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Parties Involved:
COMSAT Corporation
Petitioner
Federal Communications Commission
Respondent
United States of America
Respondent

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 18, 1997 Decided May 30, 1997

No. 96-1325

COMSAT CORPORATION,

PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND 

UNITED STATES OF AMERICA,

RESPONDENTS

On Petition for Review of an Order of the 

Federal Communications Commission

Daniel E. Troy argued the cause for petitioner, with whom 

Lawrence W. Secrest, III, William B. Baker, Warren Y. 

Zeger, and Robert A. Mansbach were on the briefs. Richard 

E. Wiley entered an appearance.

C. Grey Pash, Jr., Counsel, Federal Communications Commission, argued the cause for respondent, with whom William E. Kennard, General Counsel, Daniel M. Armstrong,

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Associate General Counsel, Joel I. Klein, Acting Assistant 

Attorney General, U.S. Department of Justice, Robert B. 

Nicholson and Andrea Limmer, Attorneys were on the brief.

Before: EDWARDS, Chief Judge, SILBERMAN and WILLIAMS, 

Circuit Judges.

Opinion for the Court filed by Chief Judge EDWARDS.

EDWARDS, Chief Judge: Petitioner COMSAT, a common 

carrier offering a broad range of satellite-based services, 

requests review of the Federal Communications Commission ("FCC or the Commission") rulemaking amending its 

regulatory fee schedule. The FCC promulgated an amendment to the fee schedule charging COMSAT a "signatory fee" 

for costs allegedly incurred by the agency as a result of 

COMSAT's status as the United States' signatory to two 

international bodies, the International Telecommunications 

Satellite Organization and the International Mobile Satellite 

Organization (hereinafter referred to as the "Organizations"). 

Because we find that the FCC acted outside the scope of its 

statutory authority when it promulgated this amendment, we 

grant the petition for review.

First, we find that the statutory language of section 9 of 

the Communications Act of 1934, which provides that "[i]ncreases or decreases in fees made by amendments pursuant 

to this paragraph shall not be subject to judicial review," 47 

U.S.C. § 159(b)(3) (1994), does not deprive this court of 

jurisdiction to review the Commission's action in this case. 

This language provides that there shall be no judicial review 

where the Commission has amended the statutory fee schedule pursuant to the terms of § 159(b)(3). However, there is 

no preclusion of judicial review where, as here, the Commission has acted outside the scope of its authority under 

§ 159(b)(3). Thus, consideration of this court's jurisdiction 

merges with consideration of the question whether the Commission possessed the requisite statutory authority to charge 

COMSAT a signatory fee.

Second, consistent with our finding of jurisdiction, we find 

that, on the merits, the Commission exceeded its statutory 

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authority when it charged COMSAT a signatory fee. Section 

159(b)(3) permits amendments to the statutory fee schedule 

where the "Commission determines that the Schedule requires amendment to comply with the requirements of paragraph (1)(A) [which mandates that the Commission allocate 

fees to cover the costs of certain regulatory activities in 

accord with the benefits provided to the payor and other 

factors that the Commission determines are in the public 

interest]." 47 U.S.C. § 159(b)(3). However, the next sentence of § 159(b)(3) states that, "[i]n making such amendments, the Commission shall add, delete, or reclassify services in the Schedule to reflect additions, deletions, or 

changes in the nature of its services as a consequence of 

Commission rulemaking proceedings or changes in law."

Id. (emphasis added). This latter sentence clearly limits the 

Commission's authority to promulgate amendments under the 

first sentence. The Commission conceded at oral argument 

that the signatory fee was not imposed in response to any 

such "rulemaking proceeding[ ] or change[ ] in law." Thus, 

the Commission had no lawful basis for its signatory fee, for 

it was neither authorized nor justified by § 159(b)(3). 

Accordingly, we vacate the Commission's rule charging 

COMSAT signatory fees.

I. BACKGROUND

A. COMSAT

COMSAT, a private corporation formed pursuant to the 

Communications Satellite Act of 1962, see 47 U.S.C. §§ 701-

44 (1994), serves by congressional designation as the United 

States' sole representative and signatory to the Organizations. Both Organizations are multinational and were created 

pursuant to international agreements for the purpose of 

establishing and operating world-wide satellite communications systems. The United States is a party to both Organizations through congressionally authorized Executive Agreements.

B. The Commission's Regulatory Fee Regime

Congress has authorized the Commission to assess and 

collect two types of fees: application fees, which are not at 

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issue here, and regulatory fees. Section 9 of the Communications Act of 1934 authorizes the Commission to collect regulatory fees "to recover the costs of ... enforcement activities, 

policy and rulemaking activities, user information services, 

and international activities." 47 U.S.C. § 159(a)(1) (1994). 

The revenues collected under this section should equal the 

amounts appropriated by Congress for that fiscal year for the 

performance of these activities. See 47 U.S.C. § 159(b)(1)(B) 

(1994).

Congress established an initial regulatory fee schedule 

under section 9 which did not include a charge for "signatory 

fees." By statute, the Commission must proportionally adjust the fee schedule to ensure that the total revenue generated by the fees satisfies the targets set by Congress in the 

appropriations acts. See 47 U.S.C. § 159(b)(2) (1994). Congress also gave the Commission the authority to amend the 

fee schedule where the "Commission determines that the 

Schedule requires amendment to comply with the requirements of paragraph (1)(A) [which mandates that the Commission allocate fees to cover the costs of certain regulatory 

activities in accord with the benefits provided to the payor 

and other factors that the Commission determines are in the 

public interest.]" 47 U.S.C. § 159(b)(3). However, the statute provides that, "[i]n making such amendments, the Commission shall add, delete, or reclassify services in the Schedule to reflect additions, deletions or changes in the nature of 

its services as a consequence of Commission rulemaking 

proceedings or changes in law." 47 U.S.C. § 159(b)(3).

C. The Commission's Decision to Charge COMSAT a "Signatory Fee"

On April 15, 1996, in a notice of proposed rulemaking, the 

Commission proposed to amend the regulatory fee schedule 

under section 9 to create a new category of fees, the so-called 

"signatory fee." See Assessment and Collection of Regulatory Fees for Fiscal Year 1996, 61 Fed. Reg. 16,432, 16,436 

(1996). The Commission explained that, in fiscal year 1995, 

COMSAT had not been required to pay a "geosynchronous 

satellite regulatory fee" for its Organization satellites "because the legislative history of Section 9 states that regulatoUSCA Case #96-1325 Document #275433 Filed: 05/30/1997 Page 4 of 8
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ry fees should not be assessed upon space stations operated 

by international bodies." Id. The Commission indicated that 

the signatory fee, thus, was being proposed as an alternative 

means of recovering the regulatory costs incurred as a result 

of "COMSAT's participation in the [Organizations'] programs." Id.

COMSAT opposed the signatory fee proposal. It filed 

comments challenging the Commission's authority to create 

such a signatory fee and the methodology by which the 

Commission calculated the fee. See Comments of COMSAT 

Corporation, MD Docket No. 96-84 (Apr. 29, 1996), reprinted 

in J.A. 62. COMSAT argued that no change in circumstances or law had occurred to trigger the Commission's 

authority to amend the fee schedule and that section 9, which 

requires the Commission "to take into account factors that 

are reasonably related to the benefits provided to the payor 

of the fee by the Commission's activities ... and other factors 

that the Commission determines are necessary in the public 

interest," 47 U.S.C. § 159(b)(1)(A), did not authorize the 

Commission to create a signatory fee because the proposed 

fee was not "reasonably related" to "benefits" conferred on 

COMSAT by the Commission's activities since COMSAT's 

signatory status was conferred by Congress, and not by the 

agency. See Comments of COMSAT Corporation, MD Docket No. 96-84 (Apr. 29, 1996) at 6, 10, reprinted in J.A. 71, 75. 

COMSAT also argued that the proposed "signatory fee" could 

not be based on the agency activities cited by the Commission, because, to the extent these activities conferred any 

"benefits" on COMSAT, the associated regulatory costs were 

already recouped through the application fees and other 

regulatory fees that COMSAT pays to the Commission. See 

id. at 14, reprinted in J.A. 79.

The Commission rejected COMSAT's arguments in its final 

rule, concluding that the signatory fee classification "fully 

satisfies the statutory requirements in Section 9." Assessment and Collection of Regulatory Fees for Fiscal Year 1996,

61 Fed. Reg. 36,629, 36,635 (1996). The Commission said, 

"We also have no doubt that Comsat benefits significantly 

from its status as signatory and the regulatory oversight that 

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is necessitated by that status. Therefore, taking into account 

these benefits, we perceive no public interest basis for relieving Comsat of the costs that the Commission incurs in 

regulating its activities." Id. at 36,635-36 (footnote omitted).

COMSAT paid the fees in full under protest. On September 10, 1996, COMSAT petitioned this court for review.

II. ANALYSIS

A. The Jurisdiction of this Court Under Section 9 of the 

Communications Act

As with most administrative agency decisions, we start with 

the assumption that there is a "strong presumption" of reviewability. Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 670 (1986). Under the Administrative 

Procedure Act, "agency actions are judicially reviewable "except to the extent that(1) statutes preclude judicial review; 

or (2) agency action is committed to agency discretion by 

law.' " Natural Resources Defense Council, Inc. v. SEC, 606 

F.2d 1031, 1043 (D.C. Cir. 1979) (quoting 5 U.S.C. § 701(a)). 

Neither exception is applicable here. As section 9 articulates 

standards that the Commission must follow in amending the 

statutory fee schedule, we can quickly dispense with the 

second exception to the presumption of judicial reviewability. 

See Heckler v. Chaney, 470 U.S. 821, 830 (1985) (This exception "is applicable in those rare instances where statutes are 

drawn in such broad terms that in a given case there is no 

law to apply." (quotation omitted)).

We also find that the first exception to the presumption of 

judicial reviewability is inapplicable here, because the provision of the statute that limits judicial review is not applicable 

to this case. See Citizens To Preserve Overton Park, Inc. v. 

Volpe, 401 U.S. 402, 410 (1971) (There must be a "showing of 

clear and convincing evidence of a ... legislative intent to 

restrict access to judicial review." (internal quotation omitted)). The statutory language of section 9 only provides that 

"[i]ncreases or decreases in fees made by amendments pursuant to this paragraph shall not be subject to judicial review." 

47 U.S.C. § 159(b)(3) (emphasis added). Thus, the statute 

says that the courts may not review the Commission's actions 

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where the Commission has acted within the scope of its 

authority under section 9. The no-review provision of section 

9, accordingly, merges consideration of the legality of the 

Commission's action with consideration of this court's jurisdiction in cases in which the challenge to the Commission's 

action raises the question of the Commission's authority to 

enact a particular amendment. Where, as here, we find that 

the Commission has acted outside the scope of its statutory 

mandate, we also find that we have jurisdiction to review the 

Commission's action.

Our construction of section 9 does not strip the statute of 

meaning, for there are numerous amendments that could be 

made consonant with the terms of § 159(b)(3) that would not 

be subject to judicial review. For example, an amendment to 

increase the amount of an existing feefor a statutorily 

permissible reasonwould be covered by section 9. This 

case, however, does not present such a situation.

At oral argument, counsel for the FCC suggested that the 

no-review provision of section 9 could be read to shield from 

judicial review any Commission action purportedly taken 

pursuant to section 9. Thus, according to counsel, the Commission could impose a tax on an unregulated railroad or a 

tax on an individual for eating ice cream, so long as the FCC 

claimed to be acting under section 9. This is a preposterous 

position, one that we will not countenance. As this court said 

in Railway Labor Executives Ass'n. v. National Mediation 

Bd., 29 F.3d 655 (D.C. Cir. 1994) (en banc), "it goes without 

saying that the bald assertion of power by [an] agency cannot 

legitimize it." Id. at 669. "Unable to link its assertion of 

authority to any statutory provision, the [FCC's] position in 

this case amounts to the bare suggestion that it possesses 

plenary authority to act within a given area simply because 

Congress has endowed it with some authority to act in that 

area. We categorically reject that suggestion." Id. at 670.

B. The Scope of the Commission's Authority to Amend the 

Regulatory Fee Schedule Under Section 9 of the Communications Act

We are faced with the simple question of whether the 

Commission possessed the authority to institute a signatory 

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fee under § 159(b)(3). Section 159(b)(3) permits amendments 

to the regulatory fee schedule adopted by Congress where 

the "Commission determines that the Schedule requires 

amendment to comply with the requirements of paragraph 

(1)(A) [which mandates that the Commission allocate fees to 

cover the costs of certain regulatory activities in accord with 

the benefits provided to the payor and other factors that the 

Commission determines are in the public interest]." 47 

U.S.C. § 159(b)(3). The next sentence of § 159(b)(3), however, says that, "[i]n making such amendments, the Commission shall add, delete, or reclassify services in the Schedule to 

reflect additions, deletions, or changes in the nature of its 

services as a consequence of Commission rulemaking proceedings or changes in law." Id. (emphasis added). The 

second sentence, thus, limits the authority granted to the 

Commission under the first sentence. The Commission may 

amend the fee schedule in the circumstances articulated by 

the first sentence only where the requirements of the second 

sentence are met. This is clear, because the second sentence 

begins with the words "[i]n making such amendments," thus 

showing that the first and second sentences are not separate 

sources of authority for the promulgation of amendments.

In this case, counsel for the Commission conceded at oral 

argument that the signatory fee imposed on COMSAT was 

not charged pursuant to any rulemaking or change in law. 

The Commission, thus, acknowledged that, when it charged 

COMSAT a signatory fee, it acted outside the scope of its 

statutory authority to amend the fee schedule under section 

9. The Commission's amendment was neither authorized nor 

justified by § 159(b)(3). We therefore find that the disputed 

fee cannot survive this petition for review; accordingly, we 

hold the fee unlawful and set aside the action of the Commission. See 5 U.S.C. § 706(2)(C) (The reviewing court "shall 

hold unlawful and set aside agency action ... in excess of 

statutory jurisdiction [and] authority.").

III. CONCLUSION

We grant petitioner COMSAT's request for review and 

vacate the Commission's rule charging a signatory fee.

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