Storer Communications, Inc. v. F.C.C., s. 85-1246
| Decision Date | 30 May 1985 |
| Docket Number | Nos. 85-1246,85-1257,s. 85-1246 |
| Citation | 246 U.S.App.D.C. 146,763 F.2d 436 |
| Parties | , 53 USLW 2606 STORER COMMUNICATIONS, INC., Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Media Access Project, et al., the Committee For Full Value of Storer Communications, Inc., National Black Media Coalition, Intervenors. NATIONAL BLACK MEDIA COALITION, Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Arthur B. Goodkind, Washington, D.C., with whom Bernard Koteen and Mary M. Hendriksen, Washington, D.C., were on brief, for appellant, Storer Communications, Inc.
David Honig, was on brief, for Nat. Black Media Coalition.
Daniel M. Armstrong, Associate Gen. Counsel, F.C.C., Washington, D.C., with whom Jack D. Smith, Gen. Counsel and C. Grey Pash, Jr., Counsel, F.C.C., Washington, D.C., were on brief, for appellee.
Henry Geller, Washington, D.C., with whom Andrew Schwartzman and Robert M. Gurss, Washington, D.C., were on brief, for intervenors, Media Access Project, et al.
Douglas M. Kraus, New York City, with whom Stephen A. Sharp, and Mark E. Herlihy, Washington, D.C., were on brief, for intervenor, The Committee for Full Value of Storer Communications, Inc.
Robert M. Gurss, Washington, D.C., was on brief, for amicus curiae, NAACP, urging reversal.
Before TAMM, WALD and STARR, Circuit Judges.
Opinion PER CURIAM.
In a Memorandum Opinion and Order dated April 22, 1985, the Federal Communications Commission ("FCC" or "Commission") determined that, in the specific circumstances presented here where a committee of minority shareholders of Storer Communications, Inc. ("Storer") mounted a proxy contest with the purpose of replacing the existing board of directors, any resulting change in control would not constitute a "substantial change" in control requiring full compliance with the pre-grant application approval procedures of 47 U.S.C. Sec. 309. The Commission concluded that the public interest would be satisfied by Commission review of the shareholder committee's actions pursuant to a modified version of the FCC's "short-form" transfer of control application procedures. We affirm the Commission's decision.
Section 310(d) of the Communications Act ("the Act"), 47 U.S.C. Sec. 310(d), provides in pertinent part:
No ... station license, or any rights thereunder, shall be transferred, assigned, or disposed of in any manner, voluntarily or involuntarily, directly or indirectly, or by transfer of control of any corporation holding such ... license, to any person except upon application to the Commission and upon finding by the Commission that the public interest, convenience, and necessity will be served thereby.
(emphasis added). Section 309(b) of the Act provides that before certain license applications can be granted, including applications for the assignment or transfer of a license, the Commission must issue a public notice followed by a 30-day waiting period in which, pursuant to section 309(d), any "party in interest" may file a petition to deny the application. 1 Section 309(c) of the Act, however, provides that certain types of applications, e.g., transfers not involving a "substantial change" in control, are excepted from the procedures set forth in section 309(b). Pursuant to Commission regulations, applications for a transfer subject to the notice and 30-day waiting period of section 309(b) are filed on FCC Form 315 ("long form") whereas applications falling within one of the exceptions listed in section 309(c) are filed on FCC Form 316 ("short form"). See 47 C.F.R. Sec. 73.3540 (1984). Applications filed on the short form are not subject to the 30-day waiting period, petitions to deny, or the potential of a hearing which are entailed in applications filed on the long form.
The events culminating in the present action began on March 19, 1985, when a shareholder group, known as The Committee for Full Value of Storer Communications, Inc. ("the Committee"), notified the Commission by letter that it had acquired ownership or voting rights in 5.3 percent of Storer's stock and that it intended to conduct a proxy contest to replace Storer's existing board of directors with a new slate of nominees. See Committee's Letter of Notification (March 19, 1985), Appellant's Appendix ("Appendix") at 1. The Committee's nominees pledged, if elected, to implement a program to maximize the value of the shareholders' investment in Storer by selling the company's assets and distributing the net proceeds to the shareholders. In its letter of notification, the Committee asserted its position that the election of a new board of directors by existing shareholders would not be a transfer of control requiring prior Commission consent under the Act. Id. at 2. The Committee, however, further stated:
We are mindful that in the past, the Commission has used the "short form" application for consent to transfer control (FCC Form 316) as a means to act on such proposals. Despite our view that the "short form" is unnecessary, we enclose for your convenience an original and two copies of a completed form. If the Commission considers the form to be necessary, it is respectfully requested that the application be granted as expeditiously as possible.
Id. at 1-2. Storer filed a petition for dismissal of the application on the grounds that control of Storer rested in the existing board of directors; consequently replacing the existing board with a new board "would constitute a voluntary de facto transfer of control" which could be accomplished only with prior Commission consent pursuant to long-form, not short-form, procedures. See Storer's Petition for Dismissal of Application (March 26, 1985), Appendix at 17, 18.
On March 29, 1985, the FCC's Mass Media Bureau ("the Bureau"), finding that ultimate control of the corporation rested with the shareholders and not the board, agreed with the Committee's position that no transfer of control requiring prior Commission approval was at issue in the proposed election of a new board. See Mass Media Bureau Letter (March 29, 1985), Appendix at 87. 2 The Bureau, nonetheless, granted the Committee's short-form application "to remove any uncertainty as to [the Committee's] authority to proceed." Id. at 89. Storer filed a petition for review on April 1, 1985, seeking full Commission review of the Bureau's decision. On April 25, 1985, the Commission issued its opinion reversing the Bureau in part by finding a cognizable transfer of control but upholding the Committee's right to proceed in its proxy solicitation without the necessity of first undergoing the long-form approval process. See FCC Memorandum Opinion and Order (April 22, 1985) ("FCC Opinion"), Appendix at 278. 3 Storer then filed this appeal pursuant to 42 U.S.C. Sec. 402(b). 4
This case presented the FCC with a question of first impression: Whether the election of a new board of directors, solely as a result of a proxy contest unaccompanied by any significant change in ownership interests or voting rights, constitutes a transfer of control within the meaning of section 310(d), and, if so, whether the transfer is excepted from long-form procedures by virtue of section 309(c)(2)(B) excepting applications which do not involve a "substantial change in ownership or control." The Commission, noting that prior precedent establishes that control need not be formal, legal control but may consist of actual working control, see, e.g., Lorain Journal Co. v. FCC, 351 F.2d 824, 829 (D.C.Cir.1965), cert. denied, 383 U.S. 967, 86 S.Ct. 1272, 16 L.Ed.2d 308 (1966); Powel Crosley, Jr., 11 F.C.C. 3 (1945), concluded that the election of the new board would constitute a cognizable transfer of control requiring prior Commission approval pursuant to section 310(d). This finding is not challenged on appeal. The Commission, however, further concluded that, based upon the specific circumstances of this case, the election of the new board would not be a "substantial change" in control requiring long-form procedures within the meaning of section 309. The Commission, thus, found that a modified short-form procedure would be the appropriate procedure for obtaining FCC approval in this case. The sole issue on review is whether the Commission's decision was arbitrary, capricious or an abuse of discretion.
The resolution of the issue before this court is essentially one of statutory construction. If Congress has expressed its intent unambiguously then both the agency and this court must give effect to that intent.
If, however, the Court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.
Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., --- U.S. ----, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984) (footnotes omitted). It is well-established that an agency's interpretation of its own statute is entitled to great deference and "should be followed unless there are compelling indications that it is wrong." Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 381, 89 S.Ct. 1794, 1801, 23 L.Ed.2d 371 (1969); accord FEC v. Democratic Senatorial Campaign Comm., 454 U.S. 27, 37, 102 S.Ct. 38, 44, 70 L.Ed.2d 23 (1981).
In this case, neither the statute nor its legislative history is dispositive. As discussed in Part I, section 310(d) provides that no license shall be transferred through a transfer of control of any corporation holding such a license except upon prior application to the Commission and a...
To continue reading
Request your trial
-
Monongahela Power Co. v. Marsh
...932 (1961); Capitol Technical Serv., Inc. v. FAA, 253 U.S.App.D.C. 62, 68, 791 F.2d 964, 970 (1986); Storer Communications, Inc. v. FCC, 246 U.S.App.D.C. 146, 150, 763 F.2d 436, 440 (1985); Eagle Picher Indus., Inc. v. EPA, 245 U.S.App.D.C. 196, 201 n. 5, 759 F.2d 922, 927 n. 5 (1985).83 Th......
-
In re South Canaan Cellular Investments, Inc.
...be required before the lender, or its assignee, could obtain control over SCCCC, LP and its license. See Storer Communications, Inc. v. F.C.C., 763 F.2d 436, 439-40 (D.C.Cir. 1985) (substantial change in board of directors of corporation that controlled a license required FCC approval); In ......
-
Jefferson-Pilot Corp. & Subsidiaries v. Comm'r of Internal Revenue
...is given, and any party in interest who opposes the assignment is given an opportunity to voice opposition. Storer Communications, Inc. v. F.C.C., 763 F.2d 436, 438 (D.C. Cir. 1985). The information sought on the Form 314 is extensive. Indeed, the part of the Form 314 for the assignment of ......
-
Global Van Lines, Inc. v. I.C.C.
...(1984). See also Blum v. Bacon, 457 U.S. 132, 141, 102 S.Ct. 2355, 2361, 72 L.Ed.2d 728, 736 (1982); Storer Communications, Inc. v. FCC, 246 U.S.App.D.C. 146, 150, 763 F.2d 436, 440 (1985); Eagle-Picher Indus., Inc. v. EPA, 245 U.S.App.D.C. 196, 201 n. 5, 759 F.2d 922, 927 n. 5 (1985). To q......