# Brief for the Respondents in Opposition — Federal Communications Commission v. Broadcasting Service Organization, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Brief for the Respondents in Opposition
- **Published:** January 1, 1949
- **Citation:** 337 U.S. 901

## Text

BLEED ‘THR OUGH — POOR «

IN THE

Supreme Court of the United States

October Term, 1948

ee

FeperaL ComMunicatTions CoMMISSION,

Petitioner,
—V.—

BroabcastinG Service Orcanization, Inc.,

Respondent.

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

BRIEF FOR THE RESPONDENT IN OPPOSITION

——
ee

Ben S. Fisuer,
Joun P. SourHMayp,
902 Warner Bldg.,
Washington, D. C.,
Attorneys for Respondent.

Watter M. Bastian,
National Press Bldg.,
Washington, D. C.,

Of Counsel.

ease

OPY

PAGE
I a elcaeadidlialabiinncsieniccietiendéabecnducaoin 1
elas eeitnnpdorasninnees 1
I sels cnarcasentssinnseniesieastesadsnoes 2
RLS 2
GT SE EE 2
Present Organization of Respondent ............ ‘iene 3
RR I ooo cccesoniececaecereascverenesaneveeuees 4
Claims Made Against the Stock 0... 6
pe eB esls on b 8
Reasons for Not Reporting the Acquisition .......... 8
Unauthorized Purchase of Stock in the Name of
I 9
Transfer of 60% of Voting Stock Reported in 1938 11
Purchase of Class A Non-Voting Stock ............. 11
Purchase of Remaining Interest in B Stock ........ 12
Final Settlement of Claims 2000000000000... 0ccccccccccecseese. 13
Application for Construction Permit —............ 14
Service Rendered by Station WORL 14
Proceedings Subsequent to Hearing ....00..00000.0......... 15
Reasons for Denying the Writ .00.00..00.00.00.0ccccccccccecceecseeoeee 17

Appendix

Conclusion

ii

CrraTIONs:
PAGE
Pp UD UD iS SS ees 27(n)

Riis: SIRI cacsceshstlccseeshicscirensanishetatenapdeninnpehindenibaldlismemuinadie 20
Bay State Beacon Inc. v. Federal Communications
Commission (App. D. C.) No. 9766, Slip Opinion,

decided December 20, 1948 _..0.........-.....-cccccecceceeceeneeses 27(n)
Black River Valley Broadcasts v. MeNinch, 101 F.

TID stieiceecnnstiteinrenittiiniaitaitaines 27(n)
Bonwit Teller & Co. v. Coumnr. of internal Revenue,

53 F. 2d. 381; Cert. den. 284 U. S. 690 ...................... 20
Brown Investment Co. v. Warner, Register of Copy-

rights, 161 I. 2d. 910; Cert. den. 382 U. 5. 3UL ........ 20

Carlson v. Federal Communications Commission
(App. D. C.) No. ¥5«7, Siip Upinion, decided f'eb-

ruary i4, ly4y 27(n)
Chicago Junction Case, 204 L. dS. 208 . 2U
Clark v. Lebersee finanz-iiorporatiou, A. G., 332

U. S. 484 27(n)
Consolidated iKdison Co. v. National Labor Kela-

FS LS DS ee 20, 28
Crowell v. Benson, 285 U. 8S. 22 ....... 28
Donaldson v. Read Magazine, 333 U.S. 178 .00000....... 25, 26

E. Anthony and Sons, Inc. v. National Labor Rela-
tions Board, 163 F. 2d. 22; Cert. den. 332 U. S.

errr rrr rrr

BLEED ‘THR OUGH — POOR C

iii
PAGE
Federal Radio Commission v. Nelson Bros. Bond &

Mortgage Co., 289 U. S. 266 .2...2...2-...--cc-eecceeceres 23, 27(n)
Fields v. Hannegan, Postmaster, 162 F. 2d. 17; Cert.

A I Oi 25
Hannegan v. Esquire, Ine., 327 U. S. 146 2.00... 27(n)
Hilton v. Sullivan, 334 U. S. 323 2.002222... eeeeceseeeeeee 27(n)
Hurley v. Lowe, Deputy Commr., Bureau of Km-

ployees’ Compensation, 168 F. 2d. 553; Cert. den.

PRE ie ie Seed CRON een Re NO 25 |
Leach v. Carlisle, 258 U. S. 138, 140 ~...002.000 ee 20
Liberty Mutual Insurance Co. v. Cordello, 330 U. 8S.

IO sicecisc delsiash ceahieieaneshceiiadk abecb kiatiahlasnttiaabaasaemneialents 26
Mansfield Journal Company v. Federal Commiunica-

tions Commission (App. D. C.) No. 9817, decided

IE Teas UIE cecstbccindcpidintatnsiasisdsesieilhchiabssttrinantitahaattantahienoaiiba 26(n)

National Labor Relations Board v. A. 8. Abeil Co.,
Be A: OEE cdescasosanatoesguebiealapleshh ninidinhdiasidaabiiumlantsictnguaiens 20

National Labor Relations Board vy. Columbian
Enameling and Stamping Co., Inc., 306 U. S. 292,

aR RE eens ce eRe me eee 20, 28
National Labor Relations Board y. Pennsylvania
Greyhound Lines, 303 U. S. 261, 271 — 20... 20
National Labor Relations Board vy. Sheboygan Chair
A EE Re ee en ee 20
National Labor Relations Board v. Waterman
Steamship Corporation, 309 U. S. 206 2... 26(n)

Norris & Hirshberg, Inc. v. Securities and Exchange
Commission, 163 F. 2d. 689; Cert. den. 333 U. 8.

PAGE
Panhandle Eastern Pipe Line Co. v. Federal Power
Commission, 169 F. 2d. 8S1; Cert. den. 332 U. S.
UO ech ciesctehiedacadetebibecdacibilsaidebsnidtdaihanetninoe 25
Saginaw Broadeasting Co. v. Federal Communica-
tions Commission, 96 F. 2d. 554; Cert. den. 305
RESINS RRS an RET AEG ee ae ae 23
S. E. C. v. Chenery Corp., 318 U. S. 80, 94 00000... 23
Simmons v. Federal Communications Commission
(App. D. C.) No. 9607, decided May 24, 1948,
PUT Ne SF ie MN I cicemveconsreciousvooeremennesivapintttinononieas 26(n)
WOKO, Ine. v. Federal Communications Commis-
RG RAAR SOR OR 2, 16, 17,
21, 24, 28
Yankee Network, Inc. v. Federal Communications
AS | Se . . eee 28
Sratutes Cirep
Communications Act of 1934, 48 Stat. 1064, 50 Stat.,
BO Ge Oe a OE IIE erecsarcccacdchecenceccersbnc 2
TOOTIITE TOO) ccccevecnecenrocsscccvoserenene TEMAS 2, 17, 24(n)
Ne ube lial 9, 15, 16, 22

28 U.S. C. 1254(1)

BLEED ‘THR OUGH — POOR |

IN THE

Supreme Court of the United States

October Term, 1948

No. 584

>

FEDERAL COMMUNICATIONS COMMISSION,
Petitioner,
—vV.—
BroapcastinG SERVICE Organization, INnc.,
Respondent.
ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT
—$—~»—_

BRIEF FOR THE RESPONDENT IN OPPOSITION

Opinions Below

The Decision and Order of the Federal Communications
Commission (R. 539-568, 600-601) have not yet been re-
ported. The opinion of the United States Court of Appeals
for the District of Columbia Circuit (R. 608-620) has not
yet been reported.

Jurisdiction
The judgment of the Court of Appeals was entered on

November 24, 1948 (R. 620-621). The jurisdiction of this
Court is invoked under 28 U. S. C. 1254 (1).

a

Ory

2
Question Presented

Whether the Court below erred in holding that, as a
matter of law, the Federal Communications Commission
is not empowered by the provisions of the Communications
Act of 1934, as amended, and the Decision of this Court
in the WOKO case (329 U. S. 223) to deny the application
for renewal of license of Station WORL on the ground
that respondent does not possess the character to be en-
trusted with the responsibilities of a licensee, there being
no substantial evidence to support the findings and conclu-
sions of the Commission with respect thereto.

Statute Involved

The pertinent provisions of the Communications Act of
1934, 48 Stat. 1064, as amended, 47 U.S. C. 151, et seq. are
set forth in the appendix to the Government Petition for
Writ of Certiorari, pages 23-26.

Statement of Case

Because of certain inaccuracies and inadequacies in peti-
tioner’s statement of the case, respondent finds it necessary
to review in detail the facts established by the record.

Broadeasting Service Organization, Inc. has been the
licensee of Station WORL, which operates in Boston,
Massachusetts, on 950 Ke., with 1 KW, daytime only, since
November 20, 1931. That it has been and is rendering a
meritorious program service in the public interest, con-
venience or necessity is established by the record and not
questioned by the Commission (R. 288-296).

On May 27, 1944, respondent filed an application pursuant
to Section 309 (a) of The Communications Act of 1934, as

BLEED ‘THR OUGH — POOR

3

amended, for renewal of its station license. Thereafter,
this application was designated for hearing. The hearing
was held in the fall of 1944 before an Examiner designated
by the Commission.

Present Organization of Respondent.

Broadcasting Service Organization, Inc. is a Massachu-
setts corporation with outstanding capital stock consisting
of 1000 shares of non-voting Class A preferred and 1000
shares of voting common designated as Class B. Since
November 1943 the officers, directors and stockholders have
been :

B Stock
Name Office A Stock (Votirg)
Harold A. Lafount Director-President 1000 400
Sanford H. Cohen Director — 400
George Cohen Treasurer a 200
Robert E. Davison Director-Clerk — —
Secretary

(R. 235, 355, 391)

All are citizens of the United States and possess the qual-
ifications required of officers, directors, and stockholders of
a licensee corporation. In 1927, after a successful business
career, Harold A. Lafount was appointed a member of the
Federal Radio Commission. He left the Commission in
1934 and since then has been employed as General Manager
of ali the radio interests of Mr. Arde Bulova (R. 21-23, 305).
Sanford H. Cohen, a former Assistant United States Attor-
ney, and George Cohen are brothers who have been asso-
ciated in the practice of law in New York City since 1920.
Robert H. Davison of Boston is an attorney-at-law of high-
est reputation (R. 26, 27, 83, 225-27, 279, 305-6).

The 1937 Agreements.

Prior to March 25, 1937 the stock of the licensee was
distributed as follows:

Name A Stock B Stock
George A. Crockwell 400 200
James K. Phelan 300 150
William H. Eynon 300 150
Robert C. Nordblom —_ 500

(R. 354, 386)

Station WORL had been steadily losing money and the
stockholders decided to sell the stock (R. 62, 322). Negotia-
tions were held with Crockwell. Nordblom, Crockwell,
Phelan and Eynon entered into an agreement between them-
selves of their intended sale of 700 shares of the stock
owned by them in the corporation owning and operating
Radio Station WORL (R. 382). Lafount had nothing to do
with this agreement and was not even aware of its existence
(R. 57-8, 67, 71).

On March 16, 1937, Crockwell, Nordblom and Lafount
entered into an agreement for the transfer of 400 shares of
B Stock (300 to be supplied by Crockwell and 100 by Nord-
blom) to Lafount for a consideration of $48,000.00. Crock-
well and Nordblom undertook to pay all the debts of the
corporation existing on March 25, 1937 (with certain excep-
tions) from the proceeds of the sale, to reduce the liquidat-
ing value and the annual dividends of the preferred stock,
and to cause certain changes in the by-laws of the corpora-
tion. The closing was set for March 25, 1937 (R. 385).

On March 25, Crockwell, Nordblom, Phelan, Eynon,
Lafount and Ben 8. .Fisher (attorney for Lafount and the
Cohens) met at the office of Robert H. Davison, attorney

BLEED ‘THROUGH — POOR

5)

for the licensee and its stockholders. An escrow agreement
was entered into between Crockwell, Nordblom, Lafount
and Davison providing tat $48,000 was to be paid to
Davison as escrow agent to pay off the debts of the corpo-
ration, the balance to be distributed 6214% to Crockwell
and 3714,% to Nordblom (R, 74, 75, 80, 81, 593). The Cohens
not being present at the closing, Ben 8. Fisher, as Agent,
entered into a separate agreement with Nordblom whereby
he (as such agent) agreed to purchase 200 shares of Class
B stock for $4,500 (R. 396). A cashier’s check in the amount
of $52,500 was delivered by Lafount to Davison in payment
for the 400 shares purchased by Lafount and the 3U0 shares
purchased by the Cohens (R. 82-85). Temporary certificates
were issued, one to Lafount for 400 shares and one to Nord-
blom for 300 shares. The latter was endorsed by Nordblom
in blank and delivered to Lafount. The temporary certifi-
eate for 300 shares was issued in Nordblom’s name because
Lafount did not know at that time how the Cohens wanted
their 300 shares apportioned between them (R. 106, 109, 115,
116). No arrangement was made at the closing as to how
the permanent certificates were to be issued (R. 104).
Though all the agreements were closed simultaneously,
Lafount at all times considered his purchase of the 400
shares and the Cohens’ purchase of 300 shares as separate
transactions. They were two distinet purchases negotiated
separately and based on separate contracts (R. 62-3, 76,
77, 83, 120, 172-3, 333).

Lafount’s acquisition of 400 shares of Class B stock was
reported to the Commission on Mareh 31, 1937 (R. 399). Of
the $48,000 Lafount paid for his 400 shares of B stock,
$38,000 was used to pay off the existing debts of the eorpo-
ration. The Cohens had agreed with Lafoun. that they
would pay their share of the debts and that the cost of the
700 shares should be divided ov a per share basis to equalize

6

the purchase price, Lafount’s cost being $30,000 and the
Cohens’ $22,500 (R. 27, 76, 150, 151, 228, 243). For this
reason the “Amount Actually Paid for Stock” by Lafount
was reported as $20,000 (R. 112, 399). The consideration
for the 600 shares of Class A stock acquired by Crockwell
was reported as $26,400, the par value of $44 per share.
The report of March 31, 1937 was prepared by Davison,
Crockwell’s attorney. At the time it was filed Lafount had
no detailed knowledge of the arrangements among Crock-
well, Nordblom, Eynon and Phelan for the setilement of
the value of the A stock among themselves (R. 56, 66, 74,
399).

Claims Made Against the Stock,

Shortly after the closing date Crockwell started com-
plaining to Lafount about the deal. He called frequently
on Lafount, telling him that he wished to get the station
back. He stated that Nordblom was dissatisfied too and
something had to be done about it (R. 30-31, 103, 117, 155-
157). Crockwell discussed his dissatisfaction with Nerd-
blom and with many others. The subject was also con-
sidered at a number of directors’ meetings (R. 332-333, 335-
336, 339, 340). Though Crockwell was telling Lafount that
Nordblom was dissatisfied, the latter never made any com-
plaints or claims and testified that he never was dissatisfied
with the transaction (R. 110, 327). The evidence is con-
flicting as to whether Nordblom ever expressed any dis-
satisfaction to Lafount. However, there is no question that
Crockwell led Lafount to believe that both he and Nordblom
were very displeased with the whole deal. Furthermore, it
is clear that shortly after the March 1937 closing a dispute
had arisen between Crockwell and Nordblom which con-
tinued over a considerabie period of time (R, 110, 117-118,
155-158, 362). As all the negotiations leading up to the

BLEED ‘THR OUGH — POOF

7

March 25, 1937 closing had been conducted with Crockwell,
and as he had made all the complaints, Lafount attempted
to straighten things out with him rather than with Nord-
blom whom he hardly knew (R. 30-31, 57-58, 117).

These complaints were received before Lafount had ascer-
tained how the Cohens wished to have their 300 shares
divided. When Lafount advised the Cohens of Crockwell’s
complaints, they refused to permit the permanent certifi-
cates for the 300 shares to be issued in their names until
all dissatisfaction had been ironed out and no further claims
against the stock were outstanding (R. 34-35, 109, 121, 143,
175-176, 228-229, 250). Pending the settlement of the differ-
ences a permanent certificate was issued in the same form
as the temporary one. Nordbiom endorsed it in blank, and
on April 30, 1937 it was sent to Lafount. Nordblom testified
that he did not recall why he permitted the stock to remain
in his name but believed it was a matter of convenience to
the buyers. He was glad, however, to remain a voting stock-
holder with 400 shares because the station was a tenant of
the hotel he ran and it was good business for him to watch
its progress (R. 32, 340, 342).

Early in 1939, before any settlement had been reached
with Crockwell, both Davison and Crockwell advised Lafount
that a Miss Natalie Whitwell claimed to own all the stock
of the corporation (R. 31, 176, 222, 252, 333, 339-340, 359-
360). On July 21, 1941 Hines, counsel for Miss Whitwell,
wrote Lafount demanding that all the outstanding stock of
the corporation be turned over to his client (R. 261-262,
361). In January 1942 Miss Whitwell brought a suit at law
| against the corporation in Massachusetts. The court held
for the defendants (R. 31, 177-178, 228-230, 261-263). Hines
wrote the Commission a series of letters beginning in June
1939 and ending in September 1941 i which he advised the
F. C. C. of the Whitwell claims and complained about the

COPY

8

ownership of WORL. As late as December 15, 1943, Hines,
in testimony before a Congressional Committee, asserted
claims against the Corporation on behalf of Miss Whitwell
(R. 254).

Acts of Ownership.

The permanent stock certificate for 300 shares, endorsed
in blank by Nordblom, was turned over to Sanford H. Cohen
by Lafount immediately upon its receipt and remained in
the Cohens’ possession thereafter (R. 30, 121, 228, 280). The
Cohens could have sold the stock or had it put in their
names because the certificate was negotiable (R. 248, 250).
However, the Cohens never voted the 300 shares of B stock.
While it stood in Nordblom’s name they never attended
directors’ meetings or stockholders’ meetings. No dividends
were ever paid on the stock (R. 263). Nordblom voted the
stock at all times. In fact, he voted 400 shares of B stock
at ten stockholders’ and directors’ meetings from March 5,
1937 up to and ineluding April 16, 1943. There existed no
arrangement or understanding governing the stock or the
manner in which it should be voted (R. 123-126, 219, 265,
329, 335, 342, 364-373).

Reasons for Not Reporting the Acquisition.

Thus the B stock continued to be owned of record, 400
shares by Lafount, 400 by Nordblom and 200 by Crockwell
(R. 33). Both Lafount and the Cohens believed that as
there had been no transfer on the books of the Corporation,
and as Nordblom remained the record holder of the 300
shares, it was proper for the applicant to report Nordbiom
as the holder of the stock. They did not think that the status
of the stock had changed in any way as the certificates
were still in Nordblom’s name. They felt that any transfer

BLEED THR OL'GH — POOR CO

9

to their names would be unwise at that time for they might
wish to rescind the sale and ask for the return of their
money. Jn their minds the sale remained unconsummated
and the deal had not been closed. The evidence is clear
that although the principals might have exercised poor
judgment in this respect, if they made a mistake they did
not make it in had faith (R. 34, 112, 115-116, 117, 120, 223,
143, 175-176, 228-229, 250-252, 254, 280, 284). Similarly,
Lafount and the Cohens believed that in view of the circum-
stances and the uncertainty concerning the final transfer
of the 300 shares of B stock to the Cohens it was unnecessary
under Section 310(b) of the Act to apply for a transfer
of control of the corporation. They did not think there
had been a transfer of control within the meaning of the law
(R. 119, 120, 173-174, 254-255). Sanford Cohen was not
admitted to practice before the Commission in 1937—his
admission occurred in 1940. Commission records show that
George Cohen has never been admitted to practice before
the Commission. There is no evidence indicating that in
1937 either of the Cohens was familiar with the Rules and
Regulations of the Commission. It is fair to infer—as was
in fact the case—that in failing to report the transfer the
Cohens were relying upon the advice of the attorneys
handling the deal—Ben S. Fisher (radio attorney) and
Robert H. Davison (R. 236-237).

Unauthorized Purchase of Stock in the Name of Arde Bulova.

On July 12, 1937 at Lafount’s request Arde Bulova loaned
Crockwell $5,000 on a six months’ note underwritten by
Lafount and received 200 shares of B stock as security.
Six months after the note fell due Bulova foreclosed, and
the 200 shares of B stock were sold at auction for $100. In
July 1938 Sanford Cohen left on a vacation. Knowing a sale
was going to be held, he told Lafount that he would buy the

10

stock. Lafount instructed Davison to purchase the stock
for Sanford Cohen. Because of some legal technicality
which Davison though would delay the transfer if the
stock were sold to one other than the pledgee, Davison
purchased the stock in Bulova’s name on July 28, 1938.
When Sanford Cohen returned from California in Septem-
ber, he found the stock had been bought in Bulova’s name.
The cleanest way to clear title was to have Bulova make a
simple assignment of the stock to Cohen so as to show the
actual facts. Lafount had advanced the $100 for the pur-
chase and was repaid by Sanford Cohen. Cohen was at
all times the owner of the stock (R. 35-36, 137-139, 230-
231, 267-270, 402). The purchase in Bulova’s name was a
mistake; Bulova was greatly annoyed when he discovered
that the stock had been bought in his name, because he was
not the purchaser and was not interested in the station.
Bulova never considered that he had an investment in
WORL (R. 203-204, 317, 319-320). This transfer of 200
shares of B stock from Crockwell to Sanford Cohen for a
consideration of $100 was reported to the Commission on
November 22, 1938. The date of acquisition was given as
September 30, 1938, the date when it was assigned by Bulova
and issued in Cohen’s name (R. 141-142, 204-205, 357, 436).
At the time the report was made out Cohen had paid
only $100 for the stock. The $100 was credited to Crockwell.
After the assignment, Cohen advised Bulova that he would
attempt to collect the deficiency from Crockwell and that
if he did not succeed he would make good to Bulova. No
payment was made to Bulova until it became evident that
there was no chance to collect from Crockwell. Then Cohen
paid Bulova $5,000, the amount of the debt. However, at the
time the report was made to the Commission, $100 reflected
the actual consideration paid. Sanford Cohen testified that
the failure to report the $5,000 might have been an error

BLEED ‘THROUGH — POOR C

ll

in judgment but the report had been made in good faith
(R. 231-232, 268, 270, 319-320).

Transfer of 60% of Voting Stock Reported in 1938.

In report filed with the Commission on November 22,
1938, Harold Lafount was shown as the owner of 400 shares
of Class B voting stock, Sanford Cohen the owner of 200
shares, and Robert Nordblom the owner of the remaining
400,—thus indicating that Lafount and Cohen together
owned 60% of the voting stock. Although the Commission
by this report acquired knowledge that Lafount and Cohen
together owned 60% of the voting stock, it did not require
that an application for transfer of control of the Corpora-
tion be filed (R. 207, 232, 255, 354, 391).

Purchase of Class A Non-Voting Stock.

In March 1939, on the advice of Davison, Lafount bought
900 shares of Class A non-voting preferred stock at auction
for $2,450. Through oversight this acquisition was not re-
ported to the Commission on a stock ownership report
form until about a year later. Lafount was under the im-
pression that the acquisition had been reported immedi-
ately but later found out that it had not. He was shocked
when he discovered the omission. As proof of his belief
that the acquisition of this stock had been reported, the
record shows that, upon an application for construction
permit, Lafount’s ownership of said 900 shares of Class A
stock was set forth (R. 37-38, 98-99, 210-212).

In September 1940, Lafount purchased the remaining
100 shares of A stock from one Endlar for $3,100. This pur-
chase was not reported until April 1941, again through
oversight, Lafount being under the impression that it had
been reported immediately, The purchase price of the

12

stock was reported as $3,500., which included $400 legal
fees incurred in connection with the purchase (R. 38-39,
208). Lafount’s present ownership of all the A stock has
been a matter of record with the Commission since April
1941 (R. 354, 391). On July 7, 1942 the Commission granted
an application for renewal of license to Station WORL for
the period ending August 1, 1944, having full knowledge
of this and other reports filed prior thereto.

Purchase of Remaining Interest in B Stock.

In September 1940, besides purchasing Endlar’s remain-
ing 100 shares of A stock, Lafount purchased Nordblom’s
remaining 100 shares of B stock for $1,500. This stock
was acquired because there existed a possibility that the
corporation would be sold to new interests and in order
to do so it was necessary to have possession of all the
outstanding stock (R. 140-141). The 100 shares of B stock
were purchased from Nordblom for George Cohen at the
latter’s request. The stock was endorsed in blank by Nord-
blom and given to George Cohen. The $1,500 paid by
Lafount was repaid him almost immediately (R. 245, 280,
285). Shortly after the sale Nordblom expressed dissatis-
faction with the deal and stated that he did not want it to
go through. He was dissatisfied as to the price and because
he understood that the station was to be sold and no sale
had taken place. Again George Cohen refused to permit
the transfer of the stock in his name and Norblom remained
the holder of record. For this reason the transfer was not
reported (R. 144, 160-161, 280, 285, 336, 391, 403-404).
Nordblom centinued to vote the 100 shares as well as the
300 involved in the 1937 transaction. He continued to take
an interest in the Corporation, discussed its problems, and
attended its meetings. He was glad to remain a stockholder
because the station was a tenant of the hotel he ran and it

BLEED ‘THR OUGH — POOR ¢

13

was good business for him to watch the progress of the
station. He was alse glad to remain because he was dis-
satisfied with the sale (R. 335, 340, 342).

Final Settlement of Claims.

The final settlement oceurred in November 1943, when
Lafount, after consultation with Sanford Cohen, paid
Nordblom $750 and received a receipt and general release
from

“all claims not only on account of the purchase
of 100 shares of the Class B stock of Broadcasting Ser-
vice Organization, Inc., but from all other claims aris-
ing out of your purchase from me of both Class A and
Class B common shares * * * ”

The $750 was paid by the Cohens but the release ran to
Lafount because he had handled all the negotiations (R. 33-
34, 172-173, 350). Though letters written by Nordblom and
Davison prior to the execulion of the release refer to the
$750 as being “in full payment for 100 shares,” Lafount
and Cohen testified that the $750 was to clear up all claims
against the 400 shares of B Stock (R. 33-34, 280-281, 406)
which is supported by the receipt and general release
signed by Nordblom referred to above.

The 400 shares of B stock were owned of record by
Nordblom until the final settlement of $750 was paid him
in November 1943 in final adjustment of all claims (R. 33,
165-166, 281). By this time the Whitwell and other claims
had also cleared up. On November 9, 1943 the 100 shares
were issued to George Cohen. This was reported on Novem-
ber 15, 1943 (R. 36-37, 146, 429). On November 27, 1943
the remaining 300 shares of B stock standing in Nordblom’s
name were transferred, 200 shares to Sanford Cohen and

14

100 shares to George Cohen and a report of this was filed
with the Commission on December 2, 1943. Though $4,500
had been specified as the contract price, $5,000 was reported
as the consideration. This was the actual cost to the Cohens
at the time the report was made after the various adjust-
ments (R. 34-35, 146, 215-216, 354, 357, 391, 440).

Application for Construction Permit.

In 1937 the licensee filed an application for full time
operation of WORL. The application was denied solely on
technical grounds of objectionable interference during night
time hours. In connection with this proceeding Lafount
submitted a balance sheet of the licensee as of April 30,
1937 listing “Cash in Banks $25,362.11.” At that time the
actual cash in the corporation’s bank account was $362.11.
Lafount explained that the stockholders actually had the
cash available and if the permit had been granted they
would have placed the $25,000 in the Corporation’s account
to pay the cost of construction of the full time operation.
The balance sheet was a proposed balance sheet and it
should have been so designated. Lafount considered it ex-
tremely unfortunate that the accountant who prepared the
statement had not included the $25,000 as a liability. He
had not intended to infer that the cash stood to the actual
credit of the corporation (Docket 4206, 7 F’. C. C. Reports
242, 246; R. 298-299, 303, 345-348, 401).

Service Rendered by Station WORL.

When Lafount became President of Broadcasting Service
Organization, Inc. in March 1937, the corporation was in
bad shape financially. The debts paid off at the closing
amounted to $38,000. The station as a whole, including
programming, equipment, and accounts receivable, was in
very bad shape. As soon as Lafount became President a

BLEED ‘THROUGH — POOR ¢

15

new station manager was hired. Together they succeeded
in putting the station on its feet and in furnishing the
public with good service. in 1938 the station showed a loss
of $11,424, on total receipts of $54,754. In 1943 there was a
profit of $25,101 with receipts amounting to $240,468. The
Hooper rating rose progressively, putting WORL in a tie
for first place during the daytime hours among Boston
listeners. All profits were spent to build up the station.
Time was regularly donated to at least seventy outstanding
national or local organizations as well as to numerous gov-
ernmental agencies; and the station received the MeNinch
Award for its outstanding weekly public service programs
(R. 351, 353, 374-381, 41, 43-4, 135, 288-296).

Proceedings Subsequent to Hearing.

On October 24, 1945 the Commission adopted a Proposed
Decision denying the WORL renewal application. The Pro-
posed Decision held that a transfer of control of respondent
had occurred March 25, 1937 without Commission consent,
as required by Section 310 of The Communications Act and
the Rules adopted pursuant thereto, and also found that
respondent had submitted false reports and testimony to
the Commission concerning this transfer of control and
other matters. The Proposed Decision concluded that the
WORL renewal application should be denied because re-
spondent could not be entrusted with the responsibilities of
a licensee (R. 475-502).

On November 26, 1945, respondent filed Exceptions to the
Proposed Decision accompanied by a Memorandum Brief
(R. 503-538). On January 24, 1946, the Commission heard
oral argument on its Proposed Decision.

On August 26, 1946, respondent and Bitner Broadcasting
Company, a corporation having no present broadcast inter-
ests or connection with respondent, filed joint application

——_

16

requestion Commission consent under Section 310(b) of
The Communications Act for transfer of control of respon-
dent from its present stockholders to Bitner Broadcasting
Company for a total consideration of $200,000 (R. 606-607).

On April 23, 1947, the Commission released its Decision
adopted April 21, 1947, denying the application for renewal
of license of Station WORL and dismissing as moot the
pending application for transfer of control of respondent
from its present stockholders to Bitner Broadcasting Com-
pany. A dissenting opinion was simultaneously issued by
E. K. Jett, Commissioner. The dissenting opinion points
out that on its facts this case differs from that in WOAO,
Inc. v. Federal Communications Commission (329 U. 8.
223), and concludes that since the parties are not guilty of
having made false statements and concealments designed |
to mislead the Commission, the pending applications for
renewal of license and for transfer of control of respondent
should be granted (R. 565-568).

On May 13, 1947, respondent filed a petition for rehearing
pursuant to Section 405 of The Communications Act (R.
569-597). On July 28, 1947, the Commission issued an order
setting the petition for rehearing for oral argument which
was held October 8, 1947 (R. 598-599). On October 15, 1947,
the Commission adopted a Memorandum Opinion and Order
simply stating that “After careful consideration of our
Decision and Order of April 21, 1947 and the record on
which they are based, we have concluded that no sufficient
reason has been advanced for departure therefrom * * * ”.

Ne decision was made on respondent’s request in its peti-
tion for rehearing for an opportunity at a further hearing
to present testimony on the character and integrity of its
principals and no decision was made on respondent’s con-
tention that dismissal as moot without hearing of the
application for transfer of control to Bitner Broadcasting

BLEED THROUGH - POO

—

17

Company contravenes Section 309(a) of the Act (R. 600-
601). E. K. Jett, Commissioner, simultaneously issued an
opinion dissenting from the October 15, 1947 Opinion and
Order, in substantially the same language as his dissenting
opinion on the April 21, 1947 Decision (R. 602-605).
Respondent has continued to operate Station WORL
since the expiration of its last regular license August 1,
| 1944, by virtue of extensions of temporary license granted
| by the Commission from time to time.

Reasons for Denying the Writ

1. The petitioner urges that the WORL case raises legal
issues identical to those decided in Federal Communications
Commission v. WOKO, Inc., 329 U. S. 223, and therefore
“the supervisory jurisdiction of this Court must be exer-
cised in order to vindicate the precedential effect” of this
Court’s rulings. Respondent’s position is that the legal
issues in this case are completely different from the issues
decided in the WOK O case; that the decision of the court
below is in conformity with established principles of admin-
istrative law; that no new or novel question of importance
is presented ; and, therefore, there are no special and impor-
tant reasons for grant of the writ. As hereinafter shown,
there is not the slightest justification for any assertion of
need to invoke the supervisory jurisdiction of this Court
over the court below because of the decision.

It is apparent from a study of the WOKO decision that
the question presented was whether admitted concealment
from the Commission of stock ownership for purposes of
deception supports a conclusion that the licensee cannot be
entrusted to continue its operations in the pubiic interest,
convenience, and necessity. In the instant case, the question
presented is quite different—to wit, whether there is sub-

COPY

18

stantial evidence to support findings of fact of misrepre-
sentation and concealment of stock ownership, expressly
denied by the licensee and its principals, and not contro-
verted by other witnesses, which will support a conclusion
that the licensee cannot be entrusted to continue its opera-
tion in the public interest, convenience, and necessity. The
distinction between the cases is far from putative—it is
fundamental, as the decision of the court below points out
in detail (R. 615-617). Only the most superficial comparison
could result in the erroneous conclusion that the cases in-
volve “slightly variant factual patterns” but “raise legal
issues identical to those already authoritatively decided”.

Pages 15-19 of the petition cite a list of authorities to
support the proposition that a “course of admitted falsifica-
tions and concealments, either entirely unexplained or
explained by testimony demonstrably unworthy of belief”,
is sufficient basis from which to draw an inference of
wilfulness. Respondent does not take issue with this propo-
sition or with the authorities cited in support thereof.
Respondent does, however, take sharp issue with any con-
tention that in this case the record reflects a “course of
admitted falsifications and concealments, entirely unex-
plained or explained by testimony demonstrably unworthy
of belief”. As indicated above, nowhere in the record is
there admission of falsifications and concealments. On the
contrary, the record is replete with uncontradicted evidence
of good faith on the part of the respondent and its principals,
professional men of high standing and good reputation.
Any omissions or deficiencies which occurred are fully
explained.

As the court below points out, one of the fundamental
defects of the Cominission decision is that it bases in-
ference upon inference (I. G18). It finds that there
have been certain omissions by the licensee from which

BLEED THROUGH — POC

19

it infers (without evidence) that these omissions were
deliberate misrepresentations and concealments, from which
it concludes that respondent does not possess the character
to continue as the licensee. The fallacy of this reasoning is
the complete absence of evidence of wilful misrepresenta-
tion or concealment. Bad character cannot reasonably and
logically be concluded from failure or delay in the filing of
certain reports, particularly when all of the witnesses
specifically disavow any intention to conceal or misrepre-
sent and nothing in the record indicates a purpose or object
in misrepresentation or concealment.

The opinion of the majority of the Commission (R. 561)
admits that “the purpose which may have led the principals
in this case to conceal the full extent of the various stock
transactions is not entirely clear”, and then attempts to
justify the Commission’s action on the ground that the
alleged misrepresentations were willful, of which there is
not a scintilla of proof. Commissioner Jett in his dissent
correctly stated that the record does not support the finding
that any of the parties are guilty of having made willful
misrepresentations (R. 566-567). Evidently, the Court of
Appeals likewise concluded—as its opinion shows—that the
record does not support the finding on which is based the

decision to deny t'1e respondent’s application for renewal of
license, and to deprive the owners of the Corporation of an
investment valued at, at least, $200,000.00.

The Labor Board and other cases cited on pages 15 and
17 of the petition establish (1) that administrative orders
supported by substantial evidence are conclusive on appeal
and (2) that administrative agencies may draw reasoned
inferences from such findings of fact. The authorities cited
do not, however, hold that where, as here, the findings of
fact are not supported by substantial evidence, they shall
be conclusive on appeal, nor do they hold that unreasonable

2@s.* 6-8. ert

COPY

inferences or inference upon inference may be drawn from
the facts of record. Substantial evidence is evidence of
quality; it must have rational probative force and be ade-
quate to support a conclusion in the mind of a reasonable
man. Consolidated Edison Co, v. National Labor Relations
Board, 305 U. 8. 197; National Labor Relations Board v.
A. S. Abell Co., 97 F. 2d 951. Substantial evidence is “more
than a scintilla and must do more than create a suspicion of
the existence of a fact to be established”. National Labor
Relations Board v, Columbian Enameling And Stamping
Co., Inc., 306 U. 8. 292, 300. Under the system of law guar-
anteed by the Constitution, the subsidiary facts must be
reached from the evidence and the ultimate facts from the
subsidiary facts, not arbitrarily or by assumption or con-
jecture or by a process contrary to reason, but according
to reason. Although inferences are to be drawn by the
agency and not by the court, the inferences must necessarily
be reasoned inferences. National Labor Relations Board v.
Pennsylvania Greyhound Lines, 303 U.S. 261, 271. To make
an essential finding without supporting evidence is arbitrary
action, since a hearing implies both the privilege of intro-
ducing evidence and the duty of deciding in accordance with
it. Chicago Junction case, 264 U.S. 258. See also Baltimore
& Ohio Railroad Company v. U. S., 5 F. Supp. 929; Bonwit
Teller & Co. v. Commissioner of Internal Revenue, 53 F. 2d
381 cert. den. 284 U, 8. 690; National Labor Relations Board
v. Sheboygan Chair Co., 125 F. 2d 436. In short, there must
be a reasonable exercise of administrative discretion having
a logical relationship to the facts, which is not the case here.
The conclusions of the Commission as to wilfulness and
intent to mislead, not having been fairly arrived at, and not
being supported by substantial evidence, can “justly be said
to be palpably wrong and therefore arbitrary.” Leach vy.
Carlisle, 258 U.S. 138, 140.

BLEED THROUGH —- PO

21

2. Petitionc» complains that the decision of the court
below recognizes the good public service record and in-
creased financial stability of WORL, whereas this Court in
the WOKO case rejected the contention that the Commis-
sion must take cognizance of the public service record of a
station notwithstanding that concealment and misrepresen-
tation had been admitted. The fact is that the court below
recognized the ruling of the WOKO case that if there is con-
cealment, materiality of such concealment is irrelevant (R.
614, 616). What the court below said on the public service
record of WORL is as follows (R. 617-618):

“In the view of the majority of this court, the record
amply supports appellant’s protestations of good faith.
True, the record is replete with evidence that appel-
lant’s agents were careless and inaccurate and, perhaps,
lacking in good judgment as to the reports required by
the Commission, but none of these characteristics in
themselves imply bad faith and it is equally certain
and of record that none of these characteristics were
projected over to and affected the management and
conduct of appellant’s business as a radio broadcasting
licensee. In fact, appellant’s outstanding public servic
record and its progressively increasing financial stabil-
ity—both matters of record in this case—expressly
negative any such projection.”

In petitioner’s effort to establish that the court below
ignored the decision of this Court in the WOKO ease, it
has distorted the language of the opinion. The statement in
that opinion that there are no harmful consequences to the
Commission or to the public interest because of respon
dent’s improper reports, is made only in connection with:
disproval of the poor analogy between this ease and criminal

R COPY

22

or tort cases in which intent may be imputed upon a show
ing of heedlessness of the foreseeable harmful consequences
(R. 618).

In Paragraph 13 of the conclusions of its decision denyiny
the WORL renewal of license, the Commission made specific
findings on alleged violation of Section 310(b) of the Act
by respondent, although the denial is predicated upon
alleged misrepresentations and concealments rather than
violation of Section 310(b) (R. 563). In view of the con-
clusions of Paragraph 13, it was entirely proper for the
court below to advert to the Commission action of July 7
1942, granting an application for renewal of the WORI.
license with full knowledge that Lafount and Sanford Cohen
had acquired control of the licensee corporation (R. 618-
619). This action by the Commission is cited by the court
not as a bar to denial of the pending renewal application
but rather as an indication of the arbitrariness of the Com-
mission’s refusal to renew. The court below specifically held '
as follows (R. 619): i

“We wish it clearly understood that we are not rul-
ing that, once forgiven, a licensee should always there-
after be forgiven for irregularity in compliance wit)
statute or with rule or regulation. The fallacy of suc: P
a rule is obvious. Nor are we ruling that a licensee can
with impunity disregard or disobey statute, rule, or
regulation. Further, we do not question the power of
the Commission, within statutory bounds, to adopt and
administer a stricter policy of enforcement of its rules
and regulations with regard to revocation or renewal
of broadcasting licenses. But the Conunission, and this
court on review, must constantly be guided by the pre-
vailing purpose of the Communications Act in ascer-
taining the result in each case which will best serve tlic

eee ee

BLEED ‘THR OUGH — POOR C<

23

public interest. In such a determination there is no
place for the arbitrary application of pointless tech-
nicality unsupported by substantial evidence. We hold,
therefore, that, as to this particular case, taking into
consideration all of the circumstances discussed abov:

the Commission’s decision of April 21, 1947, was im-
proper as a matter of law and lacked the support of
substantial evidence and was the result of arbitrary
and capricious action by the Commission. Accordingly,
pursuant to Section 402 (e) of the Act, the decision of
the Commission is reversed and the case remanded to
the Commission to carry out the judgment of this court.”
(Emphasis supplied.)

In reversing the Commission, the court below properly
used its judgment on the questions of law raised in the
appeal. S, E. C. v. Chenery Corp., 318 U. S. 80, 94. It did
not substitute its own findings of fact for those of the
Commission but held that the findings of the Commission
do not rationally support its conclusions as to wilfulness.
The court stated that upon independent search, it was unable
to find “any single specific portion of the voluminous record
before us which would justify the Commission’s conclusion
of wilfulness” (R. 616). There can be no doubt that deter-
mination by the court below under Section 402(e) of the
sufficiency of the findings of fact to support the conclusions
of law is a proper exercise of the judicial function. Federal
Radio Commission v. Nelson Bros. Bond & Mortgage Co.,
289 U. S. 266; Saginaw Broadcasting Co. v. Federal Com-
munications Commission, 96 F. 2d 554 cert. den. 305 U. S.
613. The Court’s decision is not concerned with the wisdom
or the expediency of the Commission action, but is directed
entirely to consideration whether substantial evidence sup-
ports the findings and conclusions drawn, and considera-

24

tion of the improper application by the majority of the
Commission of the rule of law in the WOKO case to the
facts of record in this case.’

3. Apparently recognizing the necessity of strengthen-
ing his doubtful contentions on the similarity of the WOKO
and WORL cases, the petitioner urges as a further ground
for grant of certiorari that the court below, which plays
“so vital a role in the review of administrative action” is in
need of “supervision by this Court” because of its persis-
tent departure from accepted legal principles and substitu-
tion of its views for those of administrative agencies. This
unwarranted and unjustified attack on the court below, a
court long and widely recognized for its competence and
experience in administrative law, requires some comment.

Table I of the Appendix to this Brief shows that in the |
two year period from January 1, 1947, to January 1, 1949, |
there have been eighty-five petitions filed for writs of cer-
tiorari to the court below. Sixty-eight of these petitions
have been denied, and one dismissed. At least twenty-six
of the sixty-eight petitions denied involved review by the
court below of administrative action. In the sixteen cases
in which certiorari was granted, six have been affirmed,
six have been reversed, and four await decision. Of the
twelve cases decided by this Court, six involve review of
administrative action, three being affirmed and three re-
versed. Thus, a total of thirty-two cases involving review
of administrative action on which petitions for certiorari

1 Respondent urged on the court below that the Commission violated
Section 309 (a) of the Communications Act in denying a hearing on
its application for transfer of control of the licensee corporation to
Bitner Broadeasting Company. The court held that in view of its
reversal of the decision on other grounds, “it is unnecessary to make 4
decision at this time” on this contention (R. 619).

BLEED ‘THR OUGH — POOF

—

25

to the court below have been filed, only three resulted in
reversal of the decision of the Court of Appeals.

Moreover, only one of the three cases of reversal on
review of administrative action involves a determination
whether substantial evidence supports administrative find-
ings of fact. Donaldson v. Read Magazine, 333 U. S. 178,
Justices Burton and Douglas, dissenting. The court below
has repeatedly given full recognition to the well established
rule of law that administrative findings of fact, if based on
substantial evidence, are binding on appeal. For instance,
in granting enforcement of an order of the National Labor
Relations Board, the court recognized that the Board’s
findings were supported by substantial evidence and fur-
ther recognized that the court cannot weigh evidence or
resolve contradictions in it, if that evidence supporting
each conclusion is substantial. EL, Anthony and Sons, Inc.
v. National Labor Relations Board, 163 F., 2d 22, cert. den.
332 U. 8. 773. In a recent case in which question as to
completeness of an administrative record on appeal was
raised, the court below carefully enunciated its duties and
responsibilities in reviewing orders of administrative
agencies and said that “thus restricted and simplified, the
function of the court is simply to see if the Commission’s
factual findings are supported by substantial evidence”.
Norris & Hirshberg, Inc. v. Securities and Exchange Com-
mission, 163 F. 2d 689, cert. den. 333 U. S. 867. See also
Panhandle Eastern Pipe Line Co. v. Federal Power Com-
mission, 169 F, 2d 881, cert. den. 332 U. S. 762, 93 L. Ed. 39;
Hurley v. Lowe, Deputy Commr., Bureau of Employees’
Compensation, 168 F. 2d 553, cert. den. 334 U.S. 828; Fields
v. Hannegan, Postmaster, 162 F. 2d 17, cert. den, 332 U.S.
773; Brown Investment Co. v. Warner, Registe, of Copy-
rights, 161 F. 2d 910, cert. den. 332 U. S. 801.

COPY

26

Of the six cases of reversal of the court below cited on
Page 21 of the petition, all pose difficult questions of ad-
ministrative law in the main without precedent. It must be
remembered that because of its location at the seat of
government, the court below is frequently called upon to
decide administrative issues of first impression. Of the six
cases cited, only Donaldson v. Read Magazine, supra, and
Liberty Mutual Insurance Co. +. Cardillo, 330 U. 8. 469
raised issues of support by substantial evidence of admin-
istrative determinations. These two cases must be com-
pared with the several more recent cases above reaffirming
the principle of finality of administrative action when based
on substantial evidence.

It seems clear from the foregoing analysis and cases that,
nothwithstanding the ill-advised protestations to the con-
trary in the Brief of the Petitioner, there is no persistent
“trend in the court below” to depart from accepted princi-
ples of judicial review and substitute its views for those of
administrative agencies.* On the contrary, the recent rec-
ord of the court below on review of the actions of adminis-

2 In National Labor Relations Board vy. Waterman Steamship Corp., 309
US 206, cited on page 21 of petitioner’s brief, this Court said that
“we do not ordinarily grant certiorari to review judgments based
solely on questions of fact”. This Court also pointed out that it granted
certiorari because of the earnest contention of the Board that this
was one of a series of decisions in which the court below (CCA Fifth)
had unwarrantedly interfered with the exclusive jurisdiction granted
the Board by Congress. The Court of Appeals for the District of
Columbia Cireuit has evidenced no such trend toward unwarranted
interference with the exclusive jurisdiction granted the Commission
by Congress. Besides the cases cited in footnote 4, broadcast decisions
of the Commission which have recently been affirmed by the court below
include Simmons v. Federal Communications Commission (App. D. C.)
No. 9607, decided May 24, 1948, cert. den. 93 L. Ed. 35, and Mansfield
Journal Company v. Federal Communications Commission (App. D. C.)
No. 9817, decided March 7, 1949.

BLEED ‘THR OUGH — POOR ¢

27

trative agencies is an enviable one by any cbjective stand-
ard.’

The petitioner does not amplify the very general asser-
tion of his petition that “the rationale of the decision be-
low is such that, if allowed to stand, the exercise by adminis-
trative agencies generally of powers virtually identical to
that here claimed by the Commission will be brought into
serious question”. It is difficult to see how the instant deci-
sion, confined as it is to the particular facts of record, can
undermine the well established principle as to conclusive-
ness Of administrative findings of fact when supported by
substantial evidence.* The decision specifically recognizes
the prior ruling of the court that it is immaterial that evi-
dence before the Commission is susceptible of other conclu-
sions than those drawn by the Commission and that, assum-
ing the presence of substantial evidence, the court will not

3 Recent eases determining varied questions of administrative law m
which decisions of the court below have been affirmed by this Court
include Hannegan v. Esquire, Inc., 327 US 146; Clark v. Uebersee
Finanz-Korporation, A. G. 332 US 484; Hilton v. Sullivan, 334 US 323;
Ahrens v. Clark, 335 US 188.

4 It is to be noted that less than a month after its WORL decision, the
court below, in affirming a Commission decision preferring one appli-
eant for a new station over another, reaffirmed the ruling of Black
River Valley Broadcasts vy. McNinch, 101 F. 2d 235, citing Federal
Radio Commission v. Nelson Bros. Bond ¢: Mortgage Co., 289 US 266
that the Commission’s “findings, under the law, must be maintained if
they are not arbitrary and capricious or erroneous in law, and are based
upon substantial evidence”. Bay State Beacon, Inc. vy. Federal Com-
munications Commission (App. D. C.), No. 9766, decided December 20,
1948. Moreover, on February 14, 1949, the court below rendered a per
curiam opinion in a case argued February 11, 1949 affirming an order
of the Commission denying renewal of license of Station WJBW, New
Orleans, La. because of violations by the licensee Carlson of the Rules
and Regulations. The opinion reads in whole as follows: “We tind no
error in the record. The decision of the Federal Commu ications Com-
mission is therefore affirmed”. Carlson vy. Federal Communications
Commission (App. 1D). C.), No. 9987, February 14, 1949. A petition for
writ of certiorari in the Carlson case is being filed April 1, 1949,

28

substitute its judgment for that of the Commission. Yankee
Network, Inc. v. Federal Communications Commission, 107
F. 2d 212 (R. 612). Likewise, the decision concedes that
where concealment is involved, the question of materiality
vel non of the facts concealed has been put to rest by the
decision of the Supreme Court in the WOO case (R. 616).
In effect, the rationale of the decision below is simply that
administrative findings of fact and conclusions which are
not supported by substantial evidence are arbitrary and
capricious and, therefore subject to reversal. This principle
of law is as sound and well established as the principle that
findings of fact and conclusions when supported by substan-
tial evidence are conclusive. Crowell v. Benson, 285 U.S.
22; Consolidated Edison Co. v. National Labor Relations
Board, 305 U. 8. 197; National Labor Relations Board v.
Columbian Enameling And Stamping Co., Inc., 306 U. S.
292.

4. From the foregoing it is manifest that the decision
below does not overstep the legitimate bounds of the judi-
cial function. It does not limit the Commission’s power to
deny broadcast applications, either for renewal of license
or for construction permits, when such denial conforms to
the requirement of Section 402(e) of the Communications
Act that the findings of fact and conclusions be supported
by substantial evidence. The decision does not announce
any new or novel standard to determine whether conclusions
of law reached by the Commission are arbitrary and capri-
cious, but simply reaffirms settled principles governing
judicial review of administrative action. In deciding that,
on the facts of this case, the rule of the WOKO decision is
inapplicable, and that the Commission acted arbitrarily,
capriciously, and unreasonably in refusing to renew the
WORL license where there was not substantial evidence to

BLEED THR OUGH — PO

29

support its findings of fact of wilful misrepresentation,
concealment, and deception, the court below did not render
a decision of such importance or of such general effect as
to require or justify issuance of a writ of certiorari.

CONCLUSION
The petition for a writ of certiorari should be de-
nied.
Respectfully submitted,
; Ben 8. FisHer,
Joun P, Sournmayn,
902 Warner Bldg.,
Washington, D. C.,
Attorneys for Respondent.
i Water M., Bastian,
Pe National Press Bldg.,
i Washington, D. C.,
j Of Counsel.
March 31, 1949.

° COPY

31
APPENDIX
Taste I

Petitions for Writ of Certiorari to The United States
Court of Appeals For District of Columbia Circuit
Filed January 1, 1947 to January 1, 1949

(Nore: Cases marked with asterisks involve administrative agencies

A. Petitions Dentep

Date
Case No. Filed Denied
Buckner et al v. Tweed 910 1/18/47 330 US 825
Friedman v. Swellenbach 990 2/6/47 330 US 838
DMW Contracting v. Stolz 1002 2/10/47 330US 839
Pepeo v. P. U. C. D.C. 1038 2/17/47 331 US 816
Kinnison v. U.S. 899 1/17/47 330 US 834
Hasson v. U.S. 1013 2/10/47 331 US 808
Garrett v. D. C. 1014 2/11/47 330 US 835
Thomas v. U.S. 1034 2/15/47 331 US 822
T. Higgins v. U. 8. 1079 2/28/47 331 US 822
Hawkins et al v. U.S. 1097 3/4/47 331 US 830
*U.8.v. P. U. C. 1135 3/17/47 331 US 816
Hensley v. U.S. 1138 3/18/47 331 US 817
B. Higgins v. U.S. 1177 3/28/47 331 US 840
*Young v. Anderson 1194 4/3/47 331 US 824
Curley v. U.S. 1211 4/5/47 331 US 837
Smith v. U. 8. 1235 4/11/47 331 US 837
*Jones & Laughlin v. United
Mine Workers 1236 4/12/47 331 US 828
- Case v. Government 1250 4/15/47 331 US 826
Mellen v. Hirsch 1322 5/5/47 = 331 US 845
Giddings v. Zellan 1490 6/1/47 332 US 759
*D. C. v. Johnson & Wimsatt 1504 6/18/47 332 US 760
*D.C. v. H. D. Lee Co. 1505 6/18/47 332 US 760

R COPY COPY BOUND CLOSE IN CENTER

Case

v. F. P. C.
Boone v. Boone
*Fields v. Hannegan
*Brown Instrument Co. v.
Warner

Burns v. Spiller
Pelley v. Matthews
*Beckham v. D, C.
Field v. U.S.
*Young Spring & Wire v.
N. L. R. B.

*Philadelphia Co. v. 8. E. C.
Gately v. Hariton

Fook v. U.S.

Wheeler v. U.S.

Capital Transit v. Grimes
Patton v. U.S.

Griffin v. U. 8.

Spruill v. Campbell
Edgerton v. Ooms
*Hurley v. Lowe

Ritchie v. Drier

Gray v. U.S.

Solis v. Clemmer

U.S. v. Davis

Holloway v. U.S. et al
Hall v. U.S.

Romney v. U.S.

Barsky v. U.S.

*Panhandle Eastern Pipe Lines

*Anthony & Sons v. N. L. R. B.

*Norris & Hirshberg v. S. E. C.

519

300 mise.

573

327 misc.
276 mise,
304 mise.

305
751

466 mise.
554 mise,
511 mise,
420 mise.
536 misc.
553 mise.

753
766

Date
Filed

6/24/47
7/10/47
8/20/47

8/27/47
8/21/47
8/29/47
9/16/47
10/27/47
11/26/47

12/29/47
1/12/48
12/17/47
12/22/47
1/7/48
1/12/48
2/4/48
1/26/48
1/6/48
1/15/48
8/29/47
4/19/48
4/22/48
6/3/48
5/13/48
4/24/48
5/24/48
6/3/48
4/20/48
4/27/48

Denied

332 US 762
332 US 766
332 US 773

332 US 801

=

332 US 773
332 US 792

332 US 811
332 US 825
332 US 851

333 US 837
333 US 867
333 US 828
333 US 838
333 US 838
333 US 829

333 US 845
333 US 830 |

333 US 857
333 US 864
333 US 874
334 US 828
334 US 860
334 US 853
334 US 860
334 US 849
334 US 852
334 US 853
334 US 847
334 US 843

‘BLEED /THR'OUGH — PO:

| Case

Airline Pilots Association v.
C. A. B.

Kingsland v. Carter
Carburetor Corp.

Billings et al v. Hill et al

Boye et al v. United Services
Life Ins.

Felton v. U.S.

Kirkland et al v. Atlantic
Coast Line

Simmons v. Federal Com-
munications Commission

Panhandle Eastern Pipe Line
v. F. P.C.

McCaffrey v. U.S.

Lawson v. U.S.

Brotherhood Locomotive
Enginemen v. U. 8.

Claxton v. Schaff

Harris v, U.S.

Fulton Iron Co. v. Larson

Pollard v. Hawfield

Meyers v. U.S.

Knowles v. War Damage Corp.

33

No.

858

123
158

215

27 mise.

254
78 mise,

438

450

467

492

Date
Filed

6/10/48

6/25/48
7/16/48

8/11/48
6/29/48

7/12/48
8/18/48

8/30/48
9/21/48
10/2/48

9/14/48
10/15/48
8/12/48
11/29/48
12/6/48
12/16/48
12/31/48

B. Petitions DisMissep

Case

Fleming v. Moberly Milk
Producers Co.

° COPY

No.

1095

COPY BOUND CLOSE

Date
Filed

3/4/47

IN CENTER

Denied

93 L.Ed.

93 L.Ed.

93 L.Ed.

93 L.Ed.
93 L.Ed.

93 L.Ed. 33

93 L.Ed.

93 L.Ed.
93 L.Ed.
93 L.Ed.

93 L.Ed.
93 L.Ed.
93 L.Ed.

93 L.Ed. 426
93 L.Ed. 478
93 L.Ed. 480
93 L.Ed. 480

Case

Clark v. Uebersee
Finanz-Korporation

Donaldson v. Read
Magazine

Eecles v. People’s
Bank

Mitchell v. Cohen

Bakery Sales Union
v. Wagshal

Hurd et al v. Hodge
et al

Ahrens v. Clark

Frazier v. U. 8.

Hilton v. Sullivan

MeDonald et al v.
U.S.

Marzani v. U. 8.

Upshaw v. U.S.

Domestic & Foreign
Commerce v. Little-

C. Petitions Grantep

No.

934

1108

1414
1487-8

225

290-1
446

213 mise.

560

678
816

524 mise.

34

Action

Affirmed

Reversed

Reversed
Reversed

Affirmed

Reversed
Affirmed
Affirmed
Affirmed

Reversed
Affirmed
Reversed

Date of
Action

12/8/47
3/8/48

3/15/48
3/8/48

3/15/48

5/3/48
6/21/48
12/20/48
6/1/48

12/13/48
6/21/48
12/13/48

Argued

Citation

332 US 4

333 USI

333 US 4
333 US4

333 US 4%

334 US
335 US
335 US
334 US 32

335 US 451
335 US§
335 US

john 31 Pending Decision 11/12/48 =
Griffin v. U.S. 417 © “ Argued 12/15/48 —
T. W. A. v.C. A. B. 387 e “ Argued 2/8/49 —
Eisler v. U.S. 255 Pending Argument ao =

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385610_0339%3A1. Public record. Not legal advice.
