351 U.S. 192 (1956), 94, United States v. Storer Broadcasting Co.

Docket Nº:No. 94
Citation:351 U.S. 192, 76 S.Ct. 763, 100 L.Ed. 1081
Party Name:United States v. Storer Broadcasting Co.
Case Date:May 21, 1956
Court:United States Supreme Court
 
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Page 192

351 U.S. 192 (1956)

76 S.Ct. 763, 100 L.Ed. 1081

United States

v.

Storer Broadcasting Co.

No. 94

United States Supreme Court

May 21, 1956

Argued February 28-29, 1956

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Syllabus

After rulemaking proceedings under the Communications Act of 1934, as amended, in which respondent appeared, filed written objections and argued orally, the Federal Communications Commission amended its rules so as to provide, in effect, that it would issue no license for an additional television broadcast station to any party already having five such stations. On the same day, applying this rule, the Commission dismissed, without hearing, respondent's application for a license for an additional television broadcast station, because respondent already had five such stations. Under the Communications Act, the Administrative Procedure Act and 5 U.S.C. § 1034, respondent applied to the Court of Appeals for review of the Commission's order amending its rule.

Held:

1. Though the question of respondent's right to appeal was not raised by either party or by the Court of Appeals, it may be considered by this Court. P. 197.

2. Respondent had standing to bring this action. Pp. 198-200.

(a) The process of rulemaking having been completed, the amended rules constituted final agency action within the meaning of the Administrative Procedure Act. Pp. 198-199.

(b) The amended rules presently "aggrieve" respondent. Pp. 199-200.

3. Section 309(b) of the Communications Act, which requires a "full hearing" before denial of an application for a license, does not prevent the Commission from adopting the rules here involved limiting the number of broadcast stations that will be licensed to any one party. Pp. 200-206.

(a) Section 309 (b) entitles each applicant for a license to a "full hearing," including the right to present his case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as may be required for a full and true disclosure of the facts. P. 202.

(b) However, § 309(b) does not withdraw from the Commission the rulemaking authority necessary for the orderly conduct of its business. Pp. 202-203.

Page 193

(c) Nor does § 309(b) bar rules that declare a present intent to limit the number of stations consistent with a permissible "concentration of control." Pp. 203-205.

(d) The Act and rules are to be read as providing a "full hearing" for applicants who have reached the existing limit of stations, upon presentation of proper applications that set out adequate reasons why the rules should be waived or amended. The Act, considered as a whole, requires no more. P. 205.

95 U.S.App.D.C. 97, 220 F.2d 204, reversed and remanded.

REED, J., lead opinion

MR. JUSTICE REED delivered the opinion of the Court.

The Federal Communications Commission issued, on August 19, 1948, a notice of proposed rulemaking under the authority of 47 U.S.C. §§ 303(r), 311, 313 and 314 (Communications Act of 1934, as amended, 47 U.S.C. § 301 et seq.). It was proposed, so far as is pertinent to this case, to amend Rules 3.35, 3.240, and 3.636 relating to Multiple Ownership of standard, FM and television broadcast stations. Those rules provide that licenses for broadcasting stations will not be granted if the applicant, directly or indirectly, has an interest in other stations beyond a limited number. The purpose of the limitations is to avoid overconcentration of broadcasting facilities.

As required by 5 U.S.C. § 1003(b), the notice permitted "interested" parties to file statements or briefs. Such parties might also intervene in appeals. 47 U.S.C. § 402(d) and (e). Respondent, licensee of a number of radio and television stations, filed a statement objecting to the proposed changes, as did other interested broadcasters.

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Respondent based its objections largely on the fact that the proposed rules did not allow one person to hold as many FM and television stations as standard stations. Storer argued that such limitations might cause irreparable financial damage to owners of standard stations if an obsolescent standard station could not be augmented by FM and television facilities.

In November, 1953, the Commission entered an order amending the Rules in question without significant changes [76 S.Ct. 766] from the proposed forms.1 A review was sought

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in due course by respondent in the Court of Appeals for the District of Columbia Circuit under 5 U.S.C. § 1034,2 47 U.S.C. § 402(a),3 and 5 U.S.C. § 1009(a), (c).4 Respondent alleged it owned or controlled, within the meaning of the Multiple Ownership Rules, seven standard radio, five FM radio, and five television broadcast stations. It asserted that the Rules complained of were in conflict with the statutory mandates that applicants should be granted licenses if the public interest would be served and that applicants must have a hearing before denial of an application. 47 U.S.C. § 309(a) and (b).5

Page 196

Respondent also claimed:

[76 S.Ct. 767]

The Rules, in considering the ownership of one (1%) percent or more of the voting stock of a broadcast licensee corporation as equivalent to ownership, operation or control of the station, are unreasonable and bear no rational relationship to the national Anti-Trust policy.

This latter claim was important to respondent because, allegedly, 20% of its voting stock was in scattered ownership, and was traded in by licensed dealers. This stock was thus beyond its control.

Respondent asserted it was a "party aggrieved" and a "person suffering legal wrong" or adversely affected under the several statutes that authorize review of FCC action. See notes 2, 3 and 4, supra. It stated its injuries from the Rules thus:

Storer is adversely affected and aggrieved by the Order of the Commission adopted on November 25, 1953, amending the Multiple Ownership Rules, in that:

(a) Storer is denied the right of a full and fair hearing to determine whether its ownership of an interest in more than seven (7) standard radio and five (5) television broadcast stations, in light of and upon a showing of all material circumstances, will

Page 197

thereby serve the public interest, convenience and necessity.

(b) The acquisition of Storer's voting stock by the public under circumstances beyond the control of Storer, may and could be violative of the Multiple Ownership rules, as amended, and result in a forfeiture of licenses now held by Storer, with resultant loss and injury to Storer and to all other Storer stockholders.

On the day the amendments to the Rules were adopted, a pending application of Storer for an additional television station at Miami was dismissed on the basis of the Rules.

While the question of respondent's right to appeal has not been raised by either party or by the Court of Appeals, our jurisdiction is now mooted. It may be considered. Federal Communications Commission v. National Broadcasting Co., 319 U.S. 239, 246. Jurisdiction depends upon standing to seek review, and upon ripeness. If respondent could not rightfully seek review from the order adopting the challenged regulations, it must await action to its disadvantage under them, and neither the Court of Appeals nor this Court has jurisdiction of the controversy. Under the above-cited Code sections, review of Commission action is granted any party aggrieved or suffering legal wrong by that action.6

Page 198

[76 S.Ct. 768] We think respondent had standing to sue at the time it exercised its privilege. The process of rulemaking was complete. It was final agency action, 5 U.S.C. § 1001(c) and (g), by which Storer claimed to be "aggrieved." When the authority to appeal was substantially the same, we held that an appellant who complained of the grant of a license to a competitor because it would reduce its own income had standing to appeal against a contention, admittedly sound, that such economic injury to appellant was not a proper issue before the Commission. We said:

Congress had some purpose in enacting section 402(b)(2). It may have been of opinion that one likely to be financially injured by the issue of a license would by the only person having a sufficient interest to bring to the attention of the appellate court errors of law in the action of the Commission in granting the license. It is within the power of Congress to confer such standing to prosecute an appeal.

Federal Communications Comm'n v. Sanders Bros. Radio Station, 309 U.S. 470, 477. We added that such an appellant could raise any relevant question of law in respect to the order.

Again, in Columbia Broadcasting System v. United States, 316 U.S. 407, this Court considered the problem of standing to review Commission action under the then existing § 402(a), 48 Stat. 1093, and the Urgent Deficiencies Act, 38 Stat. 219. CBS there sought review of the adoption of Chain Broadcasting Regulations by the Commission. Against the contention that the adoption of regulations did not command CBS to do or refrain from doing anything (dissent, 316 U.S. at 429), this Court held that the order promulgating regulations was

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reviewable because it presently affected existing contractual relationships. It said:

The regulations are not any the less reviewable because their promulgation did not operate of their own force to deny or cancel a license. It is enough that failure to comply with them penalizes licensees, and appellant, with whom they contract. If an administrative order has that effect, it is reviewable, and it does not cease to be so merely because it is not certain whether the Commission will institute proceedings to enforce the penalty incurred under its regulations for non-compliance.

Id. at 417-418. The Court said that the regulations "presently determine rights." Id. at 421.

Appellant's standing to maintain the present suit...

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