Aeronautical Radio, Inc. v. United States

• Decision Date: 10 July 1964
• Docket Number: No. 14419.,14419.
• Citation: 335 F.2d 304
• Parties: AERONAUTICAL RADIO, INC., Air Transport Association of America, Aircraft Owners and Pilots Association, Braniff Airways, Incorporated, Heart O' Wisconsin Broadcasters, Inc., David Ingle, Jr., Lake Central Airlines, Inc., North Central Airlines, Inc., Northwest Airlines, Inc., United Air Lines, Inc., Petitioners, v. UNITED STATES of America and Federal Communications Commission, Respondents, American Trucking Associations, Inc., National Association of Broadcasters, American Merchant Marine Institute, Inc., American Radio Relay League, Incorporated, Intervenors.
• Court: U.S. Court of Appeals — Seventh Circuit

335 F.2d 304 (1964)

AERONAUTICAL RADIO, INC., Air Transport Association of America, Aircraft Owners and Pilots Association, Braniff Airways, Incorporated, Heart O' Wisconsin Broadcasters, Inc., David Ingle, Jr., Lake Central Airlines, Inc., North Central Airlines, Inc., Northwest Airlines, Inc., United Air Lines, Inc., Petitioners, v. UNITED STATES of America and Federal Communications Commission, Respondents, American Trucking Associations, Inc., National Association of Broadcasters, American Merchant Marine Institute, Inc., American Radio Relay League, Incorporated, Intervenors.

No. 14419.

United States Court of Appeals Seventh Circuit.

July 10, 1964.

Donald C. Beelar, Washington, D. C., John C. Butler, Chicago, Ill., Owen M. Johnson, Jr., Chicago, Ill., James M. Johnstone, Washington, D. C., for petitioners, John S. Yodice, Washington, D. C., of counsel for Aircraft Owners and Pilots Assn., John E. Stephen, Washington, D. C., of counsel for Air Transport Assn. of America.

Lionel Kestenbaum, Dept. of Justice, Daniel R. Ohlbaum, Associate Gen. Counsel, Max D. Paglin, Gen. Counsel, Joel H. Levy, Counsel, F.C.C., Washington, D. C., William H. Orrick, Jr., Asst. Atty. Gen., George R. Kucik, Atty., Dept of Justice, Washington, D. C., for respondents.

Jeremiah Courtney, Arthur Blooston, Washington, D. C., for intervenor, American Trucking Assns., Inc.

Robert M. Booth, Jr., Washington, D. C., for intervenor, The American Radio Relay League, Inc. Cornelius P. Coughlan, New York City, for intervenor, American Merchant Marine Institute, Inc.

Douglas A. Anello, Washington, D. C., for intervenor American Merchant Marine Institute, Inc.

Before SCHNACKENBERG, KILEY and SWYGERT, Circuit Judges.

KILEY, Circuit Judge.

The issues raised by this joint petition to review¹ an order² of the Federal Communications Commission establishing a comprehensive schedule of license fees are: I. whether the Order is based on an unconstitutional and invalid delegation of legislative power; and II. whether, if constitutional, the power was exercised in such manner as to render the schedule void. We decide the issues in favor of the Commission.

The schedule under review was ordered by the Commission October 7, 1963, effective January 1, 1964,³ prescribing fees for applications for licenses to use the public air waves for radio purposes. The Commission acted under authority of Title V of the Independent Authorization Act of 1952. 65 Stat. 290 (1951), 5 U.S.C. § 140. It is § 140, a rider to the Act, which is assailed as an unconstitutional grant of legislative power.

The substance of § 140 is a declaration of the "sense of the Congress that any * * * service, * * * license, * * * or similar thing of value * * provided * * * by any Federal agency * * * except those engaged in the transaction of the official business of the Government, shall be self-sustaining to the full extent possible, and the head of each Federal Agency is authorized by regulation (which, * * * in the executive branch, shall be as uniform as practicable and subject to such policies as the President may prescribe) to prescribe * * * such fee * * * as he shall determine * * * to be fair and equitable taking into consideration direct and indirect cost to the Government, value to the recipient, public policy or interest served, and other pertinent facts * *."

I.

Petitioners contend that § 140 is an unconstitutional delegation of legislative power because of a "combination" of factors: it was addressed to all agencies and not to a specific high-level administrator; the subject matter of the legislation belies the possibility of a basic policy determination by Congress; the agency head has the "uncontrolled option" whether or not to prescribe fees; and the standards set forth in the statute are not only diverse, but are so conflicting and inconsistent that they cannot be used to place limits on the administrative discretion. In our opinion none of these factors with regard to the statute before us constitutes an unconstitutional abdication of legislative power, and we do not see how their "combination" puts § 140 "beyond the pale of constitutionality" as petitioners contend.

The constitutional essentials for determining whether an act of Congress constitutes an invalid delegation of power are set forth in Yakus v. United States, 321 U.S. 414, 64 S.Ct. 660, 88 L.Ed. 834 (1944). There the Supreme Court held constitutional the Emergency Price Control Act of 1942 which fixed prices during World War II. The Court found that Congress had stated the legislative objective, the method of achievement, and the guiding standards for the administrator. The guides were requirement of fairness and equity with due consideration "so far as practicable" to the prices prevailing in a designated base period. The Court said, "Only if we could say there is an absence of standards for the guidance of the Administrator's action, so that it would be impossible in a proper proceeding to ascertain whether the will of Congress has been obeyed would we be justified in overriding the choice of means for effecting the declared purpose." 321 U.S. at 426, 64 S.Ct. at 668.

The constitutional essentials are not absent here. The Congressional objective is that agencies issuing "license and the like" shall be self-sustaining "to the full extent possible." The method prescribed is fees "uniform as practicable." The guides are fairness and equity "taking into consideration direct and indirect cost to the Government, value to the recipient, and public policy or interest to be served." And in the proper proceeding this court can determine, as will be seen hereafter, that the Order is consistent with Congressional policy.

A reading of the Commission's Report and Order is sufficient to answer the claim that § 140 is too vague, and the criteria meaningless, as applied to petitioners and intervenors. Certainly the Commission could, without difficulty, know what Congress' goal was; the boundaries of the means to be used are plain and were, we think, applied by the Commission in a knowledgeable way. Yakus v. United States, 321 U.S. 414, 424, 64 S.Ct. 660 (1944). The standard of "fair and equitable" is a commonplace standard in our jurisprudence, and is sufficient in the area of the Commission's sphere of power as the standard of "public convenience and necessity" approved in FCC v. Pottsville Broadcasting Co., 309 U.S. 134, 138, 60 S.Ct. 437, 84 L.Ed. 656 (1940), or the various instances mentioned in Yakus at pages 426-427 of 321 U.S. The Congressional ground rules are clear enough to limit the Commission, and, if more specific, Congress might have thought, would have been too narrow to embrace all federal agencies.

Because § 140 is merely permissive in nature, rather than mandatory, or contingent upon a prerequisite finding, does not mean that it is an unconstitutional abdication of legislative functions. In Panama Refining Co. v. Ryan, 293 U.S. 388, 415, 55 S.Ct. 241, 246, 79 L.Ed. 446 (1943), the Court invalidated § 9(c) of the NIRA because it delegated to the "President an unlimited authority to determine the policy and to lay down the prohibition, or not to lay it down, as he * * * saw fit * * * with disobedience to his order * * * a crime punishable by fine and imprisonment." It is true that in cases following Panama Refining, all upholding legislative delegation, Congress made prerequisite an administrative finding before the agency was empowered to use the delegated powers.⁴

We do not believe the lack of a specific prerequisite renders § 140, which is addressed to all federal agencies, each formed for a different purpose, fatally defective. The "self-sustaining" purpose of § 140 must be weighed against the purpose for which each of the many agencies was established. Therefore, as a prerequisite to a fee schedule, each agency must weigh the policy of making its services "self-sustaining" against the public policy considerations for which it was formed, and upon this determine whether or not to establish a fee schedule. This is what the FCC has stated it has done with respect to the schedule before us: "Our determination is that the establishment of a fair and equitable schedule would be in the public interest under the Communications Act of 1934." The Communications Act, against which the purpose to be served by the delegation may be weighed, makes the present case distinguishable from Panama Refining, because it provides a general policy^4a in the light of which the Commission can determine if and when, a fee schedule is needed.

Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570, 97 A.L.R. 947 (1935), does not apply. There the Court struck down the NIRA because Congress established no standards but sought to authorize the President to do so without any guidelines.

We see no merit in the contention that the agencies to whom the power is delegated should have been specified, because we think they were identified sufficiently to indicate the Congressional purpose. And we see no merit to the contention that § 140 was enacted as a rider to an appropriation bill in violation of the Legislative Reorganization Act of 1946, 60 Stat. 812, 821, and the Standing Rules of the House and Senate. The Act of 1946 adopted only as a Senate Rule a prohibition against amendments introducing new or general legislation to appropriation bills; § 140 was not an amendment. And despite the Senate and House rules, § 140 was adopted. Also despite criticisms from many sources, for varied reasons, since its adoption in 1952, § 140 has remained in effect.

We hold § 140 of Title V is not an unconstitutional grant of legislative power.

II.

The claim is made that the Commission's schedule was drawn arbitrarily, or that the Commission exceeded the statutory authority or disregarded the statutory guidelines.

The schedule⁵ itself was broken down into three categories: Broadcast Services,...