Bar News - December 14, 2012
NH Supreme Court At-a-Glance - November 2012
By: Summarized by Nicole L. Cook
Sheehan v. New Hampshire
Department of Resources and
November 15, 2012
The petitioner purchased property in Derry (the Property) on November 13, 2008. The Property abuts Jackman Road, which is a class VI town road and not in good condition. The Property is connected to Warner Hill Road by a .44 mile tract of land, which is under the control of the respondent, the New Hampshire Department of Resources and Economic Development (DRED) as part of DREDís statewide trail system.Before purchasing the Property, the petitioner understood that the State claimed ownership of the corridor and that a gate blocked non-recreational motor vehicle access to the portion of the corridor separating the Property from Warner Hill Road. After purchasing the Property, the petitioner filed this action seeking to bar DRED from prohibiting or interfering with the non-recreational motor vehicle access of the portion of the corridor separating the Property from Warner Hill Road, and alleging that DRED had violated RSA 216-F:2, II.
- Whether the trial court erred in concluding that the New Hampshire Department of Resources and Economic Development had not limited "the publicís right to pass over existing public roads," pursuant to RSA 216-F:2, II.
In the 1930ís, the Boston & Maine Railroad (B&M) owned the tract as part of a larger railroad corridor. In the mid-to-late 1930ís, B&M sought to abandon the corridor to the State. After negotiations with B&M and adjacent abutters, the State acquired the corridor through a Commissionersí Return of Highway Layout. The purpose expressed by the State in acquiring the corridor was to create a highway over its length. Thereafter, the New Hampshire Department of Public Works and Highways (DPWH) controlled the corridor. The DPWH removed the railroad ties from the corridor, but only improved certain portions. The portion of the corridor abutting the Property remains an unpaved dirt trail.
In 1975, the Governor and Executive Council transferred the unimproved portions of the corridor from DPWH to DRED for recreational trail use. Before and after the 1975 transfer, the prior owners of the Property utilized the corridor to access the Property by non-recreational motor vehicles. In July 2008, however, DRED moved a gate nearer to Warner Hill Road, which effectively blocked all non-recreational motor vehicles from using the corridor to access the Property. Currently, the portion of the corridor abutting the Property is used only for recreational activities.
Following a bench trial, the Superior Court determined that the State had acquired title in fee simple to the corridor through a highway layout, and that the portion of the corridor abutting the Property is not a "public road" because the State has never "constructed" on it. Thus, the Superior Court ruled that DRED did not violate RSA 216-F:2, II.On appeal, the petitionerasserted that the trial court erred when it determined that the State owns the corridor in fee simple and when the court found that the corridor is not a public road. The petitioner argued that, although RSA 216-F:2, I provides that the trails within the statewide trail system shall be "held, developed and administered Ö as recreational trails," when read with RSA 216-F:2,II, which provides that the section is not intended to "limit the right of the public to pass over existing public roads" that become part of the trail system, the provisions preclude the State from restricting non-recreational motor vehicles over public roads that are part of the trail system.
The Supreme Court, reviewing for legal error only after assuming,because the petitioner failed to submit a transcript, that the evidence at trial was sufficient to support the trial courtís conclusion, disagreed with the petitionerís contention. It concluded that the petitionerís interpretation that the legislature intended to prohibit DRED from excluding non-recreational motor vehicles from using public roads within its trail system that have not been developed for such use, was contrary to the overall purpose of the statute, which the Court found to have been to establish trails for recreational purposes such as hiking, nature walks,and bicycling, and expressly allowing DREDís commissioner to restrict the use of any type of a mechanized means of transportation where, in his opinion, it would be most disruptive for the other stated principal trail uses. The Supreme Court also rejected the petitionerís interpretation because the Court found such an interpretation would abrogate the common law principles that public highways are subject to State control, that the State has the authority to regulate the "time, mode, and circumstances under which parties shall assert, enjoy, or exercise their rights of highway use," and that the legislature had not clearly expressed an intention under RSA 216-F:2, II to abrogate those principals.Accordingly, because the Supreme Court determined that DRED had not barred the petitionerís access over the corridor, only the use of non-recreational motor vehicle as a form of access, it held that the trial court did not err in concluding that DRED had not limited "the publicís right to pass over existing public roads" pursuant to RSA 216-F:2, II. Because the Supreme Court affirmed the trial courtís decision based upon the Supreme Courtís conclusion that the State has statutory authority to limit the publicís use of the corridor, the Supreme Court did not consider whether the State acquired fee simple ownership or whether the corridor constitutes a public road.
Michael J. DiCola, Hudson, for the petitioner. Michael A. Delaney, attorney general (Lauren J. Noether, senior assistant attorney general, and Anne M. Edwards, associate attorney general), for the respondent.
State v. Biondolillo
November 28, 2012
The defendant, Samuel Biondolillo, was convicted of disorderly conduct following a bench trial. The Supreme Court determined that the trial court could have found that the defendant was arrested and charged with obstructing government administration and disorderly conduct after repeatedly interrupting a police officer who was responding to a report that a man and a woman in a restaurant were not attending to the needs of their child. Specifically, the defendant, who was seated nearby inside the restaurant, interrupted the officer while the officer was speaking with the couple. The defendant told the couple not to talk to the officer and that "the police ruin peoplesí lives." Outside the restaurant, the defendant approached to within armís length of officers and the couple as the woman, for whom the officer discovered in the course of the investigation, there was an outstanding bench warrant, was being taken into custody, and asked the man whether he was okay, whether he wanted an attorney, and whether he wanted the interaction recorded. The officer told the defendant several times to back away and to stop interfering with the investigation, but the defendant refused to leave.
- Whether the defendantís disorderly conduct conviction violates his right to free speech.
- Whether there was sufficient evidence to convict the defendant of disorderly conduct.
The defendant was convicted of disorderly conduct pursuant to RSA 644:2, II (e). On appeal, the defendant argued that his disorderly conduct conviction violates his right to free speech. The Supreme Court disagreed. The Court was not persuaded that the statute is unconstitutional on its face or as applied to the defendant.
First, the Court found that, although application of the statute "may have such an effect where a prosecution under it concerns conduct encompassing expressive activity," RSA 644:2, II(e) does not specifically regulate speech because, the Court held, the statute satisfies the three-part test for regulating speech set out in State v. Comley, 130 N.H. 688 (1988). The Court found that the statute does not target speech for its content, but rather "aims only at persons who refuse to comply with an official command when that command is based upon an officerís objectively reasonable belief that the person either (1) is about to commit an offense, or (2) is engaged in a course of conduct that makes an offense Ďimminent.í" The Court also found that the statute is narrowly tailored to the Stateís interest in safeguarding an officerís ability to pursue legitimate investigations free from "possible interference or interruption by bystanders," and that the statute leaves open "ample channels of expression" where a person is not interfering or about to interfere with a criminal investigation.
Distinguishing RSA 644:2, II(e) from the city ordinance in Houston v. Hill, 482 U.S. 451 (1987), which made it "unlawful for any person to Ö in any manner oppose, molest, abuse or interrupt any policeman in the execution of his duty," the Court concluded that RSA 644:2, II(e) does not give the police unfettered discretion to arrest individuals for words or conduct that annoy or offend them, but that the statute is appropriately "tailored to advance only the legitimate, content-neutral goal of allowing police officials to disperse those on the brink of engaging in unlawful conduct" because it "criminalizes the refusal to comply with a police officerís lawful order to Ďmove from or remain away fromí a public area when it is reasonable to believe a person is about to commit an offense, regardless of whether the subject of the lawful order was engaged in expressive activity." The Court held that, although a person "may have a constitutional right to criticize and observe police conduct, he has no parallel right to engage an officer or others in conversation at a time and in a manner that causes Ė or may imminently cause Ė a substantial interference in the officerís duties during the course of a criminal investigation."
Next the Court held that the statute was not unconstitutional as applied to the defendant. The Court found that the defendant was not engaged in constitutionally-protected conduct when he refused to leave the vicinity of the officerís investigation and approached to within armís distance. The Court found that it was the fact that the defendant was interfering with the officerís performance of his duties and subsequent refusal to comply with the officerís lawful command aimed at preventing further interference that prompted the officer to arrest the defendant not the content of the defendantís speech.
The defendant next argued that there was insufficient evidence to convict him of disorderly conduct. Specifically, the defendant contended that the State offered no evidence that the officer was performing a criminal investigation, thus, no rational trier of fact could have convicted him. The Court disagreed. It found that the evidence at trial demonstrated that, although the officer initially went to the restaurant to follow up on a report about a childís welfare, his investigation once he arrived at the restaurant and after observing behavior that potentially endangered the childís welfare, required the officer to ascertain whether the childís caretaker was endangering the childís welfare. In addition, by the time the defendant injected himself into the investigation outside the restaurant, the officer had learned about the outstanding warrant for the woman. Thus, the Court found, a rational trier of fact could have concluded that the officers were conducting a criminal investigation.
Finally, the Court rejected the defendantís argument that his conviction should be reversed based on plain error. Concluding that the defendantís argument rested at least in part upon an assertion that the definition of "lawful order" was so vague as to constitute a due process violation as applied to him, the Court noted that RSA 644:2, V(a), as amended by the legislature, now contains a specific three-part definition of "lawful order." In addition, the Court found that the controlling law was in no sense settled against the trial courtís decision as applied to the defendant particularly where the United States Supreme Court has rejected a similar vagueness argument reasoning that "any person seeking Ďto engage the attention to an officer issuing a summons should understandí that he could be convicted for failing to move on when told to do so."
Michael A. Delaney, attorney general (Nicholas Cort, assistant attorney general, and Lisa L. Wolford, attorney), for the State. Brandon D. Ross, Law Office of Brandon D. Ross, Concord, for the defendant.
State v. Saunders
November 9, 2012
The defendant, Dianna Saunders, was convicted of being an accomplice to first degree murder, conspiracy, theft by unauthorized taking, and theft by misapplication of property. On appeal, she argued that the trial court erred when it (1) instructed the jury that, "[i]n a case where both direct and circumstantial evidence is offered for a conviction, the evidence does not have to exclude all rational conclusions other than the defendantís guilt," (2) found that the defendant had consented to a general rather than a limited search of her home, and (3) did not address the constitutionality of the warrant to search her home. The Supreme Court agreed with the defendant that the trial court had erred as a matter of law in giving the instruction and that the challenged instruction risked confusing the jury, but disagreed that inclusion of the single erroneous instruction given in the context of the overall charge, which included the trial court reading verbatim to the jury the model instructions on the Stateís burden of proof announced in Wentworth and approximately twenty correct recitations of the Stateís burden over the course of the trial, so infected the entire trial that the resulting conviction violated due process. The Court also upheld the trial courtís finding that the defendant had not limited the scope of the search of her home.
- Whether the trial court erred in instructing the jury that, where a case involves both direct and circumstantial evidence, the evidence does not have to exclude all rational conclusions other than the defendantís guilt.
- Whether the trial court erred in finding that the defendant consented to a general rather than a limited search of her home.
- Whether the trial court erred in not addressing the constitutionality of the warrant to search the defendantís home.
In determining that trial court had erred in giving the instruction to the jury, the Court took the opportunity to explain that, although the statement, apparently taken from the Courtís decisions in State v. Graham and State v. Spinale, was an accurate recitation of the law, that was only so in the context of the Courtís standard of review for addressing sufficiency of the evidence, and not as an instruction to the jury designed to elucidate the Stateís burden of proof in a criminal trial. Pointing out that "statements of the law [such as this] contained without [the Courtís] decisions cannot simply be incorporated into jury instructions; [but] rather, [that] consideration must be given to the context in which the statements were made and whether that same context appropriately Ďfitsí the task assigned to the jury," the Court explained that the reason a sufficiency analysis "need not exclude all rational conclusions other than guilt in a case that does not rely solely on circumstantial evidence is because of the juryís role in making credibility determinations." "[W]here the proof involves both direct and circumstantial evidence, a sufficiency challenge must fail if the evidence, including the juryís credibility determinations, is such that a rational trier of fact could not find guilt beyond a reasonable doubt, even if the evidence would support a rational conclusion other than guilt Ö [had] the jury resolved credibility issues differently." But, "where solely circumstantial evidence is at issue, the critical question is whether, even assuming all credibility resolutions in favor of the State, the inferential chain of circumstances is of sufficient strength that guilt is the sole rational conclusion." "Therefore, [the Court said,] in a criminal case that includes direct evidence, trial courts should not include in instructions to the jury language indicating that the evidence need not exclude all rational conclusions other than guilt."
As to whether the trial court should have suppressed the evidence gathered by the police when they searched the defendantís home, the Court disagreed that the only objectively reasonable interpretation of the defendantís exchange with a detective is that she consented to having her property documented as a crime scene rather than searched. In addition to being told that the police were going to search the premises to check for other people in the home or vehicles and take pictures of the scene, the trial court found that the defendant was also told that the police would be looking for anything that would explain what happened to the victim and why. Indeed, one of the detectives explained the investigation process to the defendant and told her that "they would have to go into the house, try to see what happened inside the house," and explained that "the police needed to search the vehicles because they were just looking for anything that could help." In addition, the defendant subsequently gave written consent for a general search of the house and vehicles. Thus, deferring to the trial courtís determination of credibility where it had relied upon the detectiveís trial testimony, the Court held that the defendant had consented to a general search of her home. Because the Court found that the defendant had consented to a general search of her home, it did not need to address the defendantís argument that the search warrant was unconstitutionally overbroad and lacked specificity.
Michael A. Delaney, attorney general (Michael S. Lewis, assistant attorney general), for the State.Robert L. Sheketoff, Boston, MA, and Jeffery Karp, Newburyport, MA, for the defendant.
In the Matter of Kenneth Heinrich and Dorothy Heinrich
November 9, 2012
The petitioner appealed the final decree in his divorce from the respondent. He argued that the trial court erred when it determined that his lump sum workersí compensation settlement was property subject to equitable distribution. Alternatively, the petitioner argued that the trial courtís division of the lump sum award was inequitable. The Supreme Court, affirming the trial courtís decree, held that the petitionerís lump sum workersí compensation award was subject to equitable distribution, and that the trial courtís determination that equal distribution of the petitionerís lump sum award was equitable was supported by the record.
- Whether the trial court erred when it decided that the petitionerís lump sum workersí compensation settlement is property subject to equitable distribution.
- Whether the trial courtís equal distribution division of the lump sum award was inequitable.
The parties in this case married in June 1969. Both parties worked during their marriage. They have an adult daughter with special needs to whom the respondent primarily attends. The petitioner filed for divorce on August 19, 2009, one day after he received a lump sum settlement of a workersí compensation claim. The amount of the award was calculated based upon the petitionerís life expectancy and future earnings. The trial court determined that the lump sum award was subject to equitable distribution, rejected the petitionerís argument that the entire award should be distributed to him, and determined that an equal division of the award was equitable because of (1) the partiesí long-term marriage; (2) the respondentís need to work flexible hours so that she can attend to the needs of the partiesí daughter; (3) the fact that the petitioner receives social security income but the respondent does not; (4) the fact that the petitioner owns his home while the respondent rents her home; and (5) the equal division of the partiesí remaining assets. The trial court specifically ruled that the equal division of the lump sum workersí compensation award "helps to equalize the financial aspects of divorce on each party, taking into consideration their access to ongoing income and assets and after reviewing their fixed and discretionary monthly expenses."
On appeal, the petitioner relied upon In the Matter of Valence, 147 N.H. 663 (2002), and argued that, because the settlement replaces income that he would have earned after the dissolution of his marriage, it is similar to the unvested stock options in Valence. Thus, he argued, the Court should again carve out an exception to its general rule that the "mechanistic approach" applies and the settlement award should not be deemed a marital asset subject to equitable division under RSA 458:16-1, I. Second, the petitioner suggested that the Court should abandon the mechanistic approach in favor of the analytical approach. The Supreme Court disagreed with both suggestions.
First, the Court found that, unlike in Valence where a time-based formula to determine the portion of the options that were attributable to the husbandís employment during the marriage was necessary because without it the Court could not determine whether the unvested stock options may have been a reward for past services, an incentive for future services, or a combination of both and, thus, whether they even belonged to the husband upon the dissolution of his marriage, the petitionerís lump sum was an ascertainable, fixed amount of money that belonged to him as soon as he received it, which was one day before he filed for divorce.Next, concluding that the lump sum workersí compensation award was more similar to the annuity issued to the husband in settlement of a personal injury action which was at issue in In the Matter of Preston and Preston, 147 N.H. 48 (2001), and the accidental disability pension benefit that was at issue in In the Matter of Sukerman & Sukerman, 159 N.H. 565 (2009), and explaining that New Hampshire permits the distribution of all of the property of divorcing parties without regard to title or to when or how it was acquired, the Court concluded that the mechanistic approach, which provides that, regardless of the underlying purpose of the award or the loss it is meant to replace, if the award or settlement was acquired during the marriage, it is deemed to be marital property, was most consistent with New Hampshireís statutory scheme and the legislatureís intent that any property acquired up to the date of a decree of legal separation or divorce would be subject to equitable distribution regardless of whether the property belongs to only one or to both spouses. Thus, the Supreme Court held that, because the workers compensation award was acquired during the marriage, meaning before the decree of divorce or legal separation, it is property subject to equitable distribution.
Finally, addressing the petitionerís contention that the trial courtís distribution of the award was inequitable, the Supreme Court concluded that the trial court had considered the statutorily-enumerated factors set out in RSA 458:16-a, II, and that the record supported the trial courtís determination that an equal distribution of the petitionerís lump sum award was equitable.
Brian G. Germaine, Germaine & Blaszka, Derry, for the petitioner. Steven G. Shadallah, Salem, for the respondent.
In the Matter of Robin Mason and Martin Mason
November 28, 2012
Affirmed in part, reversed in part and remanded
The partiesí final divorce decree was issued in October 2007. It directed the petitioner to pay 50% of the respondentís federal income taxes for 2006. In September 2010, the petitioner filed for Chapter 7 bankruptcy, listing her obligation under the divorce decree in three separate places. She listed the respondent as a creditor holding an unsecured nonpriority claim for $4,519.50 for "2010; divorce settlement" and as a codebtor ona federal tax lien." She also included among her unsecured priority claims a "2006; Federal Tax lien joint with ex husband" in the amount of $5,052.82. In December 2010, the bankruptcy court found the petitioner entitled to a discharge. Both parties petitioned the IRS for "innocent spouse" relief from their federal income tax liability for 2006, but only the petitionerís was granted.
- Whether the trial court erred as a matter of law in finding that the petitionerís obligation to pay 50% of the respondentís federal income taxes was automatically discharged in the petitionerís Chapter 7 bankruptcy proceedings because the respondent failed to make a showing before the bankruptcy court that the petitionerís obligation was non-dischargeable.
- Whether the trial court erred as a matter of law and unsustainably exercised its discretion when it declined to award the respondent attorneyís fees and costs.
In July 2011, the respondent filed a motion for contempt asking the trial court to order the petitioner to pay 50% of his federal income tax liability for 2006. The trial court denied the respondentís motion. It found that, even though "innocent spouse" relief "changed the nature" of the petitionerís obligation from a tax debt to a debt owed the respondent, bankruptcy had absolved the petitioner of her obligation to pay 50% of the respondentís 2006 federal income taxes.
The trial court also denied the respondentís request for attorney fees. It reasoned that the petitioner sought to have her debt to the respondent discharged in bankruptcy and had noticed the respondent in her bankruptcy petition as a creditor for "2010: divorce settlement" in the amount of the original debt to the IRS. In addition, the respondent had been duly noticed that he was listed as a creditor and had the opportunity to litigate the issue in the bankruptcy court.
On appeal, the respondent argued that the trial court erred as a matter of law when it found that the petitionerís obligation to pay 50% of the respondentís 2006 federal income taxes had been discharged in bankruptcy because the respondent failed to make a showing before the bankruptcy court that the petitionerís obligation was non-dischargeable. He also argued that the trial court erred as a matter of law and unsustainably exercised its discretion when it declined to award the respondent attorneyís fees and costs.
The Supreme Court agreed with the petitioner that the trial court had erred as a matter of law when it found that the petitionerís obligation to pay 50% of the respondentís 2006 federal income taxes had been discharged in bankruptcy. The Court concluded that, since the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, a debtunder 11 U.S.C. ß 523(a)(15) to a former spouse that is incurred by the debtor in the course of a divorce or separation and that is not covered by ß 523(a)(5)is automatically non-dischargeable in Chapter 7 bankruptcy. As such, the petitionerís obligation under the divorce decree to pay 50% of the respondentís 2006 federal income taxes, which the Court held was a debt under 11 U.S.C. ß 523(a)(15), was automatically non-dischargeable.
The Supreme Court disagreed with the respondent that the trial courtís erroneous decision on dischargeability was reason for charging the petitioner for the respondentís attorneyís fees. First, the Court noted that an award of attorneyís fees is meant to shift the cost of what should have been an unnecessary judicial proceeding onto the responsible party for instigating the action. Then, applying the rule concerning when a prevailing party may be awarded attorneyís fees, the Court concluded that, although the Court did find the petitionerís view of the law erroneous, it did not agree that the petitionerís position was frivolous, patently unreasonable, or taken in bad faith. However, because the court reversed the trial courtís order on the merits making the respondent the prevailing party, it remanded the case to the trial court to address whether the respondent may be entitled to recover costs.
Robin Mason, pro se, for the petitioner. Cheryl C. Deshaies, Exeter, and Peter Tamposi, Tamposi Law Group, Nashua, for the respondent.
Town of Carroll v. Rines
November 9, 2012
Reversed and remanded
The respondent owns two lots in Carroll, and controls two additional lots for excavation purposes. In October, 2009, the Town filed an action to enjoin him from excavating on all four lots. In June 2011, the trial court held a final hearing on the Townís petition. At issue was the extent to which the respondent was required to obtain a variance pursuant to Section VI of the Townís zoning ordinance before excavating. The ordinance regulates "Excavation of Earth Resources." The trial court found that the respondent engaged in two types of excavation on the four lots: (1) for highway purposes from December 29, 2009, which was the date the trial court approved a stipulation between the parties pursuant to which the respondent agreed not to excavate during the pendency of the lawsuit unless he obtained a variance, until the date on which the respondent ceased all excavation, which was June 22, 2010, and (2) from May 2010, the date he received approval from the planning board to subdivide the two lots he owned, to June 22, 2010, for purposes incidental to constructing a building. The trial court concluded that (1) both types of excavation were exempt from the permitting requirements of RSA chapter 155-E; (2) Section VI of the zoning ordinance was not preempted by RSA chapter 155-E; and (3) because RSA chapter 155-E did not preempt Section VI of the zoning ordinance, the respondent could not engage in either type of excavation absent a variance. On appeal, the respondent asserted that the trial court erred when it determined that RSA chapter 155-E did not preempt the zoning ordinance provisions applicable to both types of excavation. Specifically, the respondent argued that the preemption was implied.
- Whether the trial court erred when it determined that RSA chapter 155-E did not preempt the Townís zoning ordinance.
RSA chapter 155-E regulates local excavation. It distinguishes between excavations that require permits and those that do not. Excavation for highway purposes and for building construction purposes is exempt from the statuteís permitting requirements. Clarifying its holdings in Arthur Whitcomb, Inc. v. Town of Carroll, 141 N.H. 402 (1996), and Guildhall Sand & Gravel v. Town of Goshen, 155 N.H. 762 (2007), the court reiterated that the legislature had intended RSA chapter 155-E to preempt the field of excavation, and that the legislatureís purpose in enacting RSA chapter 155-E was, in part, to increase the supply of construction materials and decrease the cost of roads and other government infrastructure to the public by curtailing simultaneous state and local regulations of the same activity. But, the Court said, it had not concluded that all local legislation applicable to excavation is therefore void. Rather, RSA chapter 155-E preempts only local ordinances and regulations that would have the effect or intent of frustrating State authority.Thus, because the legislature clearly stated that RSA chapter 155-E contains only "minimum" requirements for excavations that require a permit, municipalities are not preempted from imposing more stringent regulations upon those types of excavations, but RSA chapter 155-E does not authorize municipalities to burden permit-exempt excavations with their own substantive requirements.
Accordingly, the Supreme Court concluded that where the Townís ordinance requires a variance for "excavation, grading, filling or removal of any earth, loam, topsoil, sand, gravel, clay or stone on public or private land in the Town of Carroll," without exceptions for excavations for highway purposes or excavations incidental to building construction, Section VI of the Townís ordinance is preempted because it purports to regulate excavations that are permit-exempt pursuant to RSA chapter 155-E, and it frustrates State authority. Thus, the Court held that the trial court erred in finding that the requirements of Section VI of the Townís zoning ordinance are not preempted by RSA chapter 155-E.
H. Bernard Waugh, Jr., Gardner Fulton and Waugh, Lebanon, for the petitioner.Bruce J. Marshall, DíAmante Couser Pellerin & Associates, Concord, for the respondent.
Appeal of Bretton Woods Telephone Company, Inc.
November 28, 2012
This case picks up where the Supreme Courtís decision in Appeal of Union Telephone Co., 160 N.H. 309 (2010) left off. In that case, the Court remanded to the New Hampshire Public Utilities Commission (PUC) the issue of whether the federal Telecommunications Act of 1996, 47 U.S.C. ß 253(a) (2006), preempted the state statutory requirement under RSA 374:26 (2009) that an incumbent rural local exchange carrier (RLEC) is entitled to prior notice and a hearing before the PUC grants authority to a competitive local exchange carrier (CLEC) to enter the service territory of the RLEC. On remand, however, the parties settled before the PUC could resolve the issue.
- Whether RSA 374:26 is preempted by the federal Telecommunications Act of 1996, 47 U.S.C. ß 253(a) (2006).
Here, the petitioners, four exempt incumbent RLECs, instituted the underlying proceeding and requested that the PUC rescind or declare null and void the registrations of CLECs authorized by the PUC to engage in business as telephone utilities in the service territories of RLECs. Citing statutes, including RSA 374:26 and RSA 374:22-g, the petitioners alleged that, before issuing the registrations, the PUC had failed to provide notice, hold hearings, and determine whether allowing such competition would be consistent with the public good. In light of the decision in Appeal of Union Telephone Co., the petitioners specifically argued that federal law does not preempt these requirements.
The PUC denied the petitionersí request and ruled, inter alia, that ß 253(a) of the Telecommunications Act preempts RSA 374:26 and RSA 374:22-g, II. Having found these statutes preempted, the PUC concluded that it would "commence a rulemaking to address, in a competitively neutral manner, whether additional or modified requirements are necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers in the context of competitive entry." After the PUC denied the petitionersí motion for rehearing, the petitioners appealed.
On appeal, the petitioners limited their argument to challenging the PUCís determination that ß 253 of the Telecommunications Act preempts RSA 374:22-g, II. Based upon the Courtís determination that the correct standard for preemption under the Telecommunications Act is whether a state law or regulation "materially inhibits or limits the ability of any competitor or potential competitor to compete in a fair and balanced legal and regulatory environment, the Supreme Court affirmed the PUCís finding that ß 253(a) of the Telecommunications Act preempts RSA 374:22-g, II. The Supreme Court reached its conclusion based upon its assumption that a stipulation entered into by the parties and PUC correctly interpreted RSA 374:22-g, II to require the completion of a multi-step adjudicative process before a CLEC may enter the service territory of an incumbent RLEC, and that, based upon the PUCís factual finding that such an adjudicative process would take months and possibly a year or more to complete, RSA 374:44-g, II materially inhibits or limits the ability of any competitor or potential competitor to compete in a fair and balanced legal and regulatory environment, which, the Court concluded, while not a complete or insurmountable prohibition to competition, still ran afoul of ß 253(a). In other words, the Court found the stipulated process for compliance with RSA 374:22-g, II too burdensome and, therefore, preempted.
In addition, because the Court agreed with the PUC that RSA 374:22-g, II impermissibly focuses on injury to the incumbent telecommunications provider and is not competitively neutral with respect to and as between all of the participants and potential participants in the market, the Court also accepted the PUCís finding that RSA 374:22-g, II is not competitively neutral and, therefore, not saved by ß 253(b). It also affirmed the PUCís determination that RSA 374:22-g, II is not competitively neutral because, while the other factors listed in RSA 374:22-g, II do not, on their face, protect incumbent telecommunication providers from competition, the Court found significant the PUCís determination that in order for the PUC to impose requirements on CLEC entry into service territories of incumbent RLECs on a competitively neutral basis, they would have to be imposed by administrative rule and could not be imposed in an adjudicated process on a case-by-case basis. Then, because the Court determined that ß 253(b) does not specifically address whether competitively neutral requirements may be imposed through such an adjudicatory process, the Court accorded substantial deference to the PUCís finding that they may not.
The Court also found the petitionerís contention that, by having found RSA 374:22-g, II preempted, the PUCís order itself establishes a regulatory scheme that is not competitively neutral, to be premature because the PUC has not yet adopted administrative rules regarding whether additional or modified requirements are necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers in the context of competitive entry as per the Telecommunications Actís Universal Service provisions.
Lastly, in response to the PUCís indication that it may adopt administrative rules to govern CLEC entry into the service territories of incumbent RLECs, the Court noted that the PUC erred in concluding that, in enacting ß 253(a), "Congress determined that it is for the public good to allow more than one carrier to operate in any territory," and that the PUC is preempted "from deciding not to allow a telephone utility to compete in the service area of another telephone utility." The PUC also, the Court determined, erred in reasoning that ß 253(a) preempts "a statutorily required process that could have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service." The PUCís insertion of the word "could" before the phrase "have the effect of prohibiting" erroneously expanded the statuteís preemptive reach. Under a plain reading of ß 253(a), the Court noted, a plaintiff "must show actual or effective prohibition, rather than the mere possibility of prohibition."
Henry N. Malone, Devine, Millimet & Branch, Manchester, for the petitioners.Carolyn Cole, Lebanon, for the intervenor segTEL, Inc. Olga L. Gordon and Robert J. Munnelly, Jr., Murtha Cullina, Boston, MA, for the intervenor New England Cable and Telecommunications Association, Inc.
|Nicole L. Cook
Nicole Cook has been a member of the New Hampshire bar since 2002. She joined United Fire Group in Cedar Rapids, Iowa, in August as a Claims Attorney. Nicole can be reached at firstname.lastname@example.org.