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Superior Communications v. City of Riverview

United States Court of Appeals, Sixth Circuit

February 1, 2018

Superior Communications, dba Smile FM, Plaintiff-Appellant,
v.
City of Riverview, Michigan, Defendant-Appellee.

          Argued: December 7, 2017

         Appeal from the United States District Court for the Eastern District of Michigan at Detroit. No. 2:15-cv-13363-Gerald E. Rosen, District Judge.

         ARGUED:

          Cindy Rhodes Victor, KUS RYAN, PLLC, Auburn Hills, Michigan, for Appellant.

          Lisa A. Anderson, JOHNSON, ROSATI, SCHULTZ & JOPPICH, P.C., Farmington Hills, Michigan, for Appellee.

         ON BRIEF:

          Cindy Rhodes Victor, KUS RYAN, PLLC, Auburn Hills, Michigan, for Appellant.

          Lisa A. Anderson, Michael E. Rosati, JOHNSON, ROSATI, SCHULTZ & JOPPICH, P.C., Farmington Hills, Michigan, Randall A. Pentiuk PENTIUK, COUVREUR & KOBILJAK, P.C., Wyandotte, Michigan, for Appellee.

          Before: CLAY, GIBBONS, and COOK, Circuit Judges.

          OPINION

          JULIA SMITH GIBBONS, Circuit Judge.

         This appeal concerns a dispute over whether Superior Communications can significantly expand and upgrade its radio broadcast equipment located on a telecommunications tower owned by the City of Riverview, Michigan. Though Superior alleges violations of the Telecommunications Act and of its constitutional rights, this case in fact turns on the interpretation of a straightforward licensing agreement between the parties. Because this agreement prohibits Superior from expanding its equipment without approval from the City, we affirm the district court.

         I.

         Superior Communications ("Superior"), doing business as Smile FM, is a nonprofit corporation that operates 21 radio broadcast stations throughout the State of Michigan. The City of Riverview (the "City") owns and operates a 320-foot telecommunications broadcast tower on City-owned property in Riverview, Michigan. Having received its permit from the FCC to operate a low-powered FM radio broadcast station, Superior entered into a "Telecommunication Site Access License Agreement" (the "License Agreement") with the City on October 20, 2010, to locate and operate certain radio broadcasting equipment on the City-owned telecommunications tower. Thereafter, and pursuant to the License Agreement, Superior installed one FMEC/1 single-bay antenna on the tower at a height of 300 feet and one 1, 000-watt transmitter in the City's equipment shelter. The antenna and transmitter broadcasted a 700-watt station in accordance with Superior's original FCC permit and the License Agreement. The License Agreement placed strict limitations on future modifications to Superior's broadcast equipment and made future upgrades subject to the City's prior approval.

         In April 2011, without the City's knowledge, Superior applied to the FCC for a modification to its FCC permit to allow for a significant increase in its broadcast power. In August 2012, the FCC issued Superior a permit to operate at 50, 000 watts. In September 2012, Superior first approached the City regarding upgrading its equipment to allow it to broadcast at this increased power when Superior's President Ed Czelada e-mailed the City's Land Preserve Sales Manager John Menna that Superior "received permission from the FCC to replace [Superior's] antenna." DE 21-11, E-mails, Page ID 762. At the City's request, Superior then provided details of its proposed new equipment.

          To aid in assessing Superior's request, the City hired Russell Harbaugh, an electrical engineer, to conduct an engineering evaluation of the proposed upgrade. He produced two reports (the "Harbaugh Reports"), which identified several issues to consider in determining whether to grant Superior's proposed equipment upgrade. The reports made clear that Superior's request to replace its single-bay antenna with a four-bay antenna would cause Superior's equipment to occupy thirty feet of space on the tower instead of its current three feet of space. They also expressed concern that the equipment upgrade would expose individuals around the tower to unsafe levels of radiofrequency electromagnetic radiation and that Superior's transmissions might create radio interference with other tower tenants.

         Subsequently, on November 12, 2013, the City denied Superior's request to expand its broadcasting equipment located on the tower. Following this denial, Superior commissioned its own report attacking the Harbaugh Reports' conclusions, but in April 2015, the City reaffirmed its denial of Superior's request via a formal letter from the City Attorney. Superior then commenced this suit in state court, alleging that the City breached the License Agreement and violated Superior's due process and equal protection rights by denying Superior's request to upgrade its equipment. The City removed the case, and following this removal, Superior added an additional claim under the federal Telecommunications Act ("TCA"), 47 U.S.C. § 151 et seq.

         The City moved for summary judgment on all grounds, which the district court granted. The district court concluded that the License Agreement was unambiguous and that it granted the City a contractual right to refuse Superior's requested upgrade, which the City had properly exercised. It also concluded that the City had not violated the Telecommunications Act, as the City had not enacted a "regulation" within the meaning of the Act but had instead acted in its proprietary capacity in denying Superior's request under the terms of the License Agreement. Finally, the court held that the City had a rational basis for its actions and, therefore, that Superior's constitutional claims were without merit.

         We agree that Superior's claims are without merit and hold that the district court correctly granted summary judgment for the City.

          II.

         This court reviews a district court's grant of summary judgment de novo. Kalich v. AT&T Mobility, LLC, 679 F.3d 464, 469 (6th Cir. 2012) (citing Int'l Union v. Cummins, Inc., 434 F.3d 478, 483 (6th Cir. 2006)). Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In considering a motion for summary judgment, the court must "draw all reasonable inferences in favor of the nonmoving party." Int'l Union, 434 F.3d at 483 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). In doing so, this court asks "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).

         A.

         Superior first challenges the district court's grant of summary judgment for the City on Superior's claim for breach of the License Agreement. We hold that the district court correctly concluded that Superior did not breach the unambiguous terms of the License Agreement.

         1.

         Superior first argues that the License Agreement was ambiguous and therefore that summary judgment was improper.

         Because the License Agreement contains a choice-of-law clause designating it be construed in accordance with the laws of the State of Michigan and Superior's breach of license claim arises under state law, this court uses Michigan law to interpret the License Agreement. See Johnson v. Ventra Grp., Inc., 191 F.3d 732, 738-39 (6th Cir. 1999); Super Sulky, Inc. v. U.S. Trotting Ass'n, 174 F.3d 733, 741 (6th Cir. 1999). Under Michigan law, whether a contract is ambiguous is a question of law, which is reviewed de novo on appeal. Klapp v. United Ins. Grp. Agency, Inc., 663 N.W.2d 447, 451 (Mich. 2003) (citing Farm Bureau Mut. Ins. Co. v. Nikkel, 596 N.W.2d 915 (Mich. 1999)). In interpreting the contract, a court must "honor the intent of the parties" by giving meaning to the agreement as written. Rasheed v. Chrysler Corp., 517 N.W.2d 19, 29 n.28 (Mich. 1994); see Rory v. Cont'l Ins. Co., 703 N.W.2d 23, 30-31 (Mich. 2005) (stressing unambiguous contract terms "must be enforced as written"). Thus, the contract should be read as a whole, "giving harmonious effect, if possible, to each word and phrase." Wilkie v. Auto-Owners Ins. Co., 664 N.W.2d 776, 781 n.11 (Mich. 2003) (citing Singer v. Goff, 54 N.W.2d 290, 292 (Mich. 1952)). If the contract's provisions "may reasonably be understood in different ways, " the contract is ambiguous, and its interpretation is a question of fact for the jury. Universal Underwriters Ins. Co. v. Kneeland, 628 N.W.2d 491, 494 (Mich. 2001) (citing Farm Bureau, 596 N.W.2d at 919); Klapp, 663 N.W.2d at 454. If, however, the agreement is "clear and unambiguous, it is to be construed according to its plain sense and meaning" and summary judgment is appropriate. City of Grosse Pointe Park v. Mich. Mun. Liab. & Prop. Pool, 702 N.W.2d 106, 113 (Mich. 2005) (quoting New Amsterdam Cas. Co. v. Sokolowski, 132 N.W.2d 66, 68 (Mich. 1965)). "[W]e will not create ambiguity where the terms of the contract are clear." Id.

         Superior argues that various provisions of the License Agreement are in conflict, and therefore, the contract is ambiguous. See Klapp, 663 N.W.2d at 453 ("[I]f two provisions of the same contract irreconcilably conflict with each other, the language of the contract is ambiguous."). Specifically, Superior contends that paragraphs 9(a), 11, and 16(a)(2) of the License Agreement supply conflicting information regarding Superior's ability to upgrade its equipment. We ...


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