Homeowner associations often seek to exercise architectural control over exterior structures within their communities which impact community aesthetics. For some issues, however, an association’s concern over the form of a structure potentially impacts its function creating a conflict between the interest of the association and the interest of the owner seeking to install the structure. The installation and location of satellite dishes and antennae is one such issue. The rights of the parties are largely guided by federal regulation, namely 47 CFR 1.4000, the Over-the-Air Reception Devices Rule (“OTARD Rule”), the adoption of which was authorized by Section 207 of the Telecommunications Act of 1996. The OTARD Rule is not a federal statute, but a federal regulation, which has, at times, caused confusion as to its means of enforcement. This was recently examined in Sastin 2, LLC v Hemingway Asociation, Inc, Case No CIV-17-1252-D (WD Okla Nov 19, 2018).
Background
Section 207 of the Telecommunications Act required the Federal Communications Commission (“FCC”) to “promulgate regulations to prohibit restrictions that impair a viewer’s ability to receive video programming services through devices designed for over-the-air reception . . . .” This directive resulted in the OTARD Rule which prohibits a restriction that (i) unreasonably delays or prevents installation, maintenance, or use; (ii) unreasonably increases the cost of installation, maintenance, or use; or (iii) precludes reception or transmission of an acceptable quality signal. 47 CFR 1.4000(a)(3).
With respect to enforcement, 47 CFR 1.4000(e) states that “Parties may petition the Commission for a declaratory ruling under § 1.2 of this chapter, or a court of competent jurisdiction, to determine whether a particular restriction is permissible or prohibited under this section.” (emphasis added). Further, the OTARD Rule contains a safe-harbor provision, which prevents an an owner from having to pay attorneys’ fees for non-compliance with a restriction pertaining to satellite dishes incurred prior to twenty-one (21) days after a determination that such restriction is valid. In this respect, 47 CFR 1.4000(a)(4) states:
No attorney’s fees shall be collected or assessed and no fine or other penalties shall accrue against an antenna user while a proceeding is pending to determine the validity of any restriction. If a ruling is issued adverse to a user, the user shall be granted at least a 21–day grace period in which to comply with the adverse ruling; and neither a fine nor a penalty may be collected from the user if the user complies with the adverse ruling during this grace period, unless the proponent of the restriction demonstrates, in the same proceeding which resulted in the adverse ruling, that the user’s claim in the proceeding was frivolous.
Under the OTARD Rule, where a question exists regarding the validity of a restriction imposing a limitation on installation of a satellite dish, the parties may either file a petition with the FCC or petition a “court of competent jurisdiction.” In Sastin 2, the plaintiff filed a federal court action seeking an injunction against enforcement of the association’s rules regarding satellite dishes. The question addressed by the court was whether the action had been appropriately filed in federal court and whether the federal court was a “court of competent jurisdiction” as provided under the OTARD Rule.
The Honorable Timothy D. Degiusti stated that “a court of competent jurisdiction” is a reference to “a court with an existing source of subject-matter jurisdiction.” Sastin 2, 2018 WL 6059398, at *3. In other words, a “state or federal court already endowed with subject-matter jurisdiction over the suit.” Id.
Section 207 does not provide an independent cause of action in federal court and the OTARD Rule is itself not a federal statute. It is a regulation passed by the FCC. Since it is the laws passed by Congress, not the rules or regulations adopted by the FCC, that determine whether an implied cause of action exists in federal court, the OTARD Rule itself cannot provide subject-matter jurisdiction in federal court. Accordingly, there is no statutory authority under § 207 or the OTARD Rule to commence an action in federal court. In the absence of another source of federal court jurisdiction, a party seeking relief under the OTARD Rule is required to file their petition either with the FCC or in state court. This position is consistent with the ruling in other cases. See Scott v. Lantern Park Condo. Ass’n, No. CIV. 3:05CV1265AVC, 2006 WL 618108, at *1 (D. Conn. Mar. 9, 2006) (“For the reasons hereafter set forth, the court concludes that § 207 of the Federal Telecommunications Act of 1996 and 47 C.F.R. § 1.4000 (2005) do not authorize a private right of action.”).
In addition, however, the court also considered whether there could be an additional basis for federal court jurisdiction under the Fourteenth Amendment. This approach was rejected since the case involved private parties and there was, therefore, no state action. The court, however, left open the possibility that state action would be present if “actual judicial enforcement of the covenant” had taken place prior to the filing of the suit. Sastin 2, 2018 WL 6059398, at *5. The “threat” of judicial enforcement, however, was insufficient to create the “state action” required for a Fourteenth Amendment claim.
Summary
Sastin 2 helps clarify the avenues available for relief under the OTARD Rule for a homeowner questioning the validity of their association’s rules regarding satellite dishes. While it is possible that the “court of competent jurisdiction” could be a federal court, neither § 207 nor the OTARD Rule provide an independent basis for filing a petition in federal court, and federal court jurisdiction in such a case must arise out of another source.
Matthew W. Heron is a Member at Hirzel Law, PLC where he concentrates his practice in real estate, community association law, condominium law, real estate litigation, and zoning and land use. Mr. Heron also has extensive experience in a variety of litigation matters, including insurance coverage, non-compete agreements, automotive supplier disputes, and breach of contract. He routinely appears in both federal and state courts throughout Michigan and has argued before the Michigan Court of Appeals and the Court of Appeals for the Sixth Circuit. He can be reached at (248) 986-2290.
