FCC, NAB Appeal 3rd Circuit Media Ownership Decision
The FCC and NAB petitioned Thursday for a full panel of the 3rd U.S. Circuit Court of Appeals to overturn a three-judge panel’s 2-1 decision against the FCC in the Prometheus IV ownership case, as expected (see 1910250006). For 15 years, “the same divided panel of this Court has frustrated the Commission’s repeated attempts to modernize its media ownership rules,” the FCC said. Prometheus is “irreconcilable” with “the proper role of courts in reviewing agency action,” NAB wrote.
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Numerous broadcast lawyers believe that with a now-majority Republican 3rd Circuit, the appeals have a chance. They noted that en banc appeal is always a long shot. “The appointment of new judges doesn’t change the general disinclination of courts to rehear cases that have already been completed,” said United Church of Christ lawyer Cheryl Leanza, who represents Prometheus.
It will take several steps before it becomes clear if the court will rehear the case, attorneys said. The full court could reject rehearing out of hand or decide to solicit opposing views within a few weeks, they said. The court could seek opposition filings, but that’s not a guarantee it will rehear the case, said Andrew Schwartzman, senior counselor at the Benton Institute for Broadband and Society, who represented public interest groups in the case. The decision to rehear the case would be made by the full panel of judges, as would the final ruling.
“I’d give it about a 25 percent chance” of getting reheard, said TechFreedom General Counsel James Dunstan. Tech Freedom supports the FCC’s appeal and could file if allowed, Dunstan said. Several broadcast attorneys believe the 3rd Circuit panel’s retention of the case over four iterations and a decade and a half is unusual, and could improve the en banc appeal’s chances. It's "time for another set of grown-ups to review this decades-old fight,” said Dunstan in a news release.
Courts are unlikely to reverse themselves unless there’s a “clear error in reasoning” behind a decision, said Christopher Terry, assistant professor at the University of Minnesota School of Journalism and Mass Communication. That's unlikely here, he said. The full panel might not find in the FCC’s favor but might provide clearer instructions on how the agency could fulfill its requirements, said Garvey Schubert broadcast lawyer Erwin Krasnow.
By repeatedly remanding the FCC’s quadrennial review orders, the 3rd Circuit has “effectively replaced” the FCC’s broader public interest analysis with “a narrow inquiry into the effect of the FCC’s rules on female and minority ownership,” the agency said. By rejecting the basis the agency provided for its ownership rule changes, the court “superimposed” a data requirement that isn’t backed up in the Administrative Procedure Act and conflicts with precedent, the regulator said. That decision “would work a sea change in administrative law” if allowed to stand, the FCC said: The precedent would have the effect of “hamstringing agencies in the innumerable cases where there are arguable gaps or shortcomings in a rulemaking record.” The court failed to provide a rationale for knocking down the agency’s eligible entity definition, the FCC said. “The majority’s failure to even address the agency’s arguments provides a further reason to review its decision.”
NAB attacks vacating of the definition of an eligible entity, and argues the court misinterpreted the Communications Act by requiring the agency consider ownership diversity instead of competition. The panel vacated the FCC’s broadcast reconsideration order “based solely on the majority’s narrow concerns about ownership diversity, not the rules’ merits,” NAB said. The court reinstated “all the prior rules, including several that no one contends are still necessary in the public interest,” the group said.
The FCC could meet the court’s demands if it wanted to, Terry said. He tweeted that he could gather the necessary information for $250,000. “It’s disappointing that the FCC is choosing to use its resources in this way rather than doing relatively simple work, the results of which would materially benefit everyone in the country,” Schwartzman said. The pending 2018 quadrennial review would also provide a venue for the FCC to address the court’s concerns, Terry said.
“The full Third Circuit will clearly see that the FCC’s 2017 order was well-reasoned, thoroughly explained and supported by the great weight of the evidence,” said former Commissioner Robert McDowell, now with Cooley. “Hundreds of local newspapers have disappeared since 1990 and the rest have lost reporters and millions of subscribers,” tweeted Brent Skorup, George Mason University Mercatus Center senior research fellow. “Updates to the FCC's decades-old local media and newspaper laws are long overdue.”
If the regulator isn’t granted en banc appeal or doesn’t triumph before the full panel, broadcast attorneys said it’s likely the agency would seek to appeal to the Supreme Court. Such an appeal is also considered a long shot. Dunstan said the case involves questions that could interest the justices, such as the concept of Chevron deference. If the case did become an avenue for SCOTUS to knock down Chevron deference, it would likely involve an FCC loss, Dunstan said.
The panel has retained the case and repeatedly rejected the FCC because the agency has yet to follow the court’s instructions, Terry said. “It’s not four cases; it’s one case four times.” The FCC is “really complaining about decisions the court made in 2004,” said Schwartzman. “It’s 15 years too late.”