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1998-0513_COX COM, INC._Transmittal Agr to CitiesRECEIVED MIu mlo� . 1 f 4�LLii LEO AND A RLRute P. GiEVEN wHOLD MoCHATL wu IM�MELLR TREMAS W GTON ono yUP E R.ul.l rvlE.Ii DALLAS Ls[nTER RE oqPULG nANoeLL, M. s sry ry o,� h.syTM m.' m.. n RICHARD P SiN m[s s C'NICA1' THOMAS J CR RE ROBERT C BAUM MARK IS FRI TRIG AS wN0 C B. RGEN9[P' DUKE F ryEOUIsNE soN IRRORO E O HICHA XA O. [R JET' RICY M, OLC0T7'ER nN KIM D ON O.ART IS • [Te KACAR RICIA A BILILANFMAR.�wPFNA 17111 N A PLUS LANE. L. MOnnle MATTryFW X .053 RUTAN & TUCKER, LLP ATTORNEYS AT LAW A PARTNERSHIP INCLUDING PROFESSIONAL CORPORAT%ONS 611 ANTON BOULEVARD, SUITE 1400 COSTA MESA, CALIFORNIA 92626-1998 DIRECT ALL MAIL TO: P. O. BOX 1950 COSTA MESA, CALIFORNIA 92628-1950 TELEPHONE (714) 641-5100 FAX (714) 546-9035 8011808-IGEOI P. I1-, ... I H RODGER ROWEL I�018BEB-18891 May 13, 1998 City Clerk City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 WERTHEIMER SCOTT RTAGATA . PLAOBTERGAR III JAP`rREY A, F KEVIN BRAZIL DOUGLAS J GOI_OEARI3 STEVEN J, RON GTOR ELISE K EAKA A IS CARLSON T.. CCALu Y 0 RICHARD K 5EY 1 NG JAMES SHOWELL R PPAB ELL A PATRICK s.ATTERY 1A.L. N. POSE UBOZ APRIL LE WALTER DAVID . ER ELIEEB DAN SLATER ALI... BARGARGEN KRAIG C x1LGER TERENCE .i. GALLAGHER GARVIN F ENBEROER LL PAM R aIFL DAVID J. GARIBuoi, IN Re: City of Irvine v. Federal Communications Commission, et al. Dear Sir or Madam: Enclosed is an executed copy of the Settlement Agreement in the above -referenced matter. I am also enclosing a conformed copy of the Agreement for Dismissal with Prejudice. If you have any questions or need anything further, please do not hesitate to call. Very truly yours, RUTAN & TUCKER, LLP 0�&� _ ?4� Valerie Bloom, Assistant to William M. Marticorena vj b Enclosure l_E/�T ///� ✓fie Alexandra N. Wilson Chief Policy Counsel Cox Enterprises, Inc. 1320 19th St., N.W., Suite 200 Washington, D.C. 20036 Re: CitV of Irvine, et al. v. Federal Communications Commission, et al. Dear Sandy: Please find enclosed the Settlement Agreement executed by the authorized signatory for each of the Cities. Please provide me with a fully executed copy as soon as it has been signed by Cox Communications, Inc. Representatives from each of the cities met to discuss the distribution of the one million dollar ($1,000,000) settlement with Cox. A decision was made to distribute one-time credits on the cable bills of all eligible subscribers within the seven cities: Laguna Niguel, Mission Viejo, San Juan Capistrano, Lake Forest, San Clemente, Laguna Hills and Irvine. The cities agreed on the allocation formula outlined in Section 3 of the Settlement Agreement. Cox should distribute the settlement amount equally among all eligible subscribers of record to Cox's cable television systems in the cities as of the last day of the month which shall include the following: ► Individually billed residential customers - one credit per account; ► Bulk billed residential customers - the master account will receive one credit per unit billed; the individual accounts within the bulk will not receive credits; J�vn tO(dne 174/049170-0515/3109940. ai0/06/97 OCT 8 1997 r RUTAN & TUCKER, LLP ATTORNEYS AT LAW A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS RE' 611 ANTON BOULEVARD, SUITE 1400 GAMIC MAR% A �CURNUT x COSTA MESA, CALIFORNIA 92626-1998 E LEONARD A MP[LSANDRA PHILIP J YOUNG 1. .1 D EROAR HI DIRECT ALL MAIL TO: P. O. BOX 1950 Aw THOMAS 0 ON ERt NO THEODORE I wLUAcE. �R. AMDD COSTA MESA, CALIFORNIA 92626-IB50 ...Ng IVICKII Ix. TOY 6rI TELEPHONE (714) 641-5100 A DWARD D SYMEAMMA. IF,. MARY M GREEN CAROL L DENALER [ w NET FAX (714) 546-9035 RICK MCCALL"[. AR c LEON PA x CLIFFORD R• DEBORAH j MO ..... o TO ..... TE A O w NUTAN 41880 1%721 V JEFFREY MOD SMITH R. O H ..CH... I... Do.w+" w DAN;uT[w O HRODOER NOWELL DD[ -mem WALTER ' E el.u�o [ PE Ki E DANIEL HAROLE DT ALIDON M. WARO[H MR OV[ w ILL4N M. MAPTI<Ow[NA MAN. VAN UST[. OA FSHALLENEERO[w DAVID DARI.ALD,.I.. October 6, 1997 Alexandra N. Wilson Chief Policy Counsel Cox Enterprises, Inc. 1320 19th St., N.W., Suite 200 Washington, D.C. 20036 Re: CitV of Irvine, et al. v. Federal Communications Commission, et al. Dear Sandy: Please find enclosed the Settlement Agreement executed by the authorized signatory for each of the Cities. Please provide me with a fully executed copy as soon as it has been signed by Cox Communications, Inc. Representatives from each of the cities met to discuss the distribution of the one million dollar ($1,000,000) settlement with Cox. A decision was made to distribute one-time credits on the cable bills of all eligible subscribers within the seven cities: Laguna Niguel, Mission Viejo, San Juan Capistrano, Lake Forest, San Clemente, Laguna Hills and Irvine. The cities agreed on the allocation formula outlined in Section 3 of the Settlement Agreement. Cox should distribute the settlement amount equally among all eligible subscribers of record to Cox's cable television systems in the cities as of the last day of the month which shall include the following: ► Individually billed residential customers - one credit per account; ► Bulk billed residential customers - the master account will receive one credit per unit billed; the individual accounts within the bulk will not receive credits; J�vn tO(dne 174/049170-0515/3109940. ai0/06/97 OCT 8 1997 0 FZ'JTAN S. TUCKER, LLP ATTORNEYS AT LAW A PARTNERSHIP mcwoi.c PROIESSIONIL EO.Ao.ATIo.S Alexandra N. Wilson October 6, 1997 Page 2 ► Commercial customers - one credit per account; and ► Hotels - one credit per account, i.e. not one credit per room. Credits will be provided to eligible subscribers during the first billing cycle to occur after 60 days of Cox's receipt of the allocation formula. Promotional accounts will not receive credits. The amount of each credit per eligible subscriber will be calculated by dividing the number of eligible subscribers into the total amount to be distributed. In addition, Cox is to provide a summary of the number of total eligible subscribers and total amount of settlement credited to each city. me. If you have any questions, please do not hesitate to contact Very truly yours, RUTAN & TUCKER, LLP William M. Marticorena WMM:vjb Enclosures cc: Judy Vonada, City Clerk, City of Irvine Lois Jeffrey, Esq., City Attorney, City of Laguna Hills Jerry Patterson, Esq., City Attorney, City of Lake Forest Terry E. Dixon, Esq., City Attorney, City of Laguna Niguel Peter M. Thorson, Esq., City Attorney, City of Mission Viejo Myrna Erway, City Clerk, City of San Clemente George Scarborough, City Manager, City of San Juan Capistrano 1241048170.0515/3109940. &10/06/97 0 u This SETTLEMENT AGREEMENT is intended to effectuate a complete settlement and resolution of the Petitioners' challenge to and claims against the Respondents and Intervenor in City of Irvine. et al. v. Federal Communications Commission et al., Case No. 96- 70058, pending before the United States Court of Appeals for the Ninth Circuit (the "Appeal"), and to foreclose litigation over any matters relating to the Appeal arising prior to the date of this Settlement Agreement between the parties to this Settlement Agreement (the "Parties"), who are defined as follows: City of Irvine, City of Laguna Hills, City of Laguna Niguel, City of Lake Forest, City of Mission Viejo, City of San Clemente, and City of San Juan Capistrano (collectively, the "Cities"), and Cox Communications, Inc. ("Cox"). RECITALS WHEREAS, the Cities are local franchising authorities in Orange County, California, and Cox, through one or more subsidiaries, operates cable television systems in Orange County, California; WHEREAS, on or about December 1, 1995, the Commission released a Final Order in In the Matter of Cox Communications.Inc.and Times Mirror Cable Television. Inc.. -- Rate Complaints, 1995 FCC LEXIS 7712, FCC 95-483, resolving rate complaints filed against cable television systems owned by Cox and its subsidiaries, including systems formerly owned by subsidiaries of Times Mirror Cable Television, Inc., regarding the rates charged for cable programming services; WHEREAS, on or about January 26, 1996, the Cities filed the Appeal, i.e., a petition for review in the United States Court of Appeals for the Ninth Circuit of the Final Order of the Commission, challenging, among other things, the authority of the Commission to enter into and issue the Final Order; WHEREAS, on or about February 23, 1996, Cox filed a motion for leave to intervene as of right in the Appeal, which the Ninth Circuit granted on or about March 11, 1996; WHEREAS, on or about July 31, 1996, the Commission filed a motion for a limited remand of the record, which the Ninth Circuit granted on or about August 22, 1996; WHEREAS, Cox believes that the Commission acted within the scope of its authority in issuing the Final Order and resolving all the complaints pending against the Cox and former Times Mirror systems, and that the Final Order is fully supported by the record in the matter, but the Cities take a contrary view; WHEREAS, the Cities and Cox wish to resolve this dispute without further litigation and without the substantial costs such litigation would entail; WHEREAS, it would be in the best interests of the subscribers residing within the Cities for the Appeal to be resolved and to avoid the cost, delay and uncertainty of this litigation; WHEREAS, the Cities and Cox, voluntarily and with full knowledge of their rights, and without any admission of improper or unreasonable cable television rates or charges, liability for refunds, or any other wrongdoing, now desire to settle, compromise, and dispose of the Appeal and any other claims the Cities may have against Cox relating to the matters raised in the Appeal, on the terms set forth herein; WHEREAS, the Cities have agreed to dismiss the Appeal with prejudice and to release any and all claims against Cox relating to the subject matter herein, arising prior to this Settlement Agreement, and the Cities and Cox have further agreed that this will constitute a full and final settlement; NOW, THEREFORE, in consideration of the prior recitals and of the promises and mutual obligations stated below, and other valuable consideration, the Cities and Cox, intending to be legally bound, agree as follows: AGREEMENT 1. Release by the Cities. The Cities, and each of them individually, for themselves, their representatives, officers, agents and employees, and for any predecessors in interest, successors and assigns of any of the above, hereby forever and fully release, remise, acquit and discharge Cox and any of its subsidiaries, parents, affiliates, divisions, officers, directors, agents, contractors, representatives, employees, partners, attorneys, insurers, and their successors and assigns, from all actions, causes of action, suits, torts, damages, claims, charges, demands, or other liability or relief of any nature whatsoever arising under any federal, state, or local law, occurring on or prior to the date of this Settlement Agreement and arising out of, or which may arise out of, or in any way relate to the matters alleged or raised in the Appeal or which relate to the same subject matters and could have been alleged or raised in the Appeal, except that this release shall have no effect on the issues surrounding the possessory interest surcharge, by whatever name, collected by Cox, and the potential refund thereof. 2. Dismissal of Appeal. The Cities agree to take any and all actions necessary to effect the dismissal with prejudice of the Appeal in accordance with the Federal Rules of Appellate Procedure and the Local Rules of the Ninth Circuit, including, but not limited to, taking all actions necessary to cooperate in obtaining the agreement of the Commission to the dismissal with prejudice of the Appeal, filing an agreement of dismissal in a form substantially similar to Exhibit A, or filing a motion, if required, under Rule 42(b) of the Federal Rules of Appellate Procedure. If costs of the appeal are assessed by the Ninth Circuit, Cox, on the one hand, and the Cities, on the other, agree each to pay fifty percent (50%) of said costs. - 0 9 3. Paement of Settlement Amount Cox agrees to pay to the Cities the amount of One Million Fifty Thousand Dollars ($1,050,000.00), inclusive of interest, attorney's fees and costs, to be paid after both the full execution of the Settlement Agreement and the dismissal with prejudice of the Appeal. The sum of Fifty Thousand Dollars ($50,000.00) will be paid to counsel -of -record for the Cities within ten (10) days of the last of the execution of the Settlement Agreement and the entry of the dismissal with prejudice of the appeal. For administrative convenience, distribution of One Million Dollars ($1,000,000.00) (the "Settlement Amount") will be made in the form of one-time credits on the cable bills of Eligible Subscribers. The Settlement Amount will be allocated and apportioned to Eligible Subscribers in each of the Cities according to the written allocation formula provided to Cox within thirty (30) days of the date of execution of this agreement by the Cities (the "Allocation Formula"). The Allocation Formula shall specify the total dollar amount to be allocated to each City for distribution in equal amounts to all Eligible Subscribers in that City. If a written Allocation Formula is not provided to Cox within the stated time period of thirty (30) days (the "Default Period"), Cox will distribute the Settlement Amount equally among all Eligible Subscribers in all Cities. Eligible Subscribers shall mean subscribers of record to Cox's cable television systems in the Cities as of the last day of the month in which all the conditions in the first sentence of this paragraph are satisfied, and shall include only the following: a. Individually billed residential customers - one credit per account; b. Bulk billed residential customers - the master account will receive one credit per unit billed; the individual accounts within the bulk will not receive credits; C. Commercial customers - one credit per account; and d. Hotels - one credit per account, i.e., not one credit per room. Credits will be provided to Eligible Subscribers during the first billing cycle to occur after sixty (60) days of Cox's receipt of the Allocation Formula or, if the Allocation Formula is not conveyed to Cox within the Default Period, then during the first billing cycle to occur after sixty (60) days subsequent to the Default Period. Promotional accounts will not receive credits. The amount of each credit per Eligible Subscriber will be calculated by dividing the number of Eligible Subscribers into the total amount to be distributed. Cox shall notify the Cities of payment of the credits within ninety (90) days of receipt of the Allocation Formula or, if the Allocation Formula is not conveyed to Cox within the Default Period, then within ninety (90) days subsequent to the Default Period. 4. No Admission of Liability for Refunds or Otherwise. The Cities and Cox expressly understand and agree that the distribution of funds under this Settlement Agreement constitutes a payment in settlement and compromise of disputed and doubtful claims, including costs and attorney's fees, in order to resolve litigation and potential litigation and does not constitute, nor shall it be construed to constitute, an admission or determination of refund liability or an agreement for the payment of rate refunds to subscribers. Cox expressly denies liability or wrongdoing, denies the validity of the Cities' claims, and by entering this Settlement Agreement intends merely to avoid further litigation or potential litigation with respect to the Cities' claims and potential claims. 5. Public Statements. The parties acknowledge that the Settlement Agreement is a public document which must be approved in public session. Other than publication required by the Cities in order to effectuate the approval of this Settlement Agreement, the Cities and Cox agree to use reasonable efforts not to publicize, communicate, disclose, or reveal in any manner, either by themselves or through counsel or any other agent, any of the terms of this Settlement Agreement to any person or entity not a Party to this Settlement Agreement without prior written permission from the other Parties. The Cities and Cox agree that, if anyone makes inquiry of them regarding this matter, they may make a public statement in accordance with Exhibit B or provide the information contained therein, and shall make no further comment on the subject except to provide, if requested, the dollar amount of refunds allocated to each City. Nothing in this Settlement Agreement shall prevent disclosure of the terms of this Settlement Agreement pursuant to applicable law or an order of any court of competent jurisdiction or to any taxing authority. 6. Entire Agreement. The Cities and Cox understand and agree that this Settlement Agreement, including exhibits, embodies their entire agreement and understanding with respect to the matters addressed. This Settlement Agreement supersedes any prior agreements and understandings between the Parties hereto, whether written or oral, with respect to the matters addressed by this Settlement Agreement, and the Settlement Agreement may not be changed, amended, extended, terminated, modified, waived, or discharged except by a written instrument signed by all parties hereto. 7. Authority o Enter Into Settlement Agreement. Each of the undersigned represents and warrants that he or she has the full authority to bind the Party on whose behalf he or she executes this Settlement Agreement. 8. Binding on Assignees. This Settlement Agreement shall be binding upon and shall inure to the benefit of the Cities and Cox, their representatives, agents, employees, successors and assigns. 9. Settlement Agreement Will Not Be Challenged. Each Party to this Settlement Agreement agrees that it will take no action (including, but not limited to, institution of a separate lawsuit) which seeks to challenge any provision of this Settlement Agreement or any documents provided for in this Settlement Agreement. 10. Severability. If any portion of this Settlement Agreement is found to be unenforceable, the Cities and Cox desire and agree that all other portions that can be separated from it or appropriately limited in scope shall remain fully valid and enforceable. 11. Waivers. No waiver by any Party of any default by another Party in the strict and literal performance of or compliance with any term, condition, provision or requirement contained in this Settlement Agreement shall be deemed a waiver of strict and literal performance of any other r 0 term, condition, provision or requirement, nor shall delay or omission on the part of any Party after default by another Party constitute a waiver of compliance with any other term, condition, provision or requirement contained in this Settlement Agreement. 12. Choice of Law. This Settlement Agreement shall be governed by the laws of California without regard to the principles of conflicts of laws. 13. Counterparts. This Settlement Agreement may be executed in counterparts, each of which shall be deemed an original, and which together shall constitute one and the same instrument. 14. Effective Date. This Settlement Agreement shall become effective on the last date of signature by the Parties hereto. IN WITNESS WHEREOF, the Cities and Cox have executed this Settlement Agreement: Cox Communications, Inc. By: Title: City " By: Tith City of Laguna Hills By: Title: Date Date Date Revice%erl u;:iX_y�/r�r.r�c� __ 0 0 term, condition, provision or requirement, nor shall delay or omission on the part of any Party after default by another Party constitute a waiver of compliance with any other term, condition, provision or requirement contained in this Settlement Agreement. 12. Choice of Law. This Settlement Agreement shall be governed by the laws of California without regard to the principles of conflicts of laws. 13. Counters_ This Settlement Agreement may be executed in counterparts, Each of which shall be deemed an original, and which together shall constitute one and the same instrument. la. Effective Date. This Settlement Agreement shall become effective on the last date of signature by the Parties hereto. IN WITNESS WHEREOF, the Cities and Cox have executed this Settlement Agreement: Cox Communications, Inc. By: Title: City of Irvine By: Title: City of Laguna Hifls By: Title: Ci y Manager Attest: Mary A. C 1son City C1e Date Date Approved as to Form: Lois E. Jefftpvp City Attorney 0 City of Laguna Niguel // By: i G/ . 44 Title: (17-Y N.# # FR City of Lake Forest By: Title: City of Mission Viejo By: Title: City of San Clemente By: Title: City of San Juan Capistrano Bv: Title: 9 0 JE,PTFH9FR Date Date Date Date Date City of Laguna Niguel By: Date Title: City of Lake Forest By: (� (C/� o ' — 9— 16— 9 Date Title: ATTEST Stately, CDV City of Mission Viejo ity Clerr, City of Lake Forest By: Title: City of San Clemente By: Title: City of San Juan Capistrano By: Title: 0 Date Date Date City of Laguna Niguel By: Title: City of Lake Forest By: Title: City of Mission Viejo By: Title: City of San Clemente In Title: City of San Juan Capistrano Title: 6 Date Date Date Date Date City of Laguna Niguel By: Date Title: City of Lake Forest By: _ Date Title: City of Mission Viejo By: Date Title: City of San Clemente By: Title: /—� n Date / /� City of San Juan Capistrano By: Date Title: 0 City of Laguna Niguel By: Title: City of Lake Forest By: Title: City of Mission Viejo By: Title: City of San Clemente By: Title: City of San Juan Capistrano Title: David M. Swerdlin, Mayor 9 0 Date Date Date Date September 2, 1997 Date MU-311WIRIV_ ul_ 0 EXHIBIT B In December 1995, the Federal Communications Commission approved a settlement of all the outstanding complaints that had been filed against cable systems owned by subsidiaries of Cox Communications, Inc. and Times Mirror Cable Television, Inc., regarding the rates charged for cable programming services. The Federal Communications Commission determined that it was in the best interests of all the subscribers and the cable operators to resolve all the pending rate complaints in a single global settlement. In January, 1996, seven Cities, all of which are local franchising authorities in Orange County, California, appealed the Commission's decision to approve the settlement of the rate complaints against the former Times Mirror systems. The Commission and Cox each believe that the Commission had the authority to approve the settlement, but the Cities believe that the Commission acted beyond its authority. The parties continue to maintain their positions, and there has been no determination that the Commission or Cox acted improperly, that the cable rates in question were improper or unreasonable or that cable rate refunds are owed. The Cities have determined that it is in the best interests of the cable subscribers to resolve the case and to avoid the cost, delay and uncertainty of this litigation. Cox, too, would like to put the dispute behind it and continue to provide service to its subscribers. Accordingly, the Cities and Cox have agreed to a settlement in which Cox will distribute a sum of money to the Cities, and the Cities will dismiss the case. The specific amount to be allocated to each City will be available shortly. The distribution of the settlement amount will be in the form of credits to current subscribers, which Cox will arrange for the convenience of the parties.