Reply Brief — Folden v. United States, 125 S. Ct. 2935 (2005) (No. 04-1106)

Supreme Court, U.S.

Ss FILED

JUN 6 - 2005

No. 04-1106 OFFICE OF THE CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

GENE A. FOLDEN, COASTAL COMMUNICATIONS

ASSOCIATES, AND JUDITH A. LONGSHORE,

Petitioners,

Ve

UNITED STATES OF AMERICA,

Respondent.

On Petition for Writ of Certiorari

to the United States Court of

Appeals for the Federal Circuit

REPLY BRIEF FOR PETITIONERS

ROBERT G. KERRIGAN RUSSELL D. LUKAS

GEORGE W. ESTESS (Counsel of Record)

KERRIGAN, ESTESS, RANKIN LUKAS, NACE, GUTIERREZ

& McLEop, LLP & SACHS, CHARTERED

400 East Government Street 1650 Tysons Boulevard

P.O. Box 12009 Suite 1500

Pensacola, Florida 32501 McLean, Virginia 22102

(850) 444-4444 (703) 584-8678

TABLE OF CONTENTS

Page

RM FAT WI cacnecccencannacnencidcccadasatassscainanaiccncan i

ee Oe MINIT ni.knnctdccnisssannd¥citedeantinnsoudaneanacienaceases l

RR TEES TTR TEER eID RE aE TC PIR NT Ra 3

TABLE OF AUTHORITIES

Cases:

Pewee WT, SD Ua. BP CIS I OD oven cctarccsacencnccocsecccssscaves 7

City of Rochester v. Bond,

er ce EE Cs ls FO acc evan kcctccccsckicneines camsace 7, 8,9

Communications and Control, Inc. v. FCC,

ee Bae Bie” RIES ee en 8

FCC v. ITT World Communications, Inc.,

ts Ie cata 7

Gardner v. FCC, 530 F.2d 1086 (D.C. Cir. 1976).............. 10

Ingersoll-Rand Co. v. United States,

ee ie cs Mat I baiieietiaeiss Acidaksnschuacddeudeicdscnkcccas 10

Keene Corp. v. United States, 508 U.S. 200 (1993).............. 7

Kidwell v. Dep't of the Army Bd. for Correction

of Military Records, 56 F.3d 279 (D.C. Cir. 1995)............ 5,6

Kosak v. United States, 465 U.S. 848 (1984)... 9

Sprint Corp. v. FCC, 331 F.3d 952 (D.C. Cir. 2003)............ 7

il

Steel Co. v. Citizens for a Better Environment,

S23 U.S. SS CPE) «:cscxscsconepencosedeeeeneanaeniaaeniaieabassiensses a

Teleprompter Cable Communications Corp. v.

FCC, 363 F.26 120 Gaus es Se een 10

United States v. Hohri, 482 U.S. 64 (1987) ........00.0ccc eee 5,6

United States v. Texas, 507 U.S. 529 (1993) ooocccc cece 9

United States v. Winstar, 518 U.S. 839 (1996) .....0.....00c0000. i]

Administrative Decisions:

Certain Cellular RSA Applications, 14 F.C.C.R.

4619 (WTB 1999), reconsideration denied,

16 F.C.C.R. 4860 (WTB 2001), application for

rev. denied, 17 F.C.C.R. B30B (Q00Z) .cccccsccccsscscvsseseoses 2,4, 8

CCPR Petition for Declaratory Ruling or Rulemaking

to Determine Whether Competitive Bidding Procedures

Should Be Used to License Certain Cellular RSAs,

Lt F.C.C.R. [5GG7 CESIEE ssicccseaccesesaaenedaonaininiaiseceanonaes 2

Implementation of Competitive Bidding Rules

to License Certain RSAs, 16 F.C.C.R. 4296 (2001) «0.0.0.0... 2

Federal Statutes:

S U.S.C. § SOS sissnssissssicunpsseteaeianenaaaaa: 10

3 ULS.C,. § FOS n..0scsssnscreaneanateeieeaneaaaaaenial 9

3 US... § FREE) usscsonicsinsssannstndesiepenbsapaniomenaiameieamnduanseiia 9

ZB U.S.C. § UPA) .n::scisccnasccnsecnvsentihuiattannsianinamanssensaaash 5

28 UEC. © USGA s:s:cscicsncserenisianciiaeiieieniiagaiianelneiahii 5

ZB USA. § EPR insscicesiatececseretesonnstanmanshiansuaaiintanha i

ill

PERE: Tit MITT iis niccienaiansohindsdnabansbusoutiapuiiesiendcenbianaiiedesenane a

as ar EI icianietsicicancininddsaiiecnsbiidadscéshiesaletsanamebsenimedbanincel 9

Be eeieds Oy ET iiss dssins:cndotaspasetbincécconndannadabboinaenbasdadonannibedal 8

Federal Regulations:

Pe Gt ke PEED CEPI cncietnsnsnsctosnsdnstersecnntnsnnanessentonss 3

-_— Ooo

REPLY BRIEF FOR PETITIONERS

Petitioners, Gene A. Folden, Coastal Communications

Associates, and Judith Longshore, hereby reply to the Brief

for the United States in Opposition (“Br.”).

COUNTERSTATEMENT

1. The Federal Communications Commission (“FCC”

or “Commission’’) breached implied-in-fact contracts to

award cellular licenses for seven Rural Service Areas

(“RSAs”) in accordance with (or obeying) lottery rules that

required it to hold relotteries. Respondent notes that the

FCC’s rules did not specify when relotteries were to be held.

See Br. 2. However, on July 12, 1996, the FCC announced

that it had selected September 18, 1996 as the date on which

it would fulfill its obligation to hold a relottery for six of the

seven RSAs. See App. 91a (¥ 68).

Over a five-day period in August 1996, a former FCC

attorney representing Cellular Communications of Puerto

Rico, Inc. (“CCPR”), made ex parte presentations to the’

legal advisors to Chairman Reed Hundt (an outspoken critic

of lotteries) and Commissioners James Quello, Rachelle

Chong and Susan Ness. See App. 90a-92a (FJ 63, 65, 67, 69-

72). CCPR’s counsel argued that the scheduled relottery

Should not be held for the six RSAs, including the Puerto

Rico 5 - Ceiba RSA where an affiliate of CCPR was the

interim operator. See id. 89a ({ 56), 92a (Gq 70-72).

2. The Federal Circuit found that the FCC made the

decision not to hold RSA relotteries, and that its decision

was “announced” by the Commercial Wireless Division

(“Division”) of the FCC’s Wireless Telecommunications

Bureau (“Bureau” or “WTB”) on September 10, 1996. See

id. 9a-10a, 29a n.14, 32a. In fact, the Division notified the

public that the relottery scheduled for the following week

was “postponed.” See id. 92a ({ 74). No reason was given

for the postponement. See id.

Respondent contends the Bureau postponed the relottery

2.

in order to consider an ex parte petition CCPR filed on

September 9, 1996, the day before the relottery was

“postponed.” See Br. 2. The facts Petitioners allege support

the inference that CCPR’s ex parte presentations to FCC

decision-makers in August 1996 led to the decision to end

the lottery process, not a petition CCPR filed the day before

the scheduled relottery was “postponed.” Moreover, on

October 24, 1996, when it finally disclosed that CCPR’s

petition had been filed, the Division did not state that the

relottery was postponed to allow for consideration of the

petition.’ That explanation was first offered by the FCC

more than four years later, when it claimed the WTB

postponed the relottery to “preserve the issue raised in

CCPR’s petition.”” But the FCC's contractual and legal

obligation was to adhere to its lottery rules that were in effect

and required a relottery. See Pet. 11 n.11.

3. According to Respondent, before the FCC could act

on CCPR’s petition, Congress enacted the Balanced Budget

Act of 1997 (“1997 Budget Act”), which repealed the FCC's

authority to conduct lotteries. See Br. 2. The 1997 Budget

Act was passed on August 5, 1997, approximately a year

after the FCC decided not to hold relotteries and months

after its final breach of the implied contracts. See App. 18a-

19a, 93a (¥ 78). On April 2, 1999, the WTB dismissed

CCPR’'s petition as “moot.” Certain Cellular RSA

Applications, 14 F.C.C.R. 4619, 4621 n.12 (WTB 1999)

(“Dismissal Order’), reconsideration denied, 16 F.C.C.R.

4860 (WTB 2001) (“Reconsideration Order’), application

for rev. denied, 17 F.C.C.R. 8508 (2002) (“Final Order’).

4. Petitioners brought their breach-of-contract claims to

the Court of Federal Claims seeking only money damages.

See App. 110a-llla. They had no interest in obtaining

judicial review of any FCC decision or order. Nevertheless,

' See CCPR Petition for Declaratory Ruling or Rulemaking to Determine

Whether Competitive Bidding Procedures Should Be Used to License

Certain Cellular RSAs, 11 F.C.C.R. 13847, 13847-48 (1996).

? Implementation of Competitive Bidding Rules to License Certain RSAs,

16 F.C.C.R. 4296, 4299 (2001).

7

Respondent misled the Court of Federal Claims to conclude

that Petitioners’ complaint seeks judicial review of two WTB

orders issued in April 1999 that dismissed their RSA lottery

applications. See App. 62a-63a. The Federal Circuit

disagreed. It found that the complaint “plainly represents a

challenge to the Commission's failure to hold relotteries for

the seven RSA licenses.” Jd. 27a n.13. It held that

Petitioners seek judicial review of the FCC’s decision not to

hold relotteries, see id. 29a n.14, 34a, which the Division

announced on September 10, 1996. See id. 9a, 29a n.14. It

found the FCC’s decision “in fact” denied Petitioners’

applications, “albeit without issuing a formal order.” Jd. 32a.

5. Respondent misstates the case when it claims the

Federal Circuit “concluded that the orders at issue fell within

the exclusive jurisdiction of the D.C. Circuit” under § 402(b)

of the Communications Act of 1934, as amended (“Act”).

Br. 5. The court actually concluded that “despite the absence

of a formal ‘decision’ or ‘order’ by the Commission, the

decision not to hold relotteries for the seven RSA licenses at

issue constituted an appealable decision within the meaning

of subsection 402(b).” App. 29a n.14.> The FCC’s off-the-

record decision in 1996 to breach its implied contracts never

became part of an FCC order.

ARGUMENT

1. Respondent repeats the misstatements that began the

transformation of Petitioner's breach-of-contract suit into an

appeal from an unappealable FCC decision. Compare Br. 9-

10 & n.4 with Pet. 28-29. Respondent persists in claiming

Petitioners’ complaint clearly seeks “review of staff orders

of the WTB,” including “staff orders specifically rejecting

[their] contract claims,” and asks that the Bureau’s

“rejection” of their claims be “overturnfed].” Br. 9-10.

' Respondent also misstates that the court held that the D.C. Circuit has

exclusive jurisdiction to review “challenges to the Bureau's decision not

to hold relotteries.” Br. 7. The court concluded the FCC made that

decision. See App. 29a n.14. The WTB lacked the delegated authority to

end the relottery process. See 47 C.F.R. § 0.291(a)(2) (1996).

ye

First, Petitioners were not parties to any proceedings before

the WTB. As they explained, High Tower Communications,

Inc. (“High Tower’) made an implied-in-fact contract claim,

but not to the Bureau. See Pet. 7-8, 29. As one can plainly

see, Petitioners’ complaint unmistakably alleges that High

Tower asked for Bureau reconsideration on the ground “‘it

had not been allowed to participate in the relotteries for

which it had contracted.” App. 94a (q 83). The complaint

alleged that the WTB “summarily rejected High Tower’s

contract claim.” Id. 95a ({ 89). The complaint is consistent

with the Reconsideration Order. See 16 F.C.C.R. at 4862

n.12 (“High Tower provides no support for its claim that the

Commission ‘promised’ to process applications in a certain

way in exchange for the payment of application fees.”)

Petitioners allege that High Tower first made an implied-

in-fact contract claim in an application for Commission

review of the Reconsideration Order. See App. 96a (FJ 92,

93); Pet. 7-8. That allegation is confirmed by the Final

Order in which the Commission discusses High Tower’s

implied-in-fact contract and damages claims at length. See

17 F.C.C.R. at 8514-17. Thus, the agency’s reported

decisions confirm the Bureau did not address or reject an

implied-in-fact contract claim founded on the common law

of lotteries. Compare 16 F.C.C.R. at 4862 & n.12 with 17

F.C.C.R. at 8514-17 & n.56. No “staff orders specifically

rejecting [P]etitioners’ contract claims” exist, and their

complaint cannot be read to ask the Court of Federal Claims

to “overturn” any Bureau action. See App. 110a-I1la.

Respondent’s claims to the contrary taint the Federal

Circuit’s determination that Petitioners seek judicial review

instead of money damages. See App. 12a & n.5, 25a n.11

(discussing Petitioners’ “failure” to preserve their right to

‘Nine months after Petitioners filed suit, the FCC confirmed that it lacks

jurisdiction to adjudicate claims against the United States for money

damages based on its breach of implied-in-fact contracts. See Final

Order, 17 F.C.C.R. at 8515. Likewise, the D.C. Circuit is without

jurisdiction to award money damages. See Pet. 23-24.

Se

judicial review by seeking FCC review of the WTB’s

orders).

2. Respondent incorrectly contends that the Federal

Circuit’s decision does not conflict with any decision of any

other court of appeals. See Br. 7. The court below decided

that a complaint that explicitly seeks $144 million in

monetary relief from the federal government does not invoke

the Tucker Act jurisdiction of the Court of Federal Claims. .

See App. 13a. That decision directly conflicts with the D.C.

Circuit’s rule that a claim is subject to the Tucker Act

jurisdiction of the Court of Federal Claims “if, in whole or in

part, it explicitly or ‘in essence’ seeks more than $10,000 in

monetary relief from the federal government.” Kidwell v.

Dep't of the Army Bd. for Correction of Military Records, 56

F.3d 279, 284 (D.C. Cir. 1995).

3. The Federal Circuit held that the exclusive appellate

jurisdiction of the D.C. Circuit under the Act “preempts” the

exclusive original jurisdiction of the Court of Federal Claims

under the Tucker Act. App. 27 n.13. The court’s decision

on an important jurisdictional issue conflicts with this

Court’s decision in Steel Co. v. Citizens for a Better

Environment, 523 U.S. 83 (1998) and ignores the

“comprehensive framework” established by Congress in the

Tucker Act and the Federal Courts Improvement Act. See

United States v. Hohri, 482 U.S. 64, 73 (1987).

In Steel, this Court held that every federal appellate court

has the threshold obligation to establish both its own

jurisdiction and that of the lower court. See 523 U.S. at 94-

96. Respondent argues that the Federal Circuit met that

obligation simply by deeming Petitioners’ “putative breach-

of-contract action” to be subject to the D.C. Circuit’s

exclusive jurisdiction under § 402(b). Br. 12. That

argument is based on the false premise that the D.C.

Circuit’s exclusive jurisdiction trumps the exclusive

jurisdiction of the Court of Federal Claims and the Federal

Circuit over nontort claims against the United States for

more than $10,000. See 28 U.S.C. §§ 1295(a)(3),

1491(a)(1), 1346(a)(2); Hohri, 482 U.S. at 72.

Y -

Petitioners make the type of claims (breach of implied

contract and takings claims) against the United States that

are covered by the Tucker Act and they seek the specific

relief ($144 million in damages) the Tucker Act provides.

See App. 13a. Hence, they invoke the jurisdiction of the

Court of Claims unless all their claims are clearly “frivolous

or immaterial.” Steel, 523 U.S. at 89-90. If their complaint

succeeds in stating a single nonfrivolous claim against the

government for more than $10,000 in damages, the D.C.

Circuit’s Kidwell rule applies, leaving that court without

jurisdiction irrespective of § 402(b). See 56 F.3d at 284.

Thus, the Federal Circuit was obliged under Steel to

determine whether Petitioners present any claim cognizable

under the Tucker Act.

4. A major concern of Congress in creating the Federal

Circuit was the “special need for nationwide uniformity” in

the adjudication of nontort claims against the United States.

Hohri, 482 U.S. at 71. In order to “ensure that a central

judicial body adjudicates most claims against the United

States Treasury,” Kidwell, 56 F.3d at 284, Congress created

“exclusive Federal Circuit jurisdiction over every appeal

from a Tucker Act or nontax Little Tucker Act claim.”

Hohri, 482 U.S. at 72-73 (emphasis in original). Given the

“comprehensive framework” established by Congress and its

“strong expressions of need for uniformity in the area,” this

Court adopted the presumption that if Congress intended that

there be any exceptions to the Federal Circuit’s exclusive

Tucker Act jurisdiction, it would have made its intention

“explicit, rather than left to inferences drawn from loose

language.” Id. 482 U.S. at 73.

Respondent asks this Court to draw the same type of

jurisdictional inference that was rejected in Hohri. It argues

the creation of a “comprehensive statutory and regulatory

scheme” that directs “certain types of claims” to be litigated

in the D.C. Circuit supports the inference that Congress has

withdrawn Tucker Act jurisdiction “over those claims.” Br.

16. However, the D.C. Circuit does not have exclusive

jurisdiction over “certain types of claims.” Under § 402(b),

the D.C. Circuit has jurisdiction over appeals taken from

fe, a

FCC “decisions and orders” in certain types of cases. See 47

U.S.C. § 402(b). It is the Tucker Act that affords the Court

of Federal Claims exclusive jurisdiction over certain types of

claims against the federal government. See 28 U.S.C. §

1491(a)(1). Moreover, the exclusive jurisdiction of the D.C.

Circuit under § 402(b) is a judicial creation, see Br. 7-8, but

Congress explicitly gave the Federal Circuit “exclusive

jurisdiction ... of an appeal from a final decision of the ...

Court of Federal Claims.” 28 U.S.C. § 1295(a)(3). Under the

rule that “a precisely, detailed statute preempts more general

remedies,” Brown v. GSA, 425 U.S. 820, 834 (1976), the

jurisdiction given the Court of Federal Claims, and the

exclusive jurisdiction expressly given the Federal Circuit,

specifically over contract claims against the United States for

more than $10,000, appears to trump whatever jurisdiction

the D.C. Circuit could have over those claims as “ancillary”

to the cases identified in § 402(b). Be that as it may, §

402(b) provides no basis to infer that Congress has

withdrawn Tucker Act jurisdiction over Petitioners’ breach-

of-contract claims. See Pet. 22-25.

5. As a “special review statute,” § 402(b) “cuts off”

original jurisdiction in other courts in all cases it covers,

City of Rochester v. Bond, 603 F.2d 927, 935 (D.C. Cir.

1979), but § 402(b) only covers final FCC decisions and

orders. See FCC v. ITT World Communications, Inc., 466

U.S. 463, 468 (1984). Moreover, finality pursuant to the

Administrative Procedure Act (“APA”) is a “crucial pre-

requisite” to ripeness for judicial review. Sprint Corp. v.

FCC, 331 F.3d 952, 956 (D.C. Cir. 2003). But on August 8,

2001, when Petitioners filed suit, no final FCC decision or

order existed that related to their claims. See App. 67a, 96a

({ 94). As the trial court acknowledged, the D.C. Circuit

could not have taken jurisdiction under § 402(b). See id.

67a. Under the “time-of-filing” rule,’ the Court of Federal

Claims unquestionably has exclusive jurisdiction to the

extent Petitioners make nonfrivolous Tucker Act claims.

* Subject-matter jurisdiction of the Court of Federal Claims turns on the

facts as they exist when the complaint is filed. See Keene Corp. v.

United States, 508 U.S. 200, 207-08 & n.3 (1993).

ee

i.

6. To invoke the D.C. Circuit’s exclusive jurisdiction

under § 402(b), a notice of appeal must be filed with the

court “within thirty days from the date upon which public

notice is given of the decision or order complained of.” 47

U.S.C. § 402(c). The FCC never provided the notice

necessary for its 1996 decision to become an “appealable

decision” within the meaning of § 402(b). App. 29a n.14.

Respondent does not dispute that the FCC’s decision was

“made off-the-record, never publicly acknowledged, and not

subject to judicial review.” Pet. 30. No decision or order

was ever issued by the FCC or the WTB for the stated reason

that the applications for the seven RSA licenses had in fact

been denied i in 1996 pursuant to an FCC decision not to hold

relotteries.° Because judicial review of the reasonableness of

an FCC licensing decision under § 402(b) is limited to the

agency reasoning that appears in the FCC’s order, see, e.g.,

Communications and Control, Inc. v. FCC, 374 F.3d 1329,

1336-37 (D.C. Cir. 2004), the FCC’s 1996 decision was

never subject to the D.C. Circuit’s exclusive jurisdiction.

7. Respondent defends the determination below of the

“true nature” of Petitioners’ claims, but cannot articulate the

legal standard the court employed. See Br. 9-10. The court’s

ipse dixit that Petitioners’ “action plainly represents a

cotaae challenge to the Commission’s failure to hold relotteries”

does not implicate the exclusive jurisdiction of the D.C.

Circuit. App. 27a n.13. To fall within the D.C. Circuit’s

jurisdiction, a claim must be for the same relief § 402(b)

provides. Thus, only a challenge to the lawfulness of an

FCC order subject to review under § 402(b) must be made in

the D.C. Circuit. See Rochester, 603 F.2d at 937. Petitioners

© When it dismissed the RSA lottery applications in 1999, the WTB

represented that it made the decision to dismiss the RSA lottery

applications under its delegated authority, because the 1997 Budget Act

had repealed the FCC’s lottery authority. See Dismissal Order, 14

F.C.C.R. at 4620-21. It repeated that claim in 2001. See Recon-

sideration Order, 16 F.C.C.R. at 4861-62. So did the FCC when it

finally reviewed the WTB’s orders in 2002. See Final Order, 17

F.C.C.R. at 8510. The FCC never admitted that its decision not to hold

relotteries was made before the 1997 Budget Act was enacted.

_9-

mount no such challenge.’ Furthermore, only “adequate

statutory review is exclusive.” Rochester, 603 F.2d at 935.

Since the FCC precluded adequate statutory review of its

1996 decision, Petitioners were entitled to pursue “any

applicable form of legal action ... in a court of competent

jurisdiction.” 5 U.S.C. § 703.

8. Respondent contends that regulatory lotteries are not

“properly analyzed” as implied-in-fact contracts, the breach

of which subjects the agency to a suit for money damages.

See Br. 13. However, Congress is presumed to have been

aware that lotteries are contractual arrangements under the

common law when it gave the FCC the option to use

lotteries. Cf, United States v. Texas, 507 U.S. 529, 534

(1993). Yet, it took no steps to exempt the FCC from

liability under the Tucker Act. Moreover, this Court has

recognized that if an aggrieved party is able to establish the

existence of an implied-in-fact contract with a federal

agency, that party can bring suit under the Tucker Act. See

Kosak v. United States, 465 U.S. 848, 860 n.22 (1984).

Finally, ordinary contract principles apply to public contracts

involving regulatory matters. See United States v. Winstar

Corp., 518 U.S. 839, 870-71 (1996).

9. Respondent concedes only that there may be a

“consensus that recreational lotteries subject sponsor States

to suit under contract principles.” Br. 13. It is unclear what

constitutes a “recreational” lottery, but it is the unanimous

view of the many courts that have addressed the issue that

principles of contract law apply to lotteries run by, or on

’ To decide if Petitioners’ suit is covered by § 402(b), the Federal Circuit

should have followed Rochester, since that case involved a district court

action which the Federal Circuit viewed as “indistinguishable” from

Petitioners’ breach-of-contract suit. App. 25a. The plaintiffs in

Rochester asked the court to set aside the FCC’s grant of a construction

permit, see 603 F.2d at 931, the very same relief § 402(b) provides. See

47 U.S.C. § 402(b)(6). In contrast, Petitioners’ suit against the United

States seeks money damages, a form of judicial relief that is not available

under § 402(b). The suit also does not put the lawfulness of an FCC

order at issue or ask that an FCC order be held “unlawful and set aside.”

5 U.S.C. § 706(2).

-10-

behalf of, state governments. See Pet. 16-17 & n.16. Thus,

under the law as it exists today, the general rules of contract

law apply to government-run lotteries. Respondent and two

federal courts below could not cite a single case from any

jurisdiction to the contrary.

Framed by the same contract principles that courts have

uniformly applied to lotteries, Petitioners’ contract claims

are not foreclosed by any precedent and cannot be dismissed

as jurisdictionally frivolous. See Pet. 9-10, 16-17, 19.

Respondent notes, however, that Petitioners do not cite to

any authority specifically holding that principles of contract

law apply to “lotteries conducted for regulatory purposes.”

Br. 13. Of course, Respondent cites no authority that

exempts “regulatory” lotteries from the contract principles

that are applied to all other lotteries. Evidently, the precise

issue Of whether contract principles govern federal agency-

run lotteries is one of first impression. That issue is within

the “unique expertise” of the Court of Federal Claims to

address in the first instance. Ingersoll-Rand Co. v. United

States, 780 F.2d 74, 78 (D.C. Cir. 1985).

10. Respondent argues that the FCC’s authority to

change its rules effectively precluded it from making a

contractual promise to award RSA licenses by lotteries and

prevented applicants from having a “reasonable” expectation

that the FCC would be bound by its promise. Br. 13-16.

However, the FCC’s promise to hold lotteries in accordance

with its lottery rules was (unsurprisingly) a promise to abide

by those rules until amended or revoked. And the FCC was

legally bound to do just that. See Pet. ll n.11. By offering

to hold lotteries under its rules in 1988, the FCC manifested

its intention to be bound by its rules until they were changed

pursuant to the APA. See 5 U.S.C. § 553. Because the FCC

was “bound to adhere to its own rules and procedures,”

Teleprompter Cable Communications Corp. v. FCC, 565

F.2d 736, 742 (D.C. Cir. 1977), applicants had a “reasonable

expectation” that the FCC would obey its lottery rules and

procedures, and they were entitled to act in reliance on that

expectation. Gardner v. FCC, 530 F.2d 1086, 1090 (D.C.

Cir. 1976). When they did, implied contracts were formed.

| oe

Respectfully submitted,

ROBERT G. KERRIGAN

GEORGE W. ESTESS

KERRIGAN, ESTESS, RANKIN

& McLEop, LLP

400 East Government Street

P.O. Box 12009

Pensacola, Florida 32501

(850) 444-4444

Attorneys for Petitioners

June 6, 2005

RUSSELL D. LUKAS

(Counsel of Record)

LUKAS, NACE, GUTIERREZ

& SACHS, CHARTERED

1650 Tysons Boulevard

Suite 1500

McLean, Virginia 22102

(702) 584-8678