The Newspaper Guild v. Edward H. Levi, Attorney General

539 F.2d 755, 176 U.S. App. D.C. 276

• Court: Court of Appeals for the D.C. Circuit
• Decided: August 19, 1976
• Docket: 75-1014
• Status: Published

Opinions

McGOWAN, Circuit Judge:

This case presents a narrow, albeit important, issue of statutory construction: Does section 4(b) of the Newspaper Preservation Act of 1970 make it unlawful to enter a joint newspaper operating agreement without the prior approval of the Attorney General, or does it rather require prior approval only for parties seeking an antitrust exemption for such an agreement? The District Court enjoined a Justice Department regulation implementing the latter interpretation. For the reasons set forth below, we reverse.

I

The Newspaper Preservation Act of 1970, 15 U.S.C. §§ 1801-04 (1970), was a congressional reaction against a successful antitrust suit brought by the Department of Justice against a combination of Tucson newspapers in existence since 1940. See Citizen Publishing Co. v. United States, 394 U.S. 131, 89 S.Ct. 927, 22 L.Ed.2d 148 (1969). Bills were promptly introduced in both houses of the 90th Congress to protect the Tucson publications and twenty-one other then-existing joint newspaper operating agreements from antitrust prosecution and private liability. H.R. 19123 was referred to the House Antitrust Subcommittee, which held five days of hearings; the bill, however, was not reported out of committee. A similar Senate Bill, S. 1312, was favorably reported by the Senate Subcommittee on Antitrust and Monopoly after extensive hearings, but the Judiciary Committee did not have time to act on it before the end of that session.

At the beginning of the first session of the Ninety-first Congress, bills were again introduced in both the House and Senate to sanction the Tucson combination and to insulate other existing joint operating agreements from antitrust prosecution. Both S. 1520 and H.R. 279 contained the same provisions considered by prior congressional committees reviewing S. 1312 and H.R. 19123. Among other objectives, the proposed bills declared a public interest in preserving the publication of newspapers where economic distress has caused the creation of joint operating arrangements. The proposals also defined' a failing newspaper more broadly than had the Supreme Court in Citizen Publishing.1

Section 4 provided:

(a) It shall not be unlawful under any antitrust law for any person to propose, enter into, perform, enforce, renew, or amend any joint newspaper operating arrangement if, at the time at which such arrangement is or was first entered into, not more than one of the newspaper publications involved in the performance of such arrangement was a publication .other than a failing newspaper.

(b) Nothing contained in this Act shall be construed to exempt from any antitrust law any predatory pricing, any predatory practice, or any other conduct in the otherwise lawful operations of a joint newspaper operating arrangement which would be unlawful under any antitrust law if engaged in by a single entity. Except as provided in this Act, no joint newspaper operating arrangement or any party thereto shall be exempt from any antitrust law.

At the start of the Senate hearings on S. 1520, Senators Dirksen and Brooke proffered a number of amendments for consideration. Senator Dirksen’s amendment changed section 4 to include, inter alia, the language which eventually became the section at issue in this suit:

(b) It shall be unlawful for any person to propose, enter into, perform, or enforce a joint operating arrangement, not already in effect, except with the prior written consent of the Attorney General of the United States. Prior to granting such approval, the Attorney General shall determine that not more than one of the newspaper publications involved in the performance of such an arrangement was a publication other than a failing newspaper; Provided, however, that any publisher may, at any time, propose, enter into, perform, or enforce an agreement with any person if such agreement was not prohibited by law prior to the effective date of this Act.

Hearings on S. 1520 Before the Subcomm. on Antitrust and Monopoly of the Senate Judiciary Comm., 91st Cong., 1st Sess. 4 (1969) [“Senate Hearings”]. On January 30, 1970, the Senate passed S. 1520 including the Dirksen amendment, 116 Cong.Ree. 2018 (1970).

Subsequently, the House Judiciary Committee favorably reported H.R. 279, as amended. H.R.Rep. No. 91-1193, 91st Cong., 2d Sess. (1970). The reported bill contained substantially the language of the Dirksen amendment to section 4,² except that it omitted without comment the final proviso of section 4(b). H.R. 279, as amended, was accepted by the House in lieu of S. 1520, 116 Cong.Ree. 23180 (1970), and promptly adopted by the Senate without conference, id. at 24435.

More than one year after passage of the Act, the Department of Justice gave notice of a proposed rulemaking concerning the Act. 36 Fed.Reg. 20435 (1971). Along with definitions and procedures for filing both the terms of new arrangements and those of renewals or amendments to existing arrangements, the proposed rulemaking included a purpose section which specified in relevant part:

These regulations set forth the procedure by which application may be made to the Attorney General for his approval of joint newspaper operating arrangements entered into after July 24, 1970.

Id., § 48.1. A few weeks later, the Department of Justice gave notice of an addition to the proposed purpose section:

The Newspaper Preservation Act does not require that all joint newspaper operating arrangements obtain the prior written consent of the Attorney General. The Act and these regulations provide a method for newspapers to obtain the benefit of a limited exemption from the antitrust laws if they desire to do so. Joint newspaper operating arrangements that are put into effect without the prior written consent of the Attorney General remain fully subject to the antitrust laws.

Id. at 23630, § 48.1. The proposed regulation, including the addition, was promulgated as an interim regulation on January 2, 1974. 39 Fed.Reg. 7 (1974).

The Newspaper Guild filed suit shortly thereafter alleging that the regulation contravened section 4(b) of the Act. On motions for dismissal and summary judgment, the District Court declared the challenged regulation invalid and enjoined its implementation. Newspaper Guild v. Saxbe, 381 F.Supp. 48, 53 (D.D.C.1974).³ The Department of Justice appeals from that final order.

II

A rigidly literal reading of section 4(b) undeniably provides support for the District Court’s conclusion that “all joint newspaper operating arrangements not in effect on July 24, 1970, must obtain the Attorney General’s consent before they may be put into effect.” 381 F.Supp. at 53. But, as the Supreme Court has frequently remind-? ed us, “it [is] fundamental that a section of a statute should not be read in isolation from the context of the whole Act, and that in fulfilling our responsibility in interpreting legislation, ‘we must not be guided by a single sentence' or member of a sentence, but [should] look to the provisions of the whole law, and to its object and policy.’ ” Richards v. United States, 369 U.S. 1, 11, 82 S.Ct. 585, 592, 7 L.Ed.2d 492 (1962), quoting Mastro Plastics Corp. v. NLRB, 350 U.S. 270, 285, 76 S.Ct. 349, 100 L.Ed. 309 (1956) (footnotes omitted); see e. g., Harrison v. Northern Trust Co., 317 U.S. 476, 479, 63 S.Ct. 361, 87 L.Ed. 407 (1943). After reviewing the Act in that spirit, we cannot agree that the District Court’s interpretation of section 4(b) is compelled either by the language of the statute or its underlying legislative history.

It is appropriate to start with the views of Senator Dirksen, the sponsor of the amendment that eventually became section 4(b). He explained his proposed amendment as follows:

There has been some concern expressed regarding the possibility of new joint operating arrangements being established under the terms of S. 1520, as introduced. There are still some 36 or 37 cities where two or more papers are competing commercially as well as editorially. And, there has been a genuine fear expressed by suburban papers, newspaper unions, and some segments of the public and [sic] to the dangers inherent if some of these other papers were to improperly enter into joint operating arrangements — resulting in what might be a stronger competitive force, the loss of jobs, and, maybe, eventually a loss of independent viewpoints.

This is what I had in mind in proposing Section 4(b). Before any new joint operating arrangements could come into being, the papers involved would be required to come before the Attorney General for his approval. This is not really an unusual situation, since the Department of Justice now receives prior notice of many impending mergers by the parties, who themselves are seeking ‘release’ letters. I envision the procedures under section 4(b) to be akin to the ‘release’ letter technique now employed by the Department. Before authorizing such arrangements in the future, the Department could hear from other interested parties — competing papers, unions, etc.— as well as make its own investigation, in order to be certain that the new arrangement is essential and is justified.

Further, Section 4(b) will act as a brake upon other newspapers which might otherwise prematurely turn to joint operating arrangements, without testing other means of maintaining full commercial and editorial competition.

Senate Hearings at 9 (emphasis added). We think it plainly apparent from this statement that Senator Dirksen did not intend the result reached by the District Court, for declaring it unlawful to proceed without Justice Department consent does not resemble in the slightest the release letter technique employed by the Department of Justice.⁴

Even if Senator Dirksen’s purposes were not already visible, further enlightenment is to be obtained from a proviso which he originally proposed as part of section 4(b): “Provided, however, that any publisher may, at any time, propose, enter into, perform, or enforce an agreement with any person if such agreement was not prohibited by law prior to the effective date of this Act.” Senator Dirksen explained the thrust of that proviso: “The proviso at the end of' section 4(b) is just to make sure that we have not inadvertently made illegal, in fact or by implication, arrangements which are now lawful.” Senate Hearings at 9 (emphasis added).

Senator Dirksen’s position is directly contrary to the interpretation of the District Court, since under the latter’s view certain arrangements that were lawful under the antitrust laws would nevertheless violate section 4(b). For example, the Attorney General would be unable to “approve” a joint operating agreement between two healthy, non-competitive newspapers since he is required by statute to grant approval only if he finds that no more than one of the newspapers involved is “other than a failing newspaper.” 15 U.S.C. § 1803(b) (1970); see id. § 1802(5) (definition of failing newspaper). Consequently, under the District Court’s interpretation, it is unlawful to enter into an otherwise lawful arrangement simply because the Attorney General did not — and indeed could not— give prior written consent.

The history of the proviso itself sheds light on the purpose of section 4(b). The initial Senate version contained the proviso, which, as we noted above, was inserted to avoid making illegal what had been lawful prior to the Newspaper Preservation Act. The proviso was dropped when the House bill was reported by the Judiciary Committee, but there is no indication in the report as to why the proviso was deleted. See page-of 176 U.S.App.D.C., p. 756 of 539 F.2d supra. The Senate was urged by Senator Hruska, the floor manager of the bill, to adopt the House version rather than go to conference, and he specifically noted that the House “modified the two amendments somewhat and effected other amendments which did not go the substance of 'the bill.” 116 Cong.Ree. 24434 (1970) (emphasis added). Based on that evidence alone, the failure to enact the proviso provides some support, however slight, for the position that section 4(b) was not intended to make illegal what had been lawful prior to the Act.

The dissent nevertheless concludes that “deletion of the status quo proviso points more reasonably to a broad requirement of prior approval for all future arrangements.” Dissent at-of 176 U.S.App. D.C., at 765 of 539 F.2d. Judge Tamm reaches that conclusion based on a review of the floor discussion in the Senate concerning the House amendments, noting that both proponents and opponents of the bill recognized that the House version granted a more limited exemption than had the Senate bill. We agree that the floor discussion of the House amendments suggests the Senate’s awareness that the House version “tighten[ed] the standards” with respect to whether a newspaper was “failing” and therefore eligible for the antitrust exemption. But there is nothing that indicates that the Senate thought that the House amendments made illegal what had been lawful under the Senate version. Surely if the Senate concluded that the amended House version accomplished such a major change, the issue would have been discussed directly rather than couched in terms of “tightening” the standards for availability of the exemption.

The various committee reports point in the same direction as did Senator Dirksen. We think it worth setting out in full the House Report’s “analysis” of section 4(b):

Section 4(b) applies to joint newspaper operating arrangements that come into being after enactment of the bill. Such joint newspaper operating arrangements, to have the benefit of an exemption from the antitrust laws, must have the prior written consent of the Attorney General of the United States. Prior to granting the approval, the Attorney General is required to determine that not more than one of the newspaper publications involved was a publication other than a “failing newspaper” as defined in the Act. The Attorney General also is required to find that approval of the arrangement would effectuate the policy and purposes of the Act. Section 4(b) contemplates that the Attorney General will promulgate such regulations as are appropriate for the discharge of these responsibilities.

H.R.Rep. No. 91-1193, 91st Cong., 2d Sess. 11 (1970), U.S.Code Cong. & Admin.News 1970, pp. 3547, 3555 (emphasis added). We can give the House Report only one interpretation, namely, to have the benefit of an antitrust exemption, prior written consent is required; but simply to put a joint operating arrangement into effect, consent is not required, though absent approval the arrangement remains fully subject to the antitrust laws.

There is language in the Senate Report which supports the interpretation of the District Court, but when read in the context of the entire Senate Report that interpretation appears strained. In discussing the purposes of the legislation the Senate Report indicates that the bill was intended “to grant limited antitrust exemptions to past agreements . . . and to make this method of insuring newspaper stability available to newspapers in danger of financial collapse after passage of the bill.” S.Rep. No. 91-535, 91st Cong., 1st Sess. 2 (1969) (emphasis added). Surely it is somewhat odd to claim that Congress has made an exemption “available” by declaring it unlawful to proceed without the “exemption.” The Senate Report, like the House Report, nowhere mentions the imposition of a new standard of substantive liability.

With respect to the floor debates, we need only reemphasize the point made above with respect to the committee reports and Senator Dirksen’s statements. There are statements to the effect that new agreements must come before the Attorney General for approval. But such statements are consistent with the Government’s interpretation of section 4(b); indeed, legislators would not normally be expected constantly to reiterate the magic words “in order to obtain an antitrust exemption” while discussing a bill directed to that very purpose. We have been unable to locate statements indicating that it is unlawful to proceed without the Attorney General’s written consent. To the contrary, the Government’s brief collects numerous citations to the floor debates indicating that the purpose of the bill was well understood — the availability of an antitrust exemption in appropriate circumstances upon voluntary application therefor.

Other factors suggest that the District Court’s interpretation does not reflect the intent of Congress. For one thing, Congress provided neither civil nor criminal penalties to enforce the new substantive standard it purports to find in the statute. The dissent argues that this “does not rebut the clear directive that newspapers must obtain written consent before implementing a joint operating arrangement,” Dissent at 10; if, as we think, that “directive” is far from “clear,” the absence of an enforcement scheme cuts the other way.

Furthermore, as we noted earlier, many arrangements without anticompetitive impact do not qualify for Attorney General approval given the statutory standard, and that as a result the District Court’s interpretation makes unlawful certain joint operating agreements that prior to the Newspaper Preservation Act were lawful within the meaning of the antitrust laws. See page-of 176 U.S.App.D.C., p. 759 of 539 F.2d supra. We find such a result anomalous in an Act clearly designed to create an exemption to the antitrust- laws.

This brings us to the core of our disagreement with the District Court’s interpretation. That interpretation necessarily implies that Congress sought to limit joint arrangements in the newspaper industry by adding the obstacle of prior approval to those that would otherwise not be prohibited by the antitrust laws. Such a view suggests that Congress perceived a special reason to fear combinations in, or a special difficulty in applying antitrust laws to, the newspaper industry. But we have found no evidence in the record — or, for that matter, in any public debate — indicating that such concerns existed. Rather, the record reveals that the purpose of the Act was just the opposite — to permit combinations in the newspaper industry that would otherwise be prohibited by the antitrust laws. H.R. Rep. No. 91-1193, 91st Cong., 2d Sess. 3 (1970), U.S..Code Cong. & Admin.News 1970, p. 3547 (purpose of the Act is “[t]o provide a limited exemption from the antitrust laws for joint newspaper operating arrangements entered into in the future with the prior written consent of the Attorney General . .

This statute is, in Congress’s own terms, “An Act to exempt from the antitrust laws certain combinations and arrangements necessary for the survival of failing newspapers,” 84 Stat. 466; indeed, the very section of the Act at issue here is captioned “Antitrust exemption.” See, e. g., Lan Jen Chu v. Commissioner, 486 F.2d 696, 700 (1st Cir. 1973) (language used in caption of statute provides at least some evidence of intended congressional scheme); White v. Chicago, Burlington & Quincy R. R., 417 F.2d 941, 948 (8th Cir. 1969) (title of act can be considered in construing act). The Act was a speedy and self-proclaimed response to Citizen Publishing Co., supra, and, as such, was designed to help failing newspapers, not to place additional burdens on healthy ones.

Careful draftsmanship would have undoubtedly produced a provision whose language less ambiguously indicates the intended result. But the fact that Congress acted swiftly and with less than the desired degree of precision does not argue for rigid reliance upon the literal text of the statute. It rather alerts the court to the need for delving more deeply into the congressional purpose. Legislative history is a contextual rather than a purely textual tool of construction. We conclude that the interpretation of the District Court is at odds with the “object and policy” of the Congress. See Richards v. United States, supra, 369 U.S. at 11, 82 S.Ct. 585. The decision of the District Court is therefore reversed.

It is so ordered.

1 . The Supreme Court applied a failing company test which required that no other possible buyer existed for the failing company except the one with which the arrangement was completed, and that prospects of reorganization under the Bankruptcy Act were dim or nonexistent. 394 U.S. at 138, 89 S.Ct. 927. In contrast the Act provides:

The term “failing newspaper” means a newspaper publication which, regardless of its ownership or affiliations, is in probable danger of financial failure.

15 U.S.C. § 1802(5) (1970).

2 . The House Committee bill also limited the section 4(a) exemption for existing joint operating arrangements by requiring terms of a renewal or amendment to be filed with the Department of Justice. This language, along with an additional floor amendment clarifying that arrangement amendments may not add additional newspapers to the joint operation, appears in the Act as adopted.

3 . The Government asked the District Court to reconsider its decision and pointed out that, contrary to language in the trial court opinion, all operating arrangements were not entered into by competing newspapers. See page-of 176 U.S.App.D.C., page 759 of 539 F.2d infra. The court denied this motion and reaffirmed its reliance on the plain language and legislative history of section 4(b). 381 F.Supp. at 53-54.

4 . Under that release procedure, codified at 28 C.F.R. § 50.6 (1975), the Department of Justice, at the request of the parties, can state its present enforcement intention with respect to a proposed merger or acquisition. The resulting business review letter “states only the enforcement intention of the Division as of the date of the letter, and the Division remains completely free to bring whatever action or proceeding it subsequently comes to believe is required by the public interest. As to a stated present intention not to bring an enforcement action, however, the Division has never exercised its right to bring a criminal action where there has been full and true disclosure at the time of the request.”