Atlanta Channel, Inc. v. Solomon

• Decision Date: 30 March 2020
• Docket Number: Civil Action No.: 15-1823 (RC)
• Parties: THE ATLANTA CHANNEL, INC., Plaintiff, v. HENRY A. SOLOMON, et al., Defendants.
• Court: United States District Courts. United States District Court (Columbia)

THE ATLANTA CHANNEL, INC., Plaintiff, v. HENRY A. SOLOMON, et al., Defendants.

Civil Action No.: 15-1823 (RC)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

March 30, 2020

Re Document Nos.: 143, 159

MEMORANDUM OPINION

DENYING DEFENDANT HENRY SOLOMON'S MOTION FOR SUMMARY JUDGMENT; DENYING PLAINTIFF'S MOTION FOR RULE 11 SANCTIONS

I. INTRODUCTION

Over 20 years ago, Defendant Henry Solomon submitted a form to the Federal Communications Commission ("FCC" or "Commission") on behalf of his client, the Atlanta Channel, Inc. ("ACI"). Timely submission of this material was required to establish ACI's eligibility to apply for a special license that would have given the broadcaster preference on the airwaves. But the form was incomplete: none of the boxes indicating eligibility were checked. As a result, the FCC deemed ACI ineligible to apply for a Low-Power-Television ("LPTV") Class A license pursuant to the Consumer Broadcasters Protection Act ("CBPA"), 47 U.S.C. § 336(f), and associated FCC regulations, 47 C.F.R. Part 73. Plaintiff thereafter brought malpractice claims against Mr. Solomon, alleging, as relevant here, that his actions are to blame for ACI's loss of this valuable licensing opportunity.¹ Second Am. Compl. ¶¶ 26-35, ECF No.69 ("The FCC would have granted a Class A License . . . but for the 'material deficiency' in the ACI Statement prepared, reviewed[,] and filed by Mr. Solomon." Id. ¶ 35.); id. ¶ 74 ("Mr. Solomon committed legal malpractice in the representation of ACI by failing to exercise due and proper care in the preparation and filing of the ACI statement.").

Defendant Solomon now seeks summary judgment on the grounds that, as a matter of law, ACI was never actually eligible for a Class A license. Def. Solomon's Motion for Summ. J. Based on the Lack of Eligibility of WTHC-LD for Class A Status ("Def.'s Mot.") 1-2, ECF No. 143.² According to Defendant, because ACI did not in 1999, and has not ever, satisfied the statutory and regulatory requirements for Class A status, Plaintiff cannot establish that Mr. Solomon's omission of material on the eligibility form led ACI to sustain a legally cognizable injury. Def. Solomon's Brief in Support of Motion for Summ. J. Based on the Lack of Eligibility of WTHC-LD for Class A Status ("Def.'s Br.") 4, ECF No. 143.³ Mr. Solomon thus moves for summary judgment to dismiss the claim against him. Plaintiff, unsurprisingly, characterizes the underlying law and its application to ACI quite differently—so differently that ACI not only opposes Defendant's motion for summary judgment, ECF No. 153, but also moves for Rule 11 sanctions against Solomon's counsel for making what it characterizes as a frivolous legal argument, ECF No. 159. For the reasons set forth below, the Court agrees with Plaintiff that summary judgment is inappropriate but does not find Rule 11 sanctions to be in order here. Accordingly, the Court denies both motions.

II. BACKGROUND

Because the parties dispute the manner in which the underlying statutory and regulatory structure applies to the facts presented, the Court will begin with an overview of applicable controlling law and then briefly recount the procedural and factual history of this case.

A. Statutory and Regulatory Background

1. The Consumer Broadcasters Protection Act of 1999

Congress enacted the CBPA, 47 U.S.C. § 336(f), on November 29, 1999, to ensure community access to locally-originated programming. See 145 Cong. Rec. S29977 (Nov. 17, 1999) (stating that Act aims to "ensure that many communities across the nation will continue to have access to free, over-the-air low-power television (LPTV) stations, even as full-service television stations" convert to digital format). In furtherance of this objective, the CBPA directed the FCC to create a new category of "[C]lass A television license." 47 U.S.C. § 336(f)(1)(A). The CBPA provides that the FCC should award a Class A license "subject to the same license terms and renewal standards as the licenses for full-power television stations," unless otherwise provided, id. at § 336(f)(1)(A)(i), and should accord "each such [C]lass A licensee . . . primary status as a television broadcaster" so long as the licensee satisfies "the requirements for a qualifying low-power station," id. at § 336(f)(1)(A)(ii). The statute specifies the relevant qualifying requirements:

[A] station is a qualifying low-power television station if—

(A)(i) during the 90 days preceding November 29, 1999—

(I) such station broadcast a minimum of 18 hours per day;

(II) such station broadcast an average of at least 3 hours per week of programming that was produced within the market area served by such station, or the market area served by a group of commonly controlled low-power stations that carry common local programming produced within the market area served by such group; and

(III) such station was in compliance with the Commission's requirements applicable to low-power television stations; and(ii) from and after the date of its application for a [C]lass A license, the station is in compliance with the Commission's operating rules for full-power television stations[.]

47 U.S.C. § 336(f)(2).

In addition, the CBPA established a time-limited, two-step process for local broadcasters to use to apply for a Class A license. First, "within 60 days after November 29, 1999, licensees intending to seek [C]lass A designation" were to submit to the FCC a "certification of eligibility based on [the subsection's] qualification requirements." Id. § 336(f)(1)(B). Unless the statement of eligibility had a "material deficiency," the CBPA directed the FCC to "grant certification of eligibility to apply for [C]lass A status."⁴ Id. Second, eligible applicants were permitted to "submit an application for [C]lass A designation." Id. § 336(f)(1)(C). The CBPA required the FCC to "prescribe regulations to establish a [C]lass A television license" for eligible licensees within 120 days of November 29, 1999. Id. § 336(f)(1)(A). Summing up, then, the CBPA established qualifying requirements and the process that licensees needed to follow to establish eligibility for a Class A license and delegated to the FCC the authority to, within the specified time frame, promulgate regulations concerning the details of the Class A license application process. The Court next describes the relevant FCC regulations.

2. FCC Implementation of the CBPA

As required by the CBPA, the FCC promulgated implementing regulations to establish a Class A television license. See FCC, Report and Order, In the Matter of Establishment of a Class A Television Service, MM Docket No. 00-10, FCC 00-115, 15 FCC Rcd. 6355 (Apr. 4, 2000) ("2000 Report and Order"). The FCC stated that the implementing regulations in its 2000 Report and Order were the "final regulations" described in the CBPA, such that licensees werepermitted to file Class A applications within 30 days of the date that the regulations took effect. Id. at 6360. The regulations articulated in the 2000 Report and Order took effect on June 9, 2000. Id. at 8985.

In the 2000 Report and Order, the Commission both set forth implementing regulations and discussed the interaction between the regulations and the CBPA. The FCC first reiterated the "several steps" required for an LPTV station to be eligible for a Class A license: (1) "it must have filed a certification of eligibility within 60 days of the enactment of the CBPA" (i.e. by January 28, 2000); (2) the FCC must approve the certification of eligibility; (3) "it must file an application for a Class A license . . . within 6 months from the effective date of the Class A rules" (i.e. within 6 months of June 9, 2000); and (4) the FCC must grant that license. Id. at 6361. The Commission also established that it would apply to applicants and licensees "all" of the controlling Part 73 regulations that applied to full-service stations "except for those that cannot apply for technical or other reasons." Id. at 6365.

The FCC next addressed certain terms not defined by the CBPA itself. As relevant here, the FCC discussed what "market area" it would consider in determining whether a station had complied with the local production requirements to qualify for a Class A license. See 47 U.S.C. § 336(f)(2)(A)(i)(II) (indicating that qualifying for a Class A license requires a low-power television station to broadcast a minimum amount of "programming that was produced" in that station's market area). The Commission defined market area "to encompass the area within the predicted Grade B contour," or, for "a group of commonly controlled stations," as "the area within the predicted Grade B contours" of any of those stations. 2000 Report and Order at 6364.

The FCC further provided that it would "require Class A applicants and licensees to maintain a main studio . . . within the station's Grade B contour," consistent with the local accessobjectives of the statute.⁵ Id. at 6366 (discussing "main studio rule"). However, the Commission created a limited exception by "grandfather[ing] all main studios now in existence and operated by LPTV stations . . . for purposes of [the] Class A main studio rule." Id. The FCC also made clear that it would "consider programming produced at the main studio of such grandfathered Class A stations to be locally produced programming" for purposes of compliance with all applicable statutes and regulations. Id. at 6365. These provisions ensured that there was no conflict between the locally produced programming requirement, discussed above, and the main studio rule. Id. The final main studio rule itself thus provided, "[e]ach Class A television station shall maintain a main studio at the site used by the station as of November 29, 1999, or a location within the station's Grade B contour." 47 C.F.R. § 73.1125 (2000). In addition, the FCC stated that, "[i]n order to qualify as a 'main studio,' the location must be [1] equipped with appropriate equipment capable of originating...