Bartholdi Cable Co., Inc. v. F.C.C.
| Decision Date | 10 September 1997 |
| Docket Number | 96-1094,Nos. 96-1030,s. 96-1030 |
| Parties | , 8 Communications Reg. (P&F) 304 BARTHOLDI CABLE COMPANY, INC., Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, Time Warner Cable of New York City and Paragon Communications, Intervenors. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Petitions for Review of an Order of the Federal Communications Commission.
Clifford M. Sloan, Washington, DC, argued the cause for petitioner Bartholdi Cable Company, Inc., with whom Robert L. Pettit, Washington, DC, and Robert L. Begleiter, New York City, were on the briefs. Larry S. Solomon, Washington, DC, entered an appearance.
R. Bruce Beckner, Washington, DC, argued the cause for petitioner Time Warner Cable of New York City and Paragon Communications, with whom Arthur H. Harding and Jill Kleppe McClelland were on the briefs.
Joel Marcus, Counsel, Federal Communications Commission, Washington, DC, argued the cause for respondent, with whom William E. Kennard, General Counsel, and Daniel M. Armstrong, Associate General Counsel, were on the brief. Catherine G. O'Sullivan and Nancy C. Garrison, Attorneys, United States Department of Justice, entered appearances.
Clifford M. Sloan, Washington, DC, argued the cause for Bartholdi Cable Company, Inc., as intervenor, with whom Robert L. Pettit, Washington, DC, and Robert L. Begleiter, New York City, were on the brief. Larry S. Solomon, Washington, DC, entered an appearance.
Arthur H. Harding, R. Bruce Beckner, and Jill Kleppe McClelland, Washington, DC, filed a brief for Time Warner Cable of New York City and Paragon Communications as intervenors.
Before SILBERMAN, SENTELLE and GARLAND, Circuit Judges.
Opinion for the Court filed by Circuit Judge SENTELLE.
Bartholdi Cable Co. ("Bartholdi") and Time Warner Cable of New York City ("Time Warner") petition for review of a Federal Communications Commission ("FCC" or "Commission") order rejecting Bartholdi's claim that material it submitted to the Commission was protected from public disclosure by the attorney-client and workproduct privileges as well as Exemptions 4 and 6 of the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552. For the reasons discussed below, we deny Bartholdi's petition for review and dismiss Time Warner's petition for lack of jurisdiction.
In 1991, the FCC authorized the licensing of radio frequencies known as operational fixed microwave service ("OFS") for the distribution of video programming to the public. Since that time, Bartholdi (formerly known as Liberty Cable Co., Inc.) has used OFS "paths" to provide multi-channel video programming to approximately 30,000 subscribers in apartment buildings in the New York metropolitan area.
In order for Bartholdi to provide its service lawfully, it must first obtain from the Commission an OFS license for each microwave path between a radio station and a receiver located on the roof of the building that contracted to receive Bartholdi service. In order to expedite provision of service to subscribers, Bartholdi has applied for and the Commission has granted Special Temporary Authority pursuant to 47 U.S.C. § 309(f) and 47 C.F.R. § 101.31, allowing Bartholdi to provide service pending license approval.
In March 1995, Bartholdi applied to the FCC for a number of OFS licenses. Time Warner, a competitor of Bartholdi, petitioned to deny the applications. On May 5, 1995, in one of its petitions to deny Bartholdi's OFS license applications, Time Warner informed the Commission of its discovery that Bartholdi had begun using two OFS paths without licenses.
In the meantime, Bartholdi purportedly discovered that it had begun providing service to some buildings in New York without prior authorization from the Commission. Bartholdi admitted premature activation of service to the two buildings identified by Time Warner and "immediately" began investigating the cause of the premature activations. Bartholdi also disclosed to the Commission the existence of thirteen other prematurely activated buildings. As a result of these revelations, Bartholdi's chairman retained outside counsel to determine the cause of the premature activations and to institute a compliance program.
Outside counsel conducted an "exhaustive" investigation of Bartholdi's company records and interviewed all persons with relevant knowledge. Outside counsel then prepared a comprehensive report. The report contains a description of Bartholdi's internal business and licensing operations, information concerning Bartholdi's customers, the history of management breakdown that led to the premature activations, and the identity, functions, and performance evaluations of various Bartholdi personnel.
In light of Bartholdi's disclosed violations, the Chief of the FCC's Microwave Branch sent a letter to Bartholdi on June 9, 1995, requesting that Bartholdi provide additional information concerning its unlicensed operations. In response to this request, Bartholdi submitted, inter alia, a chart showing the addresses, dates of commencement of service, and number of subscribers at each of the fifteen buildings that received unauthorized service. On the same day, Bartholdi's president informed the Wireless Telecommunications Bureau ("WTB") that "[a] complete investigation of this administrative foul-up is currently being conducted by outside counsel." Shortly thereafter, Bartholdi revealed an additional four instances of unlicensed service, bringing the total number to nineteen.
After that revelation, the Chief of the Enforcement Division of the WTB directed Bartholdi "to submit to the Commission the results of its recently conducted internal audit." Specifically, Bartholdi's report to the Commission was to list (1) "all of the OFS paths which [Bartholdi] has constructed and/or operated without authority," (2) "which of these unauthorized paths were not disclosed to the Commission in response to its letter of June , 1995," (3) "the date each unauthorized path was constructed and placed in operation," (4) "the number of subscribers currently being served by each new path," and (5) "whether [Bartholdi] is charging subscribers for service received via these unauthorized paths."
Several days later Bartholdi responded to the WTB's request by submitting a letter summarizing the findings of Bartholdi's outside counsel; a detailed list of unauthorized operations, number of subscribers, commencement dates, and charged subscribers; and the full text of the outside counsel's report as well as certain documents and communications attached to the report. These submissions were accompanied by a request that they remain confidential under Exemptions 4 and 6 of FOIA. Alternatively, to the extent the WTB determined that the submissions should not remain confidential, Bartholdi requested that the submissions be returned without consideration pursuant to 47 C.F.R. § 0.459(e). Bartholdi's request for confidentiality also made passing reference to the attorney-client and work-product privileges.
On September 13, 1995, the WTB denied Bartholdi's request for confidentiality and ordered that Bartholdi disclose the submitted materials to Time Warner and the general public. Bartholdi filed an application for review with the Commission on September 20, 1995, seeking reversal of the WTB's ruling. The application for review contained extensive discussion of Bartholdi's claims for confidentiality under Exemptions 4 and 6 of FOIA. However, the application contained no discussion of the attorney-client or work-product privileges, nor did it make mention of 47 C.F.R. § 0.459(e).
The Commission denied Bartholdi's application for review and "affirm[ed] the WTB's ruling in all ... respects." Liberty Cable Co., Inc., 11 F.C.C.R. at 2475, 2475 (1996). The Commission rejected Bartholdi's Exemption 4 confidentiality claim on the ground that Bartholdi failed to establish that disclosure of the information submitted to the Commission would result in "competitive harm." Id. at 2476. Alternatively, the Commission rejected the Exemption 4 claim on the ground that "public interest considerations favoring openness in ... licensing proceedings ... outweigh any need to protect the audit report from disclosure." Id. at 2477. Similarly, the Commission rejected Bartholdi's Exemption 6 claim on the ground that "significant public policy considerations warrant disclosure." Id. As for Bartholdi's privilege claims, the Commission noted that Bartholdi's application for review "does not even mention, let alone discuss, these privileges." Id. In any event, the Commission rejected the privilege claims on the ground that Bartholdi had failed "to provide any specific information or explanation to substantiate its generalized claims of privilege." Id. Bartholdi then sought and obtained an emergency stay from this court. This petition for review followed.
Bartholdi maintains that the Commission's decision was arbitrary and capricious. 5 U.S.C. § 706(2)(A). Under the arbitrary and capricious standard of review, we do not "substitute [our] judgment for that of the agency." Motor Vehicle Mfrs. Ass'n of the United States, Inc. v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2866, 77 L.Ed.2d 443 (1983). Rather, we look only to see whether the agency action reflects a " 'clear error in judgment.' " Bell Atl. Tel. Cos. v. FCC, 79 F.3d 1195, 1202 (D.C.Cir.1996) (quoting Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 824, 28 L.Ed.2d 136 (1971)).
Bartholdi first contends that the Commission's rejection of the privilege claims does not reflect reasoned decisionmaking. We need not reach that issue as we conclude that Bartholdi's claims of privilege were not properly raised before the...
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