Source: http://supreme.nolo.com/us/289/266/case.html
Timestamp: 2019-04-21 06:32:01+00:00

Document:
1. Congress can confer administrative authority on courts of the District of Columbia, but jurisdiction to review administrative questions cannot be exercised by this Court. P. 289 U. S. 274.
"that findings of fact by the Commission, if supported by substantial evidence, shall be conclusive unless it shall clearly appear that the findings of the Commission are arbitrary or capricious,"
the function of that court is no longer administrative, but is purely judicial, and its judgments are reviewable in this Court by certiorari. Federal Radio Comm'n v. General Electric Co., 281 U. S. 464, distinguished. Pp. 289 U. S. 275-278.
3. The fact that the judicial remedy is by appeal from the Commission, rather than by a suit de novo, does not affect its judicial quality. P. 289 U. S. 277.
the judgment of the court," means no more than that the Commission, in its further action, is to respect and follow the court's determination of the questions of law. P. 289 U. S. 278.
5. Congress has power under the commerce clause to regulate radio communication. P. 289 U. S. 279.
"fair and equitable allocation of licenses, wavelengths, time of operation, and station power to each of the states within each zone according to population,"
under the Radio Act as amended, does not require separate allocation on that basis as to each of the three types of stations -- "clear, regional and local" -- in the Commission's classification. P. 289 U. S. 281.
7. The Commission, in making allocations of frequencies to states within a zone, has the power to license operation by a station in an under-quota state on a frequency theretofore assigned to a station in an over-quota state, provided the Commission does not act arbitrarily or capriciously. P. 289 U. S. 282.
8. The authority granted the Commission to effect adjustment of broadcasting facilities as between states "by granting or refusing licenses or renewals of licenses, by changing periods of time for operation, and by increasing or decreasing station power" plainly extends to the deletion of existing stations if that course be found necessary to produce an equitable result. P. 289 U. S. 282.
9. That Congress had the power to give this authority to delete stations, in view of the limited radio facilities available and confusion resulting from interferences, is not open to question. P. 289 U. S. 282.
10. Owners of broadcasting stations necessarily make their investments and contracts subject to the paramount regulatory power of Congress. P. 289 U. S. 282.
11. The power of Congress to regulate interstate commerce is not to be fettered by a necessity for maintaining private arrangements that would interfere with the execution of its policy. P. 289 U. S. 282.
12. In providing for "equal" allocation as between zones and "fair and equitable" allocation as between states in a zone, the Act seeks reasonable equality, not geographical merely, but of opportunity to the people, and this involves an equitable distribution not only as between zones, but between states as well. P. 289 U. S. 283.
13. To construe the authority conferred in relation to the deletion of stations as being applicable only to an apportionment between zones, and not between states, would defeat the manifest purpose of the Act. P. 289 U. S. 283.
14. A broadcasting license in one state may be renewed temporarily, subject to future action on an application pending for assignment of its wavelength to a station in another state of the same zone, and when the Commission decides to make the transfer, the license may be terminated in accordance with the reservation. Proceedings for revocation under § 14 of the Act are not involved. P. 289 U. S. 284.
15. The standard of "public convenience, interest or necessity" set up by the Act is not objectionable as conferring indefinite and unlimited power, but is defined by the context and subject matter, and, where an equitable adjustment between states is in view, by the relative advantages in service which will be enjoyed by the public through the distribution of facilities. P. 289 U. S. 285.
16. In making "fair and equitable allocation," the equities of existing stations must be considered, and the weight of the evidence on that subject and all other pertinent facts is for the determination of the Commission. P. 289 U. S. 285.
17. The Commission is not bound to maintain an allocation if fair and equitable distribution makes a change necessary. P. 289 U. S. 285.
18. The Commission must reach its own conclusions on the evidence, though at variance from the conclusions of its examiner. P. 289 U. S. 285.
19. A general order of the Radio Commission requiring that applicants in an under-quota state in a zone already enjoying its full pro rata share of broadcasting facilities shall apply for "some facility already in use in that zone by an over-quota state" held merely a rule of procedural convenience, which does not preclude consideration of whether other facilities in the over-quota state should be granted in place of those applied for. P. 289 U. S. 286.
20. Parties who were fully heard by the Commission's examiner and notified of the taking of the case to the Commission by their opponent upon exceptions to the examiner's report have no ground to complain of the Commission's omission to grant them an oral hearing for which they did not ask. P. 289 U. S. 287.
Certiorari, 288 U.S. 597, to review the reversal of an order of the Federal Radio Commission licensing a broadcasting station in Indiana to operate on a radio frequency theretofore assigned to and enjoyed by two stations in Illinois, and terminating the licenses of those stations.
Gary, Indiana, about 30 miles from Chicago, is the largest steel center in the world. It has a population of approximately 110,000, and is located in what is known as the Calumet region, which has a population of about 800,000, sixty percent of whom are foreign born and represent over fifty nationalities. Station WJKS is the only radio station in Gary, and the programs it broadcasts are well designed to meet the needs of the foreign population.
"delivers a signal of sufficient strength to give good reception in its normal service area if not interfered with, heterodyne and cross-talk interference exist to within three miles of the transmitter, and constant objection to interference is found in the good service area of the station, particularly to the south, southeast and east."
This interference has increased during the past two years.
and has been operated since April, 1925. Station WIBO was licensed to share time with Station WPCC, the latter being authorized to operate on Sundays during stated hours, and, by agreement, has operated on certain weekdays in exchange for Sunday hours.
"This license is issued on a temporary basis and subject to such action as the Commission may take after hearing on the application filed by Station WJKS, Gary, Indiana, for the frequency 560 kc. No authority contained herein shall be construed as a finding by the Federal Radio Commission that the operation of this station is or will be in the public interest beyond the term hereof."
The programs broadcast by Station WIBO include a large number of chain programs originating in the National Broadcasting network, and are almost entirely commercial in their nature. The same general type of programs broadcast by WIBO, including National Broadcasting chain programs, are received in the service area of WIBO from many other stations located in the Chicago district.
Station WPCC, owned by the North Shore Church, has programs made up entirely of sermons, religious music, and talks relating to the work and interests of the church. Contributions are solicited for the use of the church and to advance the matters in which it is interested; it is not used by other denominations or societies.
"Other stations in Chicago, including WMBI, owned by the Moody Bible Institute, devoting more time to programs of a religious nature than WPCC, are received in the service area of that station."
"The State of Indiana is 2.08, units or 22 percent, under-quota in station assignments, and the State of Illinois is 12.49 units, or 55 percent, over-quota in such assignments.
The Fourth Zone, in which both states are located, is 21.00 units, or 26 percent, over-quota in station assignments. The granting of this application and deletion of WIBO and WPCC would reduce the over-quota status of the Illinois and the Fourth Zone by .88 unit and .45 unit, respectively, and would increase the quota of Indiana by .43 unit."
"1. The applicant station (WJKS) now renders an excellent public service in the Calumet region and the granting of this application would enable that station to further extend and enlarge upon that service."
"2. The deletion of Stations WIBO and WPCC would not deprive the persons within the service areas of those stations of any type of programs not now received from other stations."
"3. Objectionable interference is now experienced within the service area of WJKS through the operation of other stations on the same and adjacent frequencies."
"4. The granting of this application and deletion of Stations WIBO and WPCC would not increase interference within the good service areas of any other stations."
"5. The granting of this application and deletion of Stations WIBO and WPCC would work a more equitable distribution of broadcasting facilities within the Fourth Zone, in that there would be an increase in the radio broadcasting facilities of Indiana which is now assigned less than its share of such facilities and a decrease in the radio broadcasting facilities of Illinois which is now assigned more than its share of such facilities."
"6. Public interest, convenience and/or necessity would be served by the granting of this application."
to equalize the comparative broadcasting facilities of the various states or zones by unnecessarily injuring stations already established which are rendering valuable service to their natural service areas;"
and they were of opinion that the evidence showed that Stations WIBO and WPCC had been "serving public interest, convenience, and necessity certainly to as great an extent as the applicant station," and that "the conclusively established and admitted facts" furnished no legal basis for the Commission's decision. The minority of the court took the view that the court was substituting its own conclusions for those of the Commission; that the Commission had acted within its authority, and that its findings were sustained by the evidence.
"would not be a judgment, or permit of a judgment to be made in any lower court, but would permit only consummation of the administrative function of issuing or withholding a permit to operate the station."
Commission v. General Electric Co., 281 U. S. 464, 281 U. S. 467. The province of the Court of Appeals was found to be substantially the same as that which it had, until recently, on appeals from administrative decisions of the Commissioner of Patents. While the Congress can confer upon the courts of the District of Columbia such administrative authority, this Court cannot be invested with jurisdiction of that character whether for the purpose of review or otherwise. It cannot give decisions which are merely advisory, nor can it exercise functions which are essentially legislative or administrative. Id., pp. 281 U. S. 468-469; Keller v. Potomac Electric Power Co., 261 U. S. 428, 261 U. S. 442-444; Postum Cereal Co. v. California Fig Nut Co., 272 U. S. 693, 272 U. S. 700.
"that findings of fact by the Commission, if supported by substantial evidence, shall be conclusive unless it shall clearly appear that the findings of the Commission are arbitrary or capricious."
standpoint and to make an administrative judgment. A finding without substantial evidence to support it -- an arbitrary or capricious finding -- does violence to the law. It is without the sanction of the authority conferred. And an inquiry into the facts before the Commission, in order to ascertain whether its findings are thus vitiated, belongs to the judicial province, and does not trench upon, or involve the exercise of, administrative authority. Such an examination is not concerned with the weight of evidence or with the wisdom or expediency of the administrative action. Interstate Commerce Commission v. Illinois Central R. Co., 215 U. S. 452, 215 U. S. 470; Interstate Commerce Commission v. Union Pacific R. Co., 222 U. S. 541, 222 U. S. 547-548; New England Divisions Case, 261 U. S. 184, 261 U. S. 203-204; Keller v. Potomac Electric Power Co., supra; The Chicago Junction Case, 264 U. S. 258, 264 U. S. 263-265; Silberschein v. United States, 266 U. S. 221, 266 U. S. 225; Ma-King Products Co. v. Blair, 271 U. S. 479, 271 U. S. 483; Federal Trade Commission v. Klesner, 280 U. S. 19, 280 U. S. 30; Tagg Bros. v. United States, 280 U. S. 420, 280 U. S. 442; Federal Trade Commission v. Raladam Co., 283 U. S. 643, 283 U. S. 654; Crowell v. Benson, 285 U. S. 22, 285 U. S. 49-50.
"whether such a proceeding was originally begun by an administrative or executive determination, if, when it comes to the court, whether legislative or constitutional, it calls for the exercise of only the judicial power of the court upon which jurisdiction has been conferred by law."
Nor is it necessary that the proceeding to be judicial should be one entirely de novo. When, on the appeal, as here provided, the parties come before the Court of Appeals to obtain its decision upon the legal question whether the Commission has acted within the limits of its authority, and to have their rights, as established by law, determined accordingly, there is a case or controversy which is the appropriate subject of the exercise of judicial power. The provision that, in case the court reverses the decision of the Commission, "it shall remand the case to the Commission to carry out the judgment of the court" means no more than that the Commission, in its further action, is to respect and follow the court's determination of the questions of law. The procedure thus contemplates a judicial judgment by the Court of Appeals, and this Court has jurisdiction, on certiorari, to review that judgment in order to determine whether or not it is erroneous. Osborn v. United States Bank, 9 Wheat. 738, 22 U. S. 819; In re Pacific Railway Commission, 32 F. 241, 255; Federal Trade Commission v. Klesner, supra; Federal Trade Commission v. Raladam Co., supra; Old Colony Trust Co. v. Commissioner, supra.
has this power, its findings of fact sustain its order in the instant case, in the light of the statutory requirements for the exercise of the power, and, if so, whether these findings are supported by substantial evidence, and (3) whether, in its procedure, the Commission denied to the respondents any substantial right.
(1) No question is presented as to the power of the Congress, in its regulation of interstate commerce, to regulate radio communications. No state lines divide the radio waves, and national regulation is not only appropriate, but essential, to the efficient use of radio facilities. In view of the limited number of available broadcasting frequencies, the Congress has authorized allocation and licenses. The Commission has been set up as the licensing authority and invested with broad powers of distribution in order to secure a reasonable equality of opportunity in radio transmission and reception.
"assign bands of frequency or wavelengths to the various classes of stations and assign frequencies or wavelengths for each individual station and determine the power which each station shall use and the time during which it may operate,"
when and insofar as there are applications therefor,"
"make a fair and equitable allocation of licenses, wavelengths, time for operation, and station power to each of the states, . . . within each zone, according to population,"
carry into effect the equality of broadcasting service, . . . whenever necessary or proper, by granting or refusing licenses or renewals of licenses, by changing periods of time for operation, and by increasing or decreasing station power, when applications are made for licenses or renewals of licenses.
Commission issued its General Order No. 92 [Footnote 6] specifying the "unit value" of stations of various types, and in this way the Commission was able to make a tabulation by zones and states showing the "units due," based on estimated population, and the "units assigned." This action called for administrative judgment, and no ground is shown for assailing it. It appears that, with respect to total broadcasting facilities, Indiana is "under-quota" and Illinois is "over-quota" in station assignments.
and to determine whether, in view of all the circumstances of distribution, a more equitable adjustment would be effected by the granting of the application of Station WJKS and the deletion of Stations WIBO and WPCC.
Lumber Co. v. Garrison, 237 U. S. 251, 237 U. S. 260; Continental Insurance Co. v. United States, 259 U. S. 156, 259 U. S. 171; Sproles v. Binford, 286 U. S. 374, 286 U. S. 390-391; Stephenson v. Binford, 287 U. S. 251, 287 U. S. 276; City of New York v. Federal Radio Commission, 59 App.D.C. 129, 36 F.2d 115; 281 U.S. 729; American Bond & Mortgage Co. v. United States, 52 F.2d 318; 285 U.S. 538; Trinity Methodist Church, South v. Federal Radio Commission, 61 App.D.C. 311, 62 F.2d 850; 288 U.S. 599.
not between states, would defeat the manifest purpose of the Act.
We conclude that the Commission, in making allocations of frequencies to states within a zone, has the power to license operation by a station in an under-quota state on a frequency theretofore assigned to a station in an over-quota state, provided the Commission does not act arbitrarily or capriciously.
decision was reached, there was nothing either in the provisions of § 14, or otherwise in the Act, which precluded the Commission from terminating the licenses in accordance with the reservation stipulated.
In granting licenses, the Commission is required to act "as public convenience, interest, or necessity requires." This criterion is not to be interpreted as setting up a standard so indefinite as to confer an unlimited power. Compare New York Central Securities Corp. v. United States, 287 U. S. 12, 287 U. S. 24. The requirement is to be interpreted by its context, by the nature of radio transmission and reception, by the scope, character, and quality of services, and, where an equitable adjustment between states is in view, by the relative advantages in service which will be enjoyed by the public through the distribution of facilities. In making such an adjustment, the equities of existing stations undoubtedly demand consideration. They are not to be the victims of official favoritism. But the weight of the evidence as to these equities and all other pertinent facts is for the determination of the Commission in exercising its authority to make a "fair and equitable allocation."
not only at liberty, but was required, to reach its own conclusions upon the evidence.
"applications from under-quota states in zones which have already allocated to them their pro rata share of radio facilities should be for a facility already in use in that zone by an over-quota state,"
that other facilities were available and should be granted in place of those which the applicant designated. If such a contention had been made, there would have been no difficulty in bringing before the Commission other stations whose interests might be drawn in question. There is no showing that the respondents were prejudiced by the operation of the order in question.
Respondents complain that they were not heard in argument before the Commission. They were heard before the examiner, and the evidence they offered was considered by the Commission. The exceptions filed by the applicant to the examiner's report were filed and served upon the respondents in August, 1931, and the decision of the Commission was made in the following October. While the request of the applicant for oral argument was denied, it does not appear that any such request was made by respondents or that they sought any other hearing than that which was accorded.
* Together with No. 658, Federal Radio Comm'n v. North Shore Church (Station WPCC); No. 659, Federal Radio Comm'n et al. v. Nelson Brothers Bond & Mortgage Co. (Station WIBO), and No. 660, Federal Radio Comm'n et al. v. North Shore Church (Station WPCC).
"Sec. 5. The second paragraph of § 9 of the Radio Act of 1927 is amended to read as follows:"
"It is hereby declared that the people of all the zones established by § 82(2) of this chapter are entitled to equality of radio broadcasting service, both of transmission and of reception, and, in order to provide said equality, the licensing authority shall, as nearly as possible, make and maintain an equal allocation of broadcasting licenses, of bands of frequency or wavelengths, of periods of time for operation, and of station power to each of said zones, when and insofar as there are applications therefor, and shall make a fair and equitable allocation of licenses, wavelengths, time for operation, and station power to each of the states, the District of Columbia, the Territories and possessions of the United states within each zone, according to population. The licensing authority shall carry into effect the equality of broadcasting service hereinbefore directed, whenever necessary or proper, by granting or refusing licenses or renewals of licenses, by changing periods of time for operation, and by increasing or decreasing station power when applications are made for licenses or renewals of licenses: Provided, That if and when there is a lack of applications from any zone for the proportionate share of licenses, wavelengths, time of operation, or station power to which such zone is entitled, the licensing authority may issue licenses for the balance of the proportion not applied for from any zone, to applicants from other zones for a temporary period of ninety days each, and shall specifically designate that said apportionment is only for said temporary period. Allocations shall be charged to the state, District, Territory, or possession wherein the studio of the station is located, and not where the transmitter is located."
"At the earliest convenient time, the court shall hear and determine the appeal upon the record before it, and shall have power, upon such record, to enter a judgment affirming or reversing the decision of the Commission, and, in event the court shall render a decision and enter an order reversing the decision of the Commission, it shall remand the case to the Commission to carry out the judgment of the court: Provided, however, That the review by the court shall be limited to questions of law and that findings of fact by the Commission, if supported by substantial evidence, shall be conclusive unless it shall clearly appear that the findings of the Commission are arbitrary or capricious. The court's judgment shall be final, subject, however, to review by the Supreme Court of the United states upon writ of certiorari on petition therefor under § 347 of Title 28 of the Judicial Code by appellant, by the Commission, or by any interested party intervening in the appeal."
46 Stat. 844, 47 U.S.C. § 96(d).
"The purpose of the amendment is to clarify the procedure on appeal to the court from decisions of the Federal Radio Commission to more clearly define the scope of the subject matter of such appeals and to insure a review of the decision of the Court of Appeals of the District of Columbia by the Supreme Court."
H.R. Rep. No. 1665, 71st Cong., 2d Sess., p. 2.
Report, 1928. Federal Radio Commission, pp. 17, 48.

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