Court Opinion

ID: 9419349
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:48:59.285212+00
Date Added: 2024-06-11T16:42:05.886368
License: Public Domain

Mr. Justice Frankfurter,
dissenting:
Unlike courts, which are concerned primarily with the enforcement of private rights although public interests may thereby be implicated, administrative agencies are predominantly concerned with enforcing public rights although private interests may thereby be affected. To no small degree administrative agencies for the enforcement of public rights were established by Congress because more flexible and less traditional procedures were called for than those evolved by the courts. It is therefore essential to the vitality of the administrative process that the procedural powers given to these administrative agencies not be confined within the conventional modes by which business is done in courts.
In my judgment the decision of the Court in this case imposes a hampering restriction upon the functioning of the administrative process. This is the aspect that lends this case importance and leads me to express the reasons for my dissent.
The Communications Act of 1934, 48 Stat. 1064, 47 U. S. C. § 151 et seq., directs the Federal Communications Commission to “classify radio stations,” “prescribe the nature of the service to be rendered by each class of licensed stations and each station within any class,” and “assign bands of frequencies to the various classes of stations, and assign frequencies for each individual station and determine the power which each station shall use and the time during which it may operate.” § 303 (a) (b) (c). Accordingly, the Commission has established a plan for allocating the available radio facilities among the stations of the country. Under its Rules there are three classes of standard broadcast channels: “clear channels,” on which domi*249nant stations render service over extensive areas and which are cleared of objectionable interference within their primary service areas and over all or a substantial part of their secondary service areas; “regional channels,” on which several stations serving smaller areas operate simultaneously with powers not in excess of 5 kilowatts; and “local channels,” on which many stations serving local areas operate simultaneously with powers not in excess of 250 watts. § 3.21. Similarly, standard broadcast stations are classified into four groups: “class I stations”— dominant stations operating on clear channels and designed to render primary and secondary service over large areas and at relatively long distances; “class II stations” — operating on clear channels and designed to render service over a primary service area which is limited by and subject to such interference as may be received from class I stations; “class III stations” — operating on regional channels and designed to render service primarily to metropolitan districts and the rural areas contiguous thereto; and “class IY stations” — operating on local channels and designed to render service primarily to cities or towns and the suburban and rural areas contiguous thereto. § 3.22. Section 3.25 divides clear channels into two further groups: I-A channels, to which only one class I station is assigned, with one or more class II stations operating limited time or daytime only, and I-B channels, to which both class I and class II stations may be assigned, with more than one station operating at night.
On October 25, 1938, Station WHDH in Boston, Massachusetts, a class II station licensed to operate during the daytime only on the frequency 830 kilocycles (a class I-A channel) with power of 1 kilowatt, applied to the Commission for modification of its license so that it could operate both night and day on that frequency with increased power of 5 kilowatts. At that time Station KOA in Denver, Colorado, was the dominant class I station *250on the frequency 830 kilocycles, operating unlimited time with power of 50 kilowatts. Since the Commission’s Rules provided for the assignment of only one station to operate at night on the frequency 830 kilocycles, the WHDH application could not be granted without amendment of § 3.25.
Section 309 (a) of the Act specifies the procedure which the Commission must follow in passing upon applications for modification of licenses, such as that of WHDH: “If upon examination of any application for . . . 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 . . . 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.” The Commission, upon its examination of the WHDH application, was unable to find that a grant would serve the public interest, convenience, or necessity. The application was therefore, on September 2, 1939, designated for hearing. Three weeks later, on September 23, 1939, KOA filed a petition to intervene. Its petition, in substance, alleged only that the proposed operation of WHDH would “cause interference to station KOA in areas where KOA’s signal is now interference free,” that KOA “would be aggrieved and its interests adversely affected” by the proposed operation, and that a grant of the WHDH application would not be in the public interest, convenience, or necessity.
The Court holds that the Commission was required as a matter of law to grant KOA’s petition to intervene in the hearing upon the WHDH application. In my judg*251ment the Act precludes such a construction. Section 4 (j) provides that the Commission “may conduct its proceedings in such manner as will best conduce to the proper dispatch of business and to the ends of justice”; § 303 (r) authorizes it to 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 Act.” We have held that by force of these provisions “the subordinate questions of procedure in ascertaining the public interest, when the Commission’s licensing authority is invoked — the scope of the inquiry, whether applications should be heard contemporaneously or successively, whether parties should be allowed to intervene in one another’s proceedings, and similar questions — were explicitly and by implication left to the Commission’s own devising, so long, of course, as it observes the basic requirements designed for the protection of private as well as public interest.” Federal Communications Comm’n v. Pottsville Broadcasting Co., 309 U. S. 134, 138.
The breadth of discretion entrusted to the Commission is limited, however, by §§ 303 (f) and 312 (b). The former provides that “changes in the frequencies, authorized power, or in the times of operation of any station, shall not be made without the consent of the station licensee unless, after a public hearing, the Commission shall determine that such changes will promote public convenience or interest or will serve public necessity, or the provisions of this Act will be more fully complied with.” Section 312 (b) authorizes the Commission to modify outstanding station licenses “if in the judgment of the Commission such action will promote the public interest, convenience, and necessity, or the provisions of this Act or of any treaty ratified by the United States will be more fully complied with: Provided, however, That no such order of modification shall become final until the holder of such outstanding license or permit shall have been notified *252in writing of the proposed action and the grounds or reasons therefor and shall have been given reasonable opportunity to show cause why such an order of modification should not issue.”
The procedural scheme established by the statute is thus clear: if application is made for a station license, or for modification or renewal of a license, the Commission may grant such application without a hearing if it finds, upon examination of the application, that a grant would be in the public interest. If it is unable to reach such a determination from its study of the application, it must afford the applicant a “hearing.” § 309 (a). If a Commission order involves a change in the frequency, authorized power, or hours of operation of an existing station without its consent, such licensee is entitled to a “public hearing.” § 303 (f). If a Commission order involves “modification” of an outstanding license, presumably something other than a change in frequency, power, or hours of operation, the modification order cannot become effective until the licensee is given notice in writing and a “reasonable opportunity to show cause why such an order of modification should not issue.” § 312 (b). It is relevant here, also, that under § 312 (a) a Commission order revoking a station license cannot take effect “until fifteen days’ notice in writing thereof, stating the cause for the proposed revocation, has been given to the licensee. Such licensee may make written application to the Commission at any time within said fifteen days for a hearing upon such order, and upon the filing of such written application said order of revocation shall stand suspended until the conclusion of the hearing conducted under such rules as the Commission may prescribe. Upon the conclusion of said hearing the Commission may affirm, modify, or revoke said order of revocation.” The Act explicitly provides for a “hearing,” therefore, when the Commission proposes to deny an application for a license, or to revoke a license, or to *253change the frequency, power, or hours of operation of a station licensee. But when a Commission order merely involves “modification” of the license of an existing station, the latter is entitled only to notice in writing and a “reasonable opportunity to show cause” why the order should not issue.
The Commission has exercised the authority given it by Congress to formulate its administrative procedure. Section 1.102 of its Rules, relating to intervention in Commission proceedings by interested parties, provides as follows:
“Petitions for intervention must set forth the grounds of the proposed intervention, the position and interest of the petitioner in the proceeding, the facts on which the petitioner bases his claim that his intervention will be in the public interest, and must be subscribed or verified in accordance with section 1.122. The granting of a petition to intervene shall have the effect of permitting intervention before the Commission but shall not be considered as any recognition of any legal or equitable right or interest in the proceeding. The granting of such petition shall not have the effect of changing or enlarging the issues which shall be those specified in the Commission’s notice of hearing unless on motion the Commission shall amend the same.”
Under an earlier rule any person could intervene in a Commission proceeding if his petition disclosed “a substantial interest in the subject matter.” § 105.19, Commission’s Rules and Regulations (1935). The reasons for the change in the Commission’s intervention rule were thus stated by the Attorney General’s Committee on Administrative Procedure, Sen. Doc. No. 186, 76th Cong., 3d Sess., Pt. 3, pp. 16-17: “The effects of this complete freedom of intervention [available under the old rule] upon the Commission’s activities were very marked. Not only was the record unnecessarily prolonged by the discussion *254of noncontroversial issues, but the evidence relevant to each issue was increased manyfold by virtue of the extended cross-examination of witnesses by each intervener. More often than not the interveners presented no affirmative evidence on the issues at hand. The major functions served by them were apparently to impede the progress of the hearing, to increase the size of the record, and to obfuscate the issues by prolonged and confusing cross-examination. Nor were these dilatory and destructive tactics restricted to the hearing itself. Each intervener would customarily avail himself of his rights to take exceptions to the examiner’s report, to oral argument before the Commission, and, in many cases, to appeal from the Commission’s order to the District of Columbia Court of Appeals. ... If this [new] provision is enforced intelligently and forcefully, an important step will have been taken both toward the protection of applicants and the increase of the Commission’s prestige.” Compare In re Hazelwood, Inc., 7 F. C. C. 443.
KOA’s petition for intervention was denied, presumably because the showing required by § 1.102 had not been made. And on January 29 and 30, 1940, a hearing upon the WHDH application was held before an examiner of the Commission. Although KOA was denied the right to intervene, it could, under § 1.195 of the Commission’s Rules, have appeared and given evidence. That rule provides that the Secretary of the Commission shall maintain “a record of all communications received by the Commission relating to the merits of any application pending before the Commission,” and if the application is designated for hearing, the Secretary must notify all persons who have communicated with the Commission regarding the application “in order that such persons will have an opportunity to appear and give evidence at such hearing.” Under this rule if KOA had appeared at the hearing upon the WHDH application, it would have been entitled to *255present evidence relating to the matters raised in its petition for intervention. But, so far as the record before us shows, it made no effort to take advantage of the right of participation afforded it by § 1.195.
On December 9, 1940, the Commission issued proposed findings and conclusions. Under these the Commission found that the proposed operation of WHDH, with use of a directional antenna, “would not cause any interference to the primary service of Station KOA, Denver, Colorado, and that such interference as the proposed operation of WHDH might reasonably be expected to cause to reception of KOA would be limited to receivers in the eastern half of the United States”; that the operation of WHDH as proposed in its application would “enable it to deliver service of primary signal quality to an area having a population of 3,093,000 or to 621,000 more people than are now included within the primary service area of the station”; that by extending WHDH’s hours of operation “a new primary service to 94.9% of the Boston metropolitan area, including a population of 2,185,000,” would be provided; that, in addition to the improved service to listeners in the Boston area, there would be “an improvement and extension of service which applicant station [WHDH] now endeavors to render over the fishing banks situated off the New England coast”; and that the public interest would be served by amending § 3.25 of the Rules so as to make the frequency 830 kilocycles a I-B channel, upon which more than one station could'operate at night, thereby permitting “more efficient use of the frequency.”
On December 16, 1940, KOA again petitioned to intervene. Its petition alleged only that the proposed action, if adopted, would result in “interference to Station KOA in areas where KOA’s signals are now interference free,” would constitute a modification of KOA’s license without affording it an opportunity to be heard, and would result in *256“a degradation of service on 830 kc which will be prejudicial to the priority rights in the United States on this channel, will discriminate against service to rural listeners in order to furnish additional service to the City of Boston which is already well served.” KOA made no offer to contradict or add to the evidence adduced at the hearing, nor did it dispute the Commission’s conclusions as to the extent of the interference which KOA would suffer from the proposed operation of WHDH. Accordingly, on January 7, 1941, the Commission denied KOA’s second petition to intervene, but it permitted KOA, as well as other “clear channel” stations interested in the proceeding, to participate in the oral argument before the Com-, mission, and to file briefs amicus, in order to determine whether the proposed findings should be made final.
Meanwhile, on January 23, 1941, the President proclaimed the North American Regional Broadcasting Agreement, 55 Stat. 1005. The purpose of this Agreement, which was concluded at Havana on December 13, 1937, among Canada, Cuba, Dominican Republic, Haiti, Mexico, and the United States, was to “regulate and establish principles covering the use of the standard broadcast band in the North American Region so that each country may make the most effective use thereof with the minimum technical interference between broadcast stations.” The signatory Governments recognized that “until technical developments reach a state permitting the elimination of radio interference of international character, a regional arrangement between them is necessary in order to promote standardization and to minimize interference.” The Agreement established priorities in the use of specified clear channels, sixty-three of which were assigned to the United States, and provided that each such channel “shall be used in a manner conforming to the best engineering practice with due regard to the *257service to be rendered by the dominant stations operating thereon.”
In order to carry out the provisions of the Agreement, the United States was obliged to make extensive adjustments in the assignments of its existing stations. As part of the accommodations required, stations assigned to the frequency 830 kilocycles were to be moved to 850 kilocycles. This change affected both WHDH and KOA. The license of KOA, like that of all other standard broadcast stations, would have expired on August 1,1940, while the WHDH application was pending. The licenses of all stations, including KOA and WHDH, were successively extended by the Commission, first to October 1,1940, and, then to March 29, 1941, the effective date of the Agreement. KOA had filed an application for renewal of its license to operate on 830 kilocycles, 50 kilowatts, unlimited time. On February 4, 1941, the Commission advised all applicants for renewals, including KOA, that under the Agreement, their operating assignments were to be changed and that their applications for renewals would be regarded as applications to operate upon the new frequencies, unless the applicant wished to operate upon some other frequency, in which event its application would be designated for hearing. So far as appears, KOA did not notify the Commission that it had any objection to its renewal application being regarded as an application to operate on the frequency 850 kilocycles. Accordingly, when its license to operate on 830 kilocycles expired on March 29,1941, its license was renewed on the frequency 850 kilocycles. In no sense, therefore, did the action of the Commission changing KOA’s frequency assignment pursuant to the North American Regional Broadcasting Agreement constitute a modification of KOA’s license. And, indeed, KOA makes no such contention here, for review of Commission orders modifying station licenses, *258upon the Commission's own motion, can be reviewed only-in a suit brought in a district court under § 402 (a). See Scripps-Howard Radio v. Federal Communications Comm’n, 316 U. S. 4, 8-9, note 3.
On March 26,1941, three days before the Agreement was to become effective, the Commission issued an order adopting the proposed findings and conclusions upon the WHDH application, granting WHDH authority to operate on 850 kilocycles, with power of 5 kilowatts, day and night, and amending § 3.25 of its Rules so as to make the frequency 850 kilocycles a I-B channel upon which more than one station could operate at night. This order was made effective April 7,1941.
On April 25, 1941, KOA filed a petition for rehearing before the Commission, repeating in substance the allegations contained in its earlier petitions to intervene. And on May 20,1941, the Commission, in an opinion that considered in detail each of the allegations in the petition for rehearing, denied the petition. The Commission stated that “in view of the importance of the matters involved in this proceeding, we shall re-examine our findings and conclusions and the record upon which they are based.” In summary, it found that a grant of the WHDH application “would not result in interference to the primary service of Station KOA, Denver, Colorado, and that such interference to the reception of Station KOA as might reasonably be expected to result from a grant of the Matheson [WHDH] application would occur in its secondary service area and would be limited to receivers in the eastern half of the United States, remote from the KOA transmitter; that such secondary service as KOA could render in this area would be of uncertain character because of its dependence upon the characteristics of the individual receiver, the signal intensity and the signal to interference ratio involved in each individual case”; and “that although petitioner [KOA] contends it is entitled to serve the rural *259areas in which it is claimed interference will occur, it fails to allege either that it has been providing a useful service in such areas or point out, in terms of population, the nature and extent of the claimed interference.”
On June 7,1941, KOA filed an appeal from the Commission’s order in the Court of Appeals for the District of Columbia under § 402 (b) (2) of the Communications Act of 1934. Section 402 (b) provides for appeals to the Court from decisions of the Commission “in any of the following cases: (1) By any applicant for a construction permit for a radio station, or for a radio station license, or for renewal of an existing radio station license, or for modification of an existing radio station license, whose application is refused by the Commission. (2) By any other person aggrieved or whose interests are adversely affected by any decision of the Commission granting or refusing any such application.”
The court below could not take jurisdiction of the suit unless KOA had a right to appeal under § 402 (b) (2); in other words, unless it was “aggrieved” or its “interests were adversely affected” by the granting of the WHDH application. Since the Commission in exercising its licensing function must be governed by the public interest and not the private interest of existing licensees, an appellant under § 402 (b) (2) appears only to vindicate the public interest and not his own. Federal Communications Comm’n v. Sanders Radio Station, 309 U. S. 470; Scripps-Howard Radio v. Federal Communications Comm’n, 316 U. S. 4. That the Commission’s order may impair the value of an existing station’s license is in itself no ground for invalidating the order; it merely may create'standing to attack the validity of the order on other grounds. Whatever doubts may have existed as to whether the ingredients of “case” or “controversy,” as defined, for example, in Muskrat v. United States, 219 U. S. 346, are present in this situation were dispelled by our ruling in the Sanders *260case that the legality of a Commission order can be challenged by one “aggrieved” or “whose interests are adversely affected” thereby, even though the source of his grievance is not what is claimed to make the order unlawful. But from this it must not be concluded that anyone who claims to be “aggrieved” or who is in any way adversely affected by Commission action has a right to appeal. As the prevailing opinion in the Court of Appeals pointed out: “In the present stage of radio, very few changes, either in frequency or in power, can be made without creating some degree of electrical interference. This may range from minute and practically harmless interruption with remote and very occasional listeners in secondary service areas to total obliteration in the primary field. ... It seems not unreasonable to read the [Sanders] opinion as requiring by implication that there be probable injury of a substantial character. So much by way of limitation seems necessary to prevent vindication of the public interest from turning into mass appeals by the industry at large, with resulting hopeless clogging of the administrative process by judicial review. Likewise, with electrical interference, it is hardly necessary to secure appellate championship by every broadcaster who may be affected in only a remote and insubstantial manner.” 132 F. 2d 645, 548.
In order to establish its right to appeal, therefore, KOA had to make a showing that its interests were substantially impaired by a grant of the WHDH application. This, the record makes clear, it failed to do. In its notice of appeal to the court below, KOA made only a general allegation, what courts normally regard as a conclusion of law, that the Commission’s action resulted in a “substantial modification” of its license. No supporting allegations of fact were tendered. There was no claim that KOA’s economic position was in any way impaired, or that the proposed operation of WHDH would cause substan*261tial interference with KOA, or that such operation would result in a substantial loss of listeners to KOA, or that any areas of substantial size would no longer be able to receive satisfactory service from KOA. Neither in its petitions for intervention, nor in its petition for rehearing before the Commission, nor in its notice of appeal to the court below, did KOA specifically challenge the correctness of the Commission’s findings.
The record affords no basis, therefore, for finding that KOA had standing to appeal from the grant of the WHDH application. But even if it had, I do not believe that KOA was afforded less opportunity to participate in the proceedings before the Commission than the statute requires. Assuming that the grant of the WHDH application constituted a “modification” of KOA’s license in the sense that the scope of the operations authorized by KOA’s license was thereby limited, only § 312 (b) would come into operation. Section 303 (f) is inapplicable because the grant of the WHDH application unquestionably did not change KOA’s frequency, power, or hours of operation. Both before and after the Commission’s action, KOA’s operating assignment was precisely the same: 850 kilocycles, 50 kilowatts, unlimited time. And so the only question on this phase of the case is — was KOA afforded such opportunity of participation in the WHDH proceeding as § 312 (b) requires? That section provides that no order modifying the license of any existing station “shall become final until the holder of such outstanding license or permit shall have been notified in writing of the proposed action and the grounds or reasons therefor and shall have been given reasonable opportunity to show cause why such an order of modification should not issue.”
KOA does not claim that it did not have sufficient notice, formal and otherwise, of the proceedings upon the *262WHDH application. Nor can there be any doubt that it had ample and “reasonable opportunity to show cause” why WHDH’s application should not be granted. Under § 1.195 of the Commission’s Rules it could have appeared and given evidence at the hearing upon the WHDH application. That it did not take advantage of such an opportunity is certainly no reason for saying that it had none. KOA was permitted to argue before the Commission that the proposed grant of the WHDH application should not be made final. It submitted a petition for rehearing which the Commission considered on its merits and which the Commission denied only after a detailed review of all the contentions made by KOA.
The Court holds, nevertheless, that the Commission was required to afford KOA more than all these opportunities to show cause. Section 312 (b) is construed to require a hearing in which the licensee whose interests may be affected is entitled to intervene as a formal party. Such a construction appears to me to disregard the structure and language of the legislative scheme. Congress might have been explicit and provided in § 312 (b) that every licensee whose interests may be affected by Commission action shall be entitled to a hearing as an intervenor in the proceeding. As has been noted, the draftsmen of the Communications Act of 1934 knew how to use apt words when they wished to afford parties before the Commission the right of “hearing.” Section 309 (a) requires the Commission to afford an applicant for a license a “hearing,” not notice and an opportunity to show cause, before the application can be denied. Section 312 (a) gives a licensee a “hearing,” not notice and an opportunity to show cause, before its license can be revoked. Section 303 (f) provides that the Commission cannot change the frequency, authorized power, or times of operation of a licensee unless it affords such licensee a “public hearing,” not merely notice and an opportunity to show cause. But, for rea*263sons which it deemed sufficient, Congress did not choose to make this technical requirement of a “hearing” in specifying the procedure for. the protection of licensees who might be affected by' Commission action. Congress may well have desired to avoid the litigious waste so abundantly established by the voluminous cases to which the claim of intervention in courts has given rise. The requirement of notice and an opportunity to show cause is not the equivalent of the requirement of a “hearing.” By imposing this requirement for the adequate protection of substantial interests, Congress charged the Commission with the duty of devising appropriate procedure which would “best conduce to the proper dispatch of business and to the ends of justice.” § 4 (j). The Commission’s response was §§ 1.102 and 1.195 of its Rules.
Can it seriously be claimed that the Commission acted beyond its authority in providing that before a licensee can intervene in another proceeding he must indicate some solid ground by setting forth “the facts on which the petitioner bases his claim that his intervention will be in the public interest”? Otherwise anyone who asserts generally that the grant of another’s application will affect his license may become a party to a proceeding before the Commission and may, to the extent to which a party can shape and distort the direction of a proceeding, gain all the opportunities that a party has to affect a litigation although he has not made even a preliminary showing that his intervention will be in the public interest. I cannot read the requirement for “reasonable opportunity to show cause why such an order of modification should not issue” as a denial to the Commission of power to make such a reasonable rule for sifting the responsibility of potential intervenors. And if the Commission’s rule for intervention was within its discretionary authority in formulating appropriate rules of procedure for the conduct of its proceedings, it is equally clear that the Commission, in the *264circumstances of this particular case, was justified in finding that KOA made no substantial claim that the grant of the WHDH application would impair KOA’s economic interests or entail a substantial loss of listeners or make any appreciable inroads upon any areas served by KOA or otherwise substantially affect its interest or that of the public.
To deny to the Commission the right to require a preliminary showing, such as was found wanting here, before admitting a petitioner to the full rights of a party litigant is to fasten upon the Commission’s administrative process the technical requirements evolved by courts for the adjudication of controversies over private interests. See Federal Communications Comm’n v. Pottsville Broadcasting Co., 309 U. S. 134, 142-44. It is to assume that the modes familiar to courts for the protection of substantial interests are the only permissible modes, regardless of the nature of the subject matter and the tribunals charged with administration of the law. This is to read the discretion given to the Federal Communications Commission to fashion a procedure relevant to the interests for the adjustment of which the Commission was established through the distorting spectacles of what has been found appropriate for courts. We must assume that an agency which Congress has trusted is worthy of the trust. And especially when sitting in judgment upon procedure devised by the Commission for the fair protection of both public and private interests, we must view what the Commission has done with a generous and not a jealous eye.