U.S. v. Peninsula Communications, Inc.

• Decision Date: 14 September 2004
• Docket Number: No. A02-295 CV (JWS).,A02-295 CV (JWS).
• Citation: 335 F.Supp.2d 1013
• Parties: UNITED STATES of America, Plaintiff, v. PENINSULA COMMUNICATIONS, INC., Defendant.
• Court: U.S. District Court — District of Alaska

335 F.Supp.2d 1013

UNITED STATES of America, Plaintiff, v. PENINSULA COMMUNICATIONS, INC., Defendant.

No. A02-295 CV (JWS).

United States District Court, D. Alaska.

September 14, 2004.

ORDER FROM CHAMBERS

SEDWICK, District Judge.

[Re: Cross-Motions for Summary Judgment at Dockets 17 and 20]

I. MOTIONS PRESENTED

At docket 17, plaintiff United States of America moves for summary judgment. Defendant Peninsula Communications, Inc. cross-moves for summary judgment at docket 20. Oral argument was heard August 9, 2004. The parties filed a stipulated chronology of events at the court's request subsequent to the argument.¹

II. BACKGROUND

This is an action to enforce an order of monetary forfeiture in the amount of $140,000.00, issued on February 1, 2002, by the Federal Communications Commission (FCC) against defendant Peninsula Communications, Inc. The parties agree that the facts that led up to the order of forfeiture are fully set forth in United States v. Peninsula Communications, Inc.,² and the court will not repeat those facts in detail here. Briefly, in 1997, the FCC granted defendant's license renewal applications for the two primary FM radio stations and nine FM translator radio stations defendant owned, conditioned on defendant assigning the translator licenses to another entity. After further proceedings before the FCC and in the United States Circuit Court of Appeals for the District of Columbia, on May 19, 2001, the FCC rescinded the conditional grants of defendant's license renewal applications as to seven of the translator stations and ordered defendant to cease operating those seven stations.

Defendant continued to operate the seven translator stations after May 19, 2001. Defendant contends that it did so "[i]n order to protect its legal position (and on advice of counsel)[.]"³ On June 15, 2001, defendant filed an appeal of the FCC's May 2001 termination order to the D.C. Circuit, an appeal which was ultimately resolved in the FCC's favor.⁴ Defendant did not then seek, and never did obtain, a stay of the termination order.⁵ While defendant's appeal was pending in the D.C. Circuit, the United States, on July 6, 2001, filed suit in this court, seeking an injunction to enforce the terms of the FCC's May 2001 order.⁶ This court issued a preliminary injunction ordering defendant to cease operating the seven translator stations on October 17, 2001.⁷ Defendant filed an appeal to the Ninth Circuit Court of Appeals the following day.⁸ On November 26, 2001, the Ninth Circuit stayed this court's preliminary injunction order pending appeal.⁹ This court's issuance of the preliminary injunction was affirmed by the Ninth Circuit in United States v. Peninsula Communications, Inc.,¹⁰ on April 22, 2002. Defendant's petition for a rehearing was denied on July 3, 2002.¹¹ Defendant then filed a motion for a stay of the termination order in the D.C. Circuit, which was denied on August 13, 2002.¹² Defendant ceased operating the seven translator stations on August 28, 2002.¹³

During the pendency of defendant's appeals, the FCC, on February 1, 2002, adopted a Forfeiture Order in which it found that defendant "had willfully and repeatedly failed to comply with Section 301 of the Communications Act of 1934" by continuing to operate the seven translator stations after its licenses for those stations were rescinded on May 19, 2001.¹⁴ The FCC imposed a $140,000.00 monetary forfeiture against defendant for its operation of the seven translator stations without valid licenses. Defendant has not paid the $140,000.00 forfeiture.

On December 4, 2002, plaintiff filed the instant action, seeking judgment against defendant in the amount of the $140,000.00 forfeiture. Plaintiff now moves for summary judgment, arguing that there are no facts in dispute that would preclude an entry of judgment against defendant in the amount of $140,000.00. Defendant cross-moves for summary judgment, arguing that a forfeiture should not have been imposed, or in the alternative, that the $140,000.00 forfeiture that was imposed is excessive.

III. STANDARD OF REVIEW

As an initial matter, defendant argues that summary judgment in favor of the United States is not authorized or appropriate in an FCC forfeiture case because the party from whom a forfeiture is sought is entitled to a trial de novo as a matter of law.¹⁵ This argument is premised on 47 U.S.C. § 504(a), which sets forth the procedures for the recovery of a forfeiture and provides, in pertinent part, "[t]hat any suit for the recovery of a forfeiture imposed pursuant to the provisions of this chapter shall be a trial de novo[.]" Defendant then cites to a series of cases that mention the trial de novo requirement. See Dougan v. F.C.C.,¹⁶ Miami MDS Co. v. F.C.C.,¹⁷ Pleasant Broadcasting Co. v. F.C.C.,¹⁸ United States v. WIYN Radio, Inc.,¹⁹ and United States v. Rust Communications Group, Inc.²⁰

None of the cases cited by defendant stand for the proposition that summary judgment is not appropriate or authorized in an action brought pursuant to 47 U.S.C. § 504(a). None of these cases even address the question of whether summary judgment is available in an FCC forfeiture case. The Ninth Circuit has never addressed this issue, nor has any other circuit ever done so. Plaintiff points out that such motions are routinely brought in FCC forfeiture cases and cites to a series of cases in which motions for summary judgment were decided by the district court. See, e.g., Action for Children's Television v. F.C.C.,²¹ United States, v. WHAS, Inc.,²² United States v. Ganley,²³ United States v. Dunifer,²⁴ and F.C.C. v. Summa Corp., Las Vegas, Nev.²⁵ Because no party disputed that the summary judgment device was available in a Section 504(a) action, these cases, and others like them, are of little guidance here.

In the context of other statutes that mandate a trial de novo of an agency decision, courts have held that the use of the procedural device of summary judgment is appropriate. See Miller v. FDIC,²⁶ Freedman v. United States Dep't of Agriculture,²⁷ Modica v. United States,²⁸ and Mosley v. United States.²⁹ The court perceives no reason why the same result should not apply to a suit brought under Section 504(a). The trial de novo standard means that the court's review of an FCC forfeiture order is not limited to the administrative record. It does not mean that summary judgment cannot properly be granted if there are no genuine issues of material facts. The court will consider the cross-motions for summary judgment on their merits.

Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.³⁰ The initial burden is on the moving party to show that there is an absence of genuine issues of material fact.³¹ If the moving party meets its initial burden, then the non-moving party must set forth specific facts showing that there is a genuine issue for trial.³² In deciding a motion for summary judgment, the court views the evidence of the non-movant in the light most favorable to that party, and all justifiable inferences are also to be drawn in its favor.³³ "[T]he court's ultimate inquiry is to determine whether the `specific facts' set forth by the nonmoving party, coupled with undisputed background or contextual facts, are such that a rational or reasonable jury might return a verdict in its favor based on that evidence."³⁴ When, as here, the court is faced with cross-motions for summary judgment, each motion must be separately considered on its merits.³⁵

IV. DISCUSSION

Section 504 of Title 47, United States Code, grants district courts "broad powers of judicial review" of FCC forfeiture orders, including "the power to review both the facts surrounding the alleged violation and the amount of any forfeiture imposed."³⁶ The court's review "is not limited to a review of the administrative record before the FCC, nor do the findings and conclusions of the Commission in this case carry any weight whatsoever."³⁷ The court must make its own "`independent determination of the issues.'"³⁸

A. Was Imposition of the Forfeiture Proper?

Section 503(b)(1)(B) of Title 47, United States Code, provides that "[a]ny person who is determined by the Commission ... to have ... willfully or repeatedly failed to comply with any of the provisions of this chapter or of any ... order issued by the Commission under this chapter ... shall be liable to the United States for a forfeiture penalty." While it is undisputed that defendant continued to operate the seven translator stations for fifteen months after its licenses were rescinded and it was ordered to cease operating the stations, defendant insists that it had a right to continue operating the stations, and thus, a forfeiture should not have been imposed against it. Defendant asserts that "the Ninth Circuit Court of Appeals stayed the F.C.C. order on November 21, 2001 to allow [defendant] to complete proceedings before that Court."³⁹ If the FCC's May 2001 order had been stayed, then defendant's continued operation of the stations would not have been in violation of Section 301 of the Federal Communications Act or the May 2001 order. But, the May 2001 order was never stayed. The Ninth Circuit stayed this court's preliminary injunction order pending appeal.⁴⁰ The Ninth Circuit's stay order did not address or effect the FCC's May 2001 order. The May 2001 order was never stayed, and defendant's licenses for the seven translator stations were terminated as of the date of that order.

Defendant next argues that it could continue to operate the seven translator stations as long as judicial proceedings were pending because its licenses were still in effect pursuant to 47 U.S.C. § 307.⁴¹ Section 307(c)(3) provides that "[p]ending any hearing and final decision on ... an application [for a license renewal] and the disposition of any petition for rehearing pursuant to section 405 of this title, the...