Appendix — Faulkner Radio, Inc. v. Federal Communications Commission
Supreme Court brief1981
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IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1980
FAULKNER RADIO, INC.,
Petitioner,
FEDERAL COMMUNICATIONS COMMISSION,
Respondent.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE
DISTRICT OF COLUMBIA CIRCUIT
APPENDIX
ROBERT L. HEALD
MARVIN ROSENBERG
EDWARD W. KUMMERS, JR.
FLETCHER, HEALD & HILDRETH
1225 Connecticut Avenue, N.W.
Suite 400
Washington, D.C. 20036
(202) 828-5700
January 1981 Attorneys for Petitioner.
Washington, OC « THIEL PRESS «+ (202) 638-4621
(:)
TABLE OF CONTENTS
APPENDIX A — Judgment and Memorandum Opin-
ion of the United States Court of Appeals for
the District of Columbia Circuit in Faulkner
Radio, Inc. v. Federal Communications Com-
mission, No. 79-1749 (Oct. 15, 1980) ............. la
APPENDIX B — Memorandum Opinion and Order
of the Federal Communications Commission
on Petitions for Reconsideration, Radio Car-
voliton, 72 F.C.C.2d 264 (19079) . 0. ccc vvcccccvces 3a
APPENDIX C — Memorandum Opinion and Order
of the Federal Communications Commission
denying the request for inspection of records
of Faulkner Radio, Inc., Faulkner Radio, Inc.,
CS FALDA 2006 (IGTE 6 6.6.0 8 6 bs eke ee ek 12a
APPENDIX D — Memorandum Opinion and Order
of the Federal Communications Commission
on sua sponte reconsideration, Radio Carroll-
ton, 6D F.C.C.24 426 (3978). oc cvcnswdecacenre 15a
APPENDIX E — Memorandum Opinion and Order
of the Federal Communications Commission on
remand, Radio Carrollton, 69 F.C“ «a 1139
CRAG + 6-4 0-5 8 ho ob eee 66606 R OH SOS Se 17a
APPENDIX F — Decision of the United States
Court of Appeals for the District of Columbia
Circuit remanding the case to the Federal
Communications Commission, Faulkner Radio,
Inc. v. Federal Communications Commission,
No. 75-1568 (May 26,1977) ........ ccc cee eeeee 36a
APPENDIX G — Order of the Federal Communica-
tions Commission designating six renewal appli-
cations of Faulkner Radio, Inc. for oral argu-
ment, Faulkner Radio, Inc., 61 F.C.C.2d 23
(ROPE) ke o4 5 ay 646468554 4H S 0640S Od KO Ow 55a
APPENDIX H — Original Decision of the Federal
Communications Commission, Radio Carroll-
ton, 52 F.C.C.2d 1173 (1975), vacated in 1977
(ii
by the United States Court of Appeals for the
District of Columbia Circuit
APPENDIX I — Initial Decision of Administrative
Law Judge David I. Kraushaar, Radio Carroll-
ton, 52 F.C.C.2d 1187 (1974)
APPENDIX J — Memorandum Opinion and Order
of the Review Board of the Federal Communi-
cations Commission, Radio Carrollton, 43
F.C.C.2d 472 (1973)
APPENDIX K — Memorandum Opinion and Order
of the Federal Communications Commission
designating the case for a hearing, Radio
Carrollton, 38 F.C.C.2d 68 (1972)
APPENDIX L — Pertinent Provisions of the Con-
stitution of the United States; the Communi-
cations Act of 1934, as amended; and the
Rules of the Federal Communications Com-
a tess fo Oa ace he We ode ic eo 127a
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APPENDIX A
UNITED STATES COURT OF APPEALS
For the District of Columbia Circuit
September Term, 1980
[Filed Oct. 15 1980]
No. 79-1749
Faulkner Radio, Inc.
v.
Federal Communications Commission
Before ROBINSON, WILKEY and GINSBURG, Crr-
cuit Judges.
JUDGMENT
This cause came on for consideration of a petition for
review of orders of the Federal Communications Com-
mission, and was argued by counsel. While the issues
presented occasion no need for an opinion, they have
been accorded full consideration by the Court. See
Local Rule 13(c).
On consideration of the foregoing, it is ORDERED and
ADJUDGED by this Court that, for the reasons summar-
ized in the attached memorandun,, the orders of the Fed-
eral Communications Commission under review herein
are hereby affirmed.
PER CURIAM
For the Court
/s/ George A. Fisher
George A. Fisher
Clerk
2a
No. 79-1749 — Faulkner Radio, Inc. v. FCC
MEMORANDUM
We are in full agreement with the disposition the Com-
mission effected by the orders under review. We are also
in substantial accord with the reasoning set forth in the
Commission’s decision, which elaborately underpins
those orders. Accordingly, we sustain tle Commission.
In affirming, however, we do not intimate unqualified
approval of the Commission’s subsidiary conclusions of
law in their entirety. It is enough that we find substantial
supporting evidence and an adequate legal foundation for
the Commission’s outcome, and that we do.
3a
APPENDIX B
264 Federal Communications Commission Reports
FCC 79-379
BEFORE THE
FEDERAL COMMUNICATIONS COMMISSION
WaAsHINGTON, D.C. 20554
In Re Applications of
Wiiuiam P. JOHNSON AND Hous B. Docket No. 19636
JOHNSON D/B/A RADIO CARROLLTON ‘* File No. BP-17970
Carrollton, Georgia
For Construction Permit
FAULKNER Rapio, Inc. (WLBB) Docket No. 19637
Carrollton, Georgia File No. BR-1431
For Renewal of License
MEMORANDUM OPINION AND ORDER
(Adopted: June 7, 1979; Released: June 15, 1979)
By THE COMMISSION: COMMISSIONER FOGARTY ABSENT; COMMISSIONER
JONES NOT PARTICIPATING.
1. The Commission has before it for consideration a petition for
reconsideration and a further petition for reconsideration, filed June
80 and July 28, 1978, respectively, by Faulkner Radio, Inc. (Faulkner);
oppositions, filed July 12 and August 3, 1978, by the Broadcast Bureau;
and a reply, filed August 16, 1978, by Faulkner. Faulkner seeks
reconsideration of the denial of renewal of its broadcast license for
standard broadcast station WLBB, Carrollton, Georgia, and the grant
of a construction permit to Radio Carrollton (RC) for a new standard
72 F.C.C. 2d
4a
Radio Carrollton, et al. 265
broadcast station in Carrollton. RC has not responded to Faulkner’s
petitions.
I. Background
2. These proceedings arise from an application for a construction
permit, filed November 29, 1967, by RC. Faulkner, the licensee of
existing station WLBB, petitioned to deny RC’s application, alleging
lack of financial and character qualifications and defects in RC’s
ascertainment survey. Later, Faulkner supplemented these charges
with allegations of lack of site availability, misrepresentation, and
violations of Section 1.65 of the Rules.1 The Commission consolidated
RC’s application with Faulkner’s renewal application in response to
allegations by RC that Faulkner had filed its petition for the purpose
of delaying RC’s application and that Faulkner had made misrepresen-
tations to the Commission. Although the applications were not
mutually exclusive, the factual disputes involved “inextricably” con-
nected the two. 38 FCC 2d 68 (1972). The Commission affirmed an
initial decision granting RC’s application and denying Faulkner’s. 52
FCC 2d 1173 (1975).
3. On Faulkner’s appeal of the Commission’s decision, the United
States Court of Appeals for the District of Columbia Circuit vacated
and remanded the matter to the Commission for further proceedings.
Faulkner Radio, Inc. v. FCC, 557 F.2d 866 (D.C. Cir. 1977). Addressing
expressly only the denial of Faulkner’s license, the Court voiced two
principal concerns. The first, which the Court considered dispositive,
was that the presiding judge and the Commission had possibly applied
an erroneous presumption of veracity favoring the testimony of RC’s
principals, William and Hollis Johnson, over that of opposing witnesses
solely because the Johnsons were lawyers. The Court also expressed a
broader concern that the Commission’s recently initiated practice of
applying “strike” application criteria to evaluate petitions to deny
might have a chilling effect on the submission of such petitions by
competitors—those most likely to bring an applicant’s deficiencies to
the Commission’s attention.
4. Pursuant to the Court’s directive, the Commission conducted a
de novo review of the record and once again concluded Faulkner had
made misrepresentations and engaged in abuse of process, and was
thus disqualified. 69 FCC 2d 1189 (1978). The Commission also clarified
its definition of a “strike” petition to refer only to those petitions filed
for the “primary and substantial” purpose of delaying a competitor’s
application. In a supplementary order, the Commission explained that
the standard of proof used in disqualifying Faulkner was a “prepon-
derance of the evidence.” 69 FCC 2d 424 (1978).2
1 Still later, the Review Board granted Faulkner's petition to enlarge the issues and
added an undisclosed principal issue against RC. 43 FCC 2d 472 (Rev. Bd. 1978).
?The supplementary order was necessary because the Commission's original order
72 F.C.C. a
5a
266 Federal Communications Commission Reports
5. Faulkner petitions for reconsideration of our action on remand
on three general grounds. It contends (1) the Commission did not
comply with the Court of Appeals mandate, (2) the Commission used
the incorrect standard of proof in denying Faulkner's application, and
(3) the Commission’s “strike” petition standard is vague and cannot
fairly be applied retroactively to Faulkner. Faulkner does not request
reconsideration on the merits of any specific finding or conclusion. The
Broadcast Bureau, on the other hand, considers Faulkner’s arguments
“a monotonous rehash of those arguments it previously made to the
Commission.” Consequently, the Bureau urges that reconsideration be
denied pursuant to the Commission’s policy against reconsidering—
absent a showing of manifest error—matters already considered and
resolved. United Television Co., Inc., 59 FCC 2d 663, 664 (1976). For the
reasons stated below we shall deny reconsideration.
IT. Scope of Remand Proceedings
6. According to Faulkner, the Commission should have discarded
the existing record, ordered new hearings, drafted new findings and
conclusions on all issues including those relating only to RC, and
presented its results in a format free of any reference to past decision
making. Faulkner argues this approach is necessary because a
pervasive bias infects and distorts the existing record and decisions.
Any other approach, maintains Faulkner, puts the Commission in the
position of a reviewing court affirming an informed decision on the
basis of an unreliable record. die
7. The Commission rejects these contentions. In conducting our
review, we gave careful consideration to the scope of the proceedings
specified by the Court’s mandate. We do not read the Court’s mandate
as ordering the Commission to conduct new hearings if the Commission
determined new hearings were unnecessary. Nor do we read the
Court’s decision as reaching the merits of the Commission’s ultimate
findings and conclusions. Rather, the Court stated: “(t]he likelihood,
though not absolute certainty, that the [administrative law] judge
pursued a legally impermissible course demands at a minimum an
administrative reevaluation of the evidence.” 557 F.2d at 870. “We say
only that by what seemingly was a class-presumption applied in this
case, Faulkner Radio may have been deprived of an opportunity to
have its evidence objectively considered.” Jd. at 871.“. . . [A] remand
for reconsideration is necessary to assure that Faulkner Radio's
evidence is evaluated without the impediment of a presumption of
veracity indulged an opposing lawyer-witness solely because he
happens to be a lawyer.” Jd. at 878. We therefore reviewed the
unfortunately used the phrase “substantial evidence” in a possibly misleading way.
The original order also dismissed a Broadcast Bureau motion to enlarge the issues and
an unauthorized pleading submitted by Talton Broadcasting Company of Lee County.
Both of the Commission's Orders on remand will be further discussed in connection
with the various arguments in Faulkner's petition for reconsideration.
72 F.C.C. 2d
6a
Radio Carrollton, et al. 267
testimony and exhibits comprising the existing record to determine
whether the state of the record permitted, in light of any possible
impact an improper evidentiary presumption may have had, a just
result on objective reconsideration. Cf. Greater Boston Television Corp.
v. FCC, 463 F.2d 268, 283-4 (D.C. Cir. 1971). Our review disclosed no
prejudicial errors in the admission or exclusion of evidence,> no
distortion of the record due to the conduct of the presiding judge, and
no necessity to rely on demeanor findings to assess witnesses’
credibility. The Commission then proceeded to evaluate the record
‘free of any improper lawyer-veracity presumption. Cf. Mesaroshv.
United States, 352 U.S. 1, 11-2 (1956); Collins Securities Corp. v. SEC,
562 F.2d 820, 827 (D.C. Cir. 1977). We determined that except to the
extent indicated, our prior findings and conclusions are valid, notwith-
standing that they appeared to reflect an erroneous evidentiary
presumption.
8. We embodied the results of this examination in an appropriate
memorandum opinion and order. 69 FCC 2d 1139 (1978). For reasons of
stylistic economy, the Commission chose to “affirm” to some degree its
prior conclusions, rather than engage in the laborious and superfluous
process of drafting an entirely new decision. Our practice in this regard
reflects no prejudgment on the part of the Commission but stems from
the discretion granted administrative agencies in choosing how to
conduct proceedings on remand. Sec. 4(i), Communications Act of 1934,
as amended; FTC v. J. Weingarten, Inc., 336 F.2d 687, 694-7 (5th Cir.
1965). Numerous transcript references of decisive significance appear
throughout our opinion, which also refers to undisturbed findings and
conclusions in our decision prior to remand.
9. One particular aspect of our de novo review deserves special
attention. At Fn. 2, the Commission stated that Faulkner did not
appeal the grant of RC’s construction permit, but only the denial of its
own renewal application. Indeed, the Commission ultimately granted
RC a license to operate station WPPI, Carrollton (BL—14060). Accord-
ing to Faulkner, the Commission thereby revealed an unwarranted
limitation in perspective in reconsidering the case on remand. We need
not dispute with Faulkner whether the Commission might have
disqualified RC if the Commission felt the record justified this action.
3 Faulkner argues that the presiding judge wrongly excluded testimony regarding the
background of Faulkner’s witness, Vivian McGhee, as it related to her veracity. This
testimony was excluded (Tr. 757) as irrelevant because Mrs. McGhee’s credibility had
not been attacked. Cf. Federal Rules of Evidence, Rule 608(a\(2). The exclusion of that
testimony for the reason stated was correct. Moreover, exclusion of the challenged
testimony is invonsequential. Mrs. McGhee’s subsequent testimony concerning the
alleged existence of an undisclosed contract between RC and A! Cohen deserves little
weight not hecause any question arises concerning Mrs. McGhee’s veracity, but
because the testimony is hearsay, which in context appears unreliable.
* The last of these (actors is especially important and is discussed at length at Para. 12,
infra.
72 F.C.C. 2d
ee ee
7a
268 Federal Communications Commission Reports
As will be seen below, the Commission did not limit its review of the
record in any way prejudicial to Faulkner or unduly favorable to RC.
Therefore, whether the Court’s mandate can be read to include remand
of the grant to RC and whether Faulkner, strictly speaking, appealed
the grant to RC becomes academic.
10. While the Commission feels Faulkner did not appeal the grant
to RC and the Court did not call upon the Commission to review the
grant, the applications of Faulkner and RC are inextricably connected
by factual questions. For this reason the Commission reviewed the
entire record and not merely those portions directly related to
Faulkner.5 That the Commission in its memorandum opinion and order
concentrated its discussion on some points and treated others including
many of those directly related to RC by reference to its prior decision
does not evince neglect of the latter points as Faulkner assumes. Our
treatment reflects our conviction that the findings made and incorpo-
rated by reference did not depend on any erroneous presumption of
veracity and were thus valid. Here again, our considerations were
those of style and not prejudgment. Facts and conclusions neither
discussed in the memorandum opinion and order nor incorporated by
reference were not of decisional significance. Thus, the Commission did
reconsider the facts concerning the grant to RC although our order on
remand did not explicitly regrant RC’s application. Clearly, the
Commission adhered to the prior conclusions favorable to RC. Faulkner
has no cause to complain that the issues were not fairly evaluated.
1l. As the preceding discussion indicates, the Commission thor-
oughly considered and rejected Faulkner’s contentions in conducting
its de novo review. Faulkner’s arguments for reconsideration are
indeed little more than a summary of its brief to the Commission after
'On the other hand, the Commission sees no merit to Faulkner's argument,
incorporated by reference in its petition for reconsideration, that further issues
should have been designated. Faulkner argues that the Commision erred in failing to
designate an issue against RC based on the allegations of Loyd Madden, a former
client of the Johnsons, and that Faulkner was thus deprived of an opportunity to
show his claim was meritorious. The Commission declined to designate an issue
because Madden’s charges of fraudulent conduct had been considered and apparently
deemed nonmeritorious by local tribunals. 88 FCC 2d 70 (1972). Obviously, this
conclusion is unaffected by the later error of law found by the Court of Appeals.
There is thus no cause to reconsider it. On the subject of Loyd Madden, the
Commission takes this opportunity to correct a minor error in Para. 30 of our
memorandum opinion and order, 69 FCC 2d 1153. Hollis Johnson did not, as we stated,
represent Madden in bankruptcy proceedings but rather in real estate and income tax
matters prior to Madden’s bankruptcy. The validity of a deed executed by Madden to
Johnson was considered in Madden's bankruptcy proceeding.
* Faulkner submits that with respect to the Johnson-Thorburn telephone conversation
and the A] Cohen matter the Commission conducted a one-sided reevaluation. In these
instances, according to Faulkner, the Commission originally found favorably to RC,
based in part on the erroneous lawyer-veracity presumption, but on reconsideration
found adversely to Faulkner without revisiting the favorable findings with respect to
RC. These allegations are groundless. Our discussion clearly indicates that the
Commission considered all sides of these questions.
72 F.C.C. 2d
8a
Radio Carrollton, et al. 269
remand. Our opinion on remand makes clear that we considered
Faulkner’s brief and those of the other parties in arriving at a
procedure we consider is fair. Contrary to Faulkner’s assertions, we
believe Faulkner has received both a full hearing—as required by
§30%e) of the Communications Act—and a complete statement of
reasons—as required by §557(c) of the Administrative Procedure Act.
12. Faulkner has not demonstrated a right to new hearings. Our
examination of the record disclosed that the material questions were
thoroughly explored. The only conceivable justification for ordering a
new hearing would be the possible need to observe the demeanor of the
witnesses to determine their credibility in instances of conflicting
testimony. The Commission has determined, however, that the perfor-
mance of the witnesses as reflected in the transcript and supported by
extrinsic evidence of record is a reliable measure of their credibility. In
our view, the credibility findings we have made would not likely be
affected by observing the physical appearance of the witnesses. See
FCC v. Allentown Broadcasting Corp., 349 U.S. 358, 364 (1955); Retail,
Wholesale and Department Store Union, AFL-CIO v. NLRB, 466 F.2d
$80, 386-7 (D.C. Cir. 1972). As there is no necessity to take new
evidence on remand, neither due process nor the Administrative
Procedure Act requires a new initial decision by the presiding officer
at a hearing. See Kerner v. Celebrezze, 340 F.2d 736, 739-40 (2d Cir.
1965). Cf. Van Teslaar v. Bender, 365 F.Supp. 1007, 1011 (D. Md. 1973).
13. In the same vein, Faulkner fails to demonstrate the need to
draft an entirely new decision or of citing transcript references in
addition to those of decisive significance already cited by the Commis-
sion. A reading of the Commission’s memorandum opinion and order in
connection with the material incorporated by reference therein fully
supports the conclusions reached by the Commission. Faulkner’s
petitions for reconsideration and its brief on remand are, in contrast,
virtually devoid of specific references to the record or to specific
findings. If Faulkner betieves that the Commission failed to examine
particular additional evidence which would undercut the Commission’s
conclusions, Faulkner bears the burden of pointing out the dispositive
evidence the Commission is said to have ignored. A mere conclusory
statement that the Commission ignored such evidence does not suffice.
Cosmopolitan Broadcasting Corp. v. FCC, 581 F.2d 917, 927-8 (D.C. Cir.
1978). Depite this clear requirement, all that Faulkner has offered to
the Commission are broad and vague generalizations and a handful of
conclusory references. Furthermore, there is no merit to Faulkner’s
contention that the mere fact the Commission referred to past decision
making when the Court ordered “new” findings shows that the
Commission did not conduct a true de novo review. Faulkner’s
argument represents an unduly mechanical and formalistic view of
administrative procedure rejected in FTC v. J. Weingarten, Inc:,
supra. When the acknowledged flexibility of administrative procedure
is taken into account, Faulkner’s objections shrink to no more than
72 F.C.C. 2d
9a
270 Federal Communications Commission Reports
unsubstantiated claims of bad faith on the part of the Commission, and
we therefore reject them.
III. Standard of Proof
14. Faulkner next argues that the case against it must be proved
by “clear and convincing” evidence rather than a “preponderance of
the evidence”. Relying chiefly on Collins Securities Corp. v. SEC,
supra, which dealt with the licensing of securities dealers, Faulkner
asserts that the “clear and convincing” standard applies in cases of
alleged fraud in which heavy sanctions may result. In any event,
Faulkner virtually accuses the Commission of “covering up” adherence
to the “substantial evidence” standard used for judicial review, even
though the Commission clarified the point in its supplemental order.
15. Faulkner’s reliance on the “clear and convincing” standard
must be rejected as fundamentally inconsistent with the Communica-
tions Act’s provisions for license renewal.’ Faulkner in effect argues
that a Commission licensee has a vested property interest in its license,
which extends beyond the primary three-year licensing term, and that
the government bears a heavy burden to demonstrate misconduct on
the part of the licensee before depriving the licensee of this interest.
Section 304 of the Communications Act, however, specifically provides
that previous use of the “ether” under license creates no claim to its
continued use. Furthermore, on expiration of the three-year license
term, no renewal may issue without a determination that the public
interest, convenience, and necessity would be served thereby. §§307(d);
309(a). When the Commission for any reason is unable to make such a
finding, the burden of proof with respect to any issue designated falls
on the applicant, not on the Commission, except in those instances
where the Commission may otherwise place the burden in its discre-
tion. §30%e). See also, Brandywine-Main Line Radio, Inc. v. FCC, 478
F.2d 16, 61 (D.C. Cir. 1972). The standard of proof urged by Faulkner
would prevent the Commission from carrying out its statutory
mandate and would in effect establish a prohibited property interest in
a broadcast license. This is so because under Faulkner’s theory, the
burden of proof would implicitly be shifted to the Commission,
contrary to the statute, and renewal of license would be granted in
some cases in which renewal was likely to be contrary to the public
interest—albeit not “clearly and convincingly” so. Renewal under
these circumstances would contravene the Commission’s affirmative
*The Broadcast Bureau, in addition to urging that the “preponderance of the
evidence” standard is the correct standard, submits that the case against Faulkner
has bee. proved by “clear and convincing” evidence.
*It is important to note, however, that the issue under discussion is entirely distinct
from the question of defining a licensee's “renewal expectancies” in comparative
renewal proceedings. See Central Florida Enterprises, Inc. v. FCC, 44 RR 2d 345
(D.C. Cir. 1978) modified and rehearing denied 44 RR 2d 1567 (1979) petition for cert.
pending 47 USLW 3623 (March 20, 1979).
72 F.C.C. 2d
10a
Radio Carrollton, et al. 271
duty to grant broadcast licenses only in the public interest. Milton
Broadcasting Co., 34 FCC 2d 1036, 1043-4 (1972). Thus, Faulkner's
references to systems of licensing unrelated to broadcasting are
irrelevant. Other aspects of Faulkner’s standard of proof argument
are again no more than unsubstantiated claims of bad faith on the part
of the Commission, which the Commission categorically rejects.
IV. Strike Petition Standard
16. Faulkner’s final contention is that the Commission’s “strike”
petition standard is overly vague and cannot fairly be applied
retroactively to Faulkner. Faulkner asserts the phrase “primary and
substantial” purpose to delay, used by the Commission, is ambiguous.
“Primary”, according to Faulkner, suggests that delay must be the
controlling reason for filing the petition, while “substantial” suggests
a strong, yet not predominant, reason. Moreover, Faulkner argues that
it was prejudiced in preparing its defense because the standard had not
yet been enunciated.
17. These arguments may readily be disposed of. The Commission’s
“strike” standard is not vague. Pursuant to the Court’s directive, the
Commission clarified its “strike” petition policy to avoid the possibility
of a chilling effect on the filing of legitimate petitions to deny. We held
that we would penalize only those who filed petitions with the primary
purpose to delay, which means exactly what Faulkner believes it to
mean.!° To emphasize that we intended to penalize only reprehensible
conduct, we defined evidentiary criteria to accompany the primary
purpose standard—focusing on admissions of obstructive purpose,
material misrepresentation and concealment, baseless claims, and
irregular collateral conduct rather than the mere presence of economic
incentive to delay.
18. Furthermore, Faulkner has not been prejudiced by retroactive
application of the new standard. The “strike” petition policy involves a
situation where a party abuses our processes by claiming to act in
furtherance of general public interests when, in fact, his primary
purpose is to advance anticompetitive interests that have no place in
our regulatory scheme. Thus, while the strike petition is itself novel,
the principles underlying it are not. The Commission has long penalized
® Recently, the United States Court of Appeals for the District of Columbia Circuit
requested the Commission's views on the applicability of the “clear and convincing”
standard to license revocation proceedings. In its Report to the Court, the Commission
discusses factors militating against application of the “clear and convincing”
standard, which also apply to renewal proceedings and further support our conclusion
above. See Report in Sea Island Broadcasting Corp. of S.C., 68 FCC 2d 1796 (1978).
10 As Faulkner notes, we actually used the phrase “primary and substantial” purpose to
delay. Use of the word “substantial” reflected language in the Court of Appeals
mandate suggesting that the Commission might properly punish a strong secondary
purpose to delay. We intended to make clear that a “strike” petition satisfied both of
the standards suggested by the Court. As, however, we have adopted the more
stringent test, we see no need to perpetuate the use of the word “substantial”.
72 F.C.C. 2d
lla
272 Federal Communications Commission Reports
parties who abuse our processes through misrepresentation, anticom-
petitive practices, and “strike” applications. The Commission also
believes that the designation order fairly apprised Faulkner of the
nature of the issue designated against it.11 Moreover, an examination
of the record reveals that Faulkner’s motives were explored at length.
See Tr. 205-7, 215-7, 245, 260, 282-301, 334-6, 348-66, 385-6, 520-46,
1103-10; see also, Brief [on remand] of Faulkner Radio, Inc., filed
September 20, 1977 at paras. 42, 48. Therefore, although the formula-
tion of the Commission’s policy was to some extent in a state of flux,
the record clearly discloses that Fualkner fully understood the issues
raised and the evidence and arguments called for. Faulkner was thus
not prejudiced in defending itself.1?
19. ACCORDINGLY, IT IS ORDERED, That the petition for
reconsideration, filed June 30, 1978 and the further petition for
reconsideration, filed July 28, 1978 by Faulkner Radio, Inc., ARE
DENIED.
FEDERAL COMMUNICATIONS COMMISSION,
WituuaM J. Tricarico, Secretary.
11“To determine whether Faulkner Radio, Inc., filed ita petition to deny for the
purpose of delaying the processing of Radio Carrollton’s application, and, if so, what
effect such conduct has on the basic qualifications of Faulkner Radio, Inc., to be a
Commission licensee.” 38 FCC 2d at 75.
12 Note also that Faulkner’s misrepresentation and lack of candor themselves are
disqualifying.
72 F.C.C. 2d
12a
APPENDIX C
1096 Federal Communications Commission Reports
F.C.C. 78-535
BEFORE THE
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
In the Matter of
FAULKNER Rapio, INC. FOIA Control Nos.
On Request for Inspection of Records 8-78 and 8-79
MEMORANDUM OPINION AND ORDER
(Adopted: July 27, 1978; Released: August 1, 1978)
BY THE COMMISSION:
1. The Commission has before it for consideration (a) the Office of
Opinions and Review’s and General Counsel’s (staff) partial denial of
Faulkner Radio, Inc.’s (Faulkner) two requests for inspection of rec-
ords filed pursuant to the Freedom of Information Act (FOIA) (5 USC
§ 552), and (b) Faulkner’s Application for Review of that decision. In
its initial requests of June 7 and June 8, 1978, petitioner sought access
to four items:
(1) Custody/inspection records for the hearing transcripts in
Docket Nos. 19636 and 19637.
(2) Identification records maintained by the Office of Opinions
and Review pertaining to documents in Docket Nos. 19636 and
19637.
(3) Non-deliberative portions of memoranda prepared by the Of-
fice of Opinions and Review for the Commission’s consider-
ation in Docket Nos. 19636 and 19637.
(4) Non-deliberative portions of the transcript of Hearing Item
No. 3 considered at a closed meeting on May 18, 1978.
By letter dated June 21, 1978, items 1 and 2 of petitioner’s request
were granted to the extent that such files are maintained by the Com-
mission. Disclosure of item 3 was denied pursuant to exemption 5 of
the FOIA. Disclosure of item 4 was denied pursuant to the provisions
of the Sunshine Act. Petitioner appealed the denial of access to items
3 and 4 on June 27, 1978.
2. Petitioner requests access to the above-mentioned documents in
connection with the denial of Faulkner’s renewal application for stan-
dard broadcast Station WLBB, Carrollton, Georgia (Docket Nos.
68 F.C.C. 2d
13a
Faulkner Radio, Inc. 1097
19636-19637). The Commission’s Initial Decision ' denying the renewal
of Faulkner’s license was remanded by the U.S. Court of Appeals for
further proceedings. * The Commission reconsidered its position in a
closed meeting held May 18, 1978, and we affirmed our earlier deci-
sion.* In support of its FOIA request, petitioner now contends that it
requires the requested information in order to make a proper evalu-
ation of the Commission’s May 18th action.
3. The request in item 3 concerns access to a 34-page memorandum
entitled “Reconsideration on remand from Court of Appeals of Deci-
sion denying renewal of license of Faulkner Radio, Inc. for standard
broadcast Station WLBB, Carrollton, Georgia (Docket Nos.
19636-19637).” This staff memorandum was prepared by the Office of
Opinions and Review and was presented to the Commission for our
consideration at the closed meeting of May 18, 1978. The staff initially
denied petitioner’s request for this memorandum pursuant to exemp-
tion 5 of the FOIA. Exemption 5 exempts disclosure of “inter-agency
or intra-agency memorandums or letters which would not be available
by law to a party other than an agency in litigation with the agency.”
5 USC § 552(b)(5). After further review we believe exemption 5 was
properly invoked.
4. It is well settled that exemption 5 was designed to protect the
pre-decisional, deliberative processes of an agency. NLRB v. Sears,
Roebuck & Co., 421 US 1382 (1975); EPA v. Mink, 410 US 73 (1973).
The memorandum requested in item 3 falls squarely within the scope
of exemption 5. It contains the staff's legal analysis of the issues and
recommendations for final Commission action. The memorandum in no
way constitutes the final decision of the Commission, and disclosure
would impair the open exchange of ideas which is necessary to the
decision-making process. Nevertheless, petitioner seeks to remove its
request from the cover of exemption 5 by limiting the request to
factual, not deliberative, material contained in the memorandum. It is
conceded that the memorandum is in part a compilation of facts intro-
duced in evidence and on the public record. However, when a summary
and analysis of factual material on the public record is prepared by the
staff of an agency for use in making a complex decision, the entire
summary is part of the deliberative process, and is exempt from disclo-
sure under exemption 5 of the FOIA. Montrose Chemical Corporation
of California v. Train, 491 F.2d 63, 71 (D.C. Cir. 1974).
5. The request in item 4 concerns a video tape recording of the May
18 discussion in closed meeting of the Faulkner case. Release of closed
meeting transcripts is governed by the provisions of the Sunshine Act.
Subsection (f)(2) of the Act requires disclosure of “the discussion of
any item on the agenda, or of any item of the testimony of any witness
received at the meeting, except for such item or items of such discus-
sion or testimony as the agency determines to contain information
which may be withheld under subsection (c).” 5 USC § 552b(f)(2). The
general standard governing exemption of information from a closed
meeting is that the deleted material must be exempt under subsection
(c) of the Act. In the instant case, the requested video tape is exempt
' Radio Carrollton, et al.. 52 FCC 2d 1173 (1975).
2 Faulkner Radio, Inc. v. FCC, 557 F 2d 866 (D.C. Cir. 1977).
443 R.R. 2d 29 (1978).
68 F.C.C. 2d
l4a
1098 Federal Communications Commission Reports
under subsection (c)(10) which permits non-disclosure of discussions
“by the agency of a particular case of formal agency adjudication.” 5
USC § 552b(c)(10). The entire discussion concerning Faulkner Radio on
May 18 pertained to the disposition of an agency adjudication. Any
discussion of factual material is inextricably bound to the deliberative
rocess, inasmuch as the facts are presented only in an analytical fash-
ion. Furthermore, the legislative history of the Sunshine Act indicates
that an agency’s duty to edit a closed meeting transcript is a limited
one. The Senate Report states:
Agencies need not edit a transcript or electronic recording of the Commission's
discussion of a Fo shaper matter word by word so as to make abbreviated portions
of the record of the meeting available to the public. Where sensitive matters are an
integral part of the record of the discussion of a matter, no part of the record need
be made public. S. Rept. No. 94-354, 94th Cong., Ist Sess. (1975)
The video tape has been reviewed and no readily segregable segments
of discussion exist.
6. Accordingly, IT IS ORDERED, That the Application for Review
filed by Faulkner Radio, Inc. IS DENIED. Petitioner is advised that it
may seek judicial review of this decision pursuant to 5 USC
§ 552(a)(4)(B).
The officials responsible for the denial of petitioner’s request are the
following Commissioners: Chairman, Charles D. Ferris; Robert E. Lee,
James H. Quello, Abbott M. Washburn, Joseph B. Fogarty, Margita E.
White, and Tyrone Brown.
FEDERAL COMMUNICATIONS COMMISSION,
WILLIAM J. TRICARICO, Secretary.
fx F.C.C. 2d
15a
APPENDIX E
424 Federal Communications Commission Reports
FCC 78-444
BEFORE THE
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
In Re Applications of
WittiamM P. JOHNSON AND Ho1uis B. Docket No. 19636
JOHNSON, D/B/A RabD1o CARROLLTON | -File No. BP-17970
CARROLLTON, GEORGIA
For Construction Permit
Faulkner Radio, Inc. (WLBB) Carrollton, Docket No. 19637
Georgia File No. BR-1431
For Renewal of License
MEMORANDUM OPINION AND ORDER
(Adopted: June 28, 1978; Released: June 28, 1978)
By THE Commission: COMMISSIONER QUELLO NOT PARTICIPATING.
1. On May 18, 1978, we considered, for the second time, Faulkner
Radio, Inc.’s application for renewal of its license for station WLBB,
Carrollton, Georgia. Faulkner Radio, Inc., FCC 78-357 (adopted May
18, 1978; released May 31, 1978). Our first order denying renewal of the
WLBB license was vacated and remanded by the United States Court
of Appeals for the District of Columbia Circuit. Faulkner Radi, Inc. v.
FCC, - U.S. App. D.C.-, 557 F.2d 866 (1977). On remand, we conducted
a careful de novo review of the evidence and once again concluded that
renewal of the WLBB license would not serve the public interest,
convenience and necessity. We found Faulkner had committed
knowing and willful misrepresentations and had filed petitions to deny
69 FCC. 2d
l6a
Radio Carrollton, et al. 425
for the primary purpose of delaying the grant of another party’s
application.
‘2. We now grant sua sponte reconsideration of the May 18 Order
for the purpose of clarifying one point. Several times during the course
of the opinion the word “substantial” was used to describe the quality
and amount of record evidence which led us to deny WLBB’s license.
We now realize that our use of the word “substantial” could cause our
appraisal of the record evidence in this case to be misinterpreted.!
While regretting any possible misunderstanding caused by our use of
this word, we wish to make clear that in using the inclusive term
“substantial” we meant there was reliable and probative evidence in
the record which clearly satisfied the customary preponderance of the
evidence standard used in administrative proceedings.2 See 5 U.S.C.
§556(d); Charles Leo Suggs, 57 FCC 2d 1157, 1158 (Rev. Bd. 1976).
Moreover, we did not review the ALJ’s decision in this case under the
“substantial evidence” standard used by courts when they review
agency decisions. 5 U.S.C. §706(2\E).2 The denial was based on our
own independent review of the record which led us to conclude that the
preponderance of the evidence supported the findings and conclusions
against WLBB.
3. ACCORDINGLY, IT IS ORDERED, that, on our own motion,
reconsideration IS GRANTED in this case to the extent noted herein.
FEDERAL COMMUNICATIONS COMMISSION,
Wituiam J. Tricarico, Secretary.
1 See, e.g., letter to Clerk, United States Court of Appeals for the District of Columbia
Circuit from Counsel for Sea Island Broadcasting Corp. of South Carolina (re: Sea
Island Broadcasting Corp. of South Carolina v. FCC, No. 76-1735) dated June 1, 1978
which relied on our Faulkner decision.
? See Collins Security Corp. v. SEC, - U.S. App. D.C.-, 562 F.2d 820, 823 (1977).
> Our reference to this standard in footnote 23 of the opinion merely suggested that on
appeal a reviewing court could sustain our judgment even though there was
conflicting evidence.
68 F.C.C. 2d
17a
APPENDIX D
Radio Carrollton, et al. 1139
| FCC 78-357
BEFORE THE
FEDERAL COMMUNICATIONS COMMISSION
WasHINGTON, D.C. 20554
In Re Applications of
Wittiam P. JOHNSON AND Ho.tis B. | Docket No. 19636
JOHNSON, D/B/A/ Rapio CarRROLLTON, | File No. BP-17970
CARROLLTON, Ga.
For Construction Permit
FAULKNER RabIio, INC. (WLBB), | Docket No. 19637
CARROLLTON, Ga. File No. BR-1431
For Renewal of License
MEMORANDUM OPINION AND ORDER
(Adopted: May 18, 1978; Released: May 31, 1978)
By THE CoMMISSION: COMMISSIONER LEE ABSENT.
1. On April 30, 1975, we adopted a Decision (52 FCC 2d 1173) in the
above-captioned matter. That Decision affirmed the Initial Decision
(52 FCC 2d 1187 (1974)) of Administrative Law J udge David I.
Kraushaar; granted the application of Radio Carrollton (hereinafter
RC)! for a construction permit (BP-17970) for a standard broadcast at
Carrollton, Georgia; denied the application of Faulkner Radio, Inc.
(hereinafter Faulkner) for renewal (BR-1431) of the license to operate
WLBB, Carrollton; and ordered Faulkner to terminate operation of
WLBB. We premised our Order on a determination that a petition to
deny filed by Faulkner on June 18, 1968 was, in fact, a “strike” petition
intended to delay the grant of RC’s application, and further, that
Faulkner had engaged in willful misrepresentations and lacked candor
during the course of the proceeding.
2. On May 26, 1977, the United States Court of Appeals for the
District of Columbia Circuit vacated our Order denying renewal of the
WLBB license and remanded the matter to the Commission for further
proceedings.2 Faulkner Radio, Inc. v. FCC, 557 F.2d 866 (C.A.D.C.,
1977), 40 RR 2d 1129. In so doing, the Court expressed two principal
concerns. The first one it considered dispositive cf Faulkner's appeal,
‘Radio Carrollton is a partnership consisting of Hollis B. Johnson and William
Johnson. Although unrelated, the Johnsons were law partners in practice at
Carrollton at the time the application was filed.
? Faulkner did not appeal the grant of RC’s construction permit application. The permit
was granted April 30, 1975. RC’s application for a license (BL-14060) for WPPI,
Carrollton, was granted April 6, 1976, and later assigned to Radio Carrollton, Inc., on
June 30, 1976 (BAL-8706).
69 F.C.C. 2d
18a
1140 Federal Communications Commission Reports
and the other expressed a broader concern relating to the criteria used
by the Commission in evaluating “strike” petitions to deny. Finding
that both Judge Kraushaar and the Commission had possibly applied
an erroneous presumption of veracity favoring the testimony of RC’s
principals, William and Hollis Johnson, the Court ruled remand was
necessary “. . . to assure that Faulkner Radio’s evidence is evaluated
without the impediment of a presumption of veracity indulged an
opposing lawyer-witness solely because he happens to be a lawyer.”3
With respect to the Commission’s recently-initiated practice of using
“strike” application criteria to evaluate petitions to deny filed by
potential competitors, the Court declared that unless the criteria were
clarified, the practice “ . . . might well have a chilling effect on the
submission of petitions to deny by competitors — those most likely to
bring an applicant’s deficiencies to the Commission’s attention.”
3. On remand, the Commission directed the parties to file
comments respecting their proposed disposition of the proceeding.
(Order, FCC 77-506, released July 22, 1977). Now before us are (a) the
Brief of Faulkner Radio, Inc., filed September 20, 1977; (b) Comments
of Radio Carrollton, filed September 20, 1977; (c) the Broadcast
Bureau’s Comments Regarding Proposed Disposition of Docket No.
19637 on Remand, filed September 20, 1977; (d) Comments of Talton
Broadcasting Company of Lee County, filed September 13, 1977, and
(e) the Broadcast Bureau’s Motion to Strike (d). Also before us for
disposition are (f) the Broadcast Bureau’s Petition to Reopen the
Record and Enlarge the Issues, filed October 13, 1977; (g) the
Broadcast Bureau’s Supplement to (f), filed October 26, 1977; (h) the
Broadcast Bureau’s Further Supplement to (f), filed October 27, 1977;
(i) the Opposition of Faulkner Radio, Inc. to (f), filed November 21,
1977;5 (j) Reply to (i), filed November 30, 1977, by the Broadcast
Bureau; (k) a Motion for Leave to File Affidavit, and Further
Comments, filed December 9, 1977, by Faulkner Radio, Inc.; and (1) the
Broadcast Bureau’s Opposition to Motion for Leave to File Affidavit,
filed December 13, 1977.
4. As might be expected, the parties propose conflicting methods
for satisfying the Court’s directive. RC argues there is no need for a
further hearing and “{a] decision can be made on the present record
because there is sufficient evidence in the record to support the
Commission’s findings and conclusions regarding Faulkner’s conduct
urthout using the Johnsons’ testimony.” (RC’s Comments, p. 2,
emphasis supplied). The Broadcast Bureau, arguing that “ .. . the
issue upon which this case has been remanded by the Court of Appeals
is very narrow in scope. . . ,” urges the Commission to exercise its
3 557 F.2d 873, [SLIP Op. at p. 16].
* 557 F.2d 875, [SLIP Op. at p. 20).
> Faulkner was granted an extension of time to November 21, 1977 in which to respond
to the Bureau’s motion. FCC 77M-1811, released October 21, 1977.
649 FCC 2d
19a
Radio Carrollton, et al. 1141
broad discretion by reevaluating the existing record evidence, “shorn
of the erroneous preference now overshadowing it.” (Broadcast Bureau
Comments, p. 9). Addressing the question of whether the Commission
should further clarify its policy with regard to “strike” pleadings, the
Bureau argues that there is sufficient extrinsic independent evidence
to deny Faulkner’s application without resort to the Commission’s
challenged “strike” policy. The Bureau nevertheless recommends that
the Commission clarify its policy on “strike” petitions in its disposition
on remand rather than in the context of a formal and time-consuming
rule making proceeding.®
5. On the other hand, Faulkner argues that “[t]he Court’s finding
of prejudicial bias by the Administrative Law Judge, which the
Commission’s decision incorporated, places again before the Commis-
sion the resolution of all issues, the resolution of which are dependent
upon the credibility of the witnesses.” (Faulkner’s Comments, p. 8)’
Faulkner argues the Commission’s Decision of April 30, 1975 must be “
.. . totally disregarded and the issues decided upon a record fairly
taken and fairly considered.” (Id. at p. 9). It further argues that
Section 30%e) of the Communications Act (47 U.S.C. 30%e)) entitles it
to a full hearing and a new decision. Finally, Faulkner claims the
Commission is “effectively preclude[d] from . . . retroactively apply-
ing any standard it may choose to adopt [on strike petitions] to the
motivations underlying Faulkner’s filing of the petition todeny. . . ”(
Id. at p. 8).
6. When we first considered this matter, we concluded that a
denial of Faulkner’s renewal application was justified because
Faulkner had filed a strike petition and had engaged in willful
misrepresentations and lacked candor during the course of the
proceeding. As we noted in Para. 16 of our Decision, we considered the
misrepresentations and lack of candor the “more dispositive” ground
for denying renewal. Under the specified issues, the Presiding Judge
found—and we agreed with those findings—that Faulkner lacked
candor and committed knowing and willful misrepresentations both
through the hearing testimony of Robert M. Thorburn (a broadcaster
of some 14 years and Vice-President and General Manager of
Faulkner’s Carrollton stations) and by Thorburn’s submission of
written documents to the Commission. (Decision, Para. 5). Since
misrepresentations are alone sufficient to warrant a denial of license
renewal, we will first review the misrepresentation and lack of candor
® The Bureau devotes a considerable portion of its comments to suggesting a basis for
shaping criteria to be applied to potential “strike” petitions. Among those proposals,
it suggests use of the Grenco criteria (infra) and urges that the principal
consideration should be whether the petition to deny was filed in good faith.
’ Faulkner claims that only the ascertainment and financial issues may be considered
as resolved.
@ F.C.C. 2d
20a
1142 Federal Communications Commission Reports
issues in order to evaluate the evidence free of the erroneous lawyer-
veracity presumption which led the Court to remand this proceeding.
‘4. Initially, we reject Faulkner’s argument that the Initial
Decision and the Decision herein must be disregarded and completely
new hearings held for this reevaluation. In our judgment, the more
appropriate approach is to reevaluate the existing record, “shorn” of
any taint from the erroneous presumption that an attorney’s testimony
is entitled to superior weight. See United Television Co., Inc. (WF AN-
TV), 59 FCC 2d 663, at 665 (1976). In this connection, we note that
Faulkner’s claim that completely new hearings are needed was
rejected by the Court itself, which ruled instead that in order to assure
that Faulkner has not “. . . been deprived of an opportunity to have
its evidence objectively considered” a remand was needed to evaluate
Faulkner's evidence “. . . without the impediment of a presumption of
veracity indulged an opposing lawyer-witness solely because he
happens to be a lawyer.” Faulkner Radio, Inc. v. FCC, 557 F.2d at 870
and 873, respectively.
8. We believe an objective reexamination of the existing record
will fully carry out the Court’s directive. Faulkner’s claim that a hew
hearing is needed because of the Presiding Officer’s alleged bias must
be rejected. An identical argument, supported by the same transcript
excerpts which Faulkner cites in its present brief, was made to the
Court. Although the Court noted this claim of alleged outwardly
manifested bias, it ruled that the basis for remand was the possible
application of the erroneous lawyer-veracity presumption and not the
claim of general bias on the Presiding Officer’s part. Finally, in
rejecting Faulkner's argument that new hearings are required, we
think it significant Faulkner does not claim with any specificity that it
was denied an opportunity to present additional evidence or that it had
offered evidence which was wrongly excluded. We also deem it
significant that the Court did not reverse because error was committed
in creating the record. Rather, it remanded because the evidence may
have been erroneously evaluated.
9. In order to carry out the Court’s directive that we reevaluate
the evidence—and particularly Faulkner’s evidence—to assure it is
“objectively considered”, we will reexamine the record, devoting
particular care to the matters on which the parties and the Commission
earlier focused. Faulkner’s position respecting these matters (its claim
that new hearings are needed) has already been noted. On the other
hand, RC and the Bureau argue that completely apart from any
consideration of Faulkner’s motives in filing the petition to deny, the
record contains sufficient substantial and untainted evidence to
sustain denial of Faulkner’s renewal application on the basis of
misrepresentations and other improper conduct.
10. The June 20, 1968 Hollis Johnson-Robert Thorburn conversa-
tion. Immediately after Faulkner filed its petition to deny RC’s
application, Robert Thorburn telephoned Hollis Johnson (one of RC’s
4 Fee ol
= 21a
Radio Carrollton, et al. 1143
partners) to discuss RC’s application and Faulkner’s petition to deny.
The existence of the conversation is beyond dispute. However, the
affidavits of Johnson (contained in RC’s opposition to the petition) and
Thorburn (contained in Faulkner's reply to RC’s opposition) concerning
the conversation were found by the Commission to be directly
conflicting in most material respects and an issue was designated to
determine which of the parties made misrepresentations to the
Commission in submitting the affidavits (Issue 6).8
11. Upon review of the record, we reaffirm our conclusion in Para.
17 of our Decision that Issue 6 should be resolved against Faulkner.®
In so doing, we reject any presumption that Hollis Johnson’s testimony
is to be preferred simply because he is an attorney. Rather, we are
convinced by our reexamination of the record that Hollis Johnson’s
testimony concerning both the conversation with Thorburn and his
preparation of the affidavit describing the conversation is the more
believable and accurate, not pervaded by the evasive inconsistencies
and material contradictions central to Thorburn’s testimony. Johnson’s
preparation of the affidavit soon after the June 20th conversation (his
affidavit is dated June 26, 1968) lends credibility to the affidavit
because of its relative contemporaneousness.!° Thorburn’s affidavit,
executed August 9, 1968 in response to RC’s opposition to Faulkner’s
petition to deny, is rendered less persuasive because of the lapse of
time between the June 20th conversation and his affidavit. Further the
affidavit and testimony of Linda (Vaughn) Coffelt, Hollis Johnson’s
secretary, although of limited value because she heard only Johnson’s
side of the conversation, tends to corroborate both Johnson’s affidavit
and his testimony concerning the statements attributed to Thorburn.
Finally, the documentary evidence of Faulkner’s financial status at the
time of the conversation when considered in conjunction with the rest
of the record (although admittedly inconclusive when standing alone)
* The affidavits of Johnson and Thorburn are set out in Paras. 10 and 11 of the Initial
Decision, respectively.
* In Para. 17 of our Decision we indicated that absent an abuse of discretion, we would
not substitute our judgment on the credibility of witnesses for that expressed by the
Presiding Officer. We further noted that the Judge, in resolving Issue 6 against
Faulkner, had based his determination, in part, on “his observation of the witnesses’
demeanor.” We wish to make it clear that our reevaluation of the record evidence in
response to the Court’s remand has been de novo. Moreover, we believe the reasons we
outline below, in support of conclusions adverse to Faulkner with respect to
Thorburn’s August 9, 1968 affidavit and his testimony at the hearing concerning
Issue 6, are sufficient to justify these adverse conclusions, without regard to the
Judge’s demeanor findings. Thus, under the circumstances of this case, the Judge's
observation concerning demeanor will be treated as surplusage. See Carton Emery
Broadcasting Co., 22 FCC 584, 586 (1957).
1° Johnson’s affidavit was prepared from notes which he took during the June 20th
conversation. However, those notes were subsequently either lost or destroyed when
Johnson moved his offices. While Johnson could produce no witness to corroborate
his testimony that he took such notes, we are satisfied Johnson's testimony
respecting the taking of the notes and their subsequent loss was not shaken on cross-
examination.
8 F.C.C. 2d
Ce ee ee ee a ee - —
— _ Rae ae. ——————————————————————s
LO) ee ge ee re oT a ee ee :
22a
1144 Federal Communications Commission Reports
tends to support Johnson’s version of the statements purportedly made
by Thorburn respecting Faulkner’s need for delay.!1_ On the other
hand, a comparyison of Thorburn’s August 9, 1968 affidavit with his
vacillating testimony at hearing raises serious questions both as to the
believability of his testimony and to the truthfulness and accuracy of
the affidavit itself.12 Thorburn’s further effort to explain why he
discussed Faulkner’s financial situation during the conversation — and
more specifically why he mentioned Faulkner’s need to refinance
WLBB’s financial obligations — raises further doubt on the same
count.!3 Accordingly, we reaffirm our conclusion that Thorburn’s
affidavit concerning the June 20, 1968 conversation with Hollis
Johnson was submitted to the Commission with a “cavalier disregard”
for the truthfulness and accuracy of its content and as such constituted
a misrepresentation of facts. (See 3J’s Broadcasting Co., 41 FCC 2d
664, 667 (1973)). We also conclude that Thorburn’s testimony on this
matter before the Commission evinces an unmistakeable lack of candor
bordering on deception, conduct the Commission cannot and will not
tolerate. (See FCC v. WOKO, Inc., 329 U.S. 223 (1946)).
12. The O.S. Whitman affidavit. In 1967, O.S. Whitman, a farmer
and automotive glass installer living in Carrollton, granted RC a one-
year written purchase option! on four acres of land which RC
specified in its November 27, 1967 application as the proposed antenna
1! Faulkner Exhibits Nos. 4-7 and 10 consisting variously of pertinent FCC Form 324 :
Licensee Financial Statements, corporate financial statements, the financial portions ° -
of applications for licenses for two stations Faulkner had acquired, and a record of
outstanding promissory obligations at a Carrollton bank were offered and received.
(Tr. 224-245).
12 In his affidavit, Thorburn indicated “since Hollis Johnson called me at the time he
filed his application, I thought that, as a matter of courtesy, I would call him. . .”.
During the hearing, however, Thorburn testified that he reviewed RC’s application
at the invitation of Hollis Johnson at Johnson's office in June or July of 1968 (Tr.
200). Realizing the Petition to Deny was filed on June 18, 1968, Thorburn revised his
testimony to indicate he reviewed the RC application at Johnson’s office in
December of 1967 or January of 1968 (Tr. 202). Thorburn later revised his testimony
to say he requested a copy of the RC application from his attorney four to six weeks
after the publication notice (December 6, 1967) and until that time, he had not seen
the RC application. Later, Thorburn indicated it was he, not Hollis Johnson, who
initiated the phone call in order to see the RC application (Tr. 335). Johnson denies
having any conversation with Thorburn concerning the RC application until June 20,
1968.
13 Thorburn’s affidavit stated “I told Hollis Johnson it had been necessary to refinance
WLBB’s note at the bank for purposes of a down payment on another station.” Upon
questioning by the Law Judge, however, Thorburn could offer no explanation for
any of the statements he made concerning Faulkner's financial status, answering
only “I don’t recall why I did that. . . ” (Tr. 348), “I don’t really have a reason for
volunteering the information . . . ” (Tr. 349), and “It just happened. I was talking
when I should not have been talking,” (Tr. 349-350).
‘* RC was also accorded the right to extend the option for an additional six months.
1S There is record evidence indicating that on at least two occasions after the formal
option expired, Whitman indicated to the Johnsons that the land was still available.
69 F.C.C. 2d
23a
Radio Carrollton, et al. 1145
and transmitter site. In the Spring of 1970, after RC’s formal option
had expired'5 Whitman began to consider the possibility his daughter
might wish to live on this optioned land. Thorburn, learning of the site
location from RC’s application, contacted Whitman and after some
discussion with him obtained Whitman’s unsworn statement, which
was later submitted to the Commission in affidavit form as a part of
Faulkner’s June 23, 1970 supplement to the petition to deny.
Whitman’s purported affidavit (which was drafted by Thorburn)
stated that RC’s option had expired, that Whitman had no present
intention of selling the land to RC, and that the information contained
in the affidavit had been communicated to RC. The Commission
subsequently designated issues against RC to determine whether RC
had misrepresented the availability of the Whitman site (Issue 4) and
whether RC had failed to keep its application current. (Issue 3).
13. Our reexamination of the record clearly establishes the
following: that Thorburn (on Faulkner’s behalf) misrepresented to
Whitman without a basis in fact that the Johnsons intended to go to
court over the availability of the antenna site (Tr. 482) — the most
likely effect being to create enmity between the Johnsons and
Whitman; that Thorburn misled the Commission by suggesting
Whitman was represented by counsel when he was not (Tr. 262, 338-
343 passim ); that Thorburn willfully and knowingly misrepresented to
the Commission that the O.S. Whitman statement was in fact a duly-
executed affidavit conforming with the requirements of Section
1.580(j) of the Commission’s Rules; that the purported affidavit on
which the Commission relied intentionally withheld information
necessary to the Commission’s deliberations (namely, that at the time
the affidavit was drafted, the land was not unavailable to RC but
rather, in a “check back” status (Tr. 266-267); and finally, that
Thorburn’s testimony concerning his participation in the Whitman
The Johnsons testified they first learned the land was unavailable from the
Whitman “affidavit.”
@ FCC. &
24a
1146 Federal Communications Commission Reports
matter is not believable and is riddled by a lack of candor and an
absence of truthfulness.1*6 Thus, except as discussed below,!7 we
* conclude that the findings and conclusions of the Initial Decision which
we adopted (Paras. 54-72, 117-122), and the conclusions set forth in the
Decision (Paras. 8-9)!8 are supported by substantial record evidence
and are hereby affirmed. Mindful of the Court’s concern regarding the
possible application of the veracity presumption and its adverse effect
on Faulkner’s evidence,!9 we have proceeded with utmost caution in
reviewing the evidence on this matter. Following that review we are
satisfied there is no instance in which the testimony of RC’s principals,
the Johnsons, is to be preferred over that of Faulkner’s witnesses
because the Johnsons are lawyers.?°
14. The Al Cohen (“Hidden Ownership”) issue. Under this issue,
added by the Review Board, further hearings were held to determine
16 For instance, in testifying about the O.S. Whitman “affidavit”, Thorburn stated he
was “just realizing” the consequence of filing improperly executed affidavits.
Thorburn is a Notary Public and a broadcaster of 14 years who had previously
submitted affidavits to the Commission and who had in fact submitted supportive
affidavits along with a petition to deny in the Slidell, Louisiana broadcast
proceeding. It is to be noted that the issues raised by Faulkner there are similar to
those raised by Faulkner in this proceeding. Of further note is the fact Faulkner
Radio (for whom Thorburn was working at that time also) forfeited $3,000.00 to the
Commission for the execution of false affidavits in connection with a “fraudulent
billing” complaint lodged against Faulkner's station (WBTR-FM) in Carrollton.
Memorandum Opinion and Order, FCC 69-681, released June 23, 1969. We are also
compelled to note by way of additional example Thorburn’s testimony as to the
number of meetings he had with Whitman. A review of the record (variously at 256-
260, 261, 262-263, 264, 272, 273-275, 336-342, 344-345, 377) will reveal the patent
inconsistencies and contradictions in his testimony, and accordingly, the insubstan-
tial weight his testimony is entitled to.
17 We think the findings at Para. 63 of the Initial Decision concerning the Whitman
“affidavit” should be revised to reflect that the statement of 0.S. Whitman included
by Faulkner in the June 23, 1970 supplement to the petition to deny was an
“improperly-executed” affidavit. Similarly, the reference in Para. 9 of our Decision
to “the false Whitman affidavit” is revised to read “the improperly-executed
Whitman affidavit.” Finally, the reference in Para. 18 to “the false affidavit” is
revised to read “the improperly-executed affidavit.”
‘®In Para. 18 of our Decision we indicated that we would not disturb the Judges’
credibility findings “absent some indication of abuse of discretion.” We again wish to
make it clear, however, that our present reevaluation of the record, following the
Court's remand, is de novo in nature. See footnote 9, supra at p. 6.
'*Of course, to the extent that this issue involves documents submitted to the
Commission by Faulkner, the accuracy or truthfulness of such documents does not
involve the veracity of the Johnsons’ testimony. This same observation applies to
consideration of the Holey-Thorburn correspondence (Para. 16, infra), he appraisal
of which does not depend on any testimony of the Johnsons.
© We recognize that the issue respecting the Whitman matter called for no adverse
conclusions against Faulkner and that consideration of the Holey-Thorburn
correspondence (Para. 16, infra) was not the subject of a separate lack of candor
issue. However, no specific misrepresentation or lack of candor issues are needed to
consider these matters, since the Commission always has authority to deny a license
or application where the record reveals such misconduct. See Grenco, Inc., 39 FCC 2d
782 (1973) and BHA Enterprises, Inc., FCC 78-168, released March 9, 1978.
69 F.C.C. 2d
25a
Radio Carroliton, et al. 1147
whether Al Cohen had a one-third ownership interest in Radio
Carrollton, whether the Johnsons lacked candor with the Commission
respecting this matter, and if so, the effect on RC’s qualifications to
become a Commission licensee. After extensive consideration of both
the undisputed facts and the conflicting testimony respecting this
matter, the Judge concluded Cohen had no such ownership interest and
resolved this issue favorably to RC. (Initial Decision, Paras. 78-108). In
our Decision, we considered the Al Cohen matter as one factor to be
weighed under the abuse of process issue (Decision, Para. 10) and as a
matter relevant to the misrepresentation and lack of candor issues
(Decision, Paras. 16 and 19).
15. Upon further consideration, we do not believe the Al Cohen
matter should be made the basis for any adverse conclusions against
Faulkner. To begin with, the designated issue did not call for any
adverse conclusions against Faulkner. While we agree with the Judge
that the resolution of this issue in RC’s favor was correct, the Al Cohen
matter was not considered a decisive factor under either the abuse of
process issue or the misrepresentation and lack of candor issues. In
both instances, it was only one factor, and a distinctly minor one at
that, to be evaluated. In view of this, the Decision is modified to reflect
the fact that no conclusions adverse to Faulkner are made under this
issue.
16. The Thorburn-Holey correspondence. Finally, while not the
subject of a separate issue in this proceeding, we believe still further
evidence of lack of candor on the part of Faulkner’s witnesses is
demonstrated by the Thorburn-Holey correspondence. On May 20,
1968, the day after RC’s application was put on the Commission’s “cut-
off” list for processing,?! Thorburn sent a letter to Faulkner's
consulting radio engineer, W. J. Holey, requesting Holey “to find
another location where 1330 ke [the frequency RC proposed to use at
Carrollton] will fit as well as the frequency of 1500 ke [another
frequency available for use in the Carrollton area]. . .” On May 27,
1968, Holey replied that “the 1330 ke application for Carrollton was put
on the cut-off list May 19th and will be free and clear June 19th so I do
not see that anything can stop it, or slow it down, now. . .” Like the
June 20, 1968 Thorburn-Johnson conversation discussed above, the
Thorburn-Holey correspondence is principally relevant to the abuse of
process issue specified against Faulkner.22, However, the testimony
concerning this matter is also clearly relevant to the serious question of
Faulkner’s conduct before the Commission during hearing. It is
unnecessary to restate the findings of fact concerning this matter. (See
Paras. 23-28 of the Initial Decision). But we continue to believe they
21 The Commission's cut-off procedures for new standard broadcast stations are set
forth at Section 1.571 et seq. of the Commission’s Rules.
22 In this same connection, so is the Loyd Madden affair, discussed infra in Paras. 30 to
31.
26a
1148 Federal Communications Commission Reports
are supported by substantial evidence, and they are hereby affirmed.
Upon reevaluation of the record concerning this particular incident, it
is our judgment the testimony of Faulkner’s witnesses, Thorburn and
Holey, is so rife with contradictions, equivocations and inconsistencies,
and is so seemingly lacking in candor or appreciation for truthfulness
and accuracy as to raise additional doubts concerning Faulkner’s
qualification to remain a Commission licensee.
17. In our judgment, completely apart from any motives Faulkner
may have had to delay the grant of RC’s application, there is
substantial evidence in the record (considered free of any lawyer-
veracity presumption) to support the conclusion that Faulkner “also
displayed lack of candor and committed knowing and willful misrepre-
sentation by both the testimony of Thorburn. . . and by his seeking to
deceive the Commission in the submission.” of some of his affidavits.
(Decision, Para. 23). Through this conduct, Faulkner has demonstrated
that it does not possess the qualifications to be a licensee. Accordingly,
we conclude that the public interest would not be served by a renewal
of Faulkner’s license.?3
18. Apart from the misrepresentation, we must also consider the
Court’s directive that we clarify our strike petition policy. The Court
pointed out that in our Decision, the Commission concluded, that “one
of Faulkner’s purposes was to obstruct, impede and delay the grant of
RC’s application” and that it was “unnecessary to find this was
Faulkner’s sole—or even primary—purpose in order to put its license in
jeopardy.” The Court then went on to note its
concern . . . [that] this refinement . . . leaves open the possibility that a licensee
jeopardizes its license when it tenders a petition to deny for bona fide public-
interest reasons but it also has an incidental—perhaps even a distinctively minor—
purpose to retard progress on another’s application. Such a policy might well have a
chilling effect on the submission of petitions to deny by competitors—those most
likely to bring an applicant's deficiencies to the Commission’s attention. Faulkner
Radio, Inc. v. FCC, 557 F.2d 866, at 875 (1977).
19. As the Court further noted, the Commission has recognized the
possibility that our strike petition policy might have the chilling effect
referred to above (see State College Communications Corp., 58 FCC 2d
462, at 466 (1976)), but the Court was not persuaded such a chill was
avoidable if the Commission proposed to penalize licensees on the basis
of analyzing their subsidiary motives. (557 F.2d at 875).
20. While we can understand the Court’s concern, we believe our
strike petition policy can be fully reconciled with a licensee’s right to
petition to deny a potential competitor's application without imposing
any undue chill on that right. In our judgment, this reconciliation
23 In reaching this conclusion, we recognize that much of the supporting evidence is in
sharp conflict, particularly the crucial Hollis Johnson-Thorburn conversation. But
“the possibility of drawing two inconsistent conclusions from the evidence does not
prevent an administrative agency's findings from being supported by substantial
evidence.” Consolo v. Federal Maritime Commission, 383 U.S. 607, at 620 (1966).
69 F.C.C. 2d
27a
Radio Carrollton, et al. 1149
requires a balancing of two competing Congressional purposes. We
begin with the fundamental proposition that the field of broadcasting
is one of free competition, that such field is open to anyone who can
demonstrate his qualifications (subject only to frequency availability),
and that Congress intended to leave competition in the broadcasting
field where it found it. FCC v. Sanders Brothers Radio Station, 309
U.S. 470, at 474-5, passim (1940). Against this paramount public
interest in free competition in broadcasting must be weighed the
Congressional purpose in affording an existing licensee the right under
Section 30%d) of the Communications Act, 47 U.S.C. Sec. 309d), to file
a petition to deny against the application of a competitor or potential
competitor.
21. Under this licensing scheme, one seeking entry into the
broadcasting field is free to file his application with the Commission.
But every applicant is on notice that consideration of his application
might be delayed by the filing of a petition to deny which either
questions the adequacy of the application on its face or brings to the
Commission’s attention extra-application information bearing on the
applicant’s qualifications. As the Court itself noted, such petitions to
deny are often filed by competitors (Faulkner Radio, Inc. v. FCC,
supra, Fn. 66). And unavoidably, the progress of considering a
contested application is retarded — in greater or lesser degree —
depending on whether a petition to deny is denied without hearing, or
whether a hearing is needed to resolve substantial and material
questions of fact raised by the petition to deny. Moreover, an existing
licensee who challenges proposed new competition may well obtain an
incidental benefit by delaying such competition while his petition to
deny is being considered. But even though the challenged applicant is
undoubtedly put to extra time and expense in defending his
application, such burdens are an inseparable part of the statutory
scheme under which the applicant seeks his authorization.
22. Our discussion has thus far assumed that a licensee’s petition to
deny a competitor’s application has been filed in good faith. But when
it appears that such a petition has been filed in bad faith, we are
required to resolve “the perennially difficult problem of the relation-
ship of an existing licensee to proceedings which delay or impede
application for competitive new authority.” Pressley v. FCC, 141
U.S.App.D.C. 283, at 284, 437 F.2d 716 at 717 (1970). In the present
context, the crucial question is whether inquiry into the petitioner’s
motives in challenging his potential competitor’s application is legally
compatible with the Congressional purpose behind the pre-grant
protest procedure authorized by Section 30%d) of the Communications
Act. Essentially, the strike petition policy — and the strike application
policy on which it is based — rest on the premise that a person who
uses improper means to impede action on an application for competi-
6 F.C.C. 2d
28a
1150 Federal Communications Commission Reports
tive new service opens itself to the charge of abusing the Commission’s
processes.24 An agency is not powerless to prevent an abuse of its
processes. And in considering challenges to pending applications, “the
Commission need [not] allow the administrative processes to be
obstructed or overwhelmed by captious or purely obstructive protests.”
United Church of Christ v. FCC, 359 F.2d 994, at 1005 (1966). See also
Root Refining Co. v. Universal Oil Products Co., 169 F.2d 514 (3d Cir.
1948), cert. denied, 335 U.S. 912 (1949); Hazel-Atlas Glass Co. v.
Hartford-Empire Co., 322 U.S. 238, 247 (1944). Cf. WKAT, Inc. v. FCC,
111 U.S.App.D.C. 258, 296 F.2d 375, cert. denied, sub nom., Public
Service Television, Inc. v. FCC, 368 U.S. 841 (1961).
23. We come now to the clarification of the strike petition policy
called for by the Court. In Para. 11 of our earlier Decision, we noted
that we had adopted criteria in Grenco, Inc., 28 FCC 2d 166, 167 (1971)
for determining an applicant’s strike application motives. Under these
guidelines, the significant factors to be considered are: (a) the timing
of the application, (b) economic and competitive benefits occurring
from the application, (c) the good faith of the applicant, and (d)
questions concerning a frequency study. These criteria will continue to
govern competing applications, where questions of “strike” motives
arise.
24. However, to avoid any possibility of imposing an undue chill on
the filing of petitions to deny, we believe that more stringent
standards should apply under the strike petition policy, i.e., in the
situation where a licensee petitions to deny the application of a
competitor or potential competitor. In the case of strike petitions, we
think the crucial consideration is whether the petition to deny was filed
for the primary and substantial purpose of delay. As we pointed out in
State College Communications Corporation, 58 FCC 2d 466:
- we will not hesitate to take appropriate and necessary action where
information comes to our attention which indicates that a licensee may have filed in
bad faith — i.e., to block, impede or delay the grant of another application.
25. In considering whether a strike petition issue is warranted, we
will not infer the existence of primary purpose to delay from the mere
filing of a petition to deny, because a licensee who establishes
“standing” has a statutory right to bring to the Commission’s attention
public interest questions raised by a competitor's application and — as
already notes — any “delay” in considering a petition to deny is an
24 Decision, Para. 11, 52 FCC 2d at 1178. However, the Commission's interest in
preventing abuse of petitions to deny is not limited to petitions filed by existing
licensees. The Presiding Judge also considered the issues involving Faulkner's
conduct under the general hearing of “abuse of process.” See 52 FCC 2d 1191. See
also Asheboro Broadcasting Co., 20 FCC 2d 1 (1969) — hearing ordered to determine
whether filing of strike application involved abuse of process; and State College
Communications Corporation, supra, — hearing ordered to determine whether a
petition to deny a competition's application, allegedly filed in bad faith, invoived an
abuse of process.
69 F.C.C. 2d
29a
Radio Carrollton, et al. 1151
inseparable part of the statutory scheme. Rather, the strike petition
policy is aimed at curbing abuses of the Commission’s processes,
particularly with respect to a licensee’s efforts to block, impede or
delay the grant of a competing application. Accordingly, in order to
justify specification of a strike petition issue, the charging party must
make a strong showing that delay is the primary and substantial
purpose behind a petition to deny.
26. In determining this primary delaying purpose, we shall
consider several factors, which, depending on the particular facts, may
or may not all be present in the same case. The following factors are
the principal ones which we consider as significant indications a
petition to deny was filed primarily or substantially for purpose of
delay. (a) Statements by the licensee’s principals or officers admitting
the obstructive purpose. (b) Withholding information relevant to
disposition of the requested issues. The public interest is not served by
concealing information in order to obtain the specification of hearing
issues. When it appears a licensee has engaged in such conduct, this
factor will be considered to determine the licensee’s primary purpose.
We point out our concern here is with the concealment of material
facts, and is not intended to include insubstantial or decisionally-
insignificant inaccuracies in petitions to deny. Where a petition
contains outright misrepresentations, however, they will of course be
relevant not only to an abuse of process evaluation, but will also raise
independent questions regarding the licensee’s basic character qualifi-
cations. (c) The absence of any reasonable basis for the adverse
allegations in the petition. Should it appear that the allegations in the
petition are specious, with little or no factual or legal basis, such
evidence would tend to raise the question whether petitioner was
acting in good faith. (d) Economic motivation indicating a delaying
purpose. Generally, a licensee bent on delaying the grant of a
competitor’s application will do so because he expects to obtain an
economic benefit by preserving the competitive status quo as long as
possible. Such conduct is basically anti-competitive and totally
incompatible with the public interest in promoting unfettered fair
competition in broadcasting. The weight to be assigned to information
or evidence considered under this factor will vary, depending on
whether the licensee’s expectation of economic benefit is supported by
extrinsic evidence to this effect, or must be established circumstantial-
ly. However, we will not infer a “strike” motive from the mere filing of
a petition to deny, even though some “benefit” may accrue to the
licensee from normal processing delays.25 (e) Other conduct of the
licensee. When appropriate, the Commission will also consider other
conduct of the licensee tending to show that the licensee’s primary
25 See Gill Industries, 56 FCC 2d 765, at 769 (1975), where we noted that the “mere
existence of an ulterior economic motive in filing pleadings with” the Commission is
not sufficient, without more, to establish an abuse of process.
8 F.C.C. ad
30a
1152 Federal Communications Commission Reports
purpose is delay. It is impossible to provide an all-encompassing list
respecting such “other” conduct, beyond noting it would include
matters such as licensee efforts to stir up litigation between third
parties and a competing applicant, efforts to interfere with a
competitor’s financing of. his proposal, efforts to hinder a competitor
from obtaining necessary building or antenna sites — in short, any
relevant conduct by the licensee indicating a purpose to delay or block
the grant of a competitor’s application.
27. We consider next the assignment of the burden of proof under
a strike petition issue. As noted above, before a strike petition issue is
even specified, the party requesting such an issue must make a strong
threshhold showing that the primary and substantial purpose behind
the licensee’s petition to deny is delay. On consideration of the
information which is said to justify a strike issue and the licensee’s
response thereto, we will then consider whether a strike issue is
justified.
28. In the present case, it was possible to consider Faulkner's
“strike” motives at the same time the Commission considered the
application to which Faulkner’s petition to deny and supplements
thereto were directed, because Faulkner’s renewal application had
been consolidated for hearing with RC’s application. But in the usual
case, when a strike petition issue is directed against a licensee because
of his efforts to block or delay the grant of a competitor’s application,
that issue usually will have to be resolved in a separate renewal
proceeding involving the licensee’s station. In such a renewal
proceeding, we shall assign the evidentiary burdens in the manner we
did in State College Communications Corp., 58 FCC 2d at 467. The
burden of introducing evidence on a strike petition issue against a
licensee shall be on the party alleging improper conduct by the licensee.
The burden of proof, however, shall be on the licensee both on the issue
respecting whether the licensee’s questioned petition to deny was filed
for the primary and substantial purpose of delay, and on the ultimate
issue of whether, in light of the evidence adduced under the foregoing
issue, a grant of the licensee’s renewal application would serve the
public interest, convenience and necessity.
29. In our earlier Decision while we concluded that Faulkner filed
a strike petition, we found it unnecessary to decide whether the sole —
or even primary — purpose in doing so was to delay the grant of RC’s
application. We must now determine under the clarifying criteria
enunciated herein whether Faulkner's primary and substantial purpose
was to delay the proceeding and thus abuse our processes.26
% Faulkner argues it would be inequitable to apply any guidelines formulated in
response to the Court’s directive that we clarify the strike petition policy. Faulkner’s
claim that this would involve an impermissible retroactive application of new
standards of conduct ignores two considerations. First, as noted in Para. 22, supra,
the core of both the strike application and strike petition policies is the concept of
abuse of process, which is of long-standing duration. See Asheboro Broadcasting Co.,
68 FCC. 2d
3la
Radio Carrollton, et al. 1153
Essentially, the resolution of this question hinges on four specific
matters: (a) the Loyd Madden affair, (b) the Whitman matter, (c) the
~ Hollis Johnson-Thorburn telephone conversation, and (d) the Holey-
Thorburn correspondence. Except for the Loyd Madden affair, the
factual background of each of these matters has been discussed in
detail above in Paras. 10-13 and 16.
30. The Loyd Madden affair. Briefly, the Madden affair assumed
relevance in this proceeding because Faulkner included in its original
petition to deny allegations that Hollis Johnson had fraudulently
acquired a deed to land owned by Madden while representing Madden
in bankruptcy proceedings. Although we declined to specify a hearing
issue against RC on the basis of these allegations?” , Faulkner’s
exploitation of the Madden affair was deemed relevant to the “abuse
of process” issue designated against Faulkner and evidence concerning
this matter was received at the hearing. In essence, the evidence shows
that Thorburn (who had prepared the original petition to deny) knew
the dispute between Madden and Hollis Johnson had been settled well
before the petition to deny was filed and that Johnson had been
awarded legal fees in exchange for the deed.
31. The findings of fact concerning this matter are set forth in
Paras. 33-35 of the Initial Decision. In our judgment, those findings
are untainted by any presumption of veracity favoring the testimony
of one party over that of another, and since the findings are supported
by substantial evidence, they are hereby reaffirmed. Moreover, after a
reevaluation of the record, we reaffirm our conclusions stated in Para.
7 of the Decision (52 FCC 2d 1176) to the effect that Thorburn was
aware the Madden affair had been settled several months before
Faulkner filed the petition to deny, that Thorburn was attempting to
create enmity between the Johnsons and Madden for his own selfish
purposes, and that Thorburn’s testimony on his role in the incident was
evasive and contradictory.28 In our judgment, Faulkner had little
20 FCC 2d 1, at 3 (1969), in which we noted the “extreme disfavor” with which we
viewed a licensee’s efforts to impede the inauguration of new competitive broadcast
service. Secondly, since we have strengthened the requisite showing for determining
what constitutes a strike petition, Faulkner will not be prejudiced should we
conclude that the evidence supports such a determination when measured by an even
more rigorous standard than was applied in our earlier Decision. Cf. SEC v. Chenery
Cory., 332 U.S. 194 at 203 (1947).
27 38 FCC 2d 67, at 70 (1972).
28 Illustrative of the numerous contradictions and inconsistencies, Thorburn testified
that between the filing of RC’s opposition to Faulkner's petition to deny (July 25,
1968) and the subsequent filing by Madden of a grievance with the local bar
Grievance Committee (October 21, 1968), he (Thorburn) had no contact with Madden
(Tr. 359-360). When confronted with evidence to the contrary, Thorburn recalled
that such a meeting had, in fact, occurred (Tr. 361, 373, 383). Thorburn was also
unable to explain why Madden voluntarily forwarded a copy of the grievance
complaint to him without any explanation. Finally, Thorburn admitted discussing
with Madden the possibility of Madden’s filing a grievance complaint. (Tr. 353-68,
372-73, 381-85). This circumstantial evidence strongly suggests that Thorburn
@ F.C.C. 2d
32a
1154 Federal Communications Commission Reports
reasonable basis for raising this issue other than to delay the
proceeding. Our conclusion in this regard is buttressed by other
substantial evidence.
32. The evidence respecting the Whitman matter also provides a
basis for concluding that Faulkner wanted to delay the grant of RC’s
application and used its June 1970 supplement for the primary and
substantial purpose of delay. In that supplement, Faulkner claimed RC
had misrepresented the availability of its antenna site and obtained
specification of issues against RC. (Para. 12, supra). However, it turned
out that it was Faulkner who had made misrepresentations by
concealing a crucial fact in Whitman’s purported affidavit (which had
been drafted by Thorburn), namely, the fact that at the time the
“affidavit” was drafted, the Whitman tract was not unavailable to RC,
but rather, in a “check back” status. (Para. 13, supra). The only
reasonable explanation for Thorburn’s failure to disclose this decision-
ally significant fact is that it would have cast doubt on the need for our
specifying the misrepresentation issue against RC. Thorburn’s only
explanation for not including this fact in the petition was he did not
think it sufficiently important. See 52 FCC 2d at 1177, Tr. 266-8. That
explanation is simply unbelievable and constitutes an additional layer
of evidence indicating that there was an abuse of our processes.
33. The Hollis Johnson-Thorburn telephone conversation and the
Holey-Thorburn correspondence served to corroborate our conclusion
that issues raised in the original petition to deny and the June 1970
supplement were primarily intended to delay the proceeding and
thereby abuse our processes. The Johnson-Thorburn telephone conver-
sation (Paras. 10-11, supra), provides evidence—albeit conflicting—
that Thorburn admitted a delaying purpose in filing the original
petition to deny, and of the economic motivation for doing so. The
Holey-Thorburn correspondence (Para. 16, supra), speaks for itself. It
too serves to indicate that in May, 1968, several weeks before Faulkner
filed its original petition to deny, Thorburn was already seeking ways
to delay the processing of RC’s application by filing a strike
application. Although he decided not to pursue that course of action,
this correspondence does serve to “indicate Thorburn’s state of mind at
the time as bent on delaying RC’s application.” (Decision, Para. 14).
This extrinsic evidence of Faulkner's intent and motivation to delay
the proceeding, coupled with requests for issues for which the
underlying petitions either had an insufficient basis in fact or failed
prompted Madden to file a complaint with the lecal bar Grievance Committee. While
Thorburn denied this, his testimony is confusing and unpersuasive. Therefore, we
reaffirm our earlier conclusion that Thorburn encouraged Madden to file the
complaint. See 52 FCC 2d at 1179. Finally, Thorburn’s statement that he initiated
inquiry regarding the Madden matter in January, 1968 (Tr. 204, 279), and sought
Madden's affidavit at that time, tends to contradict his later statement that he
decided to file a petition to deny in April or May 1968 (Tr. 357).
69 F.C.C. 2d
33a
Radio Carrollton, et al. 1155
fully to disclose all relevant and material facts, leaves us no doubt that
Faulkner intended to abuse our processes and did so.
34. It is obvious from the foregoing that even under the more
stringent strike petition criteria enunciated herein, the original
petition to deny and the June 1970 supplement were strike petitions
because they were filed for the primary and substantial purpose of
delaying the grant of RC’s application. We conclude, therefore, that
such filings constitute a second separate and distinct ground for
denying Faulkner’s renewal application.
35. One other matter under the strike petition policy requires
comment in view of Fn. 55 of the Court’s opinion in Faulkner, supra.
There the Court noted that we had declined in our Decision?® to find
that the remaining seven supplements to Faulkner’s petition to deny
were filed for the purpose of delay, a finding which the Court states in
Fn. 55 “would seem necessary”. We remain of the view that except for
the June 1970 supplement, there is no basis for concluding that the
supplements to Faulkner’s petition were filed for the purpose of delay,
for the reasons stated in Fn. 14 of the Decision. But in our judgment,
this does not preclude a conclusion that the original petition to deny
and the June 1970 supplement were filed for the primary and
substantial purpose of delaying a grant of RC’s application. Where a
licensee files a series of pleadings directed to a competitor’s applica-
tion, the fact that only some of those pleadings are obstructive in
nature does not lessen the abuse of process involved in other pleadings
whose purpose is clearly obstructive.3° And particularly is this so in a
situation such as this, where the obstructive purpose is shown to exist
from the very inception of the proceeding and is furthered by the
subsequent filing of a pleading with an insubstantial basis (Faulkner’s
June 1970 supplement) and which filing is totally unprompted by any
amendments on the competing applicant’s part. In short, to paraphrase
the language of the Faulkner opinion, the “illegitimate purposes
associated with presentation of the [original] petition [and the June
1970 supplement] were substantial [and]. . . crucial” (557 F.2d at 876)
and fully justify a conclusion Faulkner’s primary and substantial
purpose was delay, irrespective of the lack of any delaying purpose
attaching to the remaining supplements.
36. Two other matters remain to be considered. The first is the
Broadcast Bureau’s motion to strike the comments of Talton Broadcast
Company of Lee County (hereinafter “Talton”).3! Talton has
2° Decision, Para. 13.
3° The same reasoning applies to only a single pleading. Here, for example, the original
petition to deny resulted in the specification of ascertainment and financial
qualification issues against RC. But the fact that some issues raised in a petition may
be bona fide ought not preclude inquiry, where appropriate, into whether other
allegations in a petition were sought on the basis of licensee misrepresentations or
concealment of information.
31 In its comments, Talton alludes to a Petition for Expedited Grant filed in connection
6 FCC. 2d
34a
1156 Federal Communications Commission Reports
applications pending before the Commission under which it proposes to
acquire the licenses of two Faulkner-owned stations — WAOA,
Opelika, Alabama (BAL-8507) and WFRI-FM, Auburn, Alabama
(BALH-2184). The Bureau’s motion to strike will be granted. Talton is
not a party to these proceedings, has not sought to intervene, and,
under our rules, has no right to file a pleading in this proceeding.
37. The final matter concerns the Broadcast Bureau’s petition to
reopen the record and designate an issue as to whether Robert
Thorburn and/or any of Faulkner’s principals have solicited or
encouraged others to make ez parte presentations in violation of
Sections 1.221(b), 1.225(a) and 1.227(e) of the Commission’s Rules. In
the circumstances, we do not believe any useful purpose would be
served by reopening the record for further hearings on the Bureau’s
petition and the supplements thereto. Assuming arguendo that
Faulkner was found to have violated the ez parte rules, the effect of
such a finding would be purely cumulative because we have already
concluded that Faulkner does not possess the requisite qualifications to
remain the licensee of Station WLBB. Further, assuming that
Faulkner was absolved of the ex parte charges, our conclusions
respecting Faulkner’s improper conduct would not be changed. In our
judgment, the public interest would not be served by needlessly
protracting this proceeding further.
38. ACCORDINGLY, IT IS ORDERED, That the Motion to Strike
Comments of Talton Broadcasting Company of Lee County, filed
September 13, 1977 by the Broadcast Bureau, IS GRANTED.
39. IT IS FURTHER ORDERED, That the Petition to Reopen the
Record and to Enlarge the Issues, filed October 13, 1977 by the
Broadcast Bureau, as supplemented on October 26, 1977, and October
27, 1977, IS DISMISSED.
40. IT IS FURTHER ORDERED, That the Motion for Leave to
File Affidavit, filed December 9, 1977, by Faulkner Radio, Inc. IS
DISMISSED as moot.
41. IT IS FURTHER ORDERED, That the above-captioned
application (BR-1431) of Faulkner Radio, Inc. for renewal of license
for standard broadcast station WLBB, Carrollton, Georgia IS DE-
NIED.
42. IT IS FURTHER ORDERED, That Faulkner Radio, Inc. IS
AUTHORIZED to continue to operate station WLBB until 12:01 AM,
August 27, 1978, to enable the licensee to conclude that station’s
affairs; PROVIDED, HOWEVER, That if licensee seeks judicial
review of our Memorandum Opinion and Order, it is authorized to
continue to operate the station until thirty (30) days after the Court
which has jurisdiction to review this proceeding issues its mandate.
with the above-noted assignment applications. Talton urges its petition be considered
by the Commission at the time it considers the relief requested by Faulkner in this
proceeding. Talton also requests permission to participate in any oral argument the
Commission may order in connection with this reconsideration on remand.
69 FCC. 2d
4 35a
Radio Carrollton, et al. 1157
FEDERAL COMMUNICATIONS COMMISSION;
WiLiiam J. Tricarico, Secretary.
@ F.C.C. ad
36a
APPENDIX F
UNITED STATES COURT OF APPEALS,
DISTRICT OF COLUMBIA CIRCUIT.
No. 75-1568.
FAULKNER RADIO, INC., Appellant,
v.
FEDERAL COMMUNICATIONS COMMISSION,
Appellee, William P. Johnson and Hollis B.
Johnson, doing business as Radio Carrollton,
Intervenor.
Argued April 8, 1976.
Decided May 26, 1977.
Before MCGOWAN, ROBINSON and WILKEY, Circuit
Judges.
Opinion for the Court filed by ROBINSON, Circuit
Judge.
WILKEY, Circuit Judge, concurs in the result.
SPOTTSWOOD W. ROBINSON, III, Circuit Judge:
Faulkner Radio, Inc., appeals from an order of the
Federal Communications Commission denying renewal of
its license to operate a radio station.’ The challenge to
the Commission’s decision is rested on several grounds,
including the claim that the Commission erred in attach-
ing greater weight to the testimony of two parties who
are lawyers, simply because they are lawyers, than to the
testimony of opposing witnesses. We find that ground
dispositive of the appeal, and remand the case to the
Commission for reconsideration.
On November 27, 1967, Radio Carrollton, a partner-
ship consisting of two practicing attorneys, Hollis B.
Johnson and William P. Johnson, filed an application for
' Radio Carrollton, 52 F.C.C.2d 1173 (1975).
37a
a permit to construct and operate a standard broadcast
station in Carrollton, Georgia. Faulkner Radio, the li-
censee of Station WLBB, an existing standard broadcast
facility in Carrollton, petitioned for denial of Radio
Carrollton’s application, questioning the applicant’s fi-
nancial and character qualifications as well as its ascer-
tainment of community needs. Radio Carrollton’s
response tendered an affidavit by Hollis Johnson averring
that Robert M. Thorburn, vice-president of Faulkner
Radio, had admitted to him during a telephone conversa-
tion that the petition to deny had been filed for the
purpose of delaying proceedings on the application.
Thorburn, in turn, submitted a counter-affidavit disput-
ing the substance of the statements attributed to him.
Over the next three years, there were numerous
amendments to the application and supplements to the
petition to deny. These generated additional character
issues, and questions concerning the availability of an
antenna site for Radio Carrollton and its compliance with
the Commission’s rules. Although Radio Carrollton’s
application for a construction permit and Radio Faulk-
ner’s later application for 12newal of its license were not
mutually exclusive from an engineering standpoint, and
thus could both have been granted,” the Commission felt
that the factual disputes “inextricably connect[ed] the
applications” and consolidated them for a hearing “‘to
permit an orderly resolution of the questions pre-
sented.”? Among the issues which the Commission desig-
nated for hearing were:
...[W]hether Radio Carrollton has complied with
the provisions of section 1.65 of the Commission’s
rules* by keeping the Commission advised of sub-
? When two or more applications for broadcasting licenses are
mutually exclusive, they must be considered and resolved together;
the Commission may not first grant one and then hear the other or
others. Ashbacker Radio Co. v. FCC, 326 U.S. 327, 66 S.Ct. 148,
90 L.Ed. 108 (1945); James River Broadcasting Corp. v. FCC, 130
U.S.App.D.C. 210, 211, 399 F.2d 581, 582 (1968).
> Radio Carrollton, 38 F.C.C.2d 68, 69 (1972).
*Section 1.65 of the Commission’s rules, 47 C.F.R. § 1.65
(1976), provides in relevant part:
[footnote continued]
38a
stantial and significant changes as required by sec-
tion 1.65, and, if not, the effect of such noncom-
pliance on its basic qualifications to be a
Commission licensee.
...[W]hether Radio Carrollton misrepresented it-
self to the Commission pertaining to the availability
of the land o ned by O. S. Whitman as an antenna
site, and if so, what effect such conduct has on the
basic qualifications of Radio Carrollton to be a
Commission licensee.
...[W]hether Faulkner Radio, Inc., filed its peti-
tion to deny for the purpose of delaying the process-
ing of Radio Carrollton’s application, and, if so,
what effect such conduct has on the basic qualifica-
tions of Faulkner Radiw, Inc., to be a Commission
licensee. ...
...[W]hether Faulkner Radio, Inc., or Radio
Carrollton misrepresented itself to the Commission
in its affidavit submitted concerning the conversa-
tion between Robert M. Thornburn [sic] and Hollis
B. Johnson, and if so, what effect such conduct has
on the basic qualifications of either applicant to be a
Commission licensee.
..+ [I]n light of the evidence adduced pursuant to
the foregoing issues, whether a grant of the Radio
Carrollton application and/or renewal of the Faulk-
ner license would serve the public interest, con-
venience, and necessity.°
At the hearing, on May 14-16, 1973, before an admin-
istrative law judge, conflicting testimony was presented as
to the content of the telephone conversation between
Thorburn and Hollis Johnson. According to Johnson,
Each applicant is responsible for the continuing accuracy
and completeness of information furnished in a pending
application or in Commission proceedings involving a pending
application. Whenever the information furnished in the pend-
ing application is no longer substantially accurate and com-
plete in all significant respects, the applicant shall as
promptly as possible and in any event within 30 days, unless
good cause is shown, amend or request the amendment of
his application so as to furnish such additional or corrected
information as may be appropriate.
* Radio Carrollton, supra note 3, 38 F.C.C.2d at 74-75.
39a
Thorburn called and apologized for raising questions
concerning Johnson’s character, and said that because of
Faulkner Radio’s financial problems it needed to retard
the granting of Radio Carrollton’s application.® On the
other hand, Thorburn maintained that the discussion
occurred only in the context of his explanation to
Johnson that the petition to deny probably would not
lead to defeat of Radio Carrollton’s application but
rather to delay by several months. Thorburn further
testified that he had not offered any apology for the
attack on Johnson’s character qualifications. ’
Evidence concerning the availability of land owned by
O. S. Whitman for an antenna site for Radio Carrollton
was likewise contradictory. Thorburn submitted a docu-
ment in the form of an affidavit signed by Whitman
stating that he had informed the Johnsons that the
property on which they held a by-then expired option
would not be available for the antenna site.* That was
significant because if Radio Carrollton knew that and did
not notify the Commission thereof, it would have been
guilty of misrepresentation and of violating the Commis-
sion’s rules.” According to the Johnsons’ testimony,
however, Whitman had first told them that the land
would be available despite expiration of the option,!° and
later had advised them that it might not be available but
that he wanted to check with his son before he made any
decision." The Johnsons further claimed that they
learned definitely that the land was not available only
through the document brought forth by Thorburn.!?
Joint Appendix (J.App.) 135-137, 157-158, 162, 176-178;
Radio Carrollton, 52 F.C.C.2d 1187, 1192 (1975).
7J.App. 218-224, 346-350; Radio Carrollton, supra note 6, 52
F.C.C.2d at 1192-1193.
Sat the hearing, Thorbum testified that Whitman had not
deposed before a notary and thus the document was not really an
affidavit. He further testified that Whitman had not been sworn
when he signed the document. J.App. 264-266.
* See note 4 supra.
107 App. 75.
''].App. 77.
27 App. 126.
40a
The parties also presented divergent testimony on
Thorburn’s role in the filing of a grievance by one Loyd
Madden against Hollis Johnson with the local bar associa-
tion.'? Although the Commission had refused to desig-
nate this incident as a character issue, the administrative
law judge allowed the testimony as relevant to Faulkner
Radio’s motive underlying the petition to deny.!*
The judge released his decision on April 15, 1974,
refusing to renew Faulkner Radio’s license and granting
Radio Carrollton’s application for a construction per-
mit.'° The judge resolved all conflicts in the evidence
against Faulkner Radio. He found that it had set out
deliberately “to mislead and deceive this Commission
concerning... Radio Carrollton, for the purpose of
thwarting or delaying the initiation of a competing
broadcast service in Carrollton, Georgia.”'® The judge
further found that Faulkner Radio
was itself responsible for distortion of the facts in
relation to the site availability matter; that the
evidence is persuasive, as well as pervasive, regarding
° Thorburn claims that Hollis Johnson coerced Madden into
signing a deed in payment for legal fees. Johnson denied any
impropriety in the transaction. J.App. 181-185, 191-195, 204-208,
280, 352-363, 372-374, 382-385.
'4Radio Carrolton, supra note 6, 52 F.C.C.2d at 1200 n.14. The
Commission declined to designate the matter as a character issue
because neither the bar association’s grievance committee nor the
bankruptcy judge handling Madden’s case had found impropriety
on Johnson’s part. Radio Carrollton, supra note 3, 38 F.C.C.2d at
70.
After the May, 1973, hearing, the Commission enlarged the
issues on Faulkner Radio’s petition, and further hearings were held
on January 15-18, 1974, on the question whether one Al Cohen
had a hidden one-third ownership interest in Radio Carrollton.
Radio Carrollton, 43 F.C.C.2d 472, 475 (1973). The Johnsons
denied that Cohen ever had any interest in the station. J.App.
84-87, 1113-1115, 1118-1123, 1133, 1138, 1143-1144, 1156,
1161-1163, 1171-1187, as did Cohen, J.App. 981-1094. Faulkner
Radio produced several witnesses who avowed that they were told
that Cohen did have such an interest. J.App. 694-696, 756-793,
804-817.
'S Radio Carrollton, supra note 6.
'© Radio Carrollton, supra note 6, 52 F.C.C.2d at 1221.
4la
Mr. Thorburn’s wanton disregard of, and indiffer-
ence to, the need for accuracy and truth in giving
testimony on the so-called Whitman site episode, as
well as upon other matters; that it was at least
circumstantially apparent that Faulkner, through
Thorburn, tried, most irresponsibly, to stir up fur-
ther enmity against the Johnsons by a disappointed
former client of their law firm when Thorburn
knew, or ought to have been aware, that the dispute
with the client had previously been settled, by
seeking, with the help of an “affidavit” and allega-
; tions in a pleading, to revive the subject before this
Commission; and that the Hollis Johnson version of
the crucial telephone conversation he had had with
Thorburn on June 20, 1968 must be accepted as
substantially accurate and therefore credible, while
Thorburn must be held to have either been reckless
with the truth or to have wilfully misrepresented the
facts in his version.!”
Faulkner Radio filed exceptions to the decision. The
Commission, after oral argument, affirmed, adopting
substantially the administrative law judge’s findings of
fact.'* Among the contentions in this court is Faulkner
Radio’s claim that the Cemmission’s decision is per-
vasively infected by bias outwardly manifested by the
judge during the hearing. One aspect of the alleged bias
assertedly is the judge’s assumption that the Commission
indulges a presumption giving greater weight to the
testimony of lawyers than that of persons pursuing other
callings.'? That the judge may have labored under that
impression seems clear, for in his opinion he stated:
It may be said, finally, that there is nothing more
precious and vital to a practicing lawyer than his
‘good name’’; that the Johnsons evidently are attor-
neys of some distinction in Carrollton, Georgia; and
that the Commission, thus, has at least a presump-
'” Radio Carrollton, supra note 6, 52 F.C.C.2d at 1222.
'8 Radio Carrollton, supra note 1, 52 F.C.C.2d at 1175.
'? Faulkner Radio also claims that the judge demonstrated bias
against it by blaming it for the delay in the handling of Radio
Carrollton’s application.
42a
tive basis for preferring the veracity of Mr. Hollis
Johnson’s testimony over Mr. Thorburn’s, absent a
persuasive justification to the contrary.”°
The Commission’s decision indicates that it reviewed
the record fully and makes plain that it concurred for the
most part in the judge’s determinations of fact. The
Commission also indicated that absent an abuse of discre-
tion by the judge, it would not substitute its judgment as
to credibility of the witnesses for that expressed by the
judge.*! Consequently, if the judge erred by according
superior weight to the veracity of the lawyer-witnesses
solely because they are lawyers, the decision of the
Commission incorporates that error. And the likelihood,
though not absolute certainty, that the judge pursued a
legally impermissible course demands at a minimum an
administrative reevaluation of the evidence.
II
Findings of fact by the Commission must be accepted
by the courts when supported by substantial evidence in
the record considered as a whole.?? Beyond that, credibil-
ity resolutions by administrative law judges are entitled
to great weight on judicial review of agency action.?3
°Radse Carrollton, supra note 6, 52 F.C.C.2d at 1223. The
judge also found that Thorbum’s testimony was marked with
inconsistencies and evasiveness, which in the judge’s view provided
a basis for disbelieving his testimony. Jd. We cannot be certain,
however, that the judge would have reached the same conclusions
with respect to credibility had he not decided to give preference to
the testimony of the lawyer-parties.
?! Radio Carrollton, supra note 1, 52 F.C.C.2d at 1180.
Communications Act of 1934, ch. 652, § 402(e), 48 Stat,
1094, as amended, 47 U.S.C. § 402(e) (1970). See FCC v. WOKO,
Inc., 329 U.S. 223, 226, 67 S.Ct. 213, 215, 91 L.Ed. 204, 207
(1946); Johnston Broadcasting Co. v. FCC, 85 U.S.App.D.C. 40,
46, 175 F.2d 351, 357 (1949).
*The power of administrative law judges to render initial
decisions does not mean that the Commission is “relegated to the
role of [a] reviewing court[] [which] sustain[s] fact finding of
courts of first instance unless clearly erroneous.” Lorain Journal
Co. v. FCC, 122 U.S.App.D.C. 127, 131, 351 F.2d 824, 828
(1965) citing FCC v. Allentown Broadcasting Corp., 349 U.S. 358,
364, 75 S.Ct. 855, 859, 99 L.Ed. 1147, 1154 (1955). The
[footnote continued]
_—
43a
Neither type of determination can stand, however, when
predicated upon a material error of law.”* We think that
such an error inhered in the judge’s treatment of the
Johnsons’ version of the disputed events if it was favored
merely because they are lawyers. We think, too, that at
the very least there is more than enough doubt on that
score to require a remand of this case to the Commission.
As Dean Wigmore has observed in a related context, “‘it
can be said that there are no rules, in our system of
Evidence, prescribing for the jury the precise effect of
any general or special class of evidence.”*5 And while the
principles governing use of evidence in administrative
tribunals are not wholly congruent with those obtaining
in the courts,”® administrative no less than judicial rulings
must respect standards of reason and fair play.?”
If the trier of fact automatically credits or repudiates
testimony of a witness simply because he is one of a
group pursuing a particular vocation, the normal burden
of proof is in some wise altered, and arbitrarily so.?8
When one party’s witness is preferred for that reason
alone, the opposing party is summoned to produce
additional evidence sufficient to overcome the presump-
tive weight bestowed upon that witness. And since
Commission’s decision must be upheld when it is supported by
substantial evidence in the record even if there is also substantial
evidence to support the contrary decision of the judge. Lorain
Journal Co. v. FCC, supra. The Commission also possesses author-
ity to reject credibility assessments of the judge. Cf. Retail,
Wholesale & Dep’t Store Union, AFL-CIO v. NLRB, 151 U.S.App.
D.C, 209, 215-216, 466 F.2d 380, 386-387 (1972),
24 See Victor Prods. Corp. v. NLRB, 93 U.S.App.D.C. 56, 59-60,
208 F.2d 834, 838-839 (1953); Breeden v. Weinberger, 493 F.2d
1002, 1010 (4th Cir. 1974). See also D.C. Transit Sys., Inc. v.
Washington Metropolitan Area Transit Comm’n, 151 U.S.App.D.C.
223, 243, 466 F.2d 394, 414, cert. denied, 409 U.S. 1086, 93 S.Ct.
688, 34 L.Ed.2d 673 (1972); Jefferson Standard Broadcasting Co.
v. FCC, 305 F.Supp. 744, 748 (W.D.N.C. 1969).
*°1 J. Wigmore, Evidence § 26 at 401 (3d ed. 1940).
26 See generally 2 K. Davis, Administrative Law §§14.01 to
14.17 (1958).
2 7See cases cited supra note 24,
?8As to the burden of proof in Commission proceedings, see
§ 309(e) of the Communications Act, 47 U.S.C. § 309(e) (1970).
44a
membership in a general class may or may not reflect on
an individual member’s veracity,*? there is necessarily an
impingement upon the full and fair hearing that Congress
has mandated*°—“a hearing . . . essential for wise and just
*°The witness’ occupation may in given situations be a factor
bearing on his credibility. Wilson v. State, 31 Ala.App. 21, 11
So.2d 563, 566 (1942), cert. denied, 243 Ala. 671, 11 So.2d 568
(1943); State v. Owen, 73 Idaho 394, 253 P.2d 203, 208 (1953);
State v. Swisher, 364 Mo. 157, 260 S.W.2d 6, 12 (1953). But the
fact that the occupation is respectable—even exalted—does not of
itself elevate the witness’ testimony above that of any other
reputable witness.
The profession of a preacher does not necessarily invest a
man with that purity of morals which renders him more
scrupulous in declaring the truth than another man; for it
sometimes happens, that even the members of that sacred
vocation are overpowered by the temptations to vice. That a
witness is a preacher, ought, if proved, to be stated to the
Jury, that they may judge how far that circumstance entitles
his testimony to additional weight; but even then a Jury
would draw their conclusions from his individual character,
and its correspondence with his profession, rather than from
the profession itself. The instruction given in this case can
only be sanctioned by assuming the position, that a preacher
ex vi termini, denotes a person whose evidence is entitled to
' greater weight than that of another man: whereas, a preacher
whose life and profession are at variance, is less entitled to
confidence than another man, since to his other vices he adds
that of hypocricy; and he who could impiously aim to
deceive the Deity, would not scruple to mislead his creatures.
Sneed v. Creath, 8 N.C. 309, 312 (1821). Compare Flynn ex rel.
Chin King v. Tillinghast, 32 F.2d 359, 360 (D. Mass. 1929), rev’d
on other grounds, 38 F.2d 5 (1st Cir.), cert. denied, 281 U.S. 768,
50 S.Ct. 467, 74 L.Ed. 1176 (1930) (race); Bliss v. Bliss, 161
Mo.App. 70, 142 S.W. 1081, 1082 (1912) (sex); Barefoot v. Lee,
168 N.C. 89, 83 S.E. 247, 248 (1914) (sex); Texas Employers Ins.
Ass'n v. Haywood, 153 Tex. 242, 266 S.W.2d 856, 859 (1954)
(race).
*°In § 309(e) of the Communications Act, 47 U.S.C. § 309(e)
(1970), Congress provided for hearings where ‘‘a substantial and
material question of fact is presented or the Commission for any
reason is unable to make the finding specified in” § 309(a)—that
the public interest, convenience and necessity will be served by a
grant of the application. The Supreme Court has held that in
§ 309(e) hearings “every party shall have the right to present his
case or defense by oral or documentary evidence, to submit
rebuttal evidence and to conduct such cross-examination as may be
required for a full and true disclosure of the facts.”’ United States
v. Storer Broadcasting Co., 351 U.S. 192, 202, 76 S.Ct. 763, 770,
100 L.Ed. 1081, 1090 (1956).
45a
application of the authority of administrative boards and
agencies.”*! We do not suggest, of course, that the
discretion of administrative law judges or agencies in
assessing credibility on the personal qualities of witnesses
is in any way to be curtailed. We say only that by what
seemingly was a class-presumption applied in this case,
Faulkner Radio may have been deprived of an opportun-
ity to have its evidence objectively considered.
The precise point we stress would appear to many as
self-evident, and perhaps that explains why it apparently
has not heretofore been squarely addressed in a reported
decision. Nonetheless, we are not without support in
precedent. In Milton Broadcasting Co.,** the Commis-
sion, in a license renewal proceeding, concluded that an
administrative law judge had been influenced in judging
credibility by his sympathy for the poor physical condi-
tion of the owner of the licensee, and thereby had shifted
the burden of proof from the licensee to the Commis-
sion’s Broadcast Bureau.*? Though indicating its reluc-
tance to substitute its own findings on credibility for
those of the judge, the Commission realized that it would
be “derelict in [its] statutory duty” to accept findings by
the judge which conflicted with evidence in the record.**
To recite the Milton holding is not to intimate a view as
to whether the judge’s credibility resolutions here are
unsupported by the evidence as in Milton. That decision
is one for the Commission in the first instance.
We may look also to our own decisions requiring trial
judges, on request, to inquire on voir dire examination of
prospective jurors as to whether any of them would
attribute more weight to the testimony of a police
officer, just because he is a police officer, than they
311d.
3234 F.C.C.2d 1036 (1972).
337d. at 1043-1045. In license renewal proceedings, the licensee
shoulders the burden of proving that renewal is in the public
interest. Communications Act of 1934, § 309(a), (e), 47 U.S.C.
§ 309(a), (e) (1970).
34Milton Broadcasting Co., supra note 32, 34 F.C.C.2d at 1045.
46a
would give to the testimony of another witness.*°
“(W] hen important testimony is anticipated from certain
categories of witnesses, whose official or semi-official
status is such that a juror might reasonably be more, or
less, inclined to credit their testimony,” we have said, “‘a
query as to whether a juror would have such an inclina-
tion is not only appropriate but should be given if
requested.””®® While those cases do not dictate specifically
that jurors who answer in the affirmative must be
excused for cause, that is the implication of the logic of
the decision in those cases. We cannot believe that the
result here should differ merely because the proceeding is
civil in nature and the presumptive bias favors members
of the bar instead of police officers.
We also draw support for our view from a compara-
tively recent case in the Third Circuit. In United States v.
Thompson,®*’ the court held that a judge was required to
disqualify himself when it was averred that he was
personally biased against a class of defendants—those
convicted of violating the selective service laws. The
defendant and his attorney had supplied pretrial affi-
davits charging that the judge had stated that it was his
policy to “‘sentence all violators to thirty (30) months in
prison if they are good people,” and to four and a half
years if they were black militants.** Deeming this class
35Salley v. United States, 122 U.S.App.D.C. 359, 361, 353 F.2d
897, 899 (1965); Brown v. United States, 119 U.S.App.D.C. 203,
204-205, 338 F.2d 543, 544-545 (1964); Sellers v. United States,
106 U.S.App.D.C. 209, 210, 271 F.2d 475, 476 (1959). Accord,
Chavez v. United States, 258 F.2d 816, 819 (10th Cir. 1958), cert.
denied, sub nom. Tenorio v. United States, 359 U.S. 916, 79 S.Ct
592, 3 L.Ed.2d 577 (1959) (dictum).
3©Brown v. United States, supra note 35, 119 U.S.App.D.C. at
205, 338 F.2d at 545. We also noted that not every failure to put
the question necessarily leads to reversal, but that “‘the issue turns
on the degree of impact which the testimony in question would be
likely to have had on the jury and what part such testimony played
in the case as a wnole.’’ Jd. Since in the present case the
administrative law judge’s decision depended on resolution of the
conflicting testimony of the lawyer- and nonlawyer-witnesses, an
announced preference for the veracity of lawyers’ testimony would
clearly constitute fundamental error.
97483 F.2d 527 (3d Cir. 1973).
387d, at 528.
47a
bias, the court concluded that it was sufficient to call for
recusal.*? We recognize, of course, that disqualification of
the judge was mandated by a statute not applicable
here,*® but that is beside the point. The fair hearing
contemplated by Congress demands as much as the
disqualification statute does; as we have declared,
an administrative hearing [which is] of such impor-
tance and vast potential consequences must be
attended, not only with every element of fairness
but with the very appearance of complete fairness.
Only thus can the tribunal conducting a quasi-
adjudicatory proceeding meet the basic requirement
of due process.*!
In the case before us, the administrative law judge
noted the undoubted value of a lawyer’s “good name’”*?
and the apparent fact that the Johnsons bore “‘some
distinction” in Carrollton.** The judge did not limit these
considerations to circumstantial interplay as factors perti-
nent to credibility, however, but ruled on the premise—
which he attributed to the Commission—that there was
“at least a presumptive basis for preferring the veracity of
Mr. Hollis Johnson’s testimony over Mr. Thorburn’s,
absent a persuasive justification to the contrary.”*4 These
pronouncements are certainly readable in combination as
397d. at 528-529. Since the court held that recusal was man-
dated by virtue of the alleged bias against those convicted of
violating the selective service laws, it did not reach the question
whether recusal was also required because of claimed bias against
black militants. Jd.
498 U.S.C. § 144 (1970) provides in pertinent part:
Whenever a party to any proceeding in a district court makes
and files a timely and sufficient affidavit that the judge
before whom the matter is pending has a personal bias or
prejudice either against him or in favor of any adverse party,
such judge shall proceed no further therein, but another
judge shall be assigned to hear such proceeding.
41 4mos Treat & Co. v. SEC, 113 U.S.App.D.C. 100, 107, 306
F.2d 260, 267 (1962).
*2See text supra at note 20.
8 See text supra at note 20.
“See text supra at note 20.
48a
the expression of a view that the testimony of Hollis
Johnson, a lawyer, was for that singular reason sur-
rounded by a presumption entitling it to a preferred
status over the testimony of a layman. At the bare
minimum, one cannot say with even the slightest degree
of confidence that the judge’s ruling—which the Commis-
sion unreservedly adopted—was not bottomed on that
predicate. Whichever way the judge’s explanation is inter-
preted, then, a remand for reconsideration is necessary to
assure that Faulkner Radio’s evidence is evaluated with-
out the impediment of a presumption of veracity in-
dulged an opposing lawyer-witness solely because he
happens to be a lawyer.
Ill
Because the case must return to the Commission for
new findings of fact, we feel compelled to make known,
for guidance of the Commission, our concern as to the
ambiguity of the Commission’s findings with respect to
motivation underlying Faulkner Radio’s petition to deny,
and with some of the implications of the Commission’s
discussion of strike petitions.
The Commission has heretofore held that where one of
the purposes of a license application is ‘‘the obstructing,
impeding, or delaying of a grant of another application,”
the former is a strike application and its filing “places in
jeopardy the authorization for the existing station which
is the intended beneficiary of the strike application.’’*
The Commission has further stated that
[t] his policy obtains even if the intention to ob-
struct, impede, or delay is not the sole reason for
participation and even if the strike applicant intends
to build and operate the proposed station if his
application is granted.*6
In Pressley v. FCC,*” we noted that “{t] hese words are
not a model of clear and complete statement which will
45 Asheboro Broadcasting Co., 20 F.C.C.2d 1, 3 (1969).
46
Id.
*7141 U.S.App.D.C. 283, 437 F.2d 716 (1970).
49a
give adequate prior notice of a standard by which
conduct can be measured,’*® and we called upon the
Commission to develop regulations to provide guidance
to licensees.*? In response to our decision, the Commis-
sion identified an essential ingredient of strike applica-
tions.°° “To be considered a ‘strike’ application,” the
Commission said, “the motive or purpose—principal or
incidental—must be to obstruct or delay another applica-
tion.”*! The Commission also set forth some criteria for
determining whether an application is or is not a strike
application: “(1) the timing of the application, (2) the
economic and competitive benefit occurring from the
application, (3) the good faith of the applicant, and (4)
questions concerning a frequency study.’’*?
Although these guidelines were established for use in
evaluating applications, the Commission, starting with the
instant case, has begun to utilize them to similarly
evaluate petitions to deny.** The administrative law judge
concluded that ‘“‘Faulkner Radio, Inc. had filed its Peti-
tion to Deny, not for a praiseworthy purpose of bringing
pertinent information concerning its adversary to the
Commission’s attention bearing on the public interest but
instead for the invidious or underhanded purpose of
delaying the processing of Radio Carrollton’s applica-
tion....”°* The Commission, in turn, applying the
strike-application criteria to Faulkner Radio’s petition,
concluded that it was a strike petition.®® More particu-
“87d. at 288 n.5, 437 F.2d at 721 n.5.
“°Fd. at 288-289, 437 F.2d at 721-722,
Grenco, Inc., 28 F.C.C.2d 166, 167 (1971).
*'7d.
id (A
* Radio Carrollton, supra note 1, 52 F.C.C.2d at 1178. See, e.g.,
State College Communications Corp., 58 F.C.C.2d 462 (1976); Gill
Indus., 56 F.C.C.2d 765, 769 (1975).
** Radio Carrollton, supra note 6, 52 F.C.C.2d at 1223.
**Radio Carrollton, supra note 1, 52 F.C.C.2d at 1178-1179.
Although the Commission in another case has indicated, in dis-
cussing Faulkner Radio’s petition, that one factor in its decision
was the volume and timing of the seven supplements to Faulkner’s
[footnote continued]
50a
larly, with respect to Faulkner’s good faith, the Commis-
sion held:
(1) The Thorburn-Holey correspondence of May,
1968 indicates that Thorburn was then in fact
contemplating a strike application. The fact he never
filed such application is immaterial, for, as the Judge
determined, such contemplation would indicate
Thorburn’s state of mind at the time as bent on
delaying [Radio Carrollton’s] application. (2) Also
in May, 1968, Thorburn misrepresented to Whitman
the supposed legal action the Johnsons contem-
plated respecting the antenna site, thereby securing
Whitman’s written statement adverse to the John-
sons.°® But, the evidence shows, Whitman had not
then actually declared the site unavailable. (3) The
next month, Faulkner filed its petition to deny.
Based on Thorburn’s experience in filing a similar
petition in the Slidell proceeding,*”’ raising identical
types of issues (i.e., ascertainment of needs, finan-
cial and character) as those in the Carrollton peti-
tion, Faulkner knew or should have known the
petition would probably delay [Radio Carrollton’s]
application considerably. And, as already men-
tioned, the character allegations of the petition
centered about the Madden dispute, which Thor-
burn knew or should have known had already been
settled.°* (4) Hollis Johnson’s version of the crucial
June 20, 1968 telephone conversation .. . attributed
to Thorburn, inter alia, an account of Faulkner’s
financial difficulties and the unprofitability of radio
ventures, and the statement that the petition to
deny had been filed to obtain four or five months’
petition, Gill Indus., supra note 53, 56 F.C.C.2d at 769, we note
that the Commission declined to find in its decision on Faulkner’s
petition that the supplements were filed for the purpose of delay.
Radio Carrollton, supra note 1, 52 F.C.C.2d at 1179 & n.14. That
finding would seem necessary since the Commission held that most
of Faulkner Radio’s supplements came in response to amendments
to Radio Carrollton’s application. Jd.
*See text supra at notes 8-12.
7One year before filing the petition to deny Radio Carrollton’s
application, Faulkner Radio submitted a similar petition against an
applicant for a Radio station in Slidell, Louisiana. J.App. 347.
®See notes 13-14 supra and accompanying text.
: 5la
delay.*® (5) Thorburn then sought to obtain a
non-competition covenant from Cohen, then a key
employee of Faulkner in Carrollton.® This action
plainly was designed to prevent [Radio Carrollton]
from obtaining experienced staff in Carrollton
should it receive a grant. (6) And finally, Thorburn
apparently encouraged Madden to file a complaint
against Hollis Johnson with the local bar grievance
committee on which, as Faulkner itself points out,
the committee advised Madden and the Commission
it lacked authority to act.°' The committee further
informed Madden if he wanted to pursue the matter
he should contact either the county grand jury or
the Georgia State Bar. The presumed lack of any
merit to Madden’s grievance is indicated by the fact
there is no evidence Madden ever did so.®
Assuming arguendo that these findings were bolstered
by substantial evidence in the record,®* they might
support the conclusion that a substantial reason for
presentation of the petition to deny was an illegitimate
objective. But, the Commission, unlike the administrative
law judge,™ declined to specifically find that a purpose
to impede, obstruct or delay was the primary or even a
substantial reason for the filing of the petition. Relying
on its strike-application policy, the Commission declared
that
the evidence clearly demonstrates Faulkner did file a
strike petition. Plainly, one of Faulkner’s purposes
was to obstruct, impede and delay the grant of
[Radio Carrollton’s] application. It is unnecessary
to find this was Faulkner’s sole—or evey primary—
purpose in order... to put its license in jeopardy.®
**See text supra at note 6.
See note 14 supra.
*'See note 14 supra.
* Radio Carrolton, supra note 1, 52 F.C.C.2d at 1179.
See Part II supra.
See text supra at note 54.
®° Radio Carrollton, supra note 1, 52 F.C.C.2d at 1180.
52a
Our concern stems from this refinement, which leaves
open the possibility that a licensee jeopardizes its license
when it tenders a petition to deny for bona fide public-
interest reasons but it also has an incidental—perhaps
even a distinctively minor—purpose to retard progress on
another’s application. Such a policy might well have a
chilling effect on the submission of petitions to deny by
competitors—those most likely to bring an applicant’s
deficiencies to the Commission’s attention.*° The Com-
mission seemingly has recognized this difficulty since in a
recent opinion designating for hearing the question of a
licensee’s motive in filing a petition to deny, it said:
While we in no way intend to cast a chilling effect
upon the filing of applications, petitions to deny or
other pleadings by licensees against competitors or
potential competitors, we will not hesitate to take
appropriate and necessary action where information
comes to our attention which indicates that a
licensee may have filed in bad faith—i.e., to block,
impede or delay the grant of another application.
We are not persuaded that the Commission will not
“cast a chilling effect” if it fails to clarify the standard it
will apply in evaluating petitions to deny. Nor are we
satisfied that a chill is avoidable so long as the Commis-
sion proposes to penalize licensees on the basis of its
analysis of their subsidiary motives. Congress has con-
ferred standing upon interested parties to enable them to
convey information bearing on the qualifications of
licensees and potential licensees to the Commission.®®
Competitors have been granted standing before the Commis-
sion and the courts because ‘‘such persons might well be the only
ones sufficiently interested to contest a Commission action.”
United Christ Church v. FCC, 123 U.S.App.D.C. 328, 335, 359
F.2d 994, 1001 (1966) citing FCC v. Sanders Bros. Radio Station,
309 U.S. 470, 477, 60 S.Ct. 693, 698, 84 L.Ed. 869, 875 (1940).
Cf. Easirn R.R. Presidents Conference v. Noerr Motor Freight,
Inc., 365 U.S. 127, 139, 81 S.Ct. 523, 530, 5 L.Ed.2d 464, 472
(1961) (‘‘it is quite probably people with... a hope of personal
advantage who provide much of the information upon which
governments must act”’),
” State College Communications Corp., supra note 53, 58
F.C.C,2d at 466.
8 See note 66 supra. Cf. Johnson & Dystel, A Day in the Life:
The Federal Communications Commission, 82 Yale LJ. 1575,
1617 (1973).
53a
Any policy which would seriously inhibit this vital flow
of intelligence might be inconsistent with the congres-
sional mandate, and injurious of the public interest as
well,
A decision by the Commission subsequent to its
disposition of this case, however, suggests that its intent
may not be that an incidental motive to delay or impede
will turn an otherwise bona fide, well grounded petition
to deny into a strike petition. In Gill Industries,®’ the
Commission refused to find an abuse of process, holding
that ‘‘the mere existence of an ulterior economic motive
in the filing of pleadings before this Commission is not
sufficient to establish abuse of process without the
exacerbating factors present in, e.g., Radio Carroll-
ton....” The Commission took pains to describe the
conduct of Faulkner Radio that resulted in its conclusion
in the present case:
[T] hat decision was based on, inter alia, the nature
o! the prosecution and delaying tactics as well as the
petitioner’s financial interest in preventing the insti-
tution of a competing service.... [Faulkner
Radio’s] tactics were designed to delay the proceed-
ing, including unwarranted delay in the filing of
petition to enlarge issues, filing of a false affidavit,
attempts to stir up already settled local litigation,
and attempts to convey a false impression.”
This characterization of Faulkner Radio’s activities
suggests that the Commission may have believed that
illegitimate purposes associated with the presentation of
the petition were substantial or even crucial, and that any
service to the public interest was minimal. That rationali-
zation is not supplied by the Commission’s decision in
this case, however, and thus cannot be considered on this
Supra note 53.
Gill Indus., supra note 53, 56 F.C.C.2d at 769. The Commis-
sion may, however, be drawing a distinction between petitions filed
for purposes of delay and those accompanied by other types of
ulterior economic motive, since in Gill the Commission pointed out
that there were no allegations that the petition there was prompted
by any desire to delay.
"Id.
54a
review. On remand, the Commission will be well advised
to clarify its policy on strike petitions and, if it finds
Faulkner Radio’s petition to be of that character, to
specify the precise basis for that conclusion.
The order appealed f-om is vacated, and the case is
remanded to the Commission for further proceedings in
conformity with this opinion.
Vacated and remanded.
55a
APPENDIX G
° - ’ . ’
Faulkner Radio, doe. et ae. we?
F.C.C. 76-870
BEFORE THE
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
In Re Applications of |
FAULKNER RADIO, INC. |
For Renewal of Licenses for |
STATION WAOA, OPELIKA, ALABAMA | Docket No. 20910
File No. BR-4723
STATION WFRI(FM), AUBURN, ALABAMA Docket No. 20911
File No. BRH-2748
STATION WBCA, Bay MINETTE, ALABAMA Docket No. 20912
| File No. BR-3448
STATION WWSM(FM), Bay MINETTE, - Docket No. 20913
ALABAMA _ File No. BRH-1629
STATION WGAA, CEDARTOWN, GEORGIA, | Docket No. 20914
AND | File No. BR-1142
STATION WBTR(FM), CARROLLTON, ' Docket No. 20915
GEORGIA | File No. BRH-1705
ORDER
(Adopted: September 15, 1976; Released: September 22, 1976)
BY THE COMMISSION:
_1. The Commission has before it for consideration the above-ca
tioned applications for renewal of licenses, filed “i Faulkner Radio,
Inc., for Stations WAOA, lika, Alabama; WFRI(FM), Auburn, Ala-
bama; WBCA and WWSM(FM), Bay Minette, Alabama; WGAA, Ce-
wn, Georgia; and WBTR(F'M), Carrollton, Georgia.
2. To place our consideration of the above-captioned applications in
Errher peespective, we note, by way of a that on November
1, 1972, Faulkner Radio, Inc.’s application for renewal of license for
Station WLBB, Carrollton, ——— was designated for evidentiary
hearing. This hearing was ordered to determine, among other things,
whether Faulkner Radio, Inc. had: (i) filed a petition to deny against
61 F.C.C. 2d
56a
24 Federal Comn.unications Commission Reports
another applicant’s non-mutually exclusive application for a new stan-
dard broadcast station in Carrollton for the purpose of delaying the
rocessing of that application; and (ii) misrepresented itself or was
king in candor in its dealing with the Commission. Radio Carrollton
et al., 38 FCC 2d 68 (1972). The Administrative Law Judge, in an
Initial Decision released April 15, 1974, found that Faulkner Radio, Inc.
had not only filed its petition to deny for “* * * the invidious or
underhanded purpose of delaying the processing of Radio Carrollton’s
gy a by the Commission and its staff,” but, also, through its
ice-President, Robert Thorburn, on several instances, was udlied
either * * * reckless with the truth or * * * wilfully misrepresented the
facts * * *.” 52 FCC 2d at 1222-23, 1226. The Administrative Law
Judge concluded, therefore, that, “* * * due to its demonstrated insin-
cerity, the public interest cannot be served by granting * * * [Faulkner
Radio, Inc.'s] application for renewal of license * * *” for WLBB; and,
accordingly, recommended denial of the license.
3. Upon wh the Commission affirmed the Administrative Law
Judge’s Initial Decision. Radio Carrollton et al., 52 FCC 2d 1173
(1975). In so doing, the Commission found, among other things, that:
* * * the record indicates Thorburn arty Seige facts and lacked candor by
fraudulent and knowing submission of the false affidavit, and by his evasive and
misleading testimony at hearing * * *. Here again, we believe the Judge’s determi-
nation as to the credibility of the witnesses should not, absent some indication of
abuse of discretion, be disturbed. The record evidence indicates Thorburn in his
affidavit and testimony was either reckless with the truth or wilfully misrepre-
sented facts. * * *.
ss © & ©
The Commission and the Courts have ey held that false statements, mis-
representations or lack of candor by applicants or licensees in the course of Commis-
sion proceedings raise substantial questions of basic character qualification. (cita-
tions omitted). We agree with the Judge that we cannot condone deception, even
‘useless deception’, by licensees, especially experienced broadcasters, and that the
fact of concealment by a licensee or applicant ‘s more significant than even the facts
concealed. (citation omitted). Faulkner placed its license in jeopardy by filing a
strike petition to deny. It also displayed lack of candor and committed knowing and
wilfull misrepresentations by both the testimony of Thorburn at hearing and by his
seeking to deceive the Commission through submission of an affidavit that was in no
sense a real affidavit. In view of the nature and degree of Thorburn’s misconduct,
we conclude that Faulkner does not possess the requisite character qualifications of
a Commission licensee * * *.
Radio Carrollton et al., 52 FCC 2d at 1180, 1182.
4. The above-captioned applications have been fully processed, and,
except for the matters discussed above, Faulkner Radio, Inc. appears
ualified. However, due to the serious nature of the conclusions in
adio Carrollton, Inc., supra, including the direct involvement of one
of the licensee’s principals in the misconduct found therein and the
nature of the misconduct—ie., giving evasive and misleading testi-
mony at the hearing—we believe that a substantial and material ques-
tion exists re ing Faulkner Radio, Inc.’s qualifications to remain a
licensee of this Commission. Therefore, we believe that the above ap-
plications: must be designated for oral argument to determine what
effect, if any, the basic character qualification finding made against
Faulkner Radio, Inc. in that proceeding has with respect to the licenses
of its remaining broadcast holdings.
61 F.C.C. 2d
57a
Faulkner Raaio, [ne., et al. 25
5. Concerning the above, we view the findings relating to licensee’s
character qualifications in Radio Carrollton as being res judicata as to
all of its other broadcast holdings. Further, since there are no factual
disputes to be resolved, but, rather, ways eee question as to what effect
the misrepresentations made in the above alate gee may have on
licensee’s basic qualifications, in lieu of the normal evidentiary hearing
we will order that an oral ent be held before the Commission en
banc on the issues specified below. Faulkner Radio, Inc. is being di-
rected herein to file a brief to the Commission concerning its position
on the specified issues as well as other matters it may deem of rel-
evance to our final determination. The Broadcast Bureau, which is
being made a y to this proceeding, may also submit a brief. Both
parties may file reply briefs.
6. Accordingly, IT IS ORDERED, That, pursuant to Section 30%e)
of the Communications Act of 1934, as amended, the prove eae
lications for renewal of licenses for Stations WAOA, WFRI(FM),
WBCA, WWSM(FM), WGAA. and WBTR(FM), filed by Faulkner Re.
jo, Inc, ARE DESIGNATED FOR ORAL ARGUMENT BEFORE
COMMISSION EN BANC, in Washington, D.C., on November
29, 1976, beginning at 2:00 p.m., upon the following issues:
1. To determine, in light of the Commission’s findings in the mat-
ter of Radio Carrollton et al., 52 FCC 2d 1173 (1975), whether
Faulkner Radio, Inc. possesses the requisite qualifications to be
a broadcast licensee of this Commission.
2. To determine, in light of the arguments made with respect to
the —— issue, whether a grant of the above-captioned
applications for renewal of licenses would serve the public in-
terest, convenience and necessity.
7, IT IS FURTHER ORDERED, That, to avail itself of the oppor-
ay, Bo be heard, Faulkner Radio, Inc., pursuant to Section 1.221(c) of
the Commission’s Rules, in person or by attorney, shall, within 20 days
of the release of this Order, file with the Commission, in triplicate, a
written notice stating an intention to appear on the date and time fixed
for bong Pet Argument and present arguments on the issues specified
in er.
8 IT IS FURTHER ORDERED, That the Broadcast Bureau is
made a y to the Oral Argument ordered herein and may partici-
oe to the extent it deems necessary to assure that the Commission is
y advised with respect to the ey oy issues.
9. IT IS FURTHER ORDERED, That Faulkner Radio, Inc. shall,
within 30 days of the release of this Order, file with the Commission a
written brief stating its position on the issues — herein. The
cast Bureau may also file, within 30 days of the release of this
r, a written brief stating its position on the issues specified
herein. Within 15 days after the deadline for filing initial briefs, both
parties may file reply briefs.
10. IT IS FUR R ORDERED, That, in accordance with Section
30%e) of the Conimunications Act of 1934, as amended, the burden of
Ero am, and the burden of proof with respect to all the issues
be upon Faulkner Radio, Inc.
61 F.C.C. 2d
58a
26 Federal Communications Commission Reports
11. IT IS FURTHER ORDERED, That Faulkner Radio, Inc. shall,
pursuant to Section 311(a)(2) of the Communications Act of 1934, as
amended, and Section 1.594 of the Commission’s Rules, give notice of
the oral argument ordered herein within the time and in the manner
prescribed in such rule, and shall advise the Commission of the publi-
cation of the notice as required by Section 1.594(g) of the Rules.
FEDERAL COMMUNICATIONS COMMISSION,
VINCENT J. MULLINS, Secretary.
59a
APPENDIX H
Radio Carrollton et al. 1173
FCC 75-492
BEFORE THE
FEDERAL COMMUNICATIONS COMMISSION
Wasunineton, D.C. 20554
In Re Applications of
Wittuim P. Jounson anv Horris B. Joun- | Docket No. 19636
D.B.A. Radio CarRROLLTON, CARROLLTON, | File No. BP-17970
aA.
For Construction Permit
Fatitxner Rapro, Inc. (WLBB), Carrott- | Docket No. 19637
ton, GA. File No. BR-1431
For Renewal of License
APPEARANCES
Samuel Miller and Mark E. Fields (Miller & Fields) on behalf of
William P. Johnson and Hollis B. Johnson, d/b as Radio Carrollton;
Frank U. Fletcher, Marvin Rosenberg, Edward W. Hummers, Jr.
and /1. Gifford Irion (Fletcher, Ieald. Rowell, Kenehan & Hildreth)
on behalf of Faulkner Radio. Inc. (\WLBB); and Walter C. Miller
and Fie S. Kravetz on behalf of the Chief, Broadeast Bureau, Ted-
eral Communications Commission.
DECISION
(Adopted April 30, 1975; Released May 8, 1975)
Commissioner JAwes H. QvELLO For Tre Cowaissi0n :?
1. This proceeding involves the application of Radio Carrollton
(MC) * for a construction permit for a new standard broadcast
station, and the application of Faulkner Radio. Inc. (Faulkner) for
renewal of its license for standard broadcast station WLBB. both at
Carrollton, Georgia. Although the two applications were not mutu-
ally exclusive. Faulkner filed a petition to deny and several supple-
ments thereto, requesting RC’s application either be denied or
designated for hearing on the basis of ascertainment of needs, finan-
cial qualifications and character issues. The Commission designated
the applications for consolidated hearing on the following issues
(88 FCC 2d 6S):
1. To determine the efforts made by Radio Carrollton to
ascertain the community necds and interests of the area to be
served and the means by which the applicant proposes to meet
those necds and interests,
* Commisstoner Reid, who did not hear oral arcument, hns read the transcript of the oral
argument and ts participating In this Decision pursuant to Section 1.277(f) of the Rules.
? Radio Carrollton Is a partnership consisting of William IP. Johusoa and Hollis L. John-
son, who are unrelated.
§2 F.C.C. 20
60a
1174 Federal Communications Commission Reports
2. To determine with respect to the application of Radio
Carrollton:
(a) Whether the commitments by the Commercial Bank,
West Georvia National Bank, and Peoples Bank are still
available to the applicant;
* (b) Whether the partners possess adequate current assets
to finance the proposed station; and
(c) Whether. in light of the evidence adduced pursuant to
(2) and (b), above, the applicant is financially qualified.
>. To determine whether Radio Carrollton has complied with
the provisions of section 1.65 of the Commission’s rules by keop-
ing the Commission advised of substantial and_ significant
changes as required by section 1.65, and, if not, the effect of
such non-compliance on its basic qualifications to be a Commis-
sion licensee.
4. To determine whether Radio Carrollton misrepresented
itself to the Commission pertaining to the availability of the
land owned by O. 8. Whitman as an antenna site, and, if so,
what effect. such conduct has on the basic qualifications of Radio
Carrollton to be a Commission licensee.
; 5. To determine whether Faulkner Radio, Inc., filed its peti-
tion to deny for the purpose of delaying the processing of Radio
Carrollton’s application, and, if so, what effect such conduct
has on the basic qualifications of Faulkner Radio, Inc., to be a
Commission licensee.
G. To determine whether Faulkner Radio, Inc., or Radio Car-
rollton misrepresented itself to the Commission in its affidavit
submitted concerning the conversation between Robert M. Thor-
}urn and IIollis B. Johnson, and. if so, what effect such conduct
has on the basic qualifications of either applicant to be a Com-
mission licensee.
7. To determine, in light of the evidence adduced pursuant to
the foregoing issues, whether a grant of the Radio Carrollton ap-
plication and/or renewal of the Faulkner license would serve the
public interest. convenience, and necessity.
2. Hearings were held in Atlanta, Georgia on May 14-16, 1975. On
June 27,1973, Faulkner filed a petition to enlarge thc issnes, requesting
a hidden ownership issue against RC, The Review Board granted
Faulkner's petition to enlarge and added the following issue (43 FCC
2d 472):
To determine whether Al Cohen has and/or had a one-third
ownership interest in Radio Carrollton. and whether William P.
Johnson and Tlollis B. Johnson. d’b as Radio Carrollton. have
been lacking in candor with the Commission concerning this in-
terest, and. if so, to determine the effect thereof upon the appli-
cant’s qualifications to be a Commission licensee.
Further hearing sessions limited to the new issue were held Jan-
uary 15-18, 197-4. with the record being closed on the latter date.
3. In an Initial Decision, FCC 74D-25, released April 15, 1974,
Adwinistrative Law Judge David I. Kraushaar determined that a
grant of RC’s application would serve the public interest. But because
of Faulkner's lack of candor and misrepresentations, and because its
62 F.C.C. 2d
6la
Radio Carrollton et al. 1175
etition to deny and eight supplements thereto* were considered to
ge been filed primarily to delay Commission processes in order to
frustrate prospective competition, he concluded the public interest
would not be served by renewing Faulkner's license. Faulkner filed
exceptions to the Initial Decision and a supporting brief. RC and the
Broadcast Bureau filed replies to Faulkner's pleadings. Oral argu-
ment before the Commission en banc was held on November 12, 1974.'
4. We agree completely with the Judge that the record demonstrates
Faulkner's renewal application should be denied and RC’s applica-
tion for a construction permit should be granted. We have fully con-
sidered the Judge's findings and conclusions in light of the argumeuts
urged by the parties in pleadings and at oral argument. and they are
adopted except as modified in this Decision and in our rulings on the
exceptions, as set forth in the attached Appendix,
5. Judge Kraushaar found that Faulkner filed its petition to deny
rimarily to stave off prospective competition. IIe further found
Padiehet lacked candor and committed knowing and willful mis-
representation both through the hearing testimony of Robert M.
horburn (a broadeaster of some 14 years’ experience who is Vice-
President and General Manager of Faulkner's Carrollton stations) ®
and by Thorburn’s submission to the Commission of an affidavit that
was not a genuine aflidavit.
6. In urging reversal, Faulkner argues in essence that: (1) It had
a reasonable basis for presenting the Madden, Whitman and Cohen
matters to the Commission: (2) Because it had a legitimate interest
in the kind of competition it might face. it had standing as a party in
interest to file its petition to deny. FCC x. Saunders Brothers Ridio
Station, 309 U.S. 470 (1940), and the possibility it might benefit by
keeping RC out of Carrollton was purely adventitious: (3) The filing
of a Jegitimate complaint is a use, not an abuse. of Commission pro-
cess and a party may not be chastised for using lawful process unless
its complaints are wanton and fabricated: ® (4) Since Thorburn had
no conceivable reason for making the statements during the June 20,
1968 telephone conversation concerning his alleged delaying motives in
filing the petition to deny (ascribed to him by Hollis Johnson), his
veracity should not be impugned and the most plausible conelusion
is that each party told the truth as he saw it and the two versions of
the conversation can be roughly reconciled: (5) Its petition to enlarge
the issues was not an abuse of process because Faulkner acted as
promptly as possible in filing that petition; and (6) The Judge's bias
2The supplements were filed on vartons dates between October 1968 and November 71
and raised additional character, ascertainment and financial issues: soneht Section 1.43
issues acainst RE’ and raised site availability issnee agninat RC. The June 1070 supple.
ment raised the Whitman site matter (see paras, 8-9, infra),
*Rautkner alse filled gs motion tor waiver of Seerion L277 (e) of the Rules, Insofar as {t
limits a brief in supporr of exceptions to 50 Pages in length. Subsequent to the oral arzu-
ment herein, Panikner filed a motion for lave te file a motion to correct transeript, to-
together with the motion to corre:t Tramserint, No apneasiticns have been leds these
motions will, therefore, be cranted. By Order (PCC TIM-2054 released February 12
1975. Faulkner's perition for leave to amend) wae granted under delegated authority.
The wiuendment redeets that on December 27. USFd, the inddernent of James HH Vaulkuer,
Rr, President and 77.52 pervent stoekholler of Faulkner Radio, Ine, which had eon pe-
turned on Mav oS. OTS. by the United States District Coure for the Hastern District of
Loulstana was dlamissed,
SPautkuer’s other Carrollton atation, not involved here, is WRTR-FM. which t< pro-
grammed separately,
8Cithhy Tung Broaweactina Co., AR FCO OF 1145, 1198 (Rev Md 19T9)- FUNCTand
Rrondvasting S «term. tne, 98 PCO %F TL CISTTY s Santherm Riandeouvetinag Co.. 1 REC A
790 (19071) sand Ware County Broadcasting Corp, 26 FCC 2 52 (1076). — ; ee
52 F.C.C. 20
62a
1176 Federal Communications Commission Reports
against a petitioner in Faulkner’s position results in the proposition
that a petitioner who fails to perfect his proof risks denial of renewal
on the theory of abuse of Commission process, which will have a
chilling effect on future petitions to deny by existing licensees,
7. The threshold issue here is whether the Judge's findings suffice to
support his conciusion that Faulkner's petition to deny was filed to
ahilaee processing of RC’s application (Issue 5). Faulkner's arguments
under this issue are without merit. We first note Faulkner has not at-
tempted to refute the Judge's finding that Thorburn was aware the
Madden affair? had been settled several months before Faulkner filed
its petition to deny. Absent a persuasive explanation to the contrary,
we think I*aulkner’s attempt to revive the subject in its petition to deny
circumstantially indicates Thorburn was attempting to create further
emnity between the Johnsons and Madden for his own selfish pur-
poses. Our own review of the record corroborates the Judge’s finding
that ‘Vhorburn’s testimony on his role in this incident was evasive and
contradictory. We think Thorburn’s reliance on Tisinger’s * word that
Johnson’s sction was professionally unethical and ‘Thorburn’s sub-
sequent discussion with Washington counsel did not convert his
presentation of these character allegations to the Commission into an
action in the public interest,
8. We also think Faulkner’s arguments concerning the Whitman
episode* ave undercut by Thorburn’s attempt to stir up Whitman
against the Johnsons by misrepresenting the Johnsons’ position to
Whitman. his conflicting and evasive testimony at hearing, and his
attempt to convey the false impression to the Commission that Whit-
man had heen represented by counsel (Aubrey Gilbert) in the matter,
when such was not the fact. Moreover. Faulkner's contention the John-
sons should hav
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