United States v. Storer Broadcasting Company

• Decision Date: 21 May 1956
• Docket Number: No. 94,94
• Citation: 100 L.Ed. 1081,351 U.S. 192,76 S.Ct. 763
• Parties: UNITED STATES of America and Federal Communications Commission, Petitioners, v. STORER BROADCASTING COMPANY
• Court: U.S. Supreme Court

351 U.S. 192

76 S.Ct. 763

100 L.Ed. 1081

UNITED STATES of America and Federal Communications Commission, Petitioners,

v STORER BROADCASTING COMPANY.

No. 94.

Argued Feb. 28, 29, 1956.

Decided May 21, 1956.

Mr.Warren E. Baker, for petitioner.

Mr. Albert R. Connelly, New York City, for respondent.

Mr. Justice REED delivered the opinion of the Court.

The Federal Communications Commission issued, on August 19, 1948, a notice of proposed rulemaking under the authority of 47 U.S.C. §§ 303(r), 311, 313 and 314, 47 U.S.C.A. §§ 303(r), 311, 313, 314 (Communications Act of 1934, as amended, 47 U.S.C. § 301 et seq., 47 U.S.C.A. § 301 et seq.). It was proposed, so far as is pertinent to this case, to amend Rules 3.35, 3.240 and 3.636 relating to Multiple Ownership of standard, FM and television broadcast stations. Those rules provide that licenses for broadcasting stations will not be granted if the applicant, directly or indirectly, has an interest in other stations beyond a limited number. The purpose of the limitations is to avoid overconcentration of broadcasting facilities.

As required by 5 U.S.C. § 1003(b), 5 U.S.C.A. § 1003(b), the notice permitted 'interested' parties to file statements or briefs. Such parties might also intervene in appeals. 47 U.S.C. § 402(d) and (e), 47 U.S.C.A. § 402(d, e). Respondent, licensee of a number of radio and television stations, filed a statement objecting to the proposed changes, as did other interested broad- casters. Respondent based its objections largely on the fact that the proposed rules did not allow one person to hold as many FM and television stations as standard stations. Storer argued that such limitations might cause irreparable financial damage to owners of standard stations if an obsolescent standard station could not be augmented by FM and television facilities.

In November 1953 the Commission entered an order amending the Rules in question without significant changes from the proposed forms.¹ A review was sought in due course by respondent in the Court of Appeals for the District of Columbia Circuit under 5 U.S.C. § 1034, 5 U.S.C.A. § 1034,² 47 U.S.C. § 402(a), 47 U.S.C.A. § 402(a),³ and 5 U.S.C. § 1009(a), (c), 5 U.S.C.A. § 1009(a, c).⁴ Respondent alleged it owned or controlled, within the meaning of the Multiple Ownership Rules, seven standard radio, five FM radio and five television broadcast stations. It asserted that the Rules complained of were in conflict with the statutory mandates that applicants should be granted licenses if the public interest would be served and that applicants must have a hearing before denial of an application. 47 U.S.C. § 309(a) and (b), 47 U.S.C.A. § 309(a, b).⁵ Respondent also claimed:

'The Rules, in considering the ownership of one (1%) per cent or more of the voting stock of a broadcast licensee corporation as equivalent to ownership, operation or control of the station, are unreasonable and bear no rational relationship to the national Anti-Trust policy.'

This latter claim was important to respondent because allegedly 20% of its voting stock was in scattered ownership and was traded in by licensed dealers. This stock was thus beyond its control.

Respondent asserted it was a 'party aggrieved' and a 'person suffering legal wrong' or adversely affected under the several statutes that authorize review of FCC action. See notes 2, 3 and 4, supra. It stated its injuries from the Rules thus:

'Storer is adversely affected and aggrieved by the Order of the Commission adopted on November 25, 1953, amending the Multiple Ownership Rules, in that:

'(a) Storer is denied the right of a full and fair hearing to determine whether its ownership of an interest in more than seven (7) standard radio and five (5) television broadcast stations, in light of and upon a showing of all material circumstances, will thereby serve the public interest, convenience and necessity.

'(b) The acquisition of Storer's voting stock by the public under circumstances beyond the control of Storer, may and could be violative of the Multiple Ownership rules, as amended, and result in a forfeiture of licenses now held by Storer, with resultant loss and injury to Storer and to all other Storer stockholders.'

On the day the amendments to the Rules were adopted, a pending application of Storer for an additional television station at Miami was dismissed on the basis of the Rules.

While the question of respondent's right to appeal has not been raised by either party or by the Court of Appeals, our jurisdiction is now mooted. It may be considered. Federal Communications Commission v. National Broadcasting Co., 319 U.S. 239, 246, 63 S.Ct. 1035, 1038, 87 L.Ed. 1374. Jurisdiction depends upon standing to seek review and upon ripeness. If respondent could not rightfully seek review from the order adopting the challenged regulations, it must await action to its disadvantage under them, and neither the Court of Appeals nor this Court has jurisdiction of the controversy. Under the above-cited Code sections, review of Commission action is granted any party aggrieved or suffering legal wrong by that action.⁶

We think respondent had standing to sue at the time it exercised its privilege. The process of rulemaking was complete. It was final agency action, 5 U.S.C. § 1001(c) and (g), 5 U.S.C.A. § 1001(c, g), by which Storer claimed to be 'aggrieved.' When the authority to appeal was substantially the same, we held that an appellant who complained of the grant of a license to a competitor because it would reduce its own income had standing to appeal against a contention, admittedly sound, that such economic injury to appellant was not a proper issue before the Commission. We said:

'Congress had some purpose in enacting section 402(b)(2). It may have been of opinion that one likely to be financially injured by the issue of a license would by the only person having a sufficient interest to bring to the attention of the appellate court errors of law in the action of the Commission in granting the license. It is within the power of Congress to confer such standing to prosecute an appeal.' Federal Communications Comm'n v. Sanders Bros. Radio Station, 309 U.S. 470, 477, 60 S.Ct. 693, 698, 84 L.Ed. 869.

We added that such an appellant could raise any relevant question of law in respect to the order.

Again in Columbia Broadcasting System v. United States, 316 U.S. 407, 62 S.Ct. 1194, 86 L.Ed. 1563, this Court considered the problem of standing to review Commission action under the then existing § 402(a), 48 Stat. 1093, and the Urgent Deficiencies Act, 38 Stat. 219. CBS there sought review of the adoption of Chain Broadcasting Regulations by the Commission. Against the contention that the adoption of regulations did not command CBS to do or refrain from doing anything, dissent 316 U.S. at 429, 62 S.Ct. 1206, this Court held that the order promulgating regulations was reviewable because it presently affected existing contractual relationships. It said:

'The regulations are not any the less reviewable because their promulgation did not operate of their own force to deny or cancel a license. It is enough that failure to comply with them penalizes licensees, and appellant, with whom they contract. If an administrative order has that effect it is reviewable and it does not cease to be so merely because it is not certain whether the Commission will institute proceedings to enforce the penalty incurred under its regulations for non-compliance.' Id., 316 U.S. at pages 417 418, 62 S.Ct. at page 1200.

The Court said that the regulations 'presently determine rights.' Id., 316 U.S. at page 421, 62 S.Ct. at page 1202.

'Appellant's standing to maintain the present suit in equity is unaffected by the fact that the regulations are not directed to appellant and do not in terms compel action by it or impose penalties upon it because of its action or failure to act. It is enough that, by setting the controlling standards for the Commission's action, the regulations purport to operate to alter and affect adversely appellant's contractual rights and business relations with station owners whose applications for licenses the regulations will cause to be rejected and whose licenses the regulations may cause to be revoked.' Id., 316 U.S. at page 422, 62 S.Ct. at page 1202.

See Federal Communications Commission v. American Broadcasting Co., 347 U.S. 284, 289, 74 S.Ct. 593, 597, 98 L.Ed. 699, and EL Dorado Oil Works v. United States, 328 U.S. 12, 18—19, 66 S.Ct. 843, 846, 90 L.Ed. 1053.

The regulations here under consideration presently aggrieve the respondent. The Commission exercised a power of rulemaking which controls broadcasters. The Rules now operate to control the business affairs of Storer. Unless it obtains a modification of this declared adminis- trative policy, Storer cannot enlarge the number of its standard of FM stations. It seems, too, that the note to Rule 3.636 (n. 1, supra) endangers Storer's stations as alleged in its petition for review. See this opinion, supra, 76 S.Ct. at page 767 at (b). Commission hearings are affected now by the Rules. Storer cannot cogently plan its present or future operations.⁷ It cannot plan to enlarge the number of its standard or FM stations, and at any moment the purchase of Storer's voting stock by some member of the public could endanger its existing structure. These are grievances presently restricting Storer's operations. In the light of the legislation allowing review of the Commission's actions, we hold that Storer has standing to bring this action.

In its petition for review Storer prayed the court to vacate the provisions of the Multiple Ownership Rules insofar as they denied to an applicant already controlling the allowable number of stations a 'full and fair hearing' to determine whether additional licenses to the applicant would be in the public interest.⁸ The Court of Appeals struck out, as contrary to § 309(a) and (b) of the...