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‘Substantive Rule’

FCC 2018 Ruling Can’t Be Applied Retroactively to City’s 2017 Tower Denial: Court

The FCC’s September 2018 small-cells declaratory ruling preempting aspects of local and municipal cell tower permit reviews (see 2210070046) is a “substantive rule” that shouldn’t be applied retroactively to the 2017 Roswell, Georgia, decision denying T-Mobile’s application to build a tower in a residential neighborhood, said U.S. District Judge Amy Totenberg for Northern Georgia in Atlanta in a signed opinion and order Friday (docket 1:10-cv-01464).

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That leaves the court to apply the significant service gaps standard articulated in its 2016 order, plus governing 11th Circuit law, when resolving the parties’ pending motions for summary judgment, said the opinion and order. Either party is free to file an interlocutory appeal of her opinion and order with the 11th Circuit, it said.

Totenberg will defer ruling on the summary judgment motions or setting a date for resuming the previously continued evidentiary hearing “until the parties have determined whether to pursue an appeal,” said the opinion and order. She ordered that any interlocutory appeal be filed within 10 days.

Though the 2018 declaratory ruling has “substantive components” that supplement the Telecommunications Act by imposing additional conditions on localities, “it also bears many of the hallmarks of an interpretive rule,” said the opinion and order. She conceded there’s “a substantial ground for difference of opinion” about whether the 2018 declaratory ruling should be treated as an interpretive rule or a substantive rule and whether the court should apply the significant gaps standard articulated in the 2016 order to the city’s decision instead of applying the “materially inhibits standard” in the FCC’s declaratory ruling, it said.

The long litigated telecommunications case “has passed through a host of legal minefields over more than a dozen years,” and is now before the court on the parties’ motions for summary judgment, said the opinion and order. The document “addresses important new threshold legal questions posed” as the court “endeavors to move this case forward to final resolution,” it said. The opinion and order is “subsequent” to the FCC’s issuance of new telecommunications regulations “that have shifted the standards for local governments’ approval of proposed cell towers, and in turn, judicial review of resulting legal challenges,” it said.

The city says the materially inhibits standard in the declaratory ruling is “unreasonable” because it replaces the significant gap test with an overly broad and subjective test that flouts Congress’s intent “to preserve local government zoning authority,” said the opinion and order. But T-Mobile claimed the court should defer to the FCC’s interpretation under the 1984 Supreme Court decision in Chevron U.S.A. v. Natural Resources Defense Council because it's the correct interpretation of Section 332’s “anti-prohibition clause” under the TCA. Chevron “established a familiar two-step procedure for evaluating whether an agency’s interpretation of a statute is lawful,” it said.

The court is “inclined to agree” with the city that the 2018 declaratory ruling reflects “an unreasonable interpretation of Section 332,” said the opinion and order. The FCC’s interpretation conflicts with those of every Circuit “that has addressed the issue,” it said. “It also appears to upset the balanced regulatory approach that was intended by Congress.”