Opinion for the Court filed by Chief Judge GINSBURG.
Biltmore Forest Broadcasting FM, Inc. appeals an order of the Federal Communications Commission awarding an FM radio station license to intervenor Liberty Productions L.P., which was the high bidder in the auction of that license. Biltmore and intervenor Orion Communications, Ltd., each of which also bid, claim that Liberty should have been disqualified because errors in Liberty’s license application were not correctable after the auction and in its application Liberty had misrepresented facts about its access to a transmitter site. Because neither contention has merit, we affirm the order of the Commission.
I. Background
In 1987 thirteen radio companies, including Biltmore, Liberty, and Orion, filed application's with the Commission for an FM station license in Biltmore Forest, North Carolina. At that time the Commission’s policy was to hold comparative hearings in order to determine the qualifications of the applicants and to decide which of the qualified applicants would best serve the public interest. An Administrative Law Judge held such a hearing and determined that neither Biltmore nor Liberty had a “reasonable assurance” that a transmitter tower site was available to it, as the Commission then required. The ALJ determined also that Liberty had intentionally misrepresented facts about the availability of a site.
Nat’l Communications Indus.,
5 F.C.C. Red. 2862,
The following evidence was before the ALJ when he made his finding concerning Liberty’s misrepresentation. Valerie Klemmer, the general partner behind Liberty, certified that Liberty had a reasonable assurance a certain site was available. Klemmer, a neophyte in the broadcasting arena, testified before the ALJ that her certification was based upon a conversation she and a friend named Tim Warner had had on August 25, 1987 with Vickey Utter, the owner of a parcel of land near Bilt-more Forest. Warner had had prior dealings with Ms. Utter in his capacity as an executive at WCQS, a public radio station in Asheville. He also had experience certifying that an applicant had a reasonable assurance a site would be available to it. Klemmer believed she had reached an
Utter consistently denied having made any deal with Klemmer. In other respects, however, Utter’s testimony was most inconsistent. In a February, 1989 affidavit she said she had no knowledge of Klemmer or Liberty and had never given Klemmer or any other representative of Liberty any assurance that her property would be available for a transmitter. Indeed, she denied having spoken to anyone representing Liberty. In a signed statement dated March 13, 1989, however, Utter said that Warner had reminded her that he and Klemmer had visited her and that they had discussed leasing a portion of her land, “but since [Klemmer] never contacted me again I assumed she found some place more suitable for her project.” Later in March Utter reiterated her position that she had never given Klemmer any assurance the land would be available, explaining that “[i]f we had discussed this or I had given her this assurance I certainly would have remembered and I would have been looking for her to make a commitment of some sort.”
At a deposition in April, 1989 Utter again recalled speaking with Klemmer and Warner, but she could not remember the details of the conversation. She did recall telling Klemmer and Warner about a lease she and Brian Lee, a representative of Orion, had executed on August 21, 1987 for the use of a portion of her land as a transmitter site. She had signed the February affidavit at the request of Lee, she explained. On March 11, Utter stated, Klemmer and Warner had visited her at her home and refreshed her memory of their earlier meeting. They had wanted her to sign a statement that she would be willing to lease the site to Liberty; Utter had refused but instead wrote and signed the statement of March 13 in which she acknowledged having discussed the matter with Klemmer and Warner in August. Utter stated in her deposition that although at the time she signed the March 13 statement she did not recall ever having discussed leasing her land to Klemmer, she included the assertion that she had done so “because that’s what [Warner] kept telling me the night he and [Klemmer] were at the house.”
Klemmer testified to a different version of events. She said that at the August meeting she and Warner told Utter of Liberty’s interest in leasing a portion of Utter’s property in the event Liberty received the license. They discussed a price of $4,000 per year. There was no mention of Utter having entered into a prior lease agreement with Lee or Orion. Klemmer believed her oral agreement with Utter gave her a reasonable assurance of the site being available for two reasons: Warner told her both that Utter had honored previous oral agreements he had made with her on behalf of WCQS, and that he understood from WCQS’s attorney that an oral agreement was sufficient for an applicant to certify having a reasonable assurance. In his testimony Warner corroborated Klemmer’s account of their meeting with Utter and the two statements she attributed to him.
Upon this record the ALJ made findings adverse to Liberty. In particular, the ALJ concluded that Klemmer had “absolutely no basis” for representing that she had obtained a reasonable assurance the Utter site was available to Liberty. Further,
she knew she had no basis for [doing so]. To argue that her feeble, half-hearted effort to obtain some of Vicki Utter’s land ... constitutes “reasonable assurance” strains credulity. No, ValerieKlemmer has blatantly dissembled in a manner that doesn’t befit a prospective broadcast permittee.
5 F.C.C. Red. at 2879 ¶ 8. The ALJ did not address Warner’s testimony at all.
Various parties appealed the ALJ’s decision to the Review Board, which affirmed that Liberty was disqualified on the site issue and therefore did not reach the misrepresentation issue.
Natl Communications Indus.,
6 F.C.C. Rcd.1978, ¶ ¶ 8-12,
Before the Commission reconsidered on remand which of the applicants would best serve the public interest, however, the Congress authorized the Commission to award licenses for FM stations upon the basis of competitive bidding, Balanced Budget Act of 1997, Pub.L. No. 105-33, § 3002, 111 Stat. 251, 258-65, and the Commission adopted a method of doing so using auctions.
Implementation of Section 309(j) of the Communications Act,
13 F.C.C. Rcd. 15920,
On July 9, 1999 the Commission announced the requirements and procedures for bidding in Auction No. 25, which would include the FM license at Biltmore Forest. Public Notice, 14 F.C.C. Red. 10632,
On September 10, 1999 Liberty arranged to borrow a large sum of money from Cumulus Broadcasting, a nationwide media company. It reported the loan agreement to the Commission on September 27.
Liberty Prods., L.P.,
16 F.C.C. Rcd. 12061 ¶ 23,
Because Liberty was the high bidder, the Commission on November 23 recommenced its proceeding “to consider the
The Commission held that Liberty’s failure to submit the family certification with its short form application did not require dismissal of its application or invalidation of its selection as the permittee on the basis of the auction, id. ¶ ¶ 14-19, and that the loan agreement between Liberty and Cumulus did not improperly bring a new party into the auction. Id. ¶ ¶ 26-28. The Commission also held that Liberty, by entering into the loan agreement with Cumulus, was no longer eligible for the “new entrant bidding credit,” id. ¶ ¶ 32-37, pursuant to which a company without major media interests was not required to pay the full amount of its bid. And the Commission rejected the suggestion that Liberty’s becoming ineligible for the bidding credit required it either to dismiss Liberty’s application or to set aside the results of the auction. Id. ¶ ¶ 38-39. Finally, the Commission reversed the ALJ’s finding that Liberty had misrepresented the availability of the proposed transmitter site in its 1987 application. Id. ¶ ¶ 49-72.
Having found no reason to disqualify Liberty, the high bidder in the auction, the Commission awarded it the license. Bilt-more appealed, Orion intervened in support of Biltmore, and Liberty intervened in support of the Commission.
II. Analysis
Biltmore’s and Orion’s objections to the Commission’s award of the license to Liberty are of two types: claims that Liberty’s failure to adhere to all the rules of the auction disqualifies it from holding the license, and claims that Liberty engaged in misrepresentation before the Commission and is therefore unfit to be a licensee.
A. Auction Violations
Biltmore claims that both Liberty’s failure timely to file the family certification and its entering into the loan agreement with Cumulus disqualify it from the auction. *
1. Family certification
Biltmore argues that both the July 9 Notice and the Commission’s regulations require that Liberty’s application be dismissed for failure to file the required family certification.
*
The July 9 Notice stated that “Bidders must certify ... compliance with the Commission’s policies relating to media interests of immediate family members,” 14 F.C.C. Red. at 10641, and 47 C.F.R. § 73.5002(b) requires that the short form application contain “all required cer
Regarding the effect of an applicant’s failure to submit required information, 47 C.F.R. § 1.2105(b) provides two different sanctions. First, § 1.2105(b)(1) states:
Any short-form application ... that does not contain all of the certifications required pursuant to this section is unacceptable for filing and cannot be corrected subsequent to the applicable filing deadline. The application will be dismissed with prejudice and the upfront payment, if paid, will be returned.
Other omissions are not subject to such Draconian treatment, however. Section 1.2105(b)(2) provides: “The Commission will provide bidders a limited opportunity to cure defects specified herein (except for failure to sign the application and to make certifications) and to resubmit a corrected application.” The Commission’s grace is not unlimited; if the applicants “fail to correct defects in their applications in a timely manner as specified by public notice,” then they “will have their applications dismissed without opportunity for resubmission.” § 1.2105(b)(3). As for the July 9 Notice, it states only that “[fjailure to submit required information by the resubmission date will result in dismissal of the application and inability to participate in the auction. See 47 C.F.R. § 1.2105(b).” 14 F.C.C. Red. at 10697.
The Commission argues that neither 47 C.F.R. § 1.2105(b) nor the Notice requires Liberty’s disqualification: The regulation applies by its terms only to “the certifications required pursuant to this section.” Because the family certification was required by the July 9 Notice rather than by § 1.2105, according to the Commission, the disqualification provided in § 1.2105(b)(1) does not apply to the omission of that certification. Rather, the applicable provisions are the more forgiving §§ 1.2105(b)(2)-(3), which afford an applicant the opportunity to make corrections before the Commission dismisses its application with no opportunity for resubmission. The parenthetical exception in subsection (b)(2) taking “failure to ... make certifications” out of the class of “defects” curable under that subsection does not apply to the family certification, the Commission’s argument suggests, because the “certifications” in question are only those implicated in subsection (b)(1), namely “the certifications required pursuant to” § 1.2105.
As for the July 9 Notice, the Commission contends it simply is not clear enough to require Liberty’s automatic disqualification for failure to submit the family certification: Although the Notice stated that a bidder that failed to submit “required information” before the auction would be “[unable] to participate in the auction,” it did not state that such an omission was incurable if it came to light after the auction was held. Because the Notice did not directly speak to Liberty’s situation, the Commission goes on, disqualifying Liberty based upon the Notice would deprive it of fair warning that its application might be disqualified without an opportunity to correct it, contrary to the rule we endorsed in
High Plains Wireless, L.P. v. FCC,
We give “controlling weight” to the Commission’s interpretation of its own regulation “unless it is plainly erroneous or inconsistent with the regulation.”
Id.
at 606. Here the Commission’s interpretation does not fall below that standard. The Commission is, of course, correct in pointing out that the family certification is
Biltmore’s arguments to the contrary notwithstanding, neither
McKay v. Wahlenmaier,
2. Loss of bidding credit
Section 1.2105(b)(2) provides that “[m]a-jor amendments cannot be made to a short-form application after the initial filing deadline,” and states that such amendments include “changes in an applicant’s size which would affect eligibility for designated entity provisions.” Similarly, the July 9 Notice, citing this provision, stated that “[a]s described more fully in the Commission’s Rules, after the ... short-form filing deadline.... [applicants will not be permitted to make major modifications to their applications (e.g., ... change bidding credits).” 14 F.C.C. Rcd. at 10644.
Biltmore claims that because Liberty’s amendment (after the filing deadline) of its short form application to reflect the loan from Cumulus affected its eligibility for a bidding credit, the change was a “major amendment” and therefore untimely. Further, it argues, allowing the change in bidding credits would affect the integrity of the auction by altering one of its “core circumstances.”
The Commission responds that the new entrant bidding credit does not depend upon an applicant’s “size” but upon its other attributable media interests; the “size” criterion applies only to the “small business bidding credit,” which is based upon the bidder’s revenues.
See
47 C.F.R. §§ 90.810, 90.814. The Commission points out that the definition of a “major amendment” in the regulation, which predates the introduction of the new entrant bidding credit, refers only to certain changes in ownership, certain changes in size, and changes in the intended service areas. 16 F.C.C. Rcd. 12061 ¶ 25. Because the loan from Cumulus did not effect a change in Liberty’s ownership or size, the Commission argues, its resulting loss of eligibility for a new entrant bidding credit is not a “major amendment” and therefore does not disqualify it from the auction. As for the July 9 Notice, the Commission argues that it purported merely to restate the
The Commission’s interpretation of § 1.2105 is neither plainly erroneous nor inconsistent with the regulation. The provision describing major amendments certainly addresses the small business bidding credit, and the Commission reasonably so interpreted it. Whether the provision also applies to other bidding credits, such as that for new entrants, is not clear on the face of the regulation. Although Biltmore argues that for purposes of the new entrant credit we should construe “changes in size” to include the number of media interests attributable to an applicant, we do not think that is the only permissible construction of the regulation. On the contrary, we think the Commission’s narrower interpretation of the regulation is quite reasonable. Nor does the July 9 Notice, which specifically referred to § 1.2105 as authority for the proposition that “changes in bidding credits” are major amendments, require (or perhaps even allow) the Commission to treat as a major amendment a change that § 1.2105 does not define as such.
Biltmore argues that the Commission’s prior determinations limit its discretion to find that a change in the new entrant credit is not a major amendment. In
Two Way Radio of Carolina, Inc.,
14 F.C.C. Rcd. 12035, ¶ 8,
modification of an applicant’s small business status does not constitute a minor change under our competitive bidding rules, and that providing Two Way Radio with more favorable financial benefits after the close of the auction, based on information not available to other bidders during the auction, would adversely affect the integrity of the auction process.
The rationale for the holding was that “other bidders placed bids based upon their understanding of the specific bidding credit and the type of installment payment plan to which Two Way Radio, as well as other bidders, were entitled.”
Id.
¶ 9.
See also Clearcall, Inc.,
12 F.C.C. Rcd. 965,
The Commission, however, distinguishes this precedent by pointing out that the proposed amendment in Two Way Radio would have increased the applicant’s bidding credit, while this case involves an amendment that decreases the applicant’s bidding credit. In its Order the Commission stated that it “fail[ed] to see how [Liberty’s] mistake would have deprived the other auction participants of information as to Liberty’s valuation of the frequency, or would have otherwise influenced their bidding strategies.” 16 F.C.C. Red. 12061, ¶ 39.
Nor do we see any such problem. Indeed, it is not clear to us - and the Commission does not explain - why even a post hoc increase in bidding credits would raise
B. Misrepresentation
Biltmore next claims the Commission was not free to reject the ALJ’s finding that Liberty misrepresented facts about the availability of a transmitter site. The appellant maintains that because the Commission did not disturb that finding on its initial review, it became the law of the case. Biltmore also claims the ALJ’s finding is entitled to special deference, and that in any event the Commission’s contrary finding that there was no misrepresentation is not supported by substantial evidence. None of these claims has any merit whatsoever.
1. Law of the case
Biltmore argues first that the Review Board’s decision, 6 F.C.C. Rcd.1978,
The Commission, joined by Liberty, responds that this argument is not properly before the court because Biltmore did not raise it before the Commission. Not so. Although Biltmore argued before the Commission first that it should review and adopt the ALJ’s findings, it did argue in the alternative that the ALJ’s findings were the law of the case. See BFB Opp. to Supp. Brief at 2, 4. We therefore go to the merits of Biltmore’s law of the case argument.
The Review Board expressly found it unnecessary to reach the misrepresentation issue once it had held Liberty was disqualified “on the site issue.” 6 F.C.C. Rcd.1978, ¶ 12. For the same reason the Commission, on appeal, had no reason to consider and to reject Liberty’s claim that the ALJ had erred in finding a misrepresentation in its application. Biltmore is simply mistaken, therefore, in suggesting that the Commission adopted the ALJ’s misrepresentation finding. For the record, we note also that the law of the case doctrine is of uncertain force in the context of administrative litigation.
See Lockert v. U.S. Dep’t of Labor,
Next Biltmore, now joined by Orion, argues that the ALJ’s finding that Klemmer “strain[ed] credulity” and “blatantly dissembled” is a credibility determination to which we must give special deference on review.
See Universal Camera Corp. v. NLRB,
As the Commission emphasizes, the important issue in the misrepresentation inquiry was not whether Klemmer had a reasonable assurance, but whether she was lying when she said she had a reasonable assurance. Indeed, the ALJ’s entire discussion of the misrepresentation issue focuses upon the inadequacy of Klemmer’s efforts to secure a site, as compared to the efforts Utter expected her to make (and the efforts Lee did make). 5 F.C.C. Red. at 2866-67 ¶ ¶ 36-51, 2879 ¶ 8. The ALJ seems to have reasoned that any reasonable person would know the effort Klem-mer made was inadequate, so Klemmer must have been lying when she said she thought it was adequate. Nowhere does the ALJ directly attack Klemmer’s testimony that she believed at the time that her efforts were adequate, let alone attribute such disbelief to his interpretation of her demeanor. Instead, his appeal is to other evidence in the record, and we owe no special deference to the ALJ’s interpretation of the record.
3. Substantial evidence for the Commission’s finding of no misrepresentation
Finally, Biltmore and Orion argue that the Commission’s finding Liberty did not misrepresent the facts in its application is not supported by substantial evidence in the record. See 5 U.S.C. § 706(2)(E);
Contemporary Media, Inc. v. FCC,
Under either approach there is substantial evidence to support the Commission’s finding that Klemmer did not misrepresent Liberty’s situation. Klem-mer’s testimony was that Warner, who she had reason to believe was knowledgeable about such things, told her that an oral agreement with Utter would suffice to constitute a reasonable assurance of having a transmitter site. She further testified that she believed she had reached such an oral agreement, and she described a meeting that the Commission could reasonably accept as justification for that belief. Although Utter gave a different account of the meeting, her testimony was internally inconsistent and the Commission need not have credited it. In sharp contrast, Klem-
III. Conclusion
For the foregoing reasons the Commission’s order awarding the license to Liberty is
Affirmed.
Notes
Intervenor Orion also argues the Commission arbitrarily and capriciously refused to determine whether the Cumulus loan amounted to a change in ownership that would disqualify Liberty under 47 U.S.C. § 309(l)(2). Because no party raises this argument, it is not properly before the court, and we shall not consider it.
See Lamprecht v. FCC,
Liberty responds with the claim that it was not subject to this filing requirement because “there could be no certification of compliance as to interests which were nonexistent.” We shall not consider this attempt by intervenor Liberty obliquely to appeal the Commission's decision that Liberty was required to file the certification. To contest this aspect of the Commission’s decision, Liberty should have filed a conditional cross-appeal. See generally 15A Charles A. Wright et al., Federal Practice & Procedure § 3902, at 78-79 (1992) (collecting cases).
Liberty adopts the Commission's position but also claims that, because the July 9 Notice specified that attributable interests were to be "determined as of the short form ... filing deadline - August 20, 1999,” 14 F.C.C. Red. at 10639, whereas the loan from Cumulus was effective after that date, Liberty should not have been denied the bidding credit. Because no party appealed that determination, however, Liberty's claim is not properly before the court. See p. 8, above, at n.*.