United States District Court, D. New Mexico
CNSP, INC. D/B/A NMSURF, Plaintiff,
CITY OF SANTA FE, Defendant.
MEMORANDUM OPINION AND ORDER
matter comes before the Court upon Defendant City of Santa
Fe's Rule 12(b)(1) Motion to Dismiss (Motion to Dismiss),
filed on March 28, 2017. (Doc. 7). As grounds for the Motion
to Dismiss, Defendant City of Santa Fe (City) argues that
Plaintiff CNSP Inc. d/b/a NMSURF's (NMSURF) claims were,
or should have been, brought as compulsory counterclaims in a
pending state action. On April 6, 2017, NMSURF filed an
amended response. (Doc. 12). Having reviewed and considered
the Motion to Dismiss and the amended response, the Court
denies the Motion to Dismiss.
The State Lawsuit
2016, the City filed suit in state court seeking a temporary
restraining order, preliminary injunction, and permanent
injunction against NMSURF to stop work on a cell tower. Ex. A
(Doc. 7-1). The City alleges that NMSURF was building a cell
tower without a building permit and that NMSURF failed to
exhaust building permit appeal remedies. Id. at
response to the suit, NMSURF removed the case to federal
court and then filed two counterclaims against the City.
(Doc. 1) filed in Civ. No. 16-825 MCA/KBM. Plaintiff alleges
in its first counterclaim that the City has continually
discriminated against NMSURF in violation of the equal
protection clauses of the United States Constitution and New
Mexico Constitution, and in violation of the federal
Telecommunications Act (TCA). Ex. C (Doc. 7-1) at 15-17,
¶¶ 1-7. As an example of the discrimination, NMSURF
describes how the City has failed to take action on
NMSURF's franchise application for public rights-of-way
(PROW) access to provide a fiber optic network. Id.
at 16, ¶ 3. NMSURF contends in its second counterclaim
that the City violated the federal Spectrum Act with respect
to NMSURF's application to build a cell tower.
Id. at 17-21, ¶¶ 8-16.
federal court remanded the case back to state court for lack
of federal jurisdiction. (Doc. 15) filed in Civ. No. 16-825
MCA/KBM. The state court then entered a preliminary
injunction in favor of the City. Ex. F (Doc. 7-1). In an
attempt to block the preliminary injunction, NMSURF filed
with the New Mexico State Supreme Court an “Emergency
Verified Petition for Writ of Mandamus and Request for
Stay.” Ex. G (Doc. 7-1). In that pleading, Plaintiff
alleges that the City violated the TCA and discriminated
against Plaintiff by failing to grant it a franchise for PROW
access in order to provide a fiber optic network.
Id. at 14. The New Mexico Supreme Court denied the
petition for a writ of mandamus and request for stay. Ex. H
(Doc. 7-1). Shortly thereafter, the state court entered a
stipulated order dismissing Plaintiff's first
counterclaim without prejudice. Ex. I (Doc. 7-1). The state
case remains pending.
The Present Federal Lawsuit
sued the City in this Court on March 20, 2017. (Doc. 1). In
the First Cause of Action, Plaintiff alleges that the City is
violating the TCA by prohibiting Plaintiff access to the PROW
to install a fiber optic network. In the Second Cause of
Action, Plaintiff alleges that the City's favorable
actions toward other telecommunications companies violates
the Fifth Amendment due process clause of the United States
Constitution and Article II, Section 18 of the New Mexico
Constitution by denying Plaintiff equal protection of the
law. Finally, in the Third Cause of Action, Plaintiff alleges
the City violated Article IX, Section 14 of the New Mexico
Constitution, the Anti-Donation Clause, by entering into a
professional services agreement with Cybermesa and donating
it a fiber optic line.
defendant in a federal lawsuit argues that the plaintiff
should have brought its claims as compulsory counterclaims in
a prior state lawsuit, the federal court “look[s] to
state law to determine if a claim is a compulsory
counterclaim, and, if so, the effect of a failure to raise
such a claim.” Valley View Angus Ranch, Inc. v.
Duke Energy Field Servs., Inc., 497 F.3d 1096, 1100
(10th Cir. 2007). Similar to Fed. R. Civ. 13(a)(1), the New
Mexico compulsory counterclaim rule states:
A pleading shall state as a counterclaim any claim which at
the time of serving the pleading the pleader has against any
opposing party, if it arises out of the transaction or
occurrence that is the subject matter of the opposing
party's claim and does not require for its adjudication
the presence of third parties of whom the court cannot
1-013(A), NMRA 1998. If a party fails to assert and litigate
compulsory counterclaims in a prior action as required by
Rule 1-013(A), those claims are deemed abandoned and that
party cannot raise those claims in a later action.
Slide-A-Ride of Las Cruces, Inc. v. Citizens Bank of
Las Cruces, 1987-NMSC-018, ¶ 14, 105 N.M. 433
(holding that prior compulsory counterclaims not asserted and
litigated in prior action are deemed abandoned).
Mexico courts utilize a “logical relationship”
test to decide if a claim in a second lawsuit “arises
out of the transaction or occurrence that is the subject
matter of the” first lawsuit and, therefore, is a
compulsory counterclaim. Adams, 2008-NMCA-135 at
¶ 18. “A logical relationship will be found if
both the claim [in the first lawsuit] and the counterclaim[,
the claim in the second lawsuit, ] have a ‘common
origin' and ‘common subject matter.'”
Id. at ¶ 19 (quoting Brunacini v.
Kavanagh, 1993-NMCA-157, ¶ 21, 117 N.M. 122).
“[T]he logical-relationship test does not rest on the
substantive law that governs the different claims, but rather
on whether the claims arise out of the same transaction or
series of transactions.” Brunacini,
1993-NMCA-157 at ¶ 20.
the City's claims in the state case concern a building
permit to erect a cell tower. In this federal case,
NMSURF's claims arise from the City's failure to act
on NMSURF's franchise application to allow it access to
the PROW to install a fiber optic network. These claims do
not have a common origin in that they arise from two separate
applications: one for a building permit and the other for a
franchise. Moreover, the subject matter in the state case
involves whether Plaintiff followed the necessary city
process to obtain a building permit while the subject matter
in this ...