American Legal Foundation v. F.C.C.

• Citation: 808 F.2d 84,257 U.S.App.D.C. 189
• Decision Date: 09 January 1987
• Docket Number: No. 85-1696,85-1696
• Parties: AMERICAN LEGAL FOUNDATION, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and the United States of America, Respondents, American Broadcasting Companies, Inc., Intervenors.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 84

808 F.2d 84

257 U.S.App.D.C. 189

AMERICAN LEGAL FOUNDATION, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and the United States of

America, Respondents,

American Broadcasting Companies, Inc., Intervenors.

No. 85-1696.

United States Court of Appeals, District of Columbia Circuit.

Argued Oct. 27, 1986.

Decided Jan. 9, 1987.

Petition for Review of an Order of the Federal Communications commission.

Michael P. McDonald, Muskegon, Mich., for petitioner.

C. Grey Pash, Jr., Counsel, F.C.C., with whom Jack D. Smith, Gen. Counsel, Daniel M. Armstrong, Gerald M. Goldstein, Counsel, F.C.C., John J. Powers, III and Marion L. Jetton, Atty., Dept. of Justice, Washington, D.C., were on the brief for respondents.

Andrea Limmer, Washington, D.C., entered an appearance for respondents.

J. Roger Wollenberg, with whom Joel Rosenbloom and Murray A. Indick, Washington, D.C., were on the brief for intervenor.

Douglas S. Land, James A. McKenna, Jr., and Robert W. Coll, Washington, D.C., entered appearances for intervenor.

Before STARR and BUCKLEY, Circuit Judges, and PARSONS, ^* Senior District Judge.

Opinion for the Court filed by Circuit Judge STARR.

STARR, Circuit Judge:

We have before us a petition for review by the American Legal Foundation ("ALF"). ALF challenges a decision by the Federal Communications Commission not to initiate an investigation of the Foundation's administrative complaint, which charged the American Broadcasting Companies, Inc. with news distortion, news suppression, and violation of the fairness doctrine in a series of nationally televised news broadcasts pertaining to the Central Intelligence Agency. The FCC has moved to dismiss the petition on the ground that the Foundation lacks standing to seek review of the Commission's decision. We agree that ALF lacks standing and therefore dismiss the petition.

I

Four broadcasts during September and November 1984 on ABC's "World News Tonight" sparked the controversy that led to this litigation. Those broadcasts reported allegations of CIA involvement with a Honolulu investment firm that went bankrupt and which was accused of defrauding investors of $22 million. Specifically, on ABC's "World News Tonight" on September 19, 1984, the network broadcast an interview with one Ronald Rewald, former president of the ill-starred firm. In that interview, Rewald claimed that he was a CIA agent and that his investment firm had served as a cover for foreign and domestic CIA operations, some of them illegal.

The second ABC report aired on September 20, 1984. It reported Rewald's explosive charge that, following allegations that his Honolulu firm had swindled numerous investors, the CIA decided to assassinate him. A former Honolulu prison guard, Scott Barnes, purported to corroborate Rewald's accusation by claiming to have been hired by the CIA to kill Rewald. Yet another interviewee, Ted Frigard, similarly claimed that a CIA representative threatened his life in order to discourage him from pursuing a lawsuit against the investment firm and the Agency.

In a third broadcast on September 26, 1984, ABC reported that the CIA had publicly denied what the network had reported in the previous two broadcasts. At the same time, ABC announced that it was standing by its earlier reports. Finally, on November 21, 1984, ABC aired what it called an "update and clarification," in which the network admitted that it had been unable to corroborate Scott Barnes' story. ABC further conceded that the network had no reason to doubt the CIA's denial of Barnes' provocative allegations. ¹

Dissatisfied with ABC's apparent partial retraction, the CIA filed a complaint against ABC with the FCC. ² The CIA claimed that ABC had deliberately reported false information about the CIA's ties with Rewald's investment firm. The CIA advanced four assertions to buttress its claim: (1) ABC never attempted to verify the claims made by Rewald and others whom the network interviewed; (2) ABC improperly refused to accept as true the CIA's vigorous denial of these claims; (3) ABC ignored information available in public documents tending to show that the CIA was not significantly involved in the Rewald firm; and (4) ABC unquestioningly broadcast statements by Scott Barnes when it knew that he was a completely untrustworthy source. ³

The CIA argued that these defects demonstrated that ABC had deliberately distorted and suppressed news in violation of well-settled Commission policy. See, e.g., Black Producer's Association, 70 F.C.C.2d 1920, 1921 (1979) (distortion); Wayne Lemons, 67 F.C.C.2d 160, 165 (1977) (suppression); Hunger in America, 20 F.C.C.2d 143 (1969) (staging and distortion); Network Coverage of the Democratic National Convention, 16 F.C.C.2d 650 (1969) (same). Moreover, in the CIA's view, ABC's suppression of evidence tending to disprove CIA involvement in illegal activities violated the Commission's much-debated fairness doctrine, which in pertinent part requires a licensee presenting one side of a controversial issue of public importance to afford a reasonable opportunity for the presentation of contrasting views. See, e.g., Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 375-79, 89 S.Ct. 1794, 1798-1800, 23 L.Ed.2d 371 (1969); American Security Council Education Foundation v. FCC, 607 F.2d 438, 443 & n. 12 (D.C.Cir.1979), cert. denied, 444 U.S. 1013, 100 S.Ct. 662, 62 L.Ed.2d 642 (1980). Finally, since ABC's series of reports impugned the character and integrity of the CIA, the broadcasts were denounced as contravening the personal attack rule, a component of the fairness doctrine under which a licensee engaging in such attacks must notify the entity (or person) attacked and permit it to respond. 47 C.F.R. Sec. 73.1920 (1984); see also Red Lion, 395 U.S. at 378, 89 S.Ct. at 1800; Galloway v. FCC, 778 F.2d 16, 18 (D.C.Cir.1985). The CIA requested an investigative hearing on ABC's production of the broadcasts. It also asked the Commission to consider the alleged abuses in ruling on applications by ABC stations for license renewal. See 47 U.S.C. Secs. 308, 309 (1982 & Supp. III 1985); see also Hunger in America, 20 F.C.C.2d at 151 n. 6.

The CIA's complaint prompted filings by a number of media groups, including the American Legal Foundation. These filings raised, among other things, the issue whether government agencies such as the CIA had standing to file administrative complaints with the Commission. The Commission staff denied the CIA's complaint. ⁴ It found that the CIA enjoyed standing but had failed to "establish prima facie complaints sufficient to initiate a Commission inquiry or sanctions." ⁵

On the day the staff denied the CIA's complaint, ALF filed its complaint against ABC. Although the Foundation's complaint more fully described the contrary evidence allegedly suppressed by ABC, the pleading in most respects mirrored that of the CIA. ⁶ ALF, too, sought a ful-scale Commission investigation, complete with public hearing, and a variety of sanctions against ABC, including revocation of licenses of all ABC stations. ALF's complaint was consolidated with the CIA's for consideration by the full Commission, from whom the CIA sought reconsideration of the staff ruling. See 47 C.F.R. Sec. 1.725(a) (1986).

The Commission denied both complaints and concluded that no further action was warranted. ⁷ In response to pleadings filed by other parties, the FCC decided preliminarily that government agencies enjoy standing to bring news distortion and fairness doctrine complaints. ⁸ That threshold issue settled, the Commission then rejected charges of news distortion and suppression because neither complaint provided "direct extrinsic evidence that [ABC] possessed a deliberate intent to distort the news." That element, according to the Commission, constituted the initial showing required to trigger an agency inquiry. ⁹ Similarly, the Commission concluded that neither party's complaint established a prima facie violation of the fairness doctrine. Specifically, the complaints did not properly identify issues on which views were broadcast or demonstrate that the issues were "controversial," that is, were "subject[s] of vigorous debate with substantial elements of the community in opposition to one another." ¹⁰ Finally, the Commission concluded that the "personal attack" alleged in the complaint took place during "bona fide newscasts," a genre of programming that the Commission exempts from the personal attack rule. ¹¹

II

The Foundation maintains that the Commission acted arbitrarily and capriciously in rejecting its charges against ABC. An antecedent issue confronts us, however, for the Commission seeks to have us dismiss the petition on the ground that ALF lacks standing to seek review in this court. Constrained to agree with the Commission on this threshold issue, we stop short of the merits of ALF's challenge.

By its own description, ALF is a "nonprofit media law center which works to promote media fairness and accountability." ¹² According to the Foundation, its specific "institutional interest" is "seeing to it that the Commission's fairness doctrine and news distortion policies are enforced." ¹³ To this end, ALF regularly initiates complaints before the Commission, intervenes in FCC proceedings, and monitors broadcasters for compliance with the law. ¹⁴

ALF has no members. In fact, the Foundation's corporate charter expressly prohibits it from having any. ¹⁵ Instead of claiming to speak for a discrete membership body, ALF purports to represent the interests of all members of the public who regularly watch ABC News (and other network news broadcasts). ALF submitted three affidavits to the Commission to buttress its claim that the Foundation represents the views of at least some ABC viewers. Each document recites that the affiant "support[s] [ALF] in its efforts to have the Commission order ABC to comply with its fairness doctrine obligations," and that ALF "represents [the...