QUALCOMM Inc. v. Federal Communications Commission

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 22, 1999 Decided July 23, 1999

No. 98-1246

QUALCOMM Incorporated,

Petitioner

v.

Federal Communications Commission and

United States of America,

Respondents

PrimeCo Personal Communications, L.P., and

Sprint Spectrum L.P.,

Intervenors

On Petition for Review of Orders of the

Federal Communications Commission

Veronica M. Ahern argued the cause and filed the briefs

for petitioner.

James M. Carr, Counsel, Federal Communications Com-

mission, argued the cause for respondents. With him on the

brief were Joel I. Klein, Assistant Attorney General, U.S.

Department of Justice, Robert B. Nicholson and Robert J.

Wiggers, Attorneys, Christopher J. Wright, General Counsel,

Federal Communications Commission, Daniel M. Armstrong,

Associate General Counsel, and John E. Ingle, Deputy Asso-

ciate General Counsel.

Robert A. Long, Jr. argued the cause for intervenors. On

the brief was Luisa L. Lancetti. Andrew J. Heimert entered

an appearance.

Before: Edwards, Chief Judge, Wald and Rogers, Circuit

Judges.

Opinion for the Court filed by Circuit Judge Rogers.

Rogers, Circuit Judge: In Freeman Engineering Associ-

ates v. FCC, 103 F.3d 169 (D.C. Cir. 1997), the court held that

although the Federal Communications Commission ("FCC")

could reasonably interpret its rules for awarding pioneer's

preferences to mean that adaptations of technology are not

innovative, it had not applied the interpretation equally

among all preference applicants to QUALCOMM's detriment.

See id. at 180. The court granted QUALCOMM's petition for

review, vacated that part of the FCC's decision denying

QUALCOMM's preference request, and remanded "for fur-

ther proceedings to remedy this inconsistency." Id. Before

the FCC granted such a remedy, but after the court's man-

date issued in Freeman Engineering, Congress advanced the

sunset date for the FCC's authority to award pioneer's pref-

erences and the FCC dismissed all pending preference appli-

cations, including QUALCOMM's. We grant QUALCOMM's

petition for review of this dismissal because the FCC misin-

terpreted Freeman Engineering as ordering no more than a

general remand for further proceedings, and thereby misap-

plied the sunset provision withdrawing its authority to award

new pioneer's preferences to a final judgment that entitled

QUALCOMM to a pioneer's preference under the rules then

in effect.

I.

The background for this appeal is set forth in Freeman

Engineering, and therefore we summarize only four relevant

areas. First, the FCC promulgated the pioneer's preference

rules in 1991 in an effort "to reduce the risk and uncertainty

innovating parties face in our existing rulemaking and licens-

ing procedures, and therefore to encourage the development

of new services and new technologies." Establishment of

Procedures to Provide a Preference to Applicants Proposing

an Allocation for New Services, 6 F.C.C.R. 3488, 3492 (1991)

("Pioneer's Preference Order"). Thus, an applicant demon-

strating "that it (or its predecessor-in-interest) has developed

an innovative proposal that leads to the establishment of a

service not currently provided or a substantial enhancement

of an existing service," id. at 3494, would "effectively ... [be]

guarantee[d] ... a license in the new service (assuming it is

otherwise qualified) by permitting the recipient of a pioneer's

preference to file a license application without being subject

to competing applications." Id. at 3492; see also 47 C.F.R.

s 1.402(a) (1995); Adams Telcom, Inc. v. FCC, 38 F.3d 576,

578 (D.C. Cir. 1994).

Second, QUALCOMM applied for a pioneer's preference,

the FCC denied it, and on appeal QUALCOMM prevailed.

QUALCOMM requested a pioneer's preference for a license

in the Southern Florida Major Trading Area ("MTA") based

on technology developed for use in broadband (2 GHz) per-

sonal communications services ("PCS"). See Request for a

Pioneer's Preference for a Personal Communications Ser-

vices System, Gen. Docket 90-314 (May 4, 1992). In 1992,

the FCC tentatively granted three pioneer's preferences--to

American Personal Communications ("APC"), Cox Enterpris-

es, Inc. ("Cox"), and Omnipoint Communications, Inc. ("Omni-

point")--and dismissed the remaining applications. See

Amendment of the Commission's Rules to Establish New

Personal Communications Services: Tentative Decision and

Memorandum Opinion and Order, 7 F.C.C.R. 7794, 7797-

7809 (1992) ("Tentative Decision"). The FCC explained in

rejecting QUALCOMM's application that its proposed tech-

nology was "essentially ... identical to that which it already

... developed for use in the 800 MHz cellular bands." Id. at

7807. In 1994, the FCC affirmed its decision granting prefer-

ences to APC, Cox, and Omnipoint, and denying

QUALCOMM a preference because its work was merely an

adaptation of previously developed technology. See Amend-

ment of the Commission's Rules to Establish New Personal

Communications Services: Third Report and Order, 9

F.C.C.R. 1337, 1339-48, 1368-70 (1994) ("Third Report and

Order"). After the FCC denied its petition for reconsidera-

tion, see Amendment of the Commission's Rules to Establish

New Personal Communications Services: Memorandum

Opinion and Order, 9 F.C.C.R. 7805, 7810-11 (1994) ("Recon-

sideration Order"), QUALCOMM petitioned for review by

this court.

On appeal, the court vacated that part of the FCC's deci-

sion denying QUALCOMM's preference application, conclud-

ing that although the FCC could reasonably interpret its

pioneer's preference rules to mean that adaptation of technol-

ogy was not innovative, it could not discriminate among

preference applicants in applying its rules. See Freeman

Eng'g, 103 F.3d at 178-80. Because Omnipoint had also

based its 2 GHz application on technology adapted from work

it had done on 900 MHz cellular bands tested at 900 MHz, in

part prior to the promulgation of the pioneer's preference

rules, the court concluded that the FCC had acted arbitrarily

and capriciously in denying QUALCOMM's application on the

ground that its "proposed technology was a non-innovative

adaptation" because it " 'ha[d] been developing its ... tech-

nology since 1985' and had 'validated [it] for 800 MHz.' " Id.

at 180 (quoting Reconsideration Order, 9 F.C.C.R. at 7811).

The court noted that although "[n]umerous parties to the

FCC proceedings pointed out this disparate treatment to the

Commission," the FCC had responded not by applying the

"developed specifically for a particular service" test applied to

QUALCOMM, but by reverting to the "associated with" test,

noting that " 'Omnipoint has demonstrated that it performed

significant new work related to 2 GHz PCS after adoption of

the pioneer's preference rules.' " Id. (quoting Third Report

and Order, 9 F.C.C.R. at 1346). Yet, the court noted, the

same could be said of QUALCOMM: its "adaptation was also

'significant new work related to 2 GHz PCS.' " Id. Conclud-

ing that the FCC "applied a newly developed (and questiona-

ble) interpretation of its pioneer's preference rules" only to

QUALCOMM, the court observed that "[w]ere this case

remanded, it is not at all clear whether the Commission would

continue to adhere to this interpretation of the pioneer's

preference rules." Id. The court's disposition in granting

QUALCOMM's petition read:

[W]e find reasonable the Commission's interpretation of

the pioneer's preference rules such that adaptations of

technology are not innovative and thus not deserving of a

preference. However, we conclude that the Commission

failed to apply this interpretation consistently to the

detriment of QUALCOMM's application for a preference.

We therefore vacate that portion of the Commission's

decision denying QUALCOMM's preference request.

We remand for further proceedings to remedy this incon-

sistency.

Id. The court's mandate issued April 18, 1997.

Third, Congress changed the landscape of the pioneer's

preference program in two ways relevant here, the first

occurring before the court issued its mandate, and the second

occurring after. As to auctions, before the court's mandate,

Congress authorized the FCC in 1993 to auction licenses for

radio spectrum. See Omnibus Budget Reconciliation Act of

1993, Pub. L. No. 103-66, s 6002, 107 Stat. 312, 387-392

(codified at 47 U.S.C. s 309(j)(1)-(12) (1994)); see also

Amendment of the Commission's Rules to Establish New

Personal Communications Services: Second Report & Order,

8 F.C.C.R. 7700, 7707-09 (1993). One of the auctions resulted

in the issuance of a license for the area sought by

QUALCOMM, the Miami-Fort Lauderdale MTA, to PrimeCo

Personal Communications and Sprint Spectrum, intervenors

in this appeal.

In addition, Congress precluded review of granted prefer-

ences and established a sunset date for the FCC's authority

to grant preferences. After the first auction for narrowband

PCS generated over $650 million,1 see FCC Report to Con-

gress on Spectrum Auctions, FCC 97-353 at 10 (Sept. 30,

1997), and in view of the fact that "pioneers" received the

license of their choice without payment, Congress amended

the Communications Act in 1994 to require the FCC to

"recover for the public a portion of the value of the public

spectrum resource" from pioneers, with provisions for install-

ment payments over a five year period. Uruguay Round

Agreements Act, Pub. L. No. 103-465, s 801, 108 Stat. 4809,

5050-51 ("GATT") (codified at 47 U.S.C. s 309(j)(13) (B) &

(C) (1994)); see also H.R. Rep. No. 103-826, pt. 2, at 26

(1994). Congress also directed the FCC to award licenses

within fifteen days to those granted preferences in the Third

Report and Order (namely, APC, Cox, and Omnipoint) and

prohibited further agency or judicial review of those prefer-

ences and licenses. See GATT, 108 Stat. at 5051 (codified at

47 U.S.C. s 309(j)(13)(E)(i)). Further, Congress added a

sunset provision, terminating the FCC's authority to grant

pioneer's preferences after September 30, 1998. See id. at

5052 (codified at 47 U.S.C. s 309(j)(13)(F)). After the court

issued its mandate, Congress advanced the sunset date from

September 1998 to August 5, 1997. See Balanced Budget Act

of 1997, Pub. L. No. 105-33, s 3002(a)(1)(F), 111 Stat. 251,

259 (1997) (amending 47 U.S.C. s 309(j)(13)(F)).

Fourth, on remand, despite QUALCOMM's urging of the

FCC to comply with 47 U.S.C. s 402(h),2 by "forthwith"

__________

1 As of September 30, 1997, winning net bids in FCC spectrum

auctions totaled almost $23 billion. See FCC Report to Congress on

Spectrum Auctions, FCC 97-353 at 10-11 (Sept. 30, 1997).

2 Section 402(h) provides:

In the event that the court shall render a decision and enter an

order reversing the order of the Commission, it shall remand

the case to the Commission to carry out the judgment of the

court and it shall be the duty of the Commission, in the absence

of the proceedings to review such judgment, to forthwith give

effect thereto, and unless otherwise ordered by the court, to do

so upon the basis of the proceedings already had and the

record upon which said appeal was heard and determined.

granting it a pioneer's preference, the FCC reopened the

proceedings for comment on QUALCOMM's application and

ultimately dismissed QUALCOMM's application for lack of

power to act. From the start of the remand proceedings,

QUALCOMM sought prompt agency action to implement

Freeman Engineering. In responding to a February 25,

1997, request of the General Counsel and the Office of

Engineering and Technology ("OET"), QUALCOMM summa-

rized their meeting on January 31, 1997, (24 days after the

court issued its decision in Freeman Engineering and almost

three months before the mandate issued on April 18, 1997),

when QUALCOMM advised that it sought a preference for its

pioneering work and emphasized the need for a quick award

to minimize prejudice to QUALCOMM in the marketplace.

At that meeting QUALCOMM also advised that it was willing

to work with the FCC on alternative remedies that did not

require rescission of Sprint's Miami license, referring specifi-

cally to available C Block Basic Trading Area ("BTA") licens-

es and the Phoenix BTA. In response to OET's February 18,

1997, notice announcing a filing period for comments on

QUALCOMM's preference application, see Public Notice DA

97-351, 12 F.C.C.R. 2364 (1997), PrimeCo and Sprint submit-

ted comments on March 20, 1997, recommending that, assum-

ing the FCC found that QUALCOMM was entitled to a

preference, it award QUALCOMM a license for alternative

spectrum.3 QUALCOMM in its comments stated that under

Freeman Engineering, it was entitled to be treated in the

same manner as Omnipoint and, thus, to have its preference

granted.

__________

47 U.S.C. s 402(h).

3 QUALCOMM objected to reopening the proceeding on the

grounds that (1) three years had passed since the FCC denied

QUALCOMM's preference, (2) the court's vacation and remand

were narrow, requiring no further factual development, and (3) the

FCC's obligation under s 402(h) did not contemplate reopening the

proceeding. The FCC nonetheless reopened the proceeding and

made Sprint and PrimeCo parties. See QUALCOMM Inc., Request

for Pioneer's Preference, Public Notice DA 97-423, 12 F.C.C.R.

2417 (1997).

On April 15, 1997, OET advised QUALCOMM that it was

"actively working" on the remand and that FCC "action

c[ould] be anticipated 'by summer.' "4 On May 27, 1998,

QUALCOMM wrote directly to the Chairman of the FCC

that it "should grant QUALCOMM's preference application

promptly, with the understanding that" while "the substantive

decision is foreordained by the record, ... we recognize that

implementation of the decision has certain practical ramifica-

tions," and that "QUALCOMM is willing to discuss substitu-

tion of presently unlicenced service areas of comparable

significance [to the MTA in South Florida]."

On September 11, 1997, the FCC dismissed all pending

pioneer's preference applications, including QUALCOMM's,

on the ground that the Balanced Budget Act of 1997 with-

drew the FCC's authority to grant any preferences. See

Dismissal of All Pending Pioneer's Preference Requests, 12

F.C.C.R. 14006, 14007 (1997) ("Dismissal Order"). As to

QUALCOMM, the FCC noted that although the court had

vacated the denial of QUALCOMM's preference request and

"remanded to the Commission for further consideration ...

[it] no longer ha[d] authority to act on it." Id. at 14008 n.10.

The court denied QUALCOMM's motion to enforce the

mandate in Freeman Engineering for lack of exhaustion

because its petition for reconsideration was pending before

the FCC. See Freeman Eng'g Assocs. v. FCC, No. 94-1779

(D.C. Cir. Nov. 5, 1997). Having been denied reconsidera-

tion, see Dismissal of All Pending Pioneer's Preference Re-

quests, 13 F.C.C.R. 11485 (1998) ("Reconsideration Order"),

QUALCOMM now appeals the FCC's Dismissal and Recon-

sideration Orders of September 11, 1997, and April 23, 1998,

respectively.

__________

4 QUALCOMM had requested a meeting with OET after read-

ing a quote in the April 7 issue of Wireless World from an FCC

staff member that resolution of the matter could take "a year or

two." See Letter from Richard M. Smith, Chief of OET, to

Veronica M. Ahern, Counsel for QUALCOMM (Apr. 15, 1997).

II.

Under Chevron, the court must first determine "whether

Congress has directly spoken to the precise question at

issue." Chevron, U.S.A., Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837, 842 (1984). "If the intent of

Congress is clear, that is the end of the matter; for the court,

as well as the agency, must give effect to the unambiguously

expressed intent of Congress." Id. at 842-43. There is no

dispute here that the Budget Act of 1997 terminated the

FCC's authority, effective August 5, 1997, to grant pioneer's

preferences. Because the statute is silent, however, with

respect to QUALCOMM's situation, the question is whether

the FCC properly interpreted the sunset provision to apply to

QUALCOMM's application; in other words, the question is

whether Congress intended its withdrawal of the FCC's

authority to grant pioneer's preferences to foreclose the FCC

from carrying out the mandate of a final judicial decision.

See id. at 843.

Rejecting QUALCOMM's contentions of entitlement aris-

ing from the court's mandate, the FCC maintains that its

interpretation of the sunset provision is entitled to deference

under Chevron, id. at 842-45 (1984), because Congress unam-

biguously intended to extinguish the FCC's authority to grant

pioneer's preferences after August 5, 1997. In the FCC's

view, QUALCOMM's application was no different from the

other pending applications inasmuch as the court in Freeman

Engineering had "simply directed the FCC to reconsider

whether QUALCOMM was entitled to the same sort of

pioneer's preference that Omnipoint received--an opportunity

to obtain a broadband PCS license without having to face

competing applications" and it was "required ... only to

consider whether QUALCOMM was entitled to the pioneer's

preference for which it applied." Respondents' Brief at 24,

26.

Although a court will generally defer to an agency's reason-

able interpretation of a statute, the effect of such deference

here would be to make retroactive a statute that does not

expressly call for it, see Landgraf v. USI Film Prod., Inc.,

511 U.S. 244 (1994), and to pose a constitutional question of

whether Congress could change the result of a final judicial

decision, see Plaut v. Spendthrift Farm, Inc., 514 U.S. 211,

240 (1995). While we agree with the FCC that the sunset

provision extinguished its authority to grant preferences, we

disagree that it applied to QUALCOMM's application. The

mandate in Freeman Engineering provided the FCC with the

authority it required to carry out the court's instruction to

"remedy this inconsistency" by granting QUALCOMM a

pioneer's preference and awarding a license for a suitable

spectrum. The court had subject matter jurisdiction and

ordered a remedy that was within its discretion. We hold,

therefore, that the sunset provision did not extinguish

QUALCOMM's entitlement to a preference, much less the

FCC's authority and duty to provide a remedy for

QUALCOMM under the mandate in Freeman Engineering.

Accordingly, we grant QUALCOMM's petition and remand

for the FCC "forthwith" to grant QUALCOMM a pioneer's

preference and to identify and award an appropriate license

to it, commensurate with the spectrum it had requested in its

application.

A.

The only plausible reading of Freeman Engineering re-

quired the FCC to grant QUALCOMM a pioneer's preference

under either of two theories. First, the FCC could abandon

the "newly developed" and "questionable" interpretation of its

pioneer's preference rules that it had applied to

QUALCOMM and award QUALCOMM a preference under

the same interpretation of the rules that permitted the award

of a preference to Omnipoint. Freeman Eng'g, 103 F.3d at

180. Second, the FCC could adhere to its newly developed

interpretation, but it still had to award QUALCOMM a

preference "to remedy th[e] inconsistency" in its treatment of

two similarly situated applicants, QUALCOMM and Omni-

point. Id. As the FCC made clear in its brief in Freeman

Engineering, Congress had precluded reconsideration of the

awards to the three original preference recipients, including

Omnipoint. See 47 U.S.C. s 309(j)(13)(E)(i); Respondents'

Brief in Freeman Engineering at 18, 54 n.59.

Contrary to its apparent assumption, the FCC had no

discretion on remand to reevaluate QUALCOMM's applica-

tion; it had previously ruled, explaining its reasons for deny-

ing QUALCOMM a pioneer's preference, and it had reaffirm-

ed its ruling and reasoning on reconsideration. The court

nonetheless agreed with QUALCOMM's claim of discrimina-

tory treatment and on remand did not accord to the FCC

another bite at the explanation apple. In Freeman Engineer-

ing, the FCC did not raise the possibility of further evalua-

tion on remand in its brief on appeal. Nor did the FCC have

discretion on remand to show that there was no inconsistency

because Omnipoint satisfied the pioneer's preference rules as

newly interpreted and applied to QUALCOMM; this argu-

ment was raised and rejected in Freeman Engineering, 103

F.3d at 180. Although the FCC did maintain that if

QUALCOMM and Omnipoint were similarly situated, then

the FCC would have been required to deny both applications,

see Respondents' Brief in Freeman Engineering at 54, nei-

ther the FCC nor QUALCOMM claimed that Omnipoint was

not entitled to a pioneer's preference under the FCC's rules.

See id.; Petitioners' Reply Brief at 23.

The FCC's sole discretion on remand, therefore, was to

fashion an appropriate remedy for QUALCOMM in view of

the fact that the Miami-Fort Lauderdale MTA sought by

QUALCOMM had been awarded as a result of an auction to

Sprint. QUALCOMM and the intervenors argued on re-

mand, and the FCC did not claim to the contrary, that the

FCC had authority to grant QUALCOMM alternative relief.

QUALCOMM repeatedly indicated its willingness to accept

relief comparable to the original license sought in its prefer-

ence application, suggesting several specific alternatives. Ac-

cording to the FCC at oral argument, this could have been

technically achieved by allowing QUALCOMM to amend its

application, and at that point, the FCC could have awarded

the pioneer's preference. Even if the identification of an

appropriate alternative spectrum could not be accomplished

"forthwith"--a claim the FCC does not make--

QUALCOMM's May 1997 letter to the FCC chairman made

clear that the grant of a pioneer's preference and the grant of

a license were not inseparable: the FCC could formally grant

QUALCOMM a pioneer's preference based on the work

identified in its preference application and award a license for

a specific spectrum at a later time. Indeed, to the extent that

the FCC did not dispute QUALCOMM's recitation of its

January 31, 1997 meeting, the FCC initially appeared to be

proceeding on remand to craft a remedy, but somehow be-

came diverted when, contrary to s 402(h), it reopened the

proceedings, over QUALCOMM's objection, issuing a public

notice for comment and joining the intervenors as parties.

The FCC's contention that the mandate in Freeman Engi-

neering was not to grant QUALCOMM a pioneer's prefer-

ence per se because the language of the court's opinion was

rather vague, remanding for "further proceedings," which the

FCC has now interpreted to give it greater remedial discre-

tion, reveals its misunderstanding of the mandate. The FCC

chooses to focus on only the first part of the court's express

and pointed instruction to the FCC in Freeman Engineering.

The court did not remand generally for "further proceed-

ings," but rather for "further proceedings to remedy this

inconsistency." Freeman Eng'g, 103 F.3d at 180. By noting

the similarities between QUALCOMM's and Omnipoint's ap-

plications, and the FCC's unpersuasive attempts to distin-

guish them during administrative proceedings and on appeal,

the court made clear that it was not remanding for a better

explanation from the FCC of its denial of QUALCOMM's

application, but rather had rejected the FCC's explanations

and instead ordered concrete relief for QUALCOMM. In

addition, the FCC chooses to ignore the effect of its own brief

in Freeman Engineering, which had pointed out that

QUALCOMM's application could not be granted for the origi-

nal license that it sought because that license had been

awarded in auction. See Respondents' Brief in Freeman

Engineering at 20. Hence, the court recognized that alterna-

tive relief remained to be identified and that a remand for

"further proceedings" for that purpose was required. While

all of this appears rather clear from the court's opinion, the

FCC has chosen to ignore both the instructions of the court

and the requirements of s 402(h).

In short, the FCC misinterpreted the mandate in Freeman

Engineering to assign it more than a ministerial role with

regard to the grant of a pioneer's preference to

QUALCOMM. The remand in Freeman Engineering was

not simply "for further proceedings," but to afford

QUALCOMM a remedy in view of the FCC's inconsistent

treatment of it, and that remedy--given the statutory con-

text--meant that QUALCOMM was entitled to a pioneer's

preference. Although the court might have been more explic-

it, its instruction to the FCC to "remedy this inconsistency"

was unusual language and clear in the context of a complex

administrative appeal in which QUALCOMM alone, out of

many petitioners, prevailed and where Congress had barred

the FCC from rescinding Omnipoint's preference.

B.

Had the FCC acted "forthwith" in accordance with the

Freeman Engineering mandate, QUALCOMM would have

been granted its pioneer's preference before Congress ad-

vanced the sunset date in the 1997 Budget Act. By extending

the remand proceeding, however, the FCC created a need to

interpret the new sunset provision, which it read to relieve

itself of the duty to carry out the mandate issued more than

four months previously. This interpretation of Congress'

withdrawal of the FCC's authority to award new pioneer's

preferences is flawed for several reasons.

First, the statute is silent on whether it applies retroactive-

ly to divest QUALCOMM of the fruits of its victory in court.

QUALCOMM's application was different than other pending

applications before the FCC. For the other numerous pend-

ing applications, of course, the mere filing of a license applica-

tion did not give the applicant a vested right to consideration

under then-prevailing standards, see Hispanic Info. & Tele-

comm. Network v. FCC, 865 F.2d 1289, 1294-95 (D.C. Cir.

1989), and the FCC retained discretion to change the stan-

dards during the course of proceedings. See Melcher v. FCC,

134 F.3d 1143, 1164 (D.C. Cir. 1998); Chadmoore Communi-

cations, Inc. v. FCC, 113 F.3d 235, 241 (D.C. Cir. 1997).

QUALCOMM, however, had prevailed on appeal and obtained

an express judicial instruction to the FCC that was more than

a mere opportunity for the FCC to reevaluate its application.

To view the relief that QUALCOMM had obtained in Free-

man Engineering as extinguished by a later-enacted sunset

provision would contravene Supreme Court doctrine govern-

ing interpretation of potentially retroactive statutes. As

Landgraf and similar authority make clear, absent an express

statement that a statute will apply to events preceding its

enactment, it may not be interpreted to impair rights a party

possessed when Congress acted. See Landgraf, 511 U.S. at

280; see also Martin v. Hadix, No. 98-262, 1999 WL 401324

(S. Ct. June 21, 1999); Lindh v. Murphy, 521 U.S. 320, 324-

26 (1997). Congress gave no such express command in either

the 1994 or 1997 sunset provisions. Consequently, because

QUALCOMM's preference application was not simply a pend-

ing application as to which no vested entitlement had at-

tached, the FCC could not properly interpret the sunset

provision to extinguish QUALCOMM's entitlement to a pref-

erence under Freeman Engineering.

Second, the FCC mistakenly conflated the sunset of its

authority to issue new pioneer's preferences and its continu-

ing obligation under the mandate in Freeman Engineering to

"remedy this inconsistency." In the FCC's view, until it

acted to grant QUALCOMM a pioneer's preference on re-

mand, QUALCOMM had no right to one, and once Congress

eliminated the FCC's authority to grant such preferences, the

FCC was without authority to act in accordance with the

mandate of this court. This position overlooks the fact that

Congress amended the Communications Act to add subsection

(h) to s 402 so that the court would remain in control of the

remand and the FCC could not deprive a victor in the courts

of the spoils of its victory. See S. Rep. No. 82-44, at 12

(1951); Greater Boston Television Corp. v. FCC, 463 F.2d

268, 281-82 (D.C. Cir. 1971). As explained in the Senate

Report, subsection (h) was "intended to confer upon the

appellate court a measure of control commensurate with the

dignity and responsibility of that tribunal." S. Rep. No.

82-44, at 12 (1951). In Greater Boston Television Corpora-

tion, the court viewed subsection (h) as designed to "ensure

deference to the court's intention in its disposition...." 463

F.2d at 281-82. Accordingly, on remand, the FCC had "the

duty" to give immediate and effective relief to QUALCOMM

consistent with Freeman Engineering. Id. at 282.

The FCC's contrary interpretation ignores settled law that

the mandate of a court issuing a final judgment carries force

beyond a victory in that immediate court. The "action[s] of a

court in setting aside the order of the Commission [are not]

an empty gesture," but rather a judgment that is the "final

and indisputable basis of action as between the Commission

and the defendant." FPC v. Pacific Power & Light Co., 307

U.S. 156, 160 (1939) (internal quotation omitted); see also

International Union of Mine, Mill & Smelter Workers v.

Eagle-Picher Mining & Smelting Co., 325 U.S. 335, 340-41

(1945). Thus, the court's mandate obliged the FCC to award

QUALCOMM a pioneer's preference with such spectrum

adjustment as was necessitated by the GATT provision bar-

ring the reconsideration or withdrawal of granted prefer-

ences, see 47 U.S.C. s 309(j)(13)(E)(i), and the award of the

original spectrum sought by QUALCOMM to another entity.

Cf. Mefford v. Gardner, 383 F.2d 748, 758 (6th Cir. 1967).

The fact that Congress in the interim extinguished the FCC's

authority to award pioneer's preferences is of no consequence

because s 402(h) provided the FCC with an independent

source of authority to implement the mandate of a court

acting within its jurisdiction and ordering a remedy within its

discretion.

Third, the FCC's interpretation of the sunset provision

raises constitutional concerns under Plaut v. Spendthrift

Farm, warranting application of the canon of constitutional

doubt, which states that ambiguous statutes should not be

read to raise a serious constitutional question when a reason-

able and clearly constitutional alternative is available. See,

e.g., Jones v. United States, 119 S. Ct. 1215, 1222 (1999). In

Plaut, the Supreme Court surveyed the legal history underly-

ing the now settled proposition that a final judgment of a

court cannot be undone by congressional legislation as to the

parties before the court. 514 U.S. at 219-225.5 Distinguish-

ing the rule that changes in statutory law occurring during

the pendency of litigation generally must be applied to that

litigation, see United States v. Schooner Peggy, 5 U.S. (1

Cranch) 103, 110 (1801), the Supreme Court instructed in

Plaut that the separation of powers doctrine embedded in the

Constitution protects the final judgment of Article III courts

from legislative interference.6 Plaut, 514 U.S. at 226. Start-

ing from the premise that Article III establishes a "judicial

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5 Plaut concerned Congress' extension of the statute of limita-

tions in civil actions to enforce the federal securities laws. In 1987,

Plaut filed a securities fraud action seeking damages for alleged

violations in 1983 and 1984. See Plaut, 514 U.S. at 213. While the

lawsuit was pending, however, the Supreme Court held in Lampf,

Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350

(1991), that such actions had to be commenced within one year after

the discovery of the facts constituting the violation and within three

years after the violation. See id. at 364. Applying Lampf, the

district court in 1991 dismissed Plaut's complaint with prejudice as

untimely filed; the judgment became final 30 days later. Respond-

ing to Lampf, and after the dismissal order in Plaut become final,

Congress enacted a statute purporting to reinstate the lawsuits

dismissed by reason of Lampf that would have been timely under

the prior limitations period. See Plaut, 514 U.S. at 214. Because

the dismissal of Plaut's complaint had become final before a new

statute that would have precluded dismissal went into effect, the

Court held that Congress had exceeded its authority. See id. at

217-18.

6 Thomas v. Network Solutions, 176 F.3d 500, 506 n.9 (D.C.

Cir. 1999), does not suggest anything to the contrary. The judg-

ment of the district court in that case was pending on appeal and

therefore not final when Congress enacted the statute at issue.

department" with the "province and duty ... to say what the

law is," Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177

(1803), the Court concluded that the historical record "shows

that the Framers crafted this charter of the judicial depart-

ment with an expressed understanding that it gives the

Federal Judiciary the power, not merely to rule on cases, but

to decide them, subject to review only by" superior Article III

courts. Plaut, 514 U.S. at 218-19; see The Federalist No.

81, at 545 (Alexander Hamilton) (J. Cooke ed. 1961). By

passing retroactive legislation affecting a case already finally

adjudicated, Congress had circumvented the fundamental

principle that the judicial power includes the authority to

render dispositive judgments, and had thus violated the prin-

ciple of separation of powers. See Plaut, 514 U.S. at 219.7

The fact that the sunset provision, unlike the statute invali-

dated in Plaut, was not by its terms directed specifically at a

particular disfavored judicial decision is irrelevant; the Su-

preme Court explained in Plaut that Congress' use of more

generally applicable terms does not alter the separation of

powers analysis. See 514 U.S. at 228. The sunset of the

FCC's preference authority did nothing to deprive the FCC

of the intellectual, staffing, or resource capability to take

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7 A final judgment for purposes of separation of powers does

not include all forms of judgment by the courts. As stated in Plaut,

a judgment at law is generally immune to subsequent legislative

changes, and an attempt by Congress to alter the legal judgment of

a court implicates separation of powers principles. A judgment

providing prospective equitable relief, however, remains vulnerable

to subsequent legislative action that accordingly would not raise the

same separation of powers concerns. See Plaut, 514 U.S. at 232;

Pennsylvania v. Wheeling & Belmont Bridge Co., 59 U.S. (18 How.)

421, 431 (1855); see also System Fed'n No. 91 v. Wright, 364 U.S.

642, 649-52 (1961); BellSouth Corp. v. FCC, 162 F.3d 678, 692-93

(D.C. Cir. 1998). The mandate in Freeman Engineering to remedy

the FCC's prior inconsistent treatment of QUALCOMM and Omni-

point, and thereby grant QUALCOMM a pioneer's preference, was

a final judgment entitling QUALCOMM to a preference, not a

judgment with prospective effects subject to evolving conduct or

conditions.

appropriate action in QUALCOMM's favor. Nor does the

FCC suggest a lack of capability. Pursuant to the remand in

Freeman Engineering, then, despite intervening congression-

al action taking away its own authority, the FCC was obligat-

ed to act pursuant to the authority of the court. Had

Congress expressly commanded what the FCC contends it

meant by its silence, the court would be forced to decide

whether Congress acted constitutionally in light of Plaut.

However, the sunset provision can reasonably be read not to

bar relief for QUALCOMM, and it should be so read to avoid

imputing to Congress the rare8 intent to undo a final judicial

mandate and the constitutional questions that such an intent

would raise.9

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8 Until Plaut, the Supreme Court was unaware of any "instance

in which Congress has attempted to set aside the final judgment of

an Article III court by retroactive legislation." Plaut, 514 U.S. at

230. In light of this historical pattern, and as with retroactive

legislation generally, see Landgraf, 511 U.S. at 277-80, the court

will not read a statute retroactively to alter a final judgement

absent an express statement of intent.

9 Saco River Cellular, Inc. v. FCC, 133 F.3d 25 (D.C. Cir. 1998),

is not to the contrary. In that case, the mandate called for a

remand to afford the FCC an opportunity to provide a better

explanation for its waiver of a financial reporting requirement. See

Northeast Cellular Tel. Co. v. FCC, 897 F.2d 1164, 1167 (D.C. Cir.

1990). Hence, the FCC's subsequent decision to award a license to

a different applicant stemmed from its own reconsideration of the

case rather than a judicial order compelling a specific result. The

direction to "remedy this inconsistency" in Freeman Engineering is

not comparable; it afforded the FCC no opportunity to develop

better reasons for denying QUALCOMM's application, much less to

reevaluate QUALCOMM's application. Rather, the court's instruc-

tion was clear from context: both Omnipoint and QUALCOMM had

sought preferences on the basis of technological modifications on

which work had commenced before the FCC had promulgated its

pioneer's preference rules. Yet the FCC had denied QUALCOMM

a preference on this basis while granting Omnipoint a preference,

and Congress had barred the FCC from rescinding Omnipoint's

preference. While the court afforded the FCC the opportunity to

reevaluate its interpretation of its rules--either to abandon its

Fourth, the legislative history is consistent with our inter-

pretation of the sunset provision inasmuch as Congress

sought to protect settled expectations. When Congress in

1994 set the date for withdrawal of the FCC's authority to

grant new pioneer's preferences, its focus was on increasing

federal revenues and not upsetting settled expectations. It

imposed a new requirement that pioneers pay for part of the

value of the spectrum they received, and it added a sunset

provision ending the FCC's authority to grant pioneer's pref-

erences. Significantly for our purposes, Congress also direct-

ed the FCC not to reconsider the pioneer's preference grants

that it had approved in the Third Report and Order and not

to delay by more than 15 days the issuance of licenses based

on such grants; it also prohibited any further administrative

or judicial review of the preferences that had already been

granted. See 47 U.S.C. s 309(j)(13)(E))(i). In so doing,

Congress made clear its intent not to undo the settled expec-

tations of APC, Cox, and Omnipoint based on final agency

action granting their pioneer's preferences. There is nothing

in the legislative history to suggest that Congress neverthe-

less intended to interfere with settled expectations derived

from a final judicial mandate directing agency action. The

House Report expressly stated that the provision finalizing

the grants in the Third Report and Order was not intended to

"affect the rights of persons who have been denied a pioneer's

preference," such as QUALCOMM; those persons could still

pursue further administrative and judicial review of the denial

of their applications. H.R. Rep. No. 103-826, pt. 2, at 8

(1994). So too, nothing suggests that when Congress ad-

vanced the sunset date in 1997, it intended to upset settled

expectations much less undo the vested rights of an applicant

that had already obtained an entitlement to a pioneer's pref-

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"newly developed" and "questionable" interpretation of its prefer-

ence rules that it applied only to QUALCOMM or retain that

interpretation--it required in any event that the FCC grant

QUALCOMM a preference. No such relief was obtained by the

prevailing party in Saco River.

erence under a judicial mandate with which the FCC was

obliged to comply under s 402(h).

Accordingly, we grant QUALCOMM's petition and remand

to the FCC "forthwith" to grant a pioneer's preference to

QUALCOMM and to take prompt action to identify a suitable

spectrum and award QUALCOMM the license for it.