Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-96-01384/USCOURTS-caDC-96-01384-0/pdf.json

Parties Involved:
AFLAC Broadcast Partners
Terminated Party
American Family Life Assurance Company of Columbus
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 September 4, 1997 Decided November 21, 1997 

No. 96-1384

AMERICAN FAMILY LIFE ASSURANCE COMPANY OF COLUMBUS,

PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND 

UNITED STATES OF AMERICA,

RESPONDENTS

On Petition for Review of an Order of the 

Federal Communications Commission

Craig J. Blakeley argued the cause for petitioner. With 

him on the briefs was Ronald J. Palenski.

C. Grey Pash, Jr., Counsel, Federal Communications Commission, argued the cause for respondents. With him on the 

brief were William E. Kennard, General Counsel, Daniel M. 

Armstrong, Associate General Counsel, Joel I. Klein, Acting 

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Assistant Attorney General, U.S. Department of Justice, Andrea Limmer, and Catherine G. O'Sullivan, Attorneys. 

James M. Carr, Counsel, Federal Communications Commission, and Robert B. Nicholson, Attorney, U.S. Department of 

Justice, entered appearances.

Before: SENTELLE, RANDOLPH, and GARLAND, Circuit Judges.

Opinion for the Court filed by Circuit Judge RANDOLPH.

RANDOLPH, Circuit Judge: In 1996 the Federal Communications Commission ruled that AFLAC Broadcast Partners, 

then the licensee of six commercial television stations and the 

owner-operator of a seventh, violated the Communications 

Act by refusing to sell time to candidates for federal elective 

office who refused to agree to a forum selection clause 

contained in AFLAC's standard "Agreement Form for Political Broadcasts." After the Commission's decision, but before 

the case reached us, AFLAC sold all of its interests in the 

television stations and apparently dissolved, with petitioner 

assuming its liabilities. Whether the case is now moot is the 

first, and as it turns out, the decisive issue.

I

The Dole-Kemp '96 Campaign wanted to buy time on 

AFLAC's stations. AFLAC insisted on its standard contract, 

which contained the forum selection clause. The clause designated the Commission as the sole and exclusive forum for 

resolving disputes about excessive charges for political advertising. Dole-Kemp refused to agree to the clause and 

AFLAC therefore refused to sell it any time. In August 

1996, Dole-Kemp lodged a complaint with the Commission, 

alleging that AFLAC's insistence on the forum selection 

clause violated the Communications Act.

The legal context of the complaint was this. Federal 

candidates for elective office have a "right" to "reasonable 

access" to broadcast stations to air their advertisements. 

This right stems from a remedy. The Act authorizes the 

Commission to revoke a broadcaster's license "for willful or 

repeated failure" to allow "legally qualified" candidates for 

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federal elective office "reasonable access" to the broadcasting 

station. 47 U.S.C. § 312(a)(7); see CBS, Inc. v. FCC, 453 

U.S. 367 (1981). Federal candidates are not entitled to free 

advertising time. They must pay, but in the days close to 

election, broadcasters cannot charge them more than the 

"lowest unit charge of the station for the same class and 

amount of time for the same period." 47 U.S.C. § 315(b)(1). 

In 1991 the Commission declared that it, and it alone, had 

jurisdiction to decide whether broadcasters had billed candidates for more than the lowest unit charge § 315(b)(1) permitted; that this was solely a federal question; and that state 

causes of action dependent on any duty arising from § 315(b) 

were preempted. See In re Exclusive Jurisdiction With 

Respect to Violations of the Lowest Unit Charge Requirements of Section 315(b) of the Communications Act of 1934, 6 

F.C.C.R. 7511, 7511 ¶ 1 (1991); see also Wilson v. A.H. Belo 

Corp., 87 F.3d 393, 400 (9th Cir. 1996) (upholding the declaration); but see Miller v. FCC, 66 F.3d 1140, 1146 (11th Cir. 

1995). Sometime after the Commission's announcement, 

AFLACin order to ensure that its candidate-customers 

would seek Commission resolution of any overbilling disputesbegan insisting on the forum selection clause.

In September 1996, the Commission ruled that AFLAC's 

refusal to sell time to federal candidates unless they agreed to 

the clause violated the reasonable access provision of 

§ 312(a)(7) because it forced "a federal candidate ... to 

surrender another legal right." In re Complaint of DoleKemp '96 Campaign, 11 F.C.C.R. 13036, 13040 ¶ 6 (1996). 

The other "legal right," as best we can gather, was the right 

to sue in state or federal court for recovery of overcharges, a 

right the Commission said in its 1991 pronouncement did not 

exist. See id. at 13039-40 WW 5-7. AFLAC thereafter deleted 

the offending clause and sold air time to Dole-Kemp.

The Commission decided several other issues relating to 

AFLAC's standard contract, but the petition for review contests only the ruling on the forum selection clause. Petitioner 

thinks this ruling is inconsistent with the Commission's position regarding its exclusive jurisdiction and that, as applied in 

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the ruling, § 312(a)(7) violates the First Amendment to the 

Constitution. The Commission thinks the case is moot.

II

One way of approaching the mootness question is to suppose Dole-Kemp had filed a complaint against AFLAC in a 

district court rather than at the Commission, that the district 

court reached the same result as the Commission, that a 

preliminary injunction issued, and that AFLAC thereafter 

sold air time to Dole-Kemp without insisting on the forum 

selection clause. That hypothetical case surely would be 

moot on appeal. "An appeal from an order granting a 

preliminary injunction becomes moot when, because of the 

defendant's compliance or some other change in circumstances, nothing remains to be enjoined through a permanent 

injunction." Christian Knights of the Ku Klux Klan v. 

District of Columbia, 972 F.2d 365, 369 (D.C. Cir. 1992). The 

demise of the Dole-Kemp ticket plus AFLAC's sale of its 

stations would preclude saving the case from mootness on the 

basis that the issue was "capable of repetition, yet evading 

review." Southern Pacific Terminal Co. v. ICC, 219 U.S. 

498, 515 (1911); see Christian Knights, 972 F.2d at 369-71.

As far as mootness is concerned, is the case before us any 

different? Yes, in several ways. For one thing the opposing 

party is the Commission rather than a private litigant. Once 

an agency's action reaches a court of appeals on review, the 

controversy no longer consists of simply the private dispute 

litigated before the agency. The controversy becomes, as 

then-Judge Scalia pointed out, a dispute between the private 

party "and the agency concerning the lawfulness of the 

agency action." Radiofone, Inc. v. FCC, 759 F.2d 936, 940 

(D.C. Cir. 1985) (separate opinion). That Dole-Kemp received full satisfaction, therefore, does not necessarily put this 

controversy to rest. As a regulator, the Commission has a 

continuing interest in forbidding forum selection clauses like 

AFLAC's. Also, unlike an injunction ordering AFLAC to sell 

time to Dole-Kemp, the Commission's Order was not restricted to granting relief to the complaining party. Rather, the 

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Order directed AFLAC "to conform its practices consistent 

with our holding herein." In re Complaint of Dole-Kemp '96 

Campaign, 11 F.C.C.R. at 13041 ¶ 10. In other words, the 

Commission directed AFLAC to stop insisting on the clause 

when any federal candidate sought to buy time from any of its 

stations. Whether the Order also reached back to contracts 

already signed and completed is a question we discuss later.

These considerations, and others, are taken for granted in 

the Commission's mootness argument. The Commission correctly focuses not on the circumstances of Dole-Kemp, but on 

the change in AFLAC's situation brought about by the sale of 

its stations after the Commission's Order issued. The natural 

and obvious question is why, in light of the sale, petitioner 

still cares about the Commission's ruling? Petitioner gives 

this answer. AFLAC will not be negotiating with candidates 

for air time in the future, but it entered into contracts 

containing the offending clause in the past. Petitioner tells 

us that not all of the state statutes of limitations have run. 

(We shall assume that state statutes of limitations control. 

But see In re Complaint of Harvey Sloane, 12 F.C.C.R. 8513, 

8515 WW 7, 9 (1997).) Stuck with AFLAC's liabilities, petitioner worries about being haled into state court for having 

overcharged some former candidate for federal office. If 

AFLAC's forum selection clause were validthat is, if we 

agreed with petitioner's arguments on the meritsthe state 

court would respect our judgment and dismiss the complaint, 

or perhaps transfer the case to the Commission. The Commission's Order, petitioner concludes, is thus a source of a 

continuing injury because, so long as the Order stands, 

petitioner is being deprived of the benefit of the bargains 

AFLAC struck with federal candidates.

Of course, infringements of common-law rights, including 

contract rights, can cause the sorts of injuries that give rise 

toin the Supreme Court's words"real," "live," "actual," 

"cognizable," "present," "genuine," "ongoing," "continuing," 

"substantial" Article III "Cases" and "Controversies." See 

Tennessee Elec. Power Co. v. TVA, 306 U.S. 118, 137-38 

(1939); United States Nat'l Bank of Oregon v. Independent 

Ins. Agents of America, 508 U.S. 439, 446 (1993); Arizonans 

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for Official English v. Arizona, 117 S. Ct. 1055, 1068 (1997); 

Raines v. Byrd, 117 S. Ct. 2312, 2317 (1997); ASARCO, Inc. 

v. Kadish, 490 U.S. 605, 619 (1989); City of Los Angeles v. 

Lyons, 461 U.S. 95, 102 (1983); Suitum v. Tahoe Regional 

Planning Agency, 117 S. Ct. 1659, 1664 n.7 (1997); Lewis v. 

Continental Bank Corp., 494 U.S. 472, 477 (1990); Board of 

License Comm'rs v. Pastore, 469 U.S. 238, 240 (1985); North 

Carolina v. Rice, 404 U.S. 244, 246 (1971). As some of these 

modifiers suggest, the controversy must exist not only at the 

start but also throughout all stages of judicial review. See 

Arizonans for Official English, 117 S. Ct. at 1068. And as 

we are regularly reminded, to save a case from mootness the 

ongoing injury must be more than a "remote possibility," not 

"conjectural," more than "speculative." Warth v. Seldin, 422 

U.S. 490, 507 (1975); City of Los Angeles, 461 U.S. at 102. 

This is where petitioner runs into trouble. Petitioner reports 

no litigation on the horizon, no complaints from federal 

candidates on the verge of filing, no simmering disputes about 

to erupt into a lawsuit alleging excessive charges. And the 

problems do not end there.

Petitioner treats the Commission's decision as having "voided" all of the forum selection clauses in AFLAC's contracts. 

We doubt the decision was meant to have, or could have had, 

that consequence. Petitioner faces no impending threat of 

Commission sanctions if it asserts the clause in state court 

litigation. The Commission acted under § 312(a)(7), a provision granting it authority to revoke a broadcaster's licenses. 

If, after the Commission's decision, AFLAC had persisted in 

using and asserting the clause, the Commission could have 

invoked § 312(a)(7) to put AFLAC out of the broadcasting 

business, a prospect that would certainly have rendered the 

case a live one for Article III purposes. But the sword is no 

longer hanging over AFLAC's head. AFLAC has no broadcasting licenses to revoke; it put itself out of the business 

after the Commission's decision.

In what respect, then, has the Commission "voided" 

AFLAC's forum selection clauses? Petitioner replies: a state 

court would be "bound" by the Commission's ruling and thus 

would refuse to enforce the clause. But are state courts so 

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"bound"? Whether a federal court of appeals would sustain 

the Commission's ruling that the clause violates § 312(a)(7) 

remains to be seen. Like the lower federal courts, state 

courts fulfilling their duty to comply with Chevron, U.S.A., 

Inc. v. NRDC, 467 U.S. 837 (1984), would not necessarily have 

to uphold the Commission's decision as a matter of federal 

law. See Arizonans for Official English, 117 S. Ct. at 1064 

n.11; ASARCO, 490 U.S. at 617.

More important, petitioner forgets that the Commission 

acted to enforce § 312(a)(7), to prevent AFLAC from refusing 

to sell time to federal candidates. Yet the litigation petitioner fears would not be about AFLAC's refusal to sell time. 

No former federal candidate could sue AFLAC for charging 

too much unless the candidate had agreed to the forum 

selection clause, bought time, and broadcast advertisements 

on AFLAC's stations. The Commission's Order did not 

direct AFLAC to take any action with respect to these 

individuals. The Order, as counsel for the Commission stated 

at oral argument, was prospective only. With respect to 

candidates who aired their advertisements, it is possible that 

AFLAC overbilled them, but it is not possible that AFLAC 

violated § 312(a)(7) by refusing to sell them time. The 

Commission's Order, in short, could not have "voided" the 

forum selection clauses in contracts already consummated, 

yet these are the only contracts petitioner thinks may be 

subject to litigation in state court sometime in the future.

There is nothing to petitioner's related point that the 

severability clause in AFLAC's standard contract will itself 

render the forum selection clause void. The severability 

clause states that "if any term or provision of this Agreement 

contravenes or is invalid under any federal, state or local law, 

court decision, rule, ordinance or regulation or administrative 

sanction (including that of the FCC as upheld by a reviewing 

court with applicable jurisdiction ), [t]his Agreement shall be 

construed as if it did not contain the offending term or 

provision." J.A. 38 (italics added). This clause cannot 

breathe life into a controversy that has come to rest. If we 

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sion and so the severability provision would not make the 

forum selection clause inoperative.

What other possible legal consequences could flow from the 

Commission's Order? We suppose some hypothetical state 

court litigant could try to invoke collateral estoppel to prevent 

petitioner from relying on the forum selection clause. But 

petitioner does not raise this specter, doubtless because it is 

so far-fetched. We do not deny that agency adjudications 

may have preclusive effects. See Astoria Fed. Sav. & Loan 

Ass'n v. Solimino, 501 U.S. 104, 107-08 (1991); RESTATEMENT 

(SECOND) OF JUDGMENTS § 83 (1982). But if the state court 

agreed with our analysis of § 312(a)(7) and the prospectiveonly effect of the Commission's Order, and if the state court 

generally followed the same principles of offensive use of 

collateral estoppel as we do, petitioner would have no cause 

for concern. See Parklane Hosiery Co. v. Shore, 439 U.S. 

322, 331 (1979); Milton S. Kronheim & Co. v. District of 

Columbia, 91 F.3d 193, 197 (D.C. Cir. 1996), cert. denied, 117 

S. Ct. 1468 (1997); 47 C.F.R. § 1.45(c) (1997); North American Telecomm. Ass'n, FCC 86-304 app., File No. E-85-1, 60 

R.R.2d 1355, 1365 (Aug. 1, 1986); see also Montana v. United 

States, 440 U.S. 147, 157 (1979); Jack Faucett Assocs., Inc. v. 

American Tel. & Tel. Co., 744 F.2d 118, 125 (D.C. Cir. 1984).

What we are left with, then, is simply the impact of the 

Commission's precedentor more precisely, the impact of the 

rationale contained in iton a state court in future litigation. 

Yet we have said before, and we say again, that the "mere 

precedential effect of [an] agency's rationale in later adjudications" is not an injury sufficient to confer standing on someone seeking judicial review of the agency's ruling. Radiofone, 759 F.2d at 939; see also Shell Oil Co. v. FERC, 47 F.3d 

1186, 1201-02 (D.C. Cir. 1995); Crowley Carribean Transport, Inc. v. Peña, 37 F.3d 671, 674 (D.C. Cir. 1994); Telecommunications Research & Action Ctr. v. FCC, 917 F.2d 585, 

588 (D.C. Cir. 1990). The "later adjudications" mentioned in 

Radiofone were later adjudications by the same agency. But 

the principle still has force, indeed is all the more telling, in 

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dent on later state court proceedings. It is all the more 

telling because the "precedent" we are considering is not the 

product of the future decisionmaker, that is, the state court. 

Unlike the situation in Radiofone, stare decisis therefore will 

not apply.

Any assessment of the impact of the Commission's ruling 

thus necessarily entails a long string of "ifs." If a former 

federal candidate who entered into the standard contract 

thought he or she had been overcharged by AFLAC; and if

this individual marched into a state court; and if the state 

judge found that the Commission had decided the validity of 

the forum selection clause in contracts already completed; 

and if this judge thought that the Commission's Order decided the matter correctly, taking due account of the principles 

of Chevron; and if the state judge therefore declared the 

forum selection clause invalid under § 312(a)(7); and if, despite Chevron, the state judge rejected the Commission's 1991 

pronouncement that the agency had sole and exclusive jurisdiction over these matters, so that the state case could go 

forwardthen and only then would petitioner suffer harm 

from the Commission's Order, the harm being having to 

defend itself in a state court rather than before the Commission. We would be unwilling to credit such gross speculation 

for the purpose of establishing standing, and we are equally 

unwilling to do so for the purpose of deciding the related 

question whether we have a live controversy before us. 

None of what we have written would be affected if, as 

petitioner seems to suggest, we treated the Commission's 

decision here as a "declaratory ruling" articulating a general 

policy that similar forum selection clauses in political advertising contracts with federal candidates are inconsistent with 

§ 312(a)(7). Characterizing the Commission's decision that 

way neither gives it greater status in terms of its binding 

effect in state court litigation, nor makes it more likely that 

petitioner will be injured by the decision. See Tennessee Gas 

Pipeline Co. v. Federal Power Comm'n, 606 F.2d 1373, 1382 

n.40 (D.C. Cir. 1979). Accordingly, we hold that this petition 

for judicial review is moot.

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III

Our decision that the case is now moot leads to the 

questionon which we ordered supplemental briefing

whether we should vacate the Commission's unreviewed Order. The Supreme Court's decision in A.L. Mechling Barge 

Lines, Inc. v. United States, 368 U.S. 324 (1961), is, we 

believe, controlling. Extending the principle of United States 

v. Munsingwear, 340 U.S. 36 (1950), to "unreviewed administrative orders," Mechling held that federal courts should 

vacate agency orders they decline to review on grounds of 

mootness. 368 U.S. at 329. Since Mechling we have, as a 

matter of course, vacated agency orders in cases that have 

become moot by the time of judicial review. See, e.g., Northwest Pipeline Corp. v. FERC, 863 F.2d 73, 79 (D.C. Cir. 

1988); Radiofone, 759 F.2d at 938; Hollister Ranch Owners' 

Ass'n v. FERC, 759 F.2d 898, 901-02 (D.C. Cir. 1985); Tennessee Gas Pipeline, 606 F.2d at 1382-83.

Not surprisingly, the Commission opposes this course of 

action. It argues against vacatur on the grounds that (1) 

AFLAC caused this dispute to become moot through its 

"unilateral, voluntary action"; (2) it is entirely "speculative" 

that the Commission's Order will have any preclusive effects 

on petitioner in the future; and (3) the continuing precedential force of the Order remains valuable to the public.

The Commission's first point misinterprets U.S. Bancorp 

Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18 (1994). 

Vacatur is generally not justified, the Court held, when "the 

party seeking relief from the judgment below caused the 

mootness by voluntary action" in settling the case. Id. at 24. 

The specific holding of Bancorp, concerning as it does settlements, has no application here. Nor does the Court's general 

reasoning. See id. at 25, 29; see also Anderson v. Green, 513 

U.S. 557, 560 (1995); Karcher v. May, 484 U.S. 72, 83 (1987); 

Mahoney v. Babbitt, 113 F.3d 219, 221-22 (D.C. Cir. 1997); 

National Black Police Ass'n v. District of Columbia, 108 F.3d 

346, 351-52, 354 (D.C. Cir. 1997); National Football League 

Players Ass'n v. Pro-Football, Inc., 79 F.3d 1215, 1216-17 

(D.C. Cir. 1996). AFLAC announced the sale of its stations 

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before Dole-Kemp even complained to the Commission. It 

did not sell the stations in order to moot this case; in fact, its 

successor argues vigorously that the case is still alive.

The Commission's second point, we believe, goes to the 

equities. Once we pass from the issue of mootness to the 

issue of remedy, we still may encounter some lingering 

though remote possibility of residual collateral harm to petitioner from the unreviewed Order. Recourse to the "equitable tradition of vacatur" may be warranted, then, partly 

because it eliminates that possibility altogether. Bancorp,

513 U.S. at 25. In saying this we simply followas indeed 

we mustthe Court's lead in Munsingwear, 340 U.S. at 41, 

which utilized vacatur "to prevent a judgment, unreviewable 

because of mootness, from spawning any legal consequences." 

In Mechling also the barge owners as petitioners wanted the 

Interstate Commerce Commission's order vacated to avoid 

having it serve as a defense in future actions they might bring 

against railroads for damages. See 368 U.S. at 328-29. It 

may, as the Commission puts it, be "speculative" whether 

leaving the Order standing could cause some residual harm, 

but vacating the Order puts the speculation to rest. See, e.g., 

Radiofone, 759 F.2d at 941; Hollister Ranch Owners' Ass'n,

759 F.2d at 901-02; see also Greenwich Collieries v. Director, 

Office of Workers' Compensation Programs, United States 

Dep't of Labor, 732 F.2d 343, 344-45 (3d Cir. 1984).

The Commission's third reason for opposing vacatur again 

reflects a misunderstanding of Bancorp. Recognizing the 

value of judicial opinions to the public, Bancorp stated that 

precedents should not be treated as "merely the property of 

private litigants" to be casually set aside whenever, through 

settlement rather than appeal, a party avoids the full consequences of an adverse judgment. 513 U.S. at 26, 27 (internal 

quotation marks and citation omitted); see also Mahoney, 113 

F.3d at 222-23. The Court never suggested, nor have we, 

that the precedential value of a decision alone renders vacatur 

inappropriate. Such a rule would swallow Munsingwear.

The petitioner in this case did not, through the sale of 

AFLAC's broadcasting interests, attempt to employ some 

sort of "refined collateral attack" on the Commission's Order. 

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Bancorp, 513 U.S. at 27. Having sought "review of the 

merits of an adverse ruling" and having been "frustrated by 

the vagaries of circumstance, petitioner ought not in fairness 

be forced to acquiesce" in the Commission's judgment. Id. at 

25; see also Tennessee Gas Pipeline, 606 F.2d at 1382-83.

* * *

AFLAC's petition for review is dismissed as moot and the 

Commission's Order is vacated.

So ordered.

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