Court Opinion

ID: 6499333
Source: CourtListenerOpinion
Date Created: 2022-07-12 15:00:32.483518+00
Date Added: 2024-06-11T09:12:17.465549
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 12, 2022                  Decided July 12, 2022

                        No. 21-1171

     NATIONAL ASSOCIATION OF BROADCASTERS, ET AL.,
                     PETITIONERS

                             v.

   FEDERAL COMMUNICATIONS COMMISSION AND UNITED
               STATES OF AMERICA,
                  RESPONDENTS

             On Petition for Review of an Order
        of the Federal Communications Commission

   Stephen B. Kinnaird argued the cause for petitioners. With
him on the joint briefs were Richard Kaplan, Jerianne
Timmerman, Robert E. Branson, David Honig, and James
Winston.

    William J. Scher, Counsel, Federal Communications
Commission, argued the cause for respondents. With him on
the brief were Robert B. Nicholson and Peter M. Bozzo,
Attorneys, U.S. Department of Justice, and Jacob M. Lewis,
Acting Deputy General Counsel, Federal Communications
Commission.
                             2
   Before: PILLARD and WALKER, Circuit Judges, and
RANDOLPH, Senior Circuit Judge.

    Opinion for the Court filed by Circuit Judge WALKER.

    WALKER, Circuit Judge: In October 1964, Barry
Goldwater’s supporters sponsored thirty minutes of television
time for an actor named Ronald Reagan to make a closing
argument for Goldwater’s struggling campaign. The speech —
which failed to save Goldwater but launched Reagan on a path
to the White House — was introduced with a stock
announcement:

    The following pre-recorded political program is
    sponsored by TV for Goldwater-Miller on behalf of
    Barry Goldwater, Republican candidate for President
    of the United States.1

    Today, similar announcements for sponsored radio
broadcasts are required by the Communications Act of 1934.
To make that announcement, a broadcaster must ask its
employees and sponsors for information necessary to
determine a sponsor’s identity.

    Recently, the FCC began to require more. It issued an
order mandating that radio broadcasters check two federal
sources to verify a sponsor’s identity.

     Because the FCC has no authority to impose that
verification requirement, we vacate that facet of its order.

1
 Reagan Foundation, “A Time for Choosing” by Ronald Reagan,
YouTube (Apr. 2, 2009), https://www.youtube.com/watch?v
=qXBswFfh6AY&t=2s.
                               3

                                I

     Since 1927, Congress has forbidden the operation of a
radio station without a federal license. Radio Act of 1927, Pub.
L. No. 69-632, 44 Stat. 1162. It tasked the Federal Radio
Commission, now called the Federal Communications
Commission, with granting those licenses and administering
the obligations that come with them. Id.; see 47 U.S.C. § 301
et seq.

    Section 317(a) of the Communications Act imposes one
such obligation. It requires broadcasters to announce who
“paid for or furnished” a sponsored program at the time of the
program. 47 U.S.C. § 317(a)(1). To ensure that the
broadcaster can make that identification, § 317(c) imposes an
additional duty:

       The licensee of each radio station shall exercise
       reasonable diligence to obtain from its
       employees, and from other persons with whom
       it deals directly in connection with any program
       or program matter for broadcast, information to
       enable such licensee to make the announcement
       required by this section.

47 U.S.C. § 317(c). We’ll call the “licensee of” the “radio
station” a “broadcaster” and “persons with whom [the
broadcaster] deals directly” “sponsors.”

    Finally, Congress required the FCC to “prescribe
appropriate rules and regulations to carry out the provisions of”
§ 317. 47 U.S.C. § 317(e).
                               4
    Recently, the FCC has raised concerns that the Chinese
and Russian governments have been secretly leasing airtime to
broadcast propaganda on American radio. To address that
problem, the FCC issued an order called “In the Matter of
Sponsorship Identification Requirements for Foreign
Government-Provided Programming.” 36 FCC Rcd. 7702
(2021). It requires broadcasters to undertake a five-step
process whenever they lease airtime to a sponsor:

    1) Tell the sponsor about the § 317 disclosure
       requirement;

    2) Ask the sponsor whether it is a foreign
       governmental entity or an agent of one;

    3) Ask the sponsor whether anyone further back in
       the production or distribution chain is a foreign
       governmental entity or an agent of one;

    4) Independently confirm the sponsor’s status, at
       both the time of the lease and the time of any
       renewal, by checking the Department of
       Justice’s Foreign Agents Registration Act
       website and the FCC’s U.S.-based foreign
       media outlets reports; and

    5) Document those inquiries and investigations.

See id. ¶ 35.

     The National Association of Broadcasters objected to step
four (the verification requirement) and petitioned for review.
                               5
                               II

      An agency must identify statutory authority for any action
it takes. See Truck Trailer Manufacturers Association v. EPA,
17 F.4th 1198, 1201 (D.C. Cir. 2021). Here, the FCC has not
done so. Rather, it has decreed a duty that the statute does not
require and that the statute does not empower the FCC to
impose.

    Remember the only obligation that § 317(c) places on a
broadcaster: It must “exercise reasonable diligence to obtain
from its employees, and from other persons with whom it
deals directly . . . information to enable [the broadcaster] to
make the announcement required by this section.” 47 U.S.C.
§ 317(c) (emphases added).

     In that sentence, the “to obtain” clause means broadcasters
do not need to exercise diligence in general. And the two
“from” clauses mean broadcasters do not need to make a
diligent effort to obtain the information from any possible
source. They simply need to be diligent in their efforts “to
obtain” the necessary information “from” employees and
sponsors. See Grecian Magnesite Mining, Industrial &
Shipping Co., SA v. Commissioner, 926 F.3d 819, 824 (D.C.
Cir. 2019) (“ordinarily, and within reason, modifiers and
qualifying phrases attach to the terms that are nearest”).
Nothing more.

     The FCC’s verification requirement ignores the limits that
the statute places on broadcasters’ narrow duty of inquiry. It
instead tells a broadcaster to seek information from two federal
sources in addition to the two sources that the statute
prescribes. That is not the law that Congress wrote.

    The FCC offers two arguments against that interpretation.
                               6

     First, it says that verifying information’s accuracy is part
of making a reasonably diligent effort to obtain that
information from a source. But § 317(c) imposes a duty of
inquiry, not a duty of investigation. Loveday v. FCC, 707 F.2d
1443, 1449 (D.C. Cir. 1983) (Section 317(c) “is satisfied by
appropriate inquiries made by the station to the party that pays
it for the broadcast”). It does not make broadcasters
responsible for the truth of the information they obtain.

     Second, the FCC argues that even if § 317(c) does not
affirmatively authorize it to require searches of the federal
sources, it can require the searches as part of its general
authority to “prescribe appropriate rules and regulations to
carry out the provisions” of § 317. 47 U.S.C. § 317(e). A
generic grant of rulemaking authority to fill gaps, however,
does not allow the FCC to alter the specific choices Congress
made. See Murray Energy Corp. v. EPA, 936 F.3d 597, 627
(D.C. Cir. 2019) (“A general grant of authority cannot displace
the clear, specific text of the Act.”); Alabama Association of
Realtors v. Department of Health & Human Services, 141 S.
Ct. 2485, 2488 (2021). Instead, the FCC must abide “not only
by the ultimate purposes Congress has selected, but by the
means it has deemed appropriate, and prescribed, for the
pursuit of those purposes.” Colorado River Indian Tribes v.
National Indian Gaming Commission, 466 F.3d 134, 139-40
(D.C. Cir. 2006) (quoting MCI Telecommunications, Corp. v.
American Telephone & Telegraph Co., 512 U.S. 218, 231 n.4
(1994)).

     Here, Congress chose the means for broadcasters to obtain
the information necessary to announce who paid for
programming: Ask employees and sponsors. The FCC cannot
alter Congress’s choice.
                              7
                         *    *   *

     We hold that the FCC cannot require radio broadcasters to
check federal sources to verify sponsors’ identities. We
therefore vacate that aspect of the challenged order. Because
our resolution of the statutory question resolves the parties’
dispute, we do not reach the broadcasters’ other APA
arguments or their First Amendment claim.

                                                  So ordered.