Petition for Writ of Certiorari — Bethel Broadcasting, Inc. v. Federal Communications Commission (Nos. 86-1561, 86-1556)

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1986

BETHEL BROADCASTING, INC.,

Petitioner

Vv.

FEDERAL COMMUNICATIONS COMMISSION,

Respondent

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

JAMES J. FEATHERSTONE *

A. THOMAS CARROCCIO

SANTARELLI, SMITH, KRAUT

& CARROCCIO

2033 M Street, N.W.

Washington, D.C. 20036

(202) 466-6800

r Counsel for Petitioner

* Counsel of Record

WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

QUESTIONS PRESENTED

Whether, when considering the comparative qualifica-

tions of two or more applicants competing for a valuable

and mutually exclusive authorization, an administrative

agency may ignore the effect of its own procedural rules,

which rules had previously operated to fix the compara-

tive positions of the competing applicants as of a date

certain.

Whether, when reviewing an order of an administra-

tive agency, a circuit court may support that order with

a reasoned basis not articulated by the agency.

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TABLE OF CONTENTS

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Reasons for granting the petition —...0.000002..2......-2..----- 5

A. The Circuit Court’s Affirmance of the Order

of the Commission Ignores both the Rules of

the Commission and the Precedents Estab-

lished by the Decisions of this Court -............. 6

B. The Circuit Court Has Attempted to Support

the Commission’s Order by Supplying a Rea-

soned Basis for the Order that the Commis-

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(iii)

TABLE OF AUTHORITIES

Cases: Page

Alexander S. Klein, Jr., 86 F.C.C. 2d 423 (1981). 6

Belo Broadcasting Corp., 68 F.C.C. 3d 1313

(1978) 7

Berryville Broadcasting Company, 70 F.C.C. 2d 1

(Rev. Bd. 1978) 6

Birmingham Family Television, Inc., 91 F.C.C. 2d

348 (Rev. Bd. 1982) 8,11

Camp Vv. Pitts, 411 U.S. 138 (1973) ......................... 14

Celcom Communications Corp. v. F.C.C., 789 F.2d

Oe ee ee I i ee as 15

Columbia Broadcasting Systems, Inc. v. United

po A eg ener e eee 12

Erwin O’Connor Broadcasting Company, 22 F.C.C.

eo es. Op ORE ieee 7

Henderson Broadcasting Company, 63 F.C.C. 2d

419 (Rev. Bd. 1977) 6

Las Misiones De Bejar Television Co., 93 F.C.C.

2d 191 (Rev. Bd. 1983), rev. denied, ——

F.C.C. 2d , 56 Rad. Reg. (P&F) 2d 1481

CREED scouveceassentimticnia ntcaaesadaaian 7,11

McKenna v. Seaton, 259 F.2d 780 (D.C. Cir.

1958), cert. denied, 358 U.S. 835 (1958) -........... 13

Motor Vehicle Manufacturers Association v. State

Farm Mutual Automobile Insurance Co., 463

fe F: 27s 14, 15

Reuters Limited v. F.C.C., 781 F.2d 946 (D.C.

Cir. 1986) ae 13

Sangamon Valley Television Corp. v. United

States, 269 F.2d 221 (D.C. Cir. 1959), cert. de-

nied, 376 U.S. 915 (1964) -........0......... 13

S.E.C. v. Chenery Corp., 318 U.S. 80 (1948) ....... 15

Service v. Dulles, 354 U.S. 363 (1957) .................. 12

TV 9, Inc. v. F.C.C., 495 F.2d 929 (D.C. Cir.

SS ee ST

United States ex. rel. Accardi v. Shaughnessy, 347

ne TU oe anahecieiuiad 12

Vitarelli v. Seaton, 359 U.S. 535 (1959) 0. 12

TABLE OF AUTHORITIES—Continued

Page

Women’s Broadcasting Coalition, Inc., F.C.C.

2d , 59 Rad. Reg. 2d (P&F) 730 (1986)... 7,11

Yellin v. United States, 374 U.S. 109 (1963)........ 12

Policy Statements :

Minority Ownership in Broadcasting, 92 F.C.C. 2d

RD - Ce crtchccchinensintatntienSassinccaicttinndnnemantiminticiaseniaes 6

Policy Statement on Comparative Broadcast Hear-

ings, 1 F.C.C. 24 398 (1965) ................................. 6

Regulation :

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In THE

Supreme Court of the United States

OCTOBER TERM, 1986

No.

BETHEL BROADCASTING, INC.,

Petitioner

Vv.

FEDERAL COMMUNICATIONS COMMISSION,

Respondent

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Bethel Broadcasting, Inc. petitions for a writ of certi-

orari to review the judgment of the United States Court

of Appeals for the District of Columbia Circuit.

OPINIONS BELOW

The order of the court of appeals denying Petitioner’s

petition for rehearing (Pet. App. la) and the order of

the court of appeals denying Petitioner’s suggestion for

rehearing en bane (Pet. App. 2a) are not reported or-

ders. Pursuant to D.C. Cir. R. 13(c), the judgment of

the pane! of the court of appeals is set forth in an un-

published memorandum (Pet. App. 3a). The opinion and

order of the Federal Communications Commission is offi-

cially reported at 102 F.C.C. 2d 288 (1985) and is re-

printed in the appendix hereto (Pet. App. 7a). The deci-

sion of the Commission’s Review Board is officially re-

ported at 99 F.C.C. 2d 173 (Rev. Bd. 1984) and is re-

printed in the appendix hereto (Pet. App. 16a). The de-

cision of the Commission’s administrative law judge is

officially reported at 99 F.C.C. 2d 201 (ALJ 1983) and is

reprinted in the appendix hereto (Pet. App. 58a).

PARTIES BELOW

The parties to the proceeding in the court of appeals,

other than the parties reflected in the caption of this peti-

tion, are as follows: United American Telecasters, Inc.;

Riverside Family Television; Sunland Communications

Company ; and KIST Corp.

JURISDICTION

The orders of the court of appeals denying Petitioner’s

petition for rehearing and suggestion of rehearing en

bane were entered on December 29, 1986 (Pet. App. la

& 2a). The jurisdiction of this Court is invoked under

28 U.S.C. 1254(1).

REGULATION INVOLVED

The relevant portions of Section 73.3522 of the Rules

of the Federal Communications Commission (47 C.F.R.)

are set out in an apperdix of regulations (Pet. App.

149a).

STATEMENT

On July 20, 1981 Bethel Broadcasting, Inc. (“Bethel’’)

filed with the Federal Communications Commission

(“Commission”) an application seeking authority to con-

struct a new commercial television station to operate on

Channel 62 at Riverside, California. Several other appli-

cants also filed timely applications seeking the use of

Channel 62 at Riverside. Because the application pro-

posals of the various applicants were electromagnetically

incompatible with each other, they were, in the term of

art employed by the Commission, mutually exclusive. In

light of this mutual exclusivity, the Commission was un-

able to make a statutory finding that the grant of these

applications would serve the public interest, convenience

and necessity. Therefore, on December 23, 1981, pur-

suant to the requirements of Section 309(e) of the Com-

munications Act of 1934 (47 U.S.C. Section 309(e)), the

Commission designated all of the then pending competing

applications for hearing to determine which of the appli-

cants’ proposals would, on a comparative basis, best serve

the public interest.

The comparative proceeding was conducted by an ad-

ministrative law judge (“ALJ”), who, after an extended

hearing, issued his initial decision on November 24,

1983 (Pet. App. 58a). In that initial decision, the ALJ

granted the application of one applicant, Sunland Com-

munications Company (“Sunland’’), and denied the re-

maining applications, including that of Bethel. The de-

terminative factor in the ALJ’s selection of Sunland was

the comparative advantage attributed by the ALJ to the

proposed integration of Sunland’s purported thirty-five

percent (35%) partner, Andres Soto, into the manage-

ment of the proposed station.’

Several of the unsuccessful applicants, including

Bethel, filed exceptions to the ALJ’s decision with the

Commission’s Review Board. The exceptions generally

contended that Sunland was entitled to no comparative

credit on account of Soto’s presence, because Soto’s pur-

ported partnership and ownership interests in Sunland

were not legally cognizable. Further, certain exceptors,

again including Bethel, made specific contentions chal-

lenging the ALJ’s analysis with regard to the validity

of Soto’s position in the Sunland scheme. These excep-

1In the context of the Commission’s comparative broadcast pro-

ceedings, the term “integration” refers to the extent to which the

individuals owning and controlling an applicant will participate in

the day to day management of the station proposed by that applicant.

tors contended the analysis was flawed because it was

based on Soto’s status as of the September 1982 hearing

conducted by the ALJ, rather than Soto’s status as of

September 7, 1981, the date on which the comparative

qualifications of all the competing applicants, including

Sunland, were fixed by Commission rule.

On October 19, 1984, the Review Board issued its de-

_ cision (Pet. App. 16a). Therein, the Review Board de-

termined Soto’s purported participation in the Sunland

partnership was a sham and, therefore, not legally cog-

nizable. In light of this determination, the Review Board

stripped Sunland of the comparative credits previously

awarded on the basis of the proposed integration of

Soto. After reassessing the comparative qualifications of

the various applicants, the Review Board granted the

application of KIST Corp. (“KIST”), and denied the

remaining applications, including those of Bethel and

Sunland.

Applications for Commission review of the Review

Board’s decision were filed by four applicants, again in-

cluding Bethel. The Commission’s opinion and order

upon review was issued on September 24, 1985 (Pet. App.

7a). Therein, the Commission reversed the determination

of the Review Board with regard to the validity of Soto’s

purported partnership interest, and, on that basis, granted

Sunland’s application and denied the remaining applica-

tions, including that of Bethel

Certain applicants, including Bethel and KIST, pur-

suant to 28 U.S.C. § 23842(1), timely noted appeals of the

Commission’s order, and prosecuted those appeals before

the United States Court of Appeals for the District of

Columbia Circuit (“circuit court”). On appeal, Bethel

and KIST both contended the Commission’s determina-

tion of Soto’s status within the Sunland organization

was procedurally flawed. They specifically noted the

failure of the Commission to acknowledge the operation

and effect of the Commission’s own rule, which had fixed

the comparative qualifications of all applicants, including

Sunland. Instead, they contended, the Commission had

evaluated Soto’s status in the Sunland partnership, and

in the comparative proceeding, as of the date of the hear-

ing, rather than as of the earlier procedural date, as

- would have been correct.

The circuit court, in its October 15, 1986 judgment

(Pet. App. 3a), affirmed the Commission decision. In its

accompanying unpublished memorandum, that court

found the Commission’s determination as to Soto’s part-

nership and ownership status to be permissible.

Three applicants, including Bethel, petitioned the cir-

cuit court for rehearing of the matter, and suggested

rehearing en banc. The focus of Bethel’s petition for

rehearing was the failure of the Commission to adhere

to its own rules when evaluating the partnership and

ownership status of Soto and the resulting comparative

position of Sunland. On December 29, 1986, the circuit

court entered orders denying the petitions for rehearing

(Pet. App. la) and denying the suggestions for rehear-

ing en banc (Pet. App. 2a).

REASONS FOR GRANTING THE PETITION

The circuit court’s affirmation of the Commission’s or-

der leaves standing an action wherein that agency arbi-

trarily and capriciously ignored the operation and effect

of its own-rules to the detriment of both the public in-

terest and the procedural rights cf several competing ap-

plicants, including this petitioner. Sunland prevailed

over Bethel solely because of the degree of integration

credit accorded to Sunland on account of Soto’s proposed

participation. The circuit court’s erroneous decision, if

allowed to stand, will represent a direct conflict with

applicable decisions, not only of this Court, but also of

the circuit court itself. Accordingly, review by this Court

is warranted to rectify the error of the circuit court,

and to conform the actions in the matter at bar to ap-

plicable precedent.

A. The Circuit Court’s Affirmance of the Order of the Com-

mission Ignores both the Rules of the Commission and

the Precedents Established by the Decisions of this Court.

In evaluating the comparative standing of mutually

exclusive broadcast applicants, one of the most signifi-

cant considerations is the degree to which the persons

owning and controlling the applicant will be integrated

into the day to day management of the proposed station.

Policy Statement on Comparative Broadcast Hearings,

1 F.C.C. 2d 393 (1965). Because of the importance of,

and the comparative weight accorded to, this factor, the

Commission often finds it necessary to examine the bona

fides of the integration proposals of competing applicants.

Such examination is particularly necessary in a situation

such as the instant case, where an individual is recruited

into an applicant group in order to take advantage of a

perceived competitive enhancement accruing on account of

that individual’s racial or ethnic status. Minority Own-

ership in Broadcasting, 92 F.C.C. 2d 849 (1982). When

faced with a questionable integration claim, the Commis-

sion seeks to determine whether the proposed participa-

tion can reasonably be expected to be active and signifi-

cant. The Commission pursues such examinations be-

cause it recognizes that an integration proposal may be

nominal or a “sham”, with little or no likelihood of even-

tual implementation. Alexander S. Klein, Jr., 86 F.C.C.

2d 423 (1981); Berryville Broadcasting Company, 70

F.C.C. 2d 1 (Rev. Bd. 1978); Henderson Broadcasting

Company, 63 F.C.C. 2d 419 (Rev. Bd. 1977).

In the case at bar, the bona fides of Soto’s proposed

participation in the Sunland partnership was questioned,

and closely examined at every level of the administrative

process. Bethel is constrained to point out, however, that

the Commission’s examination on this point was under-

taken in light of a significant, but improper, enhancement

of Sunland’s comparative standing, which enhancement

was in direct contravention of the Commission’s own

rules. This improper consideration was invalid, and

should not have been affirmed by the circuit court.

In a proceeding involving mutually exclusive broadcast

applications, the respective comparative positions of the

competing applicants are fixed, pursuant to Section 73.-

3522 (a) (2) of the Commission’s Rules (Pet. App. 149a),

as of a date specified in a public notice issued by the

Commission. This specified date is generally referred

to as the “B cut-off date”. In the administrative proceed-

ing at issue herein, the B cut-off date promulgated by

the Commission was September 7, 1981.

Mutually exclusive applicants seeking to amend their

applications after the controlling B cut-off date may do

so only with permission granted upon a showing of good

cause. One of the Commission’s six long standing criteria

for determining whether good cause for such an amend-

ment exists is that the amending applicant “will not gain

a competitive advantage” by reason of the acceptance of

its proposed amendment. Belo Broadcasting Corp., 68

F.C.C. 2d 1313 (1978). Erwin O’Connor Broadcasting

Company, 22 F.C.C. 2d 140 (Rev. Bd. 1970). Although

Section 73.3522(a) (2) of the Rules refers only to pre-

designation amendments, Section 73.3522(b) (1) of the

Rules (Pet. App. 150a) extends the same good cause

requirement to postdesignation amendments.

The Commission does allow an applicant to amend its

application after the relevant B cut-off date in order to

avoid disqualification, or to report changes in material

circumstances or information. When such amendments

are allowed, however, they invariably are conditioned so

as to prevent any enhancement of the applicant’s com-

petitive standing in the comparative proceeding. Women’s

Broadcasting Coalition, Inc., F.C.C. 2d , 59

Rad. Reg. 2d (P&F) 730 (1986). Las Misiones De

Bejar Television Co., 98 F.C.C. 2d 191 (Rev. Bd. 1983) ;

rev. denied, F.C.C. 2d ——, 56 Rad. Reg. 2d 1481

(1984) ; Birmingham Family Television, Inc., 91 F.C.C.

2d 348 (Rev. Bd. 1982). Previous judicial review of the

Commission’s cut-off procedure resulted in a determina-

tion that all factors affecting an applicant’s competitive

standing must be considered as of the appropriate B cut-

off date, and without regard to any subsequent enhance-

ment arising out of qualifying or reporting amendments.

TV 9, Inc. Vv. F.C.C., 495 F.2d 929 (D.C. Cir. 1973).

The improper post-B cut-off date enhancement of the

Sunland application at issue herein had its genesis in the

voluntary withdrawal from the Sunland partnership of

George Strimel. Strimel, who held a ten percent (10%)

ownership interest in the Sunland partnership, was one

of Sunland’s three general partners as of the controlling

B cut-off date, September 7, 1981. (Pet. App. 9a, n. 4

and 88a, n. 17). Upon Strimel’s withdrawal, his ten

percent (10%) ownership interest was transferred to

Jack Hodin, Sunland’s majority partner.

Pursuant to the requirements of Section 1.65 of the

Commission’s Rules (Pet. App. 149a), Sunland was re-

quired to amend its application to reflect the change in

its ownership composition occasioned by Strimel’s volun-

tary withdrawal. On June 10, 1982 fully nine months

after the applicable B cut-off date, Sunland petitioned

the ALJ for leave to amend its application to reflect

Strimel’s voluntary withdrawal. The requested leave to

amend was granted by order of the ALJ (Pet. App.

139a). At that point in the proceeding, the ALJ was

sensitive to the potential for competitive enhancement

accruing to Sunland as a result of the amendment. To

forestall the possibility of such enhancement, the ALJ

conditioned his order granting the amendment so as to

specify that “no comparative advantage will accrue as a

result of the acceptance of the amendment” (Pet. App.

142a, n. 3).

Fifteen (15) months later, when he issued his decision

(Pet. App. 58a), the ALJ apparently had become am-

bivalent regarding the comparative effect of the Strimel

amendment on the Sunland application. On one hand,

the ALJ refused to allow comparative credit for the ten

percent (10%) ownership interest transferred to Hodin

upon Strimel’s departure (Pet. App. 88a, n. 17). On the

other hand, however, the ALJ proceeded to evaluate Soto’s

participation in the Sunland scheme as if Soto was one

of only two partners, a configuration that did not exist

until Strimel’s post-B cut-off date departure from the

partnership (Pet. App. 89a, footnote 19).

The Commission’s subsequent order (Pet. App. 7a)

echoed both the ALJ’s ambivalence regarding the treat-

ment of the B cut-off date, and his improper evaluation

of Soto’s status in light of the post-B cut-off date amend-

ment (Pet. App. 9a, n. 4 and lla, n. 7). In its order, the

Commission acknowledged the legitimacy of the Review

Board’s determination that Soto lacked an “immediate

financial obligation” with regard to the Sunland venture

(Pet. App. 10a). The Commission did not feel compelled,

however, to follow the Review Board’s reasoning to its

logical conclusion, namely the rejection of the Soto inte-

gration proposal. Instead, the Commission chose to ex-

amine the Sunland partnership agreement to determine

whether Soto “will have a legitimate interest and influ-

ence in the Sunland partnership .. .” (Pet. App. 10a).

The findings resulting from that examination are set

forth in footnote seven of the Commission’s order (Pet.

App. lla, n. 7). When those findings are compared with

the text of the Sunland partnership agreement (Pet.

App. 148a-148a), it immediately becomes apparent that

the Commission, like the ALJ before it, has chosen to

evaluate the agreement, and its effect on Soto’s bona

fides, in light of the post-B cut-off date amendment re-

garding the Strimel voluntary withdrawal. Such an eval-

uation is a clear violation of the Commission’s own rules

and precedent regarding post-B cut-off date enhancements

of an applicant’s competitive posture.

For example, compare the Commission’s conclusion that

the Sunland partnership may be dissolved “only by unan-

imous agreement of the partners” (Pet. App. lla, n. 7),

with the language of the Sunland partnership agreement,

as follows:

Notwithstanding the foregoing, Hodin and one other

partner may, at any time, agree to dissolve the part-

nership, in which event the partners shall proceed

with reasonable promptness to liquidate the business

of the partnership as provided for above. (emphasis

added).

(Pet. App. 148a). Compare, further, the Commission’s

finding that “Soto must sign all checks withdrawing

partnership funds” (Pet. App. lla, n. 7), with the fol-

lowing text from the Sunland partnership agreement:

8. Banking. All funds of the partnership shall be

deposited in its name in such accounts as shall be

designated from time to time by the partners. All

withdrawals therefrom shall be made upon checks

signed by two (2) partners, provided that Hodin

must sign all checks, unles he specifically authorizes

one of the other partners to sign a particular check-

on behalf of the partnership. (emphasis added).

(Pet. App. 147a). In addition, compare the Commis-

sion’s finding that:

Soto’s consent is required for the partnership to

“borrow or lend money, or make, deliver or accept

any commercial paper, or execute any mortgage,

security agreement, bond or lease, or purchase or

contract to purchase, or sell or contract to sell any

property for or of the partnership other than the

type of property bought and sold in the regular

course of business.”

(Pet. App. lla, n. 7), with the actual language of the

relevant partnership provision, which reads as follows:

Nevertheless, unless there is the written consent of

both Hodin and one other partner, no partner shall

on behalf of the partnership borrow or lend money,

or make, deliver or accept any commercial paper, or

execute any mortgage, security agreement, bond or

lease, or purchase or contract to purchase, or sell or

contract to sell any property for or of the partner-

ship other than the type of property bought and sold

in the regular course of business. (emphasis added).

(Pet. App. 146a).

Although the partnership agreement specifically re-

quires Hodin’s participation for each of the enumerated

partnership actions, there is no stated requirement that

he obtain Soto’s consent in order to take such actions.

Under the agreement, Hodin need only obtain the con-

sent of one other partner, not necessarily Soto. As of the

B cut-off date, when there were three partners, Hodin,

together with Strimel, had the ability to take any of the

enumerated actions, even in the face of active opposition

from Soto. Such an arrangement can hardly be con-

sidered to imbue Soto with the “negative control” the

Commission found him to possess (Pet. App. 1la).

The Commission, in order to find Soto had “negative

control” over partnership affairs, first had to give com-

parative effect to Sunland’s post-B cut-off date amend-

ment removing Strimel from the partnership. Such an

action constitutes a violation of both the condition im-

posed on the Sunland amendment by the ALJ (Pet. App.

142a, n. 3) and the Commission’s own rule against

post-B cut-off date enhancement through amendment. TV

9, Ine., supra; Women’s Broadcasting Coalition, Inc.,

supra; Las Misiones De Bejar Television Co., supra; and

Birmingham Family Television, Inc., supra.

This failure of the Commission to follow its own rules

also resulted in the derogation of Bethel’s procedural

rights under those rules.

What was in effect as of the B cut-off date was a part-

nership agreement among three individuals. That tri-

partite agreement reflects the appropriate comparative

status of Sunland and its partners. The subsequent vol-

untary withdrawal of one partner, while converting the

agreement to a pact between only two partners, could not

modify or alter, retroactively, the B cut-off date com-

parative status of the partnership or its partners. Soto’s

standing in terms of the comparative process remained

static, and should have been evaluated by the Commission

in that light. If Soto’s bona fides could not be sustained

under the terms and conditions governing the Sunland

scheme as of the B cut-off date, no subsequent enhance-

ment of his status can operate to save the Sunland in-

tegration proposal as it relates to Soto. Sunland only

may rely on, and the Commission should have considered

the validity of Soto’s participation only in light of,

Strimel’s presence.

The rules and regulations of a governmental agency,

when validity promulgated pursuant to statutory au-

thority, have the same force and effect as statutory law.

Columbia Broadcasting System, Inc. v. United States, 316

U.S. 407 (1942). Such rules and regulations must be ad-

hered to, even by the promulgating agency. The agency

simply may not ignore its own rules. Actions of an

agency are controlled by the agency rules to the same

extent as parties within the jurisdiction of the agency

are effected by the agency’s rules. Yellin v. United

States, 374 U.S. 109 (1963); Vitarelli v. Seaton, 359

U.S. 535 (1959) ; Service v. Dulles, 354 U.S. 363 (1957) ;

United States ex. rel. Accardi v. Shaughnessy, 347 U.S.

260 (1954).

Parties dealing with an agency are entitled to rely

upon the agency’s rules and regulations. To the same

extent an agency can enforce its rules and regulations

against a party within its jurisdiction, a person whose

interest is protected by the agency’s rules is entitled to

have the agency follow those rules. Such an affected per-

son has the right to seek the enforcement of an agency’s

compliance with its own rules. Yellin, supra; Vitarelli,

supra; and McKenna v. Seaton, 259 F.2d 780 (D.C. Cir.

1958), cert. denied, 358 U.S. 835 (1958). Any deroga-

tion by an agency of a substantive or procedural right

attaching to a party by virtue of the agency’s rules is a

violation of due process. Therefore, any agency action

that substantially and prejudicially ignores an agency’s

rules cannot stand. Sangamon Valley Television Corp.

v. United States, 269 F.2d 221 (D.C. Cir. 1959), cert.

denied, 376 U.S. 915 (1964).

By allowing the Commission to consider the bona fides

of Soto’s partnership interest in the context of a post-B

cut-off date enhancement of that interest, the circuit

court improperly affirmed the Commission’s violation of

its own rules. That violation was clearly detrimental to

the interests of Bethel.

The circuit court’s failure to correct the Commission’s

error is especially surprising because that court recently

had occasion to remind the Commission that “it is ele-

mentary that an agency must adhere to its own rules and

regulations.” Reuters Limited v. F.C.C., 781 F.2d 946,

950 (D.C. Cir. 1986). Bethel respectfully suggests that it

now falls to this Court to direct the circuit court to once

again admonish the Commission with regard to the ob-

servance of its own rules, this time in the context of the

B cut-off date, as it applies to the case at bar.

B. The Circuit Court Has Attempted to Support the Commis-

sion’s Order by Supplying a Reasoned Basis for the Order

that the Commission Itself Has Not Given.

The circuit court, in the memorandum accompanying

its judgment, found it “permissible for the Commission

to accept as bona fide the division of ownership rights

and responsibilities between the general partners of Sun-

land Communications Company” (Pet. App. 5a). In at-

tempting to support that finding, the circuit court fur-

ther stated that “both Hodin and Soto, in fact as well as

in form, assumed liability for partnership obligations to

third parties” (Pet. App. 5a). Bethel is constrained to

point out that liability for partnership obligations to

third parties was not addressed anywhere in the Com-

mission’s order, much less relied upon by the Commission

as a basis for its determination as to the validity of

Soto’s purported partnership participation.

This attempt of the circuit court to formulate a post

hoc justification for the Commission’s action is improper.

Camp Vv. Pitts, 411 U.S. 138 (1973). As this Court has

stated:

The reviewing court should not attempt itself to make

up for such deficiencies; we may not supply a rea-

soned basis for the agency’s action that the agency

has not given.

Motor Vehicle Manufacturers Association v. State Farm

Mutual Automobile Insurance Co., 463 U.S. 29, 43

(1983). The circuit court, therefore, should have re-

stricted its review to a determination as to whether the

Commission’s order contained proper and adequate sup-

port for the conclusions therein.

It is further suggested that the circuit court’s finding

in this regard, in addition to being improper, is also

incorrect. In this regard, it should be noted that the Re-

view Board, in its decision, stated as follows:

Thus, even if Sunland received the instant construc-

tion permit and commenced operations, Soto would

still not have incurred one dime’s worth of legal obli-

gation or responsibility for the entity. (emphasis

added).

(Pet. App. 41a). The Commission, in its order, specifi-

cally cited this conclusion of the Board, with apparent

approval (Pet. App. 9a, 74). It would appear, there-

fore, that the Commission did not find any “liability for

partnership obligations” on the part of Soto, and in fact,

may have felt compelled to find to the contrary. This fac-

tual discrepancy between the Commission’s order and the

circuit court’s judgment is vivid testimony to the validity

of this Court’s admonition that “a judicial judgment

cannot be made to do service for an administrative judg-

ment”. S.E.C. v. Chenery Corp., 318 U.S. 80, 88 (1943).

Bethel only wishes that the circuit court had followed

its own recent advice to the Commission. Last year, the

circuit court had occasion to admonish the Commission

as follows:

A reviewing court cannot do the agency’s work for

it: that is, the judiciary “may not supply a reasoned

basis for the agency’s action that the agency itself

has not given.

Celcom Communications Corp. v. F.C.C., 789 F.2d 67, 71

(D.C. Cir. 1986), quoting, Motor Vehicle Manufacturers

Association, supra. Bethel trusts that this court now will

direct the appropriate action.

The circuit court has not corrected the defects arising

out of the Commission’s failure to abide by its own rules,

but, instead, has sought to supply a reasoned basis for

the Commission’s action that the Commission itself did

not give, and, in fact may contradict the reasoning of the

Commission. Unless corrected by this Court, the actions

of the circuit court and the Commission will remain in

conflict with the decisions of the Court, to the detriment

of the public interest and this petitioner.

CONCLUSION

This petition for a writ of certiorari should be granted.

Respectfully submitted,