DECISION AND ORDER INTRODUCTION Plaintiff Spectrum Northeast, LLC (“Charter”) brings this action against Defendant City of Rochester (“the City”), alleging that the City has compelled Charter to pay certain fees related to its cable-television franchise in violation of federal law. See ECF No. 1. Currently before the Court is the City’s motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). ECF No. 8. Charter opposes the motion, ECF No. 10, and the City has filed its reply. ECF No. 11. For the reasons that follow, the City’s motion is DENIED. BACKGROUND Historically, cable television has been subject to overlapping regulatory authorities. Although “[t]he Communications Act of 1934 grant[ed] the FCC broad authority to regulate all aspects of interstate communication by wire or radio,” municipalities — known as “franchising authorities” in this context — long “exercised authority in regulating cable for the benefit of the residents in their communities.” ACLU v. FCC, 823 F.2d 1554, 1558 (D.C. Cir. 1987). Municipalities decided whether to grant a “franchise,” which authorized “a particular company to provide cable service to a specified portion of the community.” Id. “In exchange for a cable franchise, cable operators were required to assume various responsibilities in the public interest. Typically, franchise agreements obligated cable operators to pay a specified ‘franchise fee,’ and to market their services in accordance with rates established by the municipality.” Id. In 1984, Congress enacted the Cable Communications Policy Act, which sought to better allocate federal, state, and local responsibilities in the area. Pub. L. No. 98-549, 98 Stat. 2779. As is relevant here, the 1984 Act imposed a “uniform, federal standard on the level of franchise fees.” ACLU, 823 F.2d at 1559. Specifically, “[f]or any twelve-month period, the franchise fees paid by a cable operator with respect to any cable system shall not exceed 5 percent of such cable operator’s gross revenues derived in such period from the operation of the cable system to provide cable services.” 47 U.S.C. §542(b). A “franchise fee” is defined broadly to include “any tax, fee, or assessment of any kind imposed by a franchising authority or other governmental entity on a cable operator or cable subscriber, or both, solely because of their status as such.” Id. §542(g)(1). The statute contains five exceptions to that broad definition. See id. §542(g)(2)(A)-(E). Among the exceptions are (1) for any franchise in effect on October 30, 1984, “payments which are required by the franchise to be made by the cable operator during the term of such franchise for, or in support of the use of, public, educational, or governmental [("PEG")] access facilities; and (2) for any franchise granted after 1984, “capital costs which are required by the franchise to be incurred by the cable operator for [PEG] access facilities.” Id. §542(g)(2)(B), (C) (emphasis added). The importance of PEG facilities and operations was emphasized in the legislative history of the 1984 Act. H.R. Rep. No. 98-934, at 30 (1984), reprinted in 1984 U.S.C.C.A.N. 4655, 4667. Nevertheless, Congress required that taxes, fees, and assessments made by cable operators in support of PEG facilities be counted towards the statutory cap unless they were for capital costs or were voluntary payments not required by the franchise itself. See id. at 65. In 2005, the FCC initiated a rulemaking process to determine whether local franchising authorities’ processes “unreasonably impede[d] the achievement of the interrelated federal goals of enhanced cable competition and accelerated broadband deployment and, if so, how the Commission should act to address that problem.” 20 FCC Rcd. 18581, 18582 (Nov. 18, 2005). After reviewing a “voluminous record generated by the rulemaking proceeding,” the FCC “ascertained the need for new rules to ensure that the local franchising process operated in a fully competitive fashion, free of barriers to entry.” All. for Cmty. Media v. FCC, 529 F.3d 763, 770 (6th Cir. 2008) (internal quotation marks). In March 2007, the FCC released its order, which sought to address the problems with the processes employed by local (i.e., county and municipal) franchising authorities. See 22 FCC Rcd. 5101 (Mar. 5, 2007) [hereinafter "the First Order"]. It did so by adopting rules related to 47 U.S.C. §541(a)(1), which prohibits a franchising authority from “unreasonably refus[ing] to award an additional competitive franchise” to a new cable entrant. Among the problems the FCC learned through the rulemaking process was that local franchising authorities often made unreasonable demands for payments which were not to be counted towards the statutory franchise-fee cap, including demands related to support for PEG facilities and operations. 22 FCC Rcd. at 5122-24. The FCC determined that a local franchising authority’s “refusal to award an additional competitive franchise because of an applicant’s refusal to accede to [franchise-fee] demands that are deemed impermissible [] shall be considered to be unreasonable” under Section 541(a)(1). Id. at 5145. The FCC noted that the “general law with respect to franchise fees should be relatively well known,” but it decided to “restate the basic propositions [in the First Order] in [an] effort to avoid misunderstandings that can lead to delay in the franchising process as well as unreasonable refusals to award competitive franchises.” Id. The FCC clarified that payments towards capital costs for PEG facilities are not “franchise fees” subject to the 5 percent statutory cap. Id. at 5150-51. Those costs “are distinct from payments in support of the use of PEG access facilities. PEG support payments may include, but are not limited to, salaries and training. Payments made in support of PEG access facilities are considered franchise fees and are subject to the 5 percent cap.” Id. at 5151. This interpretation is consistent with the negative implication of Section 542(g)(2)(B)-(C). See Cable TV Fund 14-A, Ltd. v. City of Naperville, No. 96-C-5962, 1997 WL 433628, at *12 n.23 (N.D. Ill. July 28, 1997) (“The fact that Congress elected to use differing terminology in defining what constitutes a franchise fee for post and pre-October 30, 1984 franchises indicates Congress’ intent to draw a clear distinction between ‘payments…for, or in support of the use of, PEG access facilities’ and ‘capital costs…for PEG access facilities.’”). While the FCC did not believe that it was unreasonable to require applicants to provide financial support to PEG operations and facilities, it concluded that “required PEG support costs are subject to the franchise fee cap.” 22 FCC Rcd. at 5153; see also id. at 5152 (noting that “non-capital costs of [PEG] requirements” must be “offset from the cable operator’s franchise fee payments”). The First Order preempted any local laws, regulations, and franchise agreements that conflicted with the First Order and were not “specifically authorized by state law.” 22 FCC Rcd. at 5156-57. This included any local laws or franchise agreements that “authorize or require a local franchising authority to collect franchise fees in excess of the fees authorized by law.” Id. at 5162. The FCC did not extend the First Order to state-level regulation, because it “lack[ed] a sufficient record to evaluate whether and how such state laws may lead to unreasonable refusals to award additional competitive franchises.” Id. at 5156. In June 2008, the Sixth Circuit upheld the First Order against various challenges. See All. for Cmty. Media, 529 F.3d at 766-67, 787. After issuing the First Order, the FCC initiated another rulemaking process, asking for comment on the issue of whether the First Order’s rules and guidance should apply to existing franchisees. 22 FCC Rcd. at 5164. In November 2007, it issued an order on its findings. 22 FCC Rcd. 19633 (Nov. 6, 2007) [hereinafter "the Second Order"]. The Second Order “extend[ed] a number of the rules promulgated [in the First Order] to incumbents as well as new entrants,” including those pertaining to payments made to support the operation of PEG facilities. Id. at 19633, 19638. The FCC reasoned that Section 542 “does not distinguish between incumbent providers and new entrants,” and “[a]s a result, to the extent that a franchise-fee requirement is found to be impermissible under Section 622, that statutory interpretation applies to both incumbent operators and new entrants.” Id. at 19637-38. Indeed, the FCC observed that the requirements related to franchise fees were not “entirely new pronouncements” but simply recognition of “the state of existing law on point.” Id. at 19638 n.30. Thus, “the finding…that the non-capital costs of PEG requirements must be offset from the cable operator’s franchise fee payments is applicable to incumbents because it was based upon [the] statutory interpretation of [the 1984 Act].” Id. at 19639. In 2017, the Sixth Circuit vacated certain determinations in the Second Order related to in-kind exactions required by franchise agreements. See Montgomery Cty., Md. v. FCC, 863 F.3d 485 (6th Cir. 2017). Additional rulemaking proceedings occurred in response. In August 2019, the FCC issued an order adopting more rules and guidance. 34 FCC Rcd. 6844 (Aug. 2, 2019) [hereinafter "the Third Order"]. The FCC concluded “that cable-related, ‘in-kind’ contributions required by a cable franchise agreement are franchise fees subject to the statutory five percent cap on franchise fees set forth in section 622 of the Act, with limited exceptions, including an exemption for certain capital costs related to [PEG] channels.” Id. at 6845. That ruling applied to “both new entrants and incumbent operators.” Id. at 6858. The FCC also clarified the meaning of “capital costs” for purposes of Section 542(g)(2)(C), ruling that the term “would be understood to mean a cost incurred in acquiring or improving a capital asset,” including “equipment purchased in connection with PEG access facilities.” Id. at 6866. The FCC declared that the Third Order was “prospective,” such that “cable operators may count only ongoing and future in-kind contributions toward the five percent franchise fee cap after the Order is effective.” Id. at 6877. The FCC further ordered, “To the extent a franchise agreement that is currently in place conflicts with this Order, we encourage the parties to negotiate franchise modifications within a reasonable time.” Id. at 6877-78. It believed that “120 days should be, in most cases, a reasonable time for the adoption of franchise modifications.” Id. at 6878 n.247. But the FCC cautioned that “[i]f a franchising authority refuses to modify any provision of a franchise agreement that is inconsistent with this Order, that provision is subject to preemption under section 636(c).” Id. at 6878. Finally, the FCC extended the rulings in the First, Second, and Third Orders to state-level regulations and franchising. 34 FCC Rcd. at 6904. In May 2021, the Sixth Circuit upheld the Third Order in relevant part. See City of Eugene, Or. v. FCC, 998 F.3d 701 (6th Cir. 2021). In June 2021, Charter brought the present action. ECF No. 1. Charter is a “cable operator” authorized to “offer broadband, voice, and cable services to residential and commercial subscribers” in Rochester. ECF No. 1 11. In 1992, Charter’s predecessor in interest had executed a franchise agreement with the City, under which it was granted the right to “construct, erect, operate and maintain a cable system” within the City. ECF No. 1-1 at 6. At some unidentified point, the original term of the franchise agreement expired. ECF No. 1 31. Charter alleges that thereafter, the terms of the franchise agreement remained in effect by virtue of a “temporary operating authority” (“TOA”) issued pursuant to New York and federal law. Id. Charter does not set forth the conditions of the TOA in its complaint, nor does it identify the issuing authority or agency, but the Court understands Charter to be alleging that, while the parties’ contractual relationship under the franchise agreement has formally ended, the same duties and benefits exist by virtue of the fact that they have been incorporated into the TOA. Under the franchise agreement — and thus, the TOA — Charter is obliged to pay the City five percent of its gross revenues, on a quarterly basis, as a franchise fee. ECF No. 1-1 at 15. This is the maximum amount permissible under federal law. See 47 U.S.C. §542(b). In addition to the franchise fee, the City also receives several other benefits under the agreement. Among other things, the City receives an annual grant from Charter for PEG programming and operations. See id. at 11. That annual grant can be used “for the administration and operation of the [public access] channel, as well as for the maintenance, repair and replacement, including upgrade, of the equipment and facilities.” Rochester City Code §4A-14(B)(3). The franchise agreement provides that Charter “shall not charge against the franchise fee in any way the expenses incurred in supporting access programming and in meeting the requirements of this Agreement and the City Code.” ECF No. 1-1 at 15. On its face, this provision may conflict with Section 542, to the extent it could be read to suggest that financial support for PEG operations is not a “franchise fee” subject to the statutory cap. See 47 U.S.C. §542(g)(2)(C). For the last several years, Charter has been negotiating a new franchise agreement with the City. ECF No. 1
32, 33. During negotiations, Charter has taken the position that “PEG support costs paid by Charter” must be “treated as a franchise fee where required under federal law,” including where “Charter pays for support of the administration and operation of public access television programming.” Id. 33. Charter alleges that, despite its “repeated requests,” the City has never provided “any evidence to suggest that any portion” of the annual grant “has been used for anything other than PEG operating and administrative costs.” Id. 34. As a result, Charter maintains that the annual grant is a “franchise fee” subject to the statutory cap — which, because Charter already pays the City 5 percent of its gross revenues each quarter, means that the City “has extracted franchise fee payments in amounts that exceed the mandatory 5 percent ceiling established under federal law.” Id. 65. In February 2021, Charter took the step of reducing one of its quarterly franchise-fee payments to offset contributions it had made for public access programming. Id. 42; ECF No. 1-5 at 2-3. In response, the City accused Charter of breaching the franchise agreement and threatened to assess daily penalties and revoke the franchise unless Charter continued making the public-access contributions. See ECF No. 1-6 at 2-5. Charter has since chosen to make those contributions “under duress and protest.” ECF No. 1-7 at 5. Charter then filed the present action. ECF No. 1. It raises the following claims: (1) a claim for declaratory relief validating Charter’s position on the annual grant; (2) a claim for “money had and received”; and (3) a claim for unjust enrichment.1 ECF No. 1 at 20-26. DISCUSSION Moving under Rules 12(b)(1) and 12(b)(6), the City raises a variety of jurisdictional and substantive grounds for dismissal. Before delving into the City’s specific arguments, the Court addresses two matters that will focus its analysis. First, many of the arguments the City raises are perfunctory and undeveloped. For example, the City asserts that Charter is “estopped” from “alleging illegality of the underlying terms of the law”; that Charter has “unclean hands”; that Charter’s requests for relief are “an impossibility”; that Charter failed to show it will “suffer hardship by the withholding of judicial consideration”; that the money comprising the annual grant did not belong to Charter because it passed those costs onto customers; and that 47 U.S.C. §555 limits judicial review. ECF No. 8-1 at 15, 17, 27, 29; ECF No. 11 at 13. In each case, the City does no more than invoke a proposition; it fails to meaningfully explain its argument, cite any applicable legal authority, or apply said authority to the present dispute.2 It is not the Court’s responsibility to develop the City’s scattershot assertions into discernible legal arguments. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) (“It is not enough merely to mention a possible argument in the most skeletal way, leaving the court to do counsel’s work, create the ossature for the argument, and put flesh on its bones.”); Max M. v. New Trier High Sch. Dist. No. 203, 859 F.2d 1297, 1300 (7th Cir. 1988) (declining to address issue where litigant simply “point[ed] a finger at a particular clause” without developed argument). Accordingly, the Court will not address any of the City’s undeveloped legal assertions. The City is free to raise them at an appropriate time in the future, but the Court emphasizes that the City, like any litigant, has “an obligation to spell out its arguments squarely and distinctly.” Zannino, 895 F.2d at 17 (internal quotation marks omitted). Second, as will be discussed below, the Court rejects the remaining arguments the City marshals in favor of dismissal. But the Court’s conclusion should not be understood to mean that one or more of Charter’s claims are legally cognizable — only that the City’s arguments do not merit relief. This Court has no obligation to assess the ultimate viability of Charter’s claims sua sponte, and, given the complexities and overlapping regulatory schemes bearing on the parties’ relationship, it will not do so at this juncture.3 See, e.g., Andritz Hydro Canada, Inc. v. Rochester Gas & Elec. Corp., No. 20-CV-6772, 2021 WL 3115425, at *9 n.12 (W.D.N.Y. July 22, 2021). With these matters clarified, the Court proceeds to the substance of the City’s motion. I. Rule 12(b)(1) The City argues that the Court lacks subject matter jurisdiction over this action and that Charter’s claims are not ripe for adjudication. Charter counters that federal-question jurisdiction exists and that its claims are ripe. The Court agrees with Charter. a. Legal Standard “A case may be properly dismissed for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.” Vill. Green at Sayville, LLC v. Town of Islip, No. 17-CV-7391, 2019 WL 4737054, at *3 (E.D.N.Y. Sept. 27, 2019) (internal quotation marks omitted). “Where…a Rule 12(b)(1) motion is ‘facial’ — i.e., based solely on the allegations of the complaint or the complaint and exhibits attached to it — the plaintiff has no evidentiary burden in opposing the motion.”4 High Mtn. Corp. v. MVP Health Care, Inc., 416 F. Supp. 3d 347, 351 (D. Vt. 2019). “In ruling on a facial Rule 12(b)(1) motion, the court must accept as true all material allegations of the complaint and must construe the complaint in favor of the plaintiff.” Id. b. Analysis i. Subject Matter Jurisdiction Contrary to the City’s argument, the Court concludes that it has federal-question jurisdiction over this action.5 “Federal courts are courts of limited jurisdiction, possessing only that power authorized by Constitution and statute.” Pritika v. Moore, 91 F. Supp. 3d 553, 557 (S.D.N.Y. 2015) (internal quotation marks omitted). Under 28 U.S.C. §1331, a district court has “original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” Usually, this “arising under” jurisdiction “is invoked by…plaintiffs pleading a cause of action created by federal law.” Moore, 91 F. Supp. 3d at 556. But even where “a claim finds its origins in state rather than federal law,…there exists a special and small category of cases in which arising under jurisdiction still lies.” Id. (internal quotation marks omitted). “Federal courts may exercise jurisdiction over state law claims where it appears that some substantial, disputed question of federal law is a necessary element of one of the well-pleaded state claims.” Id. (internal quotation marks omitted). The case of Broder v. Cablevision Systems Corp., 418 F.3d 187 (2d Cir. 2005), is instructive. There, the plaintiff brought a putative class action in state court against a cable-television operator, alleging claims for breach of contract, fraud, unjust enrichment, and violation of New York General Business Law §349. See Broder, 418 F.3d at 192-93. Though he brought state-law causes of action, the premise of all of the plaintiff’s claims was in part that the cable operator had violated a federal “uniform rate requirement” by offering a discounted rate to certain customers. Id. at 191; see also 47 U.S.C. §543(d). The plaintiff also sought a declaratory judgment that the operator’s actions violated federal law. See Broder, 418 F.3d at 193. The operator removed the case to federal court, and, on appeal to the Second Circuit, the plaintiff argued that the district court lacked removal jurisdiction over the action. Id. at 191. The Second Circuit concluded that the district court possessed federal-question jurisdiction, notwithstanding that the plaintiff brought only state-law causes of action. It observed that “the existence of a cause of action created by federal law is not a necessary condition for federal-question jurisdiction under 28 U.S.C. §1331.” Id. at 194 (internal quotation marks omitted). “Instead, the question is, does a state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.” Id. The Second Circuit found this standard met in Broder. The plaintiff’s state-law claims — e.g., that the operator “breached a contract term consisting of §543(d) incorporated by reference” and violated General Business Law §349 “by failing to provide plaintiff and the Class with the uniform rates required by 47 U.S.C. §543(d)” — necessarily “raise the [federal] issue of whether [the operator] violated §543(d).” Id. at 195. That issue was “actually disputed and substantial,” since (a) the parties disputed whether the operator violated federal law, and (b) the issue “involve[d] aspects of the complex federal regulatory scheme applicable to cable television rates, as to which there is a serious federal interest in claiming the advantages thought to be inherent in a federal forum,” which could not be deemed “clearly insubstantial.” Id. (internal quotation marks). The Second Circuit therefore found that the district court had “federal-question removal jurisdiction.” Id. at 196. As in Broder, federal-question jurisdiction exists in this case. All of Charter’s claims rest on the premise that the annual grant must now be counted towards the statutory franchise-fee cap by virtue of federal law. See ECF No. 1
