Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-96-01059/USCOURTS-caDC-96-01059-0/pdf.json

Parties Involved:
Federal Communications Commission
Appellee
State of Oregon
Appellant
University Foundation, California State University at Chico
Intervenor

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 8, 1996 Decided December 20, 1996

No. 96-1059

STATE OF OREGON,

APPELLANT

v.

FEDERAL COMMUNICATIONS COMMISSION AND

UNITED STATES OF AMERICA,

APPELLEES

UNIVERSITY FOUNDATION, CALIFORNIA STATE UNIVERSITY AT CHICO,

INTERVENOR

Appeal of an Order of the

Federal Communications Commission

Howard M. Liberman argued the cause for appellant, with whom Gerald Stevens-Kittner was on the

brief.

Gregory M. Christopher, Counsel, Federal Communications Commission, argued the cause for

appellees, with whom William E. Kennard, General Counsel, and Daniel M. Armstrong, Associate

General Counsel, were on the brief. Roberta L. Cook, Counsel, entered an appearance.

Stanley S. Neustadt and Wayne Coy, Jr. were on the brief for intervenor University Foundation,

California State University at Chico.

Before: WALD, GINSBURG, and TATEL, Circuit Judges.

GINSBURG, Circuit Judge: The State of Oregon, acting through the State Board of Higher

Education for the benefit of Southern Oregon State College, appeals a decision of the Federal

Communications Commission rejecting as untimely its application for a new noncommercial FM

license and denying its application for a waiver of the cut-off rules for competing applications.

Because the Commission did not provide clear notice of the cut-off date for competing applications,

we reverse the order of the FCC and remand this matter to the Commission.

I. Background

In Ashbacker Radio Corp. v. FCC, 326 U.S. 327 (1945), the Supreme Court held that the

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FCCmust conduct a comparative hearingwheneverthere are before it mutuallyexclusive applications

for a broadcast license. The FCC has promulgated various regulations governing the processing of

such applications and establishing certain filing deadlines. "The purpose of these rules is to attract

all competitive applications for a particular [license] within a fixed and reasonably short time frame,

allowing theCommission to satisfy its Ashbacker obligations with a single, fairlyprompt comparative

hearing." McElroy Electronics Corp. v. FCC, 86 F.3d 248, 253 (D.C. Cir. 1996).

The licensing process for a new noncommercial FM station begins when the Commission

receives the first application therefor. If the Commission accepts an application for filing, then the

agency must issue a public notice (known as the "A" cut-off list) naming the applicant(s) accepted

for filing and announcing a date not less than 30 days after the publication of the notice by which all

mutually exclusive applications and petitions seeking to deny the listed application(s) must be filed.

47 C.F.R. § 73.3573(e). Any competing applications filed before the "A" list cut-off date are noted

in a "B" cut-off list. The "B" cut-off list contains the deadline for the filing of all petitions to deny

"B" list application(s). Id. When the "B" cut-off deadline has passed, the "A" and "B" list

applications are set down for a single comparative hearing.

In this case, the process got underway in June 1988 when the University Foundation,

California State University at Chico submitted to the FCC an application for a noncommercial FM

radio station in Redding, California. On November 29, 1989 the FCC sent the Foundation a letter

indicating that its application was deficient because it lacked certain engineering information. The

letter stated: "Further action on the subject application will be withheld for a period of 30 days from

the date of this letter to give you an opportunity to cure these deficiencies." The Commission duly

sent Oregon a copy of this letter. On December 6, 1989 the FCC released an "A" cut-off list setting

January 10, 1990 as the cut-off date for applications competing with that of the Foundation. On

December 28, 1989 the Foundation submitted the engineering information the FCC had requested

in its letter of November 29. On the same day, the Commission released another "A" cut-off list

setting February 1, 1990 as the deadline for applications competing with that of the Foundation.

On January 2, 1990 the Foundation sent a letter to the FCC asking that its application be

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deleted from the cut-off list issued on December 28, 1989. The Foundation did not send a copy of

this letter to Oregon, in apparent violation of the Commission's regulations governing ex parte

communications. See 47 C.F.R. §§ 1.1202(b); 1.1208(a). On January 12 the Commission issued

an erratum stating that the Foundation's application "was listed inadvertently on [the "A" list],

released December 28, 1989 and is hereby deleted."

Although it was aware of the January 10 cut-off date in the "A" list published on December

6, Oregon did not file its own application for the Redding station untilJanuary 29, 1990. The State

asserts that it believed the Commission had published the December 6 list in error because only one

week earlier, in the November 29 deficiency letter to the Foundation, the agency had indicated that

it would not act upon the Foundation's application for 30 days. Nonetheless, Oregon claims, after

the February 1 cut-off date was published it made diligent effortsto determine which cut-off date was

valid. The State continued to monitor Commission notices; consulted the Commission's

Facility/Application Information Report, which indicated that the February 1 deadline applied;

attempted to contact Commission staff directly but was unsuccessful because of the holiday season;

and received assurances from the FCC staff indirectly, via Senator Packwood's office, that the

Commission would accept applications until February 1.

On January 15, 1990 Oregon sent a letter to the Secretary of the Commission expressing its

concern that by issuing the erratum of January 12 deleting the Foundation's application from the

December 28 "A" list, the agency intended to adhere to January 10 as the cut-off date. The State

explained that it was in the process of preparing a competing application to be filed on or before

February 1, which it believed to be the applicable cut-off date.

Oregon went on to submit its application on January 29, together with a request for a waiver.

On June 21 the Chief ofthe Audio Services Division, Mass MediaBureau, rejected the State'srequest

for a waiver and returned the application as untimely filed. Oregon then filed an Application for

Review by the Commission, in which it argued that the staff exercising delegated authority had acted

arbitrarily and capriciously in denying its application as untimely.

The Commission denied review, noting that Oregon had "actual knowledge" that the

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Foundation's application was pending before the agency yet "for reasons known only to Oregon" did

not submit its own application until after the Foundation's application was accepted for filing. The

Commission rejected the State's argument that it had reasonably relied upon the FAIR Report, that

it had reasonably believed the November 29 deficiency letter precluded the Commission from placing

the Foundation's application upon an "A" list in less than 30 days, and that it could have filed its

application by January 10 if only it had been served with a copy of the Foundation's January 2 letter

to the Commission, as required by the agency'srulesfor ex parte communications. The FCC opined

that this case was analogous to Florida Inst. of Technology v. FCC, 952 F.2d 549 (D.C. Cir. 1992),

in which we held that the FCC had provided adequate notice even though it had issued two

inconsistent "A" lists.

The Commission also denied the State'srequest for a waiver. The Commission held that this

case did not present "extraordinary circumstances" and that the State had not exercised reasonable

diligence or demonstrated that its delay in filing was due to a circumstance beyond its control. The

Commission subsequently denied the State's motion for reconsideration (over a single dissenting

vote), adding that Oregon should not have been confused about the true cut-off date because, under

the FCC's regulations, "the December 28 cut-off notice was without legal effect," and "[i]t is a

well-settled rule that an agency's failure to follow its own regulations is fatal to the deviant action,"

quoting Florida Inst., 952 F.2d at 553. Oregon then appealed to this court.

II. Analysis

Oregon makes two arguments on appeal. The first is that, because the Commission failed to

provide adequate notice of the cut-off date, it was arbitrary and capricious to deny the State's

application as untimely filed. The second is that it was arbitrary and capricious for the FCC to deny

the State's application for a waiver of the cut-off rule. Because we conclude that the Commission's

rejection of Oregon's application as untimely was arbitrary and capricious, we will not address

whether the FCC should have granted the petitioner's waiver request.

The FCC enforces its cut-off rules strictly in order to provide a prompt comparative hearing

and to ensure that applicants are treated fairly and consistently. Id at 550. We have approved the

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FCC's policy of strict enforcement but only "so long as "the quid pro quo ... is explicit notice of all

applicability requirements.' " Id. (quoting Salzer v. FCC, 778 F.2d 569, 875 (D.C. Cir. 1985)). As

we have explained before, "The dismissal of an application is a sufficiently grave sanction to trigger

[the] duty to provide clear notice." Satellite Broadcasting Co. v. FCC, 824 F.2d 1, 3 (D.C. Cir.

1987). Accordingly, we have held that the FCC acts arbitrarily and capriciously "when it reject[s]

an application as untimely based on an ambiguous cut-off provision, not clarified by FCC

interpretations, if the applicant made a reasonable effort to comply." Florida Inst., 952 F.2d at 550.

Oregon argues that the FCC acted arbitrarily and capriciously in rejecting its application

because the agency failed to give prospective applicants for the Redding station clear notice of the

cut-off date for competing applications. Oregon claims that it reasonably believed that the second

"A" list was correct because the Commission's letter of November 29 had indicated that the agency

would take no action on the Foundation's application for 30 days; the FAIR Report stated that the

cut-off date was indeed February 1; and the second "A" list was issued before the first-announced

cut-off dateall of which suggests that the Commission was covering an invalid premature notice

with a valid one.

TheCommission, relying upon oursubsequent decision in Florida Institute, respondsthat the

duplicative cut-offlist could not have created any ambiguity. The Commission contends that because

the first "A" list was never retracted, the second "A" list could have no legal effect and therefore

could not have misled Oregon.

The Commission's reliance upon Florida Institute is misplaced. In that case one applicant

filed its application after the FCC had issued an "A" list and before the cut-off date for mutually

exclusive applications. Under the applicable regulations, the Commission should then have issued

a "B" list including this second application and a cut-off date for petitions to deny, but it failed to do

so. Two years after it had issued the first "A" list, the Commission mistakenly issued a new "A" list

containing the second application and announcing a new cut-off date. The Florida Institute of

Technology filed its own mutually exclusive application before the cut-off date, but the FCC rejected

the application as untimely. The Institute argued that its application was timely because the second

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"A" list supplanted the first with a new cut-off date, thereby beginning the filing process anew. We

rejected this argument, saying: "The new "A' cut-off date could not supplant the earlier one because

the September 1986 notice was without legal effect: "[i]t is a well-settled rule that an agency's failure

to follow its own regulations is fatal to the deviant action.' " Id. at 553 (quoting Way of Life

Television Network, Inc. v. FCC, 593 F.2d 1356, 1359 (D.C. Cir. 1979)).

The facts here are significantly different. In Florida Institute, the second "A" list was

published not before but long after the original cut-off date. The Institute did not and could not argue

that the FCC failed to give clear and adequate notice ofthe filing deadline; indeed, the Institute could

have determined that the second "A" list was issued in error simply by examining the public record.

The Institute's primaryargument on appealwasinstead that the second "A" list created a new window

period for the filing of mutually exclusive applications. We rejected this attempt by the Institute to

turn a clerical error into a windfall of "rights it would not otherwise enjoy." Id.

Here, in contrast, Oregon argues that the Commission failed to give clear notice of the

deadline: First the FCC said the cut-off date was January 10; then, well before that date, it said the

deadline was February 1. Unlike the petitioner in Florida Institute, Oregon was faced with

overlapping filing periods, and therefore never had one complete filing period during which the

deadline was clear. Although an FCC regulation provides that an application should be placed on

only one "A" list, it was quite possible, and certainly within the Commission's power to declare, that

it had issued the first "A" list in error. Oregon's confusion was therefore understandable; not only

had the second "A" list been issued well before the original filing deadline, but the FAIR reports

indicated that the second "A" list was applicable, andalthough the Foundation, unbeknowst to

Oregon, had brought the error to the FCC's attention in its letter of January 2the agency did not

move to correct its error until after the first deadline had passed. Thus, although the FCC originally

gave clear notice of the January 10 cut-off, its subsequent actions so muddied the waters that a

prospective applicant could not be confident what the cut-off date was. Of course, the State could

in these uncertain circumstances have hastened to apply by the original cut-off date, but its failure to

do so does not relieve the Commission of its obligation in the first instance to provide the public with

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clear notice ofthe cut-off date. And absent clear notice, it was arbitrary and capricious for the agency

to reject Oregon's application.

III. Conclusion

The FCC acted arbitrarily and capriciously by rejecting Oregon's application as untimely

without having provided clear notice of the filing deadline. Therefore, we vacate the Commission's

order dismissing Oregon's application and remand this case to the agency for further proceedings

consistent with the foregoing opinion.

So ordered.

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