Contemporary Media, Inc. v. Federal Communications Commission

214 F.3d 187, 341 U.S. App. D.C. 427, 21 Communications Reg. (P&F) 26, 2000 U.S. App. LEXIS 14054
CourtCourt of Appeals for the D.C. Circuit
DecidedJune 16, 2000
Docket99-1198
StatusPublished
Cited by9 cases

This text of 214 F.3d 187 (Contemporary Media, Inc. v. Federal Communications Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Contemporary Media, Inc. v. Federal Communications Commission, 214 F.3d 187, 341 U.S. App. D.C. 427, 21 Communications Reg. (P&F) 26, 2000 U.S. App. LEXIS 14054 (D.C. Cir. 2000).

Opinion

Opinion for the Court filed by Circuit Judge GARLAND.

GARLAND, Circuit Judge:

Three radio licensees appeal the Federal Communications Commission’s (FCC’s) revocation of their licenses and construction permits, as well as its denial of their application for a new station. The FCC took those actions after the licensees’ sole owner and president was convicted of sexually abusing children, and after the licensees made misrepresentations to the Commission about the owner’s continued involvement in station affairs. In the end, the case is no more difficult than this recitation of the facts suggests, and we therefore affirm the FCC in all respects.

I

The appellant licensees own and operate five radio stations in Missouri and Indiana, hold two construction permits for radio stations in Missouri, and have an application pending for another Missouri station. Michael Rice is the sole shareholder, president, and treasurer of all three licensees and serves on each licensee’s board of directors. In November 1990, Rice was arrested for criminal conduct involving sexual acts with a teenager. In April of the following year, he was formally charged with three felony counts of sexual assault on an individual between fourteen and sixteen years of age. The prosecutor subsequently amended the charges to include eight felony counts of sexual assault on individuals between fourteen and sixteen years of age, and four felony counts of forcible sodomy of individuals under fourteen years of age. The sexual abuse involved five children and occurred between December 1985 and October 1990. Two days after the charges were filed, Rice checked himself into a St. Louis hospital for in-patient psychiatric treatment.

In June 1991, two of the licensees filed reports notifying the FCC of the charges against Rice. The reports were filed pursuant to 47 C.F.R. § 165(a), which requires FCC license applicants to maintain “the continuing accuracy and completeness of information furnished” in pending applications. Each report stated that:

Since Mr. Rice’s hospitalization on April 3, 1991, he has had absolutely no managerial, policy, or consultative role in the affairs of the three broadcast corporations in which he has ownership inter *191 ests and officer positions. In other words, pending a resolution of the referenced criminal charges, Mr. Rice is being completely insulated and excluded from any involvement in the managerial, policy, and day-to-day decisions involving any of the four licensed stations and three construction permits held by the three corporations.

J.A. at 15-16, 120 (citation omitted). In October 1991, Rice was discharged from the hospital. On May 14, 1992, one of the licensees filed another report with the FCC, stating:

There has been no change in Mr. Rice’s status with [the reporting licensee] or in the status of the proceedings against him.... Mr. Rice is no longer hospitalized, but he continues to be treated by his physicians as an outpatient, and he continues to have no managerial or policy role in the affairs of the three broadcast corporations ... in which he has ownership interests and corporate positions.

Id. at 126-27 (citation omitted).

On August 81, 1994, Rice was convicted of all twelve felony counts against him: four counts of forcible sodomy, six counts of deviate sexual assault in the first degree, and two counts of deviate sexual assault in the second degree. The court sentenced him to a total of eighty-four years in prison. Because the sentences were set to run concurrently, his maximum term of confinement amounted to eight years. Rice began his incarceration on September 80, 1994, and is currently eligible for release.

On October 10, 1995, the FCC ordered an evidentiary hearing at which the licensees were directed to show cause why their licenses and construction permits should not be revoked and their pending application denied. The central issues at the hearing were: (1) the effect of Rice’s felony convictions on the basic character qualifications of the licensees, and (2) whether the licensees had misrepresented to the FCC that, subsequent to his arrest, Rice had been excluded from the management and operation of the stations. After the hearing, the Administrative Law Judge (ALJ) concluded that revocation of the licensees’ authorizations was appropriate due to the egregious nature of Rice’s misconduct and to the misrepresentations made by the licensees in their reports to the Commission. The FCC affirmed.

II

The licensees’ appeal raises a number of challenges, which we address in turn. First, they challenge the legality of the character policy upon which the FCC’s decision was based. We must sustain that policy unless we find it to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Administrative Procedure Act (APA), 5 U.S.C. § 706(2)(A); see ACLU v. FCC, 823 F.2d 1554,1574 (D.C.Cir.1987). 1

Section 308(b) of the Federal Communications Act provides that “[a]ll applications for station licenses, or modifications or renewals thereof, shall set forth such facts, as the Commission by regulation may prescribe as to the citizenship, character, ... and other qualifications of the applicant to operate the station.” 47 U.S.C. § 308(b). For many years, the FCC had no express policy concerning the character qualifications of its applicants; the Commission considered a wide range of factors in evaluating character, and as a consequence its evaluations sometimes yielded inconsistent results. See Policy Regarding Character *192 Qualifications in Broadcast Licensing, 87 F.C.C.2d 836, 836-37 (1981) (notice of inquiry). The Commission responded to this problem in 1986 with the adoption of a comprehensive character policy statement. See Policy Regarding Character Qualifications in Broadcast Licensing, 102 F.C.C.2d 1179 (1986) [hereinafter 1986 Character Policy Statement], The statement announced that the FCC’s character analysis would focus on “misconduct which violates the Communications Act or a Commission rule or policy, and ... certain specified nonFCC-misconduct which demonstrate[s] the proclivity of an applicant to deal truthfully with the Commission and to comply with [its] rules and policies.” Id. at 1190-91. The relevant nonFCC-miscon-duct was limited to adjudicated cases involving: fraudulent representations to government agencies, criminal false statements or dishonesty, and broadcast-related violations of antitrust laws or other laws concerning competition. See id. at 1196-1203. The FCC noted, however, that “there may be circumstances in which an applicant has engaged in nonbroadcast misconduct so egregious as to shock the conscience and evoke almost universal disapprobation.” Id. at 1205 n. 60. “Such misconduct,” the Commission stated, “might, of its own nature, constitute prima facie

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214 F.3d 187, 341 U.S. App. D.C. 427, 21 Communications Reg. (P&F) 26, 2000 U.S. App. LEXIS 14054, Counsel Stack Legal Research, https://law.counselstack.com/opinion/contemporary-media-inc-v-federal-communications-commission-cadc-2000.