# Petition for Writ of Certiorari — Weinberg v. Comcast Cablevision of Philadelphia

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2001
- **Citation:** 534 U.S. 823

## Text

Supreme Court, U.S.

FIltLeEend

V 001859 JUN 13 2002

No. 00- OFFIGE OF THE CLERK

IN THE

Supreme Court of the United States

PAUL S. WEINBERG, General Partner,
t/a Hill House,
Petitioner,
v.

COMCAST CABLEVISION OF PHILADELPHIA, L.P.,
Respondent.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE SUPERIOR COURT OF PENNSYLVANIA

PETITION FOR A WRIT OF CERTIORARI

STEVEN M. CorEN
Counsel of Record
BRUCE BODNER
BRUCE BELLINGHAM
KAUFMAN, CoreEN, RESS
& WEIDMAN, P.C.
Attorneys for Petitioner
1525 Locust Street
17th Floor
Philadelphia, PA 19102
(215) 735-8700

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COUNSEL PRESS
(800) 274-3321 + (800) 359-6859

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QUESTIONS PRESENTED

Petitioner, General Partner Paul Weinberg, t/a Hill
House, owns a multiple dwelling apartment building in
Philadelphia, Pennsylvania. Respondent, Comcast Cablevision
of Philadelphia, is a cable television service provider. In this
case, the courts of the Commonwealth of Pennsylvania have
decided important questions of federal law that have not been,
but should be, settled by this Court. The questions presented in
this petition are as follows:

1. Whether Pennsylvania’s Tenants’ Right to Cable
Television Act is unconstitutional because, in violation of the
Fourteenth Amendment, it deprived Petitioner of due process
of law, by delegating judicial power to a private forum and by
compelling him to submit the question of just compensation
for the taking of his property to binding arbitration under a
statutory scheme devoid of expert administrative oversight and
without de novo judicial review.

2. Whether Pennsylvania’s Tenants’ Right to Cable
Television Act is unconstitutional because it effected a taking
of Petitioner’s property without just compensation, by arbitrarily
limiting the measure of damages to “loss of value,” thereby
creating, by legislative fiat, a fixed, nominal payment of $1 as
“just compensation” for the occupation of Petitioner’s property,
in violation of the Fifth and Fourteenth Amendments.

3. Whether Pennsylvania’s Tenants’ Right to Cable
Television Act is unconstitutional because the requirement that
Petitioner pay one-half of all expenses and fees for an arbitration
proceeding to which he did not consent, in and of itself,
constitutes “a taking without just compensation,” in violation
of the Fifth and Fourteenth Amendments.

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TABLE OF CONTENTS
Page
RII Gna cecuceeccccececteceos i |
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Table of Cited Authorities ..............0.00.. iv
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I as eeu ccecauccbeebsdeaceee l
tMberGmt OF TUTIAGRCTION .. wc ccc ccc ccc cccese |
Constitutional and Statutory Provisions Involved .. . l
NE I OD oa cccetecusncccencecsies 4
Reasons for Granting the Writ ................. 8
A. This Case Presents Important, but Unsettled
Questions of Federal Constitutional Law That
Should be Settled By This Court ......... 8
B. Federal Court Precedents Cast Doubt on The
Constitutionality of Pennsylvania’s Tenants’
Right to Cable Television Act ........... 10
C. Pennsylvania’s CATV Act Does Not Stand
Up To Constitutional Scrutiny ........... 19

1. Pennsylvania’s CATV Act Deprives
Property Owners of Due Process by
Delegating Judicial Power to a Private
Forum Without Expert Administrative
Oversight or Meaningful Judicial
Review

ili

Contents
Page

2. Pennsylvania’s CATV Act Denies
Property Owners Just Compensation by
Ascribing Only a Nominal Value to
BO EOS Fi osain oS edk che des 24

3. Pennsylvania’s CATV Act Effects a
Second Uncompensated Taking by
Requiring Property Owners to Pay for
Puavele ASO. 5 io so a cick 28

CS oo i ec és ca al eee ee ee 29

iv

TABLE OF CITED AUTHORITIES —___-

Page
Cases:
Adelphia Cablevision v. University City Housing Co.,
755 A.2d 703 (Pa. Super. 2000) .............. 7,8
Allstate Ins. Co. v. Fioravanti, 299 A.2d 585
Soave aw ecw eu hs v0.06 565 se oheee es 8
AMSAT Cable Ltd. v. Cablevision of Ct., L.P., 6 F.3d
ee I SEE Ska vaxcaciwessecryanue 22, 23, 27
Bragg v. Weaver, 251 U.S. 57 (1919) ........... 15
Cablevision of the Midwest, Inc. v. Gross,
639 N.E.2d 1154 (Ohio 1994) ............... 27

Chicago, Burlington & Quincy R.R. Co. v. City of —
Ciicame, 16607.D. ZEOCIGST) 2 cccccccccaccs 8,9

City of Lansing v. Edward Rose Realty, Inc.,
502 N.W.2d 638 (Mich. 1993) ............... 27

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S.
De OE i kid 00 ae ok eck le eee 9,19

Gulf Power Co. v. Federal Communications
Commission, 187 F.3d 1324 (11th Cir. 1999) ...
(taveecke SRA 0s CL eee ee heres 12, 13, 14, 15

Hawaii Housing Authority v. Midkiff, 467 U.S. 229
| SR ran sere Per rs ey a ree ee ee 10, 11

In Re Adoption of Dale A., 683 A.2d 297 (Pa. Super.

RPI onk5 hdc eae k edd ccepiaee ca ieaeeeanene 8

Cited Authorities
Page
Kirby Forest Indus., Inc. v. United States, 467 U.S.
SPIO 4 wna cwack ages chackdcke eds deere 24
Loretto v. Group W. Cable, 522 N.Y.S.2d 543
(1st Dept. 1987), cert. denied, 488 U.S. 827 (1988)
POOLE CEPT TET ECT CPO Tre rr ee 27
Loretto v. Teleprompter Manhattan CATV Corp.,
458 U.S. 419 (1982), on remand, 446 N.E.2d 428
i. 8 Me, eres re re rare rors passim
Mathews v. Elridge, 424 U.S. 319 (1976) ........ 8
Midkiff v. Tom, 471 F. Supp. 871 (1979) ......... 11
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,
Be. 473 GE. GEA CGE? ov 6.n vba et cas as 10
Monongahela Navigation Co. v. United States,
re A UI. SU CIE ocat bdacccccvasvectadas 13
NYT Cable TV v. Homestead at Mansfield, Inc.,
518 A.2d 748 (N.J. Super. 1986), aff'd, 543 A.2d
i Se ee error rer re Te Tere 22, 27
Olson v. United States, 292 U.S. 246 (1934) ..... 24
Princeton Cablevision, Inc. v. Union Valley Corp.,
478 A.2d 1234 (N.J. Super. Ch. 1983) ........ 27

Rodriguez de Quijas v. Shearson/American Express,
Bees. BIO US. S77 CEFR nec cvccaccccsncnens 9

vi

Cited Authorities
Page

Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984)
shabeednsdhesdacwannideunsanasaneel 16, 17, 18

Shearson/American Express Inc. v. McMahon,
Se Ss BPC deh dasSolicviastastsdst 9

Thomas v. Union Carbide Agricultural Products Co.,
oe eR ee ee ee 16, 18, 19

Times Mirror Cable Television v. First Bank of
Springfield, 582 N.E.2d 216 (Ill. App. 1991) ... 23, 24

United States v. 47.14 Acres of Land, 674 F.2d 722

Shh WEED Rakha Oe: 25
United States v. 564.54 Acres of Land, PA., 506 F.2d

nt oh PP a Ree eae at 25
United States v. 564.54 Acres of Land, PA., 441 U.S.

ce I Nr AT ae 25
United States v. Fuller, 409 U.S. 488 (1973) ..... 25

Williamson County Regional Planning Com'n v.
Hamilton Bank, 473 U.S. 172 (1985) ....9, 10, 12, 15

Wisconsin Central Limited v. Public Service
Commission of Wisconsin, 95 F.3d 1359 (7th Cir. —
SUED Sb upechU¥ss were ce eeuedteniicesstel 14, 15

vil

Cited Authorities

Page
United States Constitution:
i i>. Se | errr See a er 18
U.S. Const., Art. TT... 2.0.0... see e cece e ee eeeee 18
Fifth Amendment ............ i, 1, 8,9, 10, 13, 15, 17
Fourteenth Amendment ....................- i, 1,9, 15
Statutes:
2 N.Y. Jur. 2d Admin. Law § 314 .............. 23
2 N.Y. Jur. 2d Admin. Law § 317 .............. 23

New York’s Executive Law Art. 28, §§ 811-31 ... 23

Mow York Statute, § SEB . oo ccccccccccccccccecs 20
New York Statute, § 828(1)(b) ................. 20
5s eb. Lo ” BPP rrerr Trt Terr ere 4
GB PS. § ZSO.SOGB, C0 BOG. 2c cctccccnscccsseses .
CEPT, CAPS cb bade dcceendasacctadenes 2
GB PD. 6 ZOD SOG GD 6 ccc ccidocssersccccsess 20, 26
6B P.S. § 250.S06-BUGNS) .. 2c cccccccccccess 5

—

vill

Cited Authorities

Page
68 P.S. § 250.506-B(b)(4) ................ 5, 24, 26, 28
SS Fas © BOP OD os cd ce ccsasusnaceantwen 28
7 Glade @ POUUICEPTD sb cnvecvdcewdsasbeen 7
es RE sb i vake civ iebeseeeeseleeee 1
Sens BUD rncikdcdiendneteeente couas |
Rule:
United States Supreme Court Rule 29(c) ........ l
Other Authorities:
18 McKinney Exec. Law 811, et seg. (1982) ..... 23

18 McKinney Exec. Law 824 (1982) ............ 23

ix

TABLE OF APPENDICES

Appendix A — Opinion Of The Superior Court Of
Pennsylvania Dated And Filed August 30, 2000

ee@ 2 ORO a'RARAAA SE & OA A ABS#s.SA O18. 4.23. 42 2 4: 2S. OAS Oo.

Appendix B — Opinion Of The Court Of Common
Pleas, Trial Division, Civil Section Dated
BR eS ey ies Or mer

Appendix C — Order Of The Court Of Common
Pleas Of Philadelphia Dated February 12, 1999

Appendix D — Award Of The American Arbitration
Association, Commercial Arbitration Tribunal
BOGGS SOONG 7, BOO aka ncaa kb oi Sadwess

Appendix E — Order Of The Supreme Court Of
Pennsylvania, Eastern District Denying Petition
For Allowance Of Appeal And Post-Submission
Communication Dated March 15, 2001 .......

Page

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24a

32a

33a

]

OPINIONS BELOW

1. The Opinion of the Superior Court is reported at
Weinberg v. Comcast Cablevision of Philadelphia, L.P., 759
A.2d 395, 2000 Pa. Super. 258 (Pa. Super. 2000) (App. A).

2. The Court of Common Pleas issued an unpublished
opinion in Weinberg v. Comcast Cablevision of Philadelphia,
L.P., Philadelphia County Court of Common Pleas, January
Term, 1999, No. 364 on May 17, 1999 (App. B).

3. An unpublished arbitration award was issued on
December 7, 1998 in Comcast Cablevision of Philadelphia, L.P.
v. Hill House Apartments, AAA No. 14E 181 00100 98 D/K

(App. D).
STATEMENT OF JURISDICTION

On March 15, 2001, the Supreme Court of Pennsylvania
denied Petitioner’s Petition for Allowance of Appeal from the
Superior Court’s decision. Weinberg v. Comcast Cablevision
of Philadelphia, L.P., _A.2d__, 2001 WL 256063 (Pa. 2001)
(App. E). This Court’s jurisdiction rests on 28 U.S.C. § 1257(a).
Since 28 U.S.C. § 2403(b) may apply, notification as required

by Rule 29(c) has been made.

CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED |

The Fourteenth Amendment of the United States
Constitution provides, in relevant part:

[Nor shall any State deprive any person of life,
liberty or property without due process of law . . .

The Fifth Amendment of the United States Constitution
provides, in relevant part:

[N]or shall private property be taken for public use,
without just compensation.

se eine tie ere fat’

4
68 P.S. § 250.506-B provides, in relevant part:

(a) A landlord shall be entitled to just compensation
from the operator resulting from loss in value of
property resulting from the permanent installation
of CATV system facilities on the premises.

(b) If a landlord believes that the loss in value of
the property exceeds the compensation contained
in the proposal accompanying the original notice
... the issue of just compensation ... shall be
determined in accordance with the following
procedure:

(1) At any time prior to the end of the
forty-five day period from the date when
the landlord receives the original notice
that the operator intends to construct or
install a CATV system facility in multiple
dwelling premises, the landlord shall serve
upon the operator written notice that the
landlord demands a greater amount of
compensation ...

(2) Ifthe operator is dissatisfied with the
result of the negotiations at the conclusion
of the forty-five day negotiation period,
then he shall notify the landlord of the
terms which the operator believes to be
unreasonable and shall accompany this
notice with a formal request for
arbitration.

(3) Arbitration proceedings shall
be conducted in accordance with
the procedures of the American
Arbitration Association or any successor
thereto. ... Requirements of this act
relating to time, presumptions and

3

compensation for loss of value shall apply
in the proceedings. The cost of the
proceedings shall be shared equally by the
landlord and the operator. The arbitration
proceedings, once commenced, shall
be concluded and a written decision
by the arbitrator shall be rendered
within fourteen days of commencement.
Judgment upon any award may be entered
in any court having jurisdiction.

(4) Within thirty days of the date of the
notice of the decision of the arbitrators,
either party may appeal the decision of
the arbitrators in a court of common pleas,
regarding the amount awarded as
compensation for loss of value ...
During the pendency of an appeal, the
operator may not enter the multiple
dwelling premises to provide CATV
services ... The court shall order each
party to pay one-half of the arbitration
costs.

(c) In determining reasonable compensation,
evidence that a landlord has a specific alternative
use for the space occupied or to be occupied by
CATV system facilities, the loss of which will result
in a monetary loss to the owner, or that installation
of CATV system facilities upon such multiple
dwelling premises will otherwise substantially
interfere with the use and occupancy of such
premises to an extent which causes a decrease in
the resale or rental value thereof shall be considered.
In determining the damages to any landlord in an
action under this section, compensation shall be
measured by the loss in value of the landlord’s

4

property. An amount representing increase in value
of the property occurring by reason of the installation
of CATV system facilities shall be deducted from

the compensation .. .
STATEMENT OF THE CASE

This case presents a challenge to the constitutionality of
the Pennsylvania Tenants’ Right to Cable Television Act
(“the Act”). In Loretto v. Teleprompter Manhattan CATV Corp.,
458 U.S. 419 (1982), this Court held that a statute authorizing a
cable television operator to install its cable and switch boxes
on the roof and side of an apartment building in order to supply
services to tenants constituted a permanent physical occupation
and thus a compensable taking that triggers substantive and
procedural protections guaranteed by the United States
Constitution. In this case, respondent Comcast Philadelphia, a
cable operator, invoked the condemnation powers delegated to
it by the Pennsylvania Tenants’ Right to Cable Television Act,
68 P.S. § 250.504-B, et seq., in order to permanently occupy a
portion of Petitioner Paul S. Weinberg’s apartment building,
Hill House.

The Act provides that a tenant may request service from
a cable operator who holds the franchise granted by
the municipality where the premises are located. The cable
operator may then, without the consent of the property owner,
enter and permanently occupy a portion of the premises for
the purpose of hooking up the tenants to the operator’s service.
Id. at § 250.503-B. The Act supplies no standards or rules
governing the private cable operator’s decision to take an
owner’s property, vests sole discretion on the subject in the
cable operator, and provides no mechanism for government
review of the cable operator’s decision to provide (or not
provide) cable service. Jd.

The Act further provides that if, after notice and an
opportunity for negotiation, an owner does not consent to the

5

cable operator’s demands, the cable operator can force the owner
into a non-judicial proceeding sponsored by the American
Arbitration Association (AAA) to enforce the mandates of
the Act. The arbitrator, in turn, is empowered to determine,
within the valuation constraints set forth in the Act, what
just compensation for the taking of the owner’s property
shall be. Adding constitutional insult to injury, the Act makes
the owner liable for half of the AAA arbitration costs, even
if the arbitration is conducted without the owner’s consent.
Id. at § 250.506-B(b)(3).

If either party is dissatisfied with the arbitrator’s decision,
the Act affords the aggrieved party very narrow rights of
appeal, which are limited to “appeal[ing] the decision of the
arbitrator in a court of common pleas, regarding the amount
awarded as compensation for the Joss of value” of the property.
Id. at § 250.506-B(b)(4) (emphasis added). The Act does not
permit an owner to argue to the arbitrator or to challenge in
court the adequacy of the legislatively-determined “loss of
value” measure as compensation for the taking. Jd. Moreover,
the Act precludes any judicial determination of just
compensation for the taking which may vary from the
legislatively-set, nominal “loss of value” measure.

In 1997, 5 of Hill House’s. 189 tenants requested that
Comcast Cablevision of Willow Grove, Inc. (“Comcast Willow
Grove’’) provide them with cable television services. At the
time, Hill House tenants received cable programming services
through a satellite-based provider, ACS Enterprises, which paid
petitioner a commission of 5% of ACS’s revenues. In January
1998, Comcast Cablevision of Philadelphia, Inc. (“Comcast
Inc.”), sent Hill House a Notice of Intention to Provide Cable
Television Service under the Act. Comcast Inc. submitted with
the notice a proposed contract pursuant to which, on the payment
of $1, Comcast Philadelphia would permanently occupy Hill
House to install wires and other facilities throughout the building
and in all 189 apartments.

6

In March 1998, respondent, Comcast Philadelphia
(“Comcast”), filed a Demand for Arbitration with the AAA.
Petitioner objected, but reluctantly participated in the arbitration
proceeding. The AAA conducted a non-record arbitration and
entered an award in favor of Comcast awarding Comcast
permanent occupancy for $1. It also directed Hill House to pay
Comcast $1,115.40 (half of Comcast’s expenses to accomplish
the taking of Petitioner’s property in arbitration).' Petitioner
therefore suffered a net loss of $1,114.40 for the privilege of
surrendering his property to Comcast under Pennsylvania’s
compulsory arbitration statute.

The Court of Common Pleas of Philadelphia County
subsequently confirmed the arbitration award based on its
holding that the Act did not effect a Constitutional taking. On
appeal, the Superior Court, by order entered August 30, 2000,
reversed — as contrary to Loretto — the lower court’s holding
that the Act did not effect a Constitutional “taking.”
The Superior Court found, on the contrary, that Petitioner
suffered a taking which triggers Constitutional due process and
just compensation concerns. But the Superior Court nonetheless
affirmed the lower court’s decision on the basis that the Act
provided for due process and just compensation. On March 15,
2001, the Pennsylvania Supreme Court denied Hill House’s
Petition for Allowance of Appeal. This petition for certiorari
follows.

The constitutional issues raised in this petition were argued
during all stages of the state court proceedings below. In the
-Court of Common Pleas, Philadelphia County, the constitutional
questions were presented in a Petition to Vacate the arbitrator’s
award. In its Civil Docketing Statement on appeal to the Superior

1. The arbitrator also imposed ongoing “contractual” obligations
on Hill House in the form of a mandatory injunction, requiring Petitioner
to assist Comcast in its future marketing and other business activities,
indefinitely; i.e., supplying tenants with literature, permitting Comcast
to solicit customers in the lobby, and allowing Comcast employees on
the premises to audit, maintain and service the system.

7

Court, and its in brief, Petitioner, again, raised the constitutional
issues presented here. In its opinion, the Superior Court of
Pennsylvania summarized Petitioner’s contentions in support
of its argument that the Act infringes on a landowner’s
constitutional right against deprivation of property without due
process and just compensation. Weinberg, supra, 759 A.2d at
399. Among other things, the court noted the following defects
identified by Petitioner with respect to the constitutionality of
the Act: (1) the Act requires the parties to submit to arbitration
even though the parties have not agreed to arbitration; (2) the
Act is an unconstitutional delegation of judicial power; (3) the
Act does not provide for de novo judicial review; (4) the Act
provides a statutory measure of damages that is in effect “a
decrease in the resale or rental value of the property,” thereby
limiting just compensation to only symbolic or incidental loss,
and (5) the Act unconstitutionally requires the property owner
to pay for the costs associated with the arbitration proceedings.
Id. at 400.

The Superior Court rejected Petitioner’s arguments as to
the unconstitutionality of the statute and concluded that

Hill House was afforded adequate opportunity to
be heard, through statutory arbitration, regarding its
right to just and timely compensation . . . [T]he Act
need not provide for de novo review or a jury trial
as required by the Eminent Domain Code. Moreover,
the Act does not limit compensation to “incidental
or symbolic loss.”

Id. at 403. As to the allegations that the statute unconstitutionally
delegates judicial power and mandates arbitration in violation
of due process, the Superior Court concluded that its decision
in Adelphia Cablevision adequately addressed these issues.’
Id. at 404.

2. In Adelphia Cablevision, the Superior Court upheld the
arbitration scheme, reasoning that “[d]ue process is a flexible concept
(Cont'd)

8

REASONS FOR GRANTING THE WRIT

The requirement that property shall not be taken for
public use without just compensation is. . . founded
in natural equity, and is laid down as a principle of
universal law. Indeed, in a free government, almost
all other rights would become worthless if the
government possessed an uncontrollable power over
the private fortune of every citizen.

Chicago, Burlington & Quincy R.R. Co. v. City of Chicago,
166 U.S. 226, 236 (1897).

A. This Case Presents Important, but Unsettled Questions
of Federal Constitutional Law That Should be Settled
By This Court

This case raises important questions of federal law that have
not been, but should be, settled by this Court. Petitioner asks
this Court to consider the constitutionality of statutory schemes
compelling property owners to submit to binding arbitration, at
their own expense, the Fifth Amendment question of just

(Cont'd)

that calls for such procedural protections as the situation demands.”
See Adelphia Cablevision v. University City Housing Co., 755 A.2d
703, 712 (Pa. Super. 2000). However, none of the cases cited by the
Court in Adelphia Cablevision involved a statutory mandate to submit
the constitutional question of just compensation to private, binding
arbitration. See In Re Adoption of Dale A., 683 A.2d 297, 300
(Pa. Super. 1996) (termination of parental rights by an orphan’s court
with counsel, but not parent, present) (citing Mathews v. Elridge, 424
U.S. 319, 334 (1976) (administrative agency hearing over termination
of statutorily created interest in social security benefits); Allstate Ins.
Co. v. Fioravanti, 299 A.2d 585, 586-87 (Pa. 1973) (upholding
contractual arbitration award relating to automobile insurance policy).
In fact, as we shall demonstrate, infra, there is no federal authority for
the proposition that private arbitration satisfies constitutional due
process with respect to a dispute involving a property owner’s right to
“just compensation” under the Fifth Amendment.

9

compensation for the taking of their property, without the right
to de novo judicial review and under a statutory framework
that, for all intents and purposes, limits the arbitrator’s discretion
to an award of nominal damages.’

On numerous occasions this Court has held that the Fifth
Amendment does not proscribe the taking of property; it merely
proscribes a taking of property without just compensation.
Williamson County Regional Planning Com’n v. Hamilton
Bank, 473 U.S. 172, 194 (1985). To avoid the prohibitions of
the Fifth Amendment,

all that is required is that a reasonable, certain, and
adequate provision for obtaining compensation exist
at the time of the taking. If the government has
provided an adequate process for obtaining
compensation, and if resort to that process yields
just compensation, then the property owner has no
claim against the Government for a taking.

Id. at 194-95. Pennsylvania’s cable access statute denies
property owners both “adequate process” and “just
compensation.”

Over the past two decades, federal courts, including this
Court, have steadily extended the reach and legitimacy of private
arbitration as a forum for settling a wide array of disputes
implicating contractual and/or statutory rights. See, e.g., Gilmer
v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (statutory
age discrimination claim subject to binding arbitration pursuant
to provision in securities registration form); Rodriguez de Quijas
v. Shearson/American Express, Inc., 490 U.S. 477 (1989)
(agreement to arbitrate claims under the Securities Act
enforceable); Shearson/American Express Inc. v. McMahon, 482
U.S. 220 (1987) (agreement between customer and broker to

3. The “just compensation” component of the Takings Clause is
applicable to the several States through the Fourteenth Amendment.
Chicago, Burlington & Quincy, supra, 166 U.S. at 235-41.

10

arbitrate, enforceable as to RICO claim); Mitsubishi Motors
Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985)
(anti-trust claim subject to binding arbitration per agreement
between international business entities). However, all of these
cases involved parties who had voluntarily entered into
contractual agreements to arbitrate; and none tested the
constitutionality of the arbitral forum as a state mandated
mechanism for vindicating constitutional, as opposed to

statutory, rights.

In fact, we can find no federal authority sanctioning the
use of compulsory arbitration as a means of resolving disputes
implicating rights guaranteed to citizens by the just
compensation clause of the Fifth Amendment. On the contrary,
several federal courts, including this Court, have called such
schemes into question, while others have found them
unconstitutional on their face. It therefore remains an unsettled
question as to whether, or by what means, a compulsory scheme
for binding arbitration can satisfy the “adequate process”
requirement announced in Williamson County. With this case
the Court has the opportunity to address this important, but yet
unsettled question of constitutional law.

B. Federal Court Precedents Cast Doubt on The
Constitutionality of Pennsylvania’s Tenants’ Right to
Cable Television Act

Federal court cases reviewing the constitutionality of
legislatively mandated compulsory arbitration schemes to
determine “just compensation” in Fifth Amendment takings
cases, though not conclusive, cast grave doubt on the
constitutionality of Pennsylvania’s cable access statute.

In Hawaii Housing Authority v. Midkiff, 467 U.S. 229
(1984), this Court considered the constitutionality of an
Hawaiian takings statute that originally contained a compulsory
arbitration provision to settle questions of just compensation in
connection with the transfer of private land holdings authorized
by the Land Reform Act of 1967. Hawaii’s Land Reform Act,

11

designed to break up highly concentrated land ownership in
Hawaii, created a mechanism for condemning residential tracts
of land and transferring ownership of the condemned fees simple
to the current lessees of the property. Jd. at 232-33.

As originally enacted, the statute provided that mandatory
arbitration be held in advance of any action in eminent domain
for the purpose of establishing the amount of compensation
that would be paid to lessors for the lessor’s leased fee interest
in the event of condemnation. Lessor and lessee had to engage
in compulsory arbitration if they could not reach a negotiated
agreement on a price for the fee simple title with the lessor
paying half the costs of the arbitration proceedings. Statutory
formulae were provided for fixing what “just compensation”
would be. /d. at 235. In short, Hawaii’s Land Reform statute
contained all of the substantive and procedural defects contained
in Pennsylvania’s Tenants’ Right to Cable Television Act.

In May 1979, the United States District Court for the
District of Hawaii declared the compulsory arbitration
provisions and the Act’s compensation formulae
unconstitutional on their face, even though, under the Hawaiian
statute property owners were ultimately afforded the right to a
jury trial on the issue of just compensation. Midkiff v. Tom, 471
F. Supp. 871, 883 (1979). The district court also expressed the
view that the provision of the statute requiring property owners
to pay one-half of all expenses and fees in connection with the
arbitration proceeding itself constituted an unconstitutional
taking without just compensation. /d. at 884. No appeal was
taken from these rulings. Instead, the legislature amended the
statute to provide for mandatory negotiations, not compulsory
arbitration, and for compensation formulae that were strictly
advisory. As a result, the constitutionality of the statute’s
compulsory arbitration scheme did not reach this Court when
the remaining provisions of Hawaii’s Land Reform Act were
upheld in 1984. See Midkiff, 467 U.S. 229, 235 n.3 (1984).

12

More recently, two federal appellate courts considered
constitutional challenges to statutory schemes mandating the
use of a non-judicial forum to determine just compensation
for the taking of private property; one involved the
Telecommunications Act of 1996, the other, a Wisconsin statute
giving utility companies access to railroad right-of-ways. Unlike
Pennsylvania’s compulsory arbitration scheme, both statutes
relied on administrative agency expertise to make an initial
determination of just compensation. Nevertheless, these statutes
received mixed reviews with respect to the due process
protections of Williamson County. As discussed, infra, the
Telecommunications Act passed constitutional muster because,
unlike Pennsylvania’s cable access statute, it provided de novo
judicial review following an administrative agency hearing.
Wisconsin’s arbitration scheme survived, but only because the
issue before the Seventh Circuit was plaintiff's petition for
injunctive relief, rather than the constitutionality of the
administrative determination of just compensation.

In Gulf Power Co. v. Federal Communications
Commission, 187 F.3d 1324 (11th Cir. 1999), a group of utility
companies challenged the constitutionality of the
Telecommunications Act of 1996 (“the Act”). They alleged that
the federal statute failed to provide a constitutionally adequate
process for obtaining just compensation in connection with
a “takings” provision in the Act giving cable television
(“CATV”) providers mandatory access to plaintiffs’ utility
poles. The plaintiffs challenged the statute on grounds similar
to those raised here. First, they argued that the Act violated
separation of powers principles by delegating to the Federal
Communication Commission (FCC), instead of a court, the task
of determining the compensation a utility would receive for
access to its property. Second, they asserted that the Act’s
provision limiting the FCC to awarding a “just and reasonable”
rate within the range of rates set by Congress prevented a
utility from receiving the constitutionally required rate of
“just compensation.” Jd. at 1331-32.

13

The Eleventh Circuit agreed, in part, with the contentions
of the utility companies on the separation of powers issue.
While acknowledging that it is for the legislative branch to
determine what private property is needed for public purposes,
the Court agreed that, when a taking has been ordered, the
question of just compensation is a judicial, not a legislative
one. It is not the province of the public, taking property through
the Congress or a state legislature, to say “what compensation
shall be paid, or even what shall be the rule of compensation.”
Id. at 1332 (emphasis added). The Fifth Amendment requires
that just compensation shall be paid, and the ascertainment of
that is a judicial inquiry. Jd. (citing Monongahela Navigation
Co. v. United States, 148 U.S. 312 (1893)).

In the end, the Eleventh Circuit upheld the constitutionality
of the Act because, unlike Pennsylvania’s cable statute, the
federal telecommunications statute provided for meaningful
judicial review and it delegated responsibility to an agency with
expertise in the field rather than a private arbitrator. “The fact
that our constitutional scheme dictates that the judicial branch
is entrusted with the ultimate responsibility for ensuring that
just compensation is awarded does not mean the other branches
of government must be excluded from the process of
determining the proper level of just compensation.” Gulf Power,
187 F.3d at 1333. The Court cited the practical advantages of
having an administrative body with technical expertise assisting
the judiciary in arriving at a more reliable determination of the
proper level of just compensation. Jd. So long as an
administrative agency’s decision concerning the level of
compensation owed remains subject to meaningful judicial
review, an administrative hearing can be a legitimate part of
providing an “adequate process” for obtaining just
compensation. Jd.

Under the Telecommunications Act, the FCC’s rate order
compensating a utility company for the use of its poles was
subject to review by a federal appellate court which had the

+

authority both to determine the proper level of just compensation
and to ensure that the utility received just compensation.* Had
the Act narrowed the scope of judicial review and made the
FCC the final arbiter of a utility’s compensation, the Eleventh
Circuit indicated that it may have reached a different conclusion
regarding the statute’s constitutionality.° See id. at 1337.

In Wisconsin Central Limited v. Public Service Commission
of Wisconsin, 95 F.3d 1359 (7th Cir. 1996), the United States
Court of Appeals for the Seventh Circuit denied plaintiff railroad
company’s request for injunctive relief to stop the installation
of utility transmission facilities in and around railroad right-of-
ways. The transmission facilities were being installed pursuant
to a Wisconsin statute that authorized an administrative body,
namely, Wisconsin’s Public Service Commission (PSC), to
establish, in the first instance, by rule making, the level of
compensation plaintiffs would receive for the taking of their
property. The PSC set the rate of compensation at a one time

4. Central to the court’s decision in Gulf Power was the extent to
which the appellate court could gather information needed to review
an FCC determination of just compensation: (1) The court could
rely on evidentiary submissions in the record from the FCC hearing;
(2) if the record was insufficient, it could remand the case and direct
the FCC to supplement the record; (3) the case could be transferred to
a district court for a full hearing; (4) the court could appoint a special
master to hold hearings and gather any additional information before
deciding the just compensation issue; (5) the court could fashion any
other “appropriate modes of procedure” to gather evidence pursuant to
its authority under the All Writs Act. The Eleventh Circuit found these
provisions for review sufficient to afford a utility a full and fair
opportunity to submit for judicial consideration all relevant evidence
bearing on the question of just compensation. Jd. at 1334-35.

5. The Court did not consider the challenge to the statute’s
rate structure ripe for review because the FCC had yet to determine
the “reasonable rate of compensation” for access to appellant’s utility
poles, but the Court noted that in a regulated industry the level of
compensation set by the government must not be so low as to be
confiscatory. Jd. at 1338.

ical

15

payment of $500. Under the statute, the railroad could petition
the commission for compensation greater than $500 if the
railroad incurred extraordinary direct expenses as a result of
the construction of the facilities or believed that special
circumstances existed, as defined in the rule. Jd. at 1364.

The railroads challenged the PSC’s determination of just
compensation, alleging, among other things, that the process
violated the Takings Clause of the Fifth Amendment and the
Due Process Clause of the Fourteenth Amendment. Jd. at 1367.
The railroads sought a declaratory judgment and injunctive
relief, relying in part on this Court’s decision in Bragg v.
Weaver, 251 U.S. 57 (1919), which they cited for the proposition
that “due process requires that an owner may obtain a full
hearing in a court of justice . . . before the compensation is finally
determined.” /d. at 1370.

The Seventh Circuit affirmed the decision of the district
court denying the railroad’s request for injunctive relief.
But the court’s decision rested more on the absence of
irreparable harm than on its conviction that Wisconsin’s
administrative procedure for determining just compensation
satisfied the due process requirements of Williamson County.
Id. at 1369-70. On the contrary, the court agreed with the
railroads, that decisions concerning “just compensation owed
one whose property is taken as a result of a legislative act is the
province of judicial — not legislative — determination.”
Id. The court went on to express its misgivings about the use of
a rule making procedure to determine just compensation in light
of the limited nature of judicial review aggrieved parties are
afforded following administrative rule-making procedures.
Under the Wisconsin statute, the court pointed out, judicial
review entailed deference to the administrative agency’s
findings of fact, and just compensation is essentially a factual
inquiry. Jd. “We do not share the district court’s conclusion
that judicial review by Wisconsin state courts would suffice
under the rule of decision in Bragg.” Id.

16

In Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984),
and in Thomas v. Union Carbide Agricultural Products Co.,
473 U.S. 568 (1985), this Court considered several challenges
to the constitutionality of certain provisions of the Federal
Insecticide, Fungicide, and Rodenticide Act (FIFRA)
mandating binding arbitration to settle disputes among
participants in a federally regulated pesticide registration and
licensing program. While this Court ultimately upheld the
constitutionality of the statute’s alternate dispute resolution
regime, what is most significant for our purposes is that, in
doing so, the Court distinguished a property owner’s “ability
to vindicate its constitutional right to just compensation” and
the “ability to vindicate its statutory right to obtain
compensation” under the terms of the pesticide registration
program. See Monsanto, 467 US. at 1019.

Under the FIFRA, pesticide manufacturers are required
to submit research data to the Environmental Protection
Agency (“EPA”) concerning their product’s health, safety,
and environmental effects as a precondition for registering
and marketing pesticide products in the United States.
In order to reduce redundant and costly research on the part
of secondary producers of the same or similar pesticides and
to streamline pesticide registration procedures, the FIFRA
authorized secondary manufacturers to use previously
submitted data in support of the registration of their own
pesticide products.

The FIFRA also instituted a scheme for sharing the costs
of data generation, with a later registrant required to
compensate the initial registrant for its fair share of the costs
of product safety research. The statute required the affected
parties to negotiate the amount of compensation owed, and
if negotiations failed, either could invoke final and binding
arbitration to settle the dispute. If the original data submitter
refused to participate in either the negotiations or arbitration,
it would forfeit its claim to compensation. By the terms of

‘
|
;

17

the Act, arbitral decisions were not subject to judicial review,
absent “fraud, misrepresentation, or other misconduct.”
7 U.S.C. § 136a(c)(1)(D)(i1).

Monsanto Company, a developer and producer of various
kinds of chemical products, including pesticides, challenged
the constitutionality of the FIFRA’s data disclosure provisions
and the use of binding arbitration to détermine its entitlement
to compensation under the Act’s data sharing provisions.
Monsanto alleged that the challenged provisions: (1) effected a
“taking of property without just compensation;” (2) violated
the original data submitter’s due process rights by compelling
binding arbitration; and (3) constituted an unconstitutional
delegation of judicial power.®° Monsanto, 467 U.S. at 999.

This Court held that insofar as the pesticide statute
authorized the EPA to make public trade secrets submitted
between 1972 and 1978, a period during which the registrant
entertained a reasonable, investment-backed expectation that
its trade secret data would be kept confidential, the Act effected
a “taking” for which Monsanto would be entitled to just
compensation under the Fifth Amendment. /d. at 1011.
However, because the Tucker Act remained available as a
remedy for any uncompensated taking, this Court concluded
that Monsanto’s constitutional challenge to the arbitration
and compensation scheme was not yet ripe for resolution.’

6. The district court found the binding arbitration scheme
unconstitutional on its face; being arbitrary and vague and not allowing
for judicial review, except in cases of fraud. Monsanto, 467 U.S. at
1000. However, the district court mistakenly concluded that Tucker
Act remedies were not available to pursue plaintiff's Fifth Amendment
takings claims. /d.

7. In Monsanto, this Court reasoned that the data originator must
first complete arbitration and, in the event of a shortfall, exhaust
its Tucker Act remedies against the United States before it can
be ascertained whether it has been deprived of just compensation.
Id. at 1019.

18

Id. at 1019. Unlike Petitioner in our case, Monsanto did not
allege or establish that it had actually been injured by an
arbitration proceeding under the statute.* Jd.

In contrast to the due process and just compensation claims
presented in Monsanto, the constitutional challenge to the
FIFRA’s compulsory arbitration scheme in Union Carbide had
a somewhat different focus. Union Carbide alleged that the use
of private arbitration violated Article III of the Constitution, an
injury that was not a function of whether the designated tribunal
awarded a reasonable amount of compensation, but of whether
an arbitrator had the authority to adjudicate the dispute at all.
Union Carbide, 473 U.S. at 580.

In deciding to uphold the constitutionality of the FIFRA’s
compulsory arbitration scheme against an Article III attack, this
Court relied on considerations that distinguish Union Carbide
from the dispute that gives rise to this petition.’ First and
foremost, like Monsanto, Union Carbide could avail itself of a
federal judicial forum under the Tucker Act to seek
compensation for any uncompensated “taking” resulting from
the data disclosure provisions of the Act. In our case, Petitioner
is denied a judicial forum by the statute. Second, the right to
compensation from subsequent registrants was not a purely
private right, but bore many of the characteristics of a public
right which did not demand an Article III judicial forum.
Id. at 589. Third, under Article I of the Constitution, the
legislative branch had the power to set up a dispute resolution
mechanism to settle a question of entitlement created by statute.
Id. Finally, historically, judicial review of agency decision
making is required when it results in the use of judicial process

8. In our case, Petitioner suffered a net loss of $1,114 as “just
compensation.”

9. In Union Carbide, this Court did not have to identify the extent
to which due process may require review of determinations by an
arbitrator because, in the proceedings below, the parties abandoned
their due process claims.

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AP AAS

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Pee Se ee es

19

to enforce an obligation upon an unwilling defendant.
Id. at 590. Under the FIFRA, all of the participants in the
pesticide program chose to engage in the data registration
process and the only potential object of judicial enforcement
power was the follow-on registrant who explicitly consents to
have his rights determined by arbitration."° /d. In contrast, under
Pennsylvania’s compulsory arbitration statute, Petitioner was
an unwilling partizipant in a non-judicial adjudicative process.

This review of the federal precedents demonstrates that
there is no authority supporting Pennsylvania’s use of
compulsory arbitration to determine what just compensation
shall be in connection with the taking of Petitioner’s property.
To the contrary, all of the cited cases cast doubt on the
constitutionality of the Pennsylvania statute.

C. Pennsylvania’s CATV Act Does Not Stand Up To
Constitutional Scrutiny

In Loretto v. Teleprompter Manhattan CATV Corp., this
Court held that a state may not require a building owner to
grant access te a cable operator to permanently occupy the
premises without just compensation. 458 U.S. at 441. While
the Pennsylvania appeals court conceded that the Act effects a
constitutional taking in our case, it concluded that the provision
under the Act for the payment of damages satisfied any due
process and just compensation requirements implicit in Loretto
even though that amount is determined by a private arbitrator
pursuant to a statutory provision for payment of only nominal
damages. |

In assessing the constitutionality of the Pennsylvania Act
under Loretto’s mandate for just compensation, we note that

10. The voluntary nature of participation in the pesticide program
is akin to the voluntary nature of a private contract to arbitrate, making
this Court’s decision in Union Carbide an extension of the Gilmer line
of cases, while distinguishing it from the case of Petitioner, who has
been compelled to submit to an arbitral forum.

20

the New York statute found by this Court to work an
unconstitutional taking in Loretto also purported to provide
compensation on terms much like that of the Pennsylvania
statute. The New York Statute, § 828 of the Executive Law,
provided that a landlord may not “demand payment from
any CATV company ‘in excess of any amount which the
[State Commission on Cable Television] shall, by regulation,
determine to be reasonable.’ ” Loretto, 458 U.S. at 423. Pursuant
to § 828(1)(b), the State Commission ruled that a one-time
$1 payment was the normal fee to which a landlord was entitled
“in the absence of a special showing of greater damages
attributable to the taking.” Jd. at 424. Prior to the statute, the
cable company customarily paid the landlords a fee of 5% of
gross revenues. /d. at 423.

It is striking that the nominal $1 payment, which was
unconstitutional in Loretto, is identical to the nominal payment
assessed by the arbitrator in the present case, some seventeen
years later. In both instances, moreover, the unconstitutional
nominal fee was arrived at despite empirical evidence that the
owner was deprived of substantially more valuable revenue due
to the taking. The 5% fee that the cable company would have
customarily paid but for New York’s taking statute is identical
to the fee that ACS Enterprises pays to Hill House. In our case,
the statute itself directs the arbitrator to deduce an artificially
low value of what was taken. The statute states “[a] landlord
shall be entitled to just compensation from the operator resulting
from Joss in value of property resulting from the permanent
installation of CATV ...” 68 P.S. § 250.506-B(a) (emphasis
added). The statutory measure of these damages is “‘a decrease
in the resale or rental value of the property resulting from the
installation.” In Loretto, the Commission similarly based its
nominal fee on an assessment of what the landlord would receive
if the property were condemned. As the amount of property
physically occupied is slight, the value of the taking,
disregarding revenue, is deemed always nominal.

— \;-.e. en

:
a

21

We recognize that in concluding Loretto’s artificially
limited compensation regime worked an unconstitutional taking,
this Court did not “presuppose that the fee which many landlords
had obtained from Teleprompter prior to the law’s enactment
is a proper measure of the value of the property taken.” Jd. at
441. While Loretto expressed no opinion as to the proper amount
of compensation due, it plainly stated that the question was one
for the “state courts” to consider. Jd. The two related
implications are that: (1) a procedural regime for compensating
takings that lacks provision for a judicial determination of just
compensation fails to provide an adequate process to value loss
from a taking; and (2) the a priori calculation of loss as nominal
was an inadequate measure of damages.

1. Pennsylvania’s CATV Act Deprives Property
Owners of Due Process by Delegating Judicial
Power to a Private Forum Without Expert
Administrative Oversight or Meaningful Judicial
Review

In the aftermath of Loretto, other states have enacted cable
access laws that have purported to satisfy the just compensation
requirements of Loretto. The Pennsylvania Act pushes the
constitutional envelope farther than any other, presenting by
far the boldest challenge to a building owner’s property rights
and the requirements of due process. The Act deprives owners
subject to physical takings of the due process afforded by
eminent domain proceedings. The Act unconstitutionally
delegates state judicial power to the AAA, a private
organization. This has two consequences. First, it deprives
building owners of procedural due process due to the lack of
expert administrative oversight of the taking process. Second,
the Act restricts judicial review.

Cable access laws in other jurisdictions have been upheld
because some courts have held they provided constitutionally
adequate alternatives to eminent domain and judicial
proceedings in the form of hearings before an expert

a

22

administrative tribunal with broad authority to regulate taking
entities in the public interest. NYT Cable TV v. Homestead at
Mansfield, Inc., 518 A.2d 748, 755 (N.J. Super. 1986), aff'd,
543 A.2d 10 (N.J. 1988); AMSAT Cable Ltd. v. Cablevision of
Ct., L.P., 6 F.3d 867, 874 (2d Cir. 1993); Loretto v. Teleprompter
Manhattan CATV Corp., 446 N.E.2d 428, 433 (N.Y. 1983) (on
remand). But the Pennsylvania Act is utterly unique in
delegating the power to condemn to a private forum without
any administrative or regulatory oversight. States that delegate
cable takings to agencies do not just off-load property owners
from the civil justice system for convenience and out of
contempt for the Constitutional interests at stake. For example,
New Jersey’s alternative to eminent domain allegedly satisfies
due process because of “the specialized nature and regulatory
requirements of the cable television industry . . .” The Cable
Television Act “recognizes these factors and reflects a legislative
intent that the BPU determine all matters necessary to the
enforcement of the act.” NYT Cable at 755. In upholding the
New Jersey statute’s due process provisions, the court
specifically rested its decision on the fact of a comprehensive
regulatory regime that severely constrains cable providers to
standards of public service and accountability. Jd. at 755
(“the administrative power under the Cable Television Act is
very broad” and “expressly includes the power to ‘supervise
and regulate’ the ‘contracts’ entered into by every CATV
company.”)

The constitutionality of Connecticut’s alternative to judicial
process and eminent domain was similarly premised on the
diversion to an administrative tribunal of disputes concerning
matters within the jurisdiction of the agency that conducts the
tribunals: the Department of Public Control. AMSAT at 874
(owners may petition the department for additional
compensation). Moreover, the AMSAT court makes much of
the owner’s recourse, under Connecticut’s scheme of
administrative justice, to judicial review of “all facts presented
in the administrative record.” Thus, the court stressed, “any

-23

alleged constitutionally under-compensated taking approved
by the administrative agency can be challenged on appeal.”
Id. at 875. In dramatic contrast, the Pennsylvania statute only
allows appeal of the amount of lost value resulting from the
taking which, as discussed below, will always be a nominal
value.

The alleged constitutionality of New York’s process is
premised on the aforementioned factors of administrative
oversight absent from the Pennsylvania statute. Loretto on
remand, 446 N.E.2d at 433 (N.Y. 1983), stresses that the statute
satisfies due process by virtue of providing an expert
administrative alternative to a judicial forum, and by broad
judicial review following disputed administrative adjudications.
New York law provided for independent judicial determination
of any constitutional issue raised in an administrative hearing,
and provided for review of any regulation or determination
(such as a nominal method of valuing just compensation).
2 N.Y. Jur. 2d Admin. Law §§ 314, 317. The Loretto statute,
New York’s Executive Law Art. 28, §§ 811-31, 18 McKinney
Exec. Law 811, et seq. (1982) (repealed 1995), gave the Cable
Commission broad power to regulate cable providers, including
the power to ensure that providers did not “unreasonably delay”
the provision of service to “any person or area” within
the franchise territory. 18 Executive Law § 824 (1982).
The Commission is specifically entitled to order service that
it deemed “in the public interest.” Compare this to the
Pennsylvania case where the power of condemnation is
delegated to the cable company with no corresponding public
duties, and where the AAA adjudicator has no peculiar
jurisdiction over cable matters or power to regulate and enforce
standards on the cable provider.

In Illinois, the court in Times Mirror Cable Television v.
First Bank of Springfield, 582 N.E.2d 216 (Ill. App. 1991) found
that the cable access statute’s diversion of cable cases from
eminent domain proceedings satisfied due process because the

24

owner was entitled to a judicial proceeding and trial by jury to
determine just compensation. /d. at 219. The holding is simply
that the owner is not entitled to stay access during the pendency
of his suit, as he would be able to in an eminent domain
proceeding. The procedural issue in 7imes Mirror is entitlement
to a pre-deprivation hearing, a very modest constraint compared
to that under the Pennsylvania law.

The cases that find cable access laws that deprive owners
of eminent domain proceedings constitutional turn on the
premise that deprivation of a right to judicial procedure is
justified by access to administrative agency hearings and
by broad, if not de novo, rights of judicial appeal. But
Pennsylvania’s access law provides no such hearing. And while
judicial review might conceivably solve the due process problem
of consigning owners’ claims to non-contractual arbitration, the
Act impermissibly limits judicial review of just compensation.
The Act limits the right of appeal to the court of common
pleas merely to the issue of the determination of lost value.
See 68 P.S. § 250.506-B(b)(4). That provision fails to comply
with the constitutional mandate of due process, unless the
streamlined adjudicative process has first been agreed to by the
parties or the owner has a right to a judicial determination on
appeal. Compulsory arbitration, coupled with limited review,
is all that the Act provides owners in terms of due process.

2. Pennsylvania’s CATV Act Denies Property Owners
Just Compensation by Ascribing Only a Nominal
Value to Their Loss

This Court has held that “just compensation” for a physical
taking should put the owner in as good a pecuniary position as
he would have been but for the taking, and no eminent domain
doctrine is to the contrary. Olson v. United States, 292 U.S.
246 (1934); see Kirby Forest Indus., Inc. v. United States, 467
U.S. 1, 11 (1984) (though not mandated, interest on takings
may be needed to put owner in as good a position pecuniarily).
Because “the basic principle” of takings compensation is

25

indemnity, measures other than diminution in market value of
remaining property are often needed for Constitutionally
adequate just compensation. United States v. 564.54 Acres of
Land, PA., 506 F.2d 796, 799 (3d Cir. 1974); see also United
States v. 564.54 Acres of Land, PA., 441 U.S. 506, 512 (1979).
Where taken property interests “have no marketplace,” a fair
measure of the government’s obligation to indemnify “may be
the present value of capitalized future earnings.” 564.54 Acres,
506 F.2d at 799. Indeed, departure from the indemnity principle
is justified only by need for an objective, workable measure of
loss. 564.54 Acres, 441 U.S. at 512. Under United States v.
Fuller, 409 U.S. 488, 490 (1973) and 564.54 Acres, 441 U.S. at
512, the legislature may not arbitrarily rule out from judicial
consideration the only form of compensation appropriate to
indemnify the pecuniary in question: fair market value measured
as the present value of the revenue stream from the taken
property."

While there is no “marketplace” for the space in Hill
House’s wall cavities and on the exterior of its building
that Comcast proposes to occupy, the commercial value of
that property is shown by the 5% commission that
ACS Enterprises contracts to pay Hill House for exclusive
access. When franchised cable is installed in a building, the
owner is prevented from exclusively contracting to provide his
tenants with comparable satellite-based service such as that of
ACS Enterprises. A court, engaged in the judicial determination
of just compensation, might find that the true measure of
economic loss to apartment building owners is not the reduction
of property value but the value of lost revenue stream that the
owner was realizing by contracting for provision of private
cable. Such contractual earning potential increases present value

11. For example, in cases involving land containing minerals,
value of mineral-bearing land is determined by the “income
capitalization method, in which the income stream from the sale of
minerals over a number of years is capitalized in terms of present worth.”
United States v. 47.14 Acres of Land, 674 F.2d 722, 726 (8th Cir. 1982).

26

of the property. Such increase in present value is the subject
of the taking. At the very least, the owner must have some
ability to argue to a court that just compensation for taking
his or her right to grant exclusive use of the property is the
pecuniary value of revenue lost thereby.

But, under the Act, the owner is denied any ability
even to argue for that measure of just compensation to
a court. The Act provides only that, “A landlord shall
be entitled to just compensation from the operator resulting
from Joss in value of property resulting from the permanent
installation of CATV system facilities on the premises.”
68 P.S. § 250.506-B(a). The statutory measure of these
damages is “a decrease in the resale or rental value of the
property resulting from the installation.” Thus, loss of
revenue is arbitrarily defined as non-compensable. Moreover,
this is a strictly a legislative determination. While the statute
provides for appeal to a court of common pleas, such appeal
is limited to “to amount awarded for loss of value or for
physical damages to the property.” Jd. at § 250.506-B(b)(4).
The Act does not provide for any judicial challenge to the
legislatively-determined “loss of value” measure of damages.

In Loretto, this Court declined to rule on the
Constitutional adequacy of the valuation of the loss before
the state court did so on remand. Loretto, 458 U.S. at 441.
The court’s comment that it did not presuppose that just
compensation would be the same 5 percent royalty on the
cable company’s receivables does not imply that a legislative
determination that merely nominal valuation is available
would suffice. But that is the conclusion that some courts
have drawn. Some post-Loretto cable access cases, including
Loretto on remand to the New York courts, uphold statutes
that effectively ascribe a nominal value to owners’
Constitutionally protected property interests (but, as noted
above, these cases all provide additional procedural due

27

process that may redeem the statutes).'? Loretto v. Teleprompter
Manhattan CATV Corp., 446 N.E.2d 428 (N.Y. 1983);
NYT Cable TV v. Homestead at Mansfield, Inc., 518 A.2d 748,
752-53 (N.J. Super. 1986), aff'd, 543 A.2d 10 (N.J. 1988);
Cablevision of the Midwest, Inc. v. Gross, 639 N.E.2d 1154
(Ohio 1994); Princeton Cablevision, Inc. v. Union Valley Corp.,
478 A.2d 1234 (N.J. Super. Ch. 1983). The statutes are upheld
as providing an individualized determination of compensation,
as opposed to a fixed provision for nominal compensation.
Loretto, 446 N.E.2d at 433 (provision for nominal compensation
“by regulation” was the only constitutional problem). AMSAT
Cable Ltd. v. Cablevision of Ct., 1.P., 6 F.3d 867, 875 (2d Cir.
1993) holds that the Connecticut mandatory cable access statute
provides just compensation because it “does not appear to
prescribe a binding rule with respect to the ascertainment of
just compensation.” See also Michigan Court of Appeals in
City of Lansing v. Edward Rose Realty, Inc., 502 N.W.2d 638
(Mich. 1993) (condemnation proceedings to gain access to
easements for a cable company was unconstitutional where
landlord already provided comparable programming.)

The Pennsylvania statute is constitutionally flawed because
it prescribes a “binding rule” that owners may receive only
nominal compensation, with no possibility of overcoming that
presumption. An award of nominal damages is never
constitutionally adequate compensation for the taking of
demonstrably valuable property interests such as that here.

12. Neither the Loretto plaintiff nor any member of the certified
class ever made application to the Cable Commission for just
compensation. Loretto v. Group W. Cable, 522 N.Y.S.2d 543, 545
(1st Dept. 1987). The plaintiff did, however, seek attorney fees as a
prevailing Section 1983 litigant. The court held that the fee claim was
unripe because the plaintiff would have to apply for compensation and
be disappointed in order to prove deprivation, and this Court denied
certiorari on this unrelated issue. Loretto v. Group W. Cable, 488 U.S.
827 (1988).

28

3. Pennsylvania’s CATV Act Effects a Second
Uncompensated Taking by Requiring Property
Owners to Pay for Private Arbitration

Not only does the Act arbitrarily rule out appropriate forms
of just compensation, it penalizes the owner by forcing him to
pay for half the costs of the proceedings by which his property
is taken involuntarily. See 68 P.S. § 250.506-B(b)(4),(5).
By cynical design, the Act nullifies the owner’s right —
inadequate in the first instance — to a determination of
just compensation. It does so by always imposing a de facto
penalty on the disputing owner that vastly exceeds the nominal
compensation he may recover. The effect is to coerce
acquiescence by penalizing the assertion of what Pennsylvania
admits are constitutional rights.

Petitioner has noted above that decisions in several states
uphold statutes that artificially ascribe nominal value to owners’
Loretto rights. However, there is no precedent at all for imposing
a financial penalty — a second taking — on property owners
who have the temerity to demand an individualized accounting
of compensation. On this, the Pennsylvania requirement that
owners pay half of the cable company’s costs of taking the
owners’ property is uniquely infirm. Pennsylvania’s statute not
only artificially imposes a nominal value on an owner’s
constitutionally protected interests, it also makes him or her
pay a substantial penalty for exercising an admittedly quixotic
right to just compensation.

29 ee
CONCLUSION

In light of the foregoing, Petitioner respectfully requests
that this Court grant its Petition for Certiorari.

Respectfully submitted,

STEVEN M. CorREN

Counsel of Record

BRUCE BODNER

BRUCE BELLINGHAM

KAUFMAN, COREN, REss

& WEIDMAN, P.C. |
Attorneys for Petitioner |
1525 Locust Street :
17th Floor

Philadelphia, PA 19102

(215) 735-8700

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_1944%3A1. Public record. Not legal advice.