Huddy v. Fed. Commun Comm'n

• Decision Date: 19 January 2001
• Docket Number: No. 00-1089,00-1089
• Parties: (D.C. Cir. 2001) John D. Huddy, Appellant v. Federal Communications Commission, Appellee Biltmore Broadcasting, LLC, Intervenor
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 720

236 F.3d 720 (D.C. Cir. 2001)

John D. Huddy, Appellant v. Federal Communications Commission, Appellee

Biltmore Broadcasting, LLC, Intervenor

No. 00-1089

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 5, 2000

Decided January 19, 2001

Appeal of an Order of the Federal Communications Commission

Gene A. Bechtel argued the cause and filed the briefs for appellant.

Roberta L. Cook, 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. Gregory M. Christopher, Counsel, entered an appearance.

Daniel E. Troy argued the cause for intervenor Biltmore Broadcasting, LLC. With him on the brief were Richard J. Bodorff and E. Joseph Knoll III.

Before: Williams, Ginsburg and Garland, Circuit Judges.

Opinion for the Court filed by Circuit Judge Williams.

Stephen F. Williams, Circuit Judge:

John D. Huddy petitions for review of a Federal Communications Commission decision denying his request for a hearing on his challenges to the assignment of a television broadcast license. We dismiss for lack of standing.

Huddy is the sole shareholder of Riklis Broadcasting Corporation, the former owner and licensee of TV station KADY. In July 1996 Riklis entered involuntary bankruptcy and a trustee was appointed to manage the corporation's estate. The FCC consented to an involuntary transfer of the KADY license to the trustee, who proceeded to auction off the station. John Cobb emerged as the highest bidder. On the trustee's endorsement of his creditworthiness, the bankruptcy court approved the sale. Cobb assigned his purchase rights to Biltmore Broadcasting, of which he is the controlling principal.

In November 1997 Biltmore applied for FCC approval of assignment of the license. Huddy filed a petition asking for a hearing, claiming that Cobb had falsely certified his financial qualifications to the FCC. In support, he asserted that in a phone conversation Cobb had said that he hadn't yet secured funding for the purchase. Cobb responded that Huddy misunderstood his remarks and that he told Huddy only that he had not chosen which of various means of financing he would use. Cobb also struck back, alleging that during the same call Huddy threatened to oppose Cobb's license application unless the latter assisted Huddy in his claims against the Riklis bankruptcy estate. Huddy later added a charge that Cobb had assumed control of KADY before FCC approval of the transfer, in violation of Commission rules. The trustee answered with an affidavit saying that in the relevant period he (the trustee) had controlled all business decisions at KADY.

The FCC ultimately approved the assignment, and on July 1, 1998 the purchase of the television station was consummated. After twice petitioning the FCC to rethink its decision and each time being rebuffed, Huddy sought review here.

To be heard on the merits Huddy must first satisfy the three elements of constitutional standing: injury in fact, causation, and redress-ability. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). These elements roughly correspond to the following questions: has Huddy asserted a present or expected injury that is legally cognizable and non-negligible, did the agency's actions materially increase the probability of injury, and will the remedy sought compensate Huddy or materially reduce the expected harm? To satisfy these requirements Huddy asserts two interests--one as a viewer of KADY and the other as a residual claimant of the bankruptcy estate who would benefit financially if the KADY license were returned to the trustee and re-auctioned. We address each claim in turn.

As a resident of the service area and a viewer of the station, Huddy can assert a possible injury to a legally protected interest. Under our precedents listeners or viewers may serve as "spokesmen" for a station's entire audience. See Office of Communication of the United Church of Christ v. FCC, 359 F.2d 994, 1002 (D.C. Cir. 1966).

But Huddy's theory breaks down on causation. At best he raises concerns about Cobb's integrity with respect to the Commission's rules regarding future licensees' behavior in financial matters and to pre-acquisition station control. But he makes no effort to link these business behavior issues with plausible predictions about Cobb's likely programming decisions. To be sure, in the interests of "preserv[ing] the integrity" of its operations, FCC v. WOKO, Inc., 329 U.S. 223, 228 (1946); see also id. at 226 (noting Commission authority under 47 U.S.C. § 312(a)), the Commission is entitled to consider a would-be licensee's deceptive behavior as grounds for rejecting an application, id., and even to make denial of a license virtually automatic on evidence of intentional misrepresentations in license applications, see, e.g., In re Opal Chadwell, Dorothy O. Schulze and Deborah Brigham, Blanco Communications, Ltd., 2 FCC Rcd. 5502 at p 14 (1987). Presumably the Commission adopts such sanctions in the interests of good broadcasting--i.e., where it believes they will have a sufficiently favorable effect on broadcasting, in the long run, to justify the various costs of imposing them. But the run may be long indeed. So the authority of the Commission to apply such sanctions doesn't ipso facto support an inference that FCC under enforcement of financial integrity policies is likely to cause the sort of "material impairment of [a viewer's] hopes or expectations" that is needed to support standing. Jaramillo v. FCC, 162 F.3d 675, 677 (D.C. Cir. 1998).

Indeed, we've already held that the Commission's failure to inflict pecuniary penalties on a licensee for an isolated breach of the Commission's program-related requirements does not increase the probability of future violations enough to afford a listener standing to insist that it pursue those penalties. Branton v. FCC, 993 F.2d 906, 909 (D.C. Cir. 1993). Huddy's claim is, of course, stronger in the sense that the relief sought would knock out Cobb altogether. But it is weaker in that Huddy shows no logical link between the FCC's overlooking Cobb's alleged business misconduct and a materially increased risk that KADY's programming will not advance the public interest. Rather than offer some affirmative reason to think that FCC neglect of Cobb's alleged improprieties materially increases the risks of harm to listeners, Huddy relies only on the always available supposition that it just might. If that were enough to show standing, listeners could always challenge any under enforcement of any license-related provision of communications law. Jaramillo, 162 F.3d at 677.

Huddy's theory here is quite a stretch from prior cases allowing listener standing. In United Church of Christ, for instance, listeners sought denial of license renewal on the ground that a TV licensee had failed to "give a fair and balanced presentation of controversial issues, especially those

concerning Negroes," and thus violated the Fairness Doctrine, 359 F.2d at 998-99, 1000, a (now-defunct) Commission policy expressly directed at broadcasting content. See...