Northern New England Telephone Operations LLC, d/b/a FairPoint Communications - NNE v. City of Concord

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2015-0067, Northern New England Telephone
Operations LLC, d/b/a FairPoint Communications - NNE v. City
of Concord, the court on October 22, 2015, issued the following
order:

Having considered the briefs and oral arguments of the parties, the court
concludes that a formal written opinion is unnecessary in this case. The
petitioner, Northern New England Telephone Operations, LLC d/b/a FairPoint
Communications – NNE (FairPoint), appeals an order of the Superior Court
(McNamara, J.) denying its summary judgment motion and granting that of the
respondent, the City of Concord (City), on FairPoint’s equal protection
challenge to the City’s taxation of FairPoint’s use and occupation of public
property. The order on appeal was issued after we vacated the trial court’s
prior order granting summary judgment to FairPoint on the same claim. See N.
New England Tel. Operations v. City of Concord, 166 N.H. 653, 654 (2014)
(FairPoint). We affirm.

The relevant facts are derived from either the trial court’s summary
judgment order or our prior opinion. FairPoint maintains poles, wires, cables,
and other equipment located within the City’s public right-of-way so that it
may provide telecommunications services in Concord. Id. at 654. For the 2000
through 2010 tax years, the City imposed a real estate tax upon FairPoint for
its use and occupation of this public property (the right-of-way tax). Id.; see
RSA 72:6 (2012). In addition to taxing FairPoint, the City taxed four other
public utility companies during this same time period: Concord Electric
Company, AT&T, Concord Steam, and Energy North.

The City did not impose the right-of-way tax upon Public Service
Company of New Hampshire (PSNH) until 2008, when the City became aware
that PSNH was using and occupying the public right-of-way.

The City also did not impose the right-of-way tax upon Comcast until
2010, even though Comcast used the public right-of-way, because the City
“believed that any such tax would duplicate the tax assessed against the entity
which owned the poles to which Comcast attached” and because it “also
believed that [it] received substantial benefits through its franchise agreement
with Comcast.” See FairPoint, 166 N.H. at 654. In 2009, the New Hampshire
Board of Tax and Land Appeals determined that Comcast, like FairPoint and
the other public utilities, was subject to the right-of-way tax. Id. Thereafter,
the City taxed Comcast for its use and occupation of the public right-of-way.
 FairPoint subsequently brought an action challenging the
constitutionality of the City’s right-of-way tax assessments against it for the
2000 through 2010 tax years. Id. In its prior order, the trial court concluded
that “intentionality” was not a required element of FairPoint’s equal protection
claim. Id. (quotation omitted). The court then decided that the City’s “decision
not to tax others similarly situated was not an exercise of judgment; rather, it
was due to a misunderstanding of the law with respect to Comcast, and a
misunderstanding of the facts” as it related to PSNH. Id. at 654-55 (quotation
omitted). The trial court concluded that there was no “rational governmental
interest in deciding not to tax entities” based upon such misunderstandings.
Id. at 655 (quotation omitted). Accordingly, the court found in favor of
FairPoint on its selective taxation claim. Id.

The City appealed, and we vacated that order. Id. at 654. We decided
that the trial court erred when it concluded that FairPoint did not have to show
intentional discrimination to prevail upon its selective taxation claim. Id. at
657-58. We explained that, to prevail, FairPoint had to show that the claimed
selective enforcement of the tax was a “conscious, intentional discrimination.”
Id. at 657 (quotation and brackets omitted). This required FairPoint to do more
than demonstrate “mere errors of judgment by officials” or “that the
enforcement was merely historically lax.” Id. (quotations omitted). In addition,
FairPoint had to demonstrate that the selection was “arbitrary or without some
reasonable justification,” and had to “negative every conceivable basis which
might support the selection, whether or not the basis has a foundation in the
record.” Id. (quotations omitted). We specifically rejected FairPoint’s argument
that “an erroneous failure to tax one or more entities necessarily results in
selective enforcement, and that such selection, because it was based merely
upon an error, is arbitrary (i.e., without rational basis).” Id. at 658. We held
that “such errors in taxation, without intentional selection,” do not “violate the
equal protection rights of taxpayers.” Id. Because the trial court applied the
wrong legal standard, we vacated its decision and remanded for further
proceedings. Id. at 658-59.

On remand, FairPoint argued that, for tax years 2000 to 2009, the City
“consciously decid[ed] to tax Fairpoint while [it] consciously decid[ed] not to tax
Comcast,” and, therefore, violated FairPoint’s constitutional rights. With
regard to the 2010 tax year, FairPoint argued that the City “turned a blind eye
toward, and remained deliberately indifferent to, the obvious risk that some
users escaped taxation.” Accordingly, FairPoint asserted, the City’s deliberate
action taken on an arbitrary basis satisfied the intent requirement of
FairPoint’s selective tax enforcement claim.

The trial court rejected FairPoint’s arguments. With regard to tax years
2000 to 2009, the trial court determined that whatever discrimination means
under FairPoint, “it plainly cannot mean ‘errors of judgment,’ which is all that
FairPoint has shown here.” With regard to tax year 2010, the court found “no

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authority” for FairPoint’s assertion that “deliberate indifference satisfies the
intent element” required by FairPoint. (Quotation omitted.) The court observed
that the authority upon which FairPoint relied for this proposition involved
municipal liability under 42 U.S.C. § 1983 (2012); FairPoint has not brought a
claim under 42 U.S.C. § 1983. Ultimately, the trial court concluded that the
City “did not, for good reason or for bad reason, single out FairPoint for
taxation,” and, thus, under our precedent, FairPoint’s equal protection claim
could not succeed. This appeal followed.

“In reviewing the trial court’s rulings on cross-motions for summary
judgment, we consider the evidence in the light most favorable to each party in
its capacity as the nonmoving party and, if no genuine issue of material fact
exists, we determine whether the moving party is entitled to judgment as a
matter of law.” Bovaird v. N.H. Dep’t of Admin. Servs., 166 N.H. 755, 758
(2014) (quotation omitted). “If our review of that evidence discloses no genuine
issue of material fact and if the moving party is entitled to judgment as a
matter of law, then we will affirm the grant of summary judgment.” Id.
(quotation omitted). “We review the trial court’s application of the law to the
facts de novo.” Id. (quotation omitted).

On appeal, FairPoint argues that “[t]he trial court erred as a matter of
law in concluding that the undisputed factual record failed to establish a
‘conscious, intentional discrimination’ by [the City].” With respect to tax years
2000 to 2009, FairPoint contends that “[the City’s] conscious decision to
exclude Comcast . . . constitute[s] ‘conscious, intentional discrimination’ within
the meaning of the State and Federal Equal Protection Clauses.” But see
FairPoint, 166 N.H. at 658 (rejecting FairPoint’s argument that “an erroneous
failure to tax one or more entities necessarily results in selective enforcement,
and that such selection, because it was based merely upon an error, is
arbitrary, i.e., without rational basis”). FairPoint asserts that its equal
protection claim is a “class of one” claim, which, it contends, “does not require
a singling out.” But see Engquist v. Oregon Dept. of Agriculture, 553 U.S. 591,
601 (2008) (explaining a “class of one” equal protection claim as a claim that a
plaintiff “has been irrationally singled out”); SBT Holdings, LLC v. Town of
Westminster, 547 F.3d 28, 33 (1st Cir. 2008) (a “class of one” equal protection
claim is “a claim in which the plaintiffs do not claim membership in a class or
group, but assert that the defendants impermissibly singled them out for
unfavorable treatment”).

With respect to all of the tax years “and in particular tax year 2010,”
FairPoint relies upon 42 U.S.C. § 1983 cases and asserts that the City’s
“deliberate indifference . . . rises to the level of intentional conduct and satisfies
the intent requirement in selective tax enforcement claims.”

As the appealing party, FairPoint has the burden of demonstrating
reversible error. Gallo v. Traina, 166 N.H. 737, 740 (2014). Based upon our

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review of the trial court’s well-reasoned order, FairPoint’s challenges to it, the
record submitted on appeal, and the relevant law, we conclude that FairPoint
has not demonstrated reversible error. See id.

Affirmed.

DALIANIS, C.J., and HICKS, CONBOY, LYNN, and BASSETT, JJ.,
concurred.

Eileen Fox,
Clerk

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