Coalition for the Preservation of Hispanic Broadcasting v. Federal Communications Commission

931 F.2d 73, 289 U.S. App. D.C. 228

• Court: Court of Appeals for the D.C. Circuit
• Decided: April 23, 1991
• Docket: Nos. 87-1285, 87-1287, 87-1289, 88-1564, 88-1588 and 88-1596
• Status: Published

Opinions

Opinion for the Court filed by Circuit Judge STEPHEN F. WILLIAMS.

Dissenting Opinion filed by Chief Judge MIKVA.

STEPHEN F. WILLIAMS, Circuit Judge:

This is an appeal from a Federal Communications Commission decision granting a conditional renewal of several television licenses. We deny the challenges of two petitioners for failure to exhaust administrative remedies and those of two others for want of standing.¹

As the panel opinion presented the facts in detail, see Coalition for the Preservation of Hispanic Broadcasting v. FCC, 893 F.2d 1349 (D.C.Cir.1990), we provide only a summary. Spanish International Communications Corporation and Bahia de San Francisco (collectively “Spanish International”) held six TV licenses, the first acquired by Spanish International’s corporate predecessors in 1961. In January 1986 an administrative law judge found that Spanish International’s relations with certain Mexican interests violated a Communications Act provision forbidding alien ownership of broadcasting stations. See 47 U.S.C. § 310(b). Facing a risk that this issue would doom its efforts to secure license renewal, Spanish International negotiated a settlement agreement under which, immediately upon renewal, it would sell the stations to Hallmark Cards, Inc. In October 1986 the Commission’s Review Board approved this settlement and conditionally renewed Spanish International’s licenses.

At about the time the Review Board acted, petitioners Hispanic Broadcasting Systems, Inc. (“HBS”) and Hispanic Broadcasting Limited Partnership filed applications for the licenses and asked the Commission to reverse the Review Board. As the filings came years after the relevant FCC “windows” had closed, the Commission rejected the applications as untimely. Nonetheless, it permitted petitioners to appear before it as amici and considered their argument that the renewal and transfer of Spanish International’s licenses violated the FCC’s “Jefferson Radio ” policy, which prohibits any licensee from transferring a broadcast station at full value while a proceeding that might lead to license forfeiture is pending. See Jefferson Radio Co. v. FCC, 340 F.2d 781, 783 (D.C.Cir.1964). The Commission rejected this argument and affirmed the Review Board’s approval of the transfer agreement and license renewal.

Two of the challengers are prospective applicants, HBS and the Partnership, and three, the Partnership (in a second capacity), Susan Jaramillo and the Coalition for the Preservation of Hispanic Broadcasting, are purportedly dissatisfied viewers. We hold that (1) HBS and the Partnership may not obtain judicial review because they did not timely invoke the administrative procedures required of prospective applicants; and (2) the viewers do not have standing to sue because they do not fall within the zone of interests contemplated by § 310(b).

The Would-Be Applicants

HBS and the Partnership seek two kinds of relief. First, they ask us to overturn the FCC’s decision to reject their applications as untimely. We deny this relief for the reasons stated by the panel opinion. 893 F.2d at 1357-59. That resolved, we turn to whether such untimely applicants may now, in the hope of vacant channels and new filing opportunities, ask this court to overturn the FCC’s approval of the renewal and transfer agreement.

Both panel opinions and, upon rehearing, the litigants themselves treated this issue as a matter of Article III standing: Are the prospects of these latecomers’ winning the licenses (if they were vacant) serious enough that they were truly harmed by the Commission’s rejection of claims that might have led to nonrenewal and vacancy? See generally Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). Yet, partly because the applicant petitioners’ untimeliness foreclosed a Commission assessment of their qualifications, the question cannot be answered without guesswork. As petitioners’ tardiness also entailed a failure to exhaust administrative remedies, however, we can resolve the case on non-constitutional grounds. See Coker v. Sullivan, 902 F.2d 84, 88 (D.C.Cir.1990) (dismissing case on non-constitutional jurisdictional grounds to avoid problematic Article III inquiry); Moore v. United States House of Representatives, 733 F.2d 946, 954 n. 39 (D.C.Cir.1984) (“[W]e should avoid deciding questions of a constitutional nature unless absolutely necessary to a decision of the case.”) (internal quotes omitted). While the government did not specifically raise the exhaustion issue, the doctrine concerns economy not only of agency but also of judicial resources, see Weinberger v. Salfi, 422 U.S. 749, 765, 95 S.Ct. 2457, 2466-67, 45 L.Ed.2d 522 (1975), and accordingly this court may in its discretion raise the issue on its own. See, e.g., Dettmann v. United States Dep’t of Justice, 802 F.2d 1472, 1476-77 & n. 8 (D.C.Cir.1986); Power Plant Division, Brown & Root, Inc. v. OSHRC, 673 F.2d 111 (5th Cir.1982); Brown v. Fauver, 819 F.2d 395, 398-99 (3d Cir.1987).

The judicial review provision of the Communications Act, 47 U.S.C. § 402(b), authorizes disappointed “applicants]” and, more generally, “any ... person who is aggrieved or whose interests are adversely affected” by a Commission licensing order to sue for relief in this court. Yet even “aggrieved” persons must comply with prescribed administrative procedures. See Spanish International Broadcasting Co. v. FCC, 385 F.2d 615 (D.C.Cir.1967); Red River Broadcasting Co. v. FCC, 98 F.2d 282 (D.C.Cir.1938); see also Valley Telecasting Co. v. FCC, 336 F.2d 914 (D.C.Cir. 1964); Springfield Television Broadcasting Corp. v. FCC, 328 F.2d 186 (D.C.Cir. 1964). Indeed, § 405 of the statute itself requires aggrieved persons who were not parties to the agency proceedings, as one prerequisite to judicial review, to petition the Commission for reconsideration of disputed orders.² In general, failure to ex-haust administrative remedies bars judicial review of FCC orders.

Spanish International illustrates the exhaustion principle at work in the licensing context. International Panorama TV sought a license to construct a new television station. A competitor, Spanish International (apparently the same company as the beneficiary of today’s ruling), twice submitted petitions attacking International Panorama’s application, invoking the grounds it afterwards raised on appeal.³ Because both petitions were untimely, the FCC refused to admit Spanish International as a party to the proceedings. After unsuccessfully petitioning for reconsideration under § 405, Spanish International asked this court (1) to reverse the FCC’s order denying it formal participation in the application proceedings and (2) to reverse the FCC’s decision that International Panorama satisfied the Commission’s character qualifications. See Appellant’s Brief, Spanish Int’l Broadcasting Co. v. FCC, 385 F.2d 615 (D.C.Cir.1967).

The court affirmed the FCC’s judgment that Spanish International’s petitions were untimely and, accordingly, ruled that Spanish International had failed to exhaust the prescribed administrative remedies. 385 F.2d at 622-27. It then refused to consider Spanish International’s substantive objections to the FCC’s decision in favor of International Panorama. See id. at 627-28. “[Ejxhaustion of administrative remedies,” explained the court, “means utilization of the earliest available corrective step,” and where a litigant “ ‘neglect[s] to avail itself of such an opportunity, it may thus have foreclosed itself from seeking further relief.’ ” Id. at 628, quoting Red River, 98 F.2d at 287-88.

As there, so here. An applicant for a broadcast license must file a timely application with the FCC before he may challenge an adverse Commission order in this court. This requirement promotes the values that the exhaustion doctrine was designed to protect: administrative and judicial economy and comity between courts and agencies. See generally McKart v. United States, 395 U.S. 185, 193-95, 89 S.Ct. 1657, 1662-63, 23 L.Ed.2d 194 (1969). The exhaustion requirement protects the FCC’s interest in the finality of its adjudication and, as in this case, of settlements arising under its jurisdiction. Requiring applicants for broadcast licenses to file on time also permits the Commission to take an advance reading of the various claims and order its business efficiently from the beginning.

Moreover, as Judge Mikva wrote for this court in New York State Ophthalmological Society v. Bowen, 854 F.2d 1379, 1387 (D.C.Cir.1988), the exhaustion doctrine “promotes judicial efficiency ... by making possible a disposition by the agency that will obviate the need for a judicial decision on [an] issue.” See also McKart, 395 U.S. at 195, 89 S.Ct. at 1663; Ticor Title Insurance Co. v. FTC, 814 F.2d 731, 741 (D.C. Cir.1987) (opinion of Edwards, J.). That principle is especially relevant here. If the applicant petitioners had filed timely applications, winning the licenses (their ultimate objective, assuming they would have spurned offers to join the settlement agreement) would have been only conditionally dependent on winning the legal dispute underlying this lawsuit (the alien ownership issue). They could have won the licenses without winning that dispute and, moreover, could have failed to qualify for those licenses without losing it. Either way, their timely participation at the administrative level could have mooted the issues fueling this litigation.

First, if HBS or the Partnership had timely pursued the proper administrative course, one of them might have prevailed in a comparative hearing and obtained the licenses without prevailing on the alien ownership issue (or, if even relevant under this scenario, the Jefferson Radio issue). Even if the FCC had ruled conclusively for Spanish International on the alien ownership issue, petitioners obviously could not have sued until after they had given their last administrative remedy — the comparative hearing — a shot, and we will not exempt them from that requirement now simply because they ignored the relevant application deadlines. And though it is difficult for a challenger to unseat an incumbent in a renewal proceeding, see generally Central Florida Enterprises, Inc. v. FCC, 683 F.2d 503, 506-08 (D.C.Cir.1982), “not even the probability of an administrative denial of relief will excuse the effort.” See Spanish International, 385 F.2d at 626.⁴

Alternatively, if HBS and the Partnership had filed timely applications, the FCC might well have determined — quite apart from the issue of Spanish International’s qualifications — that they were unqualified to operate broadcast stations. Indeed, the Commission pointed out in denying the belated applications that admitting petitioners to consideration “would require evidentiary hearings on [their] qualifications and on the standard comparative issue.” See Joint Appendix 435; see also In re Belo Broadcasting Corp., 68 FCC 2d 1313 (1978); In re Edwin Berstein, 4 FCC Rec. 8420, 8421 (Rev.Bd.1989) (citing cases), aff'd 5 FCC Rec. 2843 (FCC 1990), aff'd mem. sub nom. Lefebvre v. FCC, 926 F.2d 1215 (D.C.Cir. 1991). Whether an adverse decision on their basic qualifications would have stripped HBS and the Partnership of standing to appeal a renewal of Spanish International’s license is an open question, turning in part on the seriousness and curability of the shortcomings in their applications. Compare Orange Park Florida T.V., Inc. v. FCC, 811 F.2d 664, 670-73 (D.C.Cir. 1987), with Simmons v. FCC, 145 F.2d 578, 579 (D.C.Cir.1944). Even if such a determination had left their formal legal standing intact, it would have created a record exposing the weaknesses of their applications (thus filling the information vacuum that here prevents a firmly grounded finding of an Article III injury), and might have discouraged them from bringing their attack on Spanish International to court at all. The exhaustion doctrine thus permits us to avoid second-guessing agency decisions at the behest of litigants who have never been in a position to benefit from the decision they seek from us.

This is unlike the frequent case where compliance with an agency’s procedures would not have caused the agency to venture down a path that could have mooted the issue brought to court. In such cases this court has often relaxed exhaustion requirements to permit consideration of issues that an agency has had a “fair opportunity” to address. See, e.g., United Church of Christ v. FCC, 911 F.2d 803, 808-09 (D.C.Cir.1990); United Church of Christ v. FCC, 779 F.2d 702, 706-07 (D.C. Cir.1985); Meredith Corp. v. FCC, 809 , 870 (D.C.Cir.1987); Marsh v. FCC, 436 F.2d 132, 136 (D.C.Cir.1970); Gerico Investment Co. v. FCC, 240 F.2d 410, 411-12 (D.C.Cir.1957); see also Washington Ass'n for Television & Children v. FCC, 712 F.2d 677, 680-82 & n. 10 (D.C.Cir. 1983); NRDC v. EPA, 824 F.2d 1146, 1150-51 (D.C.Cir.1987) (en banc). That approach makes sense. In such cases, there is little reason to think that a party’s more thorough participation would have changed the agency’s mind on those issues or otherwise precluded a lawsuit.⁵ The unsurprising upshot of our decision here is simply that one who seeks to overturn a Commission licensing decision in the capacity of a disappointed applicant must actually apply, and must do so in timely fashion.

Jacksonville Broadcasting Corp. v. FCC, 348 F.2d 75, 79-80 (D.C.Cir.1965), and MG-TV Broadcasting Co. v. FCC, 408 F.2d 1257, 1265-66 (D.C.Cir.1968), insofar as they discussed exhaustion issues at all, did not explicitly address the precise problem at issue here. To the limited extent that the principles underlying either opinion conflict with our holding here, they are overruled.

Obviously nothing in our decision prevents any person who feels aggrieved from appealing an order denying him party status in the administrative proceedings; the panel decision (incorporated here) disposing of the untimely applications exemplifies the point. And if the agency’s denial were in error, its denial of status would necessarily excuse later non-participation.⁶

One final note: HBS and the Partnership cannot excuse their tardiness on the grounds that they did not exist until after the prescribed filing period. Their principals existed and could have formed the firms earlier.

The Viewers

Susan Jaramillo and the Coalition claim standing as viewers to challenge the FCC’s approval of the renewal and transfer agreement. The Partnership also asserts viewer standing on the basis of the residence and viewing habits of its general partner. We dismiss these claims on prudential standing grounds. See generally Air Courier Conference of America v. American Postal Workers Union, AFL-CIO, — U.S. -, 111 S.Ct. 913, 112 L.Ed.2d 1125 (1991); Clarke v. Securities Industry Ass’n, 479 U.S. 388, 107 S.Ct. 750, 93 L.Ed.2d 757 (1987). Though viewers and listeners are among the intended beneficiaries of many Communications Act provisions, they are not the intended beneficiaries of § 310(b), see Air Courier Conference of America, nor are they otherwise “suitable challengers” to enforce it, see Clarke, 479 U.S. at 399, 107 S.Ct. at 757; Hazardous Waste Treatment Council v. Thomas, 885 F.2d 918, 922-24 (D.C.Cir. 1989).

That section was designed to protect the entire nation — to “prevent[ ] alien activities against the Government during the time of war.” Noe v. FCC, 260 F.2d 739, 741 (D.C. Cir.1958) (quoting 68 Cong.Rec. 3037 (1927) (remarks of Sen. Wheeler)). Committee hearings on the matter focused largely on keeping the airwaves available for military use in time of war, see Hearings on S.2910 Before the Senate Committee on Interstate Commerce, 73d Cong.2d Sess. 165-72 (March 15, 1934); see also S.Rep. No. 781, 73d Cong.2d Sess. 7 (1934), and only secondarily on the hazards of alien propaganda. Moreover, even if propaganda were a main concern, viewers seem an odd group to lead the enforcement, as genuine victims would by definition fail to notice the insidious effects. The viewers can only be suing as guardians of the national interest, but “[s]uch a generalized interest ... is too abstract to constitute a ‘case or controversy’ appropriate for judicial resolution.” Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 227, 94 S.Ct. 2925, 2935, 41 L.Ed.2d 706 (1974).

Nor can viewers assert standing as intended beneficiaries of the Jefferson Radio doctrine, for it is entirely instrumental, aimed (in this context) only at enhancing the deterrent effect of whatever substantive provision supports the attack on the incumbent licensee, here § 310(b)(3). See Stereo Broadcasters, Inc. v. FCC, 652 F.2d 1026, 1027 (D.C.Cir.1981). Because petitioners cannot sue to enforce § 310(b), they cannot sue to enforce a means of enforcing § 310(b).

We affirm the FCC order of June 5,1987. We adhere to the panel opinion as it relates to petitioner TVL’s claim and to the FCC’s decision to reject petitioners’ applications as untimely. We vacate the panel opinion as it relates to the standing of petitioners HBS and the Partnership and to the merits of their Jefferson Radio claim, and dismiss for want of exhaustion the claims that each rests on its status as a frustrated applicant. Finally, we dismiss for want of standing the claims of petitioners Coalition for Hispanic Broadcasting and Susan Jar: amillo and the independent claim of the Partnership in its role of viewer.

So ordered.

1 . We also reject the claim of TVL Corporation for the reasons stated in the panel opinion, Coalition for the Preservation of Hispanic Broadcasting v. FCC, 893 F.2d 1349, 1355 (D.C.Cir. 1990).

2 . Although the applicant petitioners were not parties to the proceedings after denial of their untimely applications, their presentation to the Commission of the theories that they raise here, and the Commission’s consideration of those theories, satisfies § 405 under the cases summarized at pp. 233-234 below.

3 . Thus Spanish International met the condition that our cases sensibly impose for satisfying the exhaustion requirement of § 405: the Commission had a fair opportunity to address the issues raised on appeal. See United Church of Christ v. FCC, 911 F:2d 803, 809 (D.C.Cir.1990) ("As we stated in Meredith Corp. v. FCC [809 F.2d 863, 870 (D.C.Cir.1987) ], ‘[a]s a condition precedent to judicial review, section 405 requires only that the Commission have a "fair opportunity” to pass on [an] issue.’ ”); see also cases cited at pp. 233-234 below.

The dissent’s suggestion that the Commission did not address Spanish International’s claims on the merits, see Dissent at 237, is therefore irrelevant. It is also false. The court observed that "because of their public importance, [the Commission] treated extensively the questions raised by [Spanish International]. It found that all of the points lacked merit save its claim respecting [International Panorama’s] character qualifications, and this issue it designated for hearing.” 385 F.2d at 618. As the opinion suggests and the record and briefs confirm, the Commission later rejected Spanish International’s efforts to resurrect the same defeated attacks on International Panorama’s qualifications. See id. at 619; Appellate Record at 992-97, 1016-19, Spanish Int’l Broadcasting Co. v. FCC, 385 F.2d 615 (D.C.Cir.1967). These attacks formed Spanish International’s merits argument on appeal.

4 . The dissent proposes that parties be permitted to sit out agency proceedings until the prospects of administrative relief pass a certain threshold (never identified) of financial promise. Dissent at 237-239. The dissent understandably does not identify a single case that supports such an extension of the exhaustion doctrine’s futility exception. Apparently no court has yet felt it necessary to dilute the doctrine to that extent, presumably because no court shares the dissent’s fear that the doctrine’s application will generate “frivolous” administrative claims. See id. at 239.

5 . Contrary to the dissent’s suggestion, see Dissent at 236-237, nothing we say undermines those of the above cases decided under 47 U.S.C. § 405. In such cases, requiring exhaustion is often pointless; in ours, it is not. An agency’s prior opportunity to consider the issues on appeal may be a necessary condition for judicial review, but it is not therefore a sufficient condition. Dicta that § 405 "codif[ies]’’ the exhaustion doctrine, see Dissent at 236, can hardly wipe out Spanish International's controlling treatment of the issue, which, to our knowledge, no case has ever criticized, much less purported to overrule. This leaves the dissent’s criticism that Spanish International is "over a generation old”, Dissent at 235, a curious ground for overruling a case.

6 . Cf. Shurberg Broadcasting of Hartford, Inc. v. FCC, 876 F.2d 902, 905 (D.C.Cir. 1989) (Silberman, J.) (exhaustion not raised; applicant sought license but was rebuffed by the Commission), rev’d on other grounds sub nom. Metro Broadcasting, Inc. v. FCC, — U.S.-, 110 S.Ct. 2997, 111 L.Ed.2d 445 (1990).