SGCI Holdings III LLC v. FCC

Court of Appeals for the D.C. Circuit·Decided August 25, 2026·No. 25-5339·Published

Opinion

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 15, 2026 Decided August 25, 2026

No. 25-5339

SGCI HOLDINGS III LLC AND SOOHYUNG KIM, APPELLANTS

v.

FEDERAL COMMUNICATIONS COMMISSION, ET AL., APPELLEES

Appeal from the United States District Court for the District of Columbia (No. 1:24-cv-01204)

Patrick Strawbridge argued the cause for appellants. With him on the briefs were Tyler R. Green, Jeffrey M. Harris, Taylor A.R. Meehan, Frank H. Chang, and Daniel M. Vitagliano.

Andrew M. Bernie, Attorney, U.S. Department of Justice, argued the cause for federal appellees. With him on the brief were Brett A. Shumate, Assistant Attorney General, and Charles Scarborough, Attorney.

Michelle S. Kallen argued the cause for private appellees.

With her on the brief were Joshua Karsh, Cyrus Mehri, Elyse D. Echtman, Alison Brooke Schary, Marietta Catsambas, Louis

Miller, Nadia Ann Sarkis, David W. Schecter, Anne Marie McClellan, Peter Rutledge, and Paul M. Finamore.

Paul D. Cullen, Jr. was on the brief for amicus curiae the Administrative Law and Agency Practice Community of the District of Columbia Bar in support of private appellees.

Before: SRINIVASAN, Chief Judge, and PILLARD and WILKINS, Circuit Judges.

Opinion for the Court filed by Circuit Judge WILKINS.

WILKINS, Circuit Judge: In early 2022, Soohyung Kim, through his company Standard General, an affiliate of SGCI Holdings (collectively “Appellants”) won a public bidding auction to buy TEGNA, a broadcast television station company. Because the deal would result in the transfer of a Federal Communications Commission (“FCC”) license, the deal was contingent on Appellants obtaining regulatory approvals from both the Department of Justice and the FCC, which the merger agreement specified had to be done within 450 days. The proposed merger faced opposition from a number of organizations, including the Allen Group, Emmer Consulting (formerly known as the Goodfriend Group), NewsGuild, the National Association of Broadcast Employees and Technicians (“NABET”), United Church of Christ (“UCC”), Common Cause, and DISH Network Corporation (“DISH”), as well as a rival bidder and Allen Group CEO, Byron Allen, his longtime lobbyist, David Goodfriend, and DISH co-founder and board chairman Charlie Ergen (collectively, the “Private Appellees”).

Ultimately, the 450-day window lapsed without FCC approval, causing Appellants’ merger agreement with TEGNA to expire, and forcing Appellants to pay a hefty break-up fee.

Appellants then brought suit under the Equal Protection clause of the Fifth Amendment and 47 U.S.C. § 310(d) against the FCC, then-FCC Chairwoman Jessica Rosenworcel, and then- Chief of the FCC’s Media Bureau Holly Saurer (collectively “FCC Appellees”) Appellants also brought conspiracy and race discrimination claims against the FCC and Private Appellees under 42 U.S.C. § 1985(3) and 42 U.S.C. § 1986. Finally, Appellants brought race discrimination claims under 42 U.S.C. § 1981 against all Private Appellees other than DISH and Mr. Ergen and D.C. tortious interference and common law civil conspiracy claims against all Private Appellees. The District Court dismissed Appellants’ complaint for a number of reasons, and Appellants timely appealed. For the following reasons, we now affirm.

I.

A.

This case concerns the Communications Act and the FCC’s authority over broadcast license-transfer applications. Under 47 U.S.C. § 310(d), the Media Bureau—to which the FCC has delegated license-transfer application review, see 47 U.S.C. § 155(c), 47 C.F.R. § 0.61(a)—must determine whether “the public interest, convenience, and necessity will be served” prior to approving any such transfers. 47 U.S.C. § 310(d). The FCC is prohibited in such a review from comparing the license- transfer applicant against other potential applicants, i.e., from considering whether another buyer may better serve the “public interest, convenience, and necessity.” Id. Importantly, “[a]ny party in interest” may petition the FCC to deny a transfer application, id. § 309(d)(1), and the FCC is allowed to “formally designate the application for a hearing” if it is unable to come to a decision based on “the application [for transfer], the pleadings filed, or other matters which it may officially

notice” and a “substantial and material question of fact” is presented, id. § 309(d)(2), (e).

In early 2022, Appellants won an auction to acquire TEGNA and its 61 broadcast television stations in an $8.6 billion deal, beating out the Black-owned Allen Group’s competing bid. J.A. 16, 35. The merger contract allowed 450 days to obtain the necessary regulatory approvals for the license transfer, well beyond the 180-day average that it usually took FCC to make a decision on such applications (also known as the “shot clock”). Id. at 35–36, 45. While Appellants timely submitted their license-transfer application to the Media Bureau, resulting in the shot clock beginning in April 2022, id. at 61, the agency took longer than 450-days to advance its decision, id. at 34–48. Because a core part of the transaction could not be fulfilled, the lack of regulatory approval in the mandated timeframe ultimately resulted in the break-up of the merger. Id. at 115.

Appellants blame a pantheon of actors for their inability to obtain regulatory approval from the FCC and for the eventual merger break-up. Indeed, Appellants’ complaint outlines a conspiracy premised on Mr. Kim being the “wrong” kind of minority, with a broad range of conspirators working to ensure that Appellants would not obtain the regulatory approvals they needed to execute the Standard General-TEGNA merger. The alleged participants in this conspiracy included: two unions (NewsGuild and NABET); two non-profit organizations (UCC, Common Cause); a network provider (DISH); a media company and competing bidder (Allen Group); a lobbying group (Emmer Consulting, f/k/a the Goodfriend Group); three individuals (Byron Allen, Charles Ergen—who is the chairman and majority shareholder of DISH—and David Goodfriend, who is both Mr. Allen’s and Mr. Ergen’s longtime lobbyist); and the FCC itself (including then-Chairwoman Rosenworcel

and her personal staffer and then-Media Bureau Chief, Holly Saurer). Id. at 24–28.

Appellants set forth a number of factual allegations supporting their claims. The following is a rendition of the most relevant facts for this appeal, drawn from the complaint, and which we accept as true under Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).

The alleged conspiracy began on April 27, 2022—less than a week after the FCC’s shot clock began—when FCC Chairwoman Rosenworcel scheduled a meeting with DISH’s Mr. Ergen. J.A. 62. The complaint did not allege what that meeting was about, but Appellants noted that DISH “had a direct interest in the Standard General-TEGNA retransmission fees it would pay to carry the TEGNA stations.” Id. at 67. A few weeks later, a reporter asked Mr. Allen whether he had “given up on that deal,” referring to the Standard General- TEGNA merger. Id. at 62. Mr. Allen responded that he had “never give[n] up on anything,” that he was “always in the fight,” and that “we’re in round one.” Id. Days after, David Goodfriend, who is “Mr. Allen’s longtime lobbyist,” scheduled a meeting with Ms. Saurer of the FCC to discuss a diversity initiative and a petition for rulemaking that Mr. Goodfriend had filed alongside Common Cause and UCC. Id. at 63. That same day, NewsGuild and Common Cause filed their first objection to the Standard General-TEGNA merger, arguing that Standard General’s retransmission fees would be too high. Id. at 63–64. Afterwards, and despite Appellants’ protests, the Media Bureau extended the initial public comment period by a month from May to June. Id. at 64 & n.70.

A few additional things occurred throughout the summer of 2022. The first was that Mr. Allen unexpectedly called Mr. Kim about the Standard General-TEGNA transaction in early

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