Eastland Co. v. Federal Communications Commission

• Decision Date: 28 June 1937
• Docket Number: 6773.,No. 6772,6772
• Citation: 67 App. DC 316,92 F.2d 467
• Parties: EASTLAND CO. v. FEDERAL COMMUNICATIONS COMMISSION (PORTLAND BROADCASTING SYSTEM, Intervener). CONGRESS SQUARE HOTEL CO. v. SAME.
• Court: U.S. Court of Appeals — District of Columbia Circuit

67 App. DC 316, 92 F.2d 467 (1937)

EASTLAND CO. v. FEDERAL COMMUNICATIONS COMMISSION (PORTLAND BROADCASTING SYSTEM, Intervener).

CONGRESS SQUARE HOTEL CO. v. SAME.^*

Nos. 6772, 6773.

United States Court of Appeals for the District of Columbia.

Decided June 28, 1937.

Paul M. Segal and George S. Smith, both of Washington, D. C., for appellants.

Arthur W. Scharfeld and Philip G. Loucks, both of Washington, D. C., for intervener.

Hampson Gary, George B. Porter, Fanney Neyman and Frank U. Fletcher, all of Washington, D. C., for appellees.

Before MARTIN, Chief Justice, and ROBB, VAN ORSDEL, GRONER, and STEPHENS, Associate Justices.

MARTIN, Chief Justice.

These appeals are brought under sections 402 (b) and (c) of the Communications Act of 1934, 48 Stat. 1064, 1093 (47 U.S.C.A. § 402 (b, c), relating to the granting by the Federal Communications Commission of licenses for the construction and operation of radio broadcasting stations. The authority of this court in such cases is defined by subsection (e), § 402 of the act (47 U.S.C.A. § 402 (e) as follows: "that the review by the court shall be limited to questions of law and that findings of fact by the Commission, if supported by substantial evidence, shall be conclusive unless it shall clearly appear that the findings of the Commission are arbitrary or capricious."

The decision of the Commission in the cases now upon appeal relates to certain applications of the Portland Broadcasting System, Inc., hereinafter called the Portland System, the Eastland Company, and the Congress Square Hotel Company, as intervener, for licenses permitting the use of broadcasting frequency 640 kc. for limited time of operation.

In addition to these applications, ten others involving numerous requests and proposals relating to broadcasting frequency 640 kc. were heard and denied by the Commission concurrently with those herein appealed. No appeal, however, was taken in any of the other ten applications. The present hearing therefore is confined to the appeals wherein the Eastland Company and the Congress Square Hotel Company, respectively, are appellants, in both of which the Portland System is appellee.

On April 5, 1934, the Portland System, a Maine corporation, applied to the Commission for authorization to construct a new radio station at the city of Portland, Me., for unlimited daytime operation upon frequency 640 kc., with 500 watts power, "call letters new."

On August 3, 1934, the Eastland Company, also a Maine corporation, applied to the Commission for authorization to construct a new radio station at the city of Portland, Me., for unlimited daytime operation upon frequency 640 kc., power 100 watts, "call letters new."

At the time in question the Congress Square Hotel Company was the owner and licensee of an existing radio broadcasting station at Portland, Me., known by the call letters WCSH, it being the only broadcasting station in Portland at that time. It operated upon frequency 940 kc., with power of 1 kw. nighttime, 2½ kw. daytime, and unlimited hours of operation. This station, which was owned by the Eastland Company, opposed the granting of the application of the Portland System for authority to construct a new broadcasting station at Portland, and it has appealed from the Commission's order granting such application. The appeal of station WCSH is based chiefly upon the ground that such a station would unjustly prejudice the broadcasting patronage of that station.

It may be noted that the contestants both apply for authorization to use frequency 640 kc. in the stations proposed by them. This is a clear channel under the Commission's Rule 72, that is a channel upon which only a single station is permitted to operate during night hours. During daylight hours, however, it is possible to allow duplication on such a frequency, inasmuch as (according to the theories of those learned in the art) the so-called sky-wave or ray, which is reflected in the upper atmosphere during the night hours, does not return to earth with sufficient intensity to cause interference. Such stations are designated by Rule 77 of the Commission as "limited time" stations. The frequency 640 kc. was regularly assigned by the Commission to broadcasting station KFI, located at Los Angeles, Cal., and accordingly the applications herein in question were for daytime operation only.

The Commission, after hearing the present applications, granted that of the Portland System, denied that of the Eastland Company, and concurrently overruled the objection of the Congress Square Hotel Company. The present appeals were then taken.

The brief of the appellants sets out four contentions in support of their appeals. The first of these reads as follows: "1. The order and decision of the Broadcasting Division are invalid as having been made by a division of the Commission, the majority of which neither heard the evidence nor passed upon a report thereof."

Upon an examination of the record we are convinced that this contention must be overruled.

Under section 4 (a) of the Communications Act, supra (47 U.S.C.A. § 154 (a), it is provided that the Federal Communications Commission shall be composed of seven commissioners. Under section 5 (a) (47 U.S.C.A. § 155 (a), it is provided that the Commission is authorized by its order to divide the members thereof into not more than three divisions, each to consist of not less than three members, and that any commissioner may be assigned to and may serve upon such division as the Commission may direct; and in case of a vacancy in any division the chairman of the Commission may temporarily serve. By section 5 (b) of the act (47 U.S.C.A. § 155 (b) it is provided that the Commission may assign or refer any of its work or functions to any of such divisions for action thereon. By section 5 (c) of the act (47 U.S.C.A. § 155 (c) it is provided that each division so constituted shall have power and authority by a majority thereof to hear and determine as to any of the work or functions assigned to it for action by the Commission, and shall have all the jurisdiction and power conferred by law upon the Commission and be subject to the same duties and obligations, and that any decision made by such division in respect of any matter so assigned to it shall have the same force and effect as if made by the Commission.

Under Commission Order No. 1, passed July 17, 1934, Commissioners Gary, Brown, and Sykes were assigned for duty on the Broadcasting Division, and served as such when the applications involved in this case came on for hearing, to wit, from October 22 to November 2, 1934. On January 1, 1935, Commissioner Gary resigned, and was succeeded by Commissioner Prall. On March 9, 1935, Commissioner Brown was assigned to the Telegraph Division, and was succeeded as a member of the Broadcasting Division by Commissioner Case. The applications involved in this case were decided on May 1, 1936, by the Broadcasting Division composed of Commissioners Sykes, Case, and Prall.

The record discloses that oral testimony was introduced in the case beginning October 22, 1934 and that afterwards various depositions and publications were introduced as evidence in the case. Accordingly on May 1, 1936, the Division which entered the decision in the case was composed of commissioners who had not heard the oral testimony but nevertheless had been members of the Division for more than a year prior to the date of the decision, and during that time the stenographic reports of the oral testimony and copies of the written evidence were all in their possession and under consideration by them.

No question is raised by the appellants as to lack of notice, or opportunity to present evidence and file briefs or as to the manner in which the hearing itself was conducted. The appellants were accorded ample and timely notice and a full opportunity to be heard. The commissioners who entered the decision report that they had fully considered the evidence and the entire record of the case.

The contention of appellants is that they were entitled to have their case passed upon by the identical members of the Broadcasting Division who sat at the presentation of all of the evidence in the case, and that the procedure followed amounted to a denial of a lawful hearing and trial of the case, inasmuch as two members who joined in the decision did not hear the oral evidence when delivered by the witnesses in person.

In our opinion the partial change in the personnel of the Division which decided the case did not invalidate its decision, for it was nevertheless the decision of the Division which acted upon the evidence.

In section 4, subsection (j), of the act, supra (47 U.S.C.A. § 154 (j), it is provided that: "The Commission may conduct its proceedings in such manner as will best conduce to the proper dispatch of business and to the ends of justice. No commissioner shall participate in any hearing or proceeding in which he has a pecuniary interest. Any party may appear before the Commission and be heard in person or by attorney. Every vote and official act of the Commission shall be entered of record, and its proceedings shall be public upon the request of any party interested. The Commission is authorized to withhold publication of records or proceedings containing secret information affecting the national defense."

Rule 106.8 of the Commission provides as follows: "106.8 Except as otherwise provided herein, the rules of evidence governing civil proceedings in the courts of the United States shall govern formal hearings before the Commission; Provided, however, That the Commission reserves the right to relax such rules in any case where in its judgment the ends of justice will be better served by so doing."

It is provided by sections 409 (a) and (e) of the act, supra (47 U.S.C.A. § 409 (a, e), as follows: "§ 409. (a) Any member or examiner of the Commission, or the director of any division, when duly designated...