The Supreme Court, starting a new term tomorrow, will settle one of the most far-reaching questions so far on the future of the bureoning telecommunications age: what rights municipalities have in regulating the cable television business.
In a case with enormous impact on cable franchising and regulation, the court must decide whether localities are immune from antitrust attack in awarding cable franchises and what authority those jurisdictions have in regulating the business of the future.
The cable industry and municipalities are already at odds on the issue of local regulation. The cities contend cable is a natural monopoly like a utility and they should be immune from antitrust law in awarding franchises. On the other hadn, the industry is seeking increased deregulation.
The nine justices will also have an impact on the current takeover and merger trend. They will decide the validity of an Illinois business takeover law that is being challenged for allegedly preempting fedreal takeover law and interfering with commerce. The rsult of that case could lead to the demise of similar laws in 36 states including Virginia that attempt to protect stockholders by requiring disclosure of certain information or procedures by companies seeking to merge with other firms.
An added attraction to the court this year will be the presence of new Associate Justic Sandra Day O'Connor.
"This term the Supreme Court already has decided to hear a number of significant cases involving issues of corporate free speech, basic labor relations, equal-employment practices and the rights of commodities investors," said Stanley T. Kaleczyc, director of litigation for the National Chamber Litigation Center, a public-policy law firm. "With the appointment of Justice O'Connor, in particular, the business community will be waiting anxiously to see whether the court will be more receptive to its arguments than last term, when a number of important cases were decided adversely to business."
One major ruling against business last term was in the cotton dust case, in which the court said the Occupational Safety and Health Administration was not required to do cost-benefit analyses tempering worker protections against hazardous and posionous substances to make their costs reasonable to industry.
Kaleczyc said that so far, this session of the court lacks a case challenging such a major policy question. "The way the term is shaping up, it might be a term where they're not going to look at any huge policy issues, but [only] day-to-day bread and butter issues." One such case questions whether confidential nonmanagement employes, for example private secretaries for supervisors, can be covered by labor unions. "It's not terribly exciting, but if you're in labor relations, it's important," Kaleczyc said.
The cable case involves a suit by Community Communications Co. against Boulder, Colo. Community Communications, a wholly owned subsidiary of Telecommunications Inc., the nation's third-largest cable television firm, had operated in the Boulder area since the 1960s. But with the expanded popularity of cable television, it planned to move its business into the city proper.
However, city officials enacted an ordinance halting cable television construction within the city limits for 90 days because it said Community's plans to wire all of Boulder threatened to close out other cable television operators. Community, however, contended that the city's action violated its free-market access and antitrust laws by unilaterally determining which company could operate within the city.
Community questioned whether a home-rule municipality, granted autonomy over local matters by the state, is immune to antitrust attack when regulating the cable television industry. The 10th U.S. Circuit Court of Appeals ruled that the city's action was justified because it had exercised its governmental function.
However, a group of 24 states, including Maryland, filed a friend-of-the-court brief arguing that if the 10th circuit's ruling stands it would "result in many thousands of home-rule cities across the nation being free to act individually in defiance of the antitrust laws.
Another case with possibly far-reaching consequences for merger-minded companies challenges the Illinois Business Takeover Act, which sets requirements beyond federal law for firms seeking to acquire another company. The law mandates additional disclosure, notification and a 20-day waiting period, and the Illinois secretary of state can order an adjudication of fairness of a tender offer.
MITE Corp. and MITE Holdings Inc., in an attempt to take over Chicago Rivet & Machine Co. two years ago, tried to knock down the statute, which has implications for similar laws in other states, including Virginia. MITE claimed the law was unconstitutional and preempted the Williams Act, a federal law requiring certain disclosures and having antifraud provisions to protect shareholders during takeovers.
A federal district court struck down the Illinois law, saying it superseded the Williams Act and created an undue burden on interstate commerce. That decision was affirmed by the federal appellate court.
The court will also decide the constitutionality of several laws restricting campaign contributions by the political action committees [PACs] of trade associations and businesses, and how much professions can be regulated. In addition, the court is expected to rule this year on a number of other business-related cases, among them:
Jacksonville Bulk Terminals Inc., Hooker Chemical Corp. and Occidental Petroleum Corp. vs. International Lonshoreman's Association, et al . This dispute began in January 1980 when President Carter imposed restrictions on trade with the Soviet Union as a result of the Soviet invasin of Afghanistan. Those restrictions did not include shipments of superphosphoric acid from Occidental to the Soviets, but the longshoremen at the Jacksonville, Fla., port refused to handle the shipment to protest the invasion.
The justices were asked to decide whether a federal court can enjoing a work stoppage caused partly by a disagreement concerning whom the employer does business with when the collective bargaining agreement between the employer and union has a no-strike or no-work-stoppage clause and a provision for mandatory and binding arbitration of all disputes.
Merrill Lynch, Perce, Fenner and Smith Inc. vs. J.J. Curran and Jacquelyn L. Curran . The Curran sued Merrill Lynch for damages alleging the broker made fraudulent statements to them about securities and commodities futures, causing them to lose money. A lower court held that the Currans' commodity trading accounts did not constitute securities within the meaning of the law. However, an appellate court reversed the lower court ruling, raising the issue of whether an individual -- as opposed to an agency -- may sue under antifraud provisions of the Commodity Exchange Act.
Merrill Lynch, in appealing the decision, has asked the juistices to decide whether a customer can sue a broker for fraud.
National Labor Relations Board vs. Hendricks County (Ind.) Rural Electric Membership Corp . The court has been asked to decide whether nonmanagerial confidential employes are entitled to full protection of the Natinal Labor Relations Act if, as part of their jobs, they are privy to information concerning labor relations policies or collective bargaining.
United Mine Workers of America vs. Kerry Coal Co. The question is whether a labor organization is liable under the Labor Mangement Relations Act for alleged violations of law by its members without clear proof that the organization sanctioned the violent activities.
New York Typographical Union Local No. 6 vs. Triangle Publications . The court will decide whether a firm can end pension payments to retirees when the collective bargaining agreement has ended because the business closed.
Watt vs. Energy Action Educational Foundation. The court is asked whether oil and gas consumers and states owning offshore oil and gas lands may challenge the federal government's selection of bidding systems to lease oil and gas rights on the Outer Continental Shelf, and whether Interior Secretary James Watt is required by law to use a system suggested by Congress that would enhance bidding competition and smaller-company participation in bidding for the leases.