Dickinson v. COSMOS BROADCASTING CO., INC.

• Decision Date: 03 November 2000
• Parties: William L. DICKINSON et al. v. COSMOS BROADCASTING COMPANY, INC., et al.
• Court: Alabama Supreme Court

782 So.2d 260

William L. DICKINSON et al. v. COSMOS BROADCASTING COMPANY, INC., et al.

1981551.

Supreme Court of Alabama.

November 3, 2000.

Walter R. Byars of Steiner-Crum, Byars & Main, P.C., Montgomery; Jere L. Beasley, Rhon E. Jones, and Delacie Hester of Beasley, Allen, Crow, Methvin, Portis & Miles, P.C., Montgomery; and Roger S. Morrow of Morrow, Romine & Pearson, Montgomery, for appellants.

C.C. Torbert, Jr., and Peter S. Fruin of Maynard, Cooper & Gale, Montgomery; and Carter G. Phillips of Sidley & Austin, Washington, D.C., for appellees Cosmos Broadcasting Corp.; Television Muscle Shoals, Inc.; Gliddens Holdings, Inc.; Clear Channel Communications, Inc.; Alabama Telecasters, Inc.; Montgomery Alabama Channel 32 Operating Ltd. Partnership; Beacon Broadcasters, Ltd.; Burnham Broadcasting Corp.; Burnham Broadcasting Co., L.P.; RKZ Television, Inc.; Capstar Broadcasting; Morris Network of Alabama, Inc.; Smith Broadcasting, Inc.; New York Times Broadcasting Service, Inc.; Birmingham Television Corp.; M.G. Broadcasting of Birmingham, Inc.; Citicasters, Co.; H & R Broadcasting Corp. of Birmingham, Inc.; Birmingham Broadcasting (WVTM-TV), Inc.; and Relway Limited Partnership.

Robert S. Vance, Jr., and James P. Pewitt of Johnston, Barton, Proctor & Powell, L.L.P., Birmingham, for appellees Birmingham Broadcasting (WVTM-TV), Inc., and M.G. Broadcasting of Birmingham, Inc.

Benjamin R. Rice of Spurrier, Rice, Wood & Hall, Huntsville, for appellee Smith Broadcasting, Inc.

John N. Pappanastos of Pappanastos, Wilson & Assocs., P.C., Montgomery, for appellee Alabama Telecasters, Inc.

David W. Ogden, acting asst. atty. gen.; Redding Pitt, United States Attorney, Montgomery; Kenneth E. Vines, asst. United States attorney, Montgomery; and Douglas Hallward-Driemeier, Department of Justice, Washington, D.C., for amicus curiae Federal Communications Commission, in support of the appellees.

LYONS, Justice.

William L. Dickinson and the other plaintiffs in an action filed in the Montgomery Circuit Court appeal from that court's final order dismissing the action for lack of subject-matter jurisdiction. We affirm.

I. Factual Background

The plaintiffs, William L. Dickinson and 18 other Alabama political candidates and campaign committees for state or federal elected office (hereinafter "the candidates"),¹ sued various television-broadcast stations² alleging breach of contract; negligence, wantonness, or willfulness; money had and received; misrepresentation; and fraudulent suppression. Each claim arises from the purchase of advertising time on the defendant television stations preceding the primary and general elections of 1986, 1988, and 1990. The contract and tort claims allege that the television stations failed to fulfill the terms of their contracts with the candidates and violated federal law by charging more than the "lowest unit charge."

Each candidate signed a form contract printed by the National Association of Broadcasters, in order to advertise on the television stations. This contract included the following language:

"It is my understanding that: If the time is to be used by the candidate himself within 45 days of a primary or primary runoff election, or within 60 days of a general or special election, the above charges represent the lowest unit charge of the station for the same class and amount of time for the same period.... It is agreed that use of the station for the above-stated purposes will be governed by the Communications Act of 1934, as amended, and the FCC's rules and regulations, particularly those provisions reprinted on the back hereof, which I have read and understand."

(Emphasis added.) As stated in the contract, various provisions of the Communications Act of 1934 are listed on the back of the contract. One of those provisions, 47 U.S.C. § 315(b), contains the statutory requirement that television stations charge the "lowest unit charge" for political-campaign advertisements during the prescribed periods before elections.

The "lowest-unit-charge" requirement is not only an element of the contracts between the candidates and the stations, but is imposed upon federally regulated broadcasters as part of a comprehensive statutory and regulatory scheme to provide legally qualified candidates for political office with reasonable and affordable access to the airwaves. See 47 U.S.C. § 315(a) et seq.;³ S.Rep. No. 96, 92d Cong., 1st Sess. (1971), reprinted in 1972 U.S. Cong. & Ad. News 1773. The "lowest unit charge" is a calculation of a station's advertising rates determined by analyzing a multitude of factors, such as "most favored" advertiser rates, classes of time, rotation schedules, rebates, package plans, "make good" times, sold out times, and other components used to determine broadcast advertising rates. See In re Codification of the Commission's Political Programming Policies, 7 F.C.C.R. 678 (1991).

Like many other ratemaking procedures, determining the "lowest unit charge" is a complex process. Congress specifically designated the Federal Communications Commission ("FCC") to enforce "lowest-unit-charge" compliance "because [the FCC] has the expertise necessary to make such determinations based upon its understanding of the complex and often arcane practices of the broadcast advertising industry." In re: Exclusive Jurisdiction with Respect to Potential Violations of the Lowest Unit Charge Requirements of Section 315(b) of the Communications Act of 1934, as Amended, 6 F.C.C.R. 7511 ¶ 15 (1991), on reconsideration, 7 F.C.C.R. 4123 (1992) ("1991 FCC Declaratory Ruling").

In response to this lawsuit and to other similar litigation, the FCC initiated proceedings to consider: (1) whether claims that involve "lowest unit charges" and other elements of § 315(b) compliance fell under the exclusive original jurisdiction of the FCC, pursuant to its authority to enforce § 315(b), or (2) whether the claims were properly to be brought in a state court or in a federal court. See Notice of Intention to Issue Declaratory Ruling with Respect to Exclusive Authority of FCC to Determine Whether Broadcasters Have Violated Lowest Unit Charge Requirement of Section 315(b), 6 F.C.C.R. 5954 ¶¶ 2-6 (1991).

The FCC has broad regulatory authority over broadcasters. Since the enactment of the Communications Act of 1934, the FCC has been charged with the responsibility for enforcing federal policy in the broadcasting field.

"Federal regulation of broadcasting, whether by radio or television, is comprehensive. By the Communications Act's licensing provision federal law governs who may broadcast and over what frequencies. Under that statute and the regulations adopted pursuant to it, broadcast licenses may be issued only after the Federal Communications Commission (FCC) determines that issuance is in the public interest. Licensees' broadcasting discretion is subject to a number of important limits such as the personal attack rule, the fairness doctrine, the prime-time access rule, and the equal opportunity rule. Federal regulations also govern billing for media advertising, refusal to sell advertising time, sponsorship information, alcoholic beverage advertising, amounts of commercial time, penalties for false, misleading, or deceptive advertising, loudness of commercials, and the number of commercials permitted during a given program."

KVUE, Inc. v. Moore, 709 F.2d 922, 932 (5th Cir.1983), aff'd, 465 U.S. 1092, 104 S.Ct. 1580, 80 L.Ed.2d 114 (1984) (internal footnotes omitted).

Many of the parties to this lawsuit contributed their opinions during a notice and comment period. Afterwards, the FCC issued the 1991 FCC Declaratory Ruling, in which it declared:

"[A]ny state cause of action dependent on any determination of the lowest unit charge under Section 315(b) of the Communications Act, or of some other duty arising under that subsection, is preempted by federal law. The sole forum for adjudicating such matters shall be this Commission."

6 F.C.C.R. 7511 ¶ 1. The FCC, fearing that various courts could interpret the requirements of § 315(b) in disparate ways and thus thwart the goal of a unified regulatory system for the broadcast industry, declared that it would be the sole forum in which to bring such a claim. Id. at ¶ 7. The intention was to prevent piecemeal and potentially contradictory resolution of disputes involving the computation of the "lowest unit charge."

II. Overview

Our analysis of this case must necessarily involve two distinct steps. The first is to determine whether the candidates' claims are dependent upon or arise from a determination of § 315(b). We find the candidates' claims are dependent upon or arise from § 315(b). The second is to determine the jurisdictional consequences of the fact that the candidates' claims are dependent upon or arise from § 315(b). We find the 1991 FCC Declaratory Ruling ousts Alabama courts of jurisdiction and creates jurisdiction exclusively with the FCC. We are persuaded that the 1991 FCC Declaratory Ruling is an "order" subject to challenge only in a United States Court of Appeals. Thus, this Court cannot entertain a collateral attack on its validity. However, even if the 1991 FCC Declaratory Ruling were not an "order," as the candidates argue before us, we conclude that the Declaratory Ruling is a properly exercised regulatory interpretation by the FCC and therefore subject to judicial deference.

III. The Relation of the Claims to Section 315(b)

The first question this Court must address is whether the candidates' claims are dependent on, or arise from, a duty imposed by § 315(b), and thus lie within the ambit of the 1991 FCC Declaratory Ruling. If the candidates' five counts are standard contract and tort claims and are not dependent on, or do not arise from, a duty imposed by § 315(b), then the FCC does not have jurisdiction over the matter. See The Law of Political Broadcasting and Cablecasting: A Political Primer, 100 F.C.C.2d 1476 (1984) (...