Legal Document

537 U.S. 293 FEDERAL COMMUNICATIONS COMMISSIONv.NEXTWAVE PERSONAL INC. ET AL. No. 01-653. Supreme Court of United States. Argued October 8, 2002. Decided January 27, 2003.* Pursuant to provisions the Communications Act 1934 authorizing Federal Commission (FCC) award spectrum licenses small businesses through competitive bidding, and allow them pay for in installments, FCC auctioned off certain broadband personal communications services respondents (hereinafter NextWave). NextWave made a down payment on purchase price, signed promissory notes balance, executed agreements giving first lien on, security interest in, NextWave's rights licenses, which recited that they were conditioned upon full timely all monies due FCC, failure comply with this condition would result their automatic cancellation. eventually filed Chapter 11 bankruptcy protection suspended payments creditors, including pending confirmation its reorganization plan. The objected plan, asserting had been canceled automatically when company missed deadline, announced available auction. Bankruptcy invalidated cancellation as violation various Code provisions, but Second Circuit reversed, holding exclusive jurisdiction review FCC's regulatory action lay courts appeals. After denied petition reconsideration license cancellation, District Columbia held violated U. S. C. § 525(a), provides: "[A] governmental unit may not . revoke debtor solely because such has paid debt is dischargeable case." Held: Section 525 prohibits from revoking by debtor's make licenses. It undisputed "governmental unit" "revoke[d]" "license," "debtor" under Act. Pp. 301-308. (a) rejects petitioners' argument did "solely because" nonpayment 525(a). fact valid motive irrelevant. means nothing more or less than must alone be proximate cause whatever agency's ultimate be. 301-302. (b) contention conditions like are properly classified "debts" 525(a) fails. Under Code, "debt" "liability claim," 101(12), "claim," turn, includes any "right payment," 101(5)(A). plain meaning payment" nor an enforceable obligation, regardless Government's objectives imposing obligation. E. g., Pennsylvania Dept. Public Welfare v. Davenport, 495 552, 559. Also rejected obligations "dischargeable" it beyond courts' jurisdictional authority alter modify obligations. Dischargeability tied existence authority. states plan discharges arose before date, 1141(d)(1)(A), only debts excepts prescription those described 523, see 1141(d)(2). Ohio Kovacs, 469 274, 278. Petitioners' D.C. no power discharge irrelevant whether court can set aside agency violates 525, prevented canceling courts. 302-304. (c) Finally, Court's interpretation does not, petitioners contend, create conflict obstructing functioning Act's auction provisions. Nothing demands sanction agreed-upon periodic even requires permit over time. What describe boils policy preference part (1) selling credit (2) rather interests there default. Such administrative preferences cannot basis denying provided law's terms. P. 304. 254 F. 3d 130, affirmed. SCALIA, J., delivered opinion Court, REHNQUIST, O'CONNOR, KENNEDY, SOUTER, THOMAS, GINSBURG, JJ., joined, STEVENS, joined Parts I II. concurring judgment, post, p. 308. BREYER, dissenting opinion, 310. 1 CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR DISTRICT COLUMBIA CIRCUIT 2 Acting Solicitor General Clement argued petitioner With him briefs Deputy Wallace, Jeffrey A. Lamken, William Kanter, Jacob M. Lewis, John Rogovin, Daniel Armstrong, Joel Marcus. Jonathan Franklin Arctic Slope Regional Corp. et al. 01-657. was Lorane Hebert. 3 Donald B. Verrilli, Jr., both cases. Ian Heath Gershengorn, Hohengarten, Thomas G. Hungar, Douglas R. Cox, Miguel Estrada, Eric Brunstad, Deborah L. Schrier-Rape. 4 Laurence H. Tribe brief Creditors Communications, Inc., amici curiae urging affirmance. Charles Fried Elizabeth Warren.† 5 JUSTICE SCALIA Court. 6 In these cases, we decide (FCC Commission) owed 7 * 1993, Congress amended authorize "through system bidding." 48 Stat. 1085, amended, 107 387, 47 309(j)(1). directed "promot[e] economic opportunity competition" "avoi[d] excessive concentration licenses" "disseminating among wide variety applications, [and] rural telephone companies." 309(j)(3)(B). order achieve goal, "consider alternative schedules methods calculation, lump sums guaranteed installment other ." 309(j)(4)(A). 8 decided simultaneous, multiple-round auctions. re Implementation 309(j) Act—Competitive Bidding, 9 Rcd. 2348, ¶¶ 54, 68 (1994). accordance §§ 309(j)(3)(B) (4)(A), restricted participation two six blocks (Blocks "C" "F") designated entities total assets revenues below levels, allowed successful bidders installments term license. CFR 24.709(a)(1) (1997). Respondents Personal Power Partners, Inc. (both wholly owned subsidiaries Telecom, hereinafter jointly referred respondent NextWave), participated, respectively, "C-Block" "F-Block" awarded 63 C-Block winning bids totaling approximately $4.74 billion, 27 F-Block $123 million. regulations, downpayment perfected filing Uniform Commercial Code. gave "lien continuing Debtor's [each] License." Security Agreement between ¶ (Jan. 3, 1997), App. Pet. Cert. 402a. addition, "conditioned pursuant terms Commission's forth Note licensee," "[f]ailure will authorization." Radio Station Authorization Broadband PCS (issued Jan. 388a. 10 awarded, several bidders, NextWave, experienced difficulty obtaining financing operations petitioned restructure installment-payment See 12 16436, payments, 17325 (1997); 13 1286 (1997), adopted options licensees surrender some partial forgiveness outstanding debt. 6; 8345 (1998). deadline June 1998, elect restructuring option, 29, last date resume payments. 7413 On after failing obtain stays election Appeals Circuit, New York. 235 263, 267 (Bkrtcy. Ct. SDNY 1998). initiated adversary proceeding alleging billion indebtedness avoidable "fraudulent conveyance" 544 544, because, time actually conveyed value declined $1 billion. agreed1 —ruling effect could keep reduced price $1.02 billion—and 241 311, 318-319 (SDNY 1999). that, although might have underlying change attached 200 43, 55-56 (1999) (per curiam). also since, "NextWave's obligation close auction," fraudulent conveyance acting capacity creditor. Id., at 58. Following Circuit's decision, prepared envisioned single sum satisfy entire remaining $4.3 late fees. 1998. simultaneously "available provisions" regulations. Notice, Auction C F Block Licenses, 15 693 (2000). sought emergency relief declared respondent's "null void" 244 253, 257-258 2000). Once again, reversed. Commission, 217 125 Granting writ mandamus, "[e]xclusive lies appeals" 402, since reauction decision regulatory, proclaiming arbitrary "outside court." 3d, 139, 136. noted, however, "NextWave remains free pursue challenge acts." 140. seeking denial gravamen cases bar. Matter Notice DA 00-49 Order Reconsideration, 17500 appealed D. 402(b), capricious, contrary law, Administrative Procedure Act, 706, agreed, 525: "Applying fundamental principle federal agencies obey laws, just administer, conclude provision debtors' bankruptcy." 133 (2001). We granted certiorari. 535 904 (2002). II 14 "not law," 706(2)(A)—which means, course, merely laws itself charged administering. See, e. Citizens Preserve Overton Park, Volpe, 401 413-414 (1971) ("In if `arbitrary, abuse discretion, otherwise law' failed meet statutory, procedural, constitutional requirements"). Respondent contends, held, revocation provides, relevant part: person title case ."2 16 No one disputes Petitioners argue, nonpayment, event, "debt[s]" within They argue unnecessarily bring into find none contentions persuasive, discuss turn. 17 due. apply "valid motive" Brief 19; Petitioner 17. our view, factor When statute refers sole ("solely because"), reasonably understood include, causes whose presence preclude application prohibition, unit's effecting reading deprive force. hard imagine situation further behind cancellation—assuring financial solvency licensed entity, Perez Campbell, 402 637 (1971); Bible Speaks, 69 368, 374 Mass. 1987), punishing lawlessness, Adams, 106 811, 827 NJ 1989); Colon, 102 421, 428 ED Pa. 1989), (quite simply) making financially whole. cancellation—the act event triggers cancel, pulling trigger 18 Some think (and opponents undoubtedly thought) ought exception cancellations purpose. Besides consume rule, flies face where intended provide exceptions done so clearly expressly, device subtle denominating cause. There are, example, exemptions Code's stay U.S.C. 362(b)(4). And contains explicit Agriculture Department programs, n. 2, supra. These latter entirely superfluous read proposes—which rejected. States Nordic Village, 503 30, 35-36 (1992). B 19 contend "debt[s] [are] dischargeable" bankruptcy. First, argues "regulatory `debts'" 33. "financial nature condition" "does convert debt." Ibid. This retooling recurrent theme conditions" should exempt 525. matter how casts it, loses. said "[c]laim" "the broadest definition," Johnson Home State Bank, 501 78, 83 (1991), "plain `right payment' seeks serve obligation," 559 (1990). 274 (1985). short, debt, condition. 20 28-29; 30-31. Dischargeability, A preconfirmation unless falls express discharge. Subsection 1141(d) except therein, "confirmation [of reorganization] ... confirmation," 1141(d)(1)(A) (emphasis added), Thus, "[e]xcept nine kinds saved 523(a), 727(b)." supra, 278 added). 21 Artistically symmetrical 31-32; 32, 9. Just former That seek violating 22 obstruct 309(j), Indeed, time, leaving impecunious finance private lenders. law. "`[W]hen statutes capable coexistence, duty courts, absent expressed congressional intention contrary, regard each effective.'" J. Ag Supply, Pioneer Hi-Bred International, 534 124, 143-144 (2001) (quoting Morton Mancari, 417 535, 551 (1974)). being inherent "we plainly effective." M., 144. circumscribes permissible action, 706. III* 23 dissent finds "dangerous rely exclusively literal statute's words," 311 (opinion J.). Instead, determines, splendid isolation language,3 purpose statute, takes "to forbid discrimination against who were, and, generally, prohibit undercut `fresh start' bankruptcy's promise," 313. deduces language-trumping "purposes" most inconclusive indications. ambiguous "Protection discriminatory treatment," ibid. This, well refer impending bankruptcy, aka insolvency. Second, perception prohibitions acts "done bankruptcy-related reasons." do share perception. For prohibition immediately preceding issue here forbids adverse government taken "has insolvent commencement title, during discharge." seems us insolvency (plus mere subsequent contemporaneous bankruptcy), require additional motivation based dissent's third indication "purpose" consists ever-available snippets legislative history, 314-315. 24 get statutory text here: Step analysis ask what possibly fulfill posited "purposes."4 "One obvious way," concludes, "is interpret phrase, `solely because' `a dischargeable,' requiring something purely factual connection words open relationship dischargeability license." Post, 316. To demonstrate "openness," gives example "rule telling apartment owners refuse rent family children adopted.'" 319. says quite correctly, adoptive prohibited motivation. But differs radically respects: child class surely disfavored one. us, contrast, descriptive clause describes rule exception. (As acknowledges, "virtually debts" dischargeable, 310.) fall (nondischargeable debts) posit similar refusal normally destructive." Would "no-more-than-normal-destructiveness" necessary owner's he rule? say, specifically destructive? Of course not. establishing adding requirement: owner families destructive children. same obviously true take forbidden question nondischargeable. 25 addition distorting provision, renders superfluous. "forbid[ding] bankruptcy," 313, already explicitly achieved another portion termination [the] bankrupt Act." believe language achieves very objective inappropriate language. meant said: his debts. 26 makes much "serious anomaly" arise permitting "every car salesman, every residential home developer, appliance [to] threaten repossession product buyer pay," alone, 312. clear anomaly exists. etc., (as acknowledges) "if [he] product," neither party enforce license, see, Cheskey, 986, (1994), cannot. statement facts, purported present issue, enforcement process,5 elimination step "revoking" them—action forbids.) created Congress—a state affairs intolerable, own disposition creates allowing reclaim property interest, individuals so. 28 reasons stated, judgment 29 Affirmed. Notes: Together 01-657,Arctic al., certiorari court. &#x2020; Briefs affirmance Airadigm Richard Bress James Rogers; Urban Comm-North Carolina, Cooper, David Thompson, Preben Jensen, Simpson; Professor Kathryn Heidt, pro se; Senator Patrick Leahy Walter Dellinger Hacker. reach merits determination valued conveyed, won entitling reads follows: "Except Perishable Agricultural Commodities 1930, Packers Stockyards 1921, section entitled `An appropriations fiscal year ending 1944, purposes,' approved July 12, 1943, deny, revoke, suspend, renew permit, charter, franchise, grant to, discriminate respect against, deny employment terminate of, whom associated, discharge, discharged STEVENS join Part purposes, II,post, 313-315, discussion here. second way—prohibiting "would promise,"post, 313—plays real role analysis, indeed circular criterion ever play analysis. whole asking promise "fresh start" of. Rather reframing question, concretely accords not—where bankrupt's initially participated proceedings See,e. 314 However, asserted notice intent them. treated "regulatory," thus outside scope jurisdiction. 125, 136 recognized seemingly distinction. 143 30 judgment. 31 Because appropriate identify considerations persuaded me majority. thought licensor creditor, rather, BREYER persuasively argues, protect terminations. remain principal provision. significant, three statutes, remarkably cases.1 Those introduce ambiguity. 32 hand, indicate intend limit Executive's right retaining creditor relies. deal perishable commodities seem equally applicable exploit public airwaves. probably greater prompt dealers' importance facilitating development broadcast spectrum. 33 realized breadth categorical accommodated expressly covered text, ones today, drafters retained broad decisive. endorses general priority preserving control important asset estate completion proceedings. 34 unfair either regulator If licensee unable cancel 525(a).2 Moreover, given secured enable perform full, ultimately paid. sum, though agree BREYER'S view always sufficient determining actual Congress, produce correct answer. 35 dissenting. 36 Government entered [the debtor] [bankruptcy]." italicized having sold revokes gone bankrupt, simply promised. majority answers affirmative. mean 37 "nothing be." Ante, 301-302 38 Hence, virtually are), then once enters license—irrespective motive. That, writes, says. it. End matter. 39 dangerous, interpretive divorced consideration linguistic reason. used particular occasions often carry implied restrictions scope. "Tell customers customer business world. legal Law regulate human activities ways. life. understand undermine activity law benefit. "No vehicles park" baby strollers tanks war memorial. Fuller, Positivism Fidelity Law—A Reply Hart, 71 Harv. Rev. 630, 663 (1958). 40 my similarly restricted. restriction implicitly limits instances government's related Where totally irrelevant, relation dischargeability, consequently concerns underlie kind avoid consequences which, "absurd," least odds basic objectives. Cf. Kirby, Wall. 482, 486 (1869) ("All receive sensible construction. limited lead injustice, oppression, absurd consequence"). 41 threatens serious anomaly. say long (3) wants back all, circumstances, "dischargeable," "event" "trigger[ed]" "decision" 42 Yet commercial seller, pay—at seller product. Farrey Sanderfoot, 500 291, 297 (1991). Why (state federal), impossible repossess product, namely, fails payments? 43 facts illustrate problem. bought broadcasting $5 promised money agreed possession licenses'"automatic cancellation," maintain "fi[r]st interest" dispute" "rights party." 388a, 392a-393a, 402a-404a. never void nonpayment. word, space users. As said, ordinarily permits nonpayment—even Farrey, 297. want same? 44 light enforcing sales contract repossession. Nor American owns. 309(j)(1)-(4) (authorization auctions interest"). instead implement far-reaching, understandable, objective. promise, Grogan Garner, 498 279, 286 revocation. reason prohibition. 45 language, history support description says, treatment." whole, Appendix, infra, strongly suggests evil aims. phrase sometimes best known keeps. Gutierrez Ada, 528 250, 255 immersed host acts, refusals hire, reasons, i. e., person's debtor, become case. infra. 46 demonstrates antidiscriminatory House Senate Reports section, anti-discrimination provision." Rep. 95-989, 81 (1978) Rep.); 95-595, 367 (1977) Rep.). Report "purpose prevent reaction individual availing himself laws." 165. describing "bankruptcy per se" "a grant, entitlement" premise "that sufficiently repre[h]ensible behavior warrant sanction." 286. adds overriding goal eliminate special treatment bankruptcy" 285. effort codify (1971). Rep., 81; 165, 366. pre-empted driver's motor accident (explicitly bankruptcy). U.S., 652. rested theory "frustrate[d] effectiveness" start." Further, Report, along floor statements, assured enacting units policies." E.g., interfere legitimate objectives," 123 Cong. Rec. 35673 (remarks Butler); fair count receipt partially regulated public, Government, sold. 309(j)(3)(C). 49 concerns, relevance. contain exemptions, agriculture-related contrary. excuse, meatpacking licensing taking negative account prior (say, providing "shall bankrupt," 499d(a); ante, 308-309, (STEVENS, judgment)). bankruptcies food supply understandable. majority's view—as meatpacking, nonpayment—makes little sense me. 50 then, stop licensors interfering promises, debt-collection efforts present. Unlike majority, possible manner consistent purposes. III 51 provision's authors expected look interpretations conform conceded "ultimate contours" yet clear." determine extent policy." "in pursuit sound 367. 52 One way out mandate dischargeable," connection, causal is, fact, dischargeable. exist debt's played decisionmaking motivation—if, (or etc.) mattered FCC. interfered significant otherwise, effect, 53 language's content—i.e., reference dischargeable—but significance. coincidence bear meaningful action. Staples States, 511 600, 619-620 (1994) (statute forbidding machinegun gun, automatically, defendant know gun meets description). 54 lower statute. Toth Michigan Housing Development Authority, 477, 480 (CA6), cert. denied, 524 954 (1998); Exquisito Services, 823 2d 151, 153 (CA5 1987); Smith, 259 901, 906 Panel CA8 2001). Stoltz, 315 80 (CA2 2002). handicapping collection ways intend. purpose—preventing efforts. An generally asset, go asset—even absence evils aimed. 55 approach far novel. Well century ago, interpreted forbade knowing willful obstruction mail containing implicit local sheriff arrest carrier. Wall., 485-487. Justice Field, writing pointed centuries earlier British felony break prison extend breakout fire. 487. And, similarly, Bologna severely "`whoever drew blood streets'" surgeon faced emergency. "[C]ommon sense," wrote "accepts" rulings. So too common suggest closely "vehicles" entry park. 311. IV 56 responds characterizes slightly exaggerated manner, stating, "determine[d]" "splendid [its] language," "plays [my] analysis," "criterion" "circular." 305, 4. reader above (which considerable history) particular, Perez, relied suggested incorporates. whole—including "insolvency" 305—strongly 57 "dischargeable debt" "superfluous," "`is [bankruptcy] debtor.'" 307 deleted). new dry cleaner's (now necessarily separate cover differentiated waterfront. 58 Third, returns prohibiting 306-307. ear, tried test analogy, imagining, adopted" (which, notwithstanding complex "destructive children," 306, linguistically comparable). need adoption (thereby exempting accepts all). Is interpretation? point. opens door context purpose—which, exemption, 317. 59 points wake complicated procedural now about "enforcement [a security] in" 307, 5. certainly circumstance, more. understanding, (after lifted terminate) repossess, thereby "failure pay" "alone cause" 301. motive." 60 am this, dealers, goods sell, cars, governments items (Whether "take license," beside point.) important. retake interest. 321 (SDNY) (affirming motion 362(d)(1)), rev'd, 45-46, 62, 1999) (reversing affirmance). indicated 307-308, characterized foreclosure collateral—i.e., attempt liens. 151 (CADC 2001); cf. Kingsport Ventures, P., 251 841, 844 (ED Tenn. 2000) (private party's use "revocation" license). grounds, blocked foreclosure. 148-149, 156. 362(a)(4)-(5) (staying liens). Consequently, believes collateral, remand (such 362) block 61 emphasize point thinking lien-enforcement difficulties fear—in divorcing reasonable reassurance point, future corollary rescue create? Unless answer holds slim possibility ad hoc adjustment need. adjustment, comes amount judicial fiat—used rests heavily deduction V 62 able show bears "dischargeability" improperly objective, vacate Appeals' respectfully dissent. APPENDIX OPINION 64 states: 65 66 "(a) Except "Whenever applicant prescribed fee Secretary shall entitle commission merchant ..., pays renewal fee[:] [T]he examination circumstances termination." 499d(a) (emphases License canceled" defaulting payment. 409a. explained factors, responsibility ability, imposition requirements net capital rules, applied nondiscriminatorily."

Classification Label: 7