Edison (Para. 19, infra) holding that the parties to Commission proceedings are entitled to be fully apprised of the issues that the Commission will consider.  The precise ground for reversal, however, is unclear since the decision alludes textually to Section 1757(a)(5) by concluding that “the Commission violated the procedural rights of the city and thereby abused its discretion by purporting to ‘preempt’ city ordinances through its ‘approval’ of the project.”  In the context of CCP 1094.5 (administrative mandamus) “abuse of discretion” embraces error described in Section 1757(a)(2) (failure to proceed as required by law) Section 1757(a)(3) (inadequate findings) as well as Section 1757(a)(4) (absence of substantial evidence to support the findings).  Whether the definition in CCP 1094.5 is fully embraced in Section 1757(a)(5) is open to question. On April 19, 2013 the Commission sought review in the California Supreme Court.  On May 10, 2013, the Commission asked the Supreme Court to depublish the lower court opinion.  The Supreme Court denied both requests on June 26, 2013.

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