United States District Court, W.D. Kentucky, Louisville
INSIGHT KENTUCKY PARTNERS II, L.P. PLAINTIFF
LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT and LOUISVILLE METRO COUNCIL DEFENDANTS
Charles R. Simpson III, Senior Judge United States District
matter is before the Court on the motion of Defendants
Louisville/Jefferson County Metro Government and Louisville
Metro Council (collectively, “Defendants”) to
dismiss the claims under Federal Rule of Civil Procedure
12(b)(6), ECF No. 18. Plaintiff Insight Kentucky Partners II,
L.P. (“Insight”) responded, ECF No. 23.
Defendants replied, ECF No. 24. For the reasons explained
below, the Court will grant in part and deny in part
Defendants' motion to dismiss.
Allegations in the Complaint
video providers use facilities placed in public rights-of-way
to provide video programming to their customers. Compl.
¶ 9, ECF No. 1. These providers run wires and cables,
including fiber optic wires, from central locations to their
customers' businesses and residences. Id. ¶
10. Most of the wires and cables are hung aerially on
existing utility poles along the public rights-of-way.
Insight and the Louisville Metro Council Regulations
is a wireline video provider operating in Louisville,
Kentucky. Id. ¶ 9. Insight and its predecessor
entities have been providing customers in the area with
services for decades. Id. ¶ 15. Louisville
Metro Council regulates Insight as a “Cable
Communications System.” Id. ¶ 17. The
regulations placed on Insight are apparently costly and
concern “extension of service requirements, customer
service obligations, privacy regulations, performance
measurements, interconnection requirements with other similar
networks, rate regulation, requirements regarding street
occupancy, reporting requirements, handling complaints, and
the requirement to obtain a franchise from Louisville
Metro.” Id. ¶¶ 19, 20. For
example, the regulations require Insight to maintain a repair
and maintenance service that is capable of responding to
customer complaints or requests within twenty-four hours and
to provide Louisville Metro Council with the results of
system performance measurement tests. Id. ¶ 37.
Insight must also maintain service logs and follow a
preventive maintenance program. Id.
the franchise requirement, Insight has operated under a
franchise agreement with Louisville Metro Council since May
31, 1998. Id. ¶ 21. In 2010, the franchise
agreement expired. Id. Insight initiated timely
renewal negotiations under the Federal Cable Act.
Id. In 2012 and 2015, Insight entered into
settlement agreements with Louisville Metro Council.
Id. ¶ 21 n.1. These agreements confirmed that
the 1998 franchise agreement was still in effect.
AT&T and the Louisville Metro Council
Telecommunications, LLC (AT&T) is another wireline video
provider operating in Louisville. Id. ¶ 9.
Unlike with Insight, Louisville Metro Council does not
regulate AT&T as a “Cable Communications
System.” Id. ¶ 24. According to Insight,
AT&T takes the position that it operates under a historic
state-issued telecommunications franchise and does not
require a separate video franchise to operate in Louisville.
Id. Thus, AT&T apparently is not subject to the
regulations placed on Insight, nor is it required to obtain a
franchise from Louisville Metro Council. Id.
Google and the Louisville Metro Council Regulations
Fiber Kentucky, LLC (“Google”) has applied for
and been granted authority by Louisville Metro Council to
become a wireline video provider in the city and surrounding
area, and plans to construct its own wireline video network.
Id. ¶ 9. When Google has finished constructing
its wireline video network, it will compete with AT&T and
Insight in providing video services to customers in
Louisville. Id. ¶¶ 11-14.
with Insight, Louisville Metro Council does not plan to
regulate Google as a “Cable Communications
System.” Id. ¶ 27. Instead, Louisville
Metro Council will treat Google as a “Communications
Service” provider and will subject it to minimal
February 2016, Louisville Metro Council approved an
“Interlocal Cooperation Agreement” with the
Jefferson County, Kentucky municipalities that possess
franchise authority. Id. ¶ 29. The agreement
authorizes Louisville Metro Council to advertise and process
bids for a single, standard franchise agreement for
communication infrastructure service providers seeking to
serve the Louisville Metro area and municipalities in
Jefferson County (a “Uniform Franchise”).
2016, Louisville Metro Council awarded Google a Uniform
Franchise. Id. ¶ 30. The Uniform Franchise
requires Google to comply with applicable requirements in the
Louisville Metro Public Works & Assets Utility Policy and
with Louisville Metro Council's permitting and inspection
requirements related to working in the public right-of-way.
Id. ¶ 31. The Uniform Franchise also requires
Google to pay a “Communications Franchise Fee” in
an amount not to exceed $50, 000.00, if state law were
changed to permit such a fee. Id. Overall, Insight
asserts that the Uniform Franchise agreement and the
Louisville Metro Code regulations placed on Google will be
less burdensome than those that Louisville Metro Council has
placed on it. Id. ¶ 37.
Insight's Request to Decrease Regulations and the
Louisville Metro Council's Adoption of the One-Touch
2016, Insight sent Louisville Metro Council a letter seeking
regulatory treatment similar to the regulations that it will
apparently place on Google. Id. ¶ 43. In July
2016, after Louisville Metro had awarded Google a Uniform
Franchise, Insight sent another letter that again sought
regulatory treatment similar to the regulations that will be
placed on Google. Id. ¶ 44. In August 2016,
Louisville Metro Council declined Insight's requests.
Id. ¶ 46.
months before Insight sought similar regulatory treatment, in
February 2016, Louisville Metro Council adopted the One-Touch
Ordinance. Id. ¶ 59. The One-Touch Ordinance
allows a communications service provider seeking to make a
new utility pole attachment to relocate or alter the
attachments or facilities of any preexisting third-party user
to accommodate its own approved attachments. Id.
¶ 60. The communications service provider must use the
owner of the utility pole's approved contractors.
Id. The One-Touch Ordinance does not require the
communications service provider to notify the preexisting
third-party of its intent to relocate or alter the
attachments, unless the relocation or alteration would cause
a customer outage. Id. ¶ 61. If the
communications service provider has not provided advance
notice of its intent to relocate or alter an attachment, it
must notify the preexisting third-party about any relocation
or alteration within 30 days after performing the work.
Id. ¶ 62. The preexisting third-party then has
14 days to inspect the work to make any claim of damages or
other complaints. Id.
Insight's Claims against Defendants
September 2016, Insight filed suit against Defendants. Compl.
1, ECF No. 1. Insight asserts six claims. First, Insight
claims under 42 U.S.C. § 1983 that Defendants'
preferential treatment of AT&T and Google infringed on
its ability to engage in and transmit speech, which violated
the First and Fourteenth Amendments to the United States
Constitution and Section 8 of the Kentucky Constitution
(Count I). Id. ¶¶ 71-86. Second, Insight
asserts under 42 U.S.C. § 1983 that Defendants'
preferential treatment of AT&T and Google denied it equal
protection of the law, which violated the First and
Fourteenth Amendments to the United States Constitution and
Section 2 of the Kentucky Constitution (Count II).
Id. ¶¶ 87-105. Third, Insight asserts that
Kentucky law granting the Public Service Commission exclusive
authority to regulate utility pole attachments preempts
Louisville's One-Touch Ordinance (Count III).
Id. ¶¶ 106-15. Fourth, Insight claims
under 42 U.S.C. § 1983 that the One-Touch Ordinance
constitutes an unlawful taking of its property, which
violates the Fifth and Fourteenth Amendments to the United
States Constitution and Section 13 of the Kentucky
Constitution (Count IV). Id. ¶¶ 116-24.
Fifth, Insight also seeks declaratory relief and an award of
attorney fees under 42 U.S.C. §§ 1983 and 1988 to
remedy the alleged constitutional violations (Count V).
Id. ¶¶ 125-32. Sixth, Insight seeks a
declaratory judgment under 28 U.S.C. §§ 2201 and
2202 to determine the respective rights of the parties (Count
VI). Id. ¶¶ 133-36.
now move to dismiss Counts I through V under Federal Rule of
Civil Procedure 12(b)(6). Rule 12(b)(6) provides that a party may
move to dismiss a cause of action for “failure to state
a claim upon which relief can be granted.” To survive a
motion to dismiss, a complaint must contain sufficient facts
to state a claim that is “plausible on its face.”
Bell Atl. Corp. v. Twombly, 55 U.S. 544, 570 (2007).
A complaint states a plausible claim for relief when the
court may “draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A court
is not required to accept legal conclusions or
“threadbare recitals of the elements of a cause of
action.” Id. When resolving a motion to
dismiss, the court must “construe the complaint in the
light most favorable to the ...