My take on OTMR litigation so far

For several weeks, I have avoided offering commentary on the OTMR litigation because I know that, no matter what I say, some are going to think I’m looking at it through an anti-Google or pro-AT&T lens.

But since I have 25 years of experience handling business disputes in federal court, and 5 years of work on the Board of NES, I’m going to go ahead and give my thoughts about the litigation from time-to-time.

None of this is in any particular order.  None of this is official information from Metro or anyone else. None of this repeats privileged communications. And, I am not speaking for Metro here. This is just stuff I’m thinking about the lawsuits:

– I don’t care who is actually named in the Nashville lawsuit as of today, there are multiple parties who are certainly actively planning a litigation strategy. These include Metro, AT&T, Google, Comcast, and NES. On top of this, I’d bet money that TVA is paying attention to what is happening, as well as the State of Tennessee. And, there are probably more than a few state level lobbyists who are thinking about what, if anything, might happen in the legislature.  There have probably been times over the last few weeks where the collective hourly rate of everyone billing time on this has been into the several thousands of dollars per hour.

– At this point in a lawsuit, anyone who says they know how it’s going to go at the end is just making a guess. There are too many moving parts to predict accurately more than a few steps ahead.

– In Louisville, if AT&T wins the federal preemption argument in their summary judgment motion, it will be good news for AT&T here in Nashville. Due to some nuances in Kentucky law that are different than in Tennessee, the converse is not necessarily true.  If AT&T loses its summary judgment motion, it might be, but won’t necessarily be, bad news for them in the Nashville lawsuit.

– The federal preemption argument that AT&T is making is a pretty good argument. Blame Congress if you want. Blame the telecommunications lobby in D.C. over the last century if you want. But there are clear federal regulations about moving stuff on poles, and our OTMR ordinance is in conflict with those clear federal regulations.

– Anybody who says they know how the lawsuit plays out if AT&T wins its federal preemption argument in Louisville or Nashville is making stuff up. Maybe our federal court would only invalidate the ordinance on AT&T’s poles and not on NES’s poles. Maybe our federal court would be swayed by how inefficient that would be, come up with some argument to still rule against AT&T so OTMR could go forward, and let a court of appeals sort it out. Maybe our federal court will just copy whatever happens in Louisville, or maybe not. There just isn’t a way to know.

– Media reports show that AT&T sent a letter to NES saying that they expect NES to honor its existing agreement with AT&T. What’s up with that? I don’t know – but my guess is that AT&T doesn’t have an actual legal dispute with NES yet. When you have a contract with someone, you really shouldn’t sue them until they breach the contract or until they make it clear that they are about to breach the contract.  I infer that NES hasn’t made a definitive statement to AT&T yet about whether NES will honor the contract or the OTMR ordinance.  I presume that, if NES chooses to honor the ordinance, they’ll be a defendant pretty quickly – maybe in a separate lawsuit – maybe in the existing lawsuit.

– Speaking of NES as a defendant…you have to wonder whether Comcast has a lawsuit getting ready to be filed. Like Google and AT&T, Comcast has a contract with NES for pole attachments. My best guess is that OTMR conflicts with that contract too.

– Very few members of the public or media ever come to NES Board meetings. If you had been to a few about two years ago, you would have been treated to a complicated analysis about the role that TVA plays in the area of pole attachment regulations. I am paraphrasing, but I think it boils down to the idea that TVA has the complete unilateral ability to regulate, if it wants, what happens with attachments on poles that carry TVA power. In Tennessee, TVA has never exercised the right to make pole attachment regulations. If they ever did, as I understand it, we’d all have to follow their regulations. Most likely, TVA will continue to not regulate attachments here – but they are a player in this saga if they want to be one.

– Most of the media coverage of the lawsuit focuses on the top level headline of AT&T suing Metro, and some coverage talks about the federal preemption argument I have talked about here. But AT&T is also suing based on the Metro Charter – which says that NES “shall have exclusive management and control of the operation of said electric power plant and/or distribution system.” AT&T argues that, because the Charter grants NES the exclusive right to manage and control the power grid and distribution system, the Council and Mayor had no authority to enact OTMR. This is a pretty esoteric Charter issue – and there is absolutely no case law on this topic. The Charter is a unique document in Tennessee and this provision has never been litigated. Novel issues create uncertainty for all parties.

– About Google’s offer to help…I mean, if I’m Metro Legal, I’d guess I’d rather have their help than not, but it honestly won’t help that much. Metro will likely be in touch with Louisville, which has every reason to share information freely with Nashville. Metro will have its own outside counsel who will get paid to consider only Metro’s best interests. Plus, there is no way to have really deep collaboration sessions with Google’s team because meetings like that would not have the protection of the attorney-client privilege or work product doctrine.  So, Metro could really only share ideas about concepts with Google, but not strategy.  You never know what matters to a judge though – maybe it helps in the long run.

– Speaking of the judge, the Nashville case got assigned to Judge Kevin Sharp. I don’t think he’s got a bias or perspective that would influence the case one way or another. He’s a careful thinker. When he was in private practice, he did some work for big companies, and he did some work as a plaintiff’s lawyer for regular people. I don’t think he’ll take political issues into consideration.

– OTMR was never going to be implemented right away. There was always going to be some time for the companies involved to create needed new procedures.  NES was always going to have to approve some contractors to do OTMR too. My sense was that it was going to take 90 days, plus or minus, before Google could actually make a request to make a One Touch move of someone else’s equipment. Until these companies do this leg work, things might develop slowly in the litigation.

Here’s a quick list of things I am looking for over the next few months:

– What happens with the Louisville summary judgment? It will be interesting. Any result will be argued all ways by all parties here in Nashville. In the end, it’ll be an interesting non-binding data point and perhaps not much more.

– How long does it take for NES to be ready for Google to make a One Touch request? Will NES honor the ordinance (I assume, yes?) or their contract with AT&T?

– Is Comcast going to sue? Do they wait until there’s an actual One Touch request to move their equipment?

– Is NES inevitably a party because of their central role as a pole owner, and a party to written contracts with Google, and AT&T, and Comcast? Does NES join (or get forced to join) in litigating the Metro Charter issue that AT&T raised in its lawsuit?

Metro has asked for its deadline to file an Answer or a Motion to Dismiss to be moved to November 14. Louisville filed a Motion to Dismiss, which was denied. This is really a tactical decision, and I’m not in those conversations. I’d expect a Motion to Dismiss by Metro to be a likely loser…but sometimes you might file a motion that is a probable loser anyway just to have a chance to run your arguments by the judge, and try to get a preview of how the court is thinking about things. Best case is that you win your long shot motion. Worst case is that you maybe learn something about the judge’s thoughts. The down side is time – it slows the case down to file a motion that you suspect is a loser. In federal court, sometimes the wait for a ruling on a motion is an excruciating multi-month exercise.

– Usually, there is a case management conference about 6-8 weeks after a case is filed. The conference in this case is set for November 21. Judge Sharp has one of the Magistrate Judges conduct his case management conferences, and they typically are mostly administrative (setting deadlines, etc.). However, the parties are required to submit a proposed case management plan a few days in advance. That probably won’t be very interesting, but it might give a little insight into the pace of litigation that the parties expect. Also, I’m guessing everyone’s out-of-town lawyers will show up for that conference.

I know this has been a long post and my comments are in no particular order.  But I’ve been holding back for a few weeks…and I wanted to just get these thoughts out.

I’ll try to provide more thoughts as the two (maybe more?) lawsuits move forward.

Bob Mendes

Bob Mendes represents all of Nashville as a Council-At-Large member of Nashville’s Metro Council. He is Chair of the Council’s Charter Revision Committee, a member of the Metropolitan Audit Committee, and a member of the Council’s Budget & Finance Committee, Rules & Confirmations Committee, and Ad Hoc Affordable Housing Committee. Bob also practices business law at Waypoint Law PLLC. Bob’s complete bio is here. You can follow Bob @mendesbob.