Sprint Corp. v. Dep't of the Interior
Sprint Corp. v. Dep't of the Interior
Opinion of the Court
Scattered across the United States, telecommunications sites support the ubiquitous phone and internet services on which customers increasingly rely. Crown Castle GT Company, LLC ("Crown") operates a telecommunications site in New Mexico, on federal land managed by Defendant Bureau of Land Management (BLM). In 2003, Alamosa Properties LP ("Alamosa")-a subsidiary of Plaintiff Sprint Corporation (together with Alamosa, "Sprint")-entered into a sublease with Crown that permitted it to place antennas on Crown's existing cellular tower and designated a lease area upon which Sprint planned to install items known as cellular cabinets. A few years later, BLM promulgated a regulation requiring any subtenant on a telecommunications site that owns an "equipment shelter" present there to obtain a separate BLM authorization for it and pay a related fee.
This case concerns BLM's subsequent application of this regulation and the relevant authorizing statute to Sprint's cellular cabinets. In 2013, BLM initiated a trespass action against Sprint, assessing penalties against it for failing to obtain a BLM authorization for its cellular cabinets, on the theory that the cabinets qualified as "equipment shelters" under the regulation. Sprint appealed this determination to the Interior Board of Land Appeals (IBLA or "Board"), arguing that it did not trespass and that, even if it did, BLM lacked statutory authority to impose the penalties in question. The IBLA largely sided with BLM. Through this action, Sprint appeals the IBLA's ruling.
*17Before the Court are the parties' cross-motions for summary judgment. For the reasons explained below, the Court concludes that (1) the IBLA's determination that Sprint trespassed on public land because its cellular cabinets qualified as equipment shelters under the relevant regulation was not arbitrary and capricious, and (2) the IBLA's assessment of penalties against Sprint for its failure to obtain a right-of-way authorization for the cellular cabinets did not exceed its statutory authority. Therefore, the Court will deny Sprint's Motion for Summary Judgment (ECF No. 23) and grant Defendants' Cross-Motion for Summary Judgment (ECF No. 24).
I. Background
A. Statutory and Regulatory Background
BLM, an agency of Defendant Department of the Interior, is responsible for managing public lands. The Federal Land Policy and Management Act of 1976 (FLPMA),
BLM regulations provide that users of public lands "must have a grant under this part when [they] plan to use public lands for systems or facilities over, under, on, or through public lands."
In June 2005, BLM promulgated a regulation (the "2005 Regulation") that included new subsections (b) and (c) below:
If I am a tenant or customer in a facility, must I have my own grant or lease and if so, how will this affect my rent?
(a) You may have your own authorization, but BLM does not require a separate grant or lease for tenants and customers using a facility authorized by a BLM grant or lease that contains a subleasing provision. BLM charges the facility owner or facility manager rent based on the highest value use within the facility (including any tenant or customer *18use authorized by a separate grant or lease) and 25 percent of the rent from the rent schedule for each of the other uses subject to rent (including any tenant or customer use a separate grant or lease authorizes and the facility owner's use if it is not the highest value use).
(b) If you own a building, equipment shelter, or tower on public lands for communication purposes, you must have an authorization under this part, even if you are also a tenant or customer in someone else's facility.
(c) BLM will charge tenants and customers who hold their own grant or lease in a facility, as grant or lease holders, the full annual rent for their use based on the BLM communication use rent schedule. BLM will also include such tenant or customer use in calculating the rent the facility owner or facility manager must pay.
B. Factual and Procedural Background
1. The Orogrande Communications Site
The Orogrande Communications Site (the "Site") is located in south-central New Mexico. Pl.'s MSJ Br. at 1. In 1990, BLM issued "communications right-of-way grant/temporary use permit" number 83847 for the Site.
In 2000, Crown acquired the right-of-way via assignment. AR 327-28, 338-39. BLM approved the assignment "subject to the terms and conditions of the original [right-of-way (ROW) ] grant." AR 354. The assignment "cover[ed] the right to construct, operate, maintain, and terminate a communication site and access road" at the Site. AR 355. The right-of-way did not authorize subleasing without advance notice to and approval by BLM. AR 500. After acquiring the assignment, Crown requested authorization to enter into subleases with tenants at the Site. In January 2001, BLM granted Crown authority to sublease "subject to the terms and conditions of the original ROW grant" and "[a]ll applicable regulations in 43 CFR 2800." AR 371. That same month, BLM also granted Crown approval to amend the original right-of-way to install a 140-foot self-supporting tower. AR 366.
In January 2003, Crown entered into a sublease (the "Sublease") with Sprint for *19its tenancy at the Site. AR 962-1024. The Sublease's terms, conditions, and covenants were "subject to and subordinate to" the terms, conditions, and covenants of Crown's right-of-way, also referred to as the "Prime Lease." AR 967. The Sublease authorized Sprint to install four 60-inch by 12-inch by 7-inch antennas weighing 27 pounds each on Crown's tower, at a specified height. AR 962. The Sublease also designated a "lease area" of 17 feet by 12 feet by 10 feet for Sprint, referred to as "[e]quipment building/floor space." AR 962; see also AR 997 (showing the "[p]roposed ... lease area"). The Sublease required Sprint to use the Site "in compliance with all applicable ... regulations ... of any governmental bodies and administrative agencies" and "obtain, at its own expense, any and all necessary licenses or permits ... from such governmental authorities as shall have jurisdiction in connection with the construction, installation, operation, repair, alteration or replacement of [its] equipment or with any of its activities thereon." AR 965. The Sublease provided that Sprint would pay Crown a "Basic Monthly Payment" (starting at $ 1,500/month) and "Additional Payments" for the "portion, if any, of any tax, fee or other assessment attributable to [Sprint's] use of the Facility or against the Facility generally...." AR 963. After the Sublease was executed, Sprint installed its antennas on the tower and its cellular cabinets at the Site. Pl.'s MSJ Br. at 5; Compl. ¶ 3. Pursuant to the lease between BLM and Crown, Crown submitted rental calculation spreadsheets to BLM between 2003 and 2013 that listed tenants at the Site, including Sprint.
2. BLM's Management of the Site and Sprint's Alleged Trespass
As the manager of the federal public lands, BLM periodically inspected the Site. In March 2005, a BLM employee performed a compliance check at the Site and documented Sprint's cellular cabinets. See AR 430 (noting one "outside cabinet not on lease, possibly owned by Alamosa and/or Sprint"). He recommended that BLM "[i]ssue [a] separate lease to [the] owner of [the] outside cabinet."
In 2008, BLM also issued a guidance document for the Site called the Orogrande Communications Site Plan (the "2008 Site Plan"). See AR 541-91. The 2008 Site Plan "govern[ed] development and management of" the Site, AR 544, and was "incorporated into all leases, grants, and reservations issued" for the Site, AR 547. It included pictures of Sprint's cellular cabinets and labeled them on a diagram of the Site. AR 568, 590. But an appendix to the 2008 Site Plan listed the cabinets as a "facility" without an authorization number. See AR 570 (showing "Auth # NMNM xxxxxx" for "South Facility $ 4 Alamosa (Sprint)"). The 2008 Site Plan also contained provisions addressing tenants' rights to build equipment shelters. Specifically, it provided that "[t]enants ... may not construct their own equipment shelter (building, shelter or cabinet) ... [and] [i]f that is not possible, a separate ... application ... and authorization are required." AR 548. The 2008 Site Plan further provided that if a tenant had to construct its own equipment shelter, it is "a tenant/customer of the original lease/holder in addition[ ] to being a separate facility for billing purposes."
*20In 2009, BLM personnel again noted the presence of potentially unauthorized cabinets on the Site. See AR 600 (containing note to "check if authorized," in reference to the cabinets).
In April 2013, a BLM employee conducted an audit of the Site. AR 648. He determined that Sprint had placed unauthorized cellular cabinets on the Site. Pl.'s MSJ Br. at 9 (citing AR 638-47). As a result, BLM issued a trespass notice ("the Trespass Notice") to Sprint on May 29, 2013. AR 655-58. The Trespass Notice stated that BLM had discovered equipment operating at the Site that it believed belonged to Sprint. AR 655. On July 2, 2013, Sprint responded to the Trespass Notice, making the case that it was not trespassing because it was occupying the Site pursuant to its Sublease with Crown. AR 659-61. On July 23, 2013, BLM issued a trespass decision (the "Trespass Decision") against Sprint. AR 670-78. It concluded that Sprint had violated
3. Sprint's Administrative Appeal
In August 2013, Sprint paid its penalty under protest and appealed the decision to the IBLA. AR 679-81, 683-84. The IBLA largely upheld the Trespass Decision as to the cellular cabinets at issue in this case, rejecting nearly all of Sprint's arguments. See Sprint Corporation , 186 IBLA 132,
Having concluded that Sprint did trespass on federal land, the Board moved on to Sprint's argument that it was being double-charged for rent for its cellular cabinets, under two different rights-of-way. Id. at 140-41; see
The Board reversed the Trespass Decision in one respect, concluding that it was improper for BLM to assess penalties against Sprint between 2003 and the date the 2005 Regulation was promulgated.
4. The Instant Action
On October 4, 2016, Sprint filed the instant action. It alleges, in a single cause of *21action, that the IBLA Decision violated the Administrative Procedure Act (APA),
Defendants cross-moved for summary judgment. Defs.' MSJ Br. They argue that the cabinets are "equipment shelters," that BLM has not provided authorization for Sprint's cabinets, that equitable estoppel does not apply here, and that the IBLA correctly concluded that BLM's application of the 2005 Regulation does not run contrary to the FLPMA.
II. Legal Standard
A court must grant summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "In a case involving review of a final agency action under the APA, however, the standard set forth in Rule 56(a) does not apply because of the limited role of a court in reviewing the administrative record." Jicarilla Apache Nation v. U.S. Dep't of the Interior ,
Under the APA, a court must hold unlawful and set aside agency action, findings, and conclusions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right," or "unsupported by substantial evidence."
III. Analysis
The Court will address, in turn, Sprint's challenge to the IBLA's determinations that (1) Sprint trespassed on public land, and (2) the penalties assessed against Sprint do not exceed BLM's statutory authority. On both points, the Court concludes that summary judgment in favor of Defendants is warranted.
A. Sprint's Alleged Trespass
Sprint challenges the IBLA's conclusion that it committed trespass on three grounds. First, Sprint argues that its cellular cabinets are not "equipment shelters" within the meaning of the 2005 Regulation. Second, it contends that even if it needed a separate right-of-way authorization, BLM did in fact repeatedly authorize it to place its cellular cabinets on the Site. Third, Sprint asserts that, in light of BLM's purported authorizations of the cabinets and the agency's delay in bringing the trespass action against it, the Court should invoke equitable estoppel against Defendants to find in its favor. The Court addresses each argument in turn.
1. Whether Sprint's Cellular Cabinets Are "Equipment Shelters" Under the 2005 Regulation
The 2005 Regulation provides that "[i]f you own a[n] ... equipment shelter ... on public lands for communication purposes, you must have an authorization under this part, even if you are also a tenant or customer in someone else's facility."
Under the Auer doctrine, "an agency's interpretation of its own regulation is entitled to deference." Christensen v. Harris Cty. ,
Nonetheless, both parties seem to assume that the term "equipment shelter" is in fact ambiguous. Certainly, that is Defendants' position. See Defs.' MSJ Br. at 9-10. And Sprint appears to suggest as much. See Pl.'s MSJ Br. at 20 (recognizing that "the IBLA acknowledged that the regulations do not specifically mention 'cabinets,' i.e., that they are ambiguous in that regard"). The Court concludes in the alternative that even if the term "equipment shelter" is ambiguous, Defendants' interpretation of that term to include Sprint's cellular cabinets would be entitled to Auer deference, and the Court would uphold it.
"When reviewing an agency's interpretation of its own regulation, we accord 'substantial deference to [that] interpretation,' giving it 'controlling weight unless it is plainly erroneous or inconsistent with the regulation.' " Mellow Partners v. Comm'r ,
Courts "typically consider three factors when deciding whether to apply Auer deference." Mellow Partners ,
For purposes of this analysis the Court assumes, pursuant to the first Auer factor, that the term "equipment shelter" is ambiguous. As for the second factor, the Court has "no reason to believe that the agency's interpretation 'does not reflect [its] fair and considered judgment on the matter.' " Mellow Partners ,
*24(quoting Auer ,
Finally, under the third Auer factor, BLM's reading of the regulation is "fairly supported by the text of the regulation itself." Drake ,
Sprint offers a number of reasons why, in its view, BLM's interpretation of the 2005 Regulation is "plainly erroneous" or "inconsistent" with the text of the regulation and therefore not entitled to Auer deference. Pl.'s MSJ Br. at 24 (quoting Auer ,
Next, Sprint argues that the Sublease between Crown and Sprint refers to Sprint's "equipment," not "equipment shelters." Pl.'s MSJ Br. at 21. But the fact that a contract between two private parties used the word "equipment" says nothing about how the 2005 Regulation should be interpreted by BLM. Similarly, Sprint points out that the Sublease had "Special Conditions" that included specifications for "cabinets." Pl.'s MSJ Br. at 21. But these "conditions" were part of a generic form outlining the standards for installing many different items at the Site ranging from connectors to antennas. See AR 977-90. The fact that "cabinets" are listed on the form says nothing about whether Sprint's *25cabinets are also "equipment shelters" under the regulation.
Lastly, Sprint cites a number of cases that, in its view, suggest that "equipment shelters" are often bigger than Sprint's cellular cabinets at issue and do not perform a technical function. See Pl.'s MSJ Br. at 22-23. But none of these cases purport to interpret the 2005 Regulation or hold that the term "equipment shelter" cannot describe structures the size of the cabinets at issue here. See W. Radio Servs. Co., Inc. v. Glickman ,
2. BLM's Purported Authorization of the Cellular Cabinets
Next, Sprint argues that even if BLM had to authorize its cabinets, the administrative record demonstrates that it in fact did so. Pl.'s MSJ Br. at 25-28. Specifically, Sprint identifies four documents that it argues authorized the cabinets: (1) the 2003 Sublease between Crown and Sprint; (2) a 2004 "estoppel" letter that BLM signed for Crown stating that Crown was not in default under the Prime Lease; (3) the renewal of the Prime Lease between Crown and Sprint in December 2005; and (4) the 2008 Site Plan.
First, the record is devoid of support for the proposition that Sprint properly sought, much less obtained, a BLM right-of-way authorization for the cabinets. The FLPMA requires an applicant seeking authorization from BLM to submit "plans, contracts, agreements, or other information reasonably related to the use, or intended use, of the right-of-way, including its effect on competition."
Second, the documents on which Sprint relies do not materially undermine the IBLA's conclusion that BLM did not authorize its cellular cabinets. The first two documents Sprint identifies-the Sublease and the estoppel letter-clearly do not authorize its cabinets. The Sublease is a contract to which BLM was not even a party. In addition, the Sublease merely authorized Sprint to place antennas on Crown's tower and designated a "lease area" on the Site for Sprint's use. AR 962, 997. The *26Sublease does not specifically refer to Sprint's cabinets, nor does it purport to grant Sprint its own right-of-way.
The next document Sprint identifies-the 2005 renewal of the Prime Lease-also provides it no help. Sprint notes that the renewed lease, executed in December 2005, required Crown to provide BLM with an annual inventory of customers and tenants. Pl.'s MSJ Br. at 26 (citing AR 487). Sprint also points out that the renewed lease required that "[a]ll ... equipment located [on] the property must be in accordance with stipulations in the communications site plan approved by the authorized officer."
Sprint also argues that its cabinets were listed on a table as "Authorized Facilities" in the 2008 Site Plan. Pl.'s MSJ Br. at 26-27; see AR 570. The 2008 Site Plan, however, is a general guidance document that by its own terms "must be used in conjunction with [a] granting authorization." AR 547. As such, it cannot provide the authorization that the 2005 Regulation requires. In fact, the 2008 Site Plan explicitly reemphasizes Sprint's obligation to submit a SF-229 to BLM to obtain an authorization. It states that "[t]enants ... may not construct their own equipment shelter (building, shelter or cabinet)." AR 548. And "[i]f that is not possible, a separate SF-229 application ... and authorization are required," which "will also result in the use being a tenant/customer of the original lease/holder in addition[ ] to being a separate facility for billing purposes."
* * *
In short, the IBLA's conclusion that BLM did not authorize the placement of Sprint's cabinets on the Site is supported by more than substantial evidence, and there is no basis for the Court to set it aside.
3. Equitable Estoppel
Sprint also argues that Defendants should be equitably estopped from finding Sprint in trespass due to "BLM's affirmative misconduct." Pl.'s MSJ Br. at 28-31. Specifically, Sprint argues that BLM's purported authorization of Sprint's cabinets and its delay in bringing the trespass action constitute affirmative misconduct that should absolve Sprint of any liability.
"[A]lthough the [Supreme] Court has declined to hold that there are no circumstances in which estoppel may run against the government, it has made clear that the bar for succeeding on such a claim is high." Millard Refrigerated Servs., Inc. v. Sec'y of Labor ,
The IBLA rested its decision on the fourth prong, concluding that Sprint had failed to show "that BLM's actions constituted affirmative misconduct, a requirement for invoking equitable estoppel." Sprint , 186 IBLA at 141 (citing Ron Coleman Mining, Inc. , 172 IBLA 387, 391 (2007) ). Relatedly, it concluded that BLM is "never barred by laches from enforcing public land laws."
There is no basis in the record for the Court to disturb the IBLA's conclusion. Sprint argues that BLM engaged in "affirmative misconduct" because it knew about Sprint's cabinets as early as 2005 but did not initiate trespass proceedings until 2013. Pl.'s MSJ Br. at 30 (citing AR 430). But "[e]stoppel generally requires that government agents engage-by commission or omission-in conduct that can be characterized as misrepresentation or concealment, or, at least, behave in ways that have or will cause an egregiously unfair result." Pierce v. SEC ,
*28Sprint points to no "misrepresentation or concealment" by the agency. And the mere delay by BLM does not constitute affirmative misconduct. "[A]s a general rule, laches or neglect of duty on the part of officers of the government is no defense to a suit by it to enforce a public right or protect a public interest." United States v. Philip Morris Inc. ,
B. BLM's Statutory Authority to Assess the Penalties Against Sprint
Finally, Sprint argues that, even if its cellular cabinets constitute an illegal trespass, BLM exceeded its authority under the FLPMA in assessing penalties against it. Pl.'s MSJ Br. at 16-20. The FLPMA provides that "[t]he holder of a right-of-way shall pay in advance the fair market value thereof, as determined by the Secretary granting, issuing, or renewing such right-of-way."
Significantly, however, Sprint does not challenge the individual formulas through which BLM calculated the "fair market value" of (1) Crown's right-of-way (and the portion passed on to Sprint as a tower tenant), and (2) Sprint's own right-of-way authorizing its cabinets. See Pl.'s MSJ Br. at 16-20; see also Defs.' Reply at 3-5 & n.1 (describing how BLM calculated rent for each of the Site uses). Therefore, its argument is based solely on the fact that it was *29charged two separate fees for them. In Sprint's view, BLM is "collecting two rental payments totaling more than fair market value for the same use of the ... Site." Pl.'s MSJ Br. at 16 (emphasis removed). But in Defendants' view, Sprint is being charged for "fundamentally different uses" of the Site, both of which are authorized by BLM regulations. Defs.' MSJ Br. at 21-23 (citing
On the record before it, the Court cannot conclude that BLM exceeded its statutory authority simply by requiring Sprint to pay two separate fees in connection with these two separate rights-of-way. Each fee is associated with a separate and distinct right to use federal land, for which the FLPMA requires BLM to charge fair market value.
Sprint's argument is predicated on its contention that prior to being required to pay for its own right-of-way to install its cabinets, it was already paying fair market value for its entire use of the Site pursuant to the Sublease (and Crown's right-of-way), such that requiring it to pay an additional fee violated the FLPMA. But on the present record, where Sprint has not challenged the various formulas used by BLM to calculate fair market value, the Court simply has no basis to agree. By promulgating the 2005 Regulation and interpreting it to include cellular cabinets, BLM effectively concluded that the fair market value of installing Sprint's cabinets on public land had not been adequately captured by the rent Sprint had been paying in connection with Crown's right-of-way.
Therefore, the Court cannot conclude that BLM exceeded its statutory authority under the FLPMA merely by requiring Sprint to pay two separate fees in connection with these two separate rights-of-way.
IV. Conclusion
For all of the above reasons, in a separate Order, Defendants' Motion for Summary Judgment (ECF No. 24) will be granted and Sprint's Motion for Summary Judgment (ECF No. 23) will be denied.
In evaluating these motions, the Court considered all relevant filings including, but not limited to, the following: ECF No. 1 ("Compl."); ECF No. 16; ECF No. 23 at 1-2;
Crown's Prime Lease was renewed with BLM in December 2005. AR 486.
Similarly, Defendants argue that Sprint acknowledged in correspondence to BLM that its cabinets were equipment shelters. See Defs.' Reply at 10 & n.3 (citing AR 723). But like notes in BLM employees' field reports, these representations are of limited value, and are hardly dispositive on the matter.
It is not clear from the Joint Appendix submitted to the Court whether Sprint raised the first three of these purported authorizations before the IBLA, which only addressed the 2008 Site Plan in the IBLA Decision. See Sprint , 186 IBLA at 139. Nevertheless, even assuming they were raised, the Court concludes Sprint's arguments are without merit.
As previously noted, Sprint points out that the Sublease had "Special Conditions" that included specifications for "cabinets." Pl.'s MSJ Br. at 21. But these "conditions" were part of a generic form outlining the standards for installing many different items at the Site ranging from connectors to antennas, as opposed to a specific authorization for Sprint's cabinets. See AR 977-AR 990.
In light of this language, Sprint argues that "the text of the [2008 Site Plan] is irrelevant to the interpretation of the 2005 Regulation" and that it "does not itself have any regulatory effect." Pl.'s Reply Br. at 6. But if so, the 2008 Site Plan could hardly have provided an authorization for Sprint's cabinets.
In a footnote, Sprint argues that the IBLA Decision was arbitrary and capricious because BLM failed to submit the 2008 Site Plan in the proceedings below. Pl.'s MSJ at 27 n.2. The Court "need not address an argument raised only cursorily in a footnote." Armstrong v. Geithner ,
Sprint asserts that the IBLA decision "does not contest that (1) BLM made representations to Sprint, (2) Sprint relied on those representations to its detriment, and (3) Sprint's reliance was reasonable." Pl.'s MSJ Br. at 30. But the IBLA's "silence does not imply that [Sprint] would be any more successful on those elements." Keating ,
Defendants do not argue that their interpretation of the FLPMA is entitled to Chevron deference, so the Court need not undertake such an analysis. Cf. SSC Mystic Operating Co., LLC v. NLRB ,
In its reply brief, Sprint argues that Defendants did not respond to its fair market value argument and therefore the Court should consider it conceded. Pl.'s Reply at 1-4. But Defendants did, albeit briefly. Defs.' MSJ Br. at 21-23. Thus, it was not conceded.
Sprint also argues Defendants' actions were arbitrary and capricious because the Trespass Decision charged Sprint for its full use of the Site when only its cabinets (and not its other equipment) were in violation of the 2005 Regulation. Pl.'s MSJ Br. at 19-20. But as Sprint conceded at oral argument, it did not raise this argument before the IBLA. Oral Arg. Tr. at 10:7-11:5. Thus, the Court does not consider it. See Nuclear Energy Inst., Inc. v. EPA ,
Nothing in the Sublease is inconsistent with this conclusion. As described above, the Sublease merely authorized Sprint to place antennas on Crown's tower and designated a "lease area" on the Site for Sprint's use. AR 962, 997. The Sublease does not specifically refer to Sprint's cabinets, nor does it purport to grant Sprint its own right-of-way authorizing them. Moreover, the Sublease specifically allows for the possibility that Sprint might have to pay additional fees for its use of the Site by requiring it to use the Site "in compliance with all applicable ... regulations ... of any governmental bodies and administrative agencies" and "obtain, at its own expense, any and all necessary licenses or permits ... from such governmental authorities as shall have jurisdiction in connection with the construction, installation, operation, repair, alteration, or replacement of [its] equipment or with any of its activities thereon." AR 965.
Reference
- Full Case Name
- SPRINT CORPORATION v. DEPARTMENT OF the INTERIOR
- Cited By
- 6 cases
- Status
- Published