Office of Communication of the United Church of Christ v. Federal Communications Commission and the United States of America

WALD, Chief Judge,

dissenting:

I would find that petitioners’ facial challenge to the Policy Statement of the Federal Communications Commission (FCC) is ripe for review. I believe that the precedent of this court mandates a somewhat different framework for analyzing ripeness than the majority opinion uses and that under the proper framework, we should go ahead and hear the case on the merits.

I. The Framework for Ripeness Analysis

When a party brings a pre-enforcement challenge to an administrative regulation or policy statement, the first question for the court is whether the claim “presents a purely legal question.” Toilet Goods Association, Inc. v. Gardner, 387 U.S. 158, 163 , 87 S.Ct. 1520, 1524 , 18 L.Ed.2d 697 (1967); Better Government Association v. Department of State, 780 F.2d 86, 92 (D.C. Cir.1986). If it does, the court must weigh any interests in favor of deferring review until the agency applies its rule or policy in a particular enforcement proceeding, against any interests in favor of resolving the purely legal question immediately. Usually, the Court divides this prudential balancing into two separate stages. The court first considers the institutional interests of both the court and agency in favor of postponing or proceeding with review. If the court concludes that these institutional interests, taken in their entirety, militate toward postponing review, the court then goes on to consider whether the hardship from postponement to the party bringing the legal challenge outweighs those countervailing institutional interests. See, e.g., State Farm Mutual Automobile Insurance Co. v. Dole, 802 F.2d 474, 479-81 (D.C.Cir.1986), cert. denied, — U.S.-, 107 S.Ct. 1616 , 94 L.Ed.2d 800 (1987); Better Government, 780 F.2d at 92 ; see also ACLU v. FCC, 823 F.2d 1554 , 1582 (D.C. Cir.1987) (Edwards, J., concurring) (under prudential ripeness doctrine, court defers review when “institutional interests favor deferral and the petitioners are unable to demonstrate sufficient ‘hardship’ to outweigh those interests”).

“Hardship to the parties,” however, is not an independent requirement for a claim to be ripe. If the institutional interests of the court and agency, in the aggregate, favor immediate review, then the claim will be ripe notwithstanding the fact that postponement of review would not cause significant hardship to the party bringing the action. See Eagle-Picher Industries, Inc. v. EPA, 759 F.2d 905 , 918 (D.C.Cir.1985). Of course, the party must satisfy any applicable statutory or constitutional injury requirement in order to have standing to challenge the agency rule, see, e.g., Sierra Club v. Morton, 405 U.S. 727 , 92 S.Ct. 1361 , 31 L.Ed.2d 636 (1972), but the “hardship” element of the ripeness analysis developed in Abbott Laboratories v. Gardner, 387 U.S. 136 , 87 S.Ct. 1507 , 18 L.Ed.2d 681 (1967), was never intended and has never been understood to constitute a separate burden, requiring a party to show an additional quantum of injury before the court will address the merits of the party’s legal claim. In Eagle-Picher, the court explained why hardship is not an independent requirement, but rather is simply a factor in the prudential ripeness balance:

If we were to defer review ... merely because we could find no significant harm to petitioner from delay, we would achieve the perverse result of postponing review to the detriment of the agency and the court ... in the name of a prudential doctrine that is intended to protect the institutional needs of courts and agencies.

759 F.2d at 918. We have very recently reaffirmed our precedent that prudential ripeness does not demand a special show *111 ing of hardship when the institutional interests favor immediate review. Consolidation Coal Co. v. FMSHRC, 824 F.2d 1071 (D.C.Cir.1987); see also id. (Edwards, J., concurring) (“I write only to emphasize ... that a litigant must demonstrate ‘hardship’ only when necessary to outweigh institutional interests that militate in favor of deferral of review.”) (emphasis in original); but see id. (D.H. Ginsburg, J., dissenting) (“hardship” from postponing review is an independent requirement of ripeness law).

II. Application op the Ripeness Analysis to This Case

This case presents the same kind of “purely legal question” that was involved in the Toilet Goods case: “whether the regulation is totally beyond the agency’s power under the statute.” 387 U.S. at 163, 87 S.Ct. at 1524. Here, petitioners argue that the Policy Statement governing tender offers is entirely outside the authority of the Federal Communications Commission under 47 U.S.C. § 309 (f). 1 As this is “the type of legal issue that [may sometimes be decided] without requiring a specific attempt at enforcement,” Toilet Goods, 387 U.S. at 163 , 87 S.Ct. at 1524 , this court must weigh the interests for and against immediate review.

The majority is correct in identifying certain reasons why the court might wish to delay review until the Policy Statement is applied to a particular tender offer. Like the regulation in Toilet Goods, the Policy Statement here does not bind the agency in all circumstances. Thus, the FCC may apply its novel trustee procedures to some tender offers and not others. The court might benefit from learning what circumstances occasion the use of this mechanism, as well as the reasons the agency relies on for invoking it.

Nevertheless, it must be said that the FCC’s Policy Statement contemplates much less discretion in its application than did the regulation at issue in Toilet Goods. There, “[t]he regulation serve[d] notice only that the Commissioner may under certain circumstances order inspection of certain facilities and data, and that further certification of additives may be refused to those who decline to permit a duly authorized inspection until they have complied in that regard.” 387 U.S. at 163, 87 S.Ct. at 1524 (emphasis in original). In our case, the Policy Statement says that “in the context of a tender offer, ... [the FCC] will grant an STA [special temporary authority] to a qualified, independent trustee with power to consummate the tender offer— ” J.A. at 81 (emphasis added). The Policy Statement adds, however, that it “is not intended to foreclose the Commission, in a particular proceeding, from adopting a different approach if warranted in specific circumstances.” Id. Although not mandatory, the Policy Statement sets up a strong presumption that the trustee mechanism will be used. It was evidently the intent of the FCC to apply the Policy Statement to tender offers generally. See Supplemental Brief of FCC at 11. In this respect, then, this case differs significantly from Toilet Goods.

While the Supreme Court in Toilet Goods thought that “judicial appraisal” of the statutory issue presented was “likely to stand on a much surer footing in the context of a specific application of th[e] regulation,” 387 U.S. at 164, 87 S.Ct. at 1524-25, I respectfully submit that our evaluation of petitioners’ claim “would not be enhanced” materially by the application of the Policy Statement to a particular tender offer. Better Government, 780 F.2d at 93 . Petitioners contend that in adopting the Policy Statement, the FCC acted entirely beyond the scope of its statutory authority because tender offers cannot qualify as “extraordinary circumstances requiring temporary operations” of a broadcast facility. 47 U.S.C. § 309 (f). Tender offers, they argue, simply are not among the kind of events, like natural disasters or national security threats, for which Congress granted the FCC limited authority to suspend regular statutory procedures in order to *112 inform members of the community about the potential danger.

I find it difficult to imagine how our resolution of this legal claim will be “facilitated by further factual development.” Better Government, 780 F.2d at 92 . The issue of congressional intent in this case does not depend on any facts about tender offers that are not already in the record. Section 309(f) either is or is not limited to occasions which require “temporary broadcast operations” to keep the public informed of major events, like hurricanes. See Brief of Petitioners at 16 n. 7. We are already informed enough about tender offers to know that, unlike hurricanes, they are not the kind of events about which communities must be kept informed by broadcast facilities. Thus, if tender offers can ever qualify as “extraordinary circumstances” within the meaning of § 309(f), it must be because the statutory use of the term is not as limited as petitioners argue that it is. I believe that it is entirely possible for us to decide this question of statutory interpretation now. Petitioners’ facial challenge to the Policy Statement is, therefore, “fit” for immediate review. See Better Government at 92-93 n. 33.

Moreover, this case, unlike Toilet Goods, contains institutional interests that weigh in favor of immediate review. The FCC itself urges this court to find this case ripe because “review of the Commission’s policy in the context of a particular application, under the severe time pressures that would be inevitable ..., would be far more disruptive [to the FCC’s administration of its policy] than reviewing the Policy Statement at this time.” Supplemental Brief of FCC at 13. In this case, the FCC has an important interest in determining the legal validity of the trustee mechanisms in advance: the very market that it regulates may be affected by legal uncertainty. The Policy Statement represents an important administrative effort to cope with an increasingly vexing problem. In order to assess its own administrative agenda, including efforts to enact new legislation, the FCC needs to know the validity of this approach as soon as possible. To the extent that ripeness law is designed to protect administrative agencies from premature judicial interference, see Abbott Laboratories, 387 U.S. at 148 , 87 S.Ct. at 1515 , this interest is not at all threatened by immediate judicial review in this case.

In large measure, this court shares with the FCC its interest in an immediate adjudication of petitioners’ claim. The inevitable time sensitivity of tender offers at best will require the court to act with haste when faced with a facial challenge to the validity of the trustee mechanism in the context of a particular tender offer. Cf. Storer Communications, Inc. v. FCC, 763 F.2d 436 (D.C.Cir.1985) (per curiam) (expedited consideration of FCC decision to apply “short-form” procedures to particular proxy contest). 2 Indeed, the particular tender offer may become moot before the court ever gets a chance to rule on the merits, leaving this court no better off than it is today. See Supplemental Brief of FCC at 9-10.

In sum, while I recognize that this court may have some interest in denying this pre-enforcement challenge, the balance of institutional interests seems to weigh decidedly in favor of immediate review. Given this outcome, it is irrelevant if the petitioners’ interest in immediate review adds little, if any, weight to that side of the scale. The majority does not contend that petitioners lack the minimum requisite “injury” to establishing standing to challenge the FCC’s Policy Statement. The justiciability issue here is simply whether the court ought to hear the case now or later. Since the statutory interpretation issue presented is suitable for immediate judicial resolution and there are good reasons for conducting that review now, the ripeness inquiry should come to an end. 3

*113 III. A Further Observation

The majority, however, finds petitioners’ claim unfit for immediate review and does not share my view that both the agency and the court have a legitimate and important positive interest in deciding petitioners’ facial challenge at this time. Given that position, I recognize that, under traditional ripeness law, the majority must go on to consider whether petitioners have demonstrated sufficient hardship from postponing review to outweigh the countervailing considerations. Thus, although under my analysis, which finds the issue fit for review, there would be no need to show additional hardship, I wish to respond to one troubling aspect of the majority’s hardship analysis.

The majority relies, in part, on the “primary conduct” test articulated in Toilet Goods to reach its conclusion that petitioners are unable to show sufficient hardship. 387 U.S. at 164, 87 S.Ct. at 1524-25. The use of the standard “primary conduct” test as the determiner of hardship in the context of this case makes little sense legally or in the real world. Toilet Goods involved a challenge to agency rulemaking by a regulated entity. In contrast, the challenge here has been brought by the intended beneficiaries of a statutory scheme. Agency rulemaking will never affect the “primary conduct” of statutory beneficiaries in the same way that it often affects the “primary conduct” of regulated entities. Yet statutory beneficiaries have the right to seek judicial relief when their legally protected interests are harmed by unlawful agency action.

Thus, the “primary conduct” test, developed in the context of a pre-enforcement challenge brought by a regulated entity, is not well-suited for judging the ripeness of a pre-enforcement challenge brought by a statutory beneficiary. This court has previously attempted to redefine “primary conduct” in such a way that the term can apply to the activities of “public interest” groups that represent the interest of the members. See Better Government, 780 F.2d at 93-94 . 4 It certainly seems, whatever the formula, that courts must recognize a way for statutory beneficiaries who do not run businesses to demonstrate “hardship” from postponing a pre-enforcement challenge. It does not take much conjuring to think of circumstances in which nonregulated statutory beneficiaries would have a strong interest in immediate judicial review of their pre-enforcement challenge. 5

I fear that the majority’s application of the usual “primary conduct” test in its “hardship” analysis here would prevent such groups in virtually all cases from meeting the second prong of the ripeness analysis. Thus, I do not share its reasoning. Because, however, I find the institutional interests in this case warrant immediate review, neither do I find it necessary to decide exactly how the “hardship” element should be analyzed in a case like this where a pre-enforcement challenge to agency rule-making is brought by a listening group rather than a regulated entity. That effort can await another day.

Conclusion

For the reasons I have set forth, I respectfully dissent from the panel’s decision that the facial challenge of the tender offer Policy Statement is not ripe for review. 6

. The petitioners also challenge the FCC’s new procedures for proxy contests. This challenge, however, is precluded by our decision in Storer Communications, Inc. v. FCC, 763 F.2d 436 (D.C. Cir.1985) (per curiam).

. In Storer, the FCC issued its order on April 22, 1985. Oral argument before this court was heard on May 2, and we affirmed the FCC's decision the same day. A per curiam opinion explaining our decision followed twelve days later.

. “Because we have determined that the [FCC] and, to a lesser extent, the court ha[s] a positive interest in review [at this time], there are no conflicting interests to balance.” Eagle-Picher, 759 F.2d at 918 (emphasis in original).

. These groups often are organized to represent the intended beneficiaries of a particular statutory scheme.

. For example, if a senior citizens' interest group claimed that the FDA’s regulations prescribing inspection standards for drug manufacturer facilities were unlawfully inadequate, the senior citizens who must take medications regularly have a strong interest in an immediate determination of the validity of the regulations, even if it cannot be said that they would change their "primary conduct” in any way, depending upon whether their legal claim is decided in a pre-enforcement challenge or in the context of an enforcement proceeding against a particular drug manufacturer.

. Were the panel to reach the merits, I would hold that the FCC’s new policy with respect to tender offers goes beyond its statutory power under § 309(f), the only statutory provision on which it relies as authority for the trustee mechanism. Based on my reading of the language *114 and the legislative history of this section, I believe Congress intended § 309(f) to be used only when the FCC needed to put or keep broadcast stations in operation temporarily so that they might inform citizens of impending disasters or "extraordinary” political events. I cannot conclude that Congress intended to allow the FCC to invoke its "safety-value" authority of § 309© merely because it found the regular statutory "long-form” procedures were too cumbersome for broadcast license transfers resulting from a tender offer. Even if the FCC’s new tender offer procedures might be extremely wise as a matter of policy, this court is bound by the plain language and clear intent of Congress. See INS v. Cordoza-Fonseca, — U.S.-, 107 S.Ct. 1207 , 94 L.Ed.2d 434 (1987); Board of Governors v. Dimension Financial Corp., 474 U.S. 361 , 106 S.Ct. 681 , 88 L.Ed.2d 691 (1986). Because of the majority’s disposition of this case on ripeness grounds, I do not elaborate further on the merits. See California Ass’n. of the Physically Handicapped v. FCC, 778 F.2d 823 , 834 n. 17 (D.C.Cir. 1985) (Wald, J., dissenting).