Court Opinion

ID: 7861369
Source: CourtListenerOpinion
Date Created: 2022-09-08 17:54:58.799961+00
Date Added: 2024-06-11T16:30:50.706510
License: Public Domain

MIKYA, Chief Judge,
dissenting:
Running headlong from the questions briefed and argued before us, my colleagues seek refuge in a theory as novel as it is questionable. Unsupported by precedent, undeveloped by the court, and unresponsive to the facts of this case, the stepchild of exhaustion theory announced today has an inauspicious birth. I doubt that this poor relation will thrive; therefore, I take issue with the majority primarily because particular parties have wrongly been denied their day in court. But recognizing the possibility that today’s holding may be vivified by other judges on another day, I also write to express my view that it finds no precedent in the wholly sensible doctrine of administrative exhaustion and is, in fact, at odds with the goals underlying that requirement. Accordingly, I dissent.
I.
We granted en banc review in this case to consider a single question: Whether petitioners have standing to challenge decisions by the Federal Communications Commission (the “FCC” or “Commission”) allowing assignment of certain television station licenses to Hallmark Cards, Inc. (“Hallmark”). A technical and fact-specific issue to be sure, but one that this court deemed at the time to be of “exceptional importance.” Fed.R.App.P. 35(a). See Appellee’s Petition for Rehearing or Suggestion for Rehearing En Banc at 2 (filed Feb. 23, 1990) (seeking review of standing issue on grounds of importance).
Having heard the Commission’s position on the standing issues of this case, I sympathize with the court’s impulse to rest its holding on other grounds. Standing to appeal administrative decisions depends on a complex mix of statutory and constitutional conundrums, and is not simple to explicate. If, therefore, petitioners’ claims had been totally meritless, this court might well have dismissed them without reaching the relatively difficult standing questions. See Coker v. Sullivan, 902 F.2d 84, 88 (D.C.Cir. 1990); Adams v. Vance, 570 F.2d 950, 954 n. 7 (D.C.Cir.1978); Chinese Am. Civic Council v. Attorney Gen., 566 F.2d 321, 325 (D.C.Cir.1977). But I can see no justification for the majority’s resort to grounds so unlikely that no party ever thought to brief or argue them, and so arcane that the court can find just one inapposite case (over a generation old) to cite as direct precedent. See Majority Opinion at 232 [hereinafter “Maj.Op.”] (discussing Spanish Int’l Broadcasting Co. v. FCC, 385 F.2d 615 (D.C.Cir.1967)).
*236If it is dissatisfied with the parties’ presentations to this court, the majority could — and should — have ordered supplemental briefing so that its judgment would be an informed one. If it is merely intent on avoiding the standing question upon which rehearing en banc was granted, the majority would have been well advised to dismiss this en banc petition as improvidently granted. But the majority chooses a different course, to which I now turn.
II.
The court suggests that its approach will protect the finality of FCC proceedings and “promot[e] judicial efficiency,” thereby furthering purposes traditionally associated with the exhaustion doctrine. Maj.Op. at 232-233. But these reasons can be invoked to justify any refusal to review agency action; whenever courts find challenges to administrative decisions nonjusticiable, they enhance the finality of agency determinations and lighten the judiciary’s load. Accordingly, the court should adhere to its practice of asking whether dismissal of a case on exhaustion grounds would further “the primary purpose of the exhaustion doctrine”: preventing premature interruption of the administrative process. Randolph-Sheppard Vendors of Am. v. Weinberger, 795 F.2d 90, 104 (D.C.Cir.1986). See Atlantic Richfield Co. v. Department of Energy, 769 F.2d 771, 781 (D.C.Cir.1984) (noting that avoidance of premature interruption is the “primary objective of the exhaustion doctrine,” and stating that “[wjhere ... the goals of this requirement cannot possibly be achieved, there obviously is no need for exhaustion”); Athlone Industries, Inc. v. Consumer Prod. Safety Comm’n, 707 F.2d 1485, 1488 (D.C.Cir. 1983) (“The exhaustion doctrine was designed primarily to prevent premature interruption of the administrative process.”); see also Committee for GI Rights v. Calla-way, 518 F.2d 466, 474 (D.C.Cir.1975) (“[W]hen the reasons supporting the [exhaustion] doctrine are found inapplicable, the doctrine should not be blindly applied.”).
The majority’s decision to deny judicial review will not prevent “premature” interference with FCC proceedings for the simple reason that the petitioners raised each argument presented to this court before the Commission, and the Commission conclusively rejected every one. See Spanish Int’l Communications Corp., 2 FCC Red 3336 (1987) (rejecting competing applications and approving settlement agreement); Spanish Int’l Communications Corp., 2 FCC Red 3962 (Mass Media Bureau 1987) (approving assignment of television licenses), aff'd, 3 FCC Red 4319 (1988). This court has before it final administrative decisions, based on a record developed to the agency’s satisfaction, and reflecting the Commission’s unhampered exercise of discretion and application of expertise. See McKart v. United States, 395 U.S. 185, 194, 89 S.Ct. 1657, 1662-63, 23 L.Ed.2d 194 (1969). Applying the exhaustion doctrine to these facts stretches its underlying rationales beyond the breaking point.
My conviction that no prudential exhaustion doctrine bars assertion of jurisdiction over this petition for review finds unequivocal support in our cases interpreting the only exhaustion requirement that Congress saw fit to impose in the Communications Act. See 47 U.S.C. § 405 (1988). Section 405 bars judicial review of Commission actions where:
the party seeking such review (1) was not a party to the proceedings resulting in such order, decision, report, or action, or (2) relies on questions of fact or law upon which the Commission, or designated authority within the Commission, has been afforded no opportunity to pass.
Id. The majority concedes that section 405, as construed in our cases, does not bar review of petitioners’ claims. See Maj.Op. at 231 n. 2. Yet it fails to mention that this court has repeatedly held that section 405 “codifpes] the judicially-created doctrine of exhaustion of administrative remedies.” Washington Ass’n for Television & Children v. FCC, 712 F.2d 677, 681 (D.C. Cir.1983)). See Office of Communication of United Church of Christ v. FCC, 911 F.2d 803, 808 (D.C.Cir.1990); Northwestern Ind. Tel. Co. v. FCC, 872 F.2d 465, 470 *237(D.C.Cir.1989), cert. denied, — U.S.-, 110 S.Ct. 757, 107 L.Ed.2d 773 (1990); Brookings Mun. Tel. Co. v. FCC, 822 F.2d 1153, 1163 (D.C.Cir.1987); Telecommunications Research and Action Center v. FCC, 801 F.2d 501, 513 n. 7 (D.C.Cir.1986), cert. denied, 482 U.S. 919, 107 S.Ct. 3196, 96 L.Ed.2d 684 (1987); Office of Communication of the United Church of Christ v. FCC, 779 F.2d 702, 706 (D.C.Cir.1985). Unless it is prepared to overrule this long line of authority, I am baffled how the majority can dismiss this case for failure to exhaust administrative remedies. If section 405 does not bar review, then the prudential exhaustion requirements that are incorporated within section 405 cannot provide a basis for dismissal of petitioners’ claims.
Spanish Int’l Broadcasting Co. v. FCC, the 1967 decision so heavily relied upon by the majority, is not to the contrary. In that case, the Commission had summarily rejected petitions for administrative review and rehearing without addressing the merits of appellant’s objections. See 385 F.2d at 619. (While the FCC did address the merits of administrative petitions submitted by Spanish International Broadcasting Company during 1964, it summarily rejected the appellant’s relevant petitions, which challenged FCC decisions issued in November 1965 and March 1966. Spanish International makes no suggestion that the arguments presented in these distinct petitions overlapped. See 385 F.2d at 618-19.) Our cases interpreting section 405 establish that invocation of the exhaustion doctrine is warranted under circumstances like those in Spanish International, where the arguments of a non-party were not considered by the Commission. See United Church of Christ, 779 F.2d at 706-07; Washington Ass’n for Television & Children, 712 F.2d at 682. In this case, though, the Commission addressed petitioners’ arguments in the challenged decisions, making application of the exhaustion doctrine inappropriate. Cf. United Church of Christ, 911 F.2d at 809 (“Because the Commission ‘in fact considered the issue,’ UCC’s challenge ... may therefore be reviewed.” (citation omitted)).
It is of course true that this case might never have come to court if the petitioners had acted differently years ago, long before the legal questions presented by this appeal arose. See Maj.Op. at 233. But I cannot agree with the majority that wishful speculation about what might have been justifies denying access to this court. Nor does the exhaustion requirement’s futility exception, invoked by the majority, have any relevance to this case, see Maj.Op. at 233 & n. 4; because the exhaustion doctrine cannot reasonably be applied to the facts before us, reliance on cases interpreting one of its exceptions is insufficient to justify the majority’s holding.
I find the court’s approach particularly disquieting because Hispanic Broadcasting Limited Partnership (“HBLP”) and Hispanic Broadcasting Systems, Inc. (“HBS”) acted just as wise investors would — they spent time and money actively pursuing the licenses only at the point when a realistic chance of obtaining them arose. That a court sensitive to economic theory in other contexts should confuse rational economic behavior with a lack of genuine interest in obtaining the licenses only points up the majority’s fervor to be done with this case. Cf. Tennessee Gas Pipeline Co. v. FERC, 926 F.2d 1206, 1210-11 (D.C.Cir.1991) (discussing “Efficient Market Hypothesis”); United States v. Western Elec. Co., 900 F.2d 283, 297-98 (D.C.Cir.) (per curiam) (noting judicial and academic views on interrelationship of antitrust laws and market behavior), cert. denied, — U.S.-, 111 S.Ct. 283, 112 L.Ed.2d 238 (1990).
It is critical to remember that the television licenses which HBLP and HBS seek were not vacant during the years when, in the majority’s view, HBLP and HBS should have pursued them. Rather, they were held by Spanish International Communications Corporation and Bahia de San Francisco (collectively, “Spanish International”), which were entitled under FCC rules to an all-but-insurmountable “renewal expectancy.” See Central Florida Enterprises, Inc. v. FCC, 683 F.2d 503 (D.C.Cir.1982) (approving renewal expectancy policy), cert. denied, 460 U.S. 1084, 103 S.Ct. 1774, 76 L.Ed.2d 346 (1983). The majority ad*238mits (with some understatement) that it is “difficult” to unseat an incumbent license-holder, Maj.Op. at 233, while the FCC stated during oral argument that its policy is “not to encourage” the filing of competing applications for licenses held by qualified licensees.
The prospects for those seeking Spanish International’s licenses improved dramatically when the Commission, finding a “substantial question” whether Spanish International was under alien control, ordered that a hearing be held on the incumbent’s qualifications as a license-holder. See Hearing Designation Order, 48 Fed.Reg. 28549 (1983). But the majority fails to mention that a long-standing Commission practice known as the “Jefferson Radio policy,” as then in force, precluded transfer of Spanish International’s licenses pending resolution of the qualifications issue. See Stereo Broadcasters, Inc. v. FCC, 652 F.2d 1026, 1027 (D.C.Cir.1981). Under Jefferson Radio, the very event that gave prospective applicants real hope of obtaining Spanish International’s licenses — designation of a qualifications hearing — prevented HBLP and HBS from competing for those licenses. Their only option was to wait: If the Commission determined that Spanish International was qualified, it would again be foolish to challenge that incumbency; if unqualified, Spanish International would lose the licenses and HBS and HBLP could then compete on an equal footing with other applicants.
These reasonable expectations were upset, however, by an unforeseeable change in the well-established Jefferson Radio policy. The Commission decided to ratify the settlement agreement under which Spanish International would transfer its licenses to Hallmark, notwithstanding Jefferson Radio. See Spanish Int’l Communications Corp., 2 FCC Red 3962. In my view, approval of the settlement agreement and related license assignment constituted an impermissible departure from the Jefferson Radio policy. See Coalition for the Preservation of Hispanic Broadcasting v. FCC, 893 F.2d 1349, 1359-62 (D.C.Cir.1990) (per Mikva, J.). For present purposes, though, this court need only recognize that HBLP and HBS, relying on prior statements of that policy, had no reason to anticipate Commission approval of a license transfer during the pendency of proceedings on the qualifications issue. Surprised in this way, HBLP and HBS did the only thing they could, opposing the settlement at all levels while filing applications for the disputed licenses. See Petition of HBS to Deny Applications for Transfer of Control, filed Sept. 26, 1986, reproduced in Joint Appendix at 150 [hereinafter “J.A.”], denied, Spanish Int’l Communications Corp., Mass Media Bureau No. 3713 (released June 23, 1987), reproduced in J.A. at 443; Petition of HBS for Acceptance of Applications, filed Sept. 26, 1986, denied, 2 FCC Red 3336; Petition of HBLP [then, Hispanic Broadcasting, Ltd.] for Reconsideration, filed Nov. 10, 1986, reproduced in J.A. at 345, dismissed, Spanish Int’l Communications Corp., 1 FCC Red 844 (Review Bd.1986); Petition of HBLP to Intervene or in the Alternative for a Waiver of the Rules, filed Nov. 10, 1986, reproduced in J.A. at 372, dismissed, 1 FCC Red 844, dismissed as moot, 2 FCC Red 3336; Petition of HBLP for Acceptance of Applications, filed Dec. 9, 1986, reproduced in J.A. at 405, denied, 2 FCC Red 3336; Application of HBLP for Review, filed Dec. 29, 1986, reproduced in J.A. at 505, denied, 3 FCC Red 4319.
Petitioners have no way of curing the shortcomings that the majority sees in their past efforts; that is just another aspect of the unfairness visited specifically upon them. More generally, though, the majority does not indicate what those who would challenge FCC licensing decisions must do to satisfy its retroactive “exhaustion” requirement. Must they seek every license up for renewal on the off chance that the incumbent licensee will be found unqualified, and that the license will be economically attractive at that hypothetical time? What are the implications of such a result for the Commission’s established renewal procedures? Must prospective license-holders have applied for the license in question during the most recent filing window, or is any past filing sufficient? *239Must the FCC have recognized them as qualified to hold a broadcast license? How can they show their qualifications absent a comparative licensing proceeding? One can only speculate. It is clear, though, that the majority effectively requires parties with an interest in competing for vacant licenses to safeguard that interest by filing frivolous applications challenging incumbent license-holders.
If the majority thinks such waste of applicants’ resources a trade-off for heightened administrative efficiency, it is misguided; today’s decision may well increase the number of applications filed for licenses held by qualified incumbents, even though such applications are disfavored by the Commission and will have no real chance of success. Thus, invocation of exhaustion principles here will hinder the very administrative efficiency those principles were designed to advance. I doubt that this result is intended by the majority, but I am not surprised that nonsensical results will flow from a decision driven more by evasion than logic.
If, on the other hand, the court is motivated by a naked instinct to keep those who would challenge agency decisions out of court, my objection is more elemental. The record is clear that these petitioners acted reasonably in light of administrative precedents and the decisions of this court. Punishing sensible economic and legal decisions by withholding judicial review from firms that make them is, in my view, an unacceptable exercise of judicial discretion.
III.
I do not overlook the majority’s effort to narrow its opinion to the context of this case. See Maj.Op. at 234. But I cannot join with my colleagues on that basis alone. Rather, I believe today’s decision unwise, unsound, and unfair. I dissent.