Comcast of Sacramento I, LLC v. Sacramento Metropolitan Cable

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

COMCAST OF SACRAMENTO I, LLC; Nos. 17-16847

COMCAST OF SACRAMENTO II, LLC; 17-16923

COMCAST OF SACRAMENTO III, LLC,

Plaintiffs-Appellants/ D.C. No.

Cross-Appellees, 2:16-cv-01264-

WBS-EFB

v.

SACRAMENTO METROPOLITAN OPINION

CABLE TELEVISION COMMISSION,

Defendant-Appellee/

Cross-Appellants.

Appeal from the United States District Court

for the Eastern District of California

William B. Shubb, District Judge, Presiding

Argued and Submitted December 17, 2018

San Francisco, California

Filed May 8, 2019

Before: Consuelo M. Callahan and N. Randy Smith,

Circuit Judges, and Fernando M. Olguin,* District Judge.

Opinion by Judge N.R. Smith

*

The Honorable Fernando M. Olguin, United States District Judge for

the Central District of California, sitting by designation.

2 COMCAST V. SMCTC

SUMMARY**

Cable Franchise Fees

The panel vacated the district court’s summary judgment

and held that 47 U.S.C. § 555a(a) barred the only relief

sought by Comcast of Sacramento in its lawsuit concerning

the calculation and payment of cable franchise fees.

Under 47 U.S.C. § 555a(a), local authorities and

municipalities, involved in the regulation of cable television

services within their boundaries, are exempted from civil

money damages liability in any lawsuit for any claim arising

from the regulation of cable services.

As an initial matter, the panel rejected Comcast’s

argument that the Sacramento Metropolitan Cable Television

Commission (the “Commission”) waived any argument

relying on 47 U.S.C. § 555a(a). The panel held that the issue

was raised and addressed by the district court sua sponte, and

the Commission’s briefs sufficiently raised the issue for

purposes of appeal.

The panel held that Comcast pleaded claims of conversion

and common count, both intended to obtain a return of the

security deposit paid to the Commission by Comcast’s

predecessor in interest under the terms of a franchise

agreement, and these claims seek an award of money

damages (and not injunctive or declaratory relief) and are

brought against a cable franchising authority. The panel

**

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

COMCAST V. SMCTC 3

further held that Comcast’s lawsuit, as pleaded, arose from

cable regulation. The panel concluded that the lawsuit was

subject to the bar provided by § 555a(a), and must be

dismissed on that basis.

The panel instructed the district court to enter an order on

remand, dismissing the lawsuit without prejudice. The panel

rejected Comcast’s argument that it was left without any

possible means of obtaining the return of its security deposit.

COUNSEL

Fred A. Rowley, Jr. (argued), Jeffrey Y. Wu (argued), and

Aaron Pennekamp, Munger Tolles & Olson LLP, Los

Angeles, California; Donald B. Verrilli Jr., Munger Tolles &

Olson LLP, Washington, D.C.; Jill B. Rowe, Scott M.

McLeod, and Patrick M. Rosvall, Cooper White & Cooper

LLP, San Francisco, California; for Plaintiffs-

Appellants/Cross-Appellees.

Harriet A. Steiner (argued) and Joshua Nelson, Best Best &

Krieger LLP, Sacramento, California, for Defendant-

Appellee/Cross-Appellant.

Allison W. Meredith and Jeremy B. Rosen, Horvitz & Levy

LLP, Burbank, California, for Amicus Curiae California

Chamber of Commerce.

Karin Dougan Vogel, J. Aaron George, and Gardner

Gillespie, Sheppard Mullin Richter & Hampton LLP,

Washington, D.C., for Amicus Curiae California Cable &

Telecommunications Association.

4 COMCAST V. SMCTC

Jeffrey M. Bayne, Tillman L. Lay, and James N. Horwood,

Spiegel & McDiarmid LLP, Washington, D.C., for Amici

Curiae The Alliance for Community Media and The Alliance

for Communications Democracy.

Travis Van Ligten and Jeffrey T. Melching, Rutan & Tucker

LLP, Costa Mesa, California, for Amici Curiae League of

California Cities, California State Association of Counties,

and Scan Natoa, Inc.

OPINION

N.R. SMITH, Circuit Judge:

Under federal law, local authorities and municipalities,

involved in the regulation of cable television services within

their boundaries, are exempted from civil money damages

liability in any lawsuit for any claim arising from the

regulation of cable services. See 47 U.S.C. § 555a(a).

This lawsuit concerns the calculation and payment of

cable franchise fees. Because Comcast of Sacramento

(“Comcast”) seeks money damages in this suit, brings it

against a municipality, and the suit arises out of the regulation

of cable services, 47 U.S.C. § 555a(a) bars the only relief

sought by Comcast. Thus, we vacate the district court’s

grants of summary judgment and remand with instructions to

dismiss Comcast’s lawsuit.

COMCAST V. SMCTC 5

I. FACTUAL AND PROCEDURAL BACKGROUND

Cable Industry Background

Historically, cable operators pay a fee to local and/or state

governments in order to provide service within a particular

jurisdiction, usually referred to as a franchise fee. These fees

have been justified by the fact that cable operators use public

rights-of-way, maintained by the local governmental entities,

to deliver their services.

Prior to the 1980s, the Federal Communications

Commission (“FCC”) largely left cable franchise regulation

to local governments. However in 1984, the FCC determined

that many local authorities were imposing varying and often

high franchise fees, and that those fees were impeding the

growth of the cable television industry. Thus, Congress

enacted the Cable Communications Policy Act (the “Cable

Act”) of 1984.

The Cable Act imposes a uniform set of franchise

procedures and standards, authorizes local authorities to

collect fees in connection with the grant of a cable franchise,

but caps those fees at 5% of a cable company’s gross

revenues. See 47 U.S.C. § 542(a), (b). Franchise fees are

defined, and include any tax, fee, or assessment imposed on

“a cable operator or cable subscriber, or both, solely because

of their status as such.” Id. § 542(g)(1); see also § 542(b).

Franchise fees do not include “any tax, fee, or assessment of

general applicability (including any such tax, fee, or

assessment imposed on both utilities and cable operators or

their services but not including a tax, fee, or assessment

which is unduly discriminatory against cable operators or

6 COMCAST V. SMCTC

cable subscribers).” Id. § 542(g)(2)(A). The Cable Act also

expressly preempts any inconsistent state law. Id. § 556(c).

Several years later, Congress determined that the

delegation of cable franchising authority had resulted in an

unanticipated development: municipalities were being sued

for damages by cable operators in connection with cable

franchising decisions. See Jones Intercable of San Diego,

Inc. v. City of Chula Vista, 80 F.3d 320, 326 n.5 (9th Cir.

1996) (citing S. Rep. No. 92, 102d Cong., 2d Sess. 48–49

(1992), as reprinted in 1992 U.S.C.C.A.N. 1133, 1181–82);

see also id. (“[T]he mere pendency of these large damage

claims has had significant adverse effects on the functioning

of local governments. These claims represent a potentially

crippling burden on local government treasuries . . . .”

(alterations in original)). In response, Congress enacted the

Cable Television Consumer Protection and Competition Act

of 1992. Among other things, that Act provides that:

In any court proceeding pending on or

initiated after October 5, 1992, involving any

claim against a franchising authority or other

governmental entity, or any official, member,

employee, or agent of such authority or entity,

arising from the regulation of cable service or

from a decision of approval or disapproval

with respect to a grant, renewal, transfer, or

amendment of a franchise, any relief, to the

extent such relief is required by any other

provision of Federal, State, or local law, shall

be limited to injunctive relief and declaratory

relief.

47 U.S.C. § 555a(a) (emphasis added).

COMCAST V. SMCTC 7

Then in 1996, Congress enacted the Telecommunications

Act, which sought to increase competition by allowing non-

traditional cable companies to enter state cable markets.

However, few were able to successfully enter the California

market. This inability to enter that market resulted, in part,

from a number of traditional cable companies being well

established in California. The inability was also partly

attributable to the fact that local and municipal governments

within California imposed varied, often onerous franchise

requirements that, in effect, created barriers to new market

entrants.

In order to encourage competition in the cable television

market, the California legislature enacted the Digital

Infrastructure and Video Competition Act (“DIVCA”) in

2006. DIVCA stripped local governments of their ability to

grant cable franchises and established the California Public

Utilities Commission (“CPUC”) as “the sole franchising

authority for a state franchise to provide video service.” Cal.

Pub. Util. Code § 5840(a). Under DIVCA, local governments

continued to impose and collect “franchise fees” as a form of

rent for video service providers’ use of public rights-of-way,

but those fees were and are capped at 5% of the providers’

gross revenues. Id. § 5840(q)(1). DIVCA also permits cable

operators to “identify and collect the amount of the state [or

local] franchise fee as a separate line item on the regular bill

of each subscriber.” Id. § 5860(j). Sacramento County has

enacted an ordinance that requires each cable franchise

operating within the county to pay a franchise fee “equal to

five (5) percent per year of the Franchisee’s annual Gross

Revenues.” Sac. Cty. Code § 5.50.602.

DIVCA also authorizes the CPUC to collect from each

cable franchise an annual fee in an amount necessary “to

8 COMCAST V. SMCTC

carry out the provisions of [DIVCA].” Cal. Pub. Util. Code

§ 441. This is known as a “CPUC fee.” However, DIVCA

requires that the CPUC fee must be applied in a manner

consistent with the Cable Act’s 5% franchise fee cap. Id.

§ 442(b).

DIVCA additionally permits local governments to assess

public, educational and governmental (“PEG”) fees in a

manner consistent with federal law, id. § 5870(n), and in an

amount not to exceed “1 percent of the holder’s gross

revenues, as defined in Section 5860.” Id. Cable operators

may pass those fees on to their subscribers and thereby

recover “any fee remitted to a local entity under this section

by billing a recovery fee as a separate line item on the regular

bill of each subscriber.” Id. § 5870(o). The city of

Sacramento has enacted an ordinance imposing such a fee.

See Sac. Mun. Code § 5.28.2670(C)(1).1

The Present Dispute

Both before and after the enactment of DIVCA,

Sacramento Metropolitan Cable Television Commission

(“SMCTC”) regulated the provision of cable television

services in Sacramento and the surrounding area. Comcast

(or Comcast’s predecessors in interest, all entities hereafter

referred to as “Comcast”) offered cable television services in

the Sacramento area for years prior to the enactment of

DIVCA. Prior to 2008, Comcast was the beneficiary of a

franchise issued by SMCTC. As part of that franchise,

1

The Sacramento ordinance actually imposes a PEG fee equal to 3%

of a cable operator’s gross revenue, but the parties do not dispute that

DIVCA limits the fee to 1% of gross revenue, and SMCTC has not

attempted to collect any amount greater than that from Comcast.

COMCAST V. SMCTC 9

Comcast’s predecessor had been required to pay a deposit to

SMCTC. Following the enactment of DIVCA, Comcast

transitioned over to a franchise issued by the CPUC, and the

franchise agreement with SMCTC terminated by operation of

law in 2011. Comcast was not required to pay a deposit

under the CPUC franchise agreement, and the parties do not

dispute that the pre-existing deposit (paid to SMCTC) was to

be returned to Comcast upon expiration of the SMCTC

franchise agreement. However, SMCTC did not return the

deposit following the termination of the SMCTC franchise

agreement; instead SMCTC continued to hold the deposit in

an interest bearing trust account. Though the record does not

suggest that SMCTC had any legal authority to continue to

hold Comcast’s deposit, Comcast did not immediately request

its return.

After the SMCTC franchise had terminated, Comcast

continued to pay its annual franchise fee to SMCTC (as rent

for use of the public rights-of-way), as required by DIVCA.

However, in October 2011, Comcast informed SMCTC by

letter that it would deduct the CPUC fee from the franchise

fees paid during the 3rd quarter of 2011 and going forward

thereafter because, in Comcast’s view, the CPUC fee

“qualifies as a ‘franchise fee’ under federal law” that counted

towards the Cable Act’s 5% franchise fee cap. Additionally,

Comcast informed SMCTC that it would not include the PEG

fees it paid to SMCTC as part of the “gross revenues”

calculation that formed the basis for Comcast’s annual

franchise fee obligations.

Though SMCTC does not appear to have responded

immediately to Comcast’s October 2011 letter, SMCTC

eventually informed Comcast that it disagreed with

Comcast’s interpretation of applicable provisions of state and

10 COMCAST V. SMCTC

federal law. Following an audit performed in 2014, SMCTC

demanded that Comcast remit the withheld amounts for that

period, an amount totaling $334,610. The parties exchanged

several additional letters over the months that followed,

outlining their disagreement concerning the appropriate

calculation of CPUC and PEG fees due under state and

federal law. In an October 2014 letter sent by SMCTC,

SMCTC informed Comcast that, because Comcast had paid

less in franchise fees than SMCTC believed was due for fiscal

years 2011 and 2012, SMCTC would begin offsetting the

amount Comcast owed against Comcast’s security deposit

unless Comcast promptly paid the amounts it had withheld.

Comcast declined to pay the amounts SMCTC claimed it

owed; instead, it demanded a return of its security deposit.

SMCTC refused and instead responded to Comcast’s demand

in March 2015 by moving Comcast’s deposit out of the trust

account and into SMCTC’s general fund.

In June 2016, Comcast brought suit against SMCTC,

asserting state law claims for conversion and common count.

Both claims ultimately seek a return of Comcast’s security

deposit, which, with accrued interest, totaled $227,639.45.

SMCTC did not contest those counts but instead argued as

affirmative defenses that: (1) the CPUC fees did not

constitute “franchise fees” for purposes of the Cable Act’s

5% cap, and that Comcast therefore was not permitted to

offset those fees against the franchise fees due to SMCTC;

and (2) PEG fees counted towards “gross revenues” from

which the franchise fee would be determined, and Comcast

COMCAST V. SMCTC 11

could not exclude those fees when calculating its franchise

fee obligations.2

The parties filed cross-motions for summary judgment,

and the district court granted each motion in part following a

hearing. It found for SMCTC on the franchise fee issue,

reasoning that the CPUC fee did not constitute a “franchise

fee” and had been improperly withheld by Comcast. Comcast

of Sacramento I, LLC v. Sacramento Metro. Cable Television

Comm’n, 250 F. Supp. 3d 616, 626 (E.D. Cal. 2017).

However, the district court found for Comcast on the PEG fee

issue, determining that Comcast had properly excluded those

fees from its “gross revenue” calculations, because those fees

fell within DIVCA’s express exclusion for “amounts billed

to, and collected from, subscribers to recover . . . [a] . . . fee

imposed by [a] governmental entity.” Id. (alterations in

original and quotation marks omitted).

Though SMCTC hadn’t raised the issue, the district court

considered sua sponte whether Comcast’s lawsuit was barred

under 47 U.S.C. § 555a(a). After considering that provision,

the district court found that § 555a(a) did not bar Comcast’s

suit. The court was not convinced “that this action ‘aris[es]

from the regulation of cable service’ under section 555a.” Id.

at 627 n.5 (alterations in original). However, the district

court noted that it had found few precedential appellate

decisions concerning the application of § 555a(a).

Nonetheless, the few decisions the court located “indicate that

section 555a was meant to bar claims arising directly out of

2

SMCTC also raised a statute of limitations defense and a statutory

immunity defense but both arguments were rejected by the district court.

SMCTC has not challenged the district court’s findings regarding either

of these defenses on appeal.

12 COMCAST V. SMCTC

cable regulation, as opposed to claims that are only

tangentially related to cable regulation.” Id. (citation

omitted). Comcast moved for reconsideration regarding the

CPUC fee finding, but that motion was denied.

Both parties timely appealed, and this appeal followed.

We have jurisdiction under 28 U.S.C. § 1291.

II. STANDARD OF REVIEW

We review de novo a district court’s decision on cross-

motions for summary judgment. Center for Bio-Ethical

Reform Inc. v. Los Angeles Cty. Sheriff Dep’t, 533 F.3d 780,

786 (9th Cir. 2008) (“When presented with cross-motions for

summary judgment, we review each motion for summary

judgment separately, giving the nonmoving party for each

motion the benefit of all reasonable inferences.”). “The

interpretation and construction of statutes are questions of

law reviewed de novo.” Soltani v. W. & S. Life Ins. Co.,

258 F.3d 1038, 1041 (9th Cir. 2001).

III. DISCUSSION

Because Comcast’s lawsuit must be dismissed as pleaded

if 47 U.S.C. § 555a(a) bars the relief sought, we first consider

the application of that provision to Comcast’s lawsuit for the

return of the security deposit. Because § 555a(a) applies and

bars Comcast’s lawsuit as pleaded, we resolve this appeal on

that basis.

A.

As an initial matter, Comcast argues that SMCTC has

waived any argument relying on 47 U.S.C. § 555a(a), either

COMCAST V. SMCTC 13

by failing to raise such an argument before the district court

or by failing to raise such an argument in its opening brief.

Though “[w]e apply a ‘general rule’ against entertaining

arguments on appeal that were not presented or developed

before the district court,” In re Mercury Interactive Corp.

Sec. Litig., 618 F.3d 988, 992 (9th Cir. 2010) (internal

quotation marks omitted), this issue was raised and addressed

by the district court sua sponte. As the application of

47 U.S.C. § 555a(a) to this lawsuit was “raised sufficiently

for the trial court to rule on it,” In re Mercury Interactive

Corp. Sec. Litig., 618 F.3d at 992 (internal quotation marks

omitted), the waiver rule does not have obvious application

here. Even if a colorable argument for waiver could be made,

“[s]uch waiver is a discretionary, not jurisdictional,

determination.” Id. Where, as here, “the issue presented is

purely one of law and either does not depend on the factual

record developed below, or the pertinent record has been fully

developed,” Davis v. Elec. Arts Inc., 775 F.3d 1172, 1180

(9th Cir. 2015) (citations omitted), we may exercise our

discretion and consider it. See also United States v.

Hernandez-Rodriguez, 352 F.3d 1325, 1328 (10th Cir. 2003)

(finding that “when the district court sua sponte raises and

explicitly resolves an issue of law on the merits” it may be

considered on appeal even if the party relying on that issue

“failed to raise the issue in district court”).

Additionally, SMCTC’s opening brief addresses the

district court’s finding that the lawsuit did not arise from the

regulation of cable services and by extension its finding that

§ 555a does not apply here. SMCTC also expands upon that

argument in its reply brief. Thus SMCTC’s briefs sufficiently

raise this issue for purposes of appeal.

14 COMCAST V. SMCTC

B.

As we have previously explained, “prior to passage of

section 555a(a), municipalities [faced] unexpected and

‘potentially crippling’ civil damage liability claims in relation

to their regulation of cable operators.” Jones, 80 F.3d at 326

(quoting Daniels Cablevision, Inc. v. United States, 835 F.

Supp. 1, 11–12 (D.D.C. 1993)). In response, Congress

enacted § 555a(a), and thereby “exempted municipalities

from civil damages liability arising out of the local regulation

of cable services in order to ‘preserve the municipal

franchising and regulation scheme envisioned by the [Cable

Act].’” Id. (quoting Daniels, 835 F. Supp. at 12).

Section 555a(a) applies “[i]n any court proceeding . . .

involving any claim against a franchising authority . . . arising

from the regulation of cable service,” and limits the relief

available in such actions to “injunctive relief and declaratory

relief.” See Jones, 80 F.3d at 324 (noting that “damages are

precluded if section 555a(a) applies”); Caprotti v. Town of

Woodstock, 721 N.E.2d 957, 960 (N.Y. 1999) (“By its plain

and unconditional terms, section 555a(a) grants a local

municipality broad immunity from monetary liability that

arises out of any of the municipality’s regulatory decisions

involving cable television.” (internal quotation marks

omitted)).

In this case, Comcast pleaded claims of conversion and

common count, both intended to obtain a return of the

security deposit paid to SMCTC by Comcast’s predecessor in

interest under the terms of Comcast’s prior (and now expired)

franchise agreement. As these claims both seek an award of

money damages (and not injunctive or declaratory relief) and

are unquestionably brought against a cable franchising

COMCAST V. SMCTC 15

authority, Comcast’s lawsuit would be barred by this statute

if it arises from cable regulation.

We find that Comcast’s lawsuit, as pleaded, does indeed

arise from cable regulation. Though Comcast’s complaint

does not mention or obviously concern cable regulation,

Comcast’s complaint cannot be viewed in isolation, nor can

the claims pleaded therein be accepted at face value. See

Bright v. Bechtel Petroleum, Inc., 780 F.2d 766, 769 (9th Cir.

1986) (“A plaintiff will not be allowed to conceal the true

nature of a complaint through artful pleading.” (internal

quotation marks and citation omitted)); see also Turtle Island

Restoration Network v. U.S. Dep’t of Commerce, 438 F.3d

937, 945 (9th Cir. 2006). Comcast argues that its lawsuit

merely seeks a return of a security deposit, but this argument

glosses over the fact that the security deposit at issue was

paid pursuant to a cable franchising agreement that

established the terms under which Comcast could offer cable

television services in Sacramento and the surrounding area.

Thus, however pleaded, Comcast’s lawsuit arises from a

franchising agreement that plainly regulated cable services

and has more than a tangential connection with cable

regulation.

Moreover, both SMCTC’s responsive pleadings and the

course of this litigation to date further underscore the

connection. SMCTC’s answer includes (as an affirmative

defense) a setoff claim under California law, arguing that

SMCTC retained Comcast’s security deposit to offset

Comcast’s underpayment of its franchise fees in the years

(i.e., fiscal years 2011 and 2012) following the expiration of

the previous SMCTC issued franchise agreement. SMCTC’s

answer also alleges that the parties were unable to agree what

cable franchise fees were due for that period of time, and how

16 COMCAST V. SMCTC

those fees should be calculated under the applicable

provisions of state and federal law. Those particular

allegations are bourne out in the pleadings, arguments, and

evidentiary materials produced by the parties during the

course of this litigation. These materials demonstrate that

both parties have colorable arguments for their respective

franchise fee calculations, but these materials also

demonstrate that the relief sought by Comcast, however

pleaded, is inextricably intertwined with a wider, ongoing

disagreement between the parties that plainly arises from the

interpretation of federal and state laws that govern the

calculation of cable franchise fees under the current CPUC-

issued franchise agreement.

Given the underlying disputes concerning the

interpretation of both the current and prior franchise

agreements, and the fees and payments due in connection

with Comcast’s provision of cable services, Comcast’s

lawsuit arises from the regulation of cable television services.

As was the case in City of Glendale v. Marcus Cable

Associates, LLC, 180 Cal. Rptr. 3d 726 (Cal. Ct. App. 2014),

Comcast’s lawsuit is properly understood as an artful attempt

to plead around § 555a(a). 180 Cal. Rptr. 3d at 743. To hold

otherwise would allow parties, through creative pleading, to

do precisely what § 555a(a) bars them from doing, i.e., bring

suit for damages against a franchising authority for claims

that arise from cable regulation merely by omitting any

mention of the regulatory dispute from their pleadings. See

Turtle Island, 438 F.3d at 945 (“To allow parties to avoid this

limitation through manipulation of form . . . while in

substance challenging the regulations, would permit parties

‘through careful pleading . . . [to] avoid the . . . limits

imposed by Congress.’”) (alteration in original) (citations

omitted); see also Brown v. Gen. Servs. Admin., 425 U.S.

COMCAST V. SMCTC 17

820, 833 (1976) (“It would require the suspension of disbelief

to ascribe to Congress the design to allow its careful and

thorough remedial scheme to be circumvented by artful

pleading.”).

The district court recognized the potential applicability of

§ 555a(a) but determined that it did not apply to Comcast’s

suit. Instead, it determined that Comcast’s lawsuit had only

a tangential connection with cable regulation. The problem

with this finding is that, as explained above, this lawsuit does

not have a merely tangential connection to cable regulation;

artfully pled or not, this lawsuit is in substance one that arises

from cable regulation.3

Comcast also suggests that Congress did not intend to

immunize municipalities in circumstances such as these when

it enacted § 555a(a). We disagree. Though § 555a(a) is

undoubtedly broad, its terms are not ambiguous or unclear.

See Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 951

3

It also appears that the district court to some degree misconstrued

our decision in Jones, and the Eighth Circuit’s decision in Coplin v.

Fairfield Public Access Television Committee, 111 F.3d 1395 (8th Cir.

1997). Both in Jones and Coplin, the lawsuit at issue clearly and

obviously arose from or concerned cable regulation. See Jones, 80 F.3d

at 324 (“It is difficult to see what the City was doing, if not regulating,

when it precluded Jones from installing more cable infrastructure and from

servicing customers unless Jones first obtained a city-wide franchise.”);

Coplin, 111 F.3d at 1408 (lawsuit concerned “a governmental entity’s

right to regulate the content carried on a public access cable service”). As

a result, neither court considered a lawsuit where the connection to cable

regulation was somewhat more attenuated. We are hesitant to attribute to

either decision the holding that the district court drew from them, namely

that § 555a(a) applies only where the claims brought against the

franchising authority have a direct and obvious connection to cable

regulation.

18 COMCAST V. SMCTC

(9th Cir. 2009) (“The preeminent canon of statutory

interpretation requires us to presume that [the] legislature

says in a statute what it means and means in a statute what it

says there. Thus, our inquiry begins with the statutory text,

and ends there as well if the text is unambiguous.” (alteration

in original and citations omitted)). Section 555a(a) simply

does what it says, i.e., it exempts local authorities from civil

damages in lawsuits arising from cable regulation. Based on

the expansive and unrestricted terms used here by Congress,

there is no reason for us to conclude that disputes concerning

the calculation of fees due or owed under the provisions

governing the provision of cable services were ever intended

to be excluded from the scope of § 555a(a).4

As Comcast seeks a monetary award and has brought

claims against a cable franchising authority that arise from

cable regulation, we hold that its lawsuit is subject to the bar

4

Even if we were persuaded that the terms Congress chose when it

enacted § 555a(a) are in some way ambiguous, Comcast’s argument finds

little support in that provision’s legislative history. Congress considered,

but ultimately did not enact, a more narrow version of § 555a(a). See

Caprotti, 721 N.E.2d at 960 (noting that the original version of § 555a(a)

“passed by the Senate immunized local franchising authorities from

monetary liability solely ‘in cases where the franchising authorities are

charged with violating a cable operator’s First Amendment rights arising

from actions authorized or required by [the Cable Act]’”) (quoting H.R.

Rep. No. 102-862, at 98 (1992) (Conf. Rep.), as reprinted in 1992

U.S.C.C.A.N. 1231, 1280). That version, had it been enacted, would

plainly not have applied to Comcast’s lawsuit. However, Congress didn’t

enact that version, or include any other language that specifically limits

the scope of this exemption to claims or lawsuits concerning content

regulations, the scope of services being offered, or to any other particular

sort of regulatory action. Instead, Congress enacted a provision that

simply exempts municipalities from claims for civil damages that “aris[e]

from the regulation of cable service.” § 555a(a). We are bound to give

full effect to those plain unambiguous terms.

COMCAST V. SMCTC 19

provided by § 555a(a) and must be dismissed on that basis.

Considering the full record and the entire scope of this

litigation, it is clear that this lawsuit has sufficient connection

with cable regulation to trigger the application of § 555a(a).

Because we find that Comcast’s lawsuit is barred by

§ 555a(a), we vacate the district court’s grants of summary

judgment, and remand with instructions that Comcast’s

lawsuit be dismissed.5

Though we find that Comcast’s lawsuit must be dismissed

as pleaded and instruct the district court to enter an order to

that effect on remand, that dismissal should be without

prejudice. See Stoyas v. Toshiba Corp., 896 F.3d 933, 939

(9th Cir. 2018) (“Dismissal with prejudice and without leave

to amend is not appropriate unless it is clear . . . that the

complaint could not be saved by amendment.” (citations

omitted)).

C.

Comcast argues that a finding that their lawsuit is barred

by § 555a(a) leaves them without any possible means of

obtaining the return of its security deposit. Because our

holding is narrow in scope, we disagree. We have considered

here only the application of § 555a(a) to the present lawsuit

and determine only that the particular relief requested in

Comcast’s complaint as pleaded is subject to that bar. We

have not considered whether a claim for equitable relief

5

Because we find that Comcast’s complaint must be dismissed on this

basis, we do not address the other arguments raised on appeal by the

parties.

20 COMCAST V. SMCTC

would also be subject to § 555a(a)’s bar.6 Nor have we

considered whether this bar would apply were Comcast

defending a suit for underpayment of franchise fees brought

by SMCTC—as would likely occur were Comcast to deduct

the deposit as an overpayment from its franchise fee

payments, see California Public Utilities Code

Section 5860(h)—instead of bringing suit for damages.

IV. CONCLUSION

For the foregoing reasons, we hold that Comcast’s lawsuit

is barred by 47 U.S.C. § 555a(a). We therefore vacate the

district court’s grants of summary judgment and remand with

instructions that Comcast’s suit be dismissed without

prejudice. The parties shall bear their own costs on appeal.

VACATED and REMANDED.

6

Section 555a(a) specifically permits parties to bring suits requesting

declaratory or injunctive relief. Comcast hasn’t sought such relief here,

but an amended complaint that seeks declaratory or injunctive relief would

not necessarily be subject to § 555a(a)’s bar. See Fed. R. Civ. P. 15(a)(2)

(“The court should freely give leave [to amend] when justice so

requires.”); see also Hoang v. Bank of America, NA, 910 F.3d 1096,

1102–03 (9th Cir. 2018) (explaining that “[l]eave to amend can and should

generally be given, even in the absence of such a request by the party,”

unless “the pleading could not possibly be cured by the allegation of other

facts”) (quoting Ebner v. Fresh, Inc., 838 F.3d 958, 963 (9th Cir. 2016)).