Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the matter of                 | *  | EB Docket No. 01-39          |
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| FAMILY BROADCASTING, INC.        | ** |                              |
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| Order to Show Cause Why the      | *  |                              |
| Licenses for                     | *) |                              |
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| Stations WSTX (AM) and WSTX-FM,  |    |                              |
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| Christiansted, U.S. Virgin       | *) |                              |
| Islands,                         | ** |                              |
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| Should Not Be Revoked            | *  |                              |
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**MEMORANDUM OPINION AND ORDER AND HEARING DESIGNATION ORDER**

**Adopted: March 22, 2002 Released: March 28, 2002**

By the Commission:

**INTRODUCTION**

1.  In this order, we grant in part the exceptions filed August 28, 2001
    by Family Broadcasting, Inc. to the Summary Decision of
    Administrative Law Judge Richard L. Sippel, FCC 01D-02 (released
    August 7, 2001), revoking the licenses for Stations WSTX(AM) and
    WSTX-FM in Christiansted, U.S. Virgin Islands. We affirm the Summary
    Decision insofar as the ALJ determined that revocation is warranted
    if conceded wrongdoer, former president, director and principal
    stockholder, Gerard Luz James, were to remain in control of the
    licensee. We conclude, however, for the reasons set forth below that
    the proposed transfer of control of Family from Asta and Gerard Luz
    James to their four adult children raises genuine issues of material
    fact concerning whether the licenses should not be revoked in order
    to permit a transfer. These issues warrant consideration at a
    hearing. We therefore set aside the Summary Decision in part and
    designate for consolidated hearing before the Presiding Judge in EB
    Docket No. 01-39 the transfer of control applications (File Nos.
    BTC-20010315AAJ and BTCH-20010315AAK) involving Stations WSTX(AM)
    and WSTX-FM. The specified issues shall include the material issues
    discussed herein, as well as any additional issues added by the ALJ
    at the request of the parties or on the ALJ's own motion. Our
    expectation is that the Mass Media Bureau will review the transfer
    applications in accordance with its ordinary processing procedures,
    and that it will formally request, through the Enforcement Bureau,
    that the ALJ add any additional issues deemed appropriate by its
    processing staff.

    **BACKGROUND**

2.  Stations WSTX(AM) and WSTX-FM share a main studio located at Fort
    Louise Augusta in Christiansted, U.S. Virgin Islands. Station
    WSTX(AM) is authorized to operate from a site at Fort Louise Augusta
    with 5 kilowatts daytime power and 1 kilowatt nighttime and an
    antenna height above ground level of 106.5 meters. Station WSTX-FM
    is authorized to operate from a site at Blue Mountain, also located
    in Christiansted, with 50 kilowatts effective radiated power and an
    antenna height above ground level of 41 meters.

3.  Station WSTX-FM discontinued broadcast operation on October 15,
    1994, allegedly because of the station's close proximity to the sea
    and damage from Hurricane Marilyn, and it remained off the air until
    January 18, 1997. These events had led to the designation for
    hearing on May 28, 1996 of Family's December 4, 1995 renewal
    application for WSTX-FM.[^1] The renewal proceeding was ultimately
    terminated, with the grant of the renewal application, in June 1997
    by the Summary Decision of Administrative Law Judge Edward
    Luton.[^2] The ALJ, while finding willful and repeated violations of
    Section 73.1740 requiring a licensee to submit an informal, written
    request to remain silent, nevertheless determined that, in light of
    the station's return to the air on January 18, 1997 and continuous
    operation since that time, Family was qualified to remain a
    Commission licensee.

4.  By its Order To Show Cause and Notice of Opportunity To Participate,
    the Commission on February 8, 2001 initiated a second enforcement
    proceeding relating to Family's operation of Stations WSTX(AM) and
    WSTX-FM in St Croix.[^3] It directed Family to show cause why its
    licenses should not be revoked for misrepresentation and/or a lack
    of candor and for repeated and/or willful violations of the
    Commission's rules and, apart from the issue of revocation, whether
    to issue an Order of Forfeiture in an amount not to exceed two
    hundred seventy-five thousand dollars against Family.

5.  Gerard Luz James is the principal stockholder, with his wife, Asta
    Luz James, of Family, the licensee since 1990 of WSTX(AM) and
    WSTX-FM in St. Croix.[^4] Until March 14, 2001, Mr. James also
    served as president and a director of Family. Barbara James-Petersen
    is the daughter of Gerard and Asta Luz James, who have three other
    grown children. Ms. James-Petersen was briefly employed as the
    stations' general manager from September 1990 to 1992. She is the
    current general manager, a position she has held since July 1998,
    and she has served as president since March 14, 2001.

6.  After Family received the Order to Show Cause, Mr. Luz James
    resigned as president and director of the company and, as noted
    above, was replaced by his daughter Barbara James-Petersen. Family
    thereafter filed applications for authorization to convey the stock
    owned by Gerard and Asta Luz James to their four adult children.
    These applications, now pending before the Mass Media Bureau, seek
    Commission authorization to transfer control of Family from Asta and
    Gerard Luz James to their four adult children. None of the children,
    except Barbara James-Petersen, has been employed at, or had any
    other connection with, the stations.

7.  In a petition for reconsideration of the Order to Show Cause, filed
    on March 15, 2001, Family conceded that Stations WSTX(AM) and
    WSTX-FM had operated at variance from their authorizations and that
    inaccurate statements were made to the Commission concerning the
    relocation of the FM transmitter from its authorized site. It
    requested postponement of the hearing proceeding to give Family an
    opportunity to correct the various rule violations now that Barbara
    James-Petersen, instead of her father, is in charge of the stations'
    operation. The Commission dismissed the petition for reconsideration
    pursuant to Section 1.106(a), generally providing for
    reconsideration only of final actions.[^5]

8.  In the hearing proceeding, the Enforcement Bureau submitted a
    detailed request for Family to admit certain facts. All matters were
    admitted, largely without qualification, by Family. Motions for
    Summary Decision were thereafter filed by the Enforcement Bureau and
    by Family. The Bureau sought summary decision on all specified
    issues, urging that revocation of both licenses is the appropriate
    remedy but that a monetary forfeiture is not warranted. In seeking
    summary decision Family requested that the ALJ refrain from revoking
    the licenses or imposing a monetary forfeiture and that he also
    recommend that the Mass Media Bureau grant the pending transfer of
    control applications. Family did not ask that the assignment
    application filed with the Mass Media Bureau be consolidated with
    the above-captioned revocation proceeding or request the
    specification of additional issues raised by the proposed
    assignment. Family urged instead that the record, consisting of
    statements from Barbara James-Petersen and her father and of Ms.
    James-Petersen's deposition testimony, is sufficient to warrant
    approval of the assignment.

    **SUMMARY DECISION**

9.  The ALJ determined that there is no need for an evidentiary hearing
    in this case. Family, the ALJ noted, had not contested the merits of
    the allegations underlying the issues specified in the Show Cause
    Order. Its cooperation in responding to the Bureau's request for
    admission, according to the ALJ, makes a hearing unnecessary to
    determine whether Family had committed the technical violations
    alleged in the Show Cause Order, whether it had violated sections
    1.89 and 73.1015 by failing to respond to official Commission
    correspondence and inquiries, and whether it had made material
    misrepresentations or lacked candor concerning the relocation of the
    transmitter from the site authorized for WSTX-FM. The ALJ's
    decisions as to these issues are described below.

10. *Operation at variance from the terms of the station licenses.*
    Family conceded that the stations were repeatedly operated at
    variance with their authorizations, often without the Commission's
    knowledge or authorization. In particular, on-site inspections of
    the stations were conducted by an agent from the Commission's San
    Juan, Puerto Rico, Office on August 19, 1997, December 4, 1997,
    September 8, 1998 and April 13, 2001. Family admits that at the time
    of each inspection Stations WSTX(AM) and WSTX-FM were operating at
    variance from the terms of their licenses and that Family did not
    have an STA to operate either station at variance from the terms of
    its authorization.[^6] The ALJ therefore found willful and repeated
    violations of Sections 73.1350(a), 73.1560(a), 73.1560(b), and
    73.1690(b)(2).[^7]

11. *Misrepresentation and/or Lack of Candor.* The ALJ also found
    several instances of admitted misrepresentation or lack of candor by
    Family. In two separate responses, for example, the licensee falsely
    stated that its move to an unauthorized transmitter location was due
    to damage to its authorized facilities from Hurricane Lenny or
    Hurricane Marilyn.[^8] In fact, Gerard Luz James has admitted that
    Family was evicted on October 15, 1994 from the authorized site for
    the FM transmitter because it did not pay the rent and that his
    statements to the contrary were false.[^9] Additionally, Family was
    deemed to have admitted that Gerard Luz James had falsely
    stated: (1) that the stations were operated in accordance with the
    terms of their authorizations and (2) that a fence completely
    enclosed WSTX(AM)'s antenna tower.[^10] It was also deemed to have
    admitted that James knew that these statements were false.

12. *Violation of Public Safety Rules.* The ALJ found no genuine issue
    of fact regarding Family's compliance with sections 73.49 and 11.35,
    requiring enclosure of an antenna tower with an effective locked
    fence and the installation of Emergency Alert System (EAS)
    equipment. Family conceded that there was no fence enclosing
    WSTX(AM)'s antenna tower at the time of the August 19, 1997
    inspection; that a chain link fence was under construction, but
    incomplete, at the time of the December 4, 1997 inspection; and that
    the completed chain-link fence had an opening, which permitted
    access to the antenna tower, at the time of the September 8, 1998
    and the April 13, 2001 inspections.[^11] Family admitted that no EAS
    equipment was installed at the stations' main studio at the time of
    the April 19, 1997 and the December 4, 1997 inspections, and that
    the EAS equipment was not operational at the time of the September
    8, 1998 and the April 13, 2001 inspections.[^12]

13. *Public Inspection File.* Section 73.3526 requires that commercial
    broadcast licensees maintain and make available for public
    inspection, at the station's main studio at any time during regular
    business hours, a file containing certain prescribed materials
    regarding the station's operation. Family admitted having no file at
    the main studio for either station at the time of the August 19,
    1997 and April 13, 2000 inspections and the ALJ determined that the
    licensee willfully and repeatedly failed to maintain public
    inspection files.[^13]

14. *Failure to respond to official Commission correspondence.* The ALJ
    found that as a follow-up to the four on-site inspections the
    Commission issued a total of five Notices of Violations and the
    staff sent a letter on July 19, 2000 directing Family to respond to
    questions regarding the relocation of WSTX-FM's transmitter from its
    authorized site. Based on Family's admitted receipt and failure to
    respond to the five Notices of Violations and to the staff's July
    19, 2000 Letter, the ALJ found repeated violations of Section 1.89
    requiring written responses within 10 days.[^14]

15. *Sanctions.* Based upon the foregoing the ALJ found that there was
    no genuine issue of fact left to resolve by hearing and that the
    only remaining questions concerned law, policy and the appropriate
    sanction for Family's admitted, repeated rule violations.[^15] On
    the ultimate issue of Family's qualifications, the ALJ concluded
    that the Enforcement Bureau "has made its case that Family cannot be
    trusted to be truthful with the Commission or to operate its
    stations in accordance with the Communications Act and Commission
    rules or with a genuine concern for public safety."[^16] Family had
    admitted its repeated rule violations in operating both stations and
    the ALJ found overwhelming evidence to support findings and
    conclusions of serious violations. The repeated intentionally false
    statements of Gerard Luz James, the ALJ determined, established a
    pattern of lack of candor. Repeated failures to have EAS capability
    at both stations and to adequately prevent public access to the AM
    tower, despite being alerted to these violations on numerous
    occasions by FCC Inspectors, demonstrated a disregard for public
    safety. Given that truth and reliability are prerequisites to
    operating a broadcast station in the public interest, the ALJ
    determined that revocation is appropriate under Commission
    precedent[^17] and granted the Bureau's motion for summary decision.

16. By contrast, the ALJ determined that Family had not met its burden
    of proof for a summary decision in which the licenses would not be
    revoked. Family's motion was predicated on the proposed transfer of
    control, without monetary consideration, of Luz James's (and his
    wife's) ownership interest to his children and on his removal as
    president and director eliminating all future problems at both
    stations. Citing Mr. Luz James's advanced age and ill health and
    resulting inability to influence or control the licensee, as well as
    the proposed transferees' alleged noninvolvement in any of the
    misconduct, Family claimed that the proposed transfer is consistent
    with Commission precedent.[^18]

17. The ALJ determined, however, that doubts as to the independence of
    the proposed transferees created genuine issues of material fact,
    and that the past performance of current president Barbara James
    Petersen did not instill confidence that she could bring the
    stations into future compliance.[^19] The ALJ found "a particularly
    significant issue of fact" with respect to Ms. James-Petersen's
    independence as Family's chief executive officer, given the
    stations' continuing dependence on financial support from Asta
    James, who had given only a parole promise to provide the funds
    needed to improve and operate the station.[^20] He also stated that
    "\[t\]here is no way of determining without further discovery and a
    hearing whether this loose financial arrangement might lead to
    residual control by the parents.\" [^21]

18. The ALJ held that "the repeated wrongdoings and intentional untruths
    of Luz James cannot be confidently corrected in the future by a
    dubious assignment of control to children who will need to rely on
    the continuing financial generosity and wherewithal of the wife of
    Luz James."[^22] On this basis, the ALJ determined, for purposes of
    summary decision only, that the proposed assignment was not
    permissible under any of the cited exceptions to the general
    prohibition against a licensee assigning its license before
    favorable resolution of a revocation proceeding. [^23]

19. The ALJ also emphasized that this was the second enforcement
    proceeding involving this licensee. As noted in paragraph 3 above,
    Family's 1995 renewal application for WSTX-FM was designated for
    hearing, but that renewal proceeding was ultimately resolved in
    Family's favor. Despite the disapproval of WSTX-FM's prolonged,
    unauthorized silence expressed by another ALJ in favorably
    terminating the earlier FM renewal proceeding, the ALJ in this
    revocation proceeding noted, Family had again defied the Commission
    by failing to respond to official inquiries and lying about site
    locations.[^24] In this regard, the ALJ found insufficient
    mitigating circumstances to offset the purposeful violations
    attributable to Luz James and the licensee.[^25]

    **FAMILY'S EXCEPTIONS**

20. Family challenges only the ALJ's ultimate conclusion that the
    licenses must be revoked notwithstanding the pending transfer of
    control applications. The licensee faults the ALJ for not crediting
    the deposition testimony of Barbara James Petersen that she is
    confident that, despite formidable obstacles, she will be able to
    turn the stations around financially. It also emphasizes the
    tremendous progress Ms. James-Petersen has made in restoring both
    stations to legal operation since becoming president on March
    14, 2001. These efforts include applying for and receiving special
    temporary authorizations (STAs) that allow both stations to operate
    legally for the first time in years, and filing applications that,
    once granted and implemented, will permit both stations to operate
    in full compliance with all Commission rules on a permanent basis.
    Under Ms. James-Petersen's direction, Family has filed applications
    to reduce from 305 to about 180 feet the height of the AM tower
    (File No. BP-20010622AAF) and to move the FM station to a site on
    Recovery Hill (File No. BPH-20010316AAD). Grant of the former
    application, Family notes, will facilitate the replacement of the AM
    tower, which was knocked down for the third time in November 1999,
    by reducing the cost of its construction.

21. Family submits that there is no evidence that Barbara James-Petersen
    ever lied to the Commission concerning any matter. According to
    Family, Ms. James-Petersen was not involved in or aware of the
    numerous technical deficiencies at the stations. It claims that she
    did not know that operation of the FM station at the prescribed AM
    site was unlawful or that Family had been evicted from the station's
    authorized site for nonpayment of rent. Instead, she allegedly
    assumed that both stations were operated in accordance with their
    licenses and all Commission rules and regulations. Indeed, her
    declaration reflects she was utterly shocked when she saw the *Order
    to Show Cause*. She thereafter persuaded her father to turn over his
    stock to other family members, resign as an officer and director of
    Family and relinquish all involvement with the radio stations, and
    she has engaged legal and engineering counsel to clean up all
    violations at both stations. In her declaration, Ms. James-Petersen
    avers that, if she is allowed to correct the violations, the future
    operation of both stations will comport fully with all rules and
    regulations, the Communications Act, and the terms of the stations'
    licenses. Family acknowledges that, as reflected in the show cause
    order, Ms. James-Petersen had accompanied an FCC inspector during a
    visit to the stations that revealed a hole in the fence surrounding
    the AM tower, but claims that she immediately had the fence
    repaired. She also claims to have taken steps to reconstruct the
    stations' public file when missing items were brought to her
    attention during that same inspection. As to the inoperative EAS
    printer observed by the inspector, Ms. James-Petersen had already
    discovered the problem and the new equipment she ordered from the
    manufacturer arrived soon after the inspection.

22. By way of mitigation, Family notes the series of hurricanes that
    devastated the stations' facilities and area retail businesses, and
    the resulting loss in potential advertisers for the stations. It
    also points to its practices of liberally extending advertising time
    to devastated area businesses without requiring up-front payment or
    any payment at all, and of providing free broadcast time, often on a
    regular basis, to various local government departments. It further
    cites its donation of one-half hour of broadcast time, five days a
    week, to FEMA following Hurricane Marilyn that facilitated its
    communication with devastated areas of the island. Thus, Family
    submits that, despite the numerous rule violations, its stations
    (which are purportedly the only truly local stations serving the
    Virgin Islands) have served the public interest.

23. Family disputes the ALJ's distinction of *Second Thursday,* *Nasby*
    and *Hoffman*, all of which allegedly permit relief where, as here,
    the individual responsible for the wrongdoing receives no monetary
    benefit. Family maintains that only Mr. Luz James is responsible for
    the disqualifying misconduct in this case. His resignation as an
    officer and director and proposed gift of his stock (and his wife's
    stock) to their four children, who are all minority group members,
    makes the assignment appropriate under Commission precedent,
    according to Family. In particular, it urges that there is no
    potential benefit to Luz James nor, given his age and ill health,
    any possibility of him reasserting control over the licensee.
    Alternatively, Family submits that any questions of fact raised by
    the transfer of control applications must, pursuant to 47 U.S.C. §
    309, be resolved by hearing and requests that the Commission
    withhold action in this revocation proceeding until hearing
    proceedings on the transfer of control applications are completed.

    **ENFORCEMENT BUREAU'S REPLY BRIEF**

24. The Enforcement Bureau did not file exceptions to the Summary
    Decision. It agrees with the ALJ that under Commission precedent Mr.
    Gerard Luz James may not escape the consequences of his admitted
    lack of candor and numerous rule violations through the proposed
    transfer of control. Allowing the stock transfer to Mr. Luz James's
    children under the circumstances of this case, the Bureau believes,
    would be a sham to the detriment of the Commission's goal of
    deterring future wrongdoing. In particular, it claims, first, that
    there is no assurance of Mr. Luz James completely and irrevocably
    severing all ties to Family; second, that the present record
    reflects that Family's current president, Ms. Barbara
    James-Petersen, cannot operate the stations independently of her
    parents; and third, that Ms. James-Petersen knew or should have
    known of the various rule violations given her managerial position
    since July 1998, her presence at two FCC inspections, and her
    personal receipt of official correspondence that then went
    unanswered. §Extraordinary relief is unwarranted under the rationale
    of either *Hoffman* or *Nasby*, according to the Bureau, because the
    record does not allow a conclusion that the conceded wrongdoer, who
    resigned only after the *Order to Show Cause*, will be unable to
    influence the licensee post-transfer, and because his misconduct
    relates solely to the operation of WSTX(AM) and WSTX-FM. The Bureau
    believes that *Second Thursday* is inapposite because Family has not
    declared bankruptcy and there are no innocent creditors who would
    benefit from the transfer.

    **DISCUSSION**

25. We grant Family's Exceptions in part. The ALJ is correct that, in
    the absence of record evidence affirmatively demonstrating the
    proposed transferees' future independence and ability to operate the
    stations in accordance with all statutory and regulatory
    requirements, Mr. Luz James's removal as officer, director and
    majority stockholder does not moot the disqualifying impact of his
    intentional misrepresentation and cavalier disregard of basic public
    interest responsibilities. Because we find a genuine issue as to
    these material facts, we affirm the ALJ's denial of Family's Motion
    for Summary Decision. We likewise affirm the ALJ's determination
    that, if Luz James remains in control, Family is not basically
    qualified and the licenses for Station WSTX(AM) and WSTX-FM must be
    revoked. The record before us, however, does not provide a basis to
    determine that the proposed transfer of control is contrary to the
    public interest, and the Bureau has not shown that there are no
    genuine issues as to any material fact or that it is otherwise
    entitled to summary decision. We therefore designate for
    consolidated hearing before the Presiding Judge in EB Docket No.
    01-39 the transfer of control applications filed by Family
    Broadcasting Inc. in connection with Stations WSTX(AM) and WSTX-FM.

26. The legal standard for a Motion for Summary Decision is set forth in
    section 1.251 of the rules, 47 C.F.R. § 1.251. That provision
    specifies in pertinent part that: "(d) \[t\]he presiding officer,
    giving appropriate weight to the nature of the proceeding, the issue
    or issues, the proof, and to the need for cross-examination, may
    grant a motion for summary decision to the extent that the
    pleadings, affidavits, materials obtained by discovery or otherwise,
    admissions, or matters officially noticed, show that there is no
    genuine issue as to any material fact and that a party is otherwise
    entitled to summary decision."

27. The Commission, in the report and order adopting the rule, indicated
    that the moving party must demonstrate not only that no genuine
    issue exists as to any material fact but also that it is entitled to
    summary decision as a matter of law.[^26] It advised further that
    this extraordinary procedure should be utilized only where the
    parties are in agreement regarding the factual inferences that may
    be properly drawn from the record.[^27] Thus, even when the basic
    facts are conceded and summary decision on those facts is
    appropriate, a hearing on the inferences to be drawn from them or as
    to the ultimate findings of fact may also be appropriate.[^28] And,
    because a summary decision deprives a licensee of the opportunity
    for an evidentiary hearing, due process considerations require that
    the moving party must meet a stringent showing.[^29] The presiding
    judge, in determining whether there is a genuine issue of material
    fact, must therefore scrutinize carefully the papers filed by the
    moving party but treat with considerable indulgence the pleadings of
    the opposing party. Furthermore, the moving party has the burden of
    proof even with respect to issues on which the opposing party would
    have the burden of proof at hearing.[^30]

28. Applying this standard, we find that neither Family nor the
    Enforcement Bureau is entitled to summary decision on the ultimate
    factual issue. The record establishes, and the parties agree, that
    Family, through Gerard Luz James, has repeatedly deceived the
    Commission, ignored Commission correspondence, operated both
    stations at variance from the terms of their authorizations, and
    repeatedly violated various Commission rules, some of which are
    designed to promote public safety. There are no genuine issues of
    material fact as to Family's repeated lack of candor, demonstrated
    disregard for public safety and continued violation of a myriad of
    rules, during Mr. Luz James's tenure as president, and summary
    decision is warranted, pursuant to section 0.251, on Issues A
    through F. The record on these issues is substantial and, as the ALJ
    found, the licensee does not dispute the validity of the charges
    underlying their specification.

29. Summary decision is not warranted, however, based on the record
    before us, on whether the licenses for WSTX(AM) and WSTX-FM should
    be revoked. The ALJ is correct, and Family concedes,[^31] that
    revocation is warranted insofar as Gerard Luz James remains in
    control of the licensee. Family seeks to avoid revocation through
    the resignation of Luz James as president and director and the gift
    of his stock (and his wife's stock), subject to Commission consent,
    to their four adult children. Family relies on Commission precedent
    allowing a licensee whose license has been designated for revocation
    hearing to transfer the license to a third-party without first
    demonstrating the transferor's basic qualifications. Such
    transactions, however, are deemed to serve the public interest only
    in limited circumstances, all of which require, at the very least,
    consideration of the extent, if any, to which the individuals
    responsible for the wrongdoing will benefit from the transfer and a
    showing that such individuals will not be in a position to
    thereafter influence or control the licensee's affairs.[^32]

30. Whether a restructured Family under Barbara James-Petersen's
    direction will operate WSTX(AM) and WSTX-FM independently of Gerard
    Luz James, in the public interest, and in accordance with all
    applicable statutory and regulatory requirements is therefore
    material to the relief Family seeks. Given Ms James-Petersen's
    proposed reliance on her mother for financing and her undisputed
    tenure as the stations' general manager at least since July 1998, we
    agree with the ALJ that there are genuine issues of material fact
    that preclude the grant of Family's motion for summary decision.
    There is, for example, no documentary evidence as to the willingness
    and financial wherewithal of Asta Luz James to provide the funding
    necessary to bring both stations into compliance with Commission
    rules. Ms. James-Petersen's previous dependence on her parents
    creates genuine issues of fact as to whether a restructured Family
    will operate without influence from or monetary benefit to Luz
    James. A significant issue as to future correction of the repeated
    violations at WSTX(AM) and WSTX-FM is also raised by Ms.
    James-Petersen's managerial position at the stations since at least
    July 1998. Family's motion was properly denied, pursuant to section
    1.251(d) of the rules, because it failed to show that no genuine
    issue exists as to these material facts.

31. Genuine issues as to these clearly material facts likewise compel
    the denial of the Enforcement Bureau's motion for summary decision.
    As the proponent of a motion for summary decision, the Bureau has
    the burden of proof even with respect to issues on which the
    licensee would have the burden at hearing. [^33] It must thus
    demonstrate by record evidence that individual(s) responsible for
    Family's conceded wrongdoing will either continue to influence the
    licensee or will receive an improper benefit if the transfer of
    control is authorized, or that the transfer of control is otherwise
    precluded as a matter of law.

32. The Bureau has raised serious questions as to the familial
    transferees' future independence and managerial ability that, if not
    resolved in Family's favor after a hearing, will preclude approval
    of the proposed transfer of control and require revocation of
    Family's licenses. The mere raising of such questions, however, does
    not meet the Bureau's burden to show by affidavit or other material
    submitted for consideration by the ALJ that there is no genuine
    dispute as to these material issues. Indeed, Family, while conceding
    Barbara James-Petersen's employment in a managerial capacity and
    presence at inspections where violations were noted, maintains that
    she continued to rely on her father as chief executive officer to
    resolve these matters. Also, deposition testimony cited by the
    Bureau as demonstrating James-Petersen's ignorance of Family's
    financial and corporate affairs (and consequent incapacity to
    operate the stations independently),[^34] is arguably consistent
    with the claim that Mr. Luz James remained responsible for these
    matters until he resigned his corporate positions in March 2001.
    Where, as in this case, the parties dispute the proper inferences to
    be drawn from conceded facts, summary decision on the ultimate issue
    is not appropriate. In any event, the record \-- consisting of
    deposition testimony, detailed admissions and affidavits from
    James-Petersen and her father \-- does not establish the
    transferees' inability to operate the stations in the public
    interest, in accord with all regulatory and statutory requirements,
    and in a manner not accruing to the benefit of the conceded
    wrongdoer. There is, therefore, no basis on the present record for
    an affirmative conclusion that approval of the assignment would
    disserve the public interest and that revocation is therefore
    required.

33. Nor has the Bureau shown that it is otherwise entitled to summary
    decision as a matter of law. In this regard, we note the ALJ's
    consideration of the assignment application, currently pending
    before the Mass Media Bureau, only in the context of Family's motion
    for summary decision. We disagree with the ALJ that the transfer of
    control, if supported by the requisite evidentiary showings
    discussed above, is precluded under Commission precedent.
    Notwithstanding the continued disregard of the public interest
    exhibited by Family, under Gerard Luz James's control, Stations
    WSTX(AM) and WSTX-FM provide truly local service to the Virgin
    Islands and have been devastated by a series of hurricanes. In
    circumstances ensuring the future lawful operation of these stations
    in the public interest at the sole direction of persons having no
    responsibility for the licensee's previous violations and lack of
    candor and in a manner that does not improperly benefit any
    individual responsible for Family's previous performance, there
    could be a basis to find that the proposed transfer of control would
    serve the public interest despite the usual prohibition against a
    transfer by a licensee involved in a revocation proceeding.[^35]

34. In view of the foregoing, we conclude that the applications to
    transfer control of Family Broadcasting Inc. (File Nos.
    BTC-20010315AAJ and BTCH-20010315AAK), now pending before the Mass
    Media Bureau, raise genuine questions of material fact that warrant
    consideration in this hearing proceeding. We therefore designate the
    transfer of control application for consolidated hearing before the
    Presiding Judge in this revocation proceeding. We note that these
    applications have not been processed by the Mass Media Bureau and
    suggest that the Bureau avail itself of the opportunity to have the
    Enforcement Bureau formally request that the ALJ add any further
    issues deemed appropriate by its processing staff. The Presiding
    Judge shall thereafter prepare an Initial Decision on the following
    issues and on any additional issues added by the ALJ at the request
    of either party or on the ALJ's own motion:

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(a) To determine whether, if the transfer of control applications are
    approved, Family Broadcasting Inc. will be influenced or controlled
    by Gerard Luz James;

(b) To determine whether transferors Gerard and Asta Luz James, as
    either creditors or debtors of Family Broadcasting Inc. or in any
    other capacity, will benefit, directly or indirectly, if the
    transfer of control applications are approved;

(c) To determine whether transferee Barbara James-Petersen, in her
    capacity as general manager from July 1998 until March 2001,
    misrepresented facts and or lacked candor with the Commission
    concerning the operation of WSTX(AM) and WSTX-FM;

(d) To determine whether transferee Barbara James-Petersen, in her
    capacity as general manager from July 1998 until March 2001,
    willfully or repeatedly operated WSTX(AM) and WSTX-FM at variance
    from the terms of their licenses;

(e) To determine whether transferee Barbara James-Petersen, in her
    capacity as general manager from July 1998 until March 2001,
    willfully or repeatedly violated Sections 1.89 and/or 73.1015 of the
    Rules by failing to respond to official Commission correspondence
    and inquiries;

(f) To determine whether transferee Barbara James-Petersen will operate
    WSTX(AM) and WSTX-FM independently of any control or influence from
    transferors Asta and Gerard Luz James;

(g) To determine whether transferee Barbara James-Petersen will have
    sufficient financing and managerial capacity to ensure enclosure
    within an effective locked fence of WSTX(AM)'s antenna as required
    by Section 73.49;

(h) To determine whether transferee Barbara James-Petersen will have
    sufficient financing and managerial capacity to ensure the
    installation and maintenance of operational EAS equipment for
    Stations WSTX(AM) and WSTX-FM as required by Section 11.35;

(i) To determine whether Family Broadcasting, Inc. under the direction
    of transferee Barbara James-Petersen will operate WSTX(AM) and
    WSTX-FM in accordance with the Rules, the Communications Act, and
    the terms of their authorizations as required by Sections
    73.1350(a), 73.1560(a), 73.1560(b), and 73.1690(b); and

(j) To determine, in light of the evidence adduced pursuant to the
    foregoing issues, whether approval of the transfer of control
    application will serve the public interest.

    In the event that Issue (j) is resolved adversely, we will revoke
    the licenses for stations WSTX(AM) and WSTX-FM pursuant to the
    Summary Decision, FCC 01D-02 (rel. Aug. 7, 2001) as affirmed herein.

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35. ACCORDINGLY, IT IS ORDERED, That the Motion to Strike, filed October
    3, 2001 by Family Broadcasting, Inc. IS DENIED.[^36]

36. IT IS FURTHER ORDERED, That the Exceptions and Brief In Support of
    Exceptions, filed August 28, 2001 by Family Broadcasting, Inc. ARE
    GRANTED in part; that the Motion for Leave to File Additional
    Exception, filed October 31, 2001 by Family Broadcasting, Inc. IS
    DISMISSED; and that the Summary Decision of Administrative Law Judge
    Richard L. Sippel in *Family Broadcasting, Inc.*, FCC 01D-02 (rel.
    August 7, 2001), IS SET ASIDE to the extent reflected herein and
    otherwise IS AFFIRMED.[^37]

37. IT IS FURTHER ORDERED, That the transfer of control applications
    (File Nos. BTC-20010315AAK and BTCH-20010315AAJ) filed by Family
    Broadcasting, Inc ARE DESIGNATED FOR CONSOLIDATED HEARING, before
    the Presiding Judge in EB Docket No. 01-39 on the issues set forth
    in paragraph 34 above and on any other issues added by the Presiding
    Judge at the request of any party or on the judge's own motion.

38. IT IS FURTHER ORDERED, That, pursuant to 47 U.S.C. §§ 309, 310(d),
    Family Broadcasting Inc. shall have the burden of proceeding and the
    burden of proof as to all of the specified issues.

    FEDERAL COMMUNICATIONS COMMISSION

William F. Caton

Acting Secretary

[^1]: *Family Broadcasting, Inc.*, DA 96-856 (rel. May 30, 1996).

[^2]: *Family Broadcasting, Inc.*, 11 FCC Rcd 18700 (ALJ 1997).

[^3]: *Family Broadcasting, Inc.*, 16 FCC Rcd 4330 (2001), *recon.
    dismissed*, 16 FCC Rcd 12801 (2001).

[^4]: Mr. and Mrs. Luz James own 93 per cent of Family's stock.

[^5]: *Family Broadcasting, Inc.*, 16 FCC Rcd 12801 (2001).

[^6]: *Summary Decision*, FCC 01D-02 (ALJ rel. Aug. 7, 2001), at ¶¶
    16(j) through (q). Family admits further that it had an STA to
    operate WSTX(AM) at variance from June 17 through July 31, 1993, but
    that it did not resume regular operation of WSTX(AM) upon expiration
    of the STA or advise the Commission that the station was not being
    operated in accordance with its license terms. *Id.* at ¶ 16(a),
    (b), (d) and (f). Family also admits that, upon expiration of its
    STA for WSTX-FM, it did not resume operation of the station in
    accordance with its license or thereafter advise the Commission of
    its operation at variance from the terms of its license. *Id.* at ¶
    16(c) and (e). The ALJ determined that Family had promised to erect
    an FM antenna by September 1994, but that as of January 7, 1994
    Family continued to be operating WSTX-FM at substandard facilities
    and without a current STA. *Id.* at n.8.

[^7]:
    ##  Section 73.1350(a) provides that the licensee is responsible for operating its broadcast station in compliance with the technical rules set forth in Part 73 of the Commission's rules and with the terms of the station's authorization. Sections 73.1560(a) and (b) set forth the permissible variances, respectively, from an AM station's authorized antenna input power, and from an FM station's authorized transmitter output power. Pursuant to Section 73.1690(b)(2), an FM station must secure a construction permit in order to move the antenna to another tower structure.

[^8]: *Summary Decision*, ¶¶ 12(a) through (e)**.**

[^9]: Declaration of Gerard A. Luz James, dated March 14, 2001. *See
    also Family Broadcasting, Inc.*, FCC 01-188 ¶ 3 (rel. June 15,
    2001), indicating that Mr. James's declaration reflects that he did
    not intend to deceive the Commission but was humiliated by Family's
    eviction from the site for nonpayment of rent.

[^10]: *Summary Decision*, ¶¶ 16 (g) and (h), 18 (h) and (i). *See also
    Memorandum Opinion and Order*, FCC 01M-09 (rel. Apr. 25, 2001),
    holding that Family is deemed to have admitted for all purposes each
    of the Enforcement Bureau's 167 requests to admit, including the
    request to admit that Mr. Luz James knew various statements were
    false.

[^11]: *Summary Decision,* ¶¶ 18 (c), (f), (m) and (q).

[^12]: *Summary Decision,* ¶¶ 20(a), (d), (l) and (n).

[^13]: *Summary Decision,* ¶¶ 21, 22(a) and (d).

[^14]: *Summary Decision*, ¶**¶** 13, 14, 33.

[^15]: *Summary Decision*, ¶ 31.

[^16]: *Summary Decision*, ¶ 34.

[^17]: *Summary Decision*, ¶ 34, citing *Chameleon Radio Corp.*, 13 FCC
    Rcd 13549 (1998), *recon. denied*, 15 FCC Rcd 24173 (2000), *appeal
    pending,* No. 00-1546 (D.C. Cir. filed Dec. 28, 2000); *Center For
    Study and Application of Black Economic Development*, 10 FCC Rcd
    2836 (Rev. Bd. 1995), *recon. denied,* 10 FCC Rcd 6069 (Rev. Bd.
    1995), *review denied,* 11 FCC Rcd 1144 (1996); *Catoctin
    Broadcasting Corp. of New York*, 2 FCC Rcd 2126 (Rev. Bd. 1987),
    *aff'd in part*, 4 FCC Rcd 2553, *recon. denied*, 4 FCC Rcd 6312
    (1989); *Mid-OhioCommunications, Inc.*, 104 FCC 2d 572 (Rev. Bd.
    1986), *review denied*, 5 FCC Rcd 940, *review dismissed in part,
    denied in part*, 4 FCC Rcd 4596 (1990).

[^18]: Family cited *Nasby V. Petroleum*, 10 FCC Rcd 6029, 6033 (Rev.
    Bd. 1995), *remanded*, 11 FCC Rcd 3494 (1996) (permitting an
    interfamily assignment); *Second Thursday Corp.*, 22 FCC 2d 515
    (1970), *recon. granted,* 25 FCC 2d 112 (1970) (permitting
    assignment in the context of a bankruptcy if the wrongdoer does not
    benefit therefrom); and *Martin W. Hoffman*, 15 FCC Rcd 22086 (2000)
    (permitting assignment at a "distress sale" price under certain
    circumstances).

[^19]: *Summary Decision*, ¶¶ 40-42. Barbara James Petersen has been
    employed as the stations' general manager since at least since July
    1998. Following the March 2001 resignation of her father, Gerard Luz
    James, she assumed the presidency of Family.

[^20]: *Id.* at ¶ 41.

[^21]: *Id.*, *citing Nasby*, 11 FCC Rcd at 3495-96.

[^22]: *Summary Decision,* ¶ 46.

[^23]: *Summary Decision, ¶¶* 35-38*.*

[^24]: *Summary Decision* ¶¶ 45.

[^25]: *Id.* ¶¶ 45, 47.

[^26]: *Summary Decision Procedures*, 34 FCC 2d 485, 486 ¶ 4 (1972). The
    legal standard codified in section 1.251 is essentially the same
    legal standard prescribed by the Federal Rules of Civil Procedure,
    which requires demonstration that "there is no genuine issue as to
    any material fact, *and that the moving party is entitled to a
    judgment as a matter of law.*" (Emphasis in the original) In this
    context, the Commission explained that "\[d\]ifferences in wording
    follow from the fact that the Commission renders 'decisions' rather
    than 'judgments' and that its decisions reflect policies of its own
    making as well as statutory and case law." *Id.* at 487 ¶ 5.

[^27]: *Id.* at 488, noting that courts will deny a motion for summary
    decision where the disputed issue involves the evaluation of
    conceded facts in terms of legal and policy consequences. *See also
    Big Country Radio, Inc.*, 50 FCC 2d 967, 968 (Rev. Bd. 1975).

[^28]: *Summary Decision Procedures*, 34 FCC 2d at 488 & n.3.

[^29]: *Midwest St. Louis, Inc.*, 79 FCC 2d 519, 529 (1980).

[^30]: *Summary Decision Procedures*, 34 FCC 2d at 487-89, quoting
    Professor Gellhorn, "Summary Judgment In Agency Adjudication."

[^31]: *See, e.g., Family Broadcasting, Inc.,* FCC 01M-09 (rel. Apr. 25,
    2001), granting the Bureau's motion to have responses deemed as
    admitted ("Family represents through counsel: 'Family will have
    admitted to all of the inaccuracies contained in the statements
    submitted by Mr. James to the Commission. Thus, the enforcement
    Bureau has made its case: if family remains under the control of Luz
    James, grounds exist to revoke family's licenses'"). (Capitalization
    as it appears in the original.)

[^32]: *Petroleum V. Nasby*, 10 FCC Rcd 6029, 6033 (Rev. Bd. 1995),
    *remanded*, 11 FCC Rcd 3494 (1996) (renewal granted only after
    wrongdoer resigned his corporate position and assigned his ownership
    interest to a trust, controlled by non-family members, for the
    benefit of minor children and after a remand for a specific
    determination of whether the wrongdoer could potentially influence
    the licensee's affairs if the license were renewed); *Silver Star
    Communications-Albany, Inc.*, 6 FCC Rcd 6905 (1991) (sale at a
    reduced price permitted only after favorable resolution of hearing
    issue designated to determine whether the proposed buyer had
    secretly agreed to sell the stations back to wrongdoer so as to make
    the sale a charade enabling the wrongdoer to evade revocation of the
    license for his misconduct); *Faulkner Radio, Inc.*, 88 FCC 2d 612,
    618 (1981) (renewal conditioned on total exclusion of wrongdoer from
    station operations); *Second Thursday*, 22 FCC 2d 515 (1970),
    *recon. granted,* 25 FCC 2d 112 (1970) (assignment allowed in the
    context of a bankruptcy provided the individuals charged with the
    misconduct will have no part in future station operations and will
    either derive no benefit from the assignment or only an indirect
    benefit that is offset by equitable considerations favoring innocent
    creditors).

[^33]: In the above-captioned revocation proceeding the Enforcement
    Bureau, pursuant to Section 312(d) of the Communications Act, 47
    U.S.C. § 312(d), had the burden of proceeding with the evidence and
    the ultimate burden of proof. The ALJ properly found, as set forth
    above, that the Enforcement Bureau met that burden. Insofar as
    Family seeks to avoid revocation through the transfer of control
    application, the licensee has the burden of demonstrating, pursuant
    to 47 U.S.C. § 312(d), that its approval serves the public interest.

[^34]: The Bureau points, for example, to deposition testimony that
    James-Petersen does not know the extent of Family's indebtedness or
    net worth (Dep. at 4§6); or the identity of creditors owed \$300,000
    in long-term debt according to Family's 1996 and 1997 tax returns
    (Dep. at 45-46) or stockholders owed more than \$400,000 (Dep. at
    42-43). It also cites her inability to locate certain corporate
    documents, including tax returns for 1998 through 2000, stock
    ledgers, directors' minutes, and any document showing Family to be a
    corporation of good standing under the laws of Puerto Rico.

[^35]: *See* *Nasby V. Petroleum*, 11 FCC Rcd 3494 (1996).

[^36]: By its motion Family requests that the Commission strike those
    portions of the Bureau's reply brief suggesting that Barbara
    James-Petersen was somehow involved in the wrongdoing at Stations
    WSTX(AM) and WSTX-FM. Such assertions are procedurally improper,
    according to Family, because the ALJ did not find Ms. James-Petersen
    was complicit in any of the wrongdoing and because any disagreement
    with the ALJ's findings should have been raised in exceptions to the
    summary decision. We disagree that the Bureau, having filed no
    exceptions to the Summary Decision, is precluded from raising these
    matters in its reply brief. The applications to transfer control of
    Family to Asta and Gerard Luz James's four adult children are
    pending before the Mass Media Bureau, not before the ALJ. The
    question of James-Petersen's involvement in the wrongdoing therefore
    became relevant for consideration by the ALJ only in the context of
    *Family's* Motion for Summary Decision. Because the ALJ could not
    approve or reject the transfer applications, it was not incumbent on
    the Bureau to file exceptions to the Summary Decision in order to
    address issues relevant only to applications beyond the ALJ's
    jurisdiction. The licensee, however, sought summary decision based
    on the proposed transfer of control and now seeks review of the
    ALJ's denial of that motion. In response, the Bureau is entitled to
    address the clearly relevant impact of Ms. James-Petersen's
    managerial position.

[^37]: In response to the Enforcement Bureau's Opposition to the Motion
    to Strike, Family seeks to file an additional exception directed to
    the ALJ's finding that the earlier renewal proceeding involving
    WSTX-FM should have alerted anyone connected with Family, including
    Barbara James-Petersen, to the problems at both stations. Family
    initially failed to file exceptions on this point, because it
    believed that the earlier proceeding was beyond this ALJ's
    jurisdiction. The ALJ's finding as to the earlier proceeding,
    however, is inextricably related to issues as to Ms.
    James-Petersen's complicity in, and knowledge of, matters that
    Family claims were solely the responsibility of conceded wrongdoer
    Gerard Luz James. Given our determination herein that there are
    genuine disputes as to these material facts that cannot be resolved
    on the existing record, the request to file additional exception is
    moot. It may therefore be dismissed without regard to any question
    concerning the procedural propriety of further exceptions.