# Petition for Writ of Certiorari — Matias v. Federal Communications Commission

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1995
- **Citation:** 514 U.S. 1004

## Text

Suprem: Court, U.S.
' i ED

941236 JAN 17 1995

No. OFFICE OF THE CLERK

In The

SUPREME COURT OF THE UNITED STATES
October Term, 1994

CARMEN MATIAS AND ANDREW N. WIMBISH, JOINTLY,
Petitioner,
Vv.

FEDERAL COMMUNICATIONS COMMISSION,
MONTGOMERY COUNTY MEDIA NETWORK, INC.
d/b/a IMAGISTS
Respondents.

On Writ of Certiorari to the
United States Court of Appeals
for the District of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

GENE A. BECHTEL *
ANN C. FARHAT

Bechtel & Cole, Chartered

1901 L Street, N.W. - Suite 250
Washington, D.C. 20036

(202) 833-4190

Counsel for Petitioner
Carmen Matias and Andrew N. Wimbish,
Jointly
January 17, 1995

” Counsel of Record

QUESTION PRESENTED

Whether the party aggrieved by the adoption of a
change in policy by an administrative agency in the course of an
adjudication must seek the views of that agency on the question
of "retroactive" application of that policy change before
petitioning the Court of Appeals to review the "retroactivity"
question?

ra es aa a ee ee ee ee rl UCU Clee :|lhlUC lee _— = . a

TABLE OF CONTENTS

QUESTION PRESENTED ........---- ee eee eerrees i
a iii
EE ee eee 1
JURISDICTIONAL STATEMENT ......----- +e eee ees |
CONSTITUTION, STATUTES AND REGULATIONS ......-..-.- 2
STATEMENT OF THE CASE ........-- 02 eeeeeeccee 2
REASONS FOR GRANTING THE WRIT.....-.------+>> 7

The importance of the law of "retroactivity" in relation
to federal administrative jurisprudence. ........- 7

Previous decisions of this Court do not resolve
the issue presented here. .......--++++++05: 9

Previous decisions in the District of Columbia
circuit are at odds with the judgment entered
em ie NRL 6 gee 64 ea Seo ee 11

Decisions in other circuits also are at odds with
the judgment below. .....---+++s+ee0008 13

None of the circuit court decisions expressly
resolves the issue presented here. ......-.---- 15

The time is ripe for the Court to resolve the
"retroactivity" issue presented in this case. ..... 16

ii

TABLE OF AUTHORITIES

Judicial Decisions
Bechtel v. FCC, 10 F.3d 875 (D.C.Cir. 1993) .......... 5
Bowen v. Georgetown University Hosp..,

re 8
C. H. Guenther & Son, Inc. v. NLRB,

ee ee eee 14
Calder v. Bull, 3 Dall. (3 U.S.) 386 (1798) ............ 8
Chenery Corp. v. SEC, 128 F.2d 303

I ek a re 0s id wn Ws 0 06 4 ols 9
Chenery Corp. v. SEC, 154 F.2d 6

PE eee Ce ee eee eee ee 10
Clark-Cowlitz Joint Operating Agency v. FERC,

G26 FOG WOPe GCA. TOG bcc nies. 11, 12
Crosthwait v. FCC, 584 F.2d 550 (D.C.Cir. 1978) ....... 3
FCC v. WOKO, Inc., 329 U.S. 223 (1946) ........... 11
James B. Beam Distilling Co. v. Georgia,

OE oe ig i ee tec ees 8

Laidlaw Corporation v. NLRB, 414 F.2d 99
(7th Cir. 1969) (rehearing denied September 2,

1969), cert. den., 397 U.S. 920 (1970) ............ 14
Lamprecht v. FCC, 958 F.2d 382 (D.C.Cir. 1992) ....... 5
Local 900, Intern. U. of Elec., Etc. v. NLRB,

erie Gof ft Re) Gee 12, 13
NLRB v. Bell Aerospace Co., 416 U.S. 267 (1974) ...... 10
NLRB v. E & B Brewing Company, 276 F.2d 594

a ee a a eo re ee ee ee 14

NLRB v. Guy F. Atkinson Co., 195 F.2d 141
(9th Cir. 1952) (rehearing denied March 21,

1952), cert. den., 366 U.S. 908 (1961) ............ 15
NLRB v. Hartmann Luggage Company, 453 F.2d 178

SR NNR oir US ee 14
NLRB v. International Brotherhood, 225 F.2d 343

I Gs se o's cate SS ie = ee Sk as OK ew 13

ili

TABLE OF AUTHORITIES (continued)
Judicial Decisions (continued)
NLRB v. Majestic Weaving Co., 355 F.2d 854 (1966) .... 14

NLRB v. National Container Corp., 211 F.2d 525 (1954) .. 13
Petroleum Communications, Inc. v. FCC,

Be I oe oo cheb esarecceciia des 6,7
Retail, Wholesale & Department Store Union v.

NLRB, 466 F.2d 380 (D.C.Cir. 1972) ........ 11, 12, 14
SEC v. Chenery Corp., 318 U.S. 80 (1943) ............ 9
SEC v. Chenery Corp, 332 U.S. 194 (1947) ........ 9, 10
Thorpe v. Housing Authority of Durham,

he i cc cn, ES Se ee 10
TV 9, Inc. v. FCC, 495 F.2d 929 (D.C.Cir. 1974),

cert. denied, 419 U.S. 966 (1974)... ...........2... 4
Yakima Valley Cablevision v. FCC, 794 F.2d 737

ee A tol ore ee 12
Administrative Decisions
Anax Broadcasting, Inc., 87 FCC2d 483 (1981) ....... 3, 5
Azalea Corp., 31 FCC2d $61 (1971) ................ 3
Beacon Broadcasting System, Inc.,

ef). 3
C. H. Guenther & Son, Inc., 174 NLRB 1202 (1969) .... 14
Channel 32 Broadcasting Company,

eek 5
E & B Brewing Company, Inc., 122 NLRB 354 (1958)... . 14
Fisher Broadcasting Company, 30 FCC 177 (1961) ....... 3
Gainesville Media, Inc., 72 FCC2d 799

ee sr a oa ob MESS 5
Guy F. Atkinson Co. and J. A. Jones

Comemrecman Cb., SO MIRD 143... ce 15
Hartmann Luggage Company, 183 NLRB 1246

es 6 8 ae Pe ee ee 6 we eee Sew R 14

4

TABLE OF AUTHORITIES (continued)
Administrative Decisions (continued)

Majestic Weaving Co., Inc. of New York,

147 NLRB 859, 149 NLRB 1523 (1964)............ 14
Mid-Florida Television Corp. , 33 FCC2d |

ON eee fi eee eee ee 4
National Container Corporation, 103 NLRB 1544

CR a are Oe bk Pe bby o O06 6 uc tees 00's 13
Pacific Intermountain Express Company,

ff EE Cee UP eee 13
Policy Statement on Comparative Broadcast

po A ee 4
The Laidlaw Corporation, 171 NLRB 1366 (1968) ...... 14

Constitutions, Statutes and Regulations

re I a rua wou 626k 0 009 20 04 Sle l
ae EE so 5-0 60 6 80 0 00 oad ve 2, 12, 13
Sr Dy b's Sao Ch eel be een ae ;
Oe ES Co oo 6 0 0050s 60 ees er eae 2
Spa ss kW alale ea od eS Ns eS 2.
Fe «ORS OF Oe re ere eee 2,8
Cae Ges Oe Oe, I © 8k a aa 6S ER eee wel 2,8
Miscellaneous

Corpus Juris Civilis, Code 11.14.7 .......ccccceeees 8
Greenblatt, Judicial Limitations on Retroactive Civil

Legislation, 51 N.W. L. Rev. 540 (1956) ............. 8

Smead, The Rule Against Retroactive Legislation: A Basic
Principle of Jurisprudence, 20 Minn. L. Rev. 775 (1936) ... 8

In The
SUPREME COURT OF THE UNITED STATES
October Term, 1994

CARMEN MATIAS AND ANDREW N. WIMBISH, JOINTLY,
Petitioner,

Vv.

FEDERAL COMMUNICATIONS COMMISSION,
MONTGOMERY COUNTY MEDIA NETWORK,
INC., D/B/A IMAGISTS,
Respondents. '

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

OPINIONS BELOW

The decision under review is the judgment of the United
States Court of Appeals for the District of Columbia Circuit in
Carmen Matias, et al. v. Federal Communications Commission,
No. 93-1328 (App. 1a) declining to review the decision of that
government agency in Montgomery County Media Network, Inc.
d/b/a Imagists, 8 FCC Red. 2763 (App. 3a).

JURISDICTIONAL STATEMENT
The judgment was entered on October 17, 1994 (App. 1a).

Rehearing was not sought. This Court has jurisdiction pursuant to
28 U.S.C. §1254(1).

' The caption reflects all parties to the proceedings in the court below. The
petitioner is a joint venture of two individuals.

CONSTITUTION, STATUTES AND REGULATIONS

The constitutional provisions, statutes and regulations
involved in this case are: U.S. Const., art. I, §9, cl. 3; U.S.
Const., art. I, §10, cl. 1; 29 U.S.C. §160(e); 47 U.S.C. §§309(a),
402(b), 405. Relevant portions of the texts are set forth verbatim
in the Appendix at pages 72a-73a.

STATEMENT OF THE CASE

The petitioner, Carmen Matias and Andrew N. Wimbish,
Jointly, seeks a writ of certiorari to review the decision of the
United States Court of Appeals for the District of Columbia
Circuit (App. la) declining to review a decision of the Federal
Communications Commission ("FCC" or "the agency") denying
an application of the petitioner for construction permit for a new
television station in Conroe (Houston), Texas (App. 3a). Although
the petitioner had been the favored choice for grant of the
construction permit by the agency’s administrative law judge
(App. 59a) and review board (App. 30a), under a changed policy
announced and applied in the agency decision below, the FCC
disqualified the petitioner from consideration for failure to
establish good cause for an amendment of its transmitter site

proposal (App. 3a).

The former policy in dealing with good cause for
acceptance of amendments of transmitter site proposals, financial
amendments and other amendments that avoid disqualification
(while not improving the comparative posture of the party) was to
liberally allow such amendments so as to provide the FCC with a
wider group of competing applications to choose from, enhancing
the prospect of selecting the application that would most likely
result in programming service in the public interest (App. 67a).
The changed policy, to apply a strict standard for good cause
showings in support of curative amendments, was adopted on the
premise that this would shorten comparative proceedings and result
in the inauguration of new program service at an earlier date

(App. 67a). Both the former policy and the changed policy were
bottomed on the FCC’s statutory obligation to grant construction
permits for broadcast stations based upon a determination that such
a grant would serve “the public interest, convenience and
necessity." 47 U.S.C. §309(a) (App. 73a).

The former policy of leniency in dealing with curative
amendments in order to widen the choice of applicants was in
existence for approximately 30 years dating back to the 1950’s.
E.g., Beacon Broadcasting System, Inc., 19 Rad.Reg. (P&F) 927
(1959); Fisher Broadcasting Company, 30 FCC 177 (1961);
Azalea Corp., 31 FCC2d 561, 563 (1971); Crosthwait v. FCC,
584 F.2d 550, 555 (D.C.Cir. 1978); Anax Broadcasting, Inc. , 87
FCC2d 483, 489 (1981). The first notice that the petitioner had
that the leniency policy would be changed to a strict policy was in
1991 when the FCC announced such a policy change regarding
financial amendments (App. 61a). The FCC’s decision below in
1993 announced the change in policy as it relates to technical
amendments (App. 3a). Thus, the petitioner’s technical curative
amendment was filed (1986) five years before the FCC announced
its policy change regarding curative financial amendments (1991)
and seven years before the FCC announced its policy change
regarding curative technical amendments (1993).

The 16-month period between the filing of the petitioner’s
application and the filing of the curative technical amendment,
referred to in the court’s judgment (App. la), was largely
consumed by 11 months when the application remained pending
before the agency awaiting processing. * The amendment did not

2 The application was filed in November 1984 (App. 32a, caption). It was
processed and designated for hearing in November 1985 (App. 33a). The
amendment was filed in April 1986 and the hearing record was closed in May
1986 (App. 41a, 34a).

delay the proceeding a single day. * Accordingly, acceptance of
the amendment, by both the administrative law judge (App. 49a-
51a) and the review board (App. 25a-27a), did not frustrate the
statutory purpose of avoiding delays and hastening the provision
of new broadcast service. On the other hand, rejection of the
amendment did frustrate the statutory objective of having a choice
available for the selection of the most likely applicant to provide
program service in the public interest, i.e., reducing the field from
two applicants to one applicant, eliminating the petitioner who was
the first choice of the administrative law judge (App. 59a) and the
review board (App. 30a), leaving only the respondent here, who
was the last choice of the administrative law judge (App. 59a) and
the review board (App. 30a), for an uncontested grant of the
construction permit.

Commencing with the 1991 pclicy change regarding
curative financial amendments, and then with the 1993 policy
change regarding curative technical amendments, it was clear that
the FCC was strongly wedded to its new policy to be tough on
curative amendments and weed out applicants rather than
encouraging them to stay in comparative hearings (App. 61a, 3a).

Moreover, in dealing with its policies relative to broadcast
hearing proceedings, for decades the FCC has almost always (1)
adopted or changed policies in adjudications or other non-
rulemaking context and (2) has applied new or changed policies
retroactively. E.g., Policy Statement on Comparative Broadcast
Hearings, 1 FCC2d 393 (1965), comprehensive statement of
policies to govern hearings adopted without notice or comment and
applied retroactively; Mid-Florida Television Curp., 33 FCC2d 1,
18 (Rev. Bd. 1972) and TV 9, Inc. v. FCC, 495 F.2d 929

3 The seven year period from 1986, when the amendment was filed and
comparative hearings were held before the administration law judge, and
1993, when the FCC decided the case, reflected delays for a variety of
reasons that were unrelated to either the petitioner or the filing of its
transmitter site amendment (App. 4a).

4

(D.C.Cir. 1974), cert. denied, 419 U.S. 986 (1974), new policy
to grant a comparative preference to minorities adopted in agency
and court adjudications and applied retroactively; Gainesville
Media, Inc., 72 FCC2d 799, 805 (Rev. Bd. 1978), new policy to
grant a comparative preference to women adopted in agency
adjudication and applied retroactively; * Anax Broadcasting, Inc..,
87 FCC2d 483 (1981), changed policy to allow for two-tiered
ownership structures regarding comparative credit for management
by voting ownership parties, vastly impacting applications and
hearing cases, adopted in agency adjudication and applied
retroactively; ° Channel 32 Broadcasting Company, 6 FCC Rcd.
5188 (1991), changed policy to include educational television
services in determining whether commercial television applicants
will provide service to underserved areas, adopted in agency
adjudication and applied retroactively; the 1991 policy change
from leniency to strictness in accepting curative financial
amendments (App. 61a), was adopted in an agency adjudication
and has been applied retroactively.

Further, the agency is not known for punctuality in dealing
with petitions for reconsideration. In the court below, the
petitioner cited an example of a petition for reconsideration in a
broadcast licensing matter, for which the statute requires agency
action within 90 days, that was then pending for 20 months
notwithstanding inquiries from the petitioning party. (App. 70a).
As of this writing, the petition for reconsideration remains
pending, the delay is now 31 months and still counting.

Under all the foregoing circumstances, and given its
understanding of the law regarding court review of "retroactivity"

4 Until held unconstitutional 14 years later in Lamprecht v. FCC, 958 F.2d
382 (D.C.Cir. 1992).

> The FCC’s comparative credit for management by the voting ownership
parties was held to be arbitrary and capricious in Bechtel v. FCC, 10 F.3d
875 (D.C.Cir. 1993).

cases in agency adjudications, the petitioner elected to proceeding
directly to the court of appeals, rather than seek reconsideration of
the retroactive application of changed policy which had occurred
here.

The exclusive jurisdiction of the Court of Appeals for the
District of Columbia Circuit in this licensing case is derived from
47 U.S.C. §402(b). The sole basis for the appeal by the petitioner
was the error in announcing and applying the changed policy to it
without notice some five to seven years after the operative events
when the petitioner amended its application. Brief of Appellant
Carmen Matias and Andrew N. Wimbish, Jointly, filed June 17,
1994. The respondents argued that the appeal should be denied
for failure to raise this "retroactivity" issue below and also
advanced certain arguments relative to the merits of the
"retroactivity" issue itself. Briefs of FCC filed July 18, 1994
(appellee below) and Intervenor Montgomery County Media
Network, Inc. d/b/a Imagists filed August 2, 1994 (intervenor
below).

The court of appeals did not reach the merits of the
"retroactivity" arguments, denying the appeal for failure to raise
the "retroactivity" issue below (App. 1a). In support, the court of
appeals cited 47 U.S.C. §405 and its recent decision in Petroleum
Communications, Inc. v. FCC, 22 F.3d 1164, 1171 (1994).

47 U.S.C. §405 provides that a petition for reconsideration
is a condition precedent to judicial review where a party relies on
questions of fact or law on which the FCC "has been afforded no
opportunity to pass." (App. 73a). However, this provision, which
dates back to the beginnings of the agency itself some 60 years
ago, has long been held to codify court case law regarding
exhaustion of administrative remedies. Notwithstanding the
apparent unyielding language of the statute, that case law provide
for various situations in which a matter need not be raised with the
FCC before taking an appeal including situations where the agency
in reality had the opportunity to consider the matter or where its

predisposition to rule a given way was clear. That interpretation
of this statute is referred to in the Petroleum Communications
opinion relied on by the court of appeals, 22 F.3d at 1169-1170.

In Petroleum Communications, the court of appeals heid
that an appeal should be dismissed for failure to raise objections
to procedural errors by the FCC regarding the required content
and times of filing certain applications relative to cellular
radiotelephone service in areas not receiving existing cellular
service. This was a straightforward case of FCC rules and
requirements and an appeal therefrom. The court did not have
before it a case of "retroactive" adoption and application of a
changed policy in an agency adjudication, nor did the court
address the long-standing and contrary precedent relative to court
review of “retroactivity” issues to which we now address our
attention.

REASONS FOR GRANTING THE WRIT

The ruling of the court of appeals is contrary to or
inconsistent with decisions of this Court, with other decisions of
the Court of Appeals for the District of Columbia, and with
decisions of courts of appeal in a number of other circuits. The
ruling undermines the principle that the courts, not administrative
agencies, have the primary role in adjudicating the law of
"retroactivity," which is fundamental to our system of
jurisprudence. This Court has not heretofore addressed the precise
question that is now presented.

1. The importance of the law of "retroactivity" in relation
to federal administrative jurisprudence.

The law of "retroactivity" is a fundamental component of
our system of jurisprudence. It is the structure by which fairness
to individual parties is balanced against the needs of the
community or the nation as a whole in legislation, in case-by-case
adjudication and in administrative law which employs both the

legislative and the adjudicatory processes.

Concern with regard to retroactive application of laws to
parties having no prior knowledge of the legal effect at the time of
the operative facts has been traced to the Roman Code, which
provided that statutes should be construed prospectively in the
absence of an express provision to the contrary. Corpus Juris
Civilis, Code 11.14.7. This rule of construction was carried over
into the English law by Bracton and by Coke. Greenblatt, Judicial
Limitations on Retroactive Civil Legislation, 51 N.W. L. Rev.
540 (1956); Smead, The Rule Against Retroactive Legislation: A
Basic Principle of Jurisprudence, 20 Minn. L. Rev. 775, 776-77
(1936). It was reflected in our constitution, which prohibits the
enactment of ex post facto legislation by the Congress, U.S.
Const., art. I, §9, cl. 3, and by the States, ibid, art. I, §10, cl. 1.
From the very outset, this Court has devoted a substantial portion
of its time and energies to the law of retroactivity, commencing
with such early cases as Calder v. Bull, 3 Dall. (3 U.S.) 386
(1798) (interpreting the scope of the term "ex post facto” as used
in these constitutional provisions). Recent decisions by this Court
include, for example, James B. Beam Distilling Co. v. Georgia,
115 L.Ed.2d 481 (1991) (retroactivity in Article II court
adjudications) and Bowen v. Georgetown University Hosp., 488
U.S. 204 (1988) (retroactivity in agency rulemaking pursuant to
Congressional legislation).

The past 50 years has witnessed an explosive development
of administrative law jurisprudence, with the creation of many new
agencies, the expanded role of the executive departments, the
continuing adoption of new or revised legislative programs, and
the continuing adoption of new or revised agency regulations and
policies. In the process, trial examiners, internal review boards
and the top levels of decision-makers at the agencies turn out vast
quantities of adjudications, many of which are reviewed in the
courts. During this period of time, the docket of cases accepted by
this Court has regularly included federal administrative law cases,
as the needs of our nation continue to call for its ultimate judicial

determinations to guide and shape the lawful development of that
burgeoning process. We believe that such a need is reflected in
this case, to decide a question not previously considered by the
Court, to resolve a conflict between the case at bar and decisions
in various of the circuits, and to thusly clarify the respective roles
of the courts and the agencies in deciding "retroactivity" questions
of law.

2. Previous decisions of this Court do not resolve the
issue presented here.

The landmark decision of this Court on the law of
retroactivity in administrative agency adjudications is SEC v.
Chenery Corp, 332 U.S. 194 (1947). There, corporate officials
submitted a reorganization plan to the SEC for approval and while
that was pending they purchased stock of the corporation that
would give them an advantage under the proposed reorganization
plan. At the time of the operative facts, this did not violate any
SEC policy. However, in considering the actions of the Chenery
corporate officials, the SEC adopted a policy that such insider
trading activity should not be permitted. The company appealed to
the court of appeals, which held that the policy was not lawfully
adopted. This decision was on the merits of the adoption of the
policy. There was no consideration of a retroactivity issue at that
time. Chenery Corp. v. SEC, 128 F.2d 303 (D.C.Cir. 1942),
Circuit Judge Miller dissenting. This Court agreed that the policy
had not been lawfully adopted, expressed views regarding matters
which the agency should have considered and returned the case to
the agency for further proceedings. SEC v. Chenery Corp., 318
U.S. 80 (1943), Justices Black, Reed and Murphy dissenting,
Justice Douglas not participating. Again, no consideration was
given to the retroactivity issue.

The SEC considered the additional matters identified by
this Court and again decided to adopt the policy. The circuit court
reversed and held the SEC had done so unlawfully. As before, this
review was of the merits of the policy, not any retroactivity issue.

9

Chenery Corp. v. SEC, 154 F.2d 6 (D.C.Cir. 1946). This Court
reversed the circuit and upheld the lawfulness of the policy. In
addition, this Court for the first time considered and ruled on the
retroactivity issue as well. SEC v. Chenery Corp., supra, Justices
Frankfurter and Jackson dissenting, Justice Burton concurring, the
Chief Justice and Justice Douglas not participating. The Court
gave no indication that the retroactivity issue had been raised
below, or that it needed to know the views of the SEC. Rather,
the Court proceeded to delve into such facts and considerations
that it felt pertinent to balancing the contrasting interests — of the
public in an immediate application of agency policy, and of the
parties to whom a new policy had been applied retroactively.

The Chenery decision suggests that the courts need give
little or no deference to the views of administrative agencies in
deciding retroactivity cases. However, Chenery does not address
the issue of whether a party should be denied access to a court
which otherwise has jurisdiction to litigate a retroactivity question
because it was not explicitly raised by the aggrieved party before
the agency, to whom the retroactive implications were obvious
from the very nature of its action.

Neither do other opinions of this Court dealing with
agency adjudications. In NLRB v. Bell Aerospace Co., 416 U.S.
267 (1974), upholding a policy change by adjudication against an
argument that a rulemaking proceeding should have been
employed, while the agency below had in fact considered the
argument of the aggrieved party upon petition for reconsideration
of its initial decision, 196 NLRB 827 (1972), this was not
discussed or relied upon in the Court’s opinion. In Thorpe v.
Housing Authority of Durham, 393 U.S. 268 (1969), while civil
court litigation was in progress over an eviction from public
housing, a revised policy was adopted and applied to the situation
by the Department of Housing and Urban Development. The
retroactivity issue was addressed by the Supreme Court of North
Carolina and then by this Court without reference to any
proceedings before or deliberations by HUD regarding the pros

10

and cons of giving retroactive effect its revised policy. In FCC v.
WOKO, Inc., 329 U.S. 223 (1946) this Court reversed the court
of appeals and upheld action by the FCC denying a license
renewal application for a radio station for false statements to the
agency, notwithstanding the argument that this was an
"unannounced policy change” from prior cases in which false
statements had not enlisted license denial. Neither the opinion of
this Court, nor the majority and dissenting opinions of the court
of appeals, 153 F.2d 623 (D.C.Cir. 1946), Groner, C.J.
dissenting, made any reference to whether the "retroactivity" issue
had been argued before the agency or whether that mattered.

3. Previous decisions in the District of Columbia circuit
are at odds with the judgment entered here.

In Retail, Wholesale & Department Store Union v. NLRB,
466 F.2d 380 (D.C.Cir. 1972) the court of appeals held that the
agency erred in applying a changed policy (regarding an
employer’s reinstatement and back pay obligations tu former
strikers) because the benefits of an immediate application of that
new policy to the case at bar were outweighed by the detriment to
the parties who had relied on the earlier policy. Throughout the
Court’s opinion, there is no reference to any NLRB decision
below dealing with the law of retroactivity. The Court went to
work on that law itself, detailing five factors to be considered, and
conducting its own analysis of those five factors, saying, "Which
side of this balance preponderates is in each case a question of
law, resolvable by reviewing courts with no overriding obligation
of deference to the agency decision." 466 F.2d at 390.

In Clark-Cowlitz Joint Operating Agency v. FERC, 826
F.2d 1074 (D.C.Cir. 1987), before the entire panel, Judges
Mikva, Robinson and Edwards dissenting, the majority upheld a
retroactive change in factors in comparative proceedings for
licenses issued by FERC to operate hydroelectric power plants.
Again, throughout the entire text of the majority and dissenting
opinions, there is no reference to any decision by the agency

11

addressed to the law of retroactivity. Both opinions went right to
work on the five factors to be considered. The dissenting opinion
added the following comments to the statement in Retail,
Wholesale regarding the ability of the courts to decide retroactivity
issues for themselves:

Several additional principles emerge from cases in which
this court has reviewed agency decisions applying a new
standard retroactively. First, whether a new standard
should be applied is a question of law. Agencies possess
no particular expertise on the issue of retroactivity, and
reviewing courts in turn have "no overriding obligation of
deference” to an agency’s decision to give retroactive
effect to a new rule. [citing Retail, Wholesale]. Second,
agency decisions to apply an order retroactively must be
the product of rational analysis, and "the law requires that
an agency explain...how it determined that the balancing
of the harms and benefits favors giving a change in policy
retroactive application." Yakima Valley Cablevision v.
FCC, 794 F.2d 737, 746 (D.C.Cir. 1986). Third, an
agency’s failure to consider the less drastic alternative of
prospective application may be considered arbitrary and
capricious and thus constitute grounds for reversal. Jd.

826 F.2d at 1094.

In Local 900, Intern. U. of Elec., Etc. v. NLRB, 727 F.2d
1184 (D.C.Cir. 1984), the court of appeals refused to consider a
substantive argument (regarding superseniority rights) because the
argument had not been raised below, as required by a statute
applicable to that agency, Section 10(e) of the National Labor
Relations Act, 29 U.S.C §160(e), providing that issues must be
raised before the agency as a condition to taking an appeal from

12

the agency decision. ° However, the court of appeals did consider
"retroactive" issue, which had not been raised directly below, but
which was implied from the facts and circumstances. On this
score, the court stated: "Retroactivity is necessarily an issue any
time adjudication results in a new rule of law." 727 F.2d at 1193-
94.

4. Decisions in other circuits also are at odds with the
judgment below.

In the eighth circuit, the distinction between substantive
agency issues and "retroactivity" legal issues has been made clear
in NLRB v. International Brotherhood, 225 F.2d 343 (8th Cir.
1955). A substantive agency issue (seniority rights) was not
considered by the court of appeals because it had not been raised
below, following 29 U.S.C. §160(e). 225 F.2d at 346. However,
a retroactivity issue was considered, even though it had not been
raised below either. This is apparent from the text of the court’s
opinion, 225 F.2d at 346-48 and also from agency opinions in
which the trial examiner decided the case under the former policy,
the changed policy was applied in the decision of the Board, and
there is no Board decision reflecting any petition for
reconsideration of that decision. Pacific Intermountain Express
Company, 107 NLRB 837 (1954).

In the second circuit, the case of NLRB v. National
Container Corp., 211 F.2d 525, 534 (1954) is similar. The Board
made a policy change in its decision, reversing the Trial Examiner
who relied on the former policy, and there is no evidence from the
reported opinions that the aggrieved party sought reconsideration
under 29 U.S.C. §160(e), National Container Corporation, 103
NLRB 1544 (1953), nor is there any reference to such

® This provision, reproduced in App. at 72a, is similar to Section 405 of the
Communications Act, 47 U.S.C. §405, relied upon by the court below in the
instant case, reproduced in App. at 73a.

13

reconsideration at the agency in the text of the opinion of the court
of appeals. Yet, the court entertained and considered an appeal of
the "retroactivity" issue. Also in the second circuit, the case of
NLRB v. Majestic Weaving Co., 355 F.2d 854 (1966), agency
decisions reported in Majestic Weaving Co., Inc. of New York,
147 NLRB 859, 149 NLRB 1523 (1964), involved review of a
policy change where the aggrieved party did avail itself of seeking
reconsideration before taking the appeal. While the court of
appeals took this into account, there is nothing to indicate that the
court would have rejected the appeal for failure to raise the
“retroactivity” question in a petition for reconsideration at the
agency below.

Laidlaw Corporation v. NLRB, 414 F.2d 99 (1969)
(rehearing denied September 2, 1969), cert den., 397 U.S. 920
(1970), was decided in the seventh circuit. The Trial Examiner
applied former policy that was changed in the Board’s decision;
there was no reported reconsideration of that ruling, The Laidlaw
Corporation, 171 NLRB 1366 (1968), nor is such reconsideration
referred to in the text of the court’s opinion. The court of appeals
accepted and considered the appeal of the retroactive application
of changed policy.

The Laidlaw policy change was applied to various other
cases including the Retail, Wholesale case in the District of
Columbia Circuit referred to earlier. Other Laidlaw policy change
cases where the change was made by the Board and there is no
reported petition for reconsideration prior to taking an appeal
include C. H. Guenther & Son, Inc. v. NLRB, 427 F.2d 983 (Sth
Cir. 1970), agency action reported in C. H. Guenther & Son, Inc.,
174 NLRB 1202 (1969), and NLRB v. Hartmann Luggage
Company, 453 F.2d 178 (6th Cir. 1971), agency action reported
in Hartmann Luggage Company, 183 NLRB 1246 (1970).

To a similar effect (involving policy changes other than
the Laidlaw policy change) are NLRB v. E & B Brewing Company,
276 F.2d 594 (6th Cir. 1960), agency action reported in E & B

14

Brewing Company, Inc., 122 NLRB 354 (1958), and NLRB v. Guy
F. Atkinson Co., 195 F.2d 141 (9th Cir. 1952) (rehearing denied
March 2, 1952), cert den., 366 U.S. 908 (1961), agency action
reported in Guy F. Atkinson Co. and J. A. Jones Construction
Co., 90 NLRB 143. The Afkinson opinion draws the following
distinction between substantive agency issues and "retroactivity"
law issues:

When an agency’s determination, whether of fact, or of
law, relates to physical or economic facts, with respect to
which the agency’s experience is calculated to give it
special competence, there is reason for assuming that the
determination should, so far as possible, be regarded as
within the discretion of the agency. The matter now before
us, we apprehend, is not one of that kind. We deal with
a problem [retroactive application of new law] which
courts have frequent occasion to consider and upon which
we think it cannot be said that the board or commission
has superior opportunity for knowledge.

195 F.2d at 150-51.

5. None of the circuit court decisions expressly resolves
the issue presented here.

At least some of the circuit court decisions are premised
on the concept that the application of a new or revised policy in
an agency adjudication inherently raises the question of whether
that agency action should be applied "retroactively" to parties that
have proceeded with operative facts under a former policy.
Numerous circuit court decisions, in fact, consider a
"retroactivity" issue that was not raised at the agency below by a
petition for reconsideration of the agency adjudication announcing
the policy change. However, we have found no circuit court
decision addressed squarely to the issue presented here, i.e.,
whether agency review of the pros and cons of the “retroactive”
effect of its policy change is a prerequisite for court review of the

15

"retroactivity" question of law, or by other means. We suspect
that the reason for the absence of any such court holding is that
the courts, agencies and parties have generally assumed such to be
the law.

On the other hand, we have found no circuit court decision
-- before this one -- holding that a party is precluded from
appellate court review of a changed policy in an agency
adjudication for failing to raise the matter before the agency, e.g.,
by seeking reconsideration of the agency decision effecting the
retroactive policy change or in some other manner.

6. The time is ripe for the Court to resolve the
"retroactivity" issue presented in this case.

Accordingly, the time is ripe for this Court to resolve the
matter and this case presents the precise and narrow factual and
legal framework for this Court to do so, providing clear guidance
to all courts, agencies and parties involved in the ongoing, massive
program of administrative agency jurisprudence.

For the foregoing reasons, the writ of certiorari should
issue.

Respectfully submitted,

Gene A. Bechtel, Counsel of Record
Ann C. Farhat

Bechtel & Cole, Chartered
1901 L Street, N.W., Suite 250
Washington, D.C. 20036
202/833-4190

January 17, 1995 Counsel for the Petitioner

16

CONTENTS OF APPENDIX
Judgment, Case No. 93-1328 (D.C.Cir.
SE 2x SO ndebneeindidearintibedernevecess la

Montgomery County Media Network, Inc.
d/b/a Imagists, 8 FCC Red. 2763 (1993)........... 3a

Montgomery County Media Network, Inc.
d/b/a Imagists, 6 FCC Red. 7440

Ss MN Ha heantacdbintndnticevicctenser:ens 16a
DLBS Incorporated, 3 FCC Rcd. 6701

(Admin. Law Judge 1988)...................ceceee 32a
Aspen FM, Inc., 6 FCC Red. 1602 (1991)........... 6la

Friends University and New Life

Fellowship, Inc., Inquiry concerning status

of petition for reconsideration, File No.
BALED-910729HK, dated December 29, 1993....... 70a

Constitutional Provisions, Statutes and Regulations

U.S. CONST., ART. I, §9, CL. 3............ 72a
U.S. CONST., ART. I, §10, CL. 1........... 72a
Be is ED a vteniiccetiisaiidiscctaseren 72a
SF Re tes PUI siKitcccccnnvidisstiniasoness 73a
TF Ren IED Skvennkavisarensuventiseuses 73a

Pe EE Siidckddersnncdncisandsaasonsace 73a

Filed October 17, 1994; Amended October 18, 1994

UNITED STATES COURT OF APPEALS
For the District of Columbia Circuit

No. 93-1328 September Term, 1993
CARMEN MATIAS, ef al., APPELLANT,

Vv.
FEDERAL COMMUNICATIONS COMMISSION, APPELLEE

On Appeal from an Order of the
Federal Communications Commission

BEFORE: WALD, SENTELLE and ROGERS, Circuit Judges
JUDGMENT

This cause came to be heard on appeal from a decision
of the Federal Communications Commission, and it was briefed
and argued by counsel. The issues have been accorded full
consideration by the Court and occasion no need for a published
opinion. See D.C. Cir. Rule 36(b).

The Commission dismissed petitioners’ application for a
permit to construct a new television station because the
application lacked a suitable transmitter site, and petitioners had
not shown "good cause” to file a curative amendment over
sixteen months later. Petitioners contend that the agency’s
refusal to entertain their amendment reflects an impermissible
retroactive application of a new, stringent policy against late
filings.

Section 405 of the Communications Act of 1934, as
amended, provides that a petition to the FCC for
reconsideration is a condition preceent to judicial review when

the party seeking review "relies upon questions of fact or law
upon which the Commission...has been afforded no opportunity
to pass." 47 U.S.C. §405(2). Petitioners’ argument that the
Commission decision resulted from an improper retroactive
application of a new policy was first brought to the
Commission’s attention in petitioners’ brief to this Court; it is
therefore a "question{] of...law upon which the
Commission...has been afforded no opportunity to pass." We
have recently interpreted §405 to require that a similar claim be
presented to the agency before this Court would consider it.
Petroleum Communications, Inc. v. FCC, 22 F.3d 1164, 11171
(1994) (declining to reach the argument that a Commission
decision resulted from a discriminatory application of a
particular policy on the ground that the Commission had not
been given the "first crack" at it). It is therefore

ORDERED and ADJUDGED, by this Court, that in
No. 93-1328 the petition is dismissed.

FURTHER ORDERED, by this Court, sua sponte, that
the Clerk shall withhold issuance of the mandate herein until
seven days after disposition of any timely petition for rehearing.
See D.C.Cir. R. 41(a)(2).

Per Curiam
For the Court:

Ron Garvin, Clerk

[8 FCC Red 2763] FCC 93-196
Before the
Federal Communications Commission
Washington, D.C. 20554
MM Docket No. 85-331

In re Applications of

MONTGOMERY COUNTY MEDIA

NETWORK, INC.

d/b/a IMAGISTS File No. BPCT-841129KF
CARMEN MATIAS AND ANDREW

N. WIMBISH, JOINTLY File No. BPCT-841129KK
WOOD BROADCASTING

COMPANY File No. BPCT-841 129K W
G-A COMMUNICATIONS,

INC. File No. BPCT-841129LE

For Construction Permit
for New UHF Television Station.
Conroe, Texas

Adopted: April 13, 1993; Released: April 21, 1993
MEMORANDUM OPINION AND ORDER
By the Commission: Commissioner Marshall not participating.

1. The above captioned proceeding involving applications for
a new UHF television station in Conroe, Texas is pending before
the Commission. In an Initial Decision, Administrative Law Judge
Edward Luton disqualified Wood Broadcasting Company on a
financial issue, and preferred Carmen Matias and Andrew N.
Wimbish, Jointly (Matias-Wimbish) over Imagists and G-A
Communications, Inc. (GAC), and two other applicants that

3a

subsequently dismissed their applications, on the standard
comparative issue. DLBS Incorporated, 3 FCC Rcd 6710 (ALJ
1988).

2. GAC, Imagists, and Wood filed exceptions to the Initial
Decision with the Review Board. After hearing oral argument, the
Board remanded the proceeding to the ALJ "[t]o determine
whether JoAnn Garcia [a principal of GAC], lied to,
misrepresented facts to, or lacked candor with respect to the
Blanco, Texas comparative television (Channel 52) proceeding
[cite omitted]; and, if so, the effect thereof on the basic
qualifications of [GAC] to be a Commission licensee." /magists,
4 FCC Rcd 3749, 3752-53 { 13 (Rev. Bd. 1989). In a
Supplemental Initial Decision, Judge Luton disqualified GAC on
the misrepresentation issue. /magists, 6 FCC Rcd 2963 (ALJ
1991).

3. The Review Board affirmed both the ALJ’s disqualification
of GAC on the lack of candor and misrepresentation issues, and
those portions of the initial decision disqualifying Wood on the
financial issue and preferring Matias-Wimbish over Imagists on the
standard comparative issue. Jmagists, 6 FCC Red 7440 (Rev. Bd.
1991). GAC and Imagists seek Commission review of the Review
Board’s decision. Wood has not filed an application for review;
the Board’s denial of its application is therefore final.

4. Based upon our review of the pleadings before us, ' we
agree with the Board’s disqualification of GAC on the lack of

' The following pleadings have been filed: (a) application for review, filed
January 17, 1992, by Montgomery County Media Network d/b/a Imagists; (b)
application for review, filed January 22, 1992, by G-A Communications, Inc.;
(c) opposition to application for review, filed February 6, 1992, by the Mass
Media Bureau; (d) opposition to application for review of G-A
Communications, filed February 6, 1992, by the Mass Media Bureau; and (e)
consolidated opposition to applications for review, filed February 6, 1992, by
Carmen Matias and Andrew N. Wimbish.

4a

|

candor and misrepresentation issues. * We find, however, that
Matias-Wimbish’s April 14, 1986 site amendment was not
supported by good cause, as required by section 73.3522(b)(i) of
the Commission’s rules for post-designation amendments. We
therefore dismiss Matias-Wimbish’s application for lack of a
transmitter site and award the construction permit to Imagist,
inasmuch as it is the only basically qualified applicant.

5. Background: When Matias-Wimbish filed its application on
November 29, 1984, it specified a transmitter site that was 22
miles short-spaced. Alerted to the short-spacing by the filing on
January 16, 1985 of an Informal Objection by Association of
Maximum Service Telecasters (AMST), the applicant did not file
an amendment specifying a properly spaced site until April 14,
1986. In response to an "air hazard" determination from the FAA.
Matias-Wimbish filed a second amendment on May 14, 1986,
reducing the height of its proposal tower from 1150 to 750 feet.

6. The ALJ orally accepted the first amendment on May 13,
1986, but initially rejected the second amendment, holding that it
did not meet the requirement of 73.3522(b)(i) that engineering
amendments must be necessitated by events that the applicant
could not have reasonably foreseen. DLBS Incorporated, FCC
86M-2184 44 8-12 (July 8, 1986). In particular, the ALJ faulted
Matias-Wimbish for not discovering that, more than a year before
its April 1986 site amendment, the FAA had refused to approve
a competing applicant’s proposed location of an 1150 foot tower
at a nearby site and ultimately approved only a 745 foot tower at
that site. In the initial decision, however, the ALJ reversed himself
and accepted Matias-Wimbish’s May 1986 height amendment,
concluding that "Matias-Wimbish’s ‘carelessness’ had nothing to
do with its ability to anticipate the FAA’s later expressed

2 Because we agree that GAC is not basically qualified, there is no need to
consider its claim that the ALJ erred in concluding that Matias-Wimbish’s
proposal is comparatively superior to GAC’s.

5a

disinclination to approve a 1,150 foot tower." DLBS Incorporated,
3 FCC Red at 6720 44 129-30. Citing Women’s Broadcasting
Coalition, 59 RR 2d 730 (1986), the ALJ reasoned that "there was
a reasonable possibility of FAA clearance . . . until the time of the
FAA action." Id. at ¢ 130. Quoting extensively from the initial
decision, the Board upheld the ALJ’s acceptance of the
amendment. 6 FCC Rcd at 7450 44 43-45.

7. Discussion: For the reasons set forth below, we reverse the
Board and the ALJ on this point. We find that Matias-Wimbish’s
April 14, 1986 amendment specifying a transmitter in compliance
with the minimum mileage separation requirements of section
73.610 of the Commission Rules is not supported by good cause.
We therefore dismiss Matias-Wimbish’s application for lack of a
suitable transmitter site, without determining whether its
subsequent May 14, 1986 amendment reducing its antenna height
to secure FAA clearance also lacked good cause. ;

8. To establish good cause for a post-designation amendment,
"the applicant must demonstrate that it has acted with due
diligence, that the amendment was not required by its voluntary
act, that no additional issues or parties would be required, that the
hearing process will not be disrupted, that there will be no
prejudice to competing applicants, and that the applicant will not
gain a comparative advantage." California Broadcasting Corp. , 90
FCC 2d 800, 808 4 17 & n.28 (1982), citing Erwin O Conner, 22
FCC 2d 140, 143 4 7 (Rev. Bd. 1970). Section 73.3522(b)(i) of
the Rules provides that, in addition to the usual good cause
requirements, the applicant must also show that engineering
amendments are required by events that the applicant could not
have reasonably foreseen.

9. The April 14, 1986 site amendment meets some of these
criteria without difficulty in that its acceptance did not require the
addition of any parties or issues, and the amending applicant

would not gain a comparative advantage. However, the
amendment was required by the applicant’s voluntary act inasmuch

6a

as it initially selected a grossly short-spaced site. > Likewise, the
applicant failed to exercise due diligence in waiting fifteen months
after learning that its original site was short-spaced to amend to a
properly spaced site. Even the ALJ, who had orally accepted the
amendment, later acknowledged that the applicant had not
displayed diligence "of a high order" in this respect. DLBS
Incorporated, FCC 86M-2184 at { 7. He explained, however, that
"where an applicant is attempting to cure a potentially
disqualifying defect in its application, diligence should be
interpreted in light of the equities of the case." Jd. at { 5, citing
Anax Broadcasting, Inc., 87 FCC 2d 483, 489 (1981). Although
noting that "[iJt is difficult to find . . . any equities in favor of
Matias-Wimbish,” the ALJ found that the applicant had
nevertheless acted with due diligence because "this is not a
situation in which the applicant did absolutely nothing during the
passage of time." Jd. at { 7.

10. To the extent that the ALJ suggested that the diligence
standard is more lenient where an applicant seeks to cure a
potentially disqualifying defect, we have modified our former
practice of liberally accepting post-designation amendments that
cure disqualifying defects, such as the loss of a transmitter site or

> In Eugene Walton, 6 FCC Rcd 6071, 6075 { 16 (Rev. Bd. 1991), review
denied, 7 FCC Red 3237 (1992), the ALJ’s denial of an applicant’s request
for a waiver of the short-spacing rules was held to be reasonably foreseeable
(and the applicant thus failed to establish good cause for a site amendment
under section 73.3522(b)), given Commission precedent that such waivers are
granted only if suitable, properly spaced sites are shown to be unavailable and
strong public interest considerations are shown to support the waiver and
given the applicant’s failure to even attempt either showing. Like the
unsuccessful applicant in Walton, Matias-Wimbish cannot meet the
unforeseeability test of section 73.3522(b): It not only specified a site that was
22 miles short-spaced (Walton’s site was short-spaced by 35 meters), it also
neglected to request a waiver which, given the extent of the short-spacing,
would have likely been denied. Thus, the site amendment was required by
Matias-Wimbish’s voluntary act (i.e., specifying a short-spaced site) and the
need for that amendment was clearly foreseeable.

Ta

a financial commitment. ‘ Originally concerned with promoting
the broadest choice of applicants in an effort to obtain the
optimum in ultimate service to the public, we have tempered this
objective somewhat in view of our "responsibility to provide
service to the public in the most efficient, expeditious manner
possible. ° As we have previously stated, "[t]emporizing with
flawed proposals: has in the past disserved the public interest by
inordinately delaying the initiation of new service." ° This delay
"exact[s] an economic toll on both the Government and the
applicants," ’ in that "the public is deprived of a valued service,
and the ultimate licensee is deprived of the opportunity to provide
that service" during the selection process. ®

11. Thus, we do not allow "applicants . . . to inordinately delay
the processing of applications from applicants who are willing and
able to proceed with the prosecution of their applications." ° In
our view, defective proposals disserve the public interest, even if,
as in this case, any such deficiencies are remedied before the start
of the evidentiary hearings. In this regard, a competing party

* Aspen FM, Inc., 6 FCC Red 1602, 1603-04 44 12, 13 & n.5 (1991).
> Hillebrand Broadcasting, Inc., 1 FCC Red 419 ¢{ 2-3 (1986).
®° Chudy Broadcasting Corp., 58 RR 2d 133, 134-35 n.7 (1985).

” Proposals to Reform the Commission’s Comparative Hearing Process to
Expedite the Resolution of Cases, 6 FCC Red 157, 164 ¢ 53 (1991).

. Proposals to Reform the Commission’s Comparative Hearing Process to
Expedite the Resolution of Cases, 5 FCC Red 4050 { 3 (1990).

° Cuban-American Limited, 5 FCC Red 3781, 3782 4 5 (1990).

10 See, e.g., Eugene Walton, 6 FCC Rcd 6071 (Rev. Bd. 1991), review
denied, 7 FCC 3237 (1992), holding that a site amendment submitted well
before the start of the evidentiary hearings but ten months after the applicant

8a

i

has a valid interest in the prompt resolution of a proceeding that
is prejudiced if it must consider multiple proposals from a single
applicant. '' Indeed, any time and expense that an applicant
devotes to preparing for the evidentiary hearing based on an
opponent’s initial proposal is forfeited if that proposal is amended.
The clear waste of private and public resources that this entails is
exacerbated in multiparty proceedings where a site change by one
applicant affects the hearing preparations of a large pool of
competing applicants. This delays service to the public even if the
amendment does not require additional hearings, additional or
modified issues, or the addition of new parties. Liberally
permitting curative amendments further undermines our efforts to
reduce the time and money devoted to our comparative process to
the extent that it discourages future applicants from exercising the
maximum possible care in formulating their proposals.

12. Given our heightened concern with avoiding undue delays
that retard the provision of new service, we take this opportunity
to review what constitutes due diligence under section 73.3522(b).
As an initial matter, an applicant must show that it acted promptly
after it discovered, or it should have discovered, the potentially
disqualifying deficiency. '* Clearly, an applicant that sits idly by,

discovered the short-spacing was not supported by good cause.

\! See Shoblom Broadcasting, Inc., 93 FCC 2d 1027, 1031 { 6 (Rev. Bd.
1983), aff'd sub nom. Royce International Broadcasting Company, 820 F.2d
1332 (D.C. Cir. 1987).

'2 Compare Texas Communications Limited Partnership, 6 FCC Red 5191,
5193 4 20 (1991) (delay in amending to a new site is not excused where the
applicant had not bothered to check the status of its FAA application, relying
instead on its engineer to advise it of any deficiency) with Radio Lake Geneva
Corporation, 7 FCC Red 5586, 5589-90 44 13-14 (Rev. Bd. 1992), review
denied, FCC 93-155 4 2 & n.3 (rel. March 26, 1993) (applicant that chose to
“fight rather than switch” on the FAA’s tentative air hazard finding exercised
due diligence in amending within 30 days of the final Determination of Air
Hazard, where its dealings with the FAA were sufficiently reasonable, prudent

9a

either doing nothing or pursuing a course of action that is not
likely to resolve the problem expeditiously, lacks diligence. "

13. We recognize that some defects can be cured more readily
than others. Thus, how quickly an applicant must act in order to
establish diligence will necessarily vary depending on the facts of
each case. '* We have accorded the ALjs broad authority to
regulate the course of multiparty proceedings, permitting them to

and diligent to establish good cause for its site amendment); Harrison County
Broadcasting Co., 6 FCC Red 5819 (Rev. Bd. 1991), review denied, 7 FCC
Rcd 2993 (1992) (applicant exercised due diligence in amending to correct the
geographic coordinates of its transmitter site within 30 days of receiving
actual notice in the Hearing Designation Order that its engineer had plotted
coordinates outside of the actual boundaries of the property selected as its
site).

'3 See Texas Communications, 6 FCC Rcd at 5193-94 44 21-22 (applicant
that spent eight months looking for a site that would solve the FAA's
excessive height and EMI problems, rather than immediately reducing its
antenna height, lacked due diligence); Eugene Walton, 6 FCC Rcd 6071 (Rev.
Bd. 1991), review denied, 7 FCC Rcd 3237 (1992) (applicant that waited ten
months for action on its facially deficient waiver request, rather than
immediately amending to a properly spaced site, lacked due diligence);
Goodlettsville Broadcasting Co., 5 FCC Red 4593, 4593-94 { 8 (1990)
(applicant that chose to recalculate its original site based on new rules that it
knew, or should have known, were not yet effective, rather than amending to
a properly spaced site within the time prescribed by the ALJ, lacked due
diligence); Cuban-American Lid, 5 FCC Red 3781, 3782 44 10-12 (1990)
(applicant that sought after the ALJ’s deadline to amend to a new site, rather
than reducing its antenna height upon being advised by its engineer that the
FAA would not approve a tower that tall, lacked due diligence).

'* Compare Elijah Broadcasting, 3 FCC Red 5148 (Rev. Bd. 1988), review
denied, 5 FCC Red 5351 (1990) (site amendment accepted where the six
month delay in amending to a new transmitter site was due to special
problems - that is, the area’s rapid development, strict architectural
standards, and FAA considerations — in locating a complying site); with Texas
Communications, 6 FCC Rcd at 5193 ¢ 19 (site amendment rejected where no
reason offered at the hearing for an eight month delay in amending to new site
after the applicant learned of the FAA’s rejection of its original site).

10a

adopt appropriate procedures to facilitate the prompt performance
of their responsibilities. Cuban-American Limited, 5 FCC Rcd at
3782 9 5. As a result, the ALJs have discretion to decide in the
first instance whether an applicant has acted with sufficient
promptness upon learning of a deficiency in its original proposal,
and we will generally not substitute our judgment for that of a
presiding officer. We emphasize, however, that the general
guide!ine governing such determinations is clear -- that the agency
has a public interest obligation to provide new service to the
public as expeditiously as possible.

14. In view of the foregoing, we urge applicants, whenever
possible, to submit curative amendments no more than 30 days
after they learn, or should have learned, of the deficiency
requiring an amendment. '° An applicant waiting more than 30
days to file a petition for leave to amend should be prepared to
explain the need for additional time, and it may be asked to
document that, despite its failure to amend within 30 days, it took
immediate steps upon learning of the deficiency. '° We note
further that, in the absence of unusual circumstances, a delay of
more than six months has long been presumed to be excessive. "”

'S This is consistent with section 1.65 of the rules, which affords applicants
30 days in which to report any matter of decisional significance, and with
section 73.3522(b), which affords applicants 30 days after the designation
order to file amendments addressing any matter raised therein as a matter of
right and provides that amendments filed more than 30 days after the
designation order must be supported by good cause.

'6 See Capitol City Broadcasting Co., 6 FCC Red 5525 (Rev. Bd. 1991),
rev. denied, 7 FCC Rcd 2629 4 3 & n.2 (1992), in which we upheld the
dismissal of an application for not timely amending its financial proposal,
where the applicant had not documented its claim to have exercised due
diligence in obtaining new financing.

"7 California Broadcasting, 90 FCC 2d at 808 { 19, in which the
Commission agreed that the failure to amend to a new site for more than six
months would ordinarily not constitute due diligence, but nevertheless found

lla .

Therefore, an applicant seeking to amend more than six months
after the defect was, or should have been, discovered would have
a heavy burden of establishing due diligence.

15. Turning to the specific facts of this case, the ALJ found,
and the Board agreed, that Matias-Wimbish had demonstrated due
diligence because "this [wa]s not a situation in which the applicant
did absolutely nothing” upon learning of the short-spacing. DLBS
Incorporated, FCC 86M-2184 at { 7; Imagists, 6 FCC Rcd at
7451-52 n.6. While we do not question the validity of this
observation, '® we find that the “quantity and quality" of
Matias-Wimbish’s efforts to obtain a properly spaced site fall far
short of due diligence. '? It is undisputed that Matias-Wimbish

due diligence because the applicant began exploring new sites promptly after
the unforeseeable creation of a national park deprived it of its original site.
See also Belo Broadcasting Corp., 68 FCC 2d 1313, 1328 (1978) (six month
delay in filing a site amendment held not to constitute due diligence, given the
applicant’s continued reliance on a site that he knew was unavailable).

'8 Compare Texas Communications, 6 FCC Red at 5193 {4 20-21 (delay not
excused where the applicant had not bothered to check on the status of its
request for FAA clearance); Eugene Walton, 6 FCC Rcd 6071 (Rev. Bd.
1991), review denied, 7 FCC Rcd 3237 (1992) (applicant did not display due
diligence waiting 10 months to amend to a properly spaced site in filing a
facially deficient waiver — and waiting for action on that request — instead of
promptly amending to a properly spaced site); with Elijah, (delays attributable
to difficulties in locating new site are not fatal to a finding of due diligence).

'9 There is no merit, however, to Imagists’ claim that the Bureau should
have dismissed Matias-Wimbish’s application pursuant to section 73.3566(a),
which provides for the dismissal of applications that are determined to be
patently not in accordance with FCC rules unless accompanied by an
appropriate waiver request. (Matias-Wimbish specified a short-spaced site, but
it did not file a spacing waiver request.) In the case of television applications,
as opposed to FM applications, it is appropriate to accept a television
application specifying a short-spaced site, and make any waiver determination
relating to that site at the hearing. North Texas Media v. FCC, 778 F.2d 28,
34 (D.C. Cir. 1985); Kenter, 62 RR 2d 1573 (1986).

12a

delayed almost 5 months after the Hearing Designation Order,
FCC MM-0792 (November 13, 1985) - and 15 months after
AMST’s Informal Objection alerted it that the original site was
short-spaced -- before amending to a properly spaced site. As
noted above, even the ALJ, who accepted the amendment,
acknowledged that Matias-Wimbish had not displayed diligence of
a high order in this respect. Memorandum Opinion and Order,
FCC 86M-2184 (July 8, 1986). The Board, on the other hand,
found due diligence because, once the applicant learned of the
deficiency, it hired an engineering firm to find a new site and
"closely superintended their search for a site, contacting them
twelve times by telephone and six times by letter." 6 FCC Rcd at
7451-52 n.6.

16. We disagree with the Board’s characterization of these
efforts as constituting close supervision of the engineering firm’s
site search. Over a period of more than a year, Matias-Wimbish
claims to have contacted the firm a total of eighteen times (that is,
an average of less than twice a month). It does not allege that it
repeatedly reminded the firm of the urgency of this matter, let
alone explored the reason for the delay or discussed how the site
search might have been expedited. Nor does Matias-Wimbish
allege any special problems that would explain its 15-month delay
in amending to a new site, a length of time that far exceeds what
we have long considered excessive. Rather, it states that, after
receiving the Informal Objection in January 1985, it consulted an
engineering firm, which confirmed in February or March 1985
that the specified site was in fact short-spaced and recommended
that a new site be secured. At that time, the applicant hired the
engineering firm to find a new site, believing it to be in a better
position to negotiate with rural landowners than Wimbish who was
concerned that predominantly white rural landowners would be
unwilling to lease to him. The applicant alleges that the firm
contacted six landowners on its behalf, but that the firm did not
locate a suitable site until April 1986. In the 15 months that
elapsed until the site amendment was filed, the applicant
apparently did nothing more than urge the firm, through a series

13a

of letters and telephone calls, to pursue the matter.

17. We do not fault Matias-Wimbish for retaining an
engineering firm to assist in locating a new site. But, in the
absence of any special circumstance explaining why it took 15
months to find a new site, we cannot find that such retention, in
conjunction with the applicant’s relatively meager efforts to
expedite the firm’s site search, establishes due diligence,
particularly since none of the other applicants in this multi-party
proceeding appear to have experienced similar delays in finding
suitable sites. Thus, we reverse the ALJ’s ruling, deny
Matias-Wimbish’s April 14, 1986 Petition for Leave to Amend,
and reject its April 14 amendment. ” Lacking a suitable
fully-spaced site, Matias-Wimbish’s application is not grantable
and must therefore be dismissed.

18. ACCORDINGLY, IT IS ORDERED That, pursuant to 47
C.F.R. § 1.115(g) of the Commission’s Rules, the application for
review filed January 17, 1992 by Montgomery County Media
Network d/b/a Imagists IS GRANTED to the extent indicated
above and DISMISSED in all other respects, *' and that the
application for review filed January 22, 1992 by G-A
Communications, Inc. IS GRANTED in part and DENIED in part.

19. IT IS FURTHER ORDERED, That the ALJ’s ruling

» This case is distinguishable from Radio Associates, Inc., 6 FCC Rcd 2094
(Rev. Bd. 1991), where the Board, having rejected the claim that the applicant
was entitled to file an amendment as a matter of right, remanded the case so
that the applicant could make a good cause showing. In contrast, there was
never a question as to the need for a good cause showing in this case. Aware
that it was required to make such a showing, Matias-Wimbish singularly failed
to establish that it proceeded with due diligence. It is not entitled to a further
opportunity to bolster its showing at this late date.

2! Having concluded that Imagists is the only basically qualified applicant,
those portions of its application for review dealing with the comparative issue
are moot and have not been considered.

l4a

=

:

accepting the amendment, filed on April 14, 1986, by Carmen
Matias and Andrew N. Wimbish, Jointly IS SET ASIDE, the
petition for leave to amend IS DENIED, and that the attached
amendment IS REJECTED.

20. IT IS FURTHER ORDERED, That the Review Board’s
Decision, Imagists, 6 FCC Rcd 7440 (Rev. Bd. 1991), IS
MODIFIED, as set forth herein; that the grant of
Matias-Wimbish’s application (File No. BPCT-841129KK) IS SET
ASIDE; that the application filed by Carmen Matias and Andrew
N. Wimbish, Jointly (File No. BPCT-841129KK) IS DISMISSED;
that the application of Montgomery County Media Network d/b/a
Imagists (File No. BPCT-841129KF) IS GRANTED; and that the
application of G-A Communications, Inc. (File No.
BPCT-841129LE) IS DENIED.

FEDERAL COMMUNICATIONS COMMISSION

Donna R. Searcy
Secretary

15a

[6 FCC Red 7440] FCC 91R-112
Before the
Federal Communications Commission
Washington, D.C. 20554
MM Docket No. 85-331

In re Applications of

Montgomery County Media
Network, Inc., et al.,

d/b/a IMAGISTS File No. BPCT-841129KF
CARMEN MATIAS and ANDREW

N. WIMBISH, Jointly File No. BPCT-841129KK
WOOD BROADCASTING

COMPANY File No. BPCT-841 129KW
G-A COMMUNICATIONS,

INC. File No. BPCT-841129LE

For Construction Permit
for New UHF Television Station,
Conroe, Texas

Appearances

James L. Oyster, Esq. on behalf of Montgomery County Media
Network, Inc. et al, d/b/a Imagists; Ann C. Farhat, Esq. and
Howard W. Simcox, Esq. on behalf of Carmen Matias and Andrew
N. Wimbish, Jointly; Mark N. Uhlfelder, Esq., Mark F. Corriea,
Esq., Howard G. Stavit, Esq. and Philip V. Jackmauh, Esq. on
behalf of Wood Broadcasting Company; Donald E. Martin, Esq.
and Spencer W. Weisbroth, Esq. on behalf of G-A
Communications, Inc.; and Robert A. Zauner, Esq. on behalf of
the Mass Media Bureau.

16a

DECISION
Adopted: November 27, 1991; Released: December 23, 1991

By the Review Board: MARINO (Chairman), BLUMENTHAL,
and ESBENSEN.

Board Member ESBENSEN:

1. Now before the Review Board are the Supplemental Initial
Decision, 6 FCC Red 2963 (1991) (S.I.D.), and the Jnitial
Decision, 3 FCC Red 6710 (1988) (I.D.), of Administrative Law
Judge Edward Luton (ALJ). Also before us are the Exceptions of
G-A Communications, Inc. (G-A) to the S.I.D., a "Statement in
Support" of the S.1.D. filed by Carmen Matias and Andrew N.
Wimbish (Matias/Wimbish), and replies thereto filed by the
Commission’s Mass Media Bureau (Bureau) and Matias/Wimbish.
All the remaining captioned parties filed Exceptions and
appropriate replies to the I.D.

2. The proceeding below was ultimately heard on the following
(renumbered) issues (I.D., at paras. 1-2, 5-6):

1. To determine whether the applications of G-A
Communications, Inc. and Carmen Matias and Andrew N.
Wimbish, Jointly are consistent with the minimum mileage
separation requirements of Section 73.610 of the
Commission’s Rules and, if not, whether circumstances
exist which would warrant a waiver of the Rule.

2. To determine with respect to each of the applicants,
whether there is a reasonable possibility that the tower
height and location proposed by each would constitute a
hazard to air navigation.

[3]. To determine whether Wood Broadcasting Company
is financially qualified to construct and operate its

17a

proposed television station in Conroe, Texas.

[4]. To determine whether G-A has failed to disclose a
real party-in-interest to its application.

[5]. To determine the effect of the evidence adduced under
[4] above on the basic qualifications of G-A to be a
Commission licensee.

[6]. To determine the areas and populations which would
receive television service of 64 dBu (Grade B) or greater
intensity, together with the availability of other Grade B
television services in such areas, for the purpose of
determining whether a comparative preference should
accrue to any of the applicants.

[7]. To determine which of the proposals would, on a
comparative basis, best serve the public interest.

[8]. To determine, in light of the evidence adduced
pursuant to the foregoing issues, which of the applications
should be granted.

3. Subsequent to our initial review of the record and the hearing
of oral argument (on March 3, 1989), the Board was compelled to
remand this proceeding on the following basic qualifications issue
specified against G-A. See Imagists, 4 FCC Rcd 3749, 3752 (Rev.
Bd. 1989):

[9]. To determine whether JoAnn Garcia lied to,
misrepresented facts to, or lacked candor with the
Commission in the Blanco, Texas comparative television
(Channel 52) proceeding (MM Docket No. 85-269), Opal
Chadwell, 1 FCC Red 120 (ALJ 1986) (Initial Decision.)
2 FCC Red 5502 (Rev. Bd. 1987), (Decision), on review,
65 RR 2d 1498 (1989); and, if so, the effect thereof on
the basic qualifications of G-A Communications, Inc. to

18a

Es

be a Commission licensee.

4. In remanding this proceeding, the Board noted that the ALJ
had resolved Issues [4] and [5], supra, in G-A’s favor in the I.D.
(at paras. 140-143). Nevertheless, we recounted that (4 FCC Rcd
at 3749):

[T]he real-party-in-interest issue herein had its genesis in
the earlier proceeding of Opal Chadwell, 2 FCC Rcd 5502
(Rev. Bd. 1987), remanded on other grounds, 65 RR 2d
1498 (1989). There, applicant Dorothy O. Schulze and
Deborah Brigham, A General Partnership (Schulze and
Brigham) faced an issue to determine whether it
misrepresented or had lacked candor in reporting the
television broadcast applications of Schulze. In response
to the specific allegation that Schulze had failed to report
her ownership interest in the instant G-A application for
Channel 55 in Conroe, Texas, Schulze and Brigham
relied, in part, in the declaration of JoAnn Garcia,
president and sole voting stockholder of G-A. Garcia
testified in the Opal Chadwell proceeding that she did not
previously know Schulze, and had never contemplated
having her as a party to G-A’s application. However, the
ALJ in that proceeding disbelieved the testimony of both
Schulze and Garcia, as well as that of Richard Ozan, the
brother of both Schulze and G-A’s purported sole
non-voting (80% equity) stockholder, Elizabeth Anderson.
Instead, the Opal Chadwell ALJ disqualified Schulze and
Brigham for misrepresentation, finding (inter alia) that
Ozan had filed a number of television applications --
_ including the instant G-A application -- using various
females as false fronts. In reaching that determination, the
Opal Chadwell ALJ specifically found that Garcia’s
testimony about her own participation in the instant G-A
application was a "web of lies." Opal Chadwell, 1 FCC
Red 120, 126 (ALJ 1986). Subsequently the Board
affirmed the ALJ’s disqualification of the Schulze and

Pe ste i Nae Mg i Na i fad UPR RES Be 6 Bate! ‘

19a

Brigham applicant, holding that the "case turns on the
patently misleading testimony presented by Schulze. . .
and Garcia concerning their purported extensive
participation in the preparation and prosecution of the
applications and the absence of any meaningful
participation by Richard Ozan." Opal Chadwell, 2 FCC
Red at 5509.

5. Before returning this proceeding to the ALJ, the Board
requested the parties to file supplemental briefs addressing the
question of the applicability of the doctrine of collateral estoppel
to the real-party-in-interest issue. See Memorandum Opinion and
Order, 4 FCC Rcd 2609 (Rev. Bd. 1989). The applicability of this
doctrine was negatively resolved in our remand Order, 4 FCC Rcd
at 3751, and we there further observed:

Despite the established inapplicability of collateral estoppel
here, we must now address the residual question of
whether Garcia did, in fact, lie as a witness in the Opal
Chadwell proceeding; and, if so, what effect such
misrepresentation has upon G-A’s basic qualifications to
be a licensee. See generally Character Policy Statement,
102 FCC 2d 1179, 1188-1191, 1195-1196, 1210-1211,
1227-1229 (1986). In the Conroe I.D., paras. 107-125,
140-143, the ALJ reviewed the testimony of Garcia and
former G-A counsel, Thomas L. Root. In essence, Garcia
testified that she was the sole active "real party" behind
G-A’s application, and that Richard Ozan (brother of
G-A’s purported limited partner Elizabeth Anderson) had
no role whatsoever in prosecuting the application. Root
testified that he did not recall whether or not he had
certain conversations with Garcia, Ozan, and Anderson,
and he claimed he did not recall the content of those
conversations and various other important matters
concerning the application. The ALJ found Garcia’s
testimony “believable,” and _ resolved the
real-party-in-interest issue favorably to G-A. Jd., para.

20a

143. Garcia’s Conroe testimony was essentially replicative
of the testimony she gave in the Opal Chadwell
proceeding, which testimony was found in that Jnitial
Decision to be a "web of lies," and wholly refuted by
contrary testimony given by Root, Ozan, and Ron Baptist.
Opal Chadwell, 1 FCC Rcd at 124-126. The Commission
cannot blithely ignore an obvious negative "predicative
judgment[ ] relating to an applicant’s propensity to deal
honestly with the Commission and to comply with our
rules and policies." Character Policy Statement, 102 FCC
2d at 1232. Therefore, we shall remand this proceeding to
the presiding ALJ on an issue to determine whether, in the
Opal Chadwell proceeding, Ms. Garcia lied as a witness;
and, if so, the effect thereof upon G-A’s basic
qualifications to be a licensee. Because, as noted above in
paragraph 2, the Opal Chadwell Decision found that
Richard Ozan ran an “application mill" of which the
instant G-A application appeared to be a product, and the
existence of the "mill" was reconfirmed at oral argument
by G-A’s current counsel, we invite the Commission’s
Mass Media Bureau to participate fully in the remanded
proceeding in order to protect the integrity of the
Commission’s processes. See generally Revision of
j Application for Construction Permit for Commercial
Broadcast Station (FCC Form 301) (Gen. Docket No.
88-328), Report and Order, FCC 89-110, released April
20, 1989; Inquiry Into Alleged Abuses of the Commission’s
Processes, 3 FCC Red 4740 (1988).

tne hated tase ae ORK Aer Ra a DS

In his S.I.D., the ALJ resolved Issue [9] against G-A and found
that applicant unqualified to be a Commission licensee. * * *

[material unrelated to the _ instant petition omitted]

21a

IMAGISTS

38. Imagists is a purported Texas limited partnership. The
"general partner" is Montgomery County Media Network, Inc.
(Montgomery), a Texas corporation. The "limited partner" of
Imagists is Humanity Interested Services, Inc. (HIS), a non-profit
tax exempt Texas corporation. At the time of hearing,
Montgomery stock was wholly owned by Dr. Rhonda Saldivar,
President (50%), and Alan William Rossing, Vice
President/Secretary (50%). Montgomery’s total capital contribution
requirement was $ 1,000, with $ 500 each to be provided by
Saldivar and Rossing. However, none of these sums has been
tendered. I.D., paras. 25-28.

39. The shares of profits or other income accruing to Imagists
are proposed to be distributed as follows: Montgomery, 1%; HIS,
99%.1.D., para. 29.

40. Saldivar and Rossing both claim full-time 100% integration
credit, and both seek preferences as minorities. Both are area or
local residents. However, the ALJ ultimately determined that
Imagists was a sham applicant, entitled to less than 1% ownership
integration into management credit. * In so doing, he determined
the following (to which Imagists, as will be discussed, infra, has
generally not excepted) (I.D., paras. 151-156):

The driving force and controlling principal behind
Imagists is Charles Johnson, executive director of the
limited partner, HIS. Charles Johnson is the minister of
the Evangelistic Temple in Conroe, Texas. (Tr. 171).
Under the name of Evangelistic Temple, Mr. Johnson was

> On the "B cut-off” date, Montgomery had three shareholders (each
| purportedly owning a 1/3 interest): Saldivar, Rossing, and Frank Garza.
Garza, originally proposed as President of Montgomery, resigned in
| December 1985. Thus, Saldivar and Rossing now each claim a 50%
ownership interest.

22a

———————————

the original petitioner to have Channel 55 allocated to
Conroe. (Tr. 172). Without consulting either Saldivar or
Rossing, Johnson decided that Imagists would be
structured as a limited partnership. (Tr. 121). In the
Articles of Incorporation filed for the general partner,
Montgomery County Media Network, Charles Johnson
was named as its sole director (Tr. 108), and is still
identified as its resident agent. (Tr. 108). The address
shown on Imagists’ FCC application is "200 Avenue J,
Conroe, Texas, 77301," which is the location of the
offices of HIS. (Tr. 94). In Imagists’ Certification of
Limited Partnership, the address shown for the general
partner is a post office box rented and used by HIS.

Charles Johnson’s involvement in the prosecution of the
Imagists application is to be contrasted with lack of
involvement of Saldivar and Rossing. Both Rossing and
Saldivar were invited to join the applicant after Imagists’
structure had already been decided upon. Neither Rossing
nor Saldivar took part in the preparation and filing of the
application or in the hiring of Imagists’ communications
counsel, consulting engineers, or FAA consultant. (Tr.
92-3, 134-5). Rossing and Saldivar did not know one
another prior to the filing of the application. (Tr. 127).
Saldivar was invited to join by Charles Johnson’s brother,
also a director of HIS. (Tr. 89). Rossing was invited to
join by Charles Johnson after Johnson learned that Rossing
was an American Indian. (Tr. 165). Rossing agreed to
help out in whatever way Johnson saw fit, although he had
no idea of what his involvement might be and was not told
that he would be involved in a managerial capacity at the
station.

While Saldivar and Rossing have each served as secretary
of Montgomery County Media Network, neither has
prepared any minutes of its corporate meetings. (Tr. 97-8,
147). The minutes are prepared by the secretary for HIS.

23a

(Tr. 97-8). The original minutes are retained by Charles
Johnson. (Tr. 148-9). The positions Rossing and Saldivar
are to have at the proposed station were decided upon in
a conference phone call between Rossing, Saldivar,
Charles Johnson and communications counsel. That
decision was made in January 1986, a year and two
months after the Imagists application was filed. Neither
Saldivar nor Rossing played any part in securing FAA
tower approval, which was handled by Charles Johnson's
son, Dowen, the Assistant Executive Director for HIS.
(Tr. 111).

Dr. Saldivar, president of the general partner, did not
know what a public inspection file was (Tr. 101-2), did
not know how many shares of stock she was entitled to
(Tr. 108), and did not know whether money provided by
HIS was to be considered a loan or a contribution to
capital. (Tr. 113-4). Mr. Rossing did not know whether
Imagists had a bank account (Tr. 152), did not know what
the general partners’ liability would be in a law suit (Tr.
158), and has never received correspondence directly from
communications counsel. (Tr. 154).

Viewed collectively, the foregoing facts wholly undermine

Imagists’ representation that it has and will function as a
bona fide limited partnership. Saldivar and Rossing have
done nothing more than loan their names and minority
status to Charles Johnson for his use in obtaining a
television station. The contention that Saldivar and
Rossing will have exclusive managerial control of the
station while Charles Johnson assumes a non-participating
role is not believed.

41. In its Exceptions, Imagists does not substantially contest any
of the specific findings and conclusions of the ALJ. Instead, it
merely argues that where there is a non-profit entity in a
Commission application (here, HIS is purportedly an educational

24a

$$$ EE Te Te Ne EG! Sul Wants aetetinantes

institution), "the suppositions made in the business context are not
applicable" for determining whether an applicant is a sham.
Imagists also attempts to bolster its position by claiming that
"Johnson would be a good applicant in his own right" and would
be "100% locally owned with extensive civic and religious
activities." Imagist Exceptions at p. 13. However, we note in
passing that this argument ignores the fact that Johnson is already
active in HIS (which operates a school in Conroe), and is its
Executive Director. He is also Pastor of Evangelistic Temple of
Conroe. I.D., para. 45. Further, no claim is made that if Johnson
would have been the sole principal he would have sought full-time
integration credit, or would have been entitled to a minority
preference. Conversely, we believe that the ALJ’s conclusion is
directly on point: "Saldivar and Rossing have done nothing more
than loan their names and minority status to Charles Johnson for
his use in obtaining a television station.” See para. 42, supra.
Indeed, Dr. Saldivar did not know Johnson before being invited
to participate in Imagists’ application; and Rossing had not even
spoken with Saldivar at the time the application was filed. I.D.,
paras. 33, 42.

42. We affirm the ALJ that Imagists is just another prototypical
sham of the type found in such recent cases as Evansville Skywave,
Inc., 6 FCC Red 5373 (Rev. Bd. 1991). See also Poughkeepsie
Broadcasting Limited, 6 FCC Rcd 2497 (1991); Metroplex
Communications, Inc., 5 FCC Rcd 5610 (1990), aff'd per
judgment sub nom. South east Florida Broadcasting Limited
Partnership v. FCC, No. 90-1482 (D.C. Cir. October 28, 1991).
As a result, Imagists is entitled to no integration credit
whatsoever. Royce International Broadcasting, 6 FCC Rcd 2601
(1991).

CARMEN MATIAS and ANDREW N. WIMBISH
43. Section 73.610 (short-spacing) and air hazard issues (Issues

1 and 2) were designated against Matias/Wimbish. Subsequently,
Matias/Wimbish submitted a petition for leave to specify a new,

25a

properly spaced site that was different from the site originally
specified in its application. In this amendment, Matias/Wimbish
specified a tower height of 1150 feet. Matias/Wimbish indicated,
in a supplement to the petition for leave to amend filed April 17,
1986, that another applicant herein (Wood) had proposed the same
site, and that FAA approval had been issued to Wood.
Matias/Wimbish indicated its belief that it, too, would soon obtain
FAA approval (Tr. 390-391). This amendment was accepted at
hearing; however, Matias/Wimbish subsequently learned that, in
fact, Wood had never obtained FAA approval for its 1150 foot
proposal; rather, a height reduction (to 750 feet) was required.
(Tr. 293). Thus, this May 14, 1986 amendment to reduce the
proposed tower height was rejected by the ALJ. See Memorandum
Opinion and Order, FCC 86M-2184, released July 8, 1986. The
ALJ, noting that the May 14, 1986, amendment was required
because of "careless and erroneous reliance on what it unjustifiably
believed to be the proposal of a competitor,” ruled that
Matias/Wimbish had failed to demonstrate good cause for
acceptance of its amendment. As a result, in a further Order, FCC
86M-2183, released July 8, 1986, the ALJ also denied
Matias/Wimbish’s May 14, 1986 Motion for Partial Summary
Decision (where Matias/Wimbish had sought summary decision of
the short-spacing and air hazard issues). I.D., paras. 47-48.

44. Subsequently, however, the ALJ revisited his prior actions
concerning the Matias/Wimbish tower site amendment, and in his
I.D. (at paras. 130-131) specifically held:

By its May 14, 1986 petition, Matias/Wimbish sought
only to reduce its antenna height to obtain FAA approval,
and it should have been permitted to do so. The petition
was rejected because Matias/Wimbish’s "significant
carelessness" in proposing a 1,150 foot tower in the blind
hope that the FAA would approve that height was
inconsistent with the notion of unforeseeability. That
analysis was in error. Matias/Wimbish’s "carelessness"
had noihing to do with its ability to anticipate the FAA’s

26a

En io she aban ate wD

later-expressed disinclination to approve a 1,150 foot
tower. Nothing that Matias/Wimbish did, or failed to do,
caused the FAA action to be foreseeable. Until the time of
the FAA action, there was a reasonable possibility of FAA
clearance (Women’s Broadcasting Coalition, 59 RR 2d
730) and, consequently, no reason for Matias/Wimbish to
have "foreseen" anything else.

Good cause is otherwise shown for Matias/Wimbish’s May
14, 1986 amendment. The amendment: (a) is not
voluntary in nature; (b) confers no comparative advantage;
(c) does not prejudice any party; (d) does not disrupt the
proceeding; (e) does not require the addition of issues or
parties; and (f) was diligently filed.

Memorandum Opinion and Order, FCC 86M-2184
released July 8, 1986, is vacated; the Petition of Carmel
Matias and Andrew N. Wimbish, Jointly, for Leave to
Amend, filed May 14, 1986 is granted, and the
amendment is accepted. Order, FCC 86M-2183, released
July 8, 1986, is also vacated; the Motion for Leave to File
Motion for Partial Summary Decision and Motion for
Partial Summary Decision, both filed May 23, 1986 by
Carmen Matias and Andrew N. Wimbish, Jointly, are
granted, and the Section 73.610 issue designated against
the applicant is resolved in its favor.

The presiding officer officially notices Aeronautical Study
No. 86-ASW-0898-OE submitted as Appendix A to the
Reply of Matias/Wimbish to Oppositions to Petition for
Leave to Amend filed on June 3, 1986. Therein, the FAA
approved Matias/Wimbish’s transmitter site location and
tower height at 750 feet above ground level. The air
hazard issue designated against Matias/Wimbish is
resoived in its favor.

27a

a
nm
j

45. All the remaining captioned parties except to the ALJ’s
resolution of this matter. However, we agree that, under the
particular circumstances here present, the ALJ’s analysis is
correct. We agree that until the entire FAA process had run its
course, there remained at least a "reasonable possibility” of final
FAA determination of no hazard at the site. See Women’s
Broadcasting Coalition, supra. ° Issues 1 and 2 are resolved in

° In addition to its challenges concerning the ALJ’s reconsideration of the
Matias/Wimbish May 14 amendment, Imagists excepts to the ALJ’s
acceptance of their original April 17, 1986 amendment curing the
short-spacing deficiency. It argues that the Commission was overly lenient in
even accepting Matias/Wimbish’s application; that, in comparable cases, the
Commission has rejected short-spaced applications unaccompanied by waiver
requests, citing North Texas Media v. FCC, 778 F.2d 28 (D.C. Cir. 1985);
and, that the ALJ should also have rejected the amendment here. Without
addressing Imagists’ remarks concerning the Commission or HDO, see
generally, Frank H. Yemm, 39 RR 2d 1657 (1977), Imagists’ reliance on
North Texas Media is misplaced. There, the court upheld a Commission order
denying a waiver request of the minimum distance separation rules where a
suitable non-short-spaced site was available. Here, in contrast,
Matias/Wimbish never sought a waiver, nor was it aware that the site was
short-spaced to the reference point for another assigned television channel. Its
consulting engineer prepared the engineering portion of the application without
indicating a short-spacing problem or other deviations from Commission
requirements. Matias/Wimbish’s Petition for Leave to Amend, filed April 14,
1986, at 1 Learning of the short-spacing allegation, Matias/Wimbish hired a
new engineering firm. Jd., at 2. Wimbish, who is an African-American,
determined that it would be prudent to have the engineering firm deal with the
landowners in the rural Texas areas to obtain a new site. Jd. However, he
closely superintended their search for a site, contacting them tweive times by
telephone and six times by letter. Jd., at 3. They spoke with at least six
different landowners before securing the approval of two different landowners
on adjoining parcels of property used for the site. Matias/Wimbish
Supplement, filed April 17, 1986 (affidavit of consulting engineer).
Matias/Wimbish’s efforts are in direct contrast with those found in Texas
Communications Limited Partnership, 6 FCC Red 5191, 5193 (1991), where a
failure to inquire about the status of a site was fatal to a good cause showing.
See also Mableton Broadcasting Co., Inc., 5 FCC Red 6314, 6320-6321 (Rev.
Bd. 1990) (applicant diligent where time was necessary to negotiate even
though efforts ultimately were unsuccessful). Imagists’ exception is denied. As

28a

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favor of Matias/Wimbish.

46. With respect to the comparative aspects of Matias/Wimbish,
the ALJ awarded 100% integration credit for both individual’s
promise to work full-time at the proposed facility. Their proposal
was "substantially enhanced" by the minority status of both
principals, and the fact that Matias is female. Wimbish lives in the
proposed service area, and has been active in area civic activities;
both Matias and Wimbish propose to move to Conroe. Wimbish
also received a preference for past broadcast experience, and
neither party has media interests. See Policy Statement on
Comparative Broadcast Hearings, 1 FCC 2d 393 ( 1965).

47. None of the captioned parties (save G-A) excepts to the
ALJ’s comparative evaluation of Matias/Wimbish. G-A argues that
there was insufficient “documentation” of the partnership
arrangement between the two principals and, as a result,
Matias/Wimbish is entitled to no integration credit whatsoever.
G-A Exceptions, pps. 17-22. In reply, Matias/Wimbish notes that
(1) in its proposed findings of fact and conclusions of law filed
with the ALJ on July 21, 1986, G-A averred that Matias/W imbish

for the May 14, 1986 amendment to reduce the Proposed tower height to
secure FAA clearance, the competing parties cannot seriously complain of the
ALJ's ultimate action permitting the amendment. Arguably, Matias/Wimbish
may have been slightly remiss in initially concluding that Wood’s tower at a
similar height and location had received FAA clearance, but the applicant
quickly corrected its error less than 30 days after learning of its
misunderstanding. Moreover, on July 10, 1986, two days after the original
rejection of the May 14 amendment, the ALJ by Order, FCC 86M-2234 (as
corrected), allowed Wood to amend its application to reduce its proposed
tower height from 1145 feet to 745 feet. (G-A, too, was permitted to proffer
its FAA clearance afterwards, i.e., on July 18, 1986. I.D., para. 144.)
Cuban-American Limited, 5 FCC Red 3781, 3782 (1990), cited by G-A as
Support for rejection of Matias/Wimbish’s amendment is inapposite. There,
the Commission upheld an ALJ’s discretion to establish a time limit for
perfecting site proposals. Here, the ALJ was more lenient, and indeed
permitted G-A to submit its FAA clearance even after the close of the record.
These additional exceptions are denied.

29a

Oc ales SN lea

|

"earn 100% full-time quantitative integration. Both partners have
pledged to work at the station on a full-time basis. . . ."; (2) both
principals testified at hearing that they each hold their respective
interests and are each proportionately liable for all prosecution
costs, and will share profits and losses accordingly, and
partnership votes will be made on a 51%/49% basis. See Tr.
310-314, 341-342, 365-366, 369-370; (3) the principals have
consistently reported to the Commission and the competing parties
their structure and ownership interests; and (4) they intend to
incorporate upon grant of the construction permit.

48. The ALJ also determined that there was a letter (dated
February 18, 1985) from Matias to Wimbish stating that they are
general partners, describes their respective shares, and expresses
an agreement that both parties will leave current employment
positions to devote full-time to the proposed station. See I.D.,
para. 49. This letter was not introduced into evidence, but was
read into the record. See Tr. 311. At the same time at hearing,
Matias confirmed that the principals had subsequently entered into
a full partnership agreement dated February 18, 1985, and was
executed by both Matias and Wimbish. /d. In light of the
foregoing, G-A’s exceptions will be denied.

CONCLUSIONS

49. Both Wood and G-A are disqualified. Imagists is a sham
applicant, entitled to no integration credit whatsoever. As a result,
the comparative coverage issue (Issue [6]) is of no moment with
respect to G-A (and no new first service to a "white" area is
proposed). As the only applicant entitled to any comparative
preferences pursuant to the Commission’s Policy Statement,
Matias/Wimbish clearly prevails here and will be awarded the
construction permit at contest.

50. ACCORDINGLY, IT IS ORDERED, That the applications

of Montgomery County Media Network, Inc., et al., d/b/a
Imagists (File No. BPCT-84129KF); Wood Broadcasting Company

30a

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OR PAS Te GIDEA aera Oe) RS Py OVE! ee SO Wie

(File No. BPCT-841129KW); and G-A Communications, Inc.
(File No. BPCT-841129LE) ARE DENIED; and,

51. IT IS FURTHER ORDERED, That the application of
Carmen Matias and Andrew N. Wimbish (File No.
BPCT-841129KK) IS GRANTED. ’

FEDERAL COMMUNICATIONS COMMISSION

Eric T. Esbensen

Member, Review Board

7 The release of this document was delayed by the late reassignment to a
different Board Member.

3la

[3 FCC Red 6710] FCC 88D-38

Before the
Federal Communications Commission
Washington, D.C. 20554

MM Docket No. 85-331
In re Applications of
DLBS INCORPORATED File No. BPCT-840920KJ

Montgomery County Media
Network, Inc. et al.

d/b/a IMAGISTS File No. BPCT-841129KF
CARMEN MATIAS AND ANDREW

N. WIMBISH, JOINTLY File No. BPCT-841129KK
CONROE BROADCASTING

LIMITED PARTNERSHIP File No. BPCT-841129KV
WOOD BROADCASTING

COMPANY File No. BPCT-841129KW
G - ACOMMUNICATIONS,

INC. File No. BPCT-841129LE

For Construction Permit
Conroe, Texas

Appearances

George R. Borsari, Jr., and Howard W. Simocox, Jr., on behalf
of DLBS Incorporated; James L. Oyster, on behalf of Montgomery
County Media Network, Inc. et al, d/b/a Imagists; Ann C.
Farhat0, on behalf of Carmen Matias and Andrew N. Wimbish,
Jointly; Richard J. Bodorff, David D. Oxenford, Janet M. Evans,
Carroll John Yung, and Susan E. Borke, on behalf of Conroe
Broadcasting, Limited Partnership; Howard G. Slavit, and Philip
V. Jackmauh, on behalf of Wood Broadcasting Company; and
Donald E. Martin, on behalf of G-A Communications, Inc.

32a

ices arene eeeientinenemmmmeiiliie

INITIAL DECISION OF
ADMINISTRATIVE LAW JUDGE
EDWARD LUTON

Issued: November 8, 1988; Released: November 17, 1988
I. PRELIMINARY STATEMENT

1. This proceeding involves the mutually exclusive applications
for a new television station in Conroe, Texas, filed by Conroe
Broadcasting (Conroe), Wood Broadcasting Company (Wood),
DLBS Incorporated (DLBS), Carmen Matias and Andrew N.
Wimbish, Jointly (M&W), Montgomery County Media Network,
Inc. et al. d/b/a Imagists (Imagists), and G-A Communications,
Inc. (G-A). The Designation Order, MM-0791, released
November 13, 1985, specified the following issues for hearing:

1. To determine whether the applications of G-A
Communications, Inc. and Carmen Matias and Andrew N.
Wimbish. Jointly are consistent with the minimum mileage
separation requirements of Section 73.610 of the
Commission’s Rules and, if not, whether circumstances
exist which would warrant a waiver of the Rule.

2. To determine with respect to each of the applicants,
whether there is a reasonable possibility that the tower
height and location proposed by each would constitute a
hazard to air navigation.

3. To determine which of the proposals would, on a
comparative basis, best serve the public interest.

4. To determine, in light of the evidence adduced pursuant
to the foregoing issues, which of the applications should

be granted.

2. By Memorandum Opinion & Order, FCC 86M-1254

33a

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‘

(released April 10, 1986), the following issue was added against
Wood:

To determine whether Wood Broadcasting Company is
financially qualified to construct and operate its proposed
television station in Conroe, Texas.

3. Issue 1 was resolved in G-A’s favor pursuant to summary
decision. Order, FCC 86M-1780 (released May 27, 1986). Issue
2 was resolved in favor of DLBS, Conroe Broadcasting, and
Imagists pursuant to summary decision. Order, FCC 86M-1446
(released April 29, 1986) (DLBS): Order, FCC 86M-1257
(released April 10, 1986) (Conroe Broadcasting); Order, FCC
86M-798 (released March 3, 1986) (Imagists).

4. Hearing sessions were held during the period May 13-19,
1986. The record in this proceeding was closed on May 19, 1986.
Order, FCC 86M-1781 (released May 27, 1986).

5. Subsequent to the filing of Proposed Findings of Fact and
Conclusions of Law by the parties, the Presiding Judge designated
additional issues to be tried in this proceeding. In response to a
Motion to Enlarge Issued filed by Conroe Broadcasting, Limited
Partnership, the Presiding Judge added the following issue by way
of a Memorandum Opinion and Order, FCC 87M-344, released
February 18, 1987:

a) To determine whether G-A has failed to disclose a real
party-in-interest to its application.

b) To determine the effect of the evidence adduced under
(a) above on the basic qualifications of G-A to be a
Commission licensee.

6. By Memorandum Opinion and Order, FCC 87M-2010,
released August 25, 1987, a comparative coverage issue was
added:

To determine the areas and populations which would
receive television service of 64 dBu (Grade B) or greater
intensity, together with the availability of other Grade B
television services in such areas, for the purpose of
determining whether a comparative preference should
accrue to any of the applicants.

7. A hearing conference was convened on September 21, 1987.
Further hearing sessions were conducted on December 1, 1987
and May 2, 1988. The record was closed on May 2, 1988. Tr.
1557; Order, FCC 88M-1398, released May 11, 1988.

II. FINDINGS OF FACT

* * *

[Material unrelated to the instant petition omitted]

B. Imagists

25. Montgomery County Media Network. Inc., et al., d/b/a/
Imagists, is a Texas limited partnership. The general partner is
Montgomery County Media Network, Inc. (Montgomery), a
Texas corporation. Imagists Ex. 1, p. 1. It was stipulated at
hearing that as of the B Cut-off date, Montgomery was
structured as follows:

Name Position Ownership Interest
Frank Garza President 33 1/3%
Dr. Rhonda Saldivar Secretary 33 1/3%

Alan William Rossing _ Vice President 33 1/3%

Tr. 84. Subsequent to the B Cut-off, Dr. Saldivar and Mr.
Rossing each came to own a 59 percent share in Imagists. The
minutes of Montgomery’s Board of Directors meeting of

35a

December 13, 1985 show that Imagists’ President, Frank Garza,
tendered his resignation. CBLP Ex. 2; Tr. 100. Dr. Saldivar
assumed Mr. Garza’s position as President, and Mr. Rossing
assumed Dr. Saldivar’s position as Secretary at the December
13, 1985 meeting. The resulting structure of Montgomery is as
follows:

Name Position Ownership Interest
Dr. Rhonda Saldivar President 50%
Alan William Rossing Vice President 50%

Secretary

Imagists Ex. 1. p. 1.

26. Montgomery’s Articles of Incorporation were filed
November 8, 1984. Wood Ex. 1A. Dr. Charles Johnson was
Montgomery’s initial Director, Wood Ex. 1A. p. 2; Tr. 108.

27. The limited partner of Imagists is Humanity Interested
Services, Inc. (HIS), a non-profit tax exempt Texas corporation.
Imagists Ex. 1, p. 1. HIS operates a school in Conroe, grades
K-12. Id. Dr. Charles Johnson is Executive Director of HIS.
Tr. 90-91. David Johnson is Secretary of HIS. Dowen Johnson
is Vice President of HIS. Tr. 114. David and Charles Johnson
are brothers. Dowen is a nephew of David Johnson. Tr. 115.

28. The capital contributions made to the partnership are as
follows:

Name Cash Property

Montgomery $1,000.00 -0-
HIS -0- $ 10,000.00

36a

Conroe Ex. 3. Dr. Saldivar and Mr. Rossing testified that they
are each obligated to contribute $ 500 which will comprise
Montgomery’s $ 1,000 capital contribution to the partnership.
Neither Dr. Saldivar nor Mr. Rossing have actually paid any of
this money thus far. Nor have they made contributions toward
the costs of Imagists’ application. Tr. 108, 140. Neither Mr.
Rossing nor Dr. Saidivar has signed a stock subscription
agreement. Tr. 109, 140-141.

29. The shares of profits or other income accruing to the
partnership are as follows:

Name Share of Profits
Montgomery 1%

HIS 99 %

Conroe Ex. 4.

30. Dr. Rhonda Hill Saldivar proposes to serve as the full
time (minimum 40 hours per week) Program Director of the
station. Imagists Ex. 2, 1. Dr. Saldivar will be chairman of the
program advisory committee, will interview prospective
employees, and make recommendations to the General Manager
regarding the hiring of staff. Dr. Saldivar is a black female.

31. Dr. Saldivar currently resides in Houston, Texas, within
the Grade B contour of the proposed station. There is no record
evidence which shows the length of that residence.

32. Dr. Saldivar has been employed at Texas Southern
University as an Assistant Professor in the English Department.
Imagists Ex. 2. Dr. Saldivar was a reference librarian at the
Houston Public Library from 1984 to 1985. She was a freshman
English instructor at Houston Community College from 1982 to
1983. She was an English teacher at Jersey Village High School
in Jersey Village, Texas, from 1981 to 1982. Between 1979 and

37a

1980, Dr. Saldivar taught English at Jarvis Christian College in
Hawkins, Texas. Imagists Ex. 2, p. 3. Dr. Saldivar also taught
English at Jarvis from June to August, 1977.

33. Dr. Saldivar testified that she became aware of the

availability of a channel in Conroe through David Johnson, a
member of HIS, while she was teaching at Southern Bible
College. (January 1984 to May 1984). Tr. 86; Imagists Ex. 2.
David Johnson invited Dr. Saldivar to become a member of
HIS. Tr. 88. Through David Johnson, Dr. Saldivar became
acquainted with Charles Johnson, Executive Director of HIS.
Tr. 90-91. Following a telephone conference with David

| Johnson in which he asked Dr. Saldivar to participate in the

Conroe application, members of HIS met with Dr. Saldivar to

| discuss the application. Tr. 89-90. At that first meeting, the
relationship between HIS, Montgomery and Imagists was
explained to Dr. Saldivar. Tr. 91. According to Dr. Saldivar,
the idea to form a limited partnership was Dr. Charles
Johnson’s. Tr. 121. Dr. Saldivar had no role in preparing
Imagists’ application, and she does not know who did prepare
that application (Tr. 92).

34. In its application, Imagists lists its address as "200
Avenue J, Conroe, Texas." HIS has offices at that address and
operates the Christian Montessori School on that property. Tr.
93-94, 136.

35. The Certificate of Limited Partnership of Imagists lists its
general partner, Montgomery, as having a principal place of

| business at P.O. Box 42, Conroe, Texas, 77305. Dr. Saldivar,

| the President of Montgomery, testified that P.O. Box 42
belongs jointly to Montgomery and NIS. Tr. 95. However, Dr.
Saldivar does not have a key to that post office box. She
testified that Charles Johnson has the key. Tr. 96.

36. Thus far, all of Imagists’ legal and engineering fees have
been paid by HIS (Tr. 112). Dr. Saldivar has not contributed

38a

any money toward Imagists’ application thus far. Tr. 108. She
has not signed a stock subscription agreement. Tr. 109.

37. Alan William Rossing proposes to serve as full time
(minimum 40 hours per week) General Manager/Sales Manager
of the station. In this position he will be principally responsible
for the day-to-day operation of the station and for management
of the sales staff (Imagists Ex. 1). Mr. Rossing currently resides
in Conroe, Texas, and has resided there since approximately
1984. Mr. Rossing is an American Indian (Imagists Ex. 1).

38. Mr. Rossing is currently employed by Atlas Single-Ply
Inc., a commercial industrial roofing company. Tr. 154-155.
Prior to his employment at Atlas and beginning in July 1985,
Mr. Rossing worked for L & R Personnel, Inc., as an assistant
manager, bartender, and waiter at the Tejas Cafe and Bar in
Conroe. Imagists Ex. 1, p. 3. From April 1985 until his
employment at Atlas, Mr. Rossing was the co-owner and
operator of Curtsinger-Rossing, Inc. d/b/a/ "Old Conroe Deli
and Catering." From September 1984 to March 1985, Mr.
Rossing was the manager of Conroe City Gulf. He was
employed by Ewing Tex Corporation, an industrial roofing
company, from 1983 to 1984 as a general sales manager and
supervisor. From 1982 to 1983, Mr. Rossing was the food and
beverage directorat the Texas River Plantation Country Club in
Conroe, Mr. Rossing has not claimed civic participation in
Conroe.

39. In the Summer of 1984, Mr. Rossing became aware of
the availability of a channel at Conroe through Charles Johnson.
Tr. 132. Mr. Rossing testified that during their first
conversation, Mr. Johnson asked him to be on the board of
directors of an applicant for Conroe. Jd.

40. Mr. Rossing was not involved in the selection of
Imagists’ communications counsel. Tr. 135. He testified that
Frank Garza and Charles Johnson made that selection. To Mr.

39a

Rossing’s knowledge, Messrs. Johnson and Garza selected
Imagists’ engineer. He does not know who selected the
applicant’s FAA consultant.

41. According to Mr. Rossing, he first discussed the form of
the applicant with Charles Johnson and Frank Garza in
November 1984. Tr. 133-134. The idea for forming a limited
partnership originated with Frank Garza and Charles Johnson.
Tr. 134.

42. Mr. Rossing has never met Mr. Garza. Tr. 147. At the
time Imagists’ application was filed, Mr. Rossing had not
spoken with Mr. Garza or Dr. Saldivar. Tr. 149. Dr. Saldivar
and Mr. Rossing first met in December 1985, over a year after
the application had been filed. Tr. 138. At the December 13,
1985 meeting, Mr. Rossing first learned from Charles Johnson
that Mr. Garza had resigned. Tr. 1139, 156. Mr. Garza offered
his resignation on August 31, 1985. Tr. 156-157, 164.

43. When Charles Johnson first approached Mr. Rossing
about becoming a member of the applicant, there was no
discussion of Mr. Rossing’s future role at the proposed station.
Mr. Rossing agreed to help out in whatever way Charles
Johnson saw fit. Tr. 164. Mr. Rossing testified that either
Charles Johnson or Frank Garza chose him as Vice President of
Montgomery in the latter part of 1984. Tr. 159. Mr. Rossing
did not learn that he was chosen for this position until the latter
part of 1985, approximately a year after having been selected.

44. Mr. Rossing testified that all financial responsibilities of
the partnership would be borne by HIS. Tr. 140. Mr. Rossing
testified that Montgomery has no bank account and that he does
not know whether Imagists has a bank account. Mr. Rossing has
pledged $ 500 to Montgomery. He will be obligated to
contribute the money if Imagists receives a grant of construction
permit. Mr. Rossing has not contributed any money toward
Imagists’ application thus far. Tr. 140. Mr. Rossing does not

40a

know the extent of Montgomery’s potential liabilities. Tr. 158.
To his knowledge, possible liabilities of Montgomery have not
been discussed. Mr. Rossing testified that he does not know
how any additional funding beyond HIS’ initial $ 10,000 will be
treated. Tr. 144-145. Mr. Rossing stated that an antenna site
has been located; he does not know the location of the studio
site. Tr. 145-146.

45. Mr. Charles Johnson testified that he is Pastor of
Evangelistic Temple of Conroe. Tr. 171. He stated that one of
the attorneys on the HIS Board of Directors drafted the Articles
of Incorporation for Montgomery. Tr. 172.

46. Mr. Johnson has the key to P.O. Box 42 (actually 421) in
Conroe. Tr. 176-177. Imagists’ mail is delivered to 200 Avenue
J. Conroe, Texas. Tr. 177. Mr. Johnson testified that whenever
mail was of a nature that Imagists needed to receive, he would
deliver it to Imagists. Tr. 178.

C. Matias and Wimbish

47. Section 73.610 (short-spacing) and air hazard issues were
designated against Matias and Wimbish in the Hearing
Designation Order. On April 14, 1988, Matias and Wimbish
submitted a petition for leave to specify a new, properly spaced
site. In this amendment, Matias and Wimbish specified a tower
height of 1150 feet. Matias and Wimbish indicated, in a
supplement to the petition for leave to amend filed April 17,
1986, that another applicant herein, Wood, had proposed the
same site, and that FAA approval had been issued to Wood.
Matias and Wimbish indicated its belief that it, too, would soon
obtain FAA approval (Tr. 390-391). This amendment was
accepted at hearing; however, Matias and Wimbish subsequently
learned that in fact Wood had never obtained FAA approval for
its 1150 foot proposal; rather, a substantial height reduction was
required, as the proposed tower is in the flight path of an
international airport (Tr. 293).

4la

48. Matias and Wimbish’s May 14, 1986, amendment, to
lower the tower height, was rejected. Memorandum Opinion and
Order, FCC 86M-2184 (released July 8, 1986). Noting that the
May 14, 1986, amendment was required only because of
"careless and erroneous reliance on what it unjustifiably
believed to be the proposal of a competitor,” it was ruled that
Matias and Wimbish had failed to demonstrate good cause for
acceptance of the amendment. In a further Order, FCC
86M-2183 (released July 8, 1986), the Presiding Judge denied
Matias & Wimbish’s May 14, 1986. Motion for Partial
Summary Decision, where Matias & Wimbish had sought
summary decision of the Section 77.610 (short-spacing) and air
hazard issues.

49. Carmen Matias and Andrew N. Wimbish, Jointly, is a
general partnership. Matias/Wimbish Ex. 1, p. 1: Tr.311. The
partnership is structured as follows:

Name Position Ownership Interest

Carmen Matias General Partner 51%
Andrew N. Wimbish General Partner 49%

Matias/Wimbish Ex. 1. p. 1; Ex. 2, p. 1.

The only written understanding concerning the structure of the
partnership is a February 18, 1985 letter from Ms. Matias to
Mr. Wimbish. The letter states that the parties are general
partners, describes their respective shares, and expresses an
agreement that both parties will leave their present positions to
devote their full time to the station if they are granted a
construction permit. Tr. 311. This letter is the only formal
documentation of the partnership’s existence. Tr. 362.

50. Ms. Matias testified that her 51 percent share of the

| partnership entitles her to 51 percent of the responsibility in the
station’s operation. She also stated that profits would be

42a

OO

reinvested in the station for programming equipment and
community programs. Tr. 314, 368-369. Further, some profits
would be used to pay the partners’ salaries. Tr. 369.

51. Ms. Matias and Mr. Wimbish testified that Matias and
Wimbish intends to incorporate after Matias and Wimbish is
granted a construction permit. Tr. 311-312, 376, 413-414.
Beyond discussions of intent to incorporate, however, Matias
and Wimbish has taken no steps to form a corporation. Tr.
313-315, 376.

52. Carmen Matias proposes to serve full time (a minimum of
40 hours per week) as the General Manager of
Matias/Wimbish’s proposed station. In that capacity she will
direct and supervise the day-to-day operations of the station and
its employees. In addition, Ms. Matias will implement and
administer the station’s equal employment opportunity program.
Matias/Wimbish Ex. 1, pp. 3-4; Tr. 343.

53. Ms. Matias is an Hispanic female, born in San Juan,
Puerto Rico. In 1976, she received a Bachelor of Arts degree in
Communications from Hunter College of the City University of
New York. Matias/Wimbish Ex. 1, pp. 1-2. Ms. Matias is
currently employed as the Editorial Communications Manager
for The New York Daily News, where her responsibilities
include: the supervision of 12 promotion department
copywriters and graphics personnel; promotion of the news
editorial product, particularly via broadcast media; serving as
media liaison, where Ms. Matias writes and arranges for the
distribution of press releases publicizing editorial and corporate
developments at the newspaper and is involved in the production
of programming for internal use of the company; serving as
liaison between the promotion/public relations departments with
the newspaper’s editorial department; and production of all
internal communications and publications including NewsNotes
(management letter) and NewsPix (employee news magazine)
(since January 1985). Subsequent to January 29, 1986, Ms.

43a

{

Matias has participated in production meetings concerning a
seven-part series on the problems and issues related to mass
transit to be aired by Channel 5 in New York City as part of a
joint venture of Channel 5 and The New York Daily News. Id. at
p. 2; Tr. 345-346. Upon the grant of the construction permit to
Matias/Wimbish, Ms. Matias will terminate her present
employment and relocate to Conroe, Texas. Matias/Wimbish
Ex. 1, p. 4; Tr. 344-345.

54. From September 1982 to April 1983, Ms. Matias was the
Producer of Station WOR-TV’s (New York, New York -- now
Secaucus, New Jersey) daily 60 minute public affairs program
"Straight Talk." As Producer, Ms. Matias supervised a
12-person production staff, wrote on-air copy, developed and
executed program ideas, was responsible for the operating
budget, approved on-location remotes and selected programs for
re-broadcast.

55. From March 1983 to May 1984, Ms. Matias was an
independent freelance producer of a one--hour television pilot
entitled "Women at Work, commissioned by Group W, New
York, New York and aired over cable television. In that
capacity, Ms. Matias wrote the script, hired the production
personnel and supervised ten individuals.

56. From March 1980 to August 1982, Ms. Matias was the
Assistant to the President and Liaison for broadcast production
activities at Public Broadcasting Station WNET, Channel 13,
New York, New York. In that capacity, Ms. Matias was
involved in long-term corporate planning, national and
metropolitan area programming, project development and
underwriting for various programs, and was extensively
involved in foreign co-productions and acquisitions. Ms. Matias
also served as the management representative to the Corporation
for Public Broadcasting (CPB) and Public Broadcasting Service

(PBS).

57. From November 1976 to March 1980, Ms. Matias was
employed by Station WNEW(TV), (now WNYW(TV)), Channel
5, New York, New York, beginning as a production assistant
and working her way up to field producer and, ultimately, the
associate producer of "Midday," a daily 90 minute public affairs
program produced and aired by the station. Ms. Matias was
responsible for the initiation and execution of program topics,
the coordination of segments and shows, conducting preliminary
guest interviews, writing on-air copy and the scheduling of crew
calls.

58. Ms. Matias has been employed as media executive with
Howard J. Rubenstein Associates, Inc., a New York City public
relations firm where she was responsible for the placement of
the firm’s clients on media in the tri-state area, and on at least
one occasion, assisted in the programming production of a
segment featuring the firm’s client on a program entitled "P.M.
Magazine,” which was produced and aired by Channel 5 in
New York City (May 1984 to January 1985). Ms. Matias has
also freelanced as a media specialist and marketing consultant
for various New York City public relations firms where she was
responsible for placing the firm’s clients on television and in
other media, and special events coordination (March 1983 -
March 1984). Matias/Wimbish Ex. 1, pp. 2-3; Tro. 346-349.

59. Andrew N. Wimbish will be employed full time (a
minimum of 40 hours per week) as Director of Finance and
Administration at Matias/Wimbish’s proposed station. In that
capacity Mr. Wimbish will establish and implement the fiscal
policies of the station and he will direct and supervise all
aspects of the station’s financial operations. Mr. Wimbish will
report to Ms. Matias, the station’s General Manager.
Matias/Wimbish Ex. 2, pp. 4-5; Tr. 343-344; 396-397;
414-415.

60. Mr. Wimbish is a black American male, born in
Pittsburgh, Pennsylvania. Since July 1980, Mr. Wimbish has

45a

resided in Houston, Texas, within the proposes service area of
Matias/Wimbish’s station. In 1978, Mr. Wimbish received a
Bachelor of Science degree in Accounting from Point Park
College, Pittsburgh, Pennsylvania. Since August, 1985, Mr.
Wimbish has been self-employed as a certified public accountant
in Houston. Upon the grant of the construction permit to
Matias/Wimbish, Mr. Wimbish will terminate his
self-employment activities and relocate to Conroe, Texas.
Matias/Wimbish Ex. 2, pp. 1-2, 5; Tr. 377-378, 394, 409.

61. Prior to August 1985 and for approximately nine years
(since 1976), Mr. Wimbish was employed by Gulf Oil
Corporation, Houston, Texas in various financial and financial
management positions. Following the acquisition of Gulf by
Chevron, Mr. Wimbish declined an employment opportunity
with the merged company which would have required Mr.
Wimbish and his family to relocate to San Francisco,
Matias/Wirabish E. 2, p. 2; Tr. 377-378.

62. From 1982 until August 1985, Mr. Wimbish held the
position of Supervisor of Management Reporting and Control
for Gulf’s International Trading and Marine Sales Division. In
that position, Mr. Wimbish directly supervised five employees
and was responsible for the review and consolidation of sales
and earnings of subsidiaries for presentation to senior corporate
management; establishing standards and controls for recording
and reporting of company transactions and assets; and
developing financial information for management in order to
facilitate the monitoring and control of operations.

63. From 1980 to 1982, Mr. Wimbish held the position of
Supervisor for Gulf’s Control Unit, In Houston. In that
capacity, Mr. Wimbish directly supervised four employees and
directed, interpreted and coordinated work assignments in
accounts receivables, general ledgers and data control.

64. From 1979 to 1980, Mr. Wimbish was a Senior

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Accountant for Gulf in Pittsburgh, Pennsylvania, supervising six
employees in the preparation of marine fuel billings to Gulf’s
customers worldwide. Mr. Wimbish’s responsibilities also
included the formulation and submission of year-end financial
statements and tax receipts. From 1976 to 1979, Mr. Wimbish
was a Junior Accountant for Gulf, also in Pittsburgh. From
1974 to 1976, he was employed as an accountant with Koppers
Company, Inc., Pittsburgh, Pennsylvania, Matias/Wimbish Ex.
2, pp. 2-3; Tr. 377-378.

65. Mr. Wimbish has been active in the following civic and
community activities in Houston, Texas, located within the
proposed service area of Matias/Wimbish’s station:

Member, National Association of Black Accountants,
Houston Chapter (1984 to present). Projects undertaken
include free income

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_1158%3A1. Public record. Not legal advice.