RKO General, Inc. v. F.C.C.
| Citation | 670 F.2d 215,216 U.S.App.D.C. 57 |
| Decision Date | 04 December 1981 |
| Docket Number | Nos. 80-1696,s. 80-1696 |
| Parties | , 7 Media L. Rep. 2313 RKO GENERAL, INC., Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Multi-State Communications, Inc., Intervenor. RKO GENERAL, INC., Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Fidelity Television, Inc., Multi-State Communications, Inc., Intervenors. RKO GENERAL, INC., Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Fidelity Television, Inc., New England Television Corporation, Dudley Station Corporation, Multi-State Communications, Inc., Community Broadcasting of Boston, Inc., Intervenors. to 80-1698. |
| Court | United States Courts of Appeals. United States Court of Appeals (District of Columbia) |
J. Roger Wollenberg, Washington, D. C., with whom Joel Rosenbloom, A. Douglas Melamed, Barbara S. Wellbery, Bruce D. Ryan, W. Theodore Pierson, Harold David Cohen, William H. Fitz, Jack N. Goodman, Washington, D. C., and William E. Willis, New York City, were on the brief, for appellant.
L. Andrew Tollin, Counsel, F.C.C., Washington, D. C., with whom Marjorie S. Reed, Acting Gen. Counsel, David J. Saylor, Deputy Gen. Counsel, Daniel M. Armstrong, Associate Gen. Counsel, Lee J. Peltzman, Sue Ann Preskill and Linda L. Oliver, Counsel, F.C.C., Washington, D. C., were on the brief, for appellee.
Eugene F. Mullin, Washington, D. C., with whom B. Shelby Baetz, Nathaniel F. Emmons and Howard A. Topel, Washington, D. C., were on the brief, for intervenor, Fidelity Television, Inc., in Nos. 80-1697 and 80-1698.
Joseph M. Morrissey, Washington, D. C., was on the brief, for intervenor, Multi-State Communications, Inc., in Nos. 80-1696, 80-1697 and 80-1698.
Philip Elman, Terry F. Lenzner, James H. Davis, Joseph F. Hennessey, Edward Hayes, Jr., and Jay E. Ricks, Washington, D. C., were on the joint brief, for intervenors, New England Television Corporation, et al., in No. 80-1698.
Before TAMM, MIKVA and EDWARDS, Circuit Judges.
Opinion for the Court filed by Circuit Judge MIKVA.
The Federal Communications Commission (FCC) denied renewal of television licenses to RKO General, Inc. (RKO) in Boston, Los Angeles, and New York City. Renewal of the Boston license was denied because of a finding that RKO lacked the requisite character RKO is a wholly owned subsidiary of General Tire & Rubber Company (General Tire). 1 General Tire, by its own admission, has engaged in a staggering variety of corporate misconduct. During the Boston proceeding, RKO withheld evidence of General Tire's conduct from the FCC, either because RKO sought to protect its parent or because the parent withheld information from the subsidiary in order to protect itself. The Commission, in turn, has disqualified RKO after years of delay in an opinion that is multifarious at best. We reject most of the grounds that the FCC used to justify its denial of RKO's license renewals. We affirm the Commission's decision that RKO lacked candor, but on a quite narrow ground that cannot automatically be applied to any other proceeding. Accordingly, although we uphold denial of the Boston license renewal, the proceedings in Los Angeles and New York City must be remanded.
to be a licensee of that station. The denial of license renewals in Los Angeles and New York City followed from the Commission's earlier determination that the Boston finding would be res judicata in those proceedings.
The need for a remand and further action by the Commission is discomfiting in a fifteen-year-old case, but this extended proceeding has hardly been a model for the administrative process. We admonish all parties to get on with the task.
Extraordinary as it may seem, this case had its beginning in 1965, when RKO petitioned to renew its license for KHJ-TV in Los Angeles. The petition was opposed by a competing applicant on a variety of grounds, including the allegation that RKO had engaged in reciprocal trade practices. 2 A comparative hearing on the two applications led to a Commission finding in 1973 in favor of RKO, 3 subject to further findings on the reciprocity issue 4 in the Boston proceeding discussed below. A fuller history of these events may be found in Fidelity Television, Inc. v. FCC, 515 F.2d 684 (D.C.Cir.), cert. denied, 423 U.S. 926, 96 S.Ct. 271, 46 L.Ed.2d 253 (1975), which affirmed the Commission's decision.
In the meantime, other competing applicants had challenged RKO's license renewal application for WNAC-TV in Boston. RKO General, Inc. (WNAC), 20 F.C.C.2d 846 (1969). The FCC also designated a reciprocity With renewals in New York and Los Angeles conditioned upon its outcome, the Boston proceeding took on special importance. An Administrative Law Judge issued an initial decision in that proceeding on June 21, 1974, granting renewal to RKO despite affirmative findings as to RKO's reciprocal trade practices. 6 Exceptions and reply pleadings were then filed before the Commission in response to that initial decision. Before the FCC could act on these administrative appeals, however, RKO's parent corporation found itself enmeshed in an investigation by the Securities and Exchange Commission (SEC) that would greatly impact RKO's petitions to the FCC.
issue in the Boston proceeding, and authorized that official notice be taken of the KHJ-TV record. Similarly, when RKO sought renewal of WOR-TV in New York City in 1974, the FCC determined that RKO's application would be bound by the record in the Boston proceeding then underway. 5
In a series of civil actions brought in 1974 and 1975, the SEC had charged that questionable domestic and foreign payments by American corporations and falsification of corporate financial records to conceal such payments violated the federal securities laws. 7 One of the SEC's targets was General Tire, and RKO's competing applicants in the Boston proceeding sought to take advantage of that fact. On December 10, 1975, Community Broadcasting of Boston, Inc. (Community) filed a petition to reopen the record for a hearing on "illegal and improper conduct" by General Tire in the United States and foreign countries, including bribery of officials, creation of secret accounts, misappropriation of foreign corporate funds, and deliberate concealment of these matters by General Tire and RKO. 8
RKO opposed this move in a series of pleadings. On January 21, 1976, it urged that there was "no factual or legal foundation" for these charges. 9 In June 1977, well after the SEC had filed a complaint and obtained a consent decree against General Tire, 10 RKO continued to oppose the petition to reopen the record in oral argument before the Commission. 11 The consent decree required General Tire to conduct a review of its operations and prepare a Special Report, however. This report, which was released on July 1, 1977, 12 admitted a For reasons that may be partially attributable to strategic maneuvering among two of the many RKO competitors, 14 the FCC did not act on Community's petition to reopen the Boston proceeding until June 21, 1979. A week later, the Commission directed the parties to file summaries of their positions and present oral argument on the following questions: 15
plethora of corporate misconduct, and documented inadequacies in RKO records for certain reports previously filed with the FCC. Nevertheless, RKO continued to oppose the need for further proceedings, claiming that all "essential facts" concerning its operation of WNAC were before the Commission, and that because resolution of Community's claims "turns on inferences and legal conclusions to be drawn from those facts, the Commission would be well within its authority in deciding this case without holding a further evidentiary hearing." 13
(1) Is the record in this proceeding sufficient for the Commission to make a judgment:
(a) that RKO is qualified to remain the licensee of Station WNAC-TV, Boston, Massachusetts; or
(b) that RKO is not qualified to remain the licensee of Station WNAC-TV, Boston, Massachusetts?
(2) In the event that the record is sufficient to make either of the above judgments, what should that judgment be?
Oral argument was held before the Commission en banc shortly thereafter. The FCC concluded that it could answer the first question: RKO could not be found qualified to remain a licensee on the existing record. It decided to seek further information before answering the other questions, however. 16 Two days later, the FCC reopened the record to accept the Special Report into evidence, and urged that RKO "make a particularized proffer of specific evidence that it would introduce, if given the opportunity, to mitigate the findings" of that report. 17 RKO proffered evidence and affidavits in September 1979. RKO also now contended that it deserved additional hearings before the Commission could find it not qualified. 18
On June 6, 1980, the FCC issued three companion orders resolving the WNAC proceeding and the two other license renewals that had been conditioned upon it. 19 The Of the four grounds for disqualification, only reciprocal practices had been the subject of formal notice and hearing before an Administrative Law Judge. The FCC's findings as to General Tire's nonbroadcast misconduct and RKO's financial misrepresentations relied heavily on the Special Report. The findings concerning RKO's lack of candor rested on RKO's failure to make timely submission of the information contained in the Special Report, as reflected by RKO's earlier pleadings before the Commission. On each of these three points, the Decision rejected RKO's argument that it could not be disqualified without formal notice and hearing. Id. at PP 144-61 (General Tire's nonbroadcast misconduct); id. at PP 193-95 (financial inaccuracies); id. at PP 219-221 (lack of candor).
WNAC decision (Decision) focused on four specific areas of misconduct by RKO and General...
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