Opinion
CIVIL ACTION No. 02-2343-CM
January 8, 2003.
MEMORANDUM AND ORDER
On November 26, 2002, this court issued an order denying plaintiffs' request for injunctive relief, which would have prohibited defendant Atrium Partners, L.P. (Atriums Partners) from invoking the FCC Home Run Wiring Regulations, 47 C.F.R. § 76.804(b). This matter is before the court on Time Warner's' Motion for Injunction Pending Appeal (Doc. 37).
The court will hereafter refer to plaintiffs collectively as "Time Warner."
• Standards
Federal Rule of Civil Procedure 62(c) provides that, when an appeal is taken from a judgment denying an injunction, the court may "suspend, modify, restore, or grant an injunction during the pendency of the appeal." Fed.R.Civ.P. 62(c). The considerations on a motion for stay pending appeal are similar to those evaluated in deciding whether to grant a preliminary injunction: (1) the threat of irreparable harm to the plaintiff absent a stay; (2) the harm to the defendants from the issuance of the stay; (3) the harm to the public interest; and (4) the likelihood that the plaintiff will succeed or prevail on appeal. Hilton v. Braunskill , 481 U.S. 770, 776 (1987); Securities Investor Protection Corp. v. Blinder, Robinson Co. Inc. , 962 F.2d 960, 968 (10th Cir. 1992); Thiry v. Carlson , 891 F. Supp. 563, 565 (D.Kan. 1995). The balance of these considerations depends on the relative strength of the first three factors. To obtain a stay, the movant need not always show a strong likelihood or high probability of success on the merits. First Sav. Bank, F.S.B. v. First Bank Sys., Inc. , 163 F.R.D. 612, 615 (D.Kan. 1995). "`The probability of success that must be demonstrated is inversely proportional to the amount of irreparable injury' that the movant will suffer absent a stay." Id. (citing Mich. Coalition v. Griepentrog , 945 F.2d 150, 153 (6th Cir. 1991)). • Discussion
The court declines to repeat a recitation of the factual circumstances surrounding this case. Instead, the court refers to and incorporates into this order the factual background set forth in the November 26, 2002 order.
º Threat of Irreparable Injury An injury is irreparable if compensatory damages are unsuitable. First Sav. , 163 F.R.D. at 615. Mere economic injury does not constitute irreparable harm. Id. In other words, preliminary relief will not be granted where the applicant has an alternate remedy in the form of money damages or other relief. Time Warner asserts that it will suffer irreparable harm if the court does not grant an injunction pending appeal because, Time Warner claims, it faces a clear and unmistakable loss of revenue from customers who will have been supplied competing cable service over the home run wires at issue in this case. Time Warner contends that it may be impossible to determine the exact amount of lost revenue due to the inherently variable nature of cable services. In support, Time Warner directs the court's attention to Multi-Channel TV Cable Co. v. Charlottesville Quality Cable Operating Co. , 22 F.3d 546 (4th Cir. 1994). Multi-Channel , issued before the FCC Home Run Wiring Regulations, is clearly distinguishable from the case at hand. In Multi-Channel , Adelphia Cable Company (Adelphia) and Charlotesville Quality Cable Operating Company (CQC) were competing cable television providers. Adelphia had installed home run cable distribution systems in four apartment complexes. In the summer of 1993, Adelphia began offering cable service to the tenants within the four apartment complexes on an a la carte basis. The a la carte service allowed each tenant to customize the package of cable program services that he or she received. Later that same year, the property owner executed an exclusive cable television provider agreement with CQC, which gave CQC the exclusive right to provide cable television services to tenants. Multi-Channel , 22 F.3d at 549. CQC used Adelphia's existing home run wires without Adelphia's consent and without providing Adelphia any compensation. The court found irreparable injury on the basis that Adelphia's potential loss of revenue would be too difficult to ascertain because the offer of a la carte services was so new. Id. at 552. The court stated: "[T]he historical average of Adelphia's revenue does not provide an adequate basis for measuring the potential loss of revenue because Adelphia only began providing a la carte service in the summer of 1993. The relative novelty of such service clearly makes any calculation of Adelphia's damages difficult to ascertain and, therefore, supports a finding that Adelphia would suffer irreparable harm." Id. (internal quotation marks omitted). Multi-Channel is not analogous to the facts in this case. First, Atrium Partners is not attempting to grant another cable company an exclusive right to provide cable services. In other words, unlike Adelphia, Time Warner is not being excluded from the property-any tenant who desires to obtain service from Time Warner may do so. Time Warner will retain the wiring for the tenants who desire its services and will be compensated for the wiring it does not use. Moreover, Atrium Partners is not attempting to appropriate the home run wiring without compensation. Under the FCC Home Run Wiring Regulations, Time Warner must be paid. Finally, there is no evidence that Time Warner will be unable to calculate its potential losses. There is nothing to suggest that Time Warner cannot calculate its cable service revenues both before and after this court's ruling to determine any losses it may have incurred. The court finds that any potential harm Time Warner may suffer is not irreparable.
º Harm to Defendants
º Public Interest
The court next considers whether Atrium Partners and intervenor Everest will be harmed if the court grants an injunction pending an appeal. Should the court issue such an injunction, defendants face the dilemma of either waiting to begin offering cable service to tenants, or installing a new set of home run wires in the building. If defendants decide to wait to offer service until after this case is appealed, Everest risks losing potential revenue. If, on the other hand, defendants chose to install a duplicate home run wiring system, Everest will incur potentially substantial costs, and Atrium Partners risks subjecting its tenants to mess, inconvenience, and disruption. The court finds that defendants will be harmed if this court grants an injunction. The court next looks to the public interest. In its November 26, 2002 order, this court found that the public interest is served when consumers are given choices about whom they can select to provide cable service. With that in mind, the court concludes that the public would be harmed if an injunction is issued. The tenants at the Atriums would have to wait for resolution of the appeal before Everest (or any other competitor cable provider) could utilize the FCC Home Run Wiring Regulations, which were promulgated with the intent of fostering competition. This means that the tenants would either be denied the services of a competitor or, if Everest chooses to rewire, the tenants would face disruption and, ultimately, would bear the costs of such rewiring. The court therefore finds that the public would be deprived of a competitive choice during the pendency of an appeal. Finally, the court considers Time Warner's likelihood of success on appeal. Time Warner points out that, if the other requirements for a stay pending appeal are met, the burden is reduced, and Time Warner need only establish "questions going to the merits so serious, substantial, difficult and doubtful, as to make the issues ripe for litigation and deserving of more deliberate investigation." McClendon v. City of Albuquerque , 79 F.3d 1014, 1020 (10 Cir. 1996). However, in this case, the other three factors do not tip in Time Warner's favor. Accordingly, Time Warner must show a strong likelihood or high probability of success on the merits. First Sav. , 163 F.R.D. at 617. IT IS THEREFORE ORDERED