STATE OF MINNESOTA
IN COURT OF APPEALS
Triax Midwest Associates, L.P.,
City of Savage,
Filed September 29, 1998
Affirmed in part, reversed in part
Savage City Council
Resolution No. R-97-175
Christopher J. Dietzen, James M. Susag, Larkin, Hoffman, Daly & Lindgren, Ltd., 1500 Norwest Financial Center, 7900 Xerxes Avenue South, Bloomington, MN 55431 (for relator)
James J. Thomson, Karen R. Cole, Kennedy & Graven Chartered, 470 Pillsbury Center, 200 South Sixth Street, Minneapolis, MN 55402 (for respondent)
Considered and decided by Toussaint, Chief Judge, Huspeni, Judge, and, Forsberg Judge.
U N P U B L I S H E D   O P I N I O N
Triax Midwest Associates (Triax) operates the cable television franchise in the City of Savage (city). Triax took these consolidated certiorari appeals from resolutions of the Savage City Council (city council) finding Triax in non-compliance with customer service requirements of the Federal Communications Commission (FCC) and a portion of the Savage Cable Commission Franchise Ordinance (Savage franchise). Triax subsequently filed a negligence and breach of contract action in federal district court against the city and Bonine Excavating, Inc. (Bonine), a construction company the city hired to install its underground utilities, alleging negligence and breach of contract. On certiorari, Triax first argues that this court should choose not to exercise jurisdiction over this appeal. Instead, it should allow the claims to be heard in the federal district court. Triax next argues that the record does not support the city's findings of non-compliance. Alternatively, Triax argues that its alleged non-compliance is excused by Bonine's negligence. We opt to exercise jurisdiction, affirm non-compliance orders Nos. 1 through 4, and reverse non-compliance orders Nos. 5 and 6.
Certiorari lies to review the quasi-judicial acts and proceedings of a municipal body. Honn v. City of Coon Rapids, 313 N.W.2d 409, 414 (Minn. 1981). Certiorari review is deferential and limited in scope. Id. On certiorari, the court must examine the evidence to ascertain whether it furnished any legal and substantial basis for the action taken. Id. The court will reverse when the evidence does not provide a substantial basis for the agency's decision as a matter of law. Id. The burden of making a record, like the burden of proof, falls on the agency. See Dokmo v. Independent Sch. Dist. No. 11, Anoka-Hennepin, 459 N.W.2d 671, 676 (Minn. 1990).
Triax concedes that this court has certiorari jurisdiction over this appeal concurrently with the federal district court. Triax nevertheless urges this court not to exercise jurisdiction and to allow the claims to be heard in the district court instead. We opt not to do so.
While the writ of certiorari is not the only mechanism by which Triax could obtain judicial review of the city's decisions, it is the most appropriate. First, because of separation of powers concerns, the limited standard of review on certiorari is better suited to a review of a local government's exercise of discretion than is the standard of review in an independent proceeding in federal court. See Willis v. County of Sherburne, 555 N.W.2d 277, 281 (Minn. 1996); Dietz v. Dodge County, 487 N.W.2d 237, 239-40 (Minn. 1992); Dokmo, 459 N.W.2d at 675 (agreeing that constitutional principles of separation of powers prohibit judiciary from exercising de novo review of quasi-judicial administrative decisions). Second, while the record on certiorari is not as extensive as the record that would be generated in judicial proceedings, in this case it is adequate for review. See, e.g., Willis, 555 N.W.2d at 281 (finding record on certiorari adequate even though it fell short of record generated in judicial proceedings). Finally, in terms of practicalities and cost, the statute of limitations on Triax's negligence and breach of contract claims, as well as extensive discovery procedures, make certiorari a more appropriate method for Triax to obtain judicial review than an independent action for negligence and breach of contract. See id. (statute of limitations, discovery procedures, and panoply of rules attending plaintiff's claim made judicial review of claim by way of wrongful termination action inappropriate).
For all these reasons, we find that jurisdiction over this certiorari appeal is not only appropriate but also preferable.1
A. Non-compliance Order No. 1
The record contains substantial evidence that Triax failed to maintain a local customer service center during normal business hours from July 1996 until November 1997, in violation of 47 C.F.R. § 76.309(c)(1)(v) (1996) (non-compliance order No. 1). "Normal business hours" include evening hours one night per week and/or weekend hours. 47 C.F.R. § 76.309(c)(4)(i) (1996). Triax admitted in its quarterly reports for 1997 that its local office was open only Monday through Friday from 8 a.m. to 5 p.m. Triax's admission is sufficient to support the city's finding of non-compliance.
Admittedly, the city did not specifically identify the customer service obligation Triax had violated, either during the course of the municipal process or in resolution 97-175 (the city's official finding of non-compliance). Instead, it referred generally to Triax's failure to comply with "obligations dealing with normal business hours." In this court's view, however, Triax could have easily inferred that non-compliance order No. 1 was premised on its failure to maintain normal business hours at its local customer center in violation of subdivision (c)(1)(v), because Triax was in compliance with all other regulations requiring "normal business hours." Moreover, the record shows that Triax understood the basis of non-compliance order No. 1 well enough to cure its non-compliance after the city assessed fines against it. The city, therefore, properly exercised its discretion in issuing non-compliance order No. 1 finding Triax in violation of 47 C.F.R. § 76.309(c)(1)(v).
B. Non-compliance Order No. 2
The city also properly exercised its discretion in issuing non-compliance order No. 2, finding that Triax breached Article IV, § 2(B)(4) of the Savage franchise by failing "to maintain a written record of all complaints made to them and the resolution of such complaints, including the date of such resolution" (non-compliance order No. 2). Up until May 1997, Triax provided the city with computer-generated and "trouble call" reports that did not include the information Article IV requires. In May 1997, Triax began providing the city "quality control reports" that complied with the franchise requirements. Triax, however, did not provide a quality control report for each complaint it received, as required by the franchise.
The record does not support Triax's claim that non-compliance order No. 2 is arbitrary and capricious because it is premised on the city's "unsubstantiated hunch" that it did not receive a written report of each and every complaint. The city received approximately 85 complaints about Triax between April 1997 and December 1997. The record contains no written report of these complaints, even though many of the complainants reported having contacted Triax before they contacted the city. Nor does the record contain reports of complaints made by several city council members in an effort to document Triax's non-compliance. Contrary to Triax's claim, therefore, the city's finding of non-compliance with Article IV is based on substantial evidence.
In addition, Triax's non-compliance is not excused by the city's failure to define "complaint" and give Triax a format for the submission of complaints recorded. The common sense meaning of the term "complaint" would have served Triax well had it tried to fulfill its customer service obligations in good faith. Additionally, the franchise required no particular format for the reporting of complaints, only specific information. The city, therefore, did not abuse its discretion in issuing non-compliance order No. 2 finding Triax in breach of the Savage franchise.
C. Non-compliance Orders Nos. 3 and 4
Nor did the city abuse its discretion in finding that Triax violated (1) 47 C.F.R. § 76.309(c)(1)(ii) (1996) by failing to answer the phones within 30 seconds more than ten percent of the time under normal operating conditions, measured on a quarterly basis (non-compliance order No. 3); and (2) 47 C.F.R. § 76.309(c)(1)(iv) (1996) by allowing customers to receive a busy signal more than three percent of the time under normal operating conditions.
The record contains evidence of numerous subscriber complaints about Triax's telephone response time and frequent busy signals. Admittedly, Bonine cut some of Triax's cables during the course of construction and thereby contributed to Triax's failure to comply with telephone answering standards. Triax's counsel admitted, however, that Triax "had been using a third party long distance vendor that did not have the capabilities, both externally and internally, to support a business that generated as many telephone calls as [Triax did]." Given the limited standard of review on certiorari, this admission is sufficient to support the city's discretionary decision to find Triax in non-compliance with telephone answering standards, despite Bonine's alleged negligence.
Contrary to Triax's claim, the city's failure to meet its burden of proving the statistical measurements required to establish non-compliance does not justify reversing non-compliance orders Nos. 3 and 4, because it was caused by Triax's own failure to provide the measurements. Triax claims that it had no obligation to provide statistical measurements because cable operators are not required to acquire equipment or perform surveys to measure compliance unless "a historical record of complaints indicates a clear failure to comply." 47 C.F.R. § 76.309(c)(1)(iii) (1996). The city, however, requested the statistical measurements on the belief that the number of complaints it had received about Triax indicated a clear failure to comply with telephone answering standards. Triax, therefore, was not justified in ignoring the city's request without more pursuant to 47 C.F.R § 76.309 (c)(1)(iii). Having chosen to ignore the city's request, Triax may not now claim that the city's failure to meet its burden of proving statistical evidence of compliance excuses its non-compliance. We therefore conclude that the evidence in the record provides a substantial basis for non-compliance orders Nos. 3 and 4.
D. Non-compliance Order No. 5
The record does not, however, contain substantial evidence to support the city's finding that Triax failed to comply with 47 C.F.R. § 76.309(c)(2)(iii) through (v) (1996) (non-compliance order No. 5).
47 C.F.R. § 76.309(c)(2)(iii) requires cable operators to provide four-hour appointment windows for installation and service calls 95% of the time, measured on a quarterly basis, under normal operating conditions. Triax had 3,500 cable subscribers in Savage. To satisfy its burden of proof, therefore, the city needed to show that approximately 175 subscribers complained about Triax's service and installation hours on a quarterly basis. The record shows that the city received only three complaints regarding Triax's hours. The evidence in the record, therefore, is insufficient to support the city's finding of non-compliance with subdivision (c)(2)(iii). Because the city did not ask Triax to provide statistical evidence of compliance with service and installation hours requirements, it cannot now blame Triax for its failure to meet its burden of proof.
The evidence in the record is also insufficient to support the city's finding that Triax failed to comply with subdivision (c)(2)(iv). Subdivision (c)(2)(iv) provides that cable operators may not cancel appointments after the close of business on the business day prior to the appointment 95% of the time measured on a quarterly basis. The record shows that the city received five complaints concerning missed appointments. Here too, given Triax's subscriber base, five complaints do not constitute substantial evidence of non-compliance with subdivision (c)(2)(iv).
Finally, the record does not contain any evidence, substantial or otherwise, that Triax's representatives failed to contact customers when running late for an appointment in violation of subdivision (c)(2)(v). The city did not document a single customer complaint regarding late appointments.
We therefore conclude that non-compliance order No. 5 is unsupported by substantial evidence and the city abused its discretion in issuing it.
E. Non-compliance Order No. 6
We also conclude that the city abused its discretion in finding Triax in non-compliance with 47 C.F.R. § 76.309(c)(3)(i)(A) (1996) on the basis of a single complaint by a city council member that he did not receive certain written information at the time of installation (non-compliance order No. 6). One isolated incident of non-compliance does not constitute substantial evidence of non-compliance.
Affirmed in part, reversed in part.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. Art. VI, § 10.
1. The cases Triax cites in support of its argument that principles of comity favor allowing these claims to be heard in federal district court are inapposite, because they do not involve review of a local government's or an administrative agency's quasi-judicial decisions. Instead, they involve original actions brought by private parties in different district courts and deal with the "first to file" rule. See Green Tree Acceptance, Inc. v. Midwest Fed. Sav. & Loan Ass'n of Minneapolis, 433 N.W.2d 140 (Minn. App. 1988) (involving declaratory judgment action to construe commercial agreement and brought in state district court and related negligence and breach of contract action brought in federal district court); Minnesota Mut. Life Ins. v. Anderson, 410 N.W.2d 80 (Minn. App. 1987) (involving interpleader action brought in Ramsey County and related action brought in Hennepin County seeking determination of entitlement to proceeds of life insurance policies).