# Appendix — Hispanic Broadcasting Ltd. Partnership v. Federal Communications Commission

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1991
- **Citation:** 502 U.S. 907

## Text

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61-130
JUL 22 wR

OFFIGR GF THE CLERK

No. 9l- __

IN THE

Supreme Court of the Gnited States
OCTOBER TERM, 1991

HISPANIC BROADCASTING SYSTEMS, INC.,
A DELAWARE CORPORATION,
Petitioner,
Ws

FEDERAL COMMUNICATIONS COMMISSION,
Respondent.

APPENDIX TO
PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

STEPHEN A. SHARP*
ALLAN A. TUTTLE
PATTON, Boccs & BLOw
Suite 900
2550 M Street, N.W.
Washington, DC 20037
(202) 457-5227

“Counsel of Record

aed
PRESS OF BYRON 8S. ADAMS, WASHINGTON, D.C. (202) 347-8203

TABLE OF CONTENTS

Appendix A

Court of Appeals Decision En Bane ...............

Appendix B

Court of Appeals Panel Decision ....................

Appendix C

Federal Communications Commission
ER lhl AE EE I er DENN ALOE ee A OE RETR

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APPENDIX A

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 12, 1990 Decided April 23, 1991
As amended May 14, 1991

No. 87-1285

COALITION FOR THE PRESERVATION OF
HIsPANIC BROADCASTING, APPELLANT

V.
FEDERAL COMMUNICATIONS COMMISSION, APPELLEE

SPANISH INTERNATIONAL COMMUNICATIONS CORP.
STATION REPRESENTIVES ASSOCIATION, INC.
FOUCE AMUSEMENT ENTERPRISES, INC.
UNIVISION, INC.,

INTERVENORS

2a

No. 87-1287
HISPANIC BROADCASTING SYSTEMS, INC., APPELLANT
v.
FEDERAL COMMUNICATIONS COMMISSION, APPELLEE

SPANISH INTERNATIONAL COMMUNICATIONS CORP.
BAHIA DE SAN FRANCISCO TELEVISION Co.
SEVEN HILLS TELEVISION Co.

STATION REPRESENTATIVES ASSOCIATION, INC.
FoucE AMUSEMENT ENTERPRISES, INC.
UNIVISION, INC.

INTERVENORS

No. 87-1289

HISPANIC BROADCASTING LIMITED PARTNERSHIP,
APPELLANT

¥,
FEDERAL COMMUNICATIONS COMMISSION, APPELLEE

SPANISH INTERNATIONAL COMMUNICATIONS CORP.
BAHIA DE SAN FRANCISCO TELEVISION Co.
SEVEN HILLS TELEVISION Co.

STATION REPRESENTATIVES ASSOCIATION, INC.
UNIVISION, INC.

INTERVENORS

3a

No. 88-1564
Susan M. JARAMILLO, APPELLANT
Vv.

FEDERAL COMMUNICATIONS COMMISSION, APPELLEE

Seven HI.Lts TELEVISION Co.
Univision Ho.pIncs, INC., ET AL.,
INTERVENORS

No. 88-1588
TVL CorPORATION, APPELLANT
Vv.

FEDERAL COMMUNICATIONS COMMISSION, APPELLEE

Univision Ho.pincs, INc., et al., INTERVENOR

No. 88-1596

THE COALITION FOR THE PRESERVATION OF
HISPANIC BROADCASTING, et al., APPELLANTS

vv.

FEDERAL COMMUNICATIONS COMMISSION, APPELLEE

Univision Ho.pincs, INc., et al., INTERVENOR

4a

Notices of Appeals from an Order of the
Federal Communications Commission

Morton L. Berfield, with whom Lewis I. Cohen and Roy
W. Boyce were on the brief, for appellant Hispanic Broad-
casting Limited Partnership in No. 87-1299.

Steven A. Sharp for appellant Hispanic Broadcasting
System in No. 87-1287. Martin E. Firestone also entered
an appearance for appellant.

Katrina Renouf, with whom Margot Polivy was on the
brief, for appellant Susan Jaramillo in No. 88-1564.

Bruce A. Eisen was on the brief for appellant Coalition
for the Preservation of Hispanic Broadcasting in Nos. 87-
1285 and 88-1596.

James P. Riley and Robert A. DePont were on the brief
for appellant TVL Corporation in No. 88-1588.

Daniel M. Armstrong, Associate General Counsel, Fed-
eral Communications Commission, with whom Robert L.
Pettit, General Counsel and Sue Ann Preskill, Counsel,
Federal Communications Commission were on the brief,
for appellee in Nos. 87-1285, 87-1287, 87-1299, 88-1564,
88-1588 and 88-1596.

Linda K. Smith and David H. Solomon entered appear-
ances for intervenor Station Representatives Association,
Inc. in Nos. 87-1285, 87-1287 and 87-1299.

L. Andrew Tollin and Leon T. Knauer entered appear-
ances for intervenor Seven Hills Television Co. in Nos.
87-1285, 87-1287, 87-1299, 88-1564 and 88-1588.

N. Frank Wiggins entered an appearance for intervenor
Fouce Amusement Enterprises, Inc. in Nos. 87-1285, 87-
1287 and 87-1299.

Richard E. Wiley, John C. Quale, James R. Bayes and
Diane Z. Goldman entered appearances for intervenors
Spanish International Communications and Univision

5a

Holdings, Inc., et al. in Nos. 87-1285, 87-1287, 87-1299,
88-1588 and 88-1596.

John L. Tierney, Richard F. Swift and Ann Bavender
entered appearances for intervenor Bahia de San Fran-
cisco Television Co. in No. 87-1287.

Before: Mixva, Chief Judge, WALD, EDwarbs, RUTH B.
GINSBURG, SILBERMAN, BUCKLEY, WILLIAMS, D.H. GINSBURG, -
SENTELLE, THOMAS, HENDERSON and RANDOLPH, Circuit
Judges.

Opinion for the Court filed by Circuit Judge Wi.Liams.
Dissenting Opinion filed by Chief Judge Mixva.

WILuiaMs, Circuit Judge: This is an appeal from a Fed-
eral Communications Commission decision granting a con-
ditional renewal of several television licenses. We deny the
challenges of two petitioners for failure to exhaust admin-
istrative remedies and those of two others for want of
standing.’

As the panel opinion presented the facts in detail, see
Coalition for the Preservation of Hispanic Broadcasting v.
FCC, 893 F.2d 1349 (D.C. Cir. 1990), we provide only a
summary. Spanish International Communications Corpo-
ration and Bahia de San Francisco (collectively “Spanish
International”) held six TV licenses, the first acquired by
Spanish International’s corporate predecessors in 1961. In
January 1986 an administrative law judge found that
Spanish International’s relations with certain Mexican
interests violated a Communications Act provision forbid-
ding alien ownership of broadcasting stations. See 47
U.S.C. § 310(b). Facing a risk that this issue would doom
its efforts to secure license renewal, Spanish International
negotiated a settlement agreement under which, immedi-
ately upon renewal, it would sell the stations to Hallmark
Cards, Inc. In October 1986 the Commission’s Review

'We also reject the claim of TVL Corporation for the reasons
stated in the panel opinion, Coalition for the Preservation of His-
panic Broadcasting v. FCC, 893 F.2d 1349, 1355 (D.C. Cir. 1990).

| |

6a

Board approved this settlement and conditionally renewed
Spanish International’s licenses.

At about the time the Review Board acted, petitioners
Hispanic Broadcasting Systems, Inc. (“HBS”) and His-
panic Broadcasting Limited Partnership filed applications
for the licenses and asked the Commission to reverse the
Review Board. As the filings came years after the relevant
FCC “windows” had closed, the Commission rejected the
applications as untimely. Nonetheless, it permitted peti-
tioners to appear before it as amici and considered their
argument that the renewal and transfer of Spanish Inter-
national’s licenses violated the FCC’s “Jefferson Radio”
policy, which prohibits any licensee from transferring a
broadcast station at full value while a proceeding that
might lead to license forfeiture is pending. See Jefferson
Radio Co. v. FCC, 340 F.2d 781, 783 (D.C. Cir. 1964). The
Commission rejected this argument and affirmed the
Review Board’s approval of the transfer agreement and
license renewal.

Two of the challengers are prospective applicants, HBS
and the Partnership, and three, the Partnership (in a sec-
ond capacity), Susan Jaramillo and the Coalition for the
Preservation of Hispanic Broadcasting, are purportedly
dissatisfied viewers. We hold that (1) HBS and the Part-
nership may not obtain judicial review because they did
not timely invoke the administrative procedures required
of prospective applicants; and (2) the viewers do not have
standing to sue because they do not fall within the zone
of interests contemplated by § 310(b).

The Would-Be Applicants

HBS and the Partnership seek two kinds of relief. First,
they ask us to overturn the FCC’s decision to reject their
applications as untimely. We deny this relief for the rea-
sons stated by the panel opinion. 893 F.2d at 1357-52.
That resolved, we turn to whether such untimely appli-
cants may now, in the hope of vacant channels and new
filing opportunities, ask this court to overturn the FCC’s
approval of the renewal and transfer agreement.

Ta

Both panel opinions and, upon rehearing, the litigants
themselves treated this issue as a matter of Article III
standing: Are the prospects of these latecomers’ winning
the licenses (if they were vacant) serious enough that they
were truly harmed by the Commission’s rejection of
claims that might have led to nonrenewal and vacancy?
See generally Warth v. Seldin, 422 U.S. 490 (1975). Yet,
partly because the applicant petitioners’ untimeliness
foreclosed a Commission assessment of their qualifica-
tions, the question cannot be answered without guess-
work. As petitioners’ tardiness also entailed a failure to
exhaust administrative remedies, however, we can resolve
the case on non-constitutional grounds. See Coker v.
Sullivan, 902 F.2d 84, 88 (D.C. Cir. 1990) (dismissing case
on non-constitutional jurisdictional grounds to avoid
problematic Article III inquiry); Moore v. United States
House of Representatives, 733 F.2d 946, 954 n.39 (D.C. Cir.
1984) (“[W]e should avoid deciding questions of a consti-
tutional nature unless absolutely necessary to a decision
of the case.”) (internal quotes omitted). While the govern-
ment did not specifically raise the exhaustion issue, the
doctrine concerns economy not only of agency but also of
judicial resources, see Weinberger v. Salfi, 422 U.S. 749,
765 (1975), and accordingly this court may in its discre-
tion raise the issue on its own. See, e.g., Dettmann v.
United States Dep’t of Justice, 802 F.2d 1472, 1476-77 &
n.8 (D.C. Cir. 1986); Power Plant Division, Brown & Root,
Inc. v. OSHRC, 673 F.2d 111 (5th Cir. 1982); Brown v.
Fauver, 819 F.2d 395, 398-99 (3d Cir. 1987).

The judicial review provision of the Communications
Act, 47 U.S.C. §402(b), authorizes disappointed
“applicant[s]” and, more generally, “any ... person who
is aggrieved or whose interests are adversely affected” by
a Commission licensing order to sue for relief in this
court. Yet even “aggrieved” persons must comply with
prescribed administrative procedures. See Spanish Inter-
national Broadcasting Co. v. FCC, 385 F.2d 615 (D.C. Cir.
1967); Red River Broadcasting Co. v. FCC, 98 F.2d 282
(D.C. Cir. 1938); see also Valley Telecasting Co. v. FCC,

DEE

8a

336 F.2d 914 (D.C. Cir. 1964); Springfield Television
Broadcasting Corp. v. FCC, 328 F.2d 186 (D.C. Cir. 1964).
Indeed, § 405 of the statute itself requires aggrieved per-
sons who were not parties to the agency proceedings, as
one prerequisite to judicial review, to petition the Com-
mission for reconsideration of disputed orders.’ In gen-
eral, failure to exhaust administrative remedies bars
judicial review of FCC orders.

Spanish International illustrates the exhaustion princi-
ple at work in the licensing context. International Pan-
orama TV sought a license to construct a new television
station. A competitor, Spanish International (apparently
the same company as the beneficiary of today’s ruling),
twice submitted petitions attacking International Panora-
ma’s application, invoking the grounds it afterwards
raised on appeal.’ Because both petitions were untimely,

“Although the applicant petitioners were not parties to the pro-
ceedings after denial of their untimely applications, their presen-
tation to the Commission of the theories that they raise here, and
the Commission’s consideration of those theories, satisfies § 405
under the cases summarized at p. 12 below.

“Thus Spanish International met the condition that our cases
sensibly impose for satisfying the exhaustion requirement of
§ 405: the Commission had a fair opportunity to address the
issues raised on appeal. See United Church of Christ v. FCC, 911
F.2d 803, 809 (D.C. Cir. 1990) (“As we stated in Meredith Corp.
uv. FCC [809 F.2d 863, 870 (D.C. Cir. 1987)], ‘[a]s a condition pre-
cedent to judicial review, section 405 requires only that the Com-
mission have a “fair opportunity” to pass on [an] issue.’”); see also
cases cited at p. 12 below.

The dissent’s suggestion that the Commission did not address
Spanish International's claims on the merits, see Dissent at 4-5,
is therefore irrelevant. It is also false. The court observed that
“because of their public importance, [the Commission] treated
extensively the questions raised by [Spanish International]. It
found that all of the points lacked merit save its claim respecting
{International Panorama’s} character qualifications, and this issue
it designated for hearing.” 385 F.2d at 618. As the opinion suggests
and the record and briefs confirm, the Commission later rejected
Spanish International's efforts to resurrect the same defeated
attacks on International Panorama’s qualifications. See id. at 619;
Appellate Record at 992-97, 1016-19, Spanish Int'l Broadcasting
Co. v. FCC, 385 F.2d 615 (D.C. Cir. 1967) (No. 20,326). These
—— formed Spanish International's merits argument on
appeal.

ee eT

Ya

the FCC refused to admit Spanish International as a
party to the proceedings. After unsuccessfully petitioning
for reconsideration under § 405, Spanish International
asked this court (1) to reverse the FCC’s order denying
it formal participation in the application proceedings and
(2) to reverse the FCC’s decision that International Pan-
orama satisfied the Commission’s character qualifications.
See Appellant’s Brief, Spanish Int’l Broadcasting Co. v.
FCC, 385 F.2d 615 (D.C. Cir. 1967) (No. 20,326).

The court affirmed the FCC’s judgment that Spanish
International’s petitions were untimely and, accordingly,
ruled that Spanish International had failed to exhaust the
prescribed administrative remedies. 385 F.2d at 622-27. It
then refused to consider Spanish International’s substan-
tive objections to the FCC’s decision in favor of Interna-
tional Panorama. See id. at 627-28. “[E]xhaustion of
administrative remedies,” explained the court, “means uti-
lization of the earliest available corrective step,” and
where a litigant “‘neglect{s] to avail itself of such an
opportunity, it may thus have foreclosed itself from scek-
ing further relief.’” Jd. at 628, quoting Red River, 98 F.2d
at 287-88.

As there, so here. An applicant for a broadcast license
must file a timely application with the FCC before he may
challenge an adverse Commission order in this court. This
requirement promotes the values that the exhaustion doc-
trine was designed to protect: administrative and judicial
economy and comity between courts and agencies. See
generally McKart v. United States, 395 U.S. 185, 193-95
(1969). The exhaustion requirement protects the FCC’s
interest in the finality of its adjudication and, as in this
case, of settlements arising under its jurisdiction. Requir-
ing applicants for broadcast licenses to file on time also
permits the Commission to take an advance reading of the
various claims and order its business efficiently from the
beginning.

Moreover, as Judge Mikva wrote for this court in New
York State Ophthalmological Society v. Bowen, 854 F.2d

10a

1379, 1387 (D.C. Cir. 1988), the exhaustion doctrine
“promotes judicial efficiency ... by making possible a dis-
position by the agency that will obviate the need for a
judicial decision on [an] issue.” See also McKart, 395 U.S.
at 195; Ticor Title Insurance Co. v. FTC, 814 F.2d 731, 741
(D.C. Cir. 1987) (opinion of Edwards, J.). That principle
is especially relevant here. If the applicant petitioners had
filed timely applications, winning the licenses (their ulti-
mate objective, assuming they would have spurned offers
to join the settlement agreement) would have been only
conditionally dependent on winning the legal dispute
underlying this lawsuit (the alien ownership issue). They
could have won the licenses without winning that dispute
and, moreover, could have failed to qualify for those
licenses without losing it. Either way, their timely partici-
pation at the administrative level could have mooted the
issues fueling this litigation.

First, if HBS or the Partnership had timely pursued the
proper administrative course, one of them might have pre-
vailed in a comparative hearing and obtained the licenses
without prevailing on the alien ownership issue (or, if
even relevant under this scenario, the Jefferson Radio
issue). Even if the FCC had ruled conclusively for Spanish
International on the alien ownership issue, petitioners
obviously could not have sued until after they had given
their last administrative remedy — the comparative hear-
ing — a shot, and we will not exempt them from that
requirement now simply because they ignored the relevant
application deadlines. And though it is difficult for a chal-
lenger to unseat an incumbent in a renewal proceeding,
see generally Central Florida Enterprises, Inc. v. FCC, 683
F.2d 503, 506-08 (D.C. Cir. 1982), “not even the probabil-
ity of an administrative denial of relief will excuse the
effort.” See Spanish International, 385 F.2d at 626.‘

‘The dissent proposes that parties be permitted to sit out
agency proceedings until the prospects of administrative relief
pass a certain threshold (never identified) of financial promise.
Dissent at 5-8. The dissent understandably does not identify a sin-

re ee =

lla

Alternatively, if HBS and the Partnership had filed
timely applications, the FCC might well have determined
— quite apart from the issue of Spanish International’s
qualifications -—— that they were unqualified to operate
broadcast stations. Indeed, the Commission pointed out
in denying the belated applications that admitting peti-
tioners to consideration “would require evidentiary hear-
ings on [their] qualifications and on the standard
comparative issue.” See Joint Appendix 435; see also Jn
re Belo Broadcasting Corp., 68 FCC 2d 1313 (1978); Jn re
Edwin Berstein, 4 FCC Rec. 8420, 8421 (Rev. Bd. 1989)
(citing cases), aff'd 5 FCC Rec. 2843 (FCC 1990), aff'd
mem. sub nom. Lefebure v. FCC, No. 90-1284 (D.C. Cir.
March 8, 1991). Whether an adverse decision on their
basic qualifications would have stripped HBS and the
Partnership of standing to appeal a renewal of Spanish
International’s license is an open question, turning in part
on the seriousness and curability of the shortcomings in
their applications. Compare Orange Park Florida T.V., Inc.
v. FCC, 811 F.2d 664, 670-73 (D.C. Cir. 1987), with
Simmons v. FCC, 145 F.2d 578, 579 (D.C. Cir. 1944). Even
if such a determination had left their formal legal stand-
ing intact, it would have created a record exposing the
weaknesses of their applications (thus filling the informa-
tion vacuum that here prevents a firmly grounded finding
of an Article III injury), and might have discouraged them
from bringing their attack on Spanish International to
court at all. The exhaustion doctrine thus permits us to
avoid second-guessing agency decisions at the behest of
litigants who have never been in a position to benefit from
the decision they seek from us.

This is unlike the frequent case where compliance with

gle case that supports such an extension of the exhaustion doc-
trine’s futility exception. Apparently no court has yet felt it
necessary to dilute the doctrine to that extent, presumably
because no court shares the dissent’s fear that the doctrine’s
application will generate “frivolous” administrative claims. See id.
at 8.

12a

an agency’s procedures would not have caused the agency
to venture down a path that could have mooted the issue
brought to court. In such cases this court has often
relaxed exhaustion requirements to permit consideration
of issues that an agency has had a “fair opportunity” to
address. See, e.g., United Church of Christ v. FCC, 911
F.2d 803, 808-09 (D.C. Cir. 1990); United Church of Christ
v. FCC, 779 F.2d 702, 706-07 (D.C. Cir. 1985); Meredith
Corp. v. FCC, 809 F.2d 863, 870 (D.C. Cir. 1987); Marsh
v. FCC, 436 F.2d 132, 136 (D.C. Cir. 1970); Gerico Invest-
ment Co. v. FCC, 240 F.2d 410, 411-12 (D.C. Cir. 1957);
see also Washington Ass’n for Television & Children v.
FCC, 712 F.2d 677, 680-82 & n.10 (D.C. Cir. 1983); NRDC
v. EPA, 824 F.2d 1146, 1150-51 (D.C. Cir. 1987) (en banc).
That approach makes sense. In such cases, there is little
reason to think that a party’s more thorough participation
would have changed the agency’s mind on those issues or
otherwise precluded a lawsuit. The unsurprising upshot
of our decision here is simply that one who seeks to over-
turn a Commission licensing decision in the capacity of
a disappointed applicant must actually apply, and must
do so in timely fashion.

Jacksonville Broadcasting Corp. v. FCC, 348 F.2d 75, 79-
80 (D.C. Cir. 1965), and MG-TV Broadcasting Co. v. FCC,
408 F.2d 1257, 1265-66 (D.C. Cir. 1968), insofar as they
discussed exhaustion issues at all, did not explicitly
address the precise problem at issue here. To the limited

‘Contrary to the dissent’s suggestion, see Dissent at 4, nothing
we say undermines those of the above cases decided under 47
U.S.C. § 405. In such cases, requiring exhaustion is often point-
less; in ours, it is not. An agency’s prior opportunity to consider
the issues on appeal may be a necessary condition for judicial
review, but it is not therefore a sufficient condition. Dicta that
§ 405 “codiflies}]” the exhaustion doctrine, see Dissent at 4, can
hardly wipe out Spanish International's controlling treatment of
the issue, which, to our knowledge, no case has ever criticized,
much less purported to overrule. This leaves the dissent’s criticism
that Spanish International is “over a generation old”, Dissent at
2, a curious ground for overruling a case.

13a

extent that the principles underlying either opinion con-
flict with our holding here, they are overruled.

Obviously nothing in our decision prevents any person
who feels aggrieved from appealing an order denying him
party status in the administrative proceedings; the panel
decision (incorporated here) disposing of the untimely
applications exemplifies the point. And if the agency’s
denial were in error, its denial of status would necessarily
excuse later non-participation.®

One final note: HBS and the Partnership cannot excuse
their tardiness on the grounds that they did not exist until
after the prescribed filing period. Their principals existed
and could have formed the firms earlier.

The Viewers

Susan Jaramillo and the Coalition claim standing as
viewers to challenge the FCC’s approval of the renewal
and transfer agreement. The Partnership also asserts
viewer standing on the basis of the residence and viewing
habits of its general partner. We dismiss these claims on
prudential standing grounds. See generally Air Courier
Conference of America v. American Postal Workers Union,
AFL-CIO, 111 3. Ct. 913 (1991); Clarke v. Securities Indus-
try Ass'n, 479 U.S. 388 (1987). Though viewers and listen-
ers are among the intended beneficiaries of many
Communications Act provisions, they are not the intended
beneficiaries of § 310(b), see Air Courier Conference of
America, nor are they otherwise “suitable challengers” to
enforce it, see Clarke, 479 U.S. at 399; Hazardous Waste
Treatment Council v. Thomas, 885 F.2d 918, 922-24 (D.C.
Cir. 1989).

That section was designed to protect the entire nation
— to “prevent[ } alien activities against the Government

°Cf. Shurberg Broadcasting of Hartford, Inc. v. FCC, 876 F.2d
902, 905 (D.C. Cir. 1989) (Silberman, J.) (exhaustion not raised;
applicant sought license but was rebuffed by the Commission),
rev'd on other grounds sub nom. Metro Broadcasting, Inc. v. FCC,
110 S. Ct. 2997 (1990).

l4a

during the time of war.” Noe v. FCC, 260 F.2d 739, 741
(D.C. Cir. 1958) (quoting 68 Cong. Rec. 3037 (1927) (re-
marks of Sen. Wheeler)). Committee hearings on the mat-
ter focused largely on keeping the airwaves available for
military use in time of war, see Hearings on 8.2910 Before
the Senate Committee on Interstate Commerce, 73d Cong.
2d Sess. 165-72 (March 15, 1934); see also S. Rep. No.
781, 73d Cong. 2d Sess. 7 (1934), and only secondarily on
the hazards of alien propaganda. Moreover, even if propa-
ganda were a main concern, viewers seem an odd group
to lead the enforcement, as genuine victims would by defi-
nition fail to notice the insidious effects. The viewers can
only be suing as guardians of the national interest, but
“[s]uch a generalized interest ... is too abstract to consti-
tute a ‘case or controversy’ appropriate for judicial
resolution.” Schlesinger v. Reservists Comm. to Stop the
War, 418 U.S. 208, 227 (1974).

Nor can viewers assert standing as intended beneficia-
ries of the Jefferson Radio doctrine, for it is entirely
instrumental, aimed (in this context) only at enhancing
the deterrent effect of whatever substantive provision sup-
ports the attack on the incumbent licensee, here
§ 310(b)(3). See Stereo Broadcasters, Inc. v. FCC, 652 F.2d
1026, 1027 (D.C. Cir. 1981). Because petitioners cannot
sue to enforce §310(b), they cannot sue to enforce a
means of enforcing § 310(b).

zs * 8

We affirm the FCC order of June 5, 1987. We adhere
to the panel opinion as it relates to petitioner TVL’s claim
and to the FCC’s decision to reject petitioners’ applications
as untimely. We vacate the panel opinion as it relates to
the standing of petitioners HBS and the Partnership and
to the merits of their Jefferson Radio claim, and dismiss
for want of exhaustion the claims that each rests on its
status as a frustrated applicant. Finally, we dismiss for
want of standing the claims of petitioners Colaition for
Hispanic Broadcasting and Susan Jaramillo and the in-

+200

15a

dependent claim of the Partnership in its role of viewer.

So ordered.

16a

Mikva, Chief Judge, dissenting: Running headlong from
the questions briefed and argued before us, my colleagues
seek refuge in a theory as novel as it is questionable.
Unsupported by precedent, undeveloped by the court, and
unresponsive to the facts of this case, the stepchild of
exhaustion theory announced today has an inauspicious
birth. I doubt that this poor relation will thrive; therefore,
I take issue with the majority primarily because particular
parties have wrongly been denied their day in court. But
recognizing the possibility that today’s holding may be viv-
ified by other judges on another day, I also write to
express my view that it finds no precedent in the wholly
sensible doctrine of administrative exhaustion and is, in
fact, at odds with the goals underlying that requirement.
Accordingly, I dissent.

I.

We granted en banc review in this case to consider a
single question: Whether petitioners have standing to
challenge decisions by the Federal Communications Com-
mission (the “FCC” or “Commission”) allowing assign-
ment of certain televisicn station licenses to Hallmark
Cards, Inc. (“Hallmark”). A technical and fact-specific
issue to be sure, but one that this court deemed at the
time to be of “exceptional importance.” Fep. R. App. P.
35(a). See Appellee’s Petition for Rehearing or Suggestion
for Rehearing En Banc at 2 (filed Feb. 23, 1990) (seeking
review of standing issue on grounds of importance).

Having heard the Commission’s position on the stand-
ing issues of this case, | sympathize with the court’s
impulse to rest its holding on other grounds. Standing to
appeal administrative decisions depends on a complex mix
of statutory and constitutional conundrums, and is not
simple to explicate. If, therefore, petitioners’ claims had
been totally meritless, this court might well have dis-
missed them without reaching the relatively difficult
standing questions. See Coker v. Sullivan, 902 F.2d 84, 88
(D.C. Cir. 1990); Adams v. Vance, 570 F.2d 950, 954 n.7

17a

(D.C. Cir. 1978); Chinese Am. Civic Council v. Attorney
Gen., 566 F.2d 321, 325 (D.C. Cir. 1977). But I can see no
justification for the majority’s resort to grounds so
unlikely that no party ever thought to brief or argue them,
and so arcane that the court can find just one inapposite
case (over a generation old) to cite as direct precedent.
See Majority Opinion at 8-9 [hereinafter “Maj. Op.”]} (dis-
cussing Spanish Int’l Broadcasting Co. v. FCC, 385 F.2d
615 (D.C. Cir. 1967)).

* If it is dissatisfied with the parties’ presentations to this
court, the majority could—and should—have ordered sup-
plemental briefing so that its judgment would be an
informed one. If it is merely intent on avoiding the stand-
ing question upon which rehearing en banc was granted,
the majority would have been well advised to dismiss this
en banc petition as improvidently granted. But the major-
ity chooses a different course, to which I now turn.

II.

The court suggests that its approach will protect the
finality of FCC proceedings and “promotie] judicial
efficiency,” thereby furthering purposes traditionally asso-
ciated with the exhaustion doctrine. Maj. Op. at 9-10. But
these reasons can be invoked to justify any refusal to
review agency action; whenever courts find challenges to
administrative decisions nonjusticiable, they enhance the
finality of agency determinations and lighten the judicia-
ry’s load. Accordingly, the court should adhere to its prac-
tice of asking whether dismissal of a case on exhaustion
grounds would further “the primary purpose of the
exhaustion doctrine”: preventing premature interruption
of the administrative process. Randolph-Sheppard Vendors
of Am. v. Weinberger, 795 F.2d 90, 104 (D.C. Cir. 1986).
See Atlantic Richfield Co. v. Department of Energy, 769
F.2d 771, 781 (D.C. Cir. 1984) (noting that avoidance of
premature interruption is the “primary objective of the
exhaustion doctrine,” and stating that “[wjhere ... the
goals of this requirement cannot possibly be achieved,

18a

there obviously is no need for exhaustion”); Athlone
Industries, Inc. v. Consumer Prod. Safety Comm'n, 707
F.2d 1485, 1488 (D.C. Cir. 1983) (“The exhaustion doc-
trine was designed primarily to prevent premature inter-
ruption of the administrative process.”); see also
Committee for GI Rights v. Callaway, 518 F.2d 466, 474
(D.C. Cir. 1975) (“[W)hen the reasons supporting the [ex-
haustion] doctrine are found inapplicable, the doctrine
should not be blindly applied.”).

The majority’s decision to deny judicial review will not
prevent “premature” interference with FCC proceedings
for the simple reason that the petitioners raised each
argument presented to this court before the Commission,
and the Commission conclusively rejected every one. See
Spanish Int’l Communications Corp., 2 FCC Red 3336
(1987) (rejecting competing applications and approving
settlement agreement); Spanish Int’l Communications
Corp., 2 FCC Red 3962 (Mass Media Bureau 1987) (ap-
proving assignment of television licenses), aff'd, 3 FCC
Rcd 4319 (1988). This court has before it final administra-
tive decisions, based on a record developed to the agency’s
satisfaction, and reflecting the Commission’s unhampered
exercise of discretion and application of expertise. See
McKart v. United States, 395 U.S. 185, 194 (1969). Apply-
ing the exhaustion doctrine to these facts stretches its
underlying rationales beyond the breaking point.

My conviction that no prudential exhaustion doctrine
bars assertion of jurisdiction over this petition for review
finds unequivocal support in our cases interpreting the
only exhaustion requirement that Congress saw fit to
impose in the Communications Act. See 47 U.S.C. § 405
(1988). Section 405 bars judicial review of Commission
actions where:

the party seeking such review (1) was not a party to
the proceedings resulting in such order, decision,
report, or action, or (2) relies on questions of fact or
law upon which the Commission, or designated
authority within the Commission, has been afforded
no opportunity to pass.

19a

Id. The majority concedes that section 405, as construed
in our cases, does not bar review of petitioners’ claims.
See Maj. Op. at 8 n.2. Yet it fails to mention that this
court has repeatedly held that section 405 “codif[ies] the
judicially-created doctrine of exhaustion of administrative
remedies.” Washington Ass'n for Television & Children v.
FCC, 712 F.2d 677, 681 (D.C. Cir. 1983)). See Office of
Communication of United Church of Christ v. FCC, 911
F.2d 803, 808 (D.C. Cir. 1990); Northwestern Ind. Tel. Co.
v. FCC, 872 F.2d 465, 470 (D.C. Cir. 1989), cert. denied,
110 S. Ct. 757 (1990); Brookings Mun. Tel. Co. v. FCC, 822
F.2d 1153, 1163 (D.C. Cir. 1987); Telecommunications
Research and Action Center v.-FCC, 801 F.2d 501, 513 n.7
(D.C. Cir. 1986), cert. denied, 482 U.S. 919 (1987); Office
of Communication of the United Church of Christ v. FCC,
779 F.2d 702, 706 (D.C. Cir. 1985). Unless it is prepared
to overrule this long line of authority, I am baffled how
the majority can dismiss this case for failure to exhaust
administrative remedies. If section 405 does not bar
review, then the prudential exhaustion requirements that
are incorporated within section 405 cannot provide a basis
for dismissal of petitioners’ claims.

Spanish Int’l Broadcasting Co. v. FCC, the 1967 decision
so heavily relied upon by the majority, is not to the con-
trary. In that case, the Commission had summarily
rejected petitions for administrative review and rehearing
without addressing the merits of appellant’s objections.
See 385 F.2d at 619. (While the FCC did address the mer-
its of administrative petitions submitted by Spanish Inter-
national Broadcasting Company during 1964, it
summarily rejected the appellant’s relevant petitions,
which challenged FCC decisions issued in November 1965
and March 1966. Spanish International makes no sugges-
tion that the arguments presented in these distinct peti-
tions overlapped. See 385 F.2d at 618-19.) Our cases
interpreting section 405 establish that invocation of the
exhaustion doctrine is warranted under circumstances like
those in Spanish International, where the arguments of a
non-party were not considered by the Commission. See

20a

United Church of Christ, 779 F.2d at 706-07; Washington
Ass'n for Television & Children, 712 F.2d at 682. In this
case, though, the Commission addressed petitioners’ argu-
ments in the challenged decisions, making application of
the exhaustion doctrine inappropriate. Cf. United Church
of Christ, 911 F.2d at 809 (“Because the Commission ‘in
fact considered the issue,’ UCC’s challenge ... may there-
fore be reviewed.” (citation omitted)).

It is of course true that this case might never have
come to court if the petitioners had acted differently years
ago, long before the legal questions presented by this
appeal arose. See Maj. Op. at 10-11. But I cannot agree
with the majority that wishful speculation about what
might have been justifies denying access to this court. Nor
does the exhaustion requirement’s futility exception,
invoked by the majority, have any relevance to this case,
see Maj. Op. at 10 & n.4; because the exhaustion doctrine
cannot reasonably be applied to the facts before us, reli-
ance on cases interpreting one of its exceptions is insuffi-
cient to justify the majority’s holding.

I find the court’s approach particularly disquieting
because Hispanic Broadcasting Limited Partnership
(“HBLP”) and Hispanic Broadcasting Systems, Inc.
(“HBS”) acted just as wise investors would—they spent
time and money actively pursuing the licenses only at the
point when a realistic chance of obtaining them arose.
That a court sensitive to economic theory in other con-
texts should confuse rational economic behavior with a
lack of genuine interest in obtaining the licenses only
points up the majority’s fervor to be done with this case.
Cf. Tennessee Gas Pipeline Co. v. FERC, No. 89-1785, slip
op. at 8-10 (D.C. Cir. March 5, 1991) (discussing “Efficient
Market Hypothesis”); United States v. Western Elec. Co.,
900 F.2d 283, 297-98 (D.C. Cir.) (per curiam) (noting judi-
cial and academic views on interrelationship of antitrust
laws and market behavior), cert. denied, 111 S. Ct. 283
(1990).

It is critical to remember that the television licenses
which HBLP and HBS seek were not vacant during the

a =

2la

years when, in the majority's view, HBLP and HBS
should have pursued them. Rather, they were held by
Spanish International Communications Corporation and
Bahia de San _ Francisco (collectively, “Spanish
International”), which were entitled under FCC rules to
an all-but-insurmountable “renewal expectancy.” See
Central Florida Enterprises, Inc. v. FCC, 683 F.2d 503
(D.C. Cir. 1982) (approving renewal expectancy policy),
cert. denied, 460 U.S. 1084 (1983). The majority admits
(with some understatement) that it is “difficult” to unseat
an incumbent license-holder, Maj. Op. at 10, while the
FCC stated during oral argument that ‘ts policy is “not
to encourage” the filing of competing applications for
licenses held by qualified licensees.

The prospects for those seeking Spanish International’s
licenses improved dramatically when the Commission,
finding a “substantial question” whether Spanish Interna-
tional was under alien control, ordered that a hearing be
held on the incumbent’s qualifications as a license-holder.
See Hearing Designation Order, 48 Fed. Reg. 28549 (1983).
But the majority fails to mention that a long-standing
Commission practice known as the “Jefferson Radio
policy,” as then in force, precluded transfer of Spanish
International’s licenses pending resolution of the qualifi-
cations issue. See Stereo Broadcasters, Inc. v. FCC, 652
F.2d 1026, 1027 (D.C. Cir. 1981). Under Jefferson Radio,
the very event that gave prospective applicants real hope
of obtaining Spanish International’s licenses—designation
of a qualifications hearing—prevented HBLP and HBS
from competing for those licenses. Their only option was
to wait: If the Commission determined that Spanish Inter-
national was qualified, it would again be foolish to chal-
lenge that incumbency; if unqualified, Spanish
International would lose the licenses and HBS and HBLP
could then compete on an equal footing with other appli-
cants.

These reasonable expectations were upset, however, by
an unforeseeable change in the well-established Jefferson
Radio policy. The Commission decided to ratify the settle-

careers abieieretrieniniasiaaianiaciamnininiiatiaaniiiiiiiineiiiaimaaait

22a

ment agreement under which Spanish International would
transfer its licenses to Hallmark, notwithstanding
Jefferson Radio. See Spanish Int'l Communications Corp.,
2 FCC Red 3962. In my view, approval of the settlement
agreement and related license assignment constituted an
impermissible departure from the Jefferson Radio policy.
See Coalition for the Preservation of Hispanic Broadcasting
v. FCC, 893 F.2d 1349, 1359-62 (D.C. Cir. 1990) (per
Mikva, J.). For present purposes, though, this court need
only recognize that HBLP and HBS, relying on prior
statements of that policy, had no reason to anticipate
Commission approval of a license transfer during the pen-
dency of proceedings on the qualifications issue. Surprised
in this way, HBLP and HBS did the only thing they
could, opposing the settlement at all levels while filing
applications for the disputed licenses. See Petition of HBS
to Deny Applications for Transfer of Control, filed Sept.
26, 1986, reproduced in Joint Appendix at 150 [hereinafter
“J.A.”], denied, Spanish Int’l Communications Corp., Mass
Media Bureau No. 3713 (released June 23, 1987),
reproduced in J.A. at 443; Petition of HBS for Acceptance
of Applications, filed Sept. 26, 1986, denied, 2 FCC Rcd-
3336; Petition of HBLP [then, Hispanic Broadcasting,
Ltd.] for Reconsideration, filed Nov. 10, 1986, reproduced
in J.A. at 345, dismissed, Spanish Int'l Communications
Corp., 1 FCC Red 844 (Review Bd. 1986); Petition of
HBLP to Intervene or in the Alternative for a Waiver of
the Rules, filed Nov. 10, 1986, reproduced in J.A. at 372,
dismissed, 1 FCC Red 844, dismissed as moot, 2 FCC Red
3336; Petition of HBLP for Acceptance of Applications,
filed Dec. 9, 1986, reproduced in J.A. at 405, denied, 2 FCC
Red 3336; Application of HBLP for Review, filed Dec. 29,
1986, reproduced in J.A. at 505, denied, 3 FCC Red 4319.

Petitioners have no way of curing the shortcomings
that the majority sees in their past efforts; that is just
another aspect of the unfairness visited specifically upon
them. More generally, though, the majority does not indi-
cate what those who would challenge FCC licensing deci-
sions must do to satisfy its retroactive “exhaustion”

ee ————

23a

requirement. Must they seek every license up for renewal
on the off chance that the incumbent licensee will be
found unqualified, and that the license will be economi-
cally attractive at that hypothetical time? What are the
implications of such a result for the Commission’s estab-
lished renewal procedures? Must prospective license-
holders have applied for the license in question during the
most recent filing window, or is any past filing sufficient?
Must the FCC have recognized them as qualified to hold
a broadcast license? How can they show their qualifica-
tions absent a comparative licensing proceeding? One can
only speculate. It is clear, though, that the majority effec-
tively requires parties with an interest in competing for
vacant licenses to safeguard that interest by filing frivo-
lous applications challenging incumbent license-holders.

If the majority thinks such waste of applicants’
resources a trade-off for heightened administrative effi-
ciency, it is misguided; today’s decision may well increase
the number of applications filed for licenses held by quali-
fied incumbents, even though such applications are disfa-
vored by the Commission and will have no real chance of
success. Thus, invocation of exhaustion principles here
will hinder the very administrative efficiency those princi-
ples were designed to advance. | doubt that this result is
intended by the majority, but I am not surprised that non-
sensical results will flow from a decision driven more by
evasion than logic.

If, on the other hand, the court is motivated by a naked
instinct to keep those who would challenge agency deci-
sions out of court, my objection is more elemental. The
record is clear that these petitioners acted reasonably in
light of administrative precedents and the decisions of
this court. Punishing sensible economic and legal deci-
sions by withholding judicial review from firms that make
them is, in my view, an unacceptable exercise of judicial
discretion.

III.

I do not overlook the majority’s effort to narrow its
cpinion to the context of this case. See Maj. Op. at 12.

24a

But I cannot join with my colleagues on that basis alone.
Rather, I believe today’s decision unwise, unsound, and
unfair. I dissent.

25a

APPENDIX B

Huited States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 11, 1989 Decided January 12, 1990

Nos. 87-1285, et al.

COALITION FOR THE PRESERVATION OF
HISPANIC BROADCASTING, ET AL., PETTTIONERS

Vv.

FEDERAL COMMUNICATIONS COMMISSION,
RESPONDENT

UNIVISION HOLDINGS, INC., ET AL.,
INTERVENORS

Petition for Review of Orders of the
Federal Communications Commission

Martin E. Firestone, for Hispanic Broadcasting Sys-
tems, Inc., with whom Bruce A. Eisen, for Coalition for
the Preservation of Hispanic Broadcasting, and Richard
S. Rodin, for Susan M. Jaramillo, were on the joint brief

for petitioners in Nos. 87-1285, 87-1287, 88-1564, and 88-
1596.

26a

Morton L. Berfield, with whom Lewis I. Cohen and Ray
W. Boyce were on the brief for petitioner, Hispanic Broad-
casting Limited Partnership, in No. 87-1299.

James P. Riley, with whom Robert A. DePont was on the
brief for petitioner, TVL Corporation, in No. 88-1588.

Sue Ann Preskill, Counsel for the FCC, with whom
Diane S. Killory, General Counsel, Daniel M. Armstrong,
Associate General Counsel, and S. Lee Martin, Counsel,
FCC, were on the brief for respondent in all cases.

Richard E. Wiley, with whom John C. Quale and Diane
Z. Goldman were on the brief for intervenors, Univision
Holdings, Inc., et al., in Nos. 87-1285, 87-1287, 87-1299,
88-1564, 88-1588, and 88-1596. James R. Bayles also
entered an appearance for Univision Holdings, Inc., et al.

Linda K. Smith and David H. Solomon entered appear-
ances for intervenor, Station Representatives Association,
Inc. in Nos. 87-1285, 87-1287, 87-1299.

L. Andrew Tollin and Leon T. Knauer entered appear-

ances for intervenor, Seven Hills Television Company, in
Nos. 87-1285, 87-1287, 87-1299, and 88-1564.

N. Frank Wiggins entered an appearance for intervenor,
Fouce Amusement Enterprise, Inc., in Nos. 87-1285, 87-
1287, 87-1299.

John L. Tierney, Richard F. Swift and Ann Bavender
entered appearances for intervenor, Bahia de San Fran-
cisco Television Co., in Nos. 87-1287 and 87-1299.

Before: Mikva, Epwarps and WILLIAMS, Circuit Judges.
Opinion for the Court filed by Circuit Judge Mixva.

Opinion filed by Circuit Judge WittiaMs, dissenting in
part and concurring in part of the judgment.

Mixva, Circuit Judge: In these consolidated cases, three
companies comprised of Hispanic investors, an association
claiming concern with preserving Hispanic broadcasting,
and an Hispanic individual petition this court for judicial
review of two orders of the Federal Communications Com-

27a

mission (“FCC” or “Commission”). The first order
approved a settlement agreement providing for the grant
of license renewal applications for Spanish International
Communications Corporation (““SICC”) and Bahia De San
Francisco (“Bahia”) subject to the prompt transfer of the
licenses to a holding company controlled by Hallmark
Cards Inc. (“Hallmark”). The first order also denied peti-
tions for acceptance of competing applications for the
SICC and Bahia stations by two of the companies bringing
petitions in this case. See Spanish International Commu-
nications Corporation, 2 FCC Red. 3336 (1987). The sec-
ond order granted applications to transfer control of the
licenses to Hallmark and denied applications which sought
to block the transfer. See Spanish International Commu-
nications Corporation, 3 FCC Red 4319 (1988).

The settlement agreement was approved after an ALJ
determined that the stations in question were subject to
the de facto control of an alien in violation of §310(b)(3)
of the Communications Act of 1934, 47 U.S.C. § 310(b)(3)
(1982). The principal question presented is whether the
Commission’s approval of a full market value sale to Hall-
mark prior to the final resolution of the renewal proceed-
ings contravenes the Commission’s policy forbidding
assignment at full value of broadcast stations by a
licensee, whose qualifications are under investigation,
until the Commission has determined that the licensee
has not forfeited its broadcast authorization. See Jefferson
Radio Company v. FCC, 340 F.2d 781, 783 (D.C. Cir. 1964).
If indeed the Commission has changed its Jefferson Radio
policy, we must determine whether it has explained ade-
quately its departure from existing policy. We affirm the
Commission’s rulings declining to accept the competing
applications and declining to review the actions of another
federal court in administering a bidding process that led
to the selection of Hallmark as the transferee. However,
we hold: (1) that the three companies, as prospective com-
petitors for the licenses, have standing to challenge the
Commission’s approval of the settlement and transfer;
and (2) that the Commission departed from the policy

28a

upheld in Jefferson Radio. Because this case does not fall
within any of the established exceptions to Jefferson
Radio, we remand this case to the Commission to com-
plete the renewal proceedings that were pending at the
time the transfer was approved or to enunciate and
explain a new policy that would modify Jefferson Radio.

I
A. Statutory Background

Section 310(k, of the Communications Act precludes
the Commission from granting a broadcast license to for-
eign nationals or their representatives or to foreign corpo-
rations. 47 U.S.C. §310(b)(1), (2). In addition, under the
provision at issue in this case, “[n]o broadcast ... license
shall be granted to or held by [a United States corpora-
tion] of which any officer or director is an alien or of
which more than one-fifth of the capital stock is owned
... or voted by aliens or their representatives.” 47 U.S.C.
§310(b)(3). Congress’ motivation in passing this restric-
tion was based primarily “ ‘upon the idea of preventing
alien activities against the Government during the time
of war.’” Noe v. FCC, 260 F.2d 739, 741 (D.C. Cir.), cert.
denied, 395 U.S. 924 (1959) (quoting 68 Cong. Rec. 3037
(1927)).

B. Procedural History
1. Proceeding before the ALJ

SICC and Bahia (collectively, “SICC”) were the licens-
ees of six television stations broadcasting in the Spanish
language. A seventh Spanish language station was
licensed to the Seven Hills Television Company, which
was controlled by many but not all of the principals who
controlled SICC. SICC’s corporate predecessors began
acquiring broadcast stations in 1961. Prior to initiating in
1983 the renewal hearing at issue in this case, the Com-
mission, with knowledge of the relationships giving rise
to the hearing, unconditionally granted various applica-
tions by SICC to acquire stations and repeatedly renewed

29a

SICC’s broadcast licenses. After a staff investigation pre-
cipitated by an outside complaint, the Commission desig-
nated for hearing the renewal applications for each SICC
station. The principal issue was whether the corporate
licensees of the stations were controlled by aliens or their
representatives in violation of Section 310(b) of the Act.
After a full evidentiary hearing, the ALJ found that SICC
had violated §310(b)(3) because Reynald V. Anselmo,
President and a director of SICC, had acted as the repre-
sentative of the Azcarraga family, Mexican citizens and
owners of a Mexican media empire. Spanish International
Communications Corporation, FCC 86D-1, Initial Decision
at 1176 (January 8, 1986). While the Azcarragas’ stock
holdings in SICC did not exceed the 20% statutory limita-
tion, the ALJ concluded that the family’s financial and
personal relationships with American principals of SICC,
particularly Anselmo, gave the family a degree of influ-
ence and control over the SICC stations which “greatly
exceeded that permitted by Section 310(b).”

According to the ALJ this influence manifested itself at
several levels. The composition and ownership of the
board of directors of licensee corporations were affected
by the Azcarragas’ financing of stock purchases for
selected principals. For example, Anselmo, a former
employee in the Azcarragas’ media empire, purchased
interests in SICC stations with Azcarraga financing. As
president and a director of all of the licensee companies,
Anselmo personally selected all station managers. In addi-
tion, a major portion of programs broadcast by SICC sta-
tions originated from Televisa, a Mexican production
company in which the Azcarragas had a controlling inter-
est. The ALJ regarded Anselmo as the chief conduit of
the Azcarragas’ influence and as a “representative of
aliens” within §310(b)(3). These facts, coupled with the
“historic financial and personal ties between Licensees
and the Azcarraga family,” resulted in “an abnormal rela-
tionship ... whereby the [SICC] stations were dependent
on foreign subsidiaries” for financing, programming and
management. Thus the ALJ denied the renewal applica-

30a

tions. He invited the parties, however, to seek “a less
drastic remedial solution, such as a _ corporate
restructuring” by raising the matter in an application for
review of his decision.

2. The Settlement Agreement

The licensees appealed the ALJ’s decision to the Com-
mission’s Review Board and several third parties filed
exceptions to the ALJ decision. The exceptions chal-
lenged: (1) the ALJ’s refusal to consider whether SICC
abused the Commission’s processes by filing lawsuits
against Spanish Radio Broadcasters of America (“SRBA”)
(one of the excepting parties) and other potential wit-
nesses in the proceeding against SICC; and (2) the ALJ’s
refusal to consider whether there was misconduct or mis-
representation sufficient to violate the Commission’s pol-
icy on character qualifications.

While the exceptions were pending before the Board,
SICC submitted a proposed settlement agreement
whereby the SICC licenses would be renewed for the lim-
ited purpose of promptly transferring the stations to an
unrelated, qualified buyer. SICC proposed to sell the sta-
tions to Hallmark, an American corporation having no
ties to the Azcarragas. The selection of Hallmark arose
from the settlement of an unrelated, ongoing stockhold-
ers’ derivative suit brought against SICC, Fouce Amuse-
ment Enterprises, Inc. vu. Spanish International
Communications Corp., No. CV 76-3451-MRP (C.D. Cal.).
After SICC agreed to settle the stockholders’ suit by sell-
ing the stations, the federal district court for the Central
District of California supervised bidding for the stations
and ultimately accepted Hallmark’s bid.

The Commission’s Review Board approved the pro-
posed settlement without ruling on the merits of the
exceptions. On review, the Commission agreed with the
Review Board that the proposed assignment of SICC
licenses was in the public interest notwithstanding its
general policy under Jefferson Radio. The Commission
reasoned that under the circumstances of the case, the

3la

proposed sale would “not unacceptably diminish” the
deterrence of licensee wrongdoing—the rationale under-
girding Jefferson Radio. Spanish International Communica-
tions Corporation, 2 FCC Red. 3336, 3338-39 (1987). The
Commission deemed the settlement in the public interest
because: (1) the “technical” nature of the violations found
by the ALJ suggested that SICC had no intention of vio-
lating the statute or deceiving the Commission; and (2).
by providing for the removal of SICC as licensees, the set-
tlement constituted an effective means to implement pro-
spectively the statutory policy against alien control.
Noting that SICC and its predecessor had been allowed
to broadcast for the past twenty-five years and citing the
“unique contributions” that these stations made to broad-
casting in this period, the Commission concluded that this
was an appropriate case in which SICC should be removed
from broadcasting, but without the harshness attending
an outright denial of its renewal applications. The Com-
mission also found that the settlement agreement served
the public interest by simplifying a complex case, saving
administrative costs, removing a “cloud” of uncertainty
that can adversely affect a station’s performance, and
facilitating the resolution of the Fouce stockholder’s deriv-
ative suit and the antitrust litigation directed at SRBA.
Prior to this decision, SRBA withdrew its exceptions to
the ALJ decision and filed a petition in support of the
SICC settlement agreement, noting that SRBA and SICC
were “executing an agreement that is intended to result
in settlement as among themselves of the Antitrust
Litigation.” At no stage of these proceedings did the Com-
mission rule on the merits of the exceptions.

Subsequently, the FCC considered Hallmark’s qualifica-
tions and approved the applications to transfer the sta-
tions to Hallmark.

3. Challenges Below by Petitioners

The Hispanic Broadcasting Limited Partnership
(“HBLP”) filed a petition for review of the Review
Board’s approval of the settlement agreement along with

32a

an application for acceptance of its competing license
applications. The Commission denied both requests.
Regarding the competing applications, the Commission
concluded that because HBLP failed to file in accordance
with Commission time limits the applications properly
were rejected. The Commission declined to waive its cut-
off rule “absent a compelling justification” which it did
not find.

Hispanic Broadcasting Systems, Inc. (“HBS”) also peti-
tioned below for acceptance of competing applications.
Although the Commission denied this petition, HBS does
not challenge that ruling t¥fore this court. The Coalition
for the Preservation of Hispanic Broadcasting (“the
Coalition”), HBS, and Susan M. Jaramillo submitted a
consolidated petition for review in this case. Each party
petitioned below for denial of the application to transfer
SICC stations to Hallmark. These petitions also were
denied.

TVL Corporation, comprised of Hispanic investors and
one of the two finalists in the shareholder derivative set-
tiement process, petitioned the Review Board to deny
applications to transfer SICC’s licenses to Hallmark. In
its petition TVL argued that the transfers should be
denied without prejudice and that an order should be
issued by the Commission directing SICC to request the
Ninth Circuit, which had jurisdiction over the SICC stock-
holders derivative suit, to remand that litigation with
instructions: (1) to vacate its selection of Hallmark as the
prevailing bidder; and (2) to consider the final bids of
Hallmark and TVL as of July 23, 1986.

TVL argued that the bidding process discriminated
against minority-controlled entities seeking to purchase
SICC. By requiring bidders to sign a confidentiality agree-
ment precluding signers from seeking to acquire SICC by
means other than the market value bidding process, TVL
asserts that minority parties contemplating a “distress
sale” were discriminated against. Pursuant to the
Jefferson Radio policy of prohibiting a licensee facing

eee

33a

qualification issues in a renewal hearing from profiting on
the sale of broadcast interests, TVL believed it was highly
unlikely that a full market sale would be allowed. When
TVL learned that the Commission’s Mass Media Bureau
had acceded to the “full value” sale, TVL quickly gathered
the financing for a full value bid, timely filed its bid, and
was selected as a second round bidder. On Julv 18, 1986
the TVL and Hallmark bids were submitted to the district
court as the two finalists. Evidence of the final TVL
financing commitments was not yet available when the
bids were piaced before the court, although TVL had
advised SICC that it would be available as it ultimately
was on July 23, 1986. The court entered an order condi-
tionally approving the Hallmark bid on July 18, 1986.
TVL then filed a motion to intervene in the shareholder
suit and Hallmark moved for an affirmance of the order
entered on July 18. The district court rejected TVL’s
motion to intervene and approved Hallmark on several
grounds, one of which was that Hallmark had unequivocal
financial backing. The Ninth Circuit affirmed the denial
of the motion to intervene without comment on the merits
of TVL’s claims. Fouce Amusement Enterprises, Inc. v.
Spanish International Communications Corp., 819 F.2d
1145 (9th Cir.) (table), cert. denied sub nom. TVL Corp.
v. Spanish International Communications Corp., 108 S. Ct.
754 (1988).

TVL argued that the settlement agreement between
SICC and the Bureau lacked appropriate measures to pro-
tect adequately potential minority purchasers who had
previously been pursuing the possibility of a “distress
sale” acquisition. The Commission rejected this claim,
reasoning, inter alia, that the relief requested would be
“entirely inappropriate and at variance with the Commis-
sion’s long-standing policy of declining to adjudicate mat-
ters properly pending in another forum.” Spanish
International Communications Corporation, 3 FCC Red
4319, 4320 (1988).

34a

II
A. Standing

The Commission concedes that petitioner HBLP has
standing to challenge the Commission’s dismissal of its
competing applications. The Commission argues, however,
that if this court upholds the dismissal of the competing
applications, then HBLP does not have standing to chal-
lenge the settlement agreement or the transfer of SICC
stations to Hallmark. In addition, the Commission argues
that all other petitioners lack standing to bring their
respective claims. We find that the three companies have
standing; therefore we need not resolve the question of
whether the Coalition or Ms. Jaramillo can claim standing
as viewers.

The law of standing is based on a set of constitutional
and prudential requirements. To establish standing under
article III of the Constitution a litigant must plead an
injury in fact fairly traceable to the conduct complained
of and likely to be redressed by the relief requested. Allen
v. Wright, 468 U.S. 737, 751 (1984). Under statutory and
prudential standing requirements, standing to challenge
an order of the Commission is conferred by § 151 of the
Communications Act, which allows appeal to this court by

“any ... person who is aggrieved or whose interests are
adversely affected” by such order. 47 U.S.C. §402 (b)(6)
(1982).

1. Standing as Viewers

In their consolidated brief, the Coalition, HBS and
Susan M. Jaramillo (collectively, “Consolidated
Petitioners”) claim standing as viewers under Office of
“ommunication of the United Church of Christ v. FCC,
which allows responsible representatives of the broadcast
audience to assist the Commission in vindicating the pub-
lic interest. 359 F.2d 994, 1004-05 (D.C. Cir. 1966). Con-
solidated Petitioners suggest that the settlement
threatens the public’s interest in the continuation of
Spanish language programming. Their claim of standing

35a

is problematic because there is no evidence to suggest that
the anti-alien control provisions of the Act were imple-
mented to advance the public’s interest in programming
content. We need not resolve this issue, however, because
we find that HBLP, HBS, and TVL have standing as pro-
spective competitors to challenge the Commission’s
approval of the settlement agreement. Since the relief
sought by those petitioners encompasses the relief sought
by the other Consolidated Petitioners, it is of no moment
whether “viewer” standing exists in this case.

2. Standing as Prospective Competitors

As a threshold matter we must address the nature of
the action brought by petitioner TVL. TVL does not chal-
lenge the settlement agreement per se but the process
which led to the selection of Hallmark as the transferee.
It asks us to reverse the Commission’s approval of the
settlement agreement on the grounds that the Commis-
sion failed to address its claim that the bidding process
was discriminatory. This cause of action is not reviewable
in this court, however, because it essentially seeks a
review of the judicial proceedings which occurred in the
Ninth Circuit. Neither the Commission nor this court can
engage in such review.

The Commission argues that, assuming we uphold its
denial of the competing applications, none of the petition-
ers have standing as prospective competitors for the SICC
licenses. It conceded at oral argument that if a reversal
of its orders would result in vacant licenses, companies
eligible to file applications for those licenses would have
standing to challenge the Commission’s order. See, e.g.,
MG-TV Broadcasting v. FCC, 408 F.2d 1257, 1264 n.24
(D.C. Cir. 1968) (prospective applicant had standing to
challenge assignment of a construction permit where
denial of the application would have left the station
vacant and available for other applications). The Commis-
sion argued, however, that MG-T'’V is limited to cases
where the license could become available directly as a
result of the court’s order. We reject this distinction.

ee

36a

While MG-T’V involved a substantive challenge which,
if accepted, immediately would have rendered the relevant
license open to competition, the rationale for prospective
competitor standing does not require that we restrict it
to such circumstances. This court recently allowed a
would-be competitor for a license to challenge an FCC
order granting the incumbent licensee permission to sell
its broadcast properties to a minority-controlled enter-
prise pursuant to the Commission’s distress sale policy.
See Shurberg Broadcasting of Hartford, Inc. v. FCC, 876
F.2d 902 (D.C. Cir. 1989). There, similar to this case, the
Commission’s order sanctioned a sale that would have
avoided a renewal hearing. Yet the Shurberg court’s ruling
that the distress sale policy was unconstitutional did not
create a vacant frequency but reverted the incumbent
licensee to its prior designated-for-hearing status. Appar-
ently the FCC did not contest Shurberg’s standing in that
case. See id. at 906-07. While the Shurberg court did not
address the issue of standing explicitly, this result is con-
sistent with the general principle underlying standing for
frustrated competitors. Cf. National Maritime Union of
America v. Commander, Military Sealift Command, 824
F.2d 1228, 1237-38 (D.C. Cir. 1987) (“[I]njury to a bidder’s
right to a fair procurement is obviously an injury both
traceable to the alleged illegality in a procurement and
redressable by any remedy that eliminates the alleged
illegality.”).

By analogy, HBLP and HBS claim an injury to their
right to a fair license award process both traceable to the
Commission’s wrongful conduct in approving the transfer
to Hallmark and redressable by our remedy which elimi-
nates that conduct, i.e., remand for continuance of the
qualification hearing or articulation of a new policy. Simi-
larly, TVL claims a “fair procedure” injury traceable to
the Commission’s approval of the transfer and redress-
able, if we were willing to review the merits, by reopening
the settlement to permit a reopening of the bidding pro-
cess. HBLP, HBS, and TVL have all made unsuccessful
attempts to become the licensee for the stations at issue

37a

in this dispute. While there is no certainty that this
opportunity will be regained upon remand, that possibility
is far from remote. Moreover these parties were entitled
to expect that a proceeding which was insulating the
licenses from competition until its conclusion would not
be truncated by an illegal transfer of the licenses to a
third party. We therefore find a redressable injury, meet-
ing the constitutional requirements for standing to chal-
lenge the Commission’s approval of the settlement and
transfer.

We disagree with the dissent’s suggestion that HBLP
and HBS should not be afforded article III standing
because they were not within “the zone of active
consideration” for the licenses in question. As the dissent
correctly notes, this “active consideration” requirement
has been imposed as a condition for standing to challenge
government contract awards. See National Maritime
Union, 824 F.2d at 1237-38 n. 12. But to export this rea-
soning wholesale to the license renewal context ignores
critical differences between the license renewal and con-
tract bidding processes. In the classic disappointed bidder
case, all potential parties started with a level playing held
whereby each applicant brought its resources to bear in
vying for a “vacant” contract. In contrast, the typical
“frustrated competitor” for an FCC licence has had to vie
with the incumbent licensee (as well as other competitors)
in a process which obviously creates institutional biases
toward the incumbent. It is not an “open” bidding contest
per se. More importantly, once an incumbent’s qualifica-
tions have been designated for hearing, as was the case
here, the incumbent is insulated from competition. For
example, HBLP timely filed a competing application for
SICC’s Miami station license at a time when SICC’s
renewal application for that licence was in hearing on the
issue of alien control. Although we hold below that the
FCC correctly declined to accept this application during
the pendency of the hearing, this fact illustrates the inap-
propriateness of the “active consideration” requirement in
the FCC licensing context. The dissent’s suggestion that

38a

SICC somehow was rendered vulnerable once its qualifica-
tions were challenged, opening the door to free and fair
competition, could not be further from the actual circum-
stances of this case. Once SICC’s qualifications were in
hearing all possibility of competition for the licenses was
precluded until the Commission finally resolved the hear-
ing.

The bidding process administered in the Ninth Circuit
as a remedy for the shareholder derivative suit can hardly
be viewed as an exclusive (or even appropriate) place for
applicants to demonstrate their “standing” in the licens-
ing dispute. It was not an official FCC forum for compet-
ing for the licenses; indeed FCC policy appeared to
prohibit the consummation of any transfer until the con-
clusion of the hearing. The dissent proceeds to argue that
once the FCC decided to truncate the hearing process
with the Hallmark settlement, HBS and HBLP could
have demonstrated the seriousness of their commitment
to obtaining the licenses by at least petitioning to inter-
vene in that proceeding. But this action, too, would not
have enabled these companies to gain the FCC’s “active
consideration” of their own applications.

Such arguments illustrate how the dissent misconstrues
the standing inquiry. Standing does not amount to some
kind of largesse dispensed at the discretion of article III
judges. This circuit has never explicitly imposed a require-
ment that a “frustrated competitor” for an FCC license
demonstrate its prospects for succeeding in the license
award process. In Orange Park Florida T.V., Inc. v. FCC,
on which the dissent heavily relies, this court stated that
“contingencies may arise” which could cause the peti-
tioner to “decide not to reapply” or could “defeat its [re-
newed] application.” 811 F.2d 664, 673 n.18 (D.C. Cir.
1987). The Orange Park court further stated that it could
discern no “ ‘absolute barriers’” to the petitioner’s com-
peting for the license in the future—the outer limit
imposed by this court in determining whether an injury
is redressable by the relief the petitioner seeks. /d.
(quoting Greater Tampa Chamber of Commerce v. Gold-

a

39a

schmidt, 627 F.2d 258, 264-65 (D.C. Cir. 1980). It was in
this redressability context that the Orange Park court
noted that the petitioner had “devised plans sufficiently
detailed to enable it to compete for the facility.” 811 F.2d
at 673 n.18. While a would-be competitor certainly could
simplify the reviewing court’s standing analysis by provid-
ing such detail, this statement does not constitute a legal
requirement for standing under the law of this circuit.
The dissent also cites Public Citizen v. Lockheed Aircraft
Corp., 565 F.2d 708 (D.C. Cir. 1977), for the proposition
that a would-be competitor lacks standing where it fails
to demonstrate its capacity to compete in the future. In
that case, however, members of a trade association of
machinery dealers sought to challenge a sale by the fed-
eral government of a manufacturing plant to the Lock-
heed Corporation. Because none of the members of the
association, which were in the business of machinery sales
and not defense contracting, had displayed a realistic
intent to purchase an entire plant, the foundation for
standing was deemed too speculative. Jd. at 717-19. In
contrast, the three companies at issue in this case have
actually attempted in the past to bid or compete for the
licenses in question.

Equally insupportable is the dissent’s attempt to rele-
gate this court’s standing ruling in MG-TV Broadcasting
to the status of a “superseded” case. Despite its appear-
ance in a footnote, until the case is overruled or limited,
the MG-TV court’s reasoning on standing has the force
of precedent.

The three companies also satisfy the statutory and pru-
dential requirements for standing. Frustrated license
applicants are parties “aggrieved” within the meaning of
§ 402 (b)(6) of the Communications Act because they have
a “concrete, economic interest that has been perceptibly
damaged by the Commission’s award [of licenses to
another competitor.]” See Orange Park, 811 F.2d at 673.
Having disposed of TVL’s claim, we turn then to the sub-
stance of the complaints made by HBLP and HBS.

40a

B. Competing Applications

Petitioner HBLP presents a threefold argument as to
why its competing applications should have been accepted
by the Commission at the time the SICC settlement
agreement came up for review before the Commission.
HBLP reasons: (1) that its application for SICC’s Miami
facility (WLTV) should have been accepted as a matter
of right without the need for a waiver of the cutoff rule;
(2) that its application for SICC’s San Antonio facility
(KWEX-TV) should have been accepted because, due to
confusion in the Commission’s notices, no valid cut-off
date was established; and (3) that the remaining HBLP
applications should have been accepted pursuant to a
waiver of the cutoff rule because the Commission has not
applied its “compelling justification” policy consistently in
the past. We reject each of these arguments.

1. The Miami Application

HBLP invites this court to address a question left open
in a previous case, Committee for Open Media v. FCC, 543
F.2d 861, 872-73 (D.C. Cir. 1976): whether the Commis-
sion properly can reject an otherwise timely competing
application because of the pendency of a non-comparative
renewal hearing. The “window” was open for filing com-
peting applications in the state of Florida at the time
SICC’s WLTV renewal application was in hearing on the
issue of alien control. But because HBLP’s application
was mutually exclusive with SICC’s, the Commission
barred HBLP from filing its application. HBLP argues
that the Commission’s Ashbacker doctrine favoring com-
parative hearings in broadcast licensing decisions,
Ashbacker Radio Corp. v. FCC, 326 U.S. 327 (1945), com-
pels acceptance of its competing application. The Com-
mission replies that its longstanding policy against
accepting competing applications when qualification
issues are under active prosecution is a necessary means
for achieving administrative finality. In Shurberg, Judge
Silberman spoke with approval of this policy rationale,
reasoning that designated-for-hearing applications should

4la

be protected from competitive filings so long as the FCC
is engaged in ongoing administrative activity. See
Shurbderg, 876 F.2d at 908-09.

We conclude that the Commission acted within its dis-
cretion in barring HBLP’s competing application for
WLTV. While we are not unsympathetic to the argument
that an extended qualifications proceeding inadvertently
benefits the licensee by insulating it from competition, the
circumstances of the case sub judice do not give rise to
public interest concerns which outweigh the public’s inter-
est in administrative finality and efficiency. In New South
Media Corp. v. FCC, this court held that “with no renewal
hearing ongoing ..., no evidence-taking underway, [and]
no proceeding in midstream or even launched,” the Com-
mission erred in barring competing applications because
doing so would not “require reopening of ‘matters once
decided,’ or ‘relitigation’ of issues already aired.” 685 F.2d
708, 716 (D.C. Cir. 1982) (citation omitted). In reaching
this decision, the New South court relied on a case in
which the Commission ruled that competing applications
should be entertained where prosecution of a renewal
application had been deferred for three years. Jd. (citing
Carlisle Broadcasting Associates, 59 FCC 2d 885, 885 n.1,
889 n.16 (1976)). In contrast, the New South court sug-
gested that if a renewal application were actually “in hear-
ing throughout most of the license term and past its
expiration,” competing applications should not be allowed
until conclusion of the proceeding. Jd. (distinguishing
Committee for Open Media, 543 F.2d 861).

The two other cases relied upon by HBLP are unavail-
ing. In La Rose v. FCC, 494 F.2d 1145 (D.C. Cir. 1974),
a renewal hearing was reopened in order to protect inno-
cent creditors by enabling a court-appointed receiver to
pursue an opportunity to sell the station in question. In
MG-TV Broadcasting Company v. FCC, this court held
that the Commission erred in extending a construction
permit where the holder of the permit had made no signif-
icant progress toward construction and lacked good faith.
Instead, a comparative hearing was required. 408 F.2d

42a

1257 (D.C. Cir. 1968). Unlike the cases discussed thus far,
HBLP’s argument offers no countervailing interest, other
than the public’s broad interest in competition, for open-
ing an ongoing qualifications hearing to competing appli-
cations. Moreover, HBLP does not offer any specific
evidence to support its claim that its application would
only marginally extend the renewal proceeding. Yet, a
qualifications hearing might extend into the next license
period if competing applications dictated the “reopening
of the hearing record for cross-examination of previous
witnesses, objection to exhibits already admitted, intro-
duction of new evidence, and retrial of issues.” Committee
for Open Media, 543 F.2d at 873. In light of these consid-
erations, the Commission did not abuse its discretion in
refusing to accept HBLP’s application for the WLTV
facility.

2. The San Antonio Application

HBLP claims that no valid cutoff date was established
for applications competing for one of SICC’s licenses—
that of KWEX-TV. It argues that the Commission failed
to follow proper procedure in alerting potential applicants
that the filing period for competing applications would not
be truncated by its order designating for hearing SICC’s
KWEX-TV renewal application. HBLP effectively con-
cedes that the Commission’s official notice in the Federal
Register was accurate. Petitioner argues, however, that
the Commission erred in issuing a news release, prior to
the official notice, which announced the designation for
hearing without noting that the normal window for com-
peting applications would be maintained. In its order
below, the Commission rejected this claim because HBLP
failed to demonstrate that it or any other applicants were
actually confused or deterred by the news release; alterna-
tively the Commission relied on its official notice.

We affirm the Commission’s ruling because: (1) HBLP
did not attempt to file a competing application at the rele-

vant time and no prejudice has been demonstrated to any
other applicants; cf. Salzer v. FCC, 778 F.2d 869, 875 (D.C.

43a

Cir. 1985) (filing intructions were vague and ambiguous
and 44 of 53 applicants apparently were misled by them);
and (2) the official notice was accurate and was released
before the close of the window.

3. Denial of Waivers

HBLP asserts that the Commission erred in denying
waivers of its cutoff rule for its remaining competing
applications (and for the Miami and San Antonio applica-
tions in light of the failure of the above claims). It argues
that the Commission has not applied its “compelling
justification” basis for waivers consistently in the past and
reasons that the lack of an established “strict” waiver pol-
icy impels the Commission to grant waivers in the case
sub judice. We find this argument without merit.

The FCC precedents relied upon by HBLP upheld
waivers based upon persuasive showings of impossibility,
hardship, or other arguments demonstrating a clear public
interest in allowing the waiver. HBLP has not identified
any Commission precedent similar to this case where
applicants seek waivers three years after the cutoff date
and offer only the public’s interest in competition as a jus-
tification for the waiver. Moreover, HBLP has not offered
any explanation as to why, with the exception of the
Miami application, the competing applications were not
timely filed. We affirm the Commission’s ruling because
it has offered a reasonable distinction between this case
and occasions in the past when waivers of filing deadlines
have been granted.

C. Deviation from Jefferson Radio

As a threshold matter petitioner HBLP argues that by
approving the settlement agreement the Commission vio-
lated §§ 301 and 304 of the Act, which preclude property
rights in broadcast licenses. Similarly, HBS argues that
§ 310(b) absolutely precluded the Commission from grant-
ing a license to SICC for any purpose after the ALJ’s
finding of de facto alien control. We need not resolve these
questions, however, because we find that the Commission

44a

violated its policy as upheld in Jefferson Radio. HBLP also
argues that the Commission, pursuant to § 309 of the Act,
should have provided notice and an opportunity for public
participation prior to consideration of the settlement
because the settlement raised issues of substantial public
concern. We reject this argument. Nothing in § 309
requires the Commission to solicit public comment on set-
tlement agreements ir adjudicatory proceedings. See 47
U.S.C. § 309 (1982). On the contrary, the Act limits the
right of petition to deny an application to a “party in
interest.” 47 U.S.C. § 309(d)(1).

Petitioner HBLP charges that by approving a full mar-
ket sale to Hallmark prior to the conclusion of the
renewal proceeding, the Commission made an ad hoc
exception to the policy upheld in Jefferson Radio without
articulating a clear rationale for this departure. We agree.

The content and rationale of the Jefferson Radio policy
are adequately explained in a previous opinion of this
court: ;

Under a long-standing policy formulated by the
[Commission] and upheld by this court, Jefferson
Radio Co. v. FCC, 340 F.2d 781, 783 (D.C. Cir. 1964),
radio station licensees whose licenses have been des-
ignated for revocation hearing, or whose renewal
applications have been designated for hearing on
basic qualification issues, are forbidden to transfer
control of these licenses. Established on the premise
that “a licensee ... has nothing to assign or transfer
unless and until he has established his own
qualifications,” Northland Television, Inc., 42 Rad.
Reg. 2d 1107, 1110 (1978), the policy stems from the
Commission’s concern for the continued effectiveness
of the deterrent provided by, in the appellant’s words,
the “awesome potential for economic loss that
attends deprivation of license.”

Stereo Broadcasters, Inc. v. FCC, 652 F.2d 1026 (D.C. Cir.
1981). As the Commission has observed:

[Where an evidentiary hearing has been designated
on a renewal application or show cause order to

45a

determine disqualification questions, permitting the
suspected wrongdoer to evade sanction by transfer-
ring his interest or assigning the license without
hearing will diminish the deterrent effect which revo-
cation or renewal proceedings should have on broad-
cast licensees. Only under exceptional circumstances
giving rise to compelling equitabie considerations will
the Commission grant renewal to such an applicant
and authorize a concomitant license assignment or
transfer of control. ... Additionally the assignor must
show he will derive no unwarranted [financial] benefit
from a grant of renewal ... conditioned upon the pro-
posed transfer or assignment.

Northland Television, 42 Rad. Reg. 2d at 1110 (emphasis
added).

The Commission has found compelling equitable cir-
cumstances in cases where the assignor is disabled or
where the licensee’s assets are held by a receiver in bank-
ruptcy for the benefit of innocent creditors. Jd. at 1110
n.4. In those rare cases where the Commission, prior to
final resolution of a renewal hearing, has approved trans-
fers falling outside these recognized exceptions, the trans-
fer was made with a substantial monetary penalty to the
transferor. See, e.g, RKO General, Inc. (KHJ-TV), 3 FCC
Red 5057, 5062 (1988) (assignor to get $105 million less
than purchase price and settlement would avoid years of
further litigation); A.S.D. Answering Service Inc., 1 FCC
Red 753, 754 (1986) (surrender of a construction permit
and three licenses and dismissal of all low band licensing
application plus firing of all employees whose conduct was
at issue); George E. Cameron Jr. Communications, 56 Rad.
Reg. 2d 825, 828 (1984) (transferee assumed $6.5 million
in debt, relinquished rights in another station, and
returned a silent, failed station to the air and tranferors
received no compensation whatsoever).

The Commission presents three arguments in support
of its claim that its actions are consistent with Jefferson
Radwo. First, it argues that the policy prohibits transfers
only when the potential benefits in the proposed assign-

46a

ment are outweighed by a countervailing and overriding
public interest in the Commission retaining effective con-
trol over the conduct of its licensees. The Commission’s
reliance on Northwestern Indiana Broadcasting Corp., 60
FCC 2d 205 (1976), as precedent for this balancing
approach, however, is misplaced. In Northwestern, the
Commission declined to accept a settlement proposal
which would have avoided a lengthy qualification hearing
by transferring the station to a third party. The Commis-
sion reached this conclusion even though the proposed
transfer was approved by the party which precipitated the
qualification hearing and would have given a majority
black community its first black radio station. Jd at 209-
10. The Commission invoked balancing language to
explain the deterrence rationale underlying Jefferson
Radio, reasoning that despite its potential benefits, the
settlement was precluded by the “countervailing and over-
riding public interest” in maintaining the deterrence func-
tion of its hearing processes. Rather than establishing a
balancing test, the Commission in Northwestern
unequivocally adhered to Jefferson Radio, precluding the
settlement because it did not fall within established
exceptions. /d. at 210-11.

The dissent suggests that this court has constructed
Jefferson Radio as some kind of rigid doctrine to frustrate
the Commission’s desire to distribute justice in its licens-
ing process. We take the doctrine as the Commission
established it. Obviously the Commission is free to change
the doctrine, as long as it explains why and what it is
doing, and complies with its process requirements.

Thus the Commission’s argument that it properly
weighed the factors favoring approval of the settlement
agreement against its interest in deterrence is without
merit. Equally unavailing is the Commission’s second
argument that there are no guiding precedents in this case
because it involves subjective inferences of de facto control
under §310 (b) and because SICC was an incumbent
licensee of 20 years. The Commission reasons that the
“illusive nature” of de facto control counsels against a

47a

harsh remedy in the absence of specific precedent to guide
a licensee. The authority upon which the Commission
relies, however, does not support this contention. This
court in Greater Boston Television Corp. v. FCC, 444 F.2d
841, 861 (D.C. Cir.), cert. denied, 403 U.S. 923 (1971),
upheld the Commission’s decision to impose a remedy
having a harsh effect even though there was not an
explicit precedent giving notice to the licensee that it was
required to report a change in de facto control. The
Greater Boston court did state that use of a sweeping
rather than a more refined administrative remedy may in
some instances represent an improvident use of adminis-
trative discretion. Jd. It did not, however, provide exam-
ples of such instances and its holding counsels against the
position which the Commission asserts in this case.

Third, the Commission attempts to use the fact that
this case involves de facto control to distinguish it from
precedents requiring sales in exception to Jefferson Radio
to be made at diminished value. The Commission argues
that the misconduct at issue in those cases was more egre-
gious than in this case because: (1) with no alien having
exceeded the 20% stock ownership limitation or having
served as an officer or director, SICC complied with the
two statutory benchmarks for de jure control; and (2)
SICC made no attempt to conceal the relationships at
issue nor did its conduct involve any misrepresentations
or character violations. Offsetting the allegedly
“technical” misconduct against, inter alia, the “unique”
contributions of SICC to broadcasting and the administra-
tive convenience of the settlement, the Commission con-
cluded that the equities of the case distinguished it from
other cases warranting harsher treatment.

This distinction is specious for two reasons. First, none
of the “diminished value” cases turn on the egregiousness
of the conduct in question. As described above, all of
these cases are premised on a clear requirement that
exceptions to Jefferson Radio falling outside the estab-
lished categories of insolvency or disability be made only
at substantial monetary cost to the assignor. Even under

48a

the established exceptions the Commission has required
adequate showings not only of compelling equitable cir-
cumstances but also of reduced financial benefit for the
assignor. See Northland Television, 42 Rad. Reg. 2d 1107
(licensee had to make adequate showing that its principal
suffered disability and that the proposed transfer would
not result in a profit to the assignor).

Second, SICC’s conduct is not rendered less serious
simply because the ALJ found that the violation involved
de facto control. Clearly, the complex pattern of interlock-
ing relationships scrutinized by the ALJ were developed
for the precise purpose of avoiding the de jure restrictions
in §310 (b). The ALJ’s extensive findings demonstrate
that conduits for alien influence can be created that have
the potential to be just as effective as de jure violations.
For example, in the early days of SICC’s tenure as a
broadcaster, the Azcarragas advanced emergency funds to
the stations, provided programming to the stations while
deferring payment for years, and opened collateral deposit
accounts for the stations to draw upon in order for the
stations to receive financing from United States banks. In
addition, a number of the officers and directors of the
SICC stations had significant pre-existing associations
with the Azcarraga media empire and became principal!
investors in various licensee stations with the benefit of
Azcarraga financing. Jnitial Decision at 91 80-114. While
we reach no conclusions as to whether such conduct con-
stitutes a violation of § 310(b), we are unpersuaded that
the distinction between de jure and de facto conduct has
any relevance for the purposes of maintaining the deter-
rence rationale which informs the Jefferson Radio policy.

The abuse-of-process allegations raised in the excep-
tions to the ALJ’s decision a'so undercut the Commis-
sion’s assertion that SICC’s conduct was distinguishable
from that addressed in the other diminsished value cases.
The Commission’s own Mass Media Bureau attempted to
add an abuse-of-process issue to the hearing before the
ALJ—a petition which the ALJ denied. The Bureau then
filed an exception which charged that SICC harrassed and

49a

intimidated SRBA and other potential witnesses for hav-
ing brought information about SICC’s conduct to the
attention of the Commission. For example, SRBA alleged
that SICC filed more than thirteen apparently baseless
antitrust suits against potential witnesses to chill adverse
petitioning before the Commission. The Commission
asserts that because SRBA withdrew its exception—
pursuant to a settlement of the antitrust litigation
brought by SICC against SRBA and associated parties—
it did not feel compelled to investigate this claim. The
terms of SRBA’s settlement with SICC are not in the
record; hence we do not know what induced SRBA to
withdraw the abuse-of-process claim and to file a petition
in support of the transfer to Hallmark. Certainly, if SICC
intended to “buy” its way out of the abuse-of-process
charges, the Commission ought not to facilitate such a
result by not investigating the charges. While we are not
suggesting that the Commission is obliged to reopen the
abuse-of-process claims, these circumstances further per-
suade us that this was not a case of mere “technical” alle-
gations sufficient to escape the requirements of Jefferson
Radio.

Finally, the Commission urges a “remedy” for a possible
violation of § 310 (b), prior to the final resolution of the
issue, which is an extreme departure from prior prece-
dents: a full market sale at $300 million with no apparent
burdens to SICC other than barring SICC principals from
becoming officers or directors of the assignee for two
years. Intervenors, indirect subsidiaries of Hallmark,
point out that in the past the Commission has ratified
unauthorized transfers of control by approving a subse-
quent application to transfer while exacting only a
$10,000 fine against the incumbent licensee. See Bartell
Broadcasters, Inc., 19 FCC 2d 890 (1969); Areawide Com-
munications, Inc., 12 FCC 2d 170 (1968). Yet in neither
of these cases had the qualifications or renewal applica-
tion of the incumbent licensees been designated for hear-
ing prior to the request for official authorization of the
transfers. Moreover, in both cases the Commission made

es

50a

a final determination that there had been a willful viola-
tion of the Act’s restriction on unauthorized transfers
before approving the transfer and assessing a fine. In con-
trast, in this case the Commission truncated a renewal
proceeding prior to finally resolving the issues which had
been designated for hearing. We also note that the qualifi-
cations of the incumbent licensees were not at issue in
Bartell and Areawide. Instead of a substantive qualifica-
tions violation, those cases dealt with the fact that osten-
sibly acceptable transfers had been effected by the
incumbent licensee without the official authorization of
the Commission.

We agree with petitioners that the relief granted by the
Commission in this case constitutes a substantive depar-
ture from Jefferson Radio which warrants a reasoned
explanation. Moreover, if on remand the Commission
chooses to modify this policy, it must articulate clearly the
content and scope of the new policy. In particular, if the
former bar to transfers at full market value is to be
replaced with a “balancing” test that weighs, inter alia, the
degree of misconduct in question (even though a final
determination will not have been made on this issue), the
Commission should explain what constitutes serious mis-
conduct sufficient to bar profits. Alternatively, the Com-
mission may complete the proceedings that were pending
at the time it approved the settlement agreement and
then fashion a remedy that furthers the goals of its stated
and known policies.

Il.

We find that HBLP, TVL, and HBS have standing as
prospective competitors to challenge the Commission’s
approval of the settlement agreement and transfer to
Hallmark. We uphold the Commission’s decision not to
accept competing applications for the licenses in question.
We find that the Commission violated its policy, as upheld
in Jefferson Radio, of precluding assignment at full value
of a broadcast license until it has finally determined that

5la

the assignor has not forfeited its right to a license. There-
fore, we remand to the Commission to complete the pro-
ceeding pending at the time the settlement agreement was
approved or to articulate a new policy that explains why
Jefferson Radio is no longer an appropriate precedent and
to justify the transfer to Hallmark without completing the
pending renewal proceeding.

It is so ordered.

52a

WILLIAMS, Circuit Judge, dissenting in part and concur-
ring in part of the judgment: After extensive hearings
before an administrative law judge, the FCC here approved
a settlement that was satisfactory to all active participants
in the administrative proceedings. Under its terms the
FCC renewed Spanish International Communications Cor-
poration’s disputed licenses but required their transfer to
a third party. At the behest of two firms that may, for all
we know, be no more than litigative shells, that played no
material role in the administrative proceedings involving
renewal, and that made no timely filings seeking compara-
tive hearings for the licenses, the court today upsets the
settlement. As I believe that neither firm has suffered a
material injury, I dissent.

The two firms, Hispanic Broadcasting System and His-
panic Broadcasting Limited Partnership, claim standing
as prospective license applicants. But as neither ever filed
a timely application for the license they seek, neither
appears before us as a runner-up, as did the petitioner in
Orange Park Florida T.V., Inc. v. FCC, 811 F.2d 664 (D.C.
Cir. 1987), or even as a defeated contestant. In fact, if
these parties are serious about competing for the stations
(should they become vacant), they haven’t told us about
it, and their performance before both the Commission and
the court supplies no basis for believing they are. They
appear more as observers who have been lollygagging
around the track while others strove. They have not dem-

onstrated the “personal stake in the outcome of the

controversy” necessary to satisfy the constitutional
requirements of Article III. Warth v. Seldin, 422 U.S. 490,
498 (1975) (internal quotations omitted).

It is true, of course, that nonrenewal of Spanish Inter-
national’s licenses, if it were ultimately to result from
invalidation of the settlement, would create vacancies for
which HBS and the Partnership could compete. Given the
edge the Commission allows incumbents in a comparative
hearing, see Central Florida Enterprises, Inc. v. FCC, 683
F.2d 503 (D.C. Cir. 1982) (“renewal expectancy” of incum-
bent licensee may be a factor in comparative proceedings),

53a

the existence of a vacancy is a potential advantage. Fur-
ther, neither a potential license contestant, nor a disap-
pointed bidder, nor others claiming standing on
comparable grounds, is by any means required to show for
purposes of standing that it would have carried off the
prize but for the alleged illegality. See, e.g., Village of
Arlington Heights v. Metropolitan Housing Development
Corp., 429 U.S. 252 (1977) (plaintiff seeking federal hous-
ing assistance); Regents of the University of California v.
Bakke, 438 U.S. 265, 280-81 n.14 (1978) (medical school
applicant); CACI, Inc.-Federal v. United States, 719 F.2d
1567, 1574-75 (Fed. Cir. 1983) (disappointed federal con-
tract bidder). Finally, in many such cases courts have
framed the complainant’s ini ry simply as the loss of an
opportunity to compete. See, e.g., C C Distributors, Inc. v.
United States, 883 F.2d 146, 151 (D.C. Cir. 1989) (disap-
pointed bidder).

This hardly means, however, that anyone can wander
_ in off the street, pronounce himself a potential contestant,
and thereby recruit the courts to upset a decision of a
coordinate branch of government. See Antonin Scalia,
The Doctrine of Standing as an Essential Element of the
Separation of Powers, 17 Suffolk U. L. Rev. 881 (1983).
Some indication of realistic prospects is also needed. As
Judge Posner has observed, a medical school applicant
could challenge a racial exclusion without proving that in
its absence he would be admitted, but “he would not have
standing if he was two years old.” Planned Parenthood
Ass’n of Chicago v. Kempiners, 700 F.2d 1115, 1137 (7th
Cir. 1983) (concurring); see also Doherty v. Rutgers School
of Law-Newark, 651 F.2d 893 (3rd Cir. 1981) (no standing
to challenge affirmative action program where plaintiff
was otherwise clearly unqualified for admission).

The rationale for requiring an indication of serious
prospects is simple enough: a lost opportunity is no loss
at all if there is no realistic chance of winning once the
supposed illegality is corrected. Those who without such
prospects nonetheless bring suit are presumably either
seeking to enjoy its nuisance value, see National Federa-

54a

tin of Federal Employees v. Cheney, 883 F.2d 1038, 1053
(O.C. Cir. 1989), or acting out of the sort of ideological
interest that the Supreme Court has declared insufficient
to confer standing. See, e.g., Sierra Club v. Morton, 405
U.S. 727 (1972).

In instances where an agency has held a contest and
the plaintiff entered, it is typically plain from the record
whether its prospects were serious. In the disappointed
bidder cases that has often been true, and there we have
insisted that the petitioners have been “ ‘within the zone
of active consideration’ for the bid’s award.” National Fed-
eration, 883 F.2d at 1053 (quoting National Maritime
Union v. Military Sealift Command, 824 F.2d 1228, 1237-
38 n.12 (D.C. Cir. 1987)). In many cases disappointed con-
tract bidders found to have standing were in fact runners-
up in the contest whose validity was challenged. See, e.z.,
Choctaw Manufacturing Co. v. United States, 761 F.2d 609,
613 (llth Cir. 1985); CACI, Inc., 719 F.2d at 1575;
Armstrong & Armstrong, Inc. v. United States, 514 F.2d
402 (9th Cir. 1975); but cf. Gull Airborne Instruments, Inc.
v. Weinberger, 694 F.2d 838, 842 & n.3 (D.C. Cir. 1982)
(dictum that second-lowest bidder in original procurement
had not shown enough likelihood of success on recompeti-
tion to challenge agency’s failure to terminate contract).
Similarly, in Orange Park, an FCC case where we drew
heavily on the disappointed bidder analogy, the plaintiff
was the sole other applicant for the contested license. But
for the Commission’s alleged error in allowing the winning
applicant to make a curative amendment, plaintiff could
have itself made an amendment curing its only apparent
deficiency. 811 F.2d at 670-73.

I have considerable doubt whether the present case
calls for anything less than a showing by HBS and the
Partnership that they were within the “zone of active
consideration” — which they obviously were not. It is not
the FCC’s fault, but theirs, that we have no clue as to
their qualifications; these parties could have fought for
Spanish International’s licenses in what would have been
the equivalent of an open contest. The complaint ques-

55a

tioning Spanish International’s qualifications was filed
with the Commission in 1980, see J.A. 16 (designation
order), and yet neither HBS nor the Partnership submit-
ted competing applications for three Spanish Interna-
tional licenses up for renewal in 1982 and 1983, see
Spanish International Communications Corp., 2 FCC Red
3336, 3337 (1987), at which times the Commission would
have been required under its regulations to accept con-
forming submissions. See 47 CFR §73.3517(e) (1988).
(The cut-off rules do not kick in during the investigation
of such complaints, but only when designation for hearing
occurs — in this case, not until June 1983.) The only
applications they did manage to proffer were no less than
three, and as many as seven, years late. See Spanish
International, 2 FCC Red 3336, 3336-37, 3342 n.& (1987).
Since the settlement they have passed up further opportu-
nities to compete. See Commission Brief 29 n.20 (no com-
peting applications were filed against Hallmark’s request:
for license renewal after the settlement). These parties
were not even also-rans, much less runners-up.

Nonetheless, one might argue that HBS’s and the Part-
nership’s prospects should be tested as if they had had no
opportunity to compete, on the theory that Spanish Inter-
national’s status as incumbent made their opportunities
sO unappealing as to excuse their failure to apply. (This
requires disregard of Spanish International’s vulnerability
once its qualifications were challenged.) Where for some
reason no contest has been run, or the plaintiff for some
other reason has had no chance to demonstrate whether
it would place, courts have applied laxer standards. Thus
in C C Distributors, allegedly illegal action cut off any
opportunity to bid, but we relied on_ plaintiffs’
“demonstrated capacity to compete for and to obtain
[similar] contracts” as assurance that an opportunity to
compete “would not be illusory.” 883 F.2d at 151. See also
Hayes International Corp. v. McLucas, 509 F.2d 247, 251
(5th Cir. 1975) (petitioner had held contract similar to one
whose award was challenged).

56a

HBS and the Partnership would go even farther, rely-
ing on MG-TV Broadcasting Co. v. FCC, 408 F.2d 1257
(D.C. Cir. 1968), for the notion that a possible license
applicant can secure standing whenever the denial of oth-
ers’ applications (which here would follow if agency pro-
ceedings took a favorable turn on remand) “would have
left the station vacant and available for appellant’s
application.” Jd. at 1264 n.24. If correct, of course, such
a rule would afford anyone standing, as any vacancy
creates such a theoretical opportunity for the whole world.
But the court’s five lines of footnote addressing the point
do not suggest that anyone had raised the issue of MG-
TV’s prospects, and indeed no party had raised the stand-
ing issue at all. See Briefs of the Commission, MG-TV
Broadcasting Co., and Intervenor Seven Arts Broadcast-
ing Co., Inc., MG-TV Broadcasting Co. v. FCC, 408 F.2d
1257 (D.C. Cir. 1968) (No. 21,224). To the extent that
MG-TYV represents such a holding, our later decision in
Orange Park, which wrestled at some length with the
problem and did not find MG-TV worthy of citation,
clearly supersedes.’

It is true that Orange Park eschewed any prediction of
the likelihood of the plaintiffs ultimately prevailing. 811
F.2d at 672-73 n.18. But we reached that conclusion only
after having determined that plaintiff “has devised plans
sufficiently detailed to enable it to compete for the
facility.” Jd. The court emphasized that the petitioner
could readily cure the deficiency in its original submission,
that it stood “ready, willing and able” to reapply for the
license, and that its intention to do so was “manifestly
evident” from the record. Jd. at 672-73 & n.18. These rep-
resent the minimum requirements that one can extract
from our cases.

'The various opinions in Shurberg Broadcasting v. FCC, 876
F.2d 902 (D.C. Cir. 1989), assumed standing and did not assess
the seriousness of Shurberg’s quest. In any event, cases.in which
jurisdiction is assumed are not authority for the existence of juris-
diction. Pennhurst State School & Hospital v. Halderman, 465
U.S. 89, 119 (1984).

57a

Thus I turn to the record in a search for some hint that,
if court action led to HBS’s or the Partnership’s having
an opportunity to compete, it would be better than
“illusory.” None appears. As noted, neither HBS nor the
Partnership made any timely application for the licenses.
Nor did either see fit even to join in the initial battle to
unseat Spanish International. Such a commitment would
have been at least an earnest of seriousness. Under Com-
mission regulations, either could have petitioned to inter-
vene in the proceedings as a matter of course within 30
days of the designation order of June 16, 1983. See 47
CFR § 1.223 (1988) (rules for intervention); J.A. 15 (desig-
nation order). The Partnership’s attempt to intervene fell
three years too late, and the Review Board rejected its
petition as “grossly out of time and defective.” Spanish
International, 1 FCC Rcd 844, 847 n.2 (Rev. Bd. 1986). Its
sole excuse, that it was not yet in existence by the rele-
vant deadline, see J.A. 377, only underscores the ram-
shackle character of its interest. (The Commission upheld
the Review Board’s ruling on intervention, and afforded
the Partnership only amicus status. Spanish International,
2 FCC Red at 3338 n.15.)

HBS did manage to participate, but very indirectly, and
in what was perhaps the least promising avenue for chal-
lenging the Commission’s consideration of the transac-
tion. Instead of petitioning to deny the conditional
renewal of Spanish International’s license, it attacked
only the transferor’s application to assign the license once
renewed. J.A. 146. As even the Partnership concedes, this
track did “not ... provide[ ] a meaningful opportunity to
challenge the decision to permit the settlement,” Partner-
ship Brief 20 n.6, since Commission assent to renewal
would necessarily entail assent to the assignment.

Finally, even before the court the roles of HBS and the
Partnership suggest the improbability that either would
be “ready, willing and able” to compete on a serious basis
for the licenses should they fall vacant. Neither party
asserts that it would in fact qualify as a licensee, cf. DKT
Memorial Fund, Ltd. v. AID, 810 F.2d 1236 (D.C. Cir.

58a

1987), nor do they stoop even to state that they intend
to compete for the stations should the vacancies occur.
Neither has offered reason to believe that, in Orange
Park’s words, it “has devised plans sufficiently detailed to
enable it to compete for the facility.” 811 F.2d at 672-73
n.18. See also Public Citizen v. Lockheed Aircraft Corp.,
565 F.2d 708, 717-19 (D.C. Cir. 1977) (no injury sufficient
to challenge excess property sale where plaintiff had not
demonstrated capacity to compete for purchase). Nor is
this a case in which the mere fact of appeal might allow
us to assume such qualification or intention. See National
Maritime, 824 F.2d at 1237 n.12 (“[p]resumably a bidder
who believed that it would have no significant likelihood
of obtaining the bid on re-solicitation would not bring
suit”). As HBS appears simply as one signer of a joint
brief with the closely related viewer petitioners, its contin-
ued role is as easily attributable to the interest in provid-
ing a back-up theory of standing as to any real interest
in seeking the licenses. (It did not even bother to appeal
the Commission’s dismissal of its belated applications.) As
for the Partnership, a successful challenge to the Commis-
sion’s cut-off rules would have made it the sole candidate
for the licenses other than Spanish International.’ But
that alone gives no hint that it would be anywhere near
the ballpark in an open competition, which is the sort that
could result here and which would likely attract some
heavy hitters. Thus, what distinguishes HBS and the
Partnership from the rest of the world is that they belat-
edly filled out a few forms. That is not enough.

By contrast, TVL was plainly within the zone of active
consideration. It was one of two finalists in the sales pro-
cess supervised by the California district court, at least

*Because the Commission’s application of its timeliness rules
prevented the Partnership from demonstrating its ability to place,
it clearly could secure standing to challenge that denial without
showing that it would have been “within the zone of active
consideration.” But without some indication of ability to meet the
Commission’s minimum qualifications, as required in Orange
Park, it should not have standing even to attack the denial.

59a

three other bidders having been eliminated elsewhere
along the way. At the time the court approved Hallmark’s
offer TVL had firm financing commitments for $250 mil-
lion of a $320 million bid; within a mere three days it had
lined up the other $70 million. If its claim of racial dis-
crimination in the district court proceedings were merito-
rious, and if Commission approval of the settlement in the
face of such discrimination were substantively invalid, its
proposed remedy — delay of the settlement to allow
reconsideration of its original bid in the light of its later
acquisition of full financing — would plausibly give it a
shot at the licenses. As TVL does not challenge the settle-
ment on Jefferson Radio grounds, however, its standing
provides no support for today’s outcome.’

As the majority finds standing for HBS and the Part-
nership it need not resolve that of the self-identified
viewer petitioners, the Coalition for the Preservation of
Hispanic Broadcasting and Susan Jaramillo. Maj. Op. at
10-11. As the court notes, there is no evidence to suggest
that Congress adopted § 310(b)(3)’s restrictions on alien
control in order to advance the public’s interest in pro-
gramming content. Indeed, such evidence as the parties
have uncovered suggests a national security purpose. See
Maj. Op. at 4. Moreover, whatever may have animated
Congress, it surely did not restrict foreign license owner-

3On the merits of TVL’s claim, I concur in the court’s result,
but on somewhat different grounds. Its filings before the Commis-
sion never made clear its current theory that Commission
approval of a transfer to Hallmark violated the Equal Protection
clause because it would incorporate or build upon the alleged dis-
crimination in the district court proceedings. Whatever the merits
of this claim, it appeared before the Commission more as a wholly
implausible effort to get the Commission to set itself up in judg-
ment over the district court and Ninth Circuit on constitutional
matters, with no explicit claim of discrimination by the Commis-
sion. See TVL Petition to Deny, Sept. 26, 1986 (J.A. 213); TVL
Application for Review, July 24, 1987 (J.A. 458). Accordingly, it
fails under the principle that a sow’s ear argument before an
agency does not require the agency to make a silk purse response.
See City of Vernon v. FERC, 845 F.2d 1042, 1047 (D.C. Cir. 1988).

60a

ship in order to enhance non-English-language program-
ming. Thus the Coalition’s interest in preserving Spanish-
language programming, J.A. 390, is “so ... inconsistent
with the purposes implicit in the statute” that their stand-
ing would be wholly inappropriate. See Clarke v. Securities
Industry Ass'n, 479 U.S. 388, 399 (1987).

For her part, Jaramillo objects to “foreign domination”
of the supply of Spanish-language programming, J.A. 491,
so that if § 310(b)(3) reflected any interest in program-
ming content, she might occupy at least a non-adverse
relation to its goals. But her standing fails for want of a
material injury. Since the settlement eliminated the possi-
bility of alien domination over the stations, her interest
in all-American Spanish-language programming could
benefit from this litigation only to the extent that Com-
mission rejection of the settlement might have tended to
deter future violations of § 310(b). This is too speculative
to satisfy Article III. Compare Linda R. S. v. Richard D.,
410 U.S. 614 (1973) (invalidation of state’s refusal to
enforce criminal non-support laws against fathers of ille-
gitimate children bears too speculative a relation to any
prospect that mother of illegitimate child would fare bet-
ter in extracting child support from father).

Nor can either the Coalition or Jaramillo stand upon
the purposes of the Jefferson Radio doctrine, for it is
entirely instrumental, aimed only at enhancing the deter-
rent effect of whatever substantive provision supports the
attack on the incumbent licensee, here § 310(b)(3). See
Stereo Broadcasters, Inc. v. FCC, 652 F.2d 1026, 1027 (D.C.
Cir. 1981).

Thus, of the four petitioners who challenge the settle-
ment on Jefferson Radio grounds, three show no material
injury and the Coalition asserts an interest that is in
apparent conflict with the purposes of § 310(b). Yet at the
behest of the two purported license applicants the court
today upsets a carefully arranged and (so far as appears)
useful agreement. The settlement cures whatever viola-
tion of § 310(b)(3) may have existed. It frees Commission

6la

time for other matters. It satisfies the group that pressed
the §310(b)(3) challenge before the Commission, the
Spanish Radio Broadcasters Association. And, so far as
Jefferson Radio’s object of maintaining deterrent effect is
concerned, the record reveals no hint that violations of -
§ 310(b)(3) are so widespread as to require much deter-
rence.

* c *

As I believe that we have no jurisdiction over the
Jefferson Radio issue, I neither join nor dissent from the
opinion on that point. But compare McKelvey v. Turnage,
792 F.2d 194, 209 (D.C. Cir. 1986) (Scalia, J., dissenting
from jurisdiction but joining on merits). A few words may
be in order, however, lest the majority opinion be misin-
terpreted on remand. Compare Atari Games Corp. uv.
Oman, No. 88-5296, slip op. at 1 (D.C. Cir. Oct. 31, 1989)
(Silberman, J., concurring). As I understand the opinion,
it reads the Commission’s Jefferson Radio doctrine as
absolute, one of unwavering unwaivering, subject only to
specific, discrete exceptions. The Commission’s fault is
the perceived inadequacy of its explanation for softening
the doctrine. On remand, therefore, the Commission is
free, for example, to explicitly change the doctrine into a
balancing test, so long as it explains adequately. See, e.z.,
NLRB v. Local Union No. 103, 434 U.S. 335, 351 (1978)
(“[aJn administrative agency is not disqualified from
changing its mind”); Greater Boston Television Corp. v.
FCC, 444 F.2d 841, 852 (D.C. Cir. 1971).

Whatever the merits of the majority’s reading of
Jefferson Radio, | am puzzled by its concern over the Com-
mission’s decision not to pursue the claims of Spanish
Radio Broadcasters of America that Spanish Interna-
tional had brought antitrust actions against it as a form
of harassment. Maj. Op. at 24-25. The ALJ rejected these
claims as lacking sufficient evidence of bad faith, and the
claimant has withdrawn them as part of the settlement.
The court expresses concern that the withdrawal may
have been motivated by an exchange of consideration. I[d.

62a

at 25. I would not be surprised; that is how many conflicts
before the FCC come to an end. But if the Commission
must press every abandoned suggestion of hanky-panky
through to the bitter end, or must satisfy itself that the
accuser in retreat was pure of heart, uncorrupted by any
trade-off, it will never be able to get on with its business.
The FCC is not some sort of general morals police.

That aside, regardless of what course the Commission
might take on remand, the context — agency choice
among remedies — requires much discretion for the
agency and deference from the court. See, e.g., Moog
Industries, Inc. v. FTC, 355 U.S. 411, 413 (1958) (noting
resource allocation problem and need for specialized,
experienced judgment). Remedial choices demand both a
grasp of the scope of the evil to be remedied (and thus
how much deterrence is needed), and a predictive judg-
ment as to deterrent effects. Judges are unlikely to be able
to contribute much on either issue. See generally FCC v.
WOKO, Inc., 329 U.S. 223, 228-29 (1946); West Coast
Media, Inc. v. FCC, 695 F.2d 617, 622 (D.C. Cir. 1982);
Lorain Journal Co. v. FCC, 351 F.2d 824, 831 (D.C. Cir.
1965). Moreover, the need for judicial deference is at its
peak where (as here) the remedy is secured as part of a
settlement. The Commission is effectively making a deci-
sion as to the allocation of its resources — a decision
whether the gain in deterrent effect that might flow from
pursuing the case to the hilt is worth the loss, in terms
of energy deflected from other matters. See Board of
Trade v. SEC, 883 F.2d 525, 530-31 (7th Cir. 1989)
(“declining a particular case hardly means that the [agen-
cy’s staff] will go twiddle their thumbs”); cf. Heckler v.
Chaney, 470 U.S. 821, 831-32 (1985). Oddly, if the Com-
mission on remand were to affirm the ALJ’s finding of a
violation, it could settle with Spanish International
untrammeled by the Jefferson Radio doctrine and in full
enjoyment of the deference that is well-established for
remedial choices. See Bartell Broadcasting Inc., 19 FCC 2d
890 (1969); Areawide Communications, Inc., 12 FCC 2d 170
(1968) (both allowing transfer at full market value despite
licensee violations of 47 U.S.C. § 310(d)).

63a

We should not interfere with the Commission on this
matter, at the instigation of parties with such feeb’e
stakes.

64a

APPENDIX C
Before the

Federal Communications Commission
Washington, D.C. 20554
FCC 87-195
37099

MM DOCKET NOS. 83-540 to 83-544 and 84-830 to 84-834

In the Matter of

SPANISH INTERNATIONAL
COMMUNICATIONS CORPORATION

File Nos. BRCT-830401LM et al.

For Renewal of License of KWEX-TV San Antonio, Texas, et al.

MM DOCKET NO. 83-545 File No. BRCT-800730KJ

BAHIA DE SAN FRANCISCO TELEVISION COMPANY
For Renewal of License of KDTV(TV) San Francisco, California

MM DOCKET NOS. 83-657 and 84-835

THE SEVEN HILLS TELEVISION COMPANY

File Nos. BRCT-830601KJ and BPTT-8403081Q

For Renewai of license of KTVW

[Text truncated at 120,000 characters. The full text is on the page linked above.]

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_2416%3A2. Public record. Not legal advice.