Judges Skeptical Toward FCC in Foreign Sponsored Content Argument

Judge Raymond Randolph appeared to agree with broadcasters that the rules run against language in the Communications Act that limits due diligence requirements on broadcasters to only needing to gather information from the companies seeking to buy airtime. “To get it from the database at the Department of Justice ... that’s getting it from the government,” said Randolph. Judge Justin Walker repeatedly questioned the bounds of the agency’s dependence on a broad provision saying the agency “shall prescribe appropriate rules” to require sponsorship identification. “What is the limiting principle?” asked Walker.

Judge Cornelia Pillard appeared more sympathetic to the FCC’s position and pushed back on Paul Hastings attorney Stephen Kinnaird -- counsel for NAB, the National Association of Black Owned Broadcasters and the Multicultural Media Telecom and Internet Council -- when he said the FCC’s rules would catch only foreign agents who lied to broadcasters about their registration as foreign agents. “Or people who have obtained information from someone they didn’t realize was a [Foreign Agents Registration Act] registrant,” said Pillard. “That seems like the more likely scenario.” The FCC and NAB declined comment.

The panel appeared to question both sides roughly equally. Attorneys told us it's difficult to predict a winner from how judges act during oral argument. The FCC is considered to have an advantage in defending its rules because of judicial deference to expert agencies, said Davis Wright’s David Gossett, a former FCC deputy general counsel: “Generally, the agency gets a lot of discretion in choosing among reasonable options.”

Kinnaird argued that requiring broadcasters to check the FARA and FCC databases was outside the reasonable diligence required by the law and that the order's language required broadcasters to conduct burdensome, in-depth investigations of filings if they found a would-be lessee's name in the database. FCC Attorney-Adviser William Scher, arguing for the agency, said the new requirement stopped at “a simple name check.” By requiring checking with outside authorities, the agency crossed a “bright line,” said Kinnaird. Walker questioned broadcaster arguments that the disclosure rules are compelling speech from broadcasters and on whether they opposed disclosures or only the database checks.

Asked by Walker what stations are to do if they find an entity on the database, Scher said existing law requiring broadcasters to accurately disclose sponsors has been in place for decades. Language in the statute limiting broadcaster diligence to the entities leasing time from them isn’t a restriction on imposing a stiffer requirement, Scher said. The diligence requirement “means ordinary prudence,” said Scher, calling the database check “readily available evidence” that it's reasonable for the FCC to require broadcasters to check.

If the court does find it's outside the bounds of diligence to require broadcasters to check the databases, it should still say the agency has the authority to impose the rules under language in the statute requiring the FCC to create appropriate rules to require sponsorship identification. In response to Walker’s questions about the limit of that authority, Scher said if the FCC interpreted it too broadly the agency would face constitutional questions, an answer Walker received with apparent skepticism. “That’s the only limit. The statute is limitless until it hits the constitutional limit,” Walker said. Randolph referred to the language cited by the FCC as “boilerplate” commonly included in many laws.

Both Pillard and Randolph seemed to propose alternative versions of the foreign sponsorship disclosure. Pillard asked both sides whether a rule requiring entities to submit screenshots documenting their absence on the FARA database would be meaningfully different from the FCC proposal. Kinnaird cited the idea as evidence the agency hadn’t considered less restrictive options, while Scher said it wasn’t meaningfully different from the FCC plan. Randolph asked whether the agency had required disclosures ahead of the content airing, and whether broadcasters had ever voluntarily investigated whether lessees were foreign agents. “It strikes me that it would be prudent whether required or not,” Randolph said. "When a program airs, if it later turns out its Russian propaganda, that’s not really in the interests of the station,” he said.