United States v. Daniels, Civ. No. 75-5072.

• Decision Date: 31 August 1976
• Docket Number: Civ. No. 75-5072.
• Citation: 418 F. Supp. 1074
• Parties: UNITED STATES of America v. Eli DANIELS and Harry Daniels, d/b/a Heart of the Black Hills Stations, Licensee of Radio Station KDSJ, Deadwood, South Dakota.
• Court: U.S. District Court — District of South Dakota

418 F. Supp. 1074

UNITED STATES of America v. Eli DANIELS and Harry Daniels, d/b/a Heart of the Black Hills Stations, Licensee of Radio Station KDSJ, Deadwood, South Dakota.

Civ. No. 75-5072.

United States District Court, D. South Dakota.

August 31, 1976.

Raymond L. Strassburger and John P. Greenspan, Daniel M. Armstrong, Associate General Counsel, Ashton R. Hardy, General Counsel, Federal Trade Communications Commission, Washington, D. C., for the Commission.

William F. Clayton, U. S. Atty., Sioux Falls, S. D., for plaintiff.

MEMORANDUM OPINION

BOGUE, District Judge.

This matter is now before the Court on cross motions for Summary Judgment. This Court has carefully reviewed the pleadings, briefs and exhibits and finds that the basic facts are not in dispute.

On March 19, 1965, Defendant was issued a Standard Broadcast Station License for radio station KDSJ, which authorized him to operate his radio station until April 1, 1968, under the terms and conditions set out in the license. For purposes of this action, the relevant conditions were as follows:

1) During the month of November, Defendant was authorized to broadcast with a non-directional antenna between the hours of 6:45 a. m. and 4:30 p. m. Mountain Standard Time (a directional antenna was required to be used during other nighttime hours of operation); and

2) The license was issued:

"subject to the provisions of the Communications Act of 1934, subsequent Acts, and Treaties, and Commission Rules made thereunder. . . ."

Through application and renewal, the license, together with the relevant conditions set out above, was effective at all times relevant to this action.

Although the license specifically set out the hours during which operation with a non-directional antenna was permissible, until 1967 a rule promulgated by the Federal Communications Commission effectively permitted radio stations such as that operated by Defendant to begin broadcasting with non-directional antennae at hours earlier than those specified in the licenses. This rule was found in 47 C.F.R. § 73.87, which stated in relevant part:

"standard broadcast stations authorized to provide regular program service on any regional channel . . . may operate with their authorized daytime facilities between 4 a. m. local standard time and local sunrise . . ."

Defendant's radio station fell within the provisions of the above-quoted former 47 C.F.R. § 73.87.

In 1967, however, 47 C.F.R. § 73.87 was completely rewritten, and it now reads as follows:

Except as provided in § 73.98 operation during emergency and § 73.99 authorizing a grant of presunrise service authority upon request and under certain conditions, no standard broadcast station shall operate at times, or with modes or powers, other than those specified in the basic instrument of authorization.

In the Notice of Rule Making, at 32 Fed. Reg. 10437-10448 (July 15, 1967), a discussion of the need for the 1967 amendment appears. Reference is made there to increasing complaints of objectionable presunrise interference, and the difficulty of identifying the source of the interference in view of a constantly increasing number of stations broadcasting with non-directional antennae before sunrise. For a thorough and enlightening discussion concerning the nature of this problem and the history of 47 C.F.R. § 73.87, see WBEN, Inc. v. United States, 396 F.2d 601 (2nd Cir. 1968), cert. denied 393 U.S. 914, 89 S.Ct. 238, 240, 21 L.Ed.2d 200 (1968).

An F.C.C. inspection of Defendant's radio station disclosed that on November 2-7, 9-13 and 16-18 inclusive, Defendant was commencing the use of daytime equipment (non-directional antenna) prior to the sunrise time of 6:45 a. m. authorized in its license. On December 9, 1970, a notice of this apparent violation of 47 C.F.R. § 73.87 was mailed to Defendant. On December 19, 1970, Defendant replied to the notice by stating that he was unaware of the changes in permissible presunrise authorization, and that he began operating according to the times specified in his license upon being notified of the apparent violation. A Notice of Apparent Liability in the amount of $1,000.00 was mailed to Defendant on August 18, 1971. This notice was based on the apparent presunrise violations, and another apparent violation relating to failure to properly maintain an operating log.

In reply to the Notice of Apparent Liability, Defendant again asserted that he was unaware of the change in 47 C.F.R. § 73.87 until he was notified of the apparent violations. He also offered an explanation of the operating log violation. By a Memorandum Opinion and Order dated March 12, 1973, the Federal Communications Commission held that Defendant was charged with notice of the 1967 rule change, and assessed a forfeiture of $800.00 for the presunrise violations. The Apparent Liability of $1,000.00 was reduced when the Commission accepted Defendant's explanation of the deficiencies in his operating log.

Defendant's request for rescission of the $800.00 forfeiture was denied October 23, 1974. Defendant continued to decline to make payment, and the United States filed this action on October 23, 1975 seeking judgment in the amount of $800.00.

The initial issue now before the Court concerns the nature and degree of notice which the Federal Communications Commission was required to give upon its amendment of 47 C.F.R. § 73.87. Notice of the amendment was published in the Federal Register on July 15, 1967 at 32 Fed.Reg. 10447. No personal notice of the amendment was mailed to Defendant. On the other hand, it may be noted that Defendant listed the Federal Register on his December 18, 1967 Application for Renewal of Broadcast Station License as one of the publications he subscribed to in order

. . . to keep informed of the requirements of the Communications Act and the Commission's Rules and Regulations . . .

Defendant urges that the 1967 amendment of 47 C.F.R. § 73.87 constituted a modification of his license for which written personal notice and opportunity for public hearing is required under 47 U.S.C. § 316(a) and 47 U.S.C. § 303(f). Plaintiff contends that the 1967 amendment was promulgated pursuant to the Commission's general rule-making authority, 47 U.S.C. §§ 154(i), 303(r), for which proper and timely publication in the Federal Register imparts sufficient notice under 5 U.S.C. § 553(b).

Plaintiff relies primarily on the case of WBEN, Inc. v. United States, 396 F.2d 601 (2nd Cir. 1968), cert. denied 393 U.S. 914, 89 S.Ct. 238, 240, 21 L.Ed.2d 200 (1968). In that case, radio stations which were licensed to broadcast full time attacked a 1967 decision of the Federal Communications Commission which affected broadcast time allocation and resulted in an immediate increase in interference with the complainants' broadcasts. The complainants in WBEN contended, inter alia, that the Commission decision constituted a modification of their licenses, and that separate evidentiary hearings were required under 47 U.S.C. §§ 316(a) and 303(f). 396 F.2d 601 at 617-621. In rejecting this contention, the Court of Appeals for the Second Circuit stated:

Adjudicatory hearings serve an important function when the agency bases its decision on the peculiar situation of individual parties who know more about this than anyone else. But when, as here, a new policy is based upon the general characteristics of an industry, rational decision is not furthered by requiring the agency to lose itself in an excursion into detail that too often obscures fundamental issues rather than clarifies them. 396 F.2d 601 at 618.

Defendant seeks to distinguish the WBEN case on the ground that WBEN radio station had actually participated in the agency action being challenged there. Cf. 5 U.S.C. § 553(b). The Court in WBEN did not rely on this fact in any way. Under the law pertaining to the notice required for rulemaking, this is a distinction without a difference.

The decision in WBEN finds support in the case of Air Line Pilots Association, International v. Quesada, 276 F.2d 892 (1960), where a group of airline pilots unsuccessfully urged that the Federal Aviation Administrator had modified their licenses without a statutorily mandated hearing for license modification. The specific agency action challenged was the promulgation of a regulation precluding a pilot from operating a carrier aircraft after the pilot has reached his sixtieth birthday. In rejecting this challenge, the Court said:

It is clear that Congress intended that the section requiring an adjudicatory hearing for license modification—49 U.S.C. § 1429 should apply only when an order of the Administrator is directed to an individual airman and is concerned with conduct or other facts peculiar to that airman. 276 F.2d 892 at 897.

See also Washington Utilities & Transportation Commission v. F. C. C., 513 F.2d 1142, 1160-1161 (9th Cir. 1975). This Court agrees with the reasoning in WBEN, Inc. v. United States, supra, and holds that the 1967 revision of 47 C.F.R. § 73.87 constituted rulemaking within the meaning of 5 U.S.C. § 551(4), rather than adjudicatory license modification under 47 U.S.C. §§ 316(a) and 303(f). The 1967 revision is an agency statement of general applicability and future effect designed to implement policy. 5 U.S.C. § 551(4). Certainly the 1967 revision had a measurable effect upon Defendant's broadcasting practices, and in that sense had an individualized impact. Nevertheless, the promulgation of the revision was not based on any facts peculiar to Defendant's radio station, and the revision was not directed specifically at Defendant. The generally applicable revision was in fact a rule rather than a license modification, and consequently the rulemaking notice provisions of 5 U.S.C. § 553 satisfy both the Administrative Procedure Act and due process, Air Line Pilots Association v. Quesada, 276 F.2d 892, 896 (2nd Cir. 1960), as well as the Communications Act of 1934. Personal notice of the 19...