939 F.3d 567
3rd Cir.2019Background
- Statutory framework: Under 47 U.S.C. § 202(h) the FCC must quadrennially review broadcast ownership rules to determine whether they remain in the public interest (weighing competition, diversity, localism).
- FCC actions: In the 2016 Report & Order the FCC largely retained existing ownership rules and kept a revenue-based "eligible entity" definition; on rehearing (2017 Reconsideration Order) it repealed several cross-ownership rules, rescinded the "eight voices" test, kept the "top-four" TV restriction (with waiver), and announced an incubator program; the 2018 Incubator Order adopted the program and defined "comparable markets."
- Procedural posture: Multiple petitions for review were consolidated in the Third Circuit; petitioners grouped as Citizen Petitioners (challenging adequacy of diversity analysis), Diversity Petitioners (challenging incubator waiver definition and delay on procurement rules), and Deregulatory Petitioner ITG (challenging retention of top-four).
- Standing and record supplementation: Petitioners submitted declarations on standing with reply briefs; the court accepted supplemental materials and found Citizen and Diversity Petitioners had Article III standing.
- Holdings summary: Court upheld retention of the top-four TV rule and the incubator "comparable markets" definition, found no unreasonable delay yet on procurement-rule consideration, but vacated and remanded the Reconsideration and Incubator Orders and the 2016 eligible-entity definition for inadequate consideration of effects on minority and female ownership.
- Remedy: Orders vacated and remanded for the FCC to develop an adequate, record-based analysis of the likely effects on ownership by women and racial minorities; court refused to appoint a special master but retained jurisdiction over remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge the Orders | Citizen/Diversity: harm from consolidation is imminent; declarations suffice even if filed with reply | FCC/Intervenors: injury speculative; standing materials must be in opening brief | Court: accepted supplemental evidence; Article III standing exists for Citizen and Diversity Petitioners |
| Retention of "top-four" TV rule | ITG: rationale for keeping top-four is inconsistent with repeal of eight-voices and is arbitrary | FCC: top-four is a reasonable line-drawing supported by record evidence of a top-four "cushion" and competitive risk | Court: upheld retention of top-four as not arbitrary or capricious |
| Incubator program "comparable markets" definition | Diversity Petitioners: NPRM implied "size" meant population; defining "comparable" by number of stations was not properly noticed and creates perverse incentives | FCC: NPRM asked how to measure size; station-count tiers reasonably focus on preventing consolidation; concerns addressed | Court: adequate notice and the station-count "comparable markets" definition was reasonable |
| Adequacy of FCC analysis on minority/female ownership | Citizen Petitioners: FCC failed to analyze effects on female ownership and relied on flawed, incomparable NTIA/Form 323 data and simplistic trends | FCC: data limited but was the best available; agency balance of multiple policy goals and predictive judgment entitled to deference | Court: vacated and remanded — FCC failed to provide a reasoned, record-supported analysis of effects on women and minority ownership |
| Delay on adopting procurement rules for broadcasters | Diversity Petitioners: FCC unreasonably delayed action on extending cable procurement rules to broadcast | FCC: record lacked adequate support; FCC sought comment and has not unreasonably delayed | Court: no unreasonable delay yet; expects final action in 2018 cycle (may revisit if further delay) |
Key Cases Cited
- Prometheus Radio Project v. FCC, 373 F.3d 372 (3d Cir. 2004) (established standards for §202(h) review; upheld top-four previously)
- Prometheus Radio Project v. FCC, 652 F.3d 431 (3d Cir. 2011) (criticized revenue-based eligible-entity definition; remanded for failure to justify diversity effect)
- Prometheus Radio Project v. FCC, 824 F.3d 33 (3d Cir. 2016) (held FCC unreasonably delayed certain quadrennial reviews; instructed FCC to decide eligible-entity definition)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (arbitrary-and-capricious standard for agency rulemaking)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing requirements)
- FCC v. Nat’l Citizens Comm. for Broad., 436 U.S. 775 (1978) (deference to FCC predictive judgments in public-interest broadcasting regulation)
- Chevron U.S.A. Inc. v. Natural Resources Def. Council, Inc., 467 U.S. 837 (1984) (agency statutory interpretation deference)
- SEC v. Chenery Corp., 332 U.S. 194 (1947) (court may not supply agency reasons the agency did not give)
- Clapper v. Amnesty Int’l USA, 568 U.S. 398 (2013) (standing requires non-attenuated causal chain)