Jacksonville Broadcasting Corporation v. Federal Communications Commission, Florida-Georgia Televisioncorporation, Inc., Intervenor

348 F.2d 75

• Court: Court of Appeals for the D.C. Circuit
• Decided: October 25, 1965
• Docket: 18181_1
• Status: Published

Opinions

FAHY, Circuit Judge, and BASTIAN, Senior Circuit Judge:

This is an appeal by Jacksonville Broadcasting Corporation (JBC) from a decision of the Federal Communications Commission reaffirming prior grants of a construction permit and television station licenses to Florida-Georgia Television Company, Inc., the intervenor, to operate on Channel 12 in Jacksonville, Florida, and finding JBC to be disqualified from consideration.

The case was commenced in 1952 by appellant in filing an application for a construction permit for a new television broadcast station on the channel. Competing applications were filed by the City of Jacksonville and by Florida-Georgia. The Commission designated the three applications as mutually exclusive and provided for a consolidated proceeding. The hearing examiner on April 4, 1955, released an Initial Decision proposing to award the construction permit to JBC. Exceptions were filed by the two other applicants and the case was heard by the Commission on February 6, 1956. In August of that year the Commission released its final decision, granting the application of Florida-Georgia and denying the applications of JBC and the City of Jacksonville. JBC filed a petition for rehearing and reconsideration, which was denied by the Commission on August 1, 1957. No appeal was taken from the Commission’s final decision. On September 20,1957, the Commission granted a license to Florida-Georgia and a modified license on May 22, 1959.

On August 2, 1960, the Commission by order reopened the record to determine whether the award to Florida-Georgia should be set aside as void or voidable and whether any of the parties to the proceeding should be disqualified by reason of misconduct. This action of the Commission was the result of testimony taken before the Subcommittee on Legislative Oversight, Committee on Interstate and Foreign Commerce, House of Representatives, from which it appeared that ex parte presentations had been made by one or more of the applicants in connection with the award of the permit in question. The Commission designated the following issues for further hearing:¹

1. To determine whether any of the members of the Commission who participated should have disqualified himself from voting in the proceedings before the Commission which resulted in the award of a construction permit for a television station on Channel 12 in Jacksonville.

2. To determine whether any person or persons influenced or attempted to influence any member of the Commission with respect to the proceedings resulting in the award of the construction permit for Channel 12, Jacksonville, in any manner whatsoever except by the recognized and public processes of adjudication.

3. To determine whether any party to the proceedings before the Commission which resulted in the award of the construction permit for Channel 12 in Jacksonville directly or indirectly secured, aided, confirmed, ratified, or knew of any misconduct or improprieties in connection with the proceedings.

4. To determine, in the light of the facts adduced upon the foregoing issues, whether the grant heretofore made of a construction permit for Channel 12, Jacksonville, was void ab initio and if not, whether such grant is voidable and action should be taken to set it aside; whether any of the applicants in this proceeding was and is disqualified to receive a grant of its application ; and whether the conduct of any applicant, if not of a disqualifying character, has been such as to reflect adversely upon such applicant from a comparative standpoint.

All applicants in the original proceeding were permitted to participate as parties in the reopened proceeding, and opportunity was provided to any persons against whom evidence might be received to cross-examine and to submit rebuttal testimony. The Attorney General of the United States was permitted to participate as amicus curiae.

On April 11, 1962, the hearing examiners released their Initial Decision, holding that former Commissioner Richard A. Mack should have disqualified himself from participating in the original decision because of his ex parte discussions of the merits of the competing applicants while the original proceeding was pending before the Commission; further, that the City of Jacksonville and JBC should be disqualified from further consideration because of attempts made by persons identified with those parties to influence the Commission; and that Florida-Georgia was not shown by the evidence to be disqualified. By reason of Commissioner Mack’s conduct, the original decision of August 31, 1956, was held to be void ab initio and the grant then made to Florida-Georgia was set aside. However, in view of the fact that they found no impropriety to have been committed by Florida-Georgia, the examiners held that the public interest, convenience and necessity would be served by authorizing the continued operation of the television station by Florida-Georgia pending final disposition by the Commission.^{2 3}

Appeal was taken to the full Commission, which, on September 16, 1963, with the unanimous vote of the four Commissioners voting, note 2, supra, released its final order. The Commission adopted most of the hearing examiners’ conclusions, disagreeing, however, with the disqualification of the City of Jacksonville. But the City has voluntarily withdrawn and its application need not be considered.

The Commission agreed with the examiners that Commissioner Mack should have disqualified himself from the deliberations and decision in the original case and that the original grant to Florida-Georgia was invalid and should be set aside. It also concluded,

that in any further proceedings to be had in connection with the subject applications, JBC is disqualified from consideration because of attempts by individuals identified with it to influence the Commission through methods outside the recognized and public processes of adjudication. City and Fla-Ga, on the other hand, are not shown by the evidence to be disqualified from further consideration and nothing in this record may be held to reflect adversely on their applications.

Finally, upon a complete review of the entire record, the Commission ordered,

That the Commission’s Decision of August 31, 1956, insofar as it granted a construction permit to Florida-Georgia Television Company, Inc., is nunc pro tunc Readopted; The Commission’s grants of station licenses on September 20, 1957 and February 12, 1958 are, nunc pro tunc, Affirmed; and the application of Florida-Georgia Television Company, Inc., for renewal of television station license for WFGA-TV, Jacksonville, Florida filed November 30, 1960, insofar as it has been continued in a deferred status by reason of the questions raised in this proceeding, Is Removed from such deferred status, without prejudice to any other causes for deferral imposed by Commission processes.

I. The order of the Commission disqualifying JBC is affirmed. The evidence of record amply supports the findings of the Commission that this applicant through its President, who was a controlling stockholder and director, in the language of the examiners, adopted by the Commission, sought outside influence,

to induce the Commission to exercise its ultimate decisional authority to adhere to the original instructions given its staff to prepare a decision upholding the grant contemplated by the Initial Decision of the Hearing Examiner, irrespective of the significance which might be drawn by the Commission from its analysis of the evidence and the exceptions of the competing applicants and oral argument thereon.

We need not go into the details of the substantial evidence to that effect, justifying the finding and conclusion of disqualification. WKAT, Inc. v. Federal Communications Comm., 111 U.S.App.D.C. 253, 261, 296 F.2d 375, 383, cert. denied, 368 U.S. 841, 82 S.Ct. 63, 7 L.Ed.2d 40. The action of the Commission was altogether within its responsibility to administer the statute in the public interest.

II. The Commission contends that its disqualification deprives JBC of standing to contest the grant to Florida-Georgia, though the Commission does not move for dismissal of the appeal. In any event, we think JBC’s disqualification does not preclude our review of the grant to Florida-Georgia. JBC had standing to bring the case here. In considering its appeal from denial of the grant to it, and from the grant to Florida-Georgia, a competitor for the channel, JBC based its case in good part upon its claim that the Commission used a double standard on the issue of disqualification — one as to it and another as to Florida-Georgia. On JBC’s appeal we are brought face to face with this and other problems as they bear upon the grant to Florida-Georgia. We are not required to abandon full consideration of these problems at the point where we uphold the Commission in finding JBC disqualified for grant of the channel to it. The whole case is then in process of decision and our review of it may be completed on all issues.

III. Intervenor Florida-Georgia, but not the Commission, would have us dismiss the appeal on a different ground. It points out that in October 1960 JBC undertook to assign to a partnership composed of its stockholders all interest in its application, shortly after which, on December 27, 1960, the corporate JBC was dissolved.³ During the proceedings before the hearing examiners JBC made known its change in business form by filing a petition to amend its application. The hearing examiners stated that “the Commission itself does intend that the Jacksonville Broadcasting Corporation successors shall participate as respondents here and that they would “defer action indefinitely on the petition to amend and permit this group now representing Jacksonville Broadcasting Corporation or its successors to participate as respondents in the proceedings.” Counsel for Florida-Georgia stated he had no objection to the participation of the JBC group at that time. No further action was taken to change the nature of the appearance of record and the JBC group participated in the hearing, all pleadings being in the name of JBC. When the Initial Decision was rendered, the examiners denied the petition to amend the application, apparently believing it to be a futility in view of the disqualification of JBC.

After the examiners’ decision JBC filed a notice of appearance indicating an intention to participate in oral argument before the full Commission. Florida-Georgia objected on the ground that the corporation had ceased to exist. The Commission declined to rule on the merits of this contention but denied Florida-Georgia’s objection, stating:

Suffice it to say that an entity styling itself “Jacksonville Broadcasting Corporation” has participated in this hearing thus far as a party respondent with the consent of all parties and has duly filed exceptions to the Initial Decision. Such entity, in the interests of a full record, will be permitted to argue such exceptions.

The “entity” continued to participate in the proceedings. When the Commission issued its final decision and order it declined to pass upon the corporation’s continued status and related matters, stating that in view of its decision concerning the ex parte conduct of JBC it was unnecessary to do so, and since such conduct antedated the application the Commission concluded these questions had become moot. In this posture of the case the Commission affirmed the examiners’ denial of JBC’s petition to amend its application.

The appeal to this court is by the “entity” which had sought and been denied the right to the amendment but was allowed to press its case in all respects without regard to its internal status. Rather than dismiss its appeal for failure of the Commission to straighten out the matter in better fashion we give JBC the same “entity” status the Commission gave it. In the circumstances presented the relation of this court to the administrative process must be construed as sufficiently accommodating to authorize the court on the appeal of JBC to consider on the merits the decision of the Commission restoring the grant of the construction permit and licenses to Florida-Georgia, contested by the “entity.” ⁴

IV. Finding that the ex parte representation in favor of Florida-Georgia could not be traced to its principals, or attributed to them, the Commission nunc pro tunc readopted the decision in favor of Florida-Georgia, made August 31, 1956, which it had reopened by its order of August 2, 1960. The Commission did not use a different standard with respect to Florida-Georgia from that it used' in finding JBC disqualified. The factual situation affecting the two applicants, carefully analyzed by the Commission, was itself different in the important respect that the principals of JBC were responsible for the extrajudicial attempts to influence the Commission, while Florida-Georgia was found not to be responsible for the overtures in its favor. We are not persuaded that this factual decision of the Commission exonerating Florida-Georgia from wrongdoing in the respects here in issue should not be accepted by this court. The Commissioners who participated in this conclusion, note 2, supra, upon a careful review of the evidence, were unanimous. We accept their findings under the rule applicable to the scope of our review.

V. We do not agree, however, that the grants to Florida-Georgia should have been restored to their original status. Though Florida-Georgia was not disqualified the decision of August 31, 1956, awarding the construction permit to it, followed in due course by licenses, must be held to have been influenced by the ex parte representations made for its benefit, even though the principals of Florida-Georgia were innocent of such representations. Such innocence saves Florida-Georgia’s qualification but does not validate grants which are the product, in part at least, of the wrongful influences brought to bear upon the result reached by the Commission in its favor. The original grant of August 31, 1956 was invalid by reason of these influences. Apparently the Commission’s reason for readopting its original decision was that it thought Florida-Georgia was the only qualified applicant remaining in the case. This fails to take into account the invalidity of the original decision. The public interest cannot be reconciled with leaving in effect grants which on this record we must hold were in significant part the result of extra-judicial representations and influences. In applying the public interest standard the decision that an applicant is not disqualified because innocent of such extra-judicial activities solves only part of the problem. The activities exerted for the benefit of the applicant undermine the validity of the consequent grant to it.

The result is that the present restoration to Florida-Georgia of the construction permit authorized August 31, 1956, and ensuing licenses, must be set aside. Since the decision upon which they rest was originally invalid, the decision and its progeny remained invalid and could not be readopted as valid.

This leaves the channel' free to be applied for by any qualified applicant. Jacksonville Broadcasting Corporation, its former officers and directors, the partnership and its members, are excluded because disqualified; but Florida-Georgia is not; for though the existing grant to it must be set aside it has not been disqualified and may compete, but on' a completely equal and in no sense a preferred basis, with any other applicant who might apply. Cf. WORZ, Inc. v. Federal Communications Comm., 120 U. S.App.D.C.-, 345 F.2d 85.

The motion to dismiss the appeal is denied. The order of the Commission is affirmed insofar as it relates to the disqualification of JBC. Insofar as it relates. to the qualification of Florida-Georgia the order is also affirmed. The order is set aside insofar as it readopted the Decision of August 31, 1956, and insofar as it affirms the grant of station licenses made September 20, 1957, and February 13, 1958, and renewal of station license for WTBA-TV, November 30, 1960. The case is remanded to the Commission for further proceedings not inconsistent with this opinion.

As authorized in WORZ, supra, authority for continued operation may be granted by the Commission in its discretion pending such further proceedings.

It is so ordered.

1 . The Commission appointed the Chief Hearing Examiner as presiding officer of the hearings. Later, the parties agreed that he would be assisted in the preparation of his report by Hearing Examiner Chester F. Naumowicz, Jr.

2 . On the original action of the Commission in 1956, Commissioners Hyde, Doer-fer, Lee and Mack voted to adopt the decision; Commissioners McConnaughey and Bartley dissented; Commissioner Craven abstained. On the 1963 order, Commissioners Henry, Hyde, Bartley and Ford voted to adopt the decision; Commissioners Cox and Loevinger did not participate ; Commissioner Lee was absent.

3 . The original proceedings had eventuated in 1956 with the award of the permit to construct the station on Channel 12 to Florida-Georgia. JBC participated in those proceedings but did not appeal from that decision. This did not preclude it from participating in the later proceedings if it was properly in them, as we hold to be the case.

4 . We have considered the contentions that Florida law prohibits the continuation of a corporate body such as JBC after its dissolution for the purposes of obtaining a television license. But without reaching a conclusion on this point we hold for the reasons we give that the motion to dismiss should not be granted.