Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-98-01516/USCOURTS-caDC-98-01516-0/pdf.json

Parties Involved:
Federal Communications Commission
Appellee
Herbert Schoenbohm
Appellant

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 18, 1999 Decided February 29, 2000

No. 98-1516

Herbert L. Schoenbohm,

Appellant

v.

Federal Communications Commission,

Appellee

Appeal of Orders of the

Federal Communications Commission

Lauren A. Colby argued the cause and filed the briefs for

appellant.

James M. Carr, Counsel, Federal Communications Commission, argued the cause for appellee. With him on the brief

were Christopher J. Wright, General Counsel, and Daniel M.

Armstrong, Associate General Counsel. Pamela L. Smith,

Counsel, entered an appearance.

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Before: Sentelle, Henderson, and Garland, Circuit

Judges.

Opinion for the Court filed by Circuit Judge Garland.

Garland, Circuit Judge: Appellant Herbert Schoenbohm

operates an amateur radio station in the U.S. Virgin Islands.

In 1992, he was convicted of a felony for fraudulently using

counterfeit access codes to obtain long distance telephone

services.1 In 1994, shortly before Schoenbohm's amateur

radio licenses were due to expire, he filed a renewal application with the Federal Communications Commission (FCC).

After a series of hearings, an administrative law judge

(ALJ) denied Schoenbohm's application. On June 29, 1998,

the Commission affirmed the denial, finding that Schoenbohm's fraud conviction, "in combination with" his misrepresentations and lack of candor during the renewal proceedings,

justified nonrenewal. Herbert L. Schoenbohm, 13 F.C.C.R.

15,028, 15,028 (1998) [hereinafter Decision]. Schoenbohm

filed a petition for reconsideration, reiterating arguments he

had previously made and asking for the first time that the

FCC investigate allegations that some of his detractors may

have had improper ex parte contacts with the ALJ. See J.A.

at 77. The FCC denied reconsideration, restating its previous justifications for nonrenewal and rejecting the request for

an inquiry into the ex parte allegations. See Herbert L.

Schoenbohm, 13 F.C.C.R. 23,774, 23,777 (1998) [hereinafter

Reconsideration Order].

Schoenbohm contends that the denials of both his renewal

application and his petition for reconsideration were arbitrary

and capricious agency actions, in violation of the Administra-

__________

1 Schoenbohm was found guilty of violating 18 U.S.C.

s 1029(a)(1), which provides that anyone who "knowingly and with

intent to defraud produces, uses, or traffics in one or more counterfeit access devices" commits a felony. The statute defines "access

device" as "any card, plate, code, account number, ... or other

means of account access that can be used ... to obtain money,

goods, services, or any other thing of value." Id. s 1029(e)(1). An

access device is "counterfeit" if it is "counterfeit, fictitious, altered,

or forged." Id. s 1029(e)(2).

tive Procedure Act, 5 U.S.C. s 706(2)(A). We affirm the

FCC's refusal to renew Schoenbohm's radio licenses and

conclude that we are without jurisdiction to review the rejection of his petition for reconsideration.

I

We begin with the FCC's denial of Schoenbohm's renewal

application. Before reaching the merits of that decision,

however, we must resolve a preliminary question of jurisdiction. The Commission argues that Schoenbohm did not

appeal from its original decision to deny his renewal application, but only from its order denying his petition to reconsider

that decision. Denial of a petition for reconsideration, the

agency correctly notes, is generally nonreviewable unless the

request for reconsideration was based on new evidence or

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changed circumstances. See ICC v. Brotherhood of Locomotive Eng'rs, 482 U.S. 270, 279-80 (1987); Southwestern Bell

Tel. Co. v. FCC, 180 F.3d 307, 311 (D.C. Cir. 1999); see also

Entravision Holdings, LLC v. FCC, No. 99-1025, slip op. at 4

& n.* (D.C. Cir. Feb. 11, 2000) (holding that nonreviewability

in this context means lack of jurisdiction).

It is true that the notice of appeal Schoenbohm filed in this

court characterizes his appeal as being from the order denying the petition for reconsideration. See J.A. at 85. It is also

true that in Southwestern Bell, where the petition for review

designated only the reconsideration order, we held both that

the reconsideration order was nonreviewable and that the

underlying order was not properly before us. See Southwestern Bell, 180 F.3d at 313-14. We did not, however, suggest

that the failure to designate an order in a petition for review

(or notice of appeal) is always fatal. To the contrary, "we

said in Southwestern Bell Telephone Co. v. FCC [that] a party

may demonstrate its intention to appeal from one order

despite referring only to a different order in its petition for

review if the petitioner's intent 'can be fairly inferred' from

the petition or documents filed more or less contemporaneously with it." Martin v. FERC, 199 F.3d 1370, 1372 (D.C.

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Cir. 2000) (quoting Southwestern Bell, 180 F.3d at 313 (quoting Brookens v. White, 795 F.2d 178, 180 (D.C. Cir. 1986))).

Here, Schoenbohm's intent to appeal from the underlying

decision (as well as from the denial of reconsideration) is

fairly inferable from the "concise statement of reasons,"

required by 47 U.S.C. s 402(c), that he filed together with his

notice of appeal. That statement expressly lists each of his

challenges to the underlying decision, including arguments

that the FCC erred in relying on his criminal conviction and

in finding that he lacked candor in his testimony before the

agency. It also separately challenges the agency's refusal to

investigate his allegations of improper ex parte contacts with

the ALJ. See J.A. at 85-86. Schoenbohm's ancillary filing

therefore makes this case like Damsky v. FCC, in which we

recently inferred an appellant's intent to appeal an underlying

decision from the fact that her concise statement of reasons

challenged the substantive merits of that decision. See 199

F.3d 527, 533 (D.C. Cir. 2000); see also Martin, 199 F.3d at

1373 (holding that petitioner's intent to seek review of underlying order was fairly inferable from his contemporaneously

filed motion for stay). At the same time, it makes this case

unlike Southwestern Bell, where there was no such challenge

in any filing "prior to the brief filed in this court." Southwestern Bell, 180 F.3d at 313.

Because Schoenbohm's intent to appeal the FCC's underlying decision can reasonably be inferred from his concise

statement of reasons, and because for the same reason the

FCC "cannot claim that any notice defects surprised or

misled it with regard to the issues [appellant] intended to

raise on appeal," we conclude that we have jurisdiction to

review the FCC's decision to deny renewal of Schoenbohm's

amateur radio licenses. Damsky, 199 F.3d at 533.

II

We review the merits of the FCC's decision only to determine whether the decision was "arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law,"

5 U.S.C. s 706(2)(A). We review the factual findings upon

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which the decision was based to ensure that they were

supported by "substantial evidence," id. s 706(2)(E). See 47

U.S.C. s 402(g); Damsky, 199 F.3d at 533. "Substantial

evidence," in turn, is defined as "such relevant evidence as a

reasonable mind might accept as adequate to support a

conclusion." Consolo v. Federal Maritime Comm'n, 383 U.S.

607, 620 (1966) (quoting Consolidated Edison Co. v. NLRB,

305 U.S. 197, 229 (1938)). Because this standard is "something less than the weight of the evidence, ... the possibility

of drawing two inconsistent conclusions from the evidence

does not prevent an administrative agency's finding from

being supported by substantial evidence." Id.

In the following sections, we apply these principles to each

of Schoenbohm's challenges to the FCC's refusal to renew his

radio licenses.

A

Schoenbohm's first contention is that it was arbitrary and

capricious for the FCC to deny renewal based on his criminal

conviction. In 1990, the Commission modified its "character"

policy to provide that "evidence of any conviction for misconduct constituting a felony will be relevant to our evaluation of

an applicant's or licensee's character." Policy Regarding

Character Qualifications in Broadcast Licensing, 5 F.C.C.R.

3252, 3252 (1990) (footnote omitted) [hereinafter Character

Policy]. Such evidence is relevant, the FCC said, because it

aids the Commission in ascertaining whether a licensee will

"deal truthfully with the Commission and ... comply with

[its] rules and policies." Id. (quoting 102 F.C.C.2d 1179,

1190-91 (1986)). Rather than establish a " 'hierarchy' of

felonies that might arise in individual cases," the Commission

examines the impact of a conviction on a case-by-case basis.

Id.

There is nothing unreasonable about the FCC's conclusion

that Schoenbohm's felony conviction was relevant to his license renewal. A conviction for fraudulent conduct plainly

calls into question a licensee's ability to act in a manner

consonant with FCC regulations. As the Commission observed, fraud "is a subject area the Commission has traditionUSCA Case #98-1516 Document #499583 Filed: 02/29/2000 Page 5 of 12
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ally considered to be pertinent to its evaluation of a licensee's

character." Decision, 13 F.C.C.R. at 15,038. Schoenbohm

argues, however, that the Commission acted arbitrarily in

judging his conviction not just relevant, but sufficient to

justify denial, since in other cases it has renewed a license or

granted a permit despite an applicant's felony conviction

when the applicant showed evidence of rehabilitation. See,

e.g., Richard Richards, 10 F.C.C.R. 3950 (Rev. Bd. 1995);

Alessandro Broad. Co., 99 F.C.C.2d 1 (Rev. Bd. 1984). According to appellant, he too established his rehabilitation.

The FCC's policy does acknowledge rehabilitation as a

mitigating factor in assessing an applicant's character. See

Character Policy, 5 F.C.C.R. at 3252 & n.4. Here, however,

the FCC found that Schoenbohm demonstrated an absence of

rehabilitation by making deliberate misrepresentations and

displaying a lack of candor during the renewal proceedings.

See Decision, 13 F.C.C.R. at 15,038. Moreover, because

these occurred in the course of the agency's own proceedings,

they were a rationale for nonrenewal that went beyond the

felony conviction alone. See id. Commission regulations

forbid applicants from "mak[ing] any misrepresentation or

willful material omission bearing on any matter...." 47

C.F.R. s 1.17; see also 47 U.S.C. s 312(a)(1). A licensee's

complete candor is important to the FCC because "effective

regulation is premised upon the agency's ability to depend

upon the representations made to it by its licensees." Leflore

Broad. Co. v. FCC, 636 F.2d 454, 461 (D.C. Cir. 1980); see

also Character Policy, 5 F.C.C.R. at 3253. Accordingly, it is

well recognized that the Commission may disqualify an applicant who deliberately makes misrepresentations or lacks candor in dealing with the agency. See Swan Creek Communications, Inc. v. FCC, 39 F.3d 1217, 1221-24 (D.C. Cir. 1994);

Garden State Broad. Ltd. v. FCC, 996 F.2d 386, 393-94 (D.C.

Cir. 1993). The FCC's findings with respect to Schoenbohm's

misrepresentations and lack of candor are therefore more

than sufficient to distinguish this case from the precedents he

cites.

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B

Schoenbohm does not dispute that if he had made misrepresentations to the Commission, that fact, together with his

fraud conviction, would have justified nonrenewal. Instead,

he disputes that he made any misrepresentations. The FCC

found to the contrary in connection with two aspects of his

presentations to the Commission.

First, the Commission determined that Schoenbohm made

misrepresentations and lacked candor in testifying about the

nature of his prior felony. As the Third Circuit noted in

affirming his conviction, Schoenbohm was found guilty of

violating 18 U.S.C. s 1029(a)(1) because he "used a counterfeit access device." United States v. Schoenbohm, No.

93-7516, slip op. at 3 (3d Cir. Apr. 18, 1994) (emphasis added).

Schoenbohm effectively conceded this in his first written

submission to the Commission, stating that he was "convicted

for defrauding a telephone resale service provider by ...

making unauthorized long distance calls." Schoenbohm Aff.

at 1 (Aug. 8, 1995) (J.A. at 160). In subsequent presentations, however, Schoenbohm described his conviction differently. In a July 18, 1995 affidavit he said:

I did not steal any money or cause the account of any

subscriber to be debited. I was convicted solely of

having knowledge in my mind of certain telephone codes

of which 4 of the 6 digits were said to be similar to those

that could be used to make long distance calls without

paying for them.

Schoenbohm Aff. at 2 (J.A. at 185) (emphasis added). And in

oral testimony before the Commission, he characterized his

conviction as based on his possession of "numbers in my

mind," rather than on the performance of any unlawful act.

Decision, 13 F.C.C.R. at 15,031 (quoting Tr. at 38).

On the basis of this evidence, the FCC found that Schoenbohm had intentionally portrayed his crime in a misleading

manner in order to minimize its significance. Schoenbohm

maintains that he was not attempting to mislead, but rather

was simply trying to explain that his crime involved numeric

codes rather than mechanical devices. Although that is not

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an impossible reading of his testimony, it was certainly reasonable for the FCC to reach a contrary conclusion.

The FCC also found that Schoenbohm misrepresented the

facts and lacked candor in connection with an inquiry the ALJ

made into whether he had attempted to violate the agency's

ex parte rules--by urging others to ask the Virgin Islands'

congressional delegate to intervene with the FCC on his

behalf.2 The ex parte rules prohibit a party in specified

proceedings (including the proceedings at issue here) from

making written presentations to the Commission without

serving them on the other parties, and from making oral

presentations without notice and an opportunity for the others to be present. See 47 C.F.R. ss 1.1202, 1.1208. They

also provide that "[n]o person shall solicit or encourage others

to make any presentation which he or she is prohibited from

making...." Id. s 1.1210.

In a radio conversation with another amateur operator,

Schoenbohm was tape recorded as saying:

I'm not allowed under ex-parte rules to ask for assistance

of ... people in political positions but other people if

they feel that government is overbearing or I'm being

treated unfairly, have every right to point this out to

their elected representatives.

J.A. at 175. He also told the other operator:

I'm not permitted at this time because of ex-parte rules

to make any requests of political intervention. Other

people could do it if they are so disposed but I can't do it.

Id. Schoenbohm then spelled out the congressional delegate's name, and provided an address and telephone number

at which he could be reached. Id.

__________

2 This inquiry is distinct from the inquiry Schoenbohm himself

requested, which would have investigated whether opponents of his

application had engaged in ex parte communications with the ALJ.

See discussion infra Part III.

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When asked to explain this conversation, Schoenbohm told

the ALJ that he intended only to share his newly acquired

knowledge regarding the ex parte rules, and that he did not

intend to encourage an ex parte solicitation on his behalf.

See Herbert L. Schoenbohm, 11 F.C.C.R. 1146, 1148-49 (1996)

(initial decision of ALJ). Later, he submitted an affidavit

reiterating that he was simply "expounding on [his] newly

discovered knowledge of the ex parte rules," and was not

asking anyone to make a contact. Schoenbohm Aff. p 8 (Feb.

1997) (J.A. at 191). Once again, although it is not impossible

that Schoenbohm intended to do no more than declare his

understanding of the law, the record provides substantial

evidence to support the FCC's finding that this explanation

was less than candid, and that he was in fact trying to solicit

others to make ex parte submissions on his behalf.

Schoenbohm further contends that because there is no

evidence that any ex parte contacts actually occurred, he "is

being punished simply for uttering words to a friend in the

course of a private amateur radio conversation." Schoenbohm Br. at 13-14. This, he argues, violates the First

Amendment. He is wrong for two reasons. First, the agency's ex parte rules do not interfere with Schoenbohm's right

to discuss the proceedings with others; they merely require

that communications with the agency be on the record. As

the FCC correctly concluded, "rules intended to protect the

integrity of the administrative process by requiring that

presentations to the agency be made on the record and that

solicitations of such presentations be limited to requests for

on-the-record presentations d[o] not violate the First Amendment." Reconsideration Order, 13 F.C.C.R. at 23,775; see

California Motor Transp. Co. v. Trucking Unlimited, 404

U.S. 508, 513 (1972) (stating that although the First Amendment protects the right of access to agencies and courts, it

does not immunize from proscription "practice[s] which may

corrupt the administrative or judicial processes"); cf. National Soc'y of Prof'l Eng'rs v. United States, 435 U.S. 679, 697

(1978) (noting that although "an injunction against price

fixing abridges the freedom of businessmen to talk to one

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another about prices," the First Amendment does not make it

impossible to enforce the antitrust laws).

Moreover, and more fundamentally, the FCC did not deny

Schoenbohm's renewal application because he violated, or

attempted to violate, the ex parte rules. Nor did it do so

because of what he said to his fellow radio operator. Rather,

the FCC denied the application because Schoenbohm made

misleading statements to the agency itself, and it is well

established that the First Amendment does not protect misrepresentations made in administrative adjudications. See

California Motor Transp., 404 U.S. at 512-13.

For the foregoing reasons, we conclude there was substantial evidence to support the FCC's findings that Schoenbohm

made misrepresentations and lacked candor in his testimony

regarding both his felony conviction and his efforts to induce

ex parte communications with the Commission. We further

conclude that the FCC acted reasonably in deciding that

Schoenbohm's "lack of candor and misrepresentation along

with the felony conviction together" justified nonrenewal of

his licenses. Decision, 13 F.C.C.R. at 15,038.

III

Following the FCC's original decision denying his license

renewal on June 29, 1998, Schoenbohm petitioned the agency

for reconsideration. In addition to restating his previous

arguments, he asked for the first time that the Commission

investigate whether amateur operators who disliked him had

themselves communicated with the ALJ ex parte, seeking to

have his application denied. In support of this request,

Schoenbohm stated that on January 17, 1998 he had made a

tape recording of a conversation between two amateur operators which, he asserted, indicated that his detractors were

making calls to the ALJ. See Pet. for Recons. pp 5, 6 (J.A. at

77).

The FCC rejected Schoenbohm's request for an inquiry on

two grounds. First, the agency held it untimely because it

was based neither on changed circumstances nor on newly

discovered facts. As the FCC noted, Schoenbohm's request

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relied on a conversation he had taped more than six months

before the Commission's decision on his renewal application.

See Reconsideration Order, 13 F.C.C.R. at 23,775. Second,

the FCC rejected Schoenbohm's request on the ground that

the tape-recorded conversation "d[id] not provide probative

evidence that anyone contacted or attempted to contact [the

ALJ], let alone that any such contact reached the Judge."

Id. at 23,776. Schoenbohm's allegation, the FCC said, was

based "solely on hearsay, speculation, and rumor." Id.

In ICC v. Brotherhood of Locomotive Engineers (BLE), the

Supreme Court held that an agency's denial of a petition for

reconsideration is nonreviewable unless the petition was

based on "new evidence or changed circumstances." 482 U.S.

at 284. Included within the ambit of nonreviewable decisions

were those concerning matters that, even though "newly

raised," were "previously available." Id. at 283. The Court

treated nonreviewability under such circumstances as jurisdictional, see id. at 287, a point this circuit confirmed in

Entravision Holdings, LLC v. FCC, No. 99-1025, slip op. at 4

n.*.

Schoenbohm does not contend that his petition for reconsideration was based on "new evidence" in the sense of

evidence not "previously available" to him. To the contrary,

it is apparent on the face of the petition that the evidence

upon which he relied--the tape recording of an amateur radio

transmission--was previously available. As the FCC noted,

the petition states that Schoenbohm made the recording on

January 17, 1998--six months before the FCC rendered its

original decision on his renewal application. Schoenbohm

could have, and under FCC rules should have, submitted this

evidence prior to that decision.3 He failed to do so, and on

__________

3 See 47 C.F.R. s 1.1214 ("Any party to a proceeding ... who has

substantial reason to believe that any violation of [the ex parte

rules] has been solicited, attempted, or committed shall promptly

advise the Office of General Counsel in writing of all the facts and

circumstances which are known to him or her."); see also 47 C.F.R.

s 1.65(a) ("Each applicant is responsible for the continuing accuracy

and completeness of information furnished in a pending application

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appeal does not respond to the FCC's contention that this

omission deprives us of jurisdiction. This is not a case,

therefore, in which nonreviewability means that "petitioner

will have been deprived of all opportunity for judicial consideration ... of facts which, through no fault of his own, the

original proceeding did not contain." BLE, 482 U.S. at 279.

Here, the fault is solely that of petitioner, and because his

petition was not based on new evidence or changed circumstances, we are without jurisdiction to review its denial.4

IV

The FCC's decision denying appellant's application for

renewal of his amateur radio licenses is affirmed. Insofar as

appellant also appeals from the FCC's refusal to reconsider

that decision, we dismiss that appeal for lack of jurisdiction.

See BLE, 482 U.S. at 284, 287; Entravision Holdings, No.

99-1025, slip op. at 4 n.*.

__________

or in Commission proceedings involving a pending application....

Whenever there has been a substantial change as to any other

matter which may be of decisional significance in a Commission

proceeding involving the pending application, the applicant shall as

promptly as possible ... submit a statement furnishing such

additional or corrected information as may be appropriate....").

4 In this case, little turns on whether we hold that the court lacks

jurisdiction, or whether we consider the issue on the merits. Even

if we were to consider the merits, BLE instructs that we must

uphold an agency's decision to deny reconsideration unless there

was the clearest abuse of discretion. See 482 U.S. at 278; see also

Southwestern Bell, 180 F.3d at 311; Beehive Tel. Co. v. FCC, 180

F.3d 314, 319-20 (D.C. Cir. 1999). It would be difficult to find such

an abuse in a case like this, where the agency's denial was based

both on the unexcused untimeliness of the appellant's submission

and on its lack of probative support.

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