Court Opinion

ID: 9643029
Source: CourtListenerOpinion
Date Created: 2023-08-22 18:15:47.469221+00
Date Added: 2024-06-11T18:10:56.693801
License: Public Domain

GRONER, Associate Justice
(dissenting).
I am unable to concur with the court in its disposition of this case.
The ground upon which relief is denied is that petitioner (appellee) has a plain, adequate, and complete remedy at law, which the opinion points out is the appeal to this court provided in section 402 (b) of the Communications Act of 1934, and that this right of appeal is exclusive.
With both these propositions I am in disagreement. Petitioner filed in the lower court its bill of complaint, in which it showed that it is a licensed broadcasting station (WREN) located 'in Lawrence, Kan., and that it has been in continuous operation since 1927; that its station renders consistent and regular broadcasting-coverage to an extensive audience in and about the cities of Lawrence, Leavenworth, Kansas City, and St. Joseph; that there are four other full-time stations serving the same area which are in severe and active competition with each other and with petitioner, with the result that petitioner, though expending on operating charges sums in excess of $75,000 annually, is as *733yet unable to operate at a profit; that in April, 1934, a daytime station (WHB) operating in the same area filed a request for authority to operate evening hours in addition to its then restricted schedule; that the Commission, being unable to determine that the granting of a permit would serve public interest, convenience, and necessity, directed that the application be set down for public hearing; that petitioner filed with the Commission its petition to intervene, alleging that if the authority requested by WHB should be granted, the effect would be to reduce the quality and extent of the service now rendered in the Kansas City, Lawrence, Leavenworth, and St. Joseph district, and would seriously and irreparably injure petitioner, in that it would result in a further distribution of the audience of listeners, the advertising revenues, the available program material and talent, and would make petitioner’s present broadcasting service financially impossible. In short, petitioner alleged that the area in question is already adequately and fully supplied with radio broadcasting service, and that the effect of introducing another nighttime station would be to vitally affect its service, revenue, and resources, and thereby adversely affect public interest, convenience, and necessity.
The Commission, although stating no reasons for its action, refused to allow petitioner to intervene and, the bill alleges, threatened to proceed to a hearing on the application of WHB without allowing petitioner to be heard in opposition thereto.
In the circumstances, which I shall detail briefly, I am of opinion that this action of the Commission was arbitrary and in direct conflict with its own rules and regulations.
Paragraph 59 of the rules of the Commission provides: “Any governmental department or officer, any person, firm, company, or corporation, or any State or political subdivision thereof may, at any time, more than 10 days prior to the date of any hearing, file with the Commission a petition to intervene therein in support of or in opposition to any application designated for hearing. If the petition discloses a substantial interest in the subject matter of the hearing the Commission will grant the same and permit the petitioner to be heard at such hearing subject to regulations hereinafter imposed.”
To the bill filed by the petitioner in the court below, the Commission filed a motion to dismiss.
In the brief and in the argument in this court, the Commission justifies its refusal to permit intervention on the broad ground that petitioner has no legal interest in the application of any other broadcasting station for a license and, particularly, that it has no legal interest based on a loss of its own revenues, and this, because no broadcasting station has a property right in its franchise or permit with respect to its audience and advertising clientele. In addition to this, the Commission says that even if petitioner has an interest, it is permitted by section 402 (b) of the act to appeal to this court from the order of the Commission in the event the application of WHB is granted.
I think neither of these grounds is sufficient, and that, in refusing to allow intervention, the Commission misinterpreted its own rules and misunderstood the law with relation to petitioner’s rights.
I am not unmindful of the broad powers which Congress has granted to the Commission, nor that these powers include the right to grant or refuse licenses or renewals of licenses, to increase or decrease station power, and to delete existing stations if it be found necessary to produce an equitable result. That much was decided by the Supreme Court in Federal Radio Commission v. Nelson Brothers, etc., Co., 289 U. S. 266, page 282, 53 S. Ct. 627, 636, 77 L. Ed. 1166, 89 A. L. R. 406, but in the same opinion the Supreme Court said that Congress did not in the delegation of its powers authorize the Commission to act arbitrarily or capriciously, and to that I may add, if it had, it would have been an invalid grant of power. Mayor, etc., of City of Baltimore v. Radecke, 49 Md. 217, 33 Am. Rep. 239. Broad as is the power granted, it is not unlimited; and I have no doubt that, in any proper case in which it is shown that the threatened action of the Commission is arbitrary, the courts of the District of Columbia, in the exercise of their equity jurisdiction, at the instance of the person injured, have authority to enjoin as a plain abuse of power.
And certainly no action can be more arbitrary, more oppressive, or more unjust than that which condemns before it hears.
This general principle the Commission itself recognizes in its rules, for, as has *734been noticed, provisión is there specifically made for the right of intervention on the part of any person whose petition shows a substantial interest in the subject-matter under investigation.
The inquiry, therefore, is whether petitioner has an- unquestionable interest in the granting or refusal by the Commission of the application of WHB to share with it the neighborhood broadcasting field. If on the admitted facts it has, its right to be heard is not a matter of discretion. The answer, as I view it, depends upon whether the granting of the application would so seriously diminish the profits of its going business as to injure or destroy a privilege which it nojv enjoys. In other words, if the effect of granting the new application will be to put it out of business or render it incapable of continuing to perform a public service, it would seem to me that it cannot.be denied it has an interest, a legal interest, in the subject-matter of the hearing. In its petition of intervention it sets forth sufficient facts to sustain this proposition, but the Commission refused it a hearing because the Commission thought that its permit to broadcast, being merely a license, constituted no “property right,” and hence no property interest of which it could complain of the loss or destruction; but this is too narrow a view. Granting that those who operate broadcasting stations do so subject to the Commission’s power of regulation, this power is not an unlimited power; and the Commission’s licensees, who on the faith of the license have invested money and established a goodwill, thereafter undoubtedly have rights which, though they may be revoked in the public interest, nevertheless may not be arbitrarily or capriciously destroyed.
The Supreme Court, in the Nelson Brothers Case, s.upra, distinctly said that in the distribution and adjustment of facilities, “the equities of existing stations undoubtedly demand consideration.” “The equities” of which the court speaks are in the nature of property rights which, at the least, may not be taken away without notice and hearing. If it were otherwise, the millions of dollars invested in radio broadcasting stations would be wholly subject to the caprice or favor of the regulatory body. Such a grant of power would be so clearly unreasonable, so oppressive, and so partial as to make it unthinkable, without more, that the Congress ever intended to grant it. Yick Wo v. Hopkins, 118 U. S. 356, 6 S. Ct. 1064, 30 L. Ed. 220.
Again, in its petition of intervention, petitioner offered to show that the broadcasting facilities in the neighborhood in which the new applicant proposed to operate were adequate, and that the effect of admitting further competition into that field would result in harm to the public. It proposed, therefore, if permitted to do so, to show that there would result from the establishment of a new station such active competition for business as would destroy its ability and the ability of others in the same field to operate in the public interest. I think this, too, was a subject which the Commission, under the statute creating it, was bound to notice. The basic principle of congressional control is public interest, convenience, and necessity, and since the passage of the act the policy of the Commission has been to accomplish this object through private enterprise. The Commission, in the preamble to its regulations, says: “This system is one which is based entirely upon the use of radio broadcasting stations for advertising purposes. It is a highly competitive system. * * * ” In these circumstances it may be said, somewhat as was said by Mr. Justice Brandéis of a like condition in the transportation field, the act recognizes the preservation of the earning capacity, and conservation of the financial resources, of the individual broadcasting station as a matter of national concern, for the reason that the property employed must be permitted to earn a reasonable return or the system will break down; thus indicating, as it seems to me, an identical or reciprocal interest between thé owner and the public, in which it is the right of either to see that competition between stations is not carried to the point of destruction (Texas & Pac. Ry. v. Gulf, etc., Ry., 270 U. S. 266, 46 S. Ct. 263, 70 L. Ed. 578).
When, therefore, WPIB made its application to the Commission for nighttime service, and the Commission agreed to a hearing, the primary issue involved determining whether the present service was adequate and, if it was, the probable effect of admitting competition into a field adequately served; and this involved determining the financial effect upon those now rendering public service in that field. In the determination of these questions petitioner had a vital interest, and, if the Commission’s rule to which I have already referred pieans anything, it means that such *735an interest may be represented at the hearing and present evidence and be heard before the determination is made. Therefore, to say, as the opinion in this case says, that petitioner has an adequate remedy by appeal to this court, after the Commission has made its final decision on the application of WHB, is, it seems to me, wholly without point. Tt is the equivalent of locking the stable door after the horse is gone. Section 402 (e) of the Communications Act of 1934 (47 USCA § 402 (e), providing for appeals to this court, limits this court’s consideration to questions of law and provides that findings of fact by the Commission, if supported by substantial evidence, shall be conclusive; and we have held time and again that the court is bound by the Commission’s fact findings. To contend, therefore, that petitioner has an adequate remedy, when it is bound by facts found without its intervention and without an opportunity on its part to be heard, is to effectively foreclose its rights before they are known and render an appeal to this court, on a record to which it is a stranger, wholly bootless. True enough, it may be the right of the Commission to determine the “equities” which shall control, but to command approval it must act judicially, must hear and weigh the evidence, and exercise its powers fairly and equitably; and this it cannot do by closing its ears to the proffer of testimony in behalf of one whose legal rights are put in jeopardy and who seasonably applies for a hearing. “Judgment ceases to be judicial if there is condemnation in advance of trial.” Escoe v. Zerbst, 55 S. Ct. 818, 820, 79 L. Ed. -, decided May 20, 1935.
HITZ, Associate Justice, concurs in this dissent.*