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Ohio Appeals Court Strikes Down City Ordinance Requiring New Structures to Connect To The Municipal Cable System

February 16, 2006

The court of appeals of Ohio has upheld a lower court decision that held unconstitutional a city ordinance mandating all new residential and commercial construction permit installation of equipment to connect to the system and pay a fee to the municipality-owned broadband telecommunications system, regardless of whether service was sought from the municipal system.

In Home Builders Association v. Lebanon, 2006 Ohio 595 (Ohio App. Feb. 13, 2006), the court of appeals of Ohio held that a municipal ordinance mandating the installation of a termination box ("telecommunications drop") on all new construction amounted to a taking without compensation and was therefore unenforceable. Moreover, the court held that a telecommunications connection fee, assessed upon installation of the telecommunications drop, was enforceable, but only with respect to a person requesting the service.

In March of2002, the City of Lebanon, Ohio adopted an ordinance requiring all new construction to connect to its telecommunications system for a fee of$1,250 and $2,000 for residential and industrial units, respectively. While payment of the connection fee was mandatory, there was no obligation to purchase service through the City. Local homebuilders filed suit claiming, among other things, that: 1) the ordinance constituted an unconstitutional taking; 2) the City had abused its power; and 3) the homebuilders were deprived of their constitutional rights in violation of Section 1983 of the U.S. Code. A local cable operator filed a third-party complaint against the City asserting that, in addition to the claims of the homeowners, the City had also unlawfully given preference to a public cable service provider and therefore discriminated against it.

On motions for summary judgment, the lower court held that the "mandatory connection" portion of the ordinance constituted an unconstitutional taking and was therefore unenforceable. Additionally, the court held that the portion of the ordinance mandating the telecommunication connection fee was enforceable, but only with respect to a person requesting service. Finding in favor of the City, the lower court held that the homebuilders did not have taxpayer standing to challenge the City's abuse of power and could not bring a Section 1983 claim, because they had failed to exhaust adequate state law remedies.

The court of appeals upheld the lower court's holdings, finding that the homebuilders had not consented to a taking of their property and that, therefore, the mandated installation was unenforceable. Relying on the general rule of law that if an unconstitutional portion of an Act is stricken as unenforceable the remaining portion, if complete and consistent with legislative intent, will remain enforceable, the court of appeals held that the portion of the ordinance mandating a telecommunications connection fee was enforceable against a person requesting service from the City. The court of appeals refused to find that the connection fee requirement was "wholly" severable from the mandatory connection requirement, as argued by the City, and could be assessed against property owners who did not request a connection,

The court of appeals upheld the remaining holdings of the lower court dismissing the homebuilders' Section 1983 claim and abuse of power claim.

We would be pleased to respond to any questions relating to these matters.

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