Contemporary Media v. Fed. Commun. Comm'n, 99-1198
| Decision Date | 16 June 2000 |
| Docket Number | No. 99-1198,99-1198 |
| Citation | 214 F.3d 187 |
| Parties | (D.C. Cir. 2000) Contemporary Media, Inc., et al., Appellants v. Federal Communications Commission, Appellee Appeal of an Order of the Federal Communications Commission |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
Appeal of an Order of the Federal Communications Commission
Howard J. Braun argued the cause for appellants. With him on the briefs were Jerold L. Jacobs and Shelley Sadowsky.
Lisa A. Burns, Counsel, Federal Communications Commission, argued the cause for appellee. With her on the brief were Christopher J. Wright, General Counsel, and Daniel M. Armstrong, Associate General Counsel.
Before: Silberman, Henderson, and Garland, Circuit Judges.
Opinion for the Court filed by Circuit Judge Garland.
Three radio licensees appeal the Federal Communications Commission's (FCC's) revocation of their licenses and construction permits, as well as its denial of their application for a new station. The FCC took those actions after the licensees' sole owner and president was convicted of sexually abusing children, and after the licensees made misrepresentations to the Commission about the owner's continued involvement in station affairs. In the end, the case is no more difficult than this recitation of the facts suggests, and we therefore affirm the FCC in all respects.
The appellant licensees own and operate five radio stations in Missouri and Indiana, hold two construction permits for radio stations in Missouri, and have an application pending for another Missouri station. Michael Rice is the sole shareholder, president, and treasurer of all three licensees and serves on each licensee's board of directors. In November 1990, Rice was arrested for criminal conduct involving sexual acts with a teenager. In April of the following year, he was formally charged with three felony counts of sexual assault on an individual between fourteen and sixteen years of age. The prosecutor subsequently amended the charges to include eight felony counts of sexual assault on individuals between fourteen and sixteen years of age, and four felony counts of forcible sodomy of individuals under fourteen years of age.The sexual abuse involved five children and occurred between December 1985 and October 1990. Two days after the charges were filed, Rice checked himself into a St. Louis hospital for in-patient psychiatric treatment.
In June 1991, two of the licensees filed reports notifying the FCC of the charges against Rice. The reports were filed pursuant to 47 C.F.R. 165(a), which requires FCC license applicants to maintain "the continuing accuracy and completeness of information furnished" in pending applications. Each report stated that:
Since Mr. Rice's hospitalization on April 3, 1991, he has had absolutely no managerial, policy, or consultative role in the affairs of the three broadcast corporations in which he has ownership interests and officer positions. In other words, pending a resolution of the referenced criminal charges, Mr. Rice is being completely insulated and excluded from any involvement in the managerial, policy, and day-to-day decisions involving any of the four licensed stations and three construction permits held by the three corporations.
J.A. at 15-16, 120 (citation omitted). In October 1991, Rice was discharged from the hospital. On May 14, 1992, one of the licensees filed another report with the FCC, stating:
There has been no change in Mr. Rice's status with [there porting licensee] or in the status of the proceedings against him.... Mr. Rice is no longer hospitalized, but he continues to be treated by his physicians as an outpatient, and he continues to have no managerial or policy role in the affairs of the three broadcast corporations ... in which he has ownership interests and corporate positions.
Id. at 126-27 (citation omitted).
On August 31, 1994, Rice was convicted of all twelve felony counts against him: four counts of forcible sodomy, six counts of deviate sexual assault in the first degree, and two counts of deviate sexual assault in the second degree. The court sentenced him to a total of eighty-four years in prison. Because the sentences were set to run concurrently, his maximum term of confinement amounted to eight years. Rice began his incarceration on September 30, 1994, and is currently eligible for release.
On October 10, 1995, the FCC ordered an evidentiary hearing at which the licensees were directed to show cause why their licenses and construction permits should not be revoked and their pending application denied. The central issues at the hearing were: (1) the effect of Rice's felony convictions on the basic character qualifications of the licensees, and (2) whether the licensees had misrepresented to the FCC that, subsequent to his arrest, Rice had been excluded from the management and operation of the stations. After the hearing, the Administrative Law Judge (ALJ) concluded that revocation of the licensees' authorizations was appropriate due to the egregious nature of Rice's misconduct and to the misrepresentations made by the licensees in their reports to the Commission. The FCC affirmed.
The licensees' appeal raises a number of challenges, which we address in turn. First, they challenge the legality of the character policy upon which the FCC's decision was based. We must sustain that policy unless we find it to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Administrative Procedure Act (APA), 5 U.S.C. 706(2)(A); see ACLU v. FCC, 823 F.2d 1554, 1574 (D.C. Cir. 1987).1
Section 308(b) of the Federal Communications Act provides that "[a]ll applications for station licenses, or modifications or renewals thereof, shall set forth such facts as the Commission by regulation may prescribe as to the citizenship, character, ... and other qualifications of the applicant to operate the station." 47 U.S.C. 308(b). For many years, the FCC had no express policy concerning the character qualifications of its applicants; the Commission considered a wide range of factors in evaluating character, and as a consequence its evaluations sometimes yielded inconsistent results. See Policy Regarding Character Qualifications in Broadcast Licensing, 87 F.C.C.2d 836, 836-37 (1981) (notice of inquiry). The Commission responded to this problem in 1986 with the adoption of a comprehensive character policy statement. See Policy Regarding Character Qualifications in Broadcast Licensing, 102 F.C.C.2d 1179 (1986) [hereinafter 1986 Character Policy Statement]. The statement announced that the FCC's character analysis would focus on "misconduct which violates the Communications Act or a Commission rule or policy, and ... certain specified non-FCC misconduct which demonstrate[s] the proclivity of an applicant to deal truthfully with the Commission and to comply with [its] rules and policies." Id. at 1190-91. The relevant non-FCC misconduct was limited to adjudicated cases involving: fraudulent representations to government agencies, criminal false statements or dishonesty, and broadcast-related violations of antitrust laws or other laws concerning competition. See id. at 1195-1203. The FCC noted, however, that "there may be circumstances in which an applicant has engaged in nonbroadcast misconduct so egregious as to shock the conscience and evoke almost universal disapprobation." Id. at 1205 n.60. "Such misconduct," the Commission stated, "might, of its own nature, constitute prima facie evidence that the applicant lacks the traits of reliability and/or truthfulness necessary to be a licensee, and might be a matter of Commission concern even prior to adjudication by another body." Id.2 The 1986 statement also listed mitigating factors that the Commission would consider in evaluating specific acts of misconduct. See id. at 1227-28.
In 1990, the FCC determined that its 1986 policy had taken "an overly narrow view of the range of misconduct that should be relevant in licensing decisions." Policy Regarding Character Qualifications in Broadcast Licensing, 5 F.C.C.R. 3252, 3252 (1990) [hereinafter 1990 Character Policy Statement]. It therefore amended that policy with a new statement, which explained:
[U]pon further reflection, we believe a propensity to comply with the law generally is relevant to the Commission's public interest analysis, and that an applicant's or licensee's willingness to violate other laws, and, in particular, to commit felonies, also bears on our confidence that an applicant or licensee will conform to FCC rules and policies.... Thus, evidence of any conviction for mis-conduct constituting a felony will be relevant to our analysis of an applicant's or licensee's character.
Id. The FCC further stated that although "not all convictions for serious crimes are equally probative" of propensity to obey the law, it would not "establish a 'hierarchy' of felonies that may arise in individual cases." Id. Rather, the Commission would analyze misconduct on a case-by-case basis through the examination of mitigating factors. As in 1986, the Commission stated that for non-FCC conduct it generally would consider only adjudicated cases. However, it "continue[d] to believe that, where an applicant has allegedly engaged in nonbroadcast misconduct 'so egregious as to shock the conscience and evoke almost universal disapprobation,' such conduct 'might be a matter of Commission concern even prior to adjudication by another body.' " Id. at 3252 n.5 (quoting 1986 Character Policy Statement, 102 F.C.C.2d at 1205 n.60).
The licensees' challenge to the legitimacy of the current character policy is threefold. First, they contend that there is "no justification for license revocation based on non-FCC related criminal misconduct of a licensee's principal, even if such...
To continue reading
Request your trial
-
Ruggiero v. F.C.C.
...denial of application for new license because principal had been convicted of sexual abuse of children), aff'd, Contemporary Media, Inc. v. FCC, 214 F.3d 187, 193 (D.C.Cir.2000). Therefore, we can hardly say the Congress was prohibited by the First Amendment from responding to the discrete ......
-
Sault Ste. Marie Tribe of Chippewa Indians v. Bernhardt
...these statutory requirements." Id. at 872. Congress has enacted other schemes that rely on self-policing. See Contemporary Media, Inc. v. FCC , 214 F.3d 187, 193 (D.C. Cir. 2000) ("The FCC relies heavily on the honesty and probity of its licensees in a regulatory system that is largely self......
-
Global Network Communications v. City of New York
...applicants, the Commission takes account of such matters in exercising its own regulatory authority." E.g. Contemporary Media, Inc. v. FCC, 214 F.3d 187 (D.C.Cir.2000). On February 27, 2006 plaintiff moved, pursuant to Federal Rule of Appellate Procedure 8(a)(2), for a preliminary injunctio......
-
Biltmore Forest Broadcasting Fm, Inc. v. F.C.C.
...the facts in its application is not supported by substantial evidence in the record. See 5 U.S.C. § 706(2)(E); Contemporary Media, Inc. v. FCC, 214 F.3d 187, 194 (D.C.Cir.2000). Commission precedent establishes that misrepresentation can be either intentional or grounded in "an indifference......