National Broadcasting Co. v. United States

• Decision Date: 02 March 1942
• Citation: 44 F. Supp. 688
• Parties: NATIONAL BROADCASTING CO., Inc., et al. v. UNITED STATES et al. (MUTUAL BROADCASTING SYSTEM, Inc., Intervener). COLUMBIA BROADCASTING SYSTEM, Inc., v. UNITED STATES (FEDERAL COMMUNICATIONS COMMISSION et al., Interveners).
• Court: U.S. District Court — Southern District of New York

44 F. Supp. 688

NATIONAL BROADCASTING CO., Inc., et al. v. UNITED STATES et al. (MUTUAL BROADCASTING SYSTEM, Inc., Intervener).

COLUMBIA BROADCASTING SYSTEM, Inc., v. UNITED STATES (FEDERAL COMMUNICATIONS COMMISSION et al., Interveners).

District Court, S. D. New York.

February 20, 1942.

Supplemental Opinion March 2, 1942.

COPYRIGHT MATERIAL OMITTED

John T. Cahill, of New York City, for National Broadcasting Company.

Charles E. Hughes, Jr., of New York City, for Columbia Broadcasting System.

Telford Taylor and Thomas E. Harris, both of Washington, D. C., for the United States and the Commission.

Louis G. Caldwell, of Washington, D. C., for Mutual Broadcasting System, Inc., Intervener.

Before L. HAND, Circuit Judge, and GODDARD and BRIGHT, District Judges.

L. HAND, Circuit Judge.

These actions were brought to declare invalid and set aside certain regulations originally promulgated by the Federal Communications Commission on May 2, 1941, and amended on October 11, 1941; in their final form they appear at the end of this opinion. After the actions were filed the Commission, on October 31, 1941, promulgated a further regulation in the form of a "minute," also appearing at the end of the opinion. Preparatory to the issuance of the regulations the Commission had held hearings at which nearly 9,000 pages of testimony were taken; among others whom it had invited to attend, were the two plaintiff "networks," which accepted and took part by introducing extensive evidence. When the regulations appeared, the "networks" brought the two actions at bar under § 402(a) of Title 47, U.S.C.A. to set them aside as beyond the powers of the Commission and as arbitrary, unreasonable and without basis in the evidence. Upon the complaints so filed and voluminous affidavits they then moved for a preliminary injunction against their enforcement pendente lite. In the action brought by the National Broadcasting Company, two "affiliated stations" have joined as parties plaintiff and the United States and the Commission were originally joined as defendants; in the action brought by the Columbia Broadcasting System it alone is plaintiff and the United States is the only defendant, but the Commission later intervened. A third "network," the Mutual Broadcasting System, intervened as a defendant in both actions. The United States and the Commission have countered the plaintiffs' motions by motions, made before answer, to dismiss the complaints for lack of jurisdiction over the subject-matter under Rule 12(b) (1), and for summary judgment under Rule 56(b), 28 U.S.C.A. following section 723c. The Mutual Broadcasting System has answered and joined in the motions of the other defendants. All these motions having come on before Judge Goddard, he assembled a court composed of three judges, to whom the hearing was transferred in accordance with the Act of October 22, 1913, 38 St.L. 219, 28 U.S.C.A. § 47.

Since we are deciding that the District Court for the Southern District of New York has no jurisdiction over the subject-matter of the actions either as a court of three judges or of one, it will not be necessary to consider the merits; nevertheless we must say something about the background of the regulations in order to make our discussion intelligible. The business of broadcasting depends for its support principally, if not altogether, upon advertising. The broadcasting is done by "stations," each "station" selecting programs which it thinks will be popular, either spoken, sung or instrumentally performed in its own studio, or relayed to it by a "network" as will appear. Interjected among these programs, occur those fervid importunities of advertisers, upon the results of which the "station" must depend for its revenue. A single "station" dependent upon its own programs alone would be very expensive to operate, and its income would be small; especially if, as has become customary, it were to add to its advertising programs what are called "sustaining programs," which are not paid for, but which are thought to give a general popularity to the "station." These circumstances have long since resulted in the creation of "networks" of the kind with which the actions at bar are concerned; that is to say, in a widespread system of contracts of a single company with separate "stations" scattered all over the Union and known as "affiliates." The plaintiffs, National Broadcasting Company and the Columbia Broadcasting System, are two such "networks;" they own and operate broadcasting "stations" of their own, but, although they depend in part upon these as outlets, their principal reliance is upon their "affiliates." They originate a great variety of programs — usually in a studio of one of their owned "stations" — which they transmit by telephone to the "affiliates" for broadcasting. The audience of such a "network" in this way becomes the aggregate of the audiences of its "affiliated stations," and this enables it to charge so much higher prices for advertising than the "affiliates" could charge alone, that both they and the "network" can divide the returns to their common advantage. There are four such national "networks," two owned by the National Broadcasting Company (one of which we are told it has disposed of since these actions were begun), another by the Columbia Broadcasting System, and the fourth by the Mutual Broadcasting System, which has intervened because it feels itself aggrieved by the practices against which the regulations in suit were directed.

Every broadcasting "station" must have a license and the Federal Communications Commission alone has power to grant, refuse, revoke, renew or modify licenses. The Commission also has "authority to make special regulations applicable to radio stations engaged in chain broadcasting." 47 U.S.C.A. § 303(i). By virtue of these powers it assumed to promulgate the regulations now challenged, all of which, it will be observed, are no more than declarations of the conditions upon which the Commission will in the future issue licenses to "stations." The defendants' motions to dismiss the complaints are based upon the theory that these regulations are not "orders" within the meaning of § 402 (a), and that therefore this court has no jurisdiction over them; indeed, that they are not "orders" of any sort, but merely announcements of the course which it will pursue in the future, whenever an "affiliated station" applies for a new license, or for the renewal of an existing one. To this the "networks" reply that the regulations had an immediate effect; that they not only announced what would be the future practice of the Commission, but presently adjudicated the invalidity of the contracts between themselves and their "affiliates;" and that they have in fact already caused serious losses, because a number of "affiliates" have declared that they will be obliged to break their contracts when their licenses are renewed, and have thus made it impossible for the "networks" to accept large and valuable advertising contracts.

We do not think that we need commit ourselves generally as to what "orders" are reviewable under the Act of October 22, 1913 (38 St.L. 219) which § 402(a) of Title 47, U.S.C.A. incorporates by reference as the measure of our jurisdiction. So far as we have found, the Supreme Court has never declared that that statute authorizes review of any decision of an administrative tribunal which neither directs anyone to do anything, nor finally adjudicates a fact to exist upon which some right or duty immediately depends. We agree that it is no answer that the decision challenged is "legislative" in character, (Chicago Junction Case, 264 U. S. 258, 263, 44 S.Ct. 317, 68 L.Ed. 667), and, as we have just implied, it is enough if it authoritatively determines the existence of a fact that at once sets in execution some sanction, though the decision itself be not in form a command. United States v. Baltimore & Ohio Railroad, 293 U.S. 454, 55 S.Ct. 268, 79 L.Ed. 587; Powell v. United States, 300 U.S. 276, 57 S.Ct. 470, 81 L.Ed. 643; Rochester Telephone Corporation v. United States, 307 U. S. 125, 59 S.Ct. 754, 83 L.Ed. 1147; American Federation of Labor v. National Labor Relations Board, 308 U.S. 401, 408, 60 S.Ct. 300, 84 L.Ed. 347. (Colorado v. United States, 271 U.S. 153, 46 S.Ct. 452, 70 L. Ed. 878; Claiborne-Annapolis Ferry Co. v. United States, 285 U.S. 382, 52 S.Ct. 440, 76 L.Ed. 808; and United States v. Idaho, 298 U.S. 105, 56 S.Ct. 690, 80 L.Ed. 1070, though they are of the same kind, are scarcely controlling, because they turned upon § 1(20) of the Interstate Commerce Act, 49 U.S.C.A. § 1(20).) But decisions which are no more than announcements of future administrative action have never, so far as we can find, been treated as within this statute. That does not necessarily imply that a person presently injured is without any remedy when the threatened action would be unlawful; the situation then may present all the elements upon which equity will intervene in ordinary course. Shields v. Utah Idaho Central Railroad Company, 305 U.S. 177, 59 S.Ct. 160, 83 L.Ed. 111. It may be that the plaintiffs at bar could bring such actions in equity; at least it does not appear that recourse to them is positively forbidden, as was for example the case in Venner v. Michigan Central, 271 U.S. 127, 46 S.Ct. 444, 70 L.Ed. 868. But even so they would not be the actions at bar, which can be brought only under the statute, since otherwise the United States cannot be sued, or the Commission sued in this district, assuming that it was in any event possible to join it at all. Such actions would have to depend jurisdictionally upon the same facts as any other action against a public officer who threatens to do an unlawful act.

We should therefore have a great deal of doubt whether the regulations could in any view be regarded as "orders" which we could review under the Act of October 22, 1913, 38 St.L. 219, if the...