Court Opinion

ID: 9445020
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:18:32.185311+00
Date Added: 2024-06-11T17:30:06.224460
License: Public Domain

DANAHER, Circuit Judge
(dissenting).
Following protracted rule-making proceedings, the Commission, in the public interest, allocated television Channel 6 to Beaumont, Texas. Three mutually exclusive applications for that channel having been filed and consolidated, comparative hearings on designated issues were commenced November 17, 1952, three years ago. After extended hearings and many procedural steps, on August 6, 1954, the Commission released its final decision of August 4, 1954, finding Beaumont superior to its competitors. Petitions for rehearing were filed by KTRM and by Enterprise. The Commission issued the awarded construction permit to Beaumont on September 9, 1954, calling for construction to commence not later than October 4, 1954, and to be completed not later than April 4, 1955. Construction went forward accordingly. Oral argument on the petitions for rehearing1 was set for December 21, 1954, and Enterprise and Beaumont were then granted an en banc hearing, KTRM having withdrawn its petition on December 17, 1954. The Commission on January 28, 1955, released its Memorandum and Order, reflecting in great detail its further consideration of the Beaumont and Enterprise claims, and affirmed its August 4,1954, decision by which Beaumont had been established as comparatively superior and entitled to the award. Procedurally, the Commission had followed meticulously the essential steps outlined in Johnston Broadcasting Co. v. Federal Communications Comm.,2 and thereupon not once, but twice concluded that, comparatively, Beaumont had demonstrated its superiority over Enterprise. The requirements of public interest, convenience and necessity had been met, and after more than two years of litigation, the public was entitled to television service, and by Beaumont.
Without more, I take it, that would have ended the matter, and had review been sought, we would have been bound to affirm. Enterprise came here seeking a stay, urging then the substance of its present argument, but another division *714of this court, on March 8, 1955, declined to stay the Commission’s August 4, 1954, order, as affirmed January 28, 1955. If Beaumont in its construction complied with the conditions- of § 319, and of the Act, Beaumont was entitled to a station license, at this point without regard to the provisions of § 309(a), (b) and (c) of the Act.
If thereafter, the station license had been issued, and if Beaumont had sought to assign its station license to some other entity, Beaumont would have been bound under § 310(b) to file an application with the Commission seeking its approval, to be granted only if the Commission could find “that the public interest, convenience, and necessity will be served thereby.”3 Lacking Commission approval, the Beaumont Broadcasting Corporation simply may not assign its station license. Thus the Commission is charged by the Act and subject to its terms, to execute the Congressional will with respect to the regulation of radio broadcast licensing.
Turning now to the facts in the instant case, the majority correctly states: “We find no basis upon which to disagree with the decision as of the time it was rendered [August 4, 1954].” I agree that must be so. The construction permit was issued September 9, 1954, and Beaumont was bound by § 405 to go forward in accordance with its terms and has done so at vast expense. The filing of petitions for rehearing before the Commission under § 405 “does not even stay the order, much less vacate or nullify it.”4 With the order thus in full force and effect, but before the argument of the rehearing petitions, the Beaumont Broadcasting Corporation in December 1954 concluded a certain option agreement with KTRM and one Hobby.
Beaumont agreed “that it will diligently continue to seek to have the Commission reaffirm the grant to it (Beaumont) of the construction permit heretofore awarded to it.” Thereafter, but only upon notice from Hobby of his intention to exercise the option referred to by the majority, Beaumont “will forthwith make application to the Commission and will diligently seek the effective consent of that body to the assignment” to a corporation to be formed by Beaumont. “Upon the condition that such consent or approval of the Commission is obtained, Beaumont will thereupon transfer and assign to the new corporation the said construction permit •x- * *>’ 5 an¿ wju iSSUe “to Hobby, upon payment therefor” 32% per cent of the stock in the corporation to be formed. Meanwhile, against Beaumont’s note, *715Hobby loaned Beaumont $55,000 to reimburse KTRM for “the sums expended by it in connection with the preparation and prosecution of its application for a television construction permit,” and KTRM withdrew from the proceedings as of December 17, 1954. Hobby’s option to subscribe and pay for 32% per cent of the stock in the corporation to be formed by Beaumont was to run for 18 months, subject to extension. “This agreement is on the condition that it well and truly meets any and all requirements of the Commission, and/or any State or Federal authority having jurisdiction in the premises.”
The corporation has not been formed. Beaumont Broadcasting Corporation has filed no application for assignment of its construction permit. If and when there is before the Commission some such application, both the statute, § 310(b) and Commission Rule 3.6346 require Commission approval as a condition precedent before there may be a valid voluntary assignment of a television station construction permit.
Beaumont filed a copy of the option agreement pursuant to the Commission’s “information” rule. Had it not done so before the December 21, 1954 argument, had it withheld the information until after the January 28, 1955 memorandum notwithstanding the execution of the agreement in December, a very different situation might well be said to have arisen. Here, however, on this record, there was no concealment. There was no fraud. There was no abuse of the Commission’s processes.7 Enterprise here was heard and its claims to preference were reviewed at length pursuant to its petition for rehearing. Of course, as the majority says: “The Commission had power to grant such reconsideration.” There is no issue on this point for the Commission exercised its discretion and it did grant reconsideration. Then, after oral argument and further consideration, for a second time the Commission found Beaumont superior to Enterprise. Now, more than three years since the comparative hearing was commenced, the majority would order another comparative hearing on an issue which has not yet arisen and may never arise.
One of the chief reasons why KTRM was found inferior in the first comparative hearing was the presence of the Hobby interests in the KTRM corporate structure. If, as a matter of public policy, that were a valid reason for the elimination of KTRM in the first place, it would seem that it will be a critical factor in the Commission’s consideration of an application, if and when filed, by Beaumont Broadcasting Corporation to assign its permit to a corporation to be formed which will also include the Hobby interests. I would expect that the Commission at the time of any such application would give to this factor at least as much weight as it received in the first place. We are not justified in anticipating what action the Commission will take if and when it is asked to take action on an application for assignment. It is perfectly obvious from the terms of the option agreement that the parties recogni2;e that it may never become operative for the very reason that the Commission may withhold its approval.
I understand the majority to say that the Commission is bound to set aside its grant to Beaumont and to order a new comparative hearing with respect to developments since the original August 4th award, in which comparative hearing Enterprise and Beaumont must again be considered as competitors on a comparative basis as though Hobby were already a stockholder in a corporation not yet formed. I cannot read the statutes so, although I have tried to accom*716modate my views to those of my able colleagues whose judgment I respect.
It seems to me that there are two distinct safeguards contemplated in the statutory scheme. One is found in § 319 (c) which authorizes the Commission before issuing a station license to take account of “cause or circumstance arising or first coming to the knowledge of the Commission since the granting of the [construction] permit”. The Commission must exercise its judgment as to whether or not such new cause or altered circumstances “make the operation of such station against the public interest”. If the station license cannot “conform generally to the terms of said [construction] permit”, or if the public interest will not be served as a result of such changed circumstances, the Commission may condition the grant of a station license upon a divestiture of any Hobby connection with the proposed new corporation, or otherwise limit the grant to Beaumont Broadcasting Corporation as presently constituted. Authority for such Commission action clearly exists under § 303 (r).8
Again, the public has the additional protection that under § 310(b) the Commission must find, if and when an application for assignment is submitted, whether the “public interest, convenience, and necessity will be served thereby” not only with reference to any assignment, but with reference to the particular proposed assignee under § 308.
To the Commission has been entrusted the administration of the regulatory authority of the Congress in the radio broadcasting field. The machinery of the statutes was set in motion and here culminated, after the required comparative hearing, in an award based on amply sustained findings that Beaumont is superior. In the exercise of our judicial function, it is certainly not within our province to say that the award should have gone to someone else. Should our powers as a court later be invoked with reference to some different step as a different stage, we then may consider whether or not the Commission has erred in its administration of the Act. As I read Mr. Justice Frankfurter’s opinion in Federal Communications Comm. v. Pottsville Broadcasting Co., 309 U.S. 134, 144-145, 60 S.Ct. 437, 442, 84 L.Ed. 656, our function under the Communications Act is “restricted to a purely judicial review.” To paraphrase language quoted by him we ask: (1) did the Commission apply the legislative standards validly set up; (2) did it act within or go beyond the authority conferred upon it; (3) did its proceedings satisfy the pertinent demands of due process; (4) was there compliance with the legal requirements which fix the function and govern the action of the Commission? If, within those standards, the Commission has acted properly it is our duty to affirm. It is not our task to supervise the Commission’s course for “courts are not charged with general guardianship against all potential mischief in the complicated tasks of government. * * * Interference by the courts is not conducive to the development of habits of responsibility in administrative agencies.” Id. 309 U.S. at page 146, 60 S.Ct. at page 443. Moreover, if abuses develop in the conduct of an administrative agency, it is primarily the duty and the concern of the Executive to correct the situation, or the people will. That is the very basis upon which, under our constitutional form of government, there is a division of responsibility. It is the duty of the Executive to execute the legislative policy. It becomes our duty to ascertain whether or not there has been error, judicially reviewable, in the agency action complained of. As I read this record, the Commission has done exactly what it was called upon to do by the applicable statutes. What may happen in the future is not yet our concern. I would affirm.

. Certain related pleadings were involved but are not itemized since they are immaterial for present purposes.

. 1949, 85 U.S.App.D.C. 40, 175 F.2d 351.

. Congress in 1952, in its first major overhaul of the 1934 Act, deliberately and with complete understanding of the problem, indeed over the Commission’s opposition, amended § 310(b). In applying the public interest, convenience and necessity test, the Commission must pro- ' ceed as though the proposed assignee and no other person were applying for the license under § 308. See p. 12, H.R. Rep. No. 1750 to accompany S. 658, 82d Cong., 2d Sess. (1952). And see Camden Radio v. Federal Communications Commission, 1954, 94 U.S.App.D.C. 312, 220 F.2d 191, rehearing denied (1955).'
Our former distinguished colleague Judge Justin Miller explained to the House Committee on Interstate and Foreign Commerce:
“This amendment would require the Commission to approve a transfer upon a finding that the transferee possesses the qualifications required under the Communications Act. The new language is designed to make certain that no construction permit or station license granted by the Commission may be transferred without the Commission’s approval; to make definite the procedure to be employed by the Commission in passing upon transfer applications; and to clarify the standard to be applied by the Commission in passing upon the merits of the application.
“One of the purposes of the proposed new language is to prevent any such policy as the AVCO rule * *
Hearings on S. 658 before the Committee on Interstate and Foreign Commerce of the House, 82d Cong., 1st Sess. 354 (1951).

. KFAB Broadcasting Co. v. Federal Communications Comm., 1949, 85 U.S. App.D.C. 160, 162, 177 F.2d 40, 42.

. Emphasis supplied.

. 47 C.F.R. § 3.684.

. Cf. Clarksburg Pub. Co. v. Federal Communications Comm., 1955, 96 U.S. App.D.C. 211, 225 F.2d 511, cited by the majority. There the only other applicant “dropped out” the day before the award to Ohio Valley. Moreover in the light of various factual deficiencies in the record, ve found the Commission’s, “demurrer” procedure ill-adapted to fulfillment of the hearing requirements of §• 309(e).

. Cf. Regents of University System of Ga. v. Carroll, 1950, 338 U.S. 586, 600, 70 S.Ct. 370, 94 L.Ed. 363.