Source: https://www.law.cornell.edu/supremecourt/text/351/192/
Timestamp: 2019-04-24 20:03:58+00:00

Document:
Argued: Feb. 28, 29, 1956.
Mr.Warren E. Baker, for petitioner.
Mr. Albert R. Connelly, New York City, for respondent.
The Federal Communications Commission issued, on August 19, 1948, a notice of proposed rulemaking under the authority of 47 U.S.C. 303(r), 311, 313 and 314, 47 U.S.C.A. §§ 303(r), 311, 313, 314 (Communications Act of 1934, as amended, 47 U.S.C. 301 et seq., 47 U.S.C.A. § 301 et seq.). It was proposed, so far as is pertinent to this case, to amend Rules 3.35, 3.240 and 3.636 relating to Multiple Ownership of standard, FM and television broadcast stations. Those rules provide that licenses for broadcasting stations will not be granted if the applicant, directly or indirectly, has an interest in other stations beyond a limited number. The purpose of the limitations is to avoid overconcentration of broadcasting facilities.
As required by 5 U.S.C. 1003(b), 5 U.S.C.A. § 1003(b), the notice permitted 'interested' parties to file statements or briefs. Such parties might also intervene in appeals. 47 U.S.C. 402(d) and (e), 47 U.S.C.A. § 402(d, e). Respondent, licensee of a number of radio and television stations, filed a statement objecting to the proposed changes, as did other interested broadcasters. Respondent based its objections largely on the fact that the proposed rules did not allow one person to hold as many FM and television stations as standard stations. Storer argued that such limitations might cause irreparable financial damage to owners of standard stations if an obsolescent standard station could not be augmented by FM and television facilities.
This latter claim was important to respondent because allegedly 20% of its voting stock was in scattered ownership and was traded in by licensed dealers. This stock was thus beyond its control.
'(a) Storer is denied the right of a full and fair hearing to determine whether its ownership of an interest in more than seven (7) standard radio and five (5) television broadcast stations, in light of and upon a showing of all material circumstances, will thereby serve the public interest, convenience and necessity.
'Congress had some purpose in enacting section 402(b)(2). It may have been of opinion that one likely to be financially injured by the issue of a license would by the only person having a sufficient interest to bring to the attention of the appellate court errors of law in the action of the Commission in granting the license. It is within the power of Congress to confer such standing to prosecute an appeal.' Federal Communications Comm'n v. Sanders Bros. Radio Station, 309 U.S. 470, 477, 60 S.Ct. 693, 698, 84 L.Ed. 869.
We added that such an appellant could raise any relevant question of law in respect to the order.
'The regulations are not any the less reviewable because their promulgation did not operate of their own force to deny or cancel a license. It is enough that failure to comply with them penalizes licensees, and appellant, with whom they contract. If an administrative order has that effect it is reviewable and it does not cease to be so merely because it is not certain whether the Commission will institute proceedings to enforce the penalty incurred under its regulations for non-compliance.' Id., 316 U.S. at pages 417 418, 62 S.Ct. at page 1200.
The Court said that the regulations 'presently determine rights.' Id., 316 U.S. at page 421, 62 S.Ct. at page 1202.
'Appellant's standing to maintain the present suit in equity is unaffected by the fact that the regulations are not directed to appellant and do not in terms compel action by it or impose penalties upon it because of its action or failure to act. It is enough that, by setting the controlling standards for the Commission's action, the regulations purport to operate to alter and affect adversely appellant's contractual rights and business relations with station owners whose applications for licenses the regulations will cause to be rejected and whose licenses the regulations may cause to be revoked.' Id., 316 U.S. at page 422, 62 S.Ct. at page 1202.
See Federal Communications Commission v. American Broadcasting Co., 347 U.S. 284, 289, 74 S.Ct. 593, 597, 98 L.Ed. 699, and EL Dorado Oil Works v. United States, 328 U.S. 12, 1819, 66 S.Ct. 843, 846, 90 L.Ed. 1053.
The regulations here under consideration presently aggrieve the respondent. The Commission exercised a power of rulemaking which controls broadcasters. The Rules now operate to control the business affairs of Storer. Unless it obtains a modification of this declared administrative policy, Storer cannot enlarge the number of its standard of FM stations. It seems, too, that the note to Rule 3.636 (n. 1, supra) endangers Storer's stations as alleged in its petition for review. See this opinion, supra, 76 S.Ct. at page 767 at (b). Commission hearings are affected now by the Rules. Storer cannot cogently plan its present or future operations. 7 It cannot plan to enlarge the number of its standard or FM stations, and at any moment the purchase of Storer's voting stock by some member of the public could endanger its existing structure. These are grievances presently restricting Storer's operations. In the light of the legislation allowing review of the Commission's actions, we hold that Storer has standing to bring this action.
In its petition for review Storer prayed the court to vacate the provisions of the Multiple Ownership Rules insofar as they denied to an applicant already controlling the allowable number of stations a 'full and fair hearing' to determine whether additional licenses to the applicant would be in the public interest. 8 The Court of Appeals struck out, as contrary to § 309(a) and (b) of the Communications Act (n. 5, supra), the words italicized in Rule 3.636 (n. 1, supra) and the similar words in Rules 3.35 and 3.240. The case was remanded to the Commission with directions to eliminate these words. 95 U.S.App.D.C. 97, 220 F.2d 204. We granted certiorari 350 U.S. 816, 76 S.Ct. 52.
Respondent defends the position of the Court of Appeals. It urges that an application cannot be rejected under 47 U.S.C. 309, 47 U.S.C.A. § 309, without a 'full hearing' to applicant. We agree that a 'full hearing' under § 309 means that every party shall have the right to present his case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as may be required for a full and true disclosure of the facts. Cf. 5 U.S.C. 1006(c), 5 U.S.C.A. § 1006(c). Such a hearing is essential for wise and just application of the authority of administrative boards and agencies.
We do not read the hearing requirement, however, as withdrawing from the power of the Commission the rulemaking authority necessary for the orderly conduct of its business. As conceded by Storer, 'Section 309(b) does not require the Commission to hold a hearing before denying a license to operate a station in ways contrary to those that the Congress has determined are in the public interest.' 11 The challenged Rules contain limitations against licensing not specifically authorized by statute. But that is not the limit of the Commission's rulemaking authority. 47 U.S.C. 154(i) and § 303(r), 47 U.S.C.A. §§ 154(i), 303(r), grant general rulemaking power not inconsistent with the Act or law.
This Commission, like other agencies, deals with the public interest. Scripps-Howard Radio v. Federal Communications Commission, 316 U.S. 4, 14, 62 S.Ct. 875, 882, 86 L.Ed. 1229. Its authority covers new and rapidly developing fields. Congress sought to create regulation for public protection with careful provision to assure fair opportunity for open competition in the use of broadcasting facilities. Accordingly, we cannot interpret § 309(b) as barring rules that declare a present intent to limit the number of stations consistent with a permissible 'concentration of control.' It is but a rule that announces the Commission's attitude on public protection against such concentration. 12 The Communications Act must be read as a whole and with appreciation of the responsibilities of the body charged with its fair and efficient operation. The growing complexity of our economy induced the Congress to place regulation of businesses like communication in specialized agencies with broad powers. Courts are slow to interfere with their conclusions when reconcilable with statutory directions. 13 We think the Multiple Ownership Rules, as adopted, are reconcilable with the Communications Act as a whole. An applicant files his application with knowledge of the Commission's attitude toward concentration of control.
'The Commission therefore did not bind itself inflexibly to the licensing policies expressed in the Regulations. In each case that comes before it the Commission must still exercise an ultimate judgment whether the grant of a license would serve the 'public interest, convenience, or necessity.' If time and changing circumstances reveal that the 'public interest' is not served by application of the Regulations, it must be assumed that the Commission will act in accordance with its statutory obligations.' Id., 319 U.S. at page 225, 63 S.Ct. at page 1013.
That flexibility is here under the present § 309(a) and (b) and the FCC's regulations. See n. 10, supra. We read the Act and Regulations as providing a 'full hearing' for applicants who have reached the existing limit of stations, upon their presentation of applications conforming to Rules 1.361(c) and 1.702, that set out adequate reasons why the Rules should be waived or amended. The Act, considered as a whole, requires no more. We agree with the contention of the Commission that a full hearing, such as is required by § 309(b), note 5, supra, would not be necessary on all such applications. As the Commission has promulgated its Rules after extensive administrative hearings, it is necessary for the accompanying papers to set forth reasons, sufficient if true, to justify a change or waiver of the Rules. We do not think Congress intended the Commission to waste time on applications that do not state a valid basis for a hearing. If any applicant is aggrieved by a refusal, the way for review is open.
We reverse the judgment of the Court of Appeals and remand the case to that court so that it may consider respondent's other objections to the Multiple Ownership Rules.
The Court has properly deemed it necessary to question sua sponte the jurisdiction of the Court of Appeals to entertain this case, 1 but I am unable to agree with its decision that such jurisdiction existed. In my view, Storer was not a 'party aggrieved by a final order' of the Commission, within the meaning of 5 U.S.C. 1034, 5 U.S.C.A. § 1034, and hence was not entitled to invoke the jurisdiction of the Court of Appeals. Accordingly, I would vacate the judgment below and remand the case to the Court of Appeals with directions to dismiss the petition for lack of jurisdiction.
2. A second obstacle to review of the regulations here is that, even if they be deemed an 'order,' Storer has not shown that it is 'aggrieved' by them.
However these allegations are read, they assert no more than that the Commission may in the future take action pursuant to the regulations to deny or revoke a license. Of course, if such action should ever be taken, Storer would then be 'aggrieved.' But by the same token it would then have a complete remedy through a direct appeal from such action under § 402(b). Until such time as the regulations are applied to it, however, Storer will not have been 'aggrieved' and hence will not be entitled to review. Indeed, in this case we do not even reach often difficult problem whether an alleged injury is sufficient or of such a nature as to entitle the complaining party to review; here we have that rare case in which no present injury of any kind is even alleged.
It is said, however, that the regulations 'now operate to control the business affairs of Storer,' despite the absence of any such allegation by Storer. Since the Regulations do not have any coercive effect, I take that to mean only that Storer, if it exercises prudent business judgment, will take into account the announced policy of the Commission in deciding whether or not to apply for an additional license. No doubtt hat is true, but I fail to see show Storer has been 'aggrieved' by being told in advance one of the factors that will govern the disposition of any future license application on its part. If anything, Storer is now able to make a more enlightened judgment as to the probabilities of success in obtaining a further license.
3. So clear is it, in fact, that Storer has not been 'aggrieved' by the mere issuance of the regulations, that the Court's grant of review in this case must be premised not upon the effect of the regulations themselves, but simply upon Storer's interest in knowing whether or not a future application of them would be valid. The result is that the statutory procedure for obtaining relief from a present injury caused by an order has been converted into something quite differentnamely, a procedure for obtaining a declaratory judgment as to the validity of a future application of new regulations. Not only is such a proceeding not authorized by the statute, however, but Storer would not have standing to invoke it even if it were.
That declaratory relief from future orders is not contemplated by § 1034 seems clear. That section authorizes review only of an 'order,' only if the order is 'final,' and only at the instance of one aggrieved 'by' the challenged order itself. The regulations here are not an 'order'; if they were it would not be 'final' since further administrative action must be taken before Storer will be affected; and Storer's grievance, if any, will be caused not 'by' the regulations but only by their future application. Moreover, quite apart from these obstacles, the procedure provided for by § 1034 is inappropriate for anticipatory equitable relief. That section requires, for example, that petitions for review be filed within 60 days after the order is issued. While such a time limitation is clearly appropriate to a procedure for relief from an injury already suffered, there seems no justification for so limiting the availability of declaratory relief from future action. Why should declaratory relief be denied as the threat of the future injury becomes more imminent, or be granted to those who have a sufficient interest to seek review immediately while being denied to those who later acquire a similar or even greater interest? Finally, no reason is apparent why existing procedures for declaratory judgments are not adequate; to construe § 1034 as an alternative declaratory judgment procedure simply produces the incongruous result of authorizing declaratory relief in the Courts of Appeals within 60 days after the order is issued and in the District Courts thereafter.
In the second place, even if § 1034 is to be construed as authorizing declaratory relief, I see no reason why the usual requirements for invoking equity jurisdiction should not be as applicable to such a proceeding as they are to an ordinary declaratory judgment action or to a proceeding to set aside a Commission order under the Urgent Deficiencies Act, the predecessor to § 1034 under which the CBS case arose. In that case, CBS's right to equitable relief in advance of the application of the regulations was expressly based on the irreparable injury it would sufferthe wholesale concellation of its contracts with licenseesbefore any further administrative action was taken and for which there was no other adequate remedy. Unless these requirements for equitable relief are to be abandoned, there can be no right to relief here, for Storer alleges no threatened injury of any kind, other than the possibility of future administrative action for which there would be a complete remedy by appeal.
4. The holding of the Court today amounts to this: that regulations which impose no duty and determine no rights may be reviewed at the instance of a person who alleges no injury, to settle whether a future application of the regulations that may never occur would be valid. The lack of support for this decision is disclosed by the Court's primary reliance on CBS, 4 a case which in my view not only fails to support the Court's conclusion but is persuasive, if not controlling, authority for precisely the opposite result. 5 In my opinion, the implications of the decision undermine much of the settled law on reviewability of administrative action, and it is the more unfortunate because made without the benefit of briefs or argument by the parties. I cannot concur in that part the Court's opinion.
While I agree that the amendatory Rules promulgated by the Federal Communications Commission relating to Multiple Ownership of standard, FM and television stations constitute a reviewable 'order' within the meaning of 5 U.S.C. 1034, 5 U.S.C.A. § 1034, my Brother HARLAN'S reasoning convinces me that the respondent was not on the record before us a 'party aggrieved' under that section. Therefore the court below should not have entertained the petition to review the Commission's order.
Procedural and jurisdictional limitations on judicial action by the federal courts are not playthings of lawyers nor obstructions on the road of justice. Whether formulated by the Constitution, congressional enactments or settled judicial precedents, they are means designed to keep the courts within appropriate limits and to enforce rights according to general standards and not have them depend on the impact of the individual case. To be sure, dealing as we are with general standards, differences of views regarding their scope and applicability are bound to arise from time to time. Who is a 'party aggrieved' or a 'party in interest' turns on the context, often confused and dubious, of a particular set of circumstances and therefore raises issues on which judges not unnaturally divide, as they do on other unmathematical problems of the law. See Singer & Sons v. Union Pacific R. Co., 311 U.S. 295, 61 S.Ct. 254, 85 L.Ed. 198.
To the laity such matters may seem technicalities in a derogatory sense of the term. But this is only one phase of an attitude of mind that thinks ill of law which does not accord with private wishes. When informed by a legal adviser that to carry out his desires would encounter 'technical legal difficulties,' a strenuous President of the United States impatiently observed that 'all law is technicality.' But even professionally competent officials are at times impatient with decisions that fail to adjudicate substantive issues on which light is sought. It seems to me important, therefore, not to minimize the function of jurisdictional limitations upon adjudication by expressing views on the merits. There are, of course, exceptional situations where it is proper for a dissenter to go to the merits when a majority of theCourt removes from the case threshold objections of procedure and jurisdiction. See e.g., Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 341, 56 S.Ct. 466, 480, 80 L.Ed. 688. This is not such a case.
'In applying the provisions of paragraph (a) of this section to the stockholders of a corporation which has more than 50 voting stockholders, only those stockholders need be considered who are officers or directors or who directly or indirectly own 1 per cent or more of the outstanding voting stock.' 47 CFR, Rev. 1953. The standard and FM Rules limited stations to seven.
'(a) Any person suffering legal wrong because of any agency action, or adversely affected or aggrieved by such action within the meaning of any lelevant statute, shall be entitled to judicial review thereof.
'(a) If upon examination of any application provided for in section 308 of this title the Commission shall find that public interest, convenience, and necessity would be served by the granting thereof, it shall grant such application.
'Notification of denial; contents; reply; hearing; intervention.
Section 10(e) of the bill required reviewing courts to 'hold unlawful any action * * * (3) contrary to statutes or statutory right.' Section 10(e) of the Act is now in substantially the same language. 5 U.S.C. 1009(e), 5 U.S.C.A. § 1009(e).
Cf. Frozen Food Express v. United States, 351 U.S. 40, 43 44, 76 S.Ct. 569, 571.
Storer also attacked the 1% ownership provision that appears as a note to Rule 3.636, n. 1, supra. This was not passed upon by the Court of Appeals. 95 U.S.App.D.C. 97, 220 F.2d 204. Its judgment leaves that portion of the Rule unaffected. As there was no cross petition for certiorari, we leave open the question of its validity.
'The Commission may perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this chapter, as may be necessary in the execution of its function.' 47 U.S.C. 154(i), 47 U.S.C.A. § 154(i).
'(r) Make such rules and regulations and prescribe such restrictions and conditions, not inconsistent with law, as may be necessary to carry out the provisions of this chapter, * * *.' 47 U.S.C. 303, 47 U.S.C.A. § 303.
'Petition for amendment or waiver of rules. Any interested person may petition for issuance, amendment, repeal or waiver of any rule or regulation. Such petition shall show the text of the proposed rule, or its change, and set forth the reason in support of the petition.' See also, 47 CFR, 1941 Supp., §§ 1.72, 1.81.
See 47 U.S.C. 310 and 311, 47 U.S.C.A. §§ 310, 311. Cf. Ashbacker Radio Corp. v. Federal Communications Commission, 326 U.S. 327, 333, n. 9, 66 S.Ct. 148, 151, 90 L.Ed. 108; and 47 CFR, Rev. 1953 § 1.724; Felman v. United States, 339 U.S. 973, 70 S.Ct. 1030, 94 L.Ed. 1379; Federal Communications Comm'n v. American Broadcasting Co., 347 U.S. 284, 74 S.Ct. 593, 98 L.Ed. 699.
See National Broadcasting Co. v. United States, 319 U.S. 190, 196, 63 S.Ct. 997, 1000. We said last Term that determination of improper concentration of control was for appraisal by the Commission after hearing. Federal Communications Commission v. Allentown Broadcasting Co., 349 U.S. 358, 363364, 75 S.Ct. 855, 858, 859, 99 L.Ed. 1147.
See Unemployment Compensation Commission of Territory of Alaska v. Aragan, 329 U.S. 143, 153, 67 S.Ct. 245, 250, 91 L.Ed. 136; O'Leary v. Brown-Pacific-Maxon, 340 U.S. 504, 508, 71 S.Ct. 470, 472.
'Sec. 309. (a) If upon examination of any application for a station license or for the renewal or modification of a station license the Commission shall determine that public interest, convenience, or necessity would be served by the granting thereof, it shall authorize the issuance, renewal, or modification thereof in accordance with said finding. In the event the Commission upon examination of any such application does not reach such decision with respect thereto, it shall notify the applicant thereof, shall fix and give notice of a time and place for hearing thereon, and shall afford such applicant an opportunity to be heard under such rules and regulations as it may prescribe.' 48 Stat. 1085.
Change to the present form was merely for more certainty and clarification to avoid the possibility of arbitrary Commission action. See S.Rep. No. 44, 82d Cong., 1st Sess. 8.
"No license shall be granted to a standard broadcast station having any contract, arrangement, or understanding, express or implied, with a network organization under which the station is prevented or hindered from, or penalized for, broadcasting the programs of any other network organization." Id., 319 U.S. at page 200, 63 S.Ct. at page 1002; 47 CFR, 1941 Supp., § 3.101.
Insofar as the Multiple Ownership regulations provide for the revocation of existing licenses upon the purchase by a licensee of a stock interest in more than the maximum number of stations, they could arguably be deemed an 'order' forbidding licensees, under pain of license revocation, to engage in stock transactions the result of which would violate the numerical limitations. Storer is not complaining, however, of any such deterrent effect of the regulations and does not allege that it desires either to buy or to sell stock in any licensee. It objects only to the possibility of a future loss of a license should persons beyond its controland, by hypothesis, not deterred by the regulationspurchase its stock. See paragraph (b) of Storer's allegations, 76 S.Ct. at page 773, infra.
The recent holding of this Court in East Texas Motor Freight Lines, Inc., v. Frozen Food Express, 351 U.S. 49, 76 S.Ct. 574, does not support the result reached here. In that case the declaratory interpretation of the Interstate Commerce Actsought by way of review of the Commission's interpretative regulations in a proceeding under the Urgent Deficiencies Actwas considered justified because of the possibility of criminal penalties being imposed for violations of the Act and the risk of loss of substantial investments in operations that might subsequently be enjoined by the Commission. No such necessity for declaratory relief is even alleged here; there is no threat of criminal prosecutions and, since a license is always a condition precedent to acquisition of a new station, there is no danger of the loss of investments to be made prior to the future administrative action.
Of the other cases cited by the Court, only Federal Communications Commission v. American Broadcasting Co., 347 U.S. 284, 74 S.Ct. 593, 98 L.Ed. 699, involved a similar stituation, and there the jurisdictional problem was neither raised by the parties nor noted by the Court.

References: § 301
 § 1003
 § 402
 v. 
 v. 
 v. 
 § 309
 § 309
 § 309
 § 1006
 § 303
 v. 
 § 309
 § 309
 § 309
 § 1034
 § 402
 § 1034
 § 1034
 § 1034
 § 1034
 § 1034
 § 1034
 v. 
 v. 
 § 1009
 v. 
 § 154
 § 303
 v. 
 § 1
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 3
 v. 
 v.