Time Warner Entertainment Co. v. Federal Communications Commission

75 GINSBURG, RANDOLPH, and Before

TATEL, Judges. Circuit TIME WARNER ENTERTAINMENT CO., L.P., Petitioner,

PER CURIAM v. appeal this from the We dismiss ruling appellant has not district court’s FEDERAL COMMUNICATIONS COM given grant immunity by been the Unit MISSION and United States of States, acting through Office of ed here America, Respondents. Independent Under 28 U.S.C. Counsel. 1291, jurisdic appeals the courts No. 97-1263. appeals

tion of from “final decisions courts____” In fi district criminal cases Appeals, United States Court of “prohibits judgment appellate nal rule review District of Circuit. Columbia imposition until of sen after conviction 3, Argued Feb. 1998. Asphalt Corp. tence.” Midland v. United States, 794, 1494, 798, 489 109 U.S. S.Ct. 22, May Decided (1989). 1497, Appellant 103 L.Ed.2d has indicted, let alone convict been tried and Appellant testify ed. has refused to be refusal, jury and, grand

fore contempt of is been held in court. Nor there treating appeal basis for under the exception of Cohen In narrow v. Beneficial Corp., dustrial Loan 337 U.S. 69 S.Ct. (1949). 1221, 93 L.Ed. 1528 ultimately If appellant indicted that, convicted, if it turns out con trary appellant ruling, to the court’s district immunity prosecution, had from such then proper of the indictment is the “[dismissal MacDonald, sanction,” United States v. U.S. 98 S.Ct. n. n. (1978). Supreme L.Ed.2d 18 Court specifically held an individual’s “right” claimed not to be indicted because immunity deal does not mean that pursue interlocutory appeals” individual “can right. to establish that Id. Heike United v. States, 423, 431, 539, 542, U.S. S.Ct (1910),upon Supreme

54 L.Ed. 821 which the MacDonald, directly Court relied in point: immunity even transactional conferred “give right statute does upon any than judgments.” other final See States, Flanagan v. United 465 U.S. (1984); 104 S.Ct. 79 L.Ed.2d 288 (2d Macchia, United States Cir.1994).

Appeal dismissed.

R. argued Bruce Beckner the cause for Fleischman, petitioner, with whom Aaron I. Davidson, K. A. and Jill Seth McClelland were on the briefs. Carr, Counsel, M. Federal Commu-

James Commission, argued cause nications Klein, respondents, I. with whom Joel Assis- General, Attorney tant United De- States Justice, partment B. Robert Nicholson and Wiggers, Attorneys, Christopher Robert J. J. Counsel, Wright, Federal General Communi- cations Daniel M. Arm- Counsel, strong, Associate General were on the brief. SILBERMAN, RANDOLPH,

Before: TATEL, Judges. Circuit Opinion by Circuit the Court filed Judge SILBERMAN.

Opinion concurring part dissenting part Judge RANDOLPH. filed Circuit

SILBERMAN, Judge: Circuit Company pe- Entertainment Federal

titions for review of order setting forth Communications Commission system operators the manner which cable may recoup external cost increases incurred September the date between 1992 and subject system first became to rate costs” regulation. “effectively “[E]xternal contends were those be control,” yond operator’s cable including: it had no beeause “(1) error, issue, 405 of retransmission or to correct section consent fees cable (2) broadcasters; operators pay Act bars our review. program Communications (3) costs; taxes; part ming remand. grant [state local] the and and We and (4) franchise fees and the costs associated requirements, with other including franchise I. educational, provision public, the of gov and The Cable Television Consumer Protection programming.” 171; ernmental-access Id. at 1992, Competition of No. 76.922(f)(1) (1997). and Act Pub.L. § 47 C.F.R. The (codified 102-385, 106 Stat. 1460 scattered “gap period” Sep refers to the time between U.S.C.), FCC to 30, of 47 directed the sections system tember and the date a be operators that regulate the rates cable subject regulation. opera came to rate An competition,” subject to at rate, “effective defined permissible tor’s initial least for 543(l)(1) (1994), charge § 47 U.S.C. could rate, using the full those reduction was de designed their subscribers. The Commission its on September rived from rate effect any system that a scheme to ensure intended not the actual rate in effect on the date competition facing such would neverthe system subject regulation, each became charge approximately the same rates as less permitted “lest build [the FCC] into ini competitive if it were in a market. Put tial rates rate unwarranted increases simply, system operator’s permitted a initial operators passage that cable took after of the September either was rate effect Warner, rate Act.” Time Cable 56 F.3d at on. by “competitive differ reduced not permit opera 173. The Commission did (the rate”), or was “full reduction ential” recoup any tors to cost increases external with FCC calculated accordance certain during gap period;1 only incurred those without formulas and worksheets reference system incurred date became after (the September rates in effect on subject regulation to rate could be taken into 76.922(b) rate”). “transition See 47 C.F.R. length gap account.2 The varied (1997). systems, Most the Commission has among operators full reduction rate-based said, Imple employed the former rate. See they subject regula because became to rate mentation Television times, Cable Consumer tion at different no shorter Competition and Act 1992: Protection longer long. than 11 and no than months Opinion Regulation, Rate Memorandum Warner, In held that the Time Com (Order Remand), Order 11 F.C.C.R. and preclude adjust “decision to a rate mission’s ¶ (1996). 20206, 22 designed changes ment to recover external during gap period Time Entertainment Co. costs incurred [was] arbitrary capricious,” id. at F.3d 151 we consid- and and as petitions for the rule insofar the FCC denied “vacatefd] ered consolidated gap-period of their implementing operators] recovery FCC’s orders the Act. One of [cable operators’ complaints cable ease cost at 178. In our external increases.” Id. (and view, one relevant to Time the FCC had offered “no reason to Warner’s petition) operators instant FCC unreason- doubt that cable incurred external ably operators adjust during gap period, yet did not allow “cable costs under its they regulations their rates to external cost increases would never be able to re reflect opting during gap period.” coup at 173. costs short of for eost-ofservice incurred Id. those counsel, however, op- problem, parties dispute point. The 1. FCC’s indicates permitted particular erators were to include one argues operator counsel that such an did FCC’s external cost increase—franchise fees—incurred Warner, however, not. contends Time during gap period. operator using slightly rate faced a transition April gap, began on different one that opinion Our address first Time Warner did not September but likewise end- instead system operator whether a transi- which used a system subject date the ed on the first became tion rate full rate was rather than reduction regulation. rate subject adjustment to the same external cost regu gap period if akin to current rates as external would be lation-which included, but Id. at cost increases had been did fly a blunderbuss.” shooting deficien- thought de allow them to recover revenue the Commission’s 174.3 alsoWe cies, say scope allowing recovery of than to “[t]he other its rule—that fense of requested cost increases would is reflected in War- external relief gap-period burdensome, administratively Expedited both for Re- Emergency ner’s Motion be too ...)” operators the FCC-“com (May view filed in this court cable Id., pletely unacceptable.” argument petition. Id. first ¶ 24 n. Petitioner had said in that motion 40.. decision, months after Eighteen operators lose millions of dollars that “cable seeking proposed rule or issuing a without every they eventually If day. in revenue proceed, the Com- public on how to comment persuading in to rule in succeed Court response an order in to our issued mission favor, recouped. their those losses cannot be ¶¶ Remand, 21-28. See on remand. Order economic loss thus con- Their unrecoverable adjust operators to “permit[s] order The irreparable injury.” The FCC con- stitutes to permissible level] rates [the their current (or as a strued that statement concession if currently charging be operators would waiver) operators the cable were not. include increases they permitted been to had seeking to recover their revenue loss. even occurring Septem- in costs between external regula- their initial date of ber and it Petitioner contends that was absurd for added). ¶25 Id., (emphasis tion.” the Commission to have drawn distinction operators re- allow"cable to Order does not past between revenue deficiencies attribut- or in future rates otherwise the differ- cover cost increases able unrecovered external they the rates would ence between on, prospective predicated but not and rates in and had charged totally recovering, past external cost those for they allowed account external been increases; its claim to the Commission never during peri- the gap cost increases incurred worse, made that distinction.4 Even Time od, years. in their allowable rates those and argues, passage which the Warner petition not for reconsider- Time Warner did solely pertained to the Commis- FCC relied issued its Order ation after the Commission “competitive sion’s choice of 17% differen- Remand; sought it instead review here. tial,” supra gap period at not at un- Petitioner claims the FCC’s order all. counsel that it was The FCC’s insists operators ability to reasonably denies “entirely for the Commis- understandable” deficiency—which recoup the Time revenue as it Time Warner sion decide did because at than million $14 Warner estimates more “changed” never it had its indicated dollars—they during four sustained position in a to the FCC after our submission comply years, that the does not order remand, petition or in a for reconsideration. with our mandate the first Time Warner arguments He contends that the other operators that those case. It contends petition—that raises its it was employ which a transition rate are unreason- pro- not unreasonable the Commission ably opportunity to take advan- denied operators recoup all way vide a tage prospective relief full afforded deficiencies, revenue the FCC’s order operators. rate-based reduction operators treated full reduction rate-based favorably using more the transi- than those

II. rate, comply and that the order did explain why presented did not with our remand—were never The Commission (presumably permitted. operators charge in a order cable Commission Warner, (citation permitted operator opt system rules rule.” Time 56 F.3d at regulation; we omitted). cost-of-service into conventional said, however, that "because cost-of-service regulatory proceeding expensive is for the cable issue, 4. The asserted dissent’s formulation operator, oper- can be FCC confident that Commission, ly to the see Dissent option lightly will not choose that and it will ator is misstated. limited'exception general indeed remain a instance, it was not foresee- Bartholdi Cable Co. v. reconsideration because able that would draw the F.3d 274 section Commission held did). remedial distinction that Petitioner was not party satisfied because the claiming exhausted its administra- therefore improperly rejected attor by tive remedies our review foreclosed ney-client work-product privileges had 405(a) Communications Act. section not raised claims before those the Commis response primary is that Time Warner’s sion. The the privileges FCC discussed directly implicated issues it raises were dicta, but concluded because the reasoning prior of our decision and were “flagged” issue was not the Commission did therefore remand order. covered not have a on it. Id. fair 405(a) at 279-80. Bartholdi Cable thus fits within Section somewhat differ- worded the category of cases in which we ently provision. than the exhaustion have said normal that even provides: It where an issue has been “raised” if it is done in a order, decision, less report, After an or action complete way, than see Northwestern Ind. any proceeding has been made or taken Tel. Co. v. 1210 n. any thereto, party ... (D.C.Cir.1987) (appellant “point[ed] out” a aggrieved person other or whose circumstance, adversely argu not make an thereby, did interests are affected ment); WATCH, (appellant 712 F.2d at 681 may for ... and it reconsideration ..., “never explicitly” argument); the its shall be lawful for ... Commission made Ali FCC, discretion, anza in its such a Federal de Mercedes v. 539 grant to reconsid- F.2d 732, (D.C.Cir.1976) (the “grist” appel if sufficient reason therefor be 739 of eration there, appear____ filing peti- argument to “nothing made of a lant’s was but was it”), party tion for shall not be a made seeking reconsideration con- of or if the review precedent judicial any argument dition to its by “seem[s] to abandon ... of order, decision, report, action, such or taking ex- positions,” inconsistent Busse Broad. cept seeking FCC, (D.C.Cir. party where the such review Corp. v. 87 F.3d 1461 (2) ... questions 1996), relies on or law the Commission has not been afforded of fact Commission, upon designat- which the or opportunity. a fair reasoning Our reflects Commission, authority ed within experience our that judges as unless an issue been opportunity pass. no case, in squarely presented is discus afforded (dicta) opinion sion added). question in the 405(a) (1994) is § 47 (emphasis U.S.C. only preliminary and view therefore not to Although provision that we have said given weight. precedential be doctrine, codifies the normal exhaustion Washington Ass’n Television and Chil (WATCH), dren v. 712 FCC F.2d Because section 405 is as it worded (D.C.Cir.1983), the does not is, however, text refer to the necessary it is not that the issue necessity party raising argument of a an presented of fact or law be the Commis typical Commission—as does the by petitioner sion itself. “There is no only exhaustion statute—but that the Com requirement opportu that Commission’s [the “opportunity pass” mission have an on a nity pass] any particular in be afforded in petition.5 of fact or law raised manner, by any particular party.” or Office Communication United Church determining whether Commission of of FCC, (D.C.Cir. Christ v. 465 F.2d opportunity question, has had on a 1972). Indeed, have, sure, we Church ques- to be asked whether a United Christ dissenting we adequately presented was to the held that since two Commis Com- “very argument mission even if sioners had raised Commission addressed us, Recently, pressed” the issue in some fashion. section 405 was not an Cisneros, by dissenting 5. Our colleague does not take v. 113 S.Ct. account 509 U.S. distinction, (1993) statutory of this relies on "com- L.Ed.2d 113 Vermont Yankee Nuclear judge Corp. mon law” exhaustion doctrine. made Power v. Natural Resources Coun Defense cil, always yield notions of "common law” to stat- 435 U.S. 98 S.Ct. 55 L.Ed.2d 460 law, (1978). utes—particularly in administrative see Dar- See, Eng’g judicial e.g., Freeman Id. have we review. review. Nor impediment to Assocs., 169, 182 precise presented issue -be Inc. v. required that the (D.C.Cir.1997). eases, to afford it in order But those are as to the Commission long predicated as the issue challenge opportunity.” explained, “fair So “where argument by the made necessarily implicated upon a in a Commission deci technical defect not bar does easily to the section if have been cured sion which could Ass’n example, National For review. attention on re called to the Commission’s (NABB), 830 Broadcasting FCC NABB, (em Better F.2d at 274 consideration.” com appellant F.2d 270 added). It is in these “technical de phasis that television Commission plained to the procedural cases oversight that fect” Act’s violated the Communication station had giving about have made the statements that rules. The FCC determined advertising opportunity to correct errors. agency an statutory appellant’s claim was foreclosed example, Rogers Radio Communica For policy interpreting statement its (D.C.Cir. tion Services v. ap statutory requirements. We allowed the 1978), that appellant contended the FCC state pellant argue policy that the FCC’s 309(a), failed, in of 47 violation U.S.C. Act, contrary although that to the ment was finding rival cellular car that a articulate argument exact was never interest, public conve rier would serve “the Commission. We said nience, necessity granting rival’s gravamen understood application; “[o]ne we determined grievance [the station] NABB’s is to afford the purposes 405] of [section Act], ac infringing the Commission [the the initial to correct tually dispose charge purported proceeding or the lead errors its decision Telecom Id. 274. And MCI its order.” ing to Id. at 1229. We said the decision.” FCC, Corp. 10 842 munications v. F.3d petitioners thing same where claimed had MCI that AT&T claimed failing APA address FCC violated charges” of provision violated a “reasonable rulemaking proceeding, Ac comments in its Act, it that was therefore entitled FCC, v. 906 Children’s Television Commission, however, damages. The deter (D.C.Cir.1990); see also Petro F.2d 755 damages. mined its “IXC barred that orders” Communications, FCC, v. 22 F.3d leum Inc. proper MCI never addressed Because (D.C.Cir.1994) (FCC no gave 1169-71 orders, interpretation of the FCC its IXC opportunity notice and comment before argued appeal that it had been afforded rule); promulgating City Brookings Mu of opportunity question, so no FCC, nicipal v. 822 F.2d Tel. Co. In accordance section 405 barred review. (D.C.Cir.1987) (APA procedural and other decision, that with NABB we said our objections); Relay League American Radio claim on that “MCI’s review Commission (D.C.Cir.1980) FCC, n. 8 v. 617 F.2d question it was [of whether [the] decided (notice procedures), a and comment where authority damages] by invoking an entitled petitioner ignored certain claimed FCC inadequate justify does not the decision evidence, Eng’g, record 103 F.3d at Freeman law; merely question itself a novel of it raise FCC, 182; see Ind. Broad. v. also Southern question cor original asks whether the was (D.C.Cir.1991) (appellant F.2d rectly Id. at 845. decided.”. deposition a the FCC claimed that reviewed record), ap- part an points to an was not where properly appellant conflicting our in which claimed Commission erroneous parently line of cases applicant’s ly “a rival research meth insisting sticklers in that ascribed a we have been FCC, it. Inc. present to the ods to v. party must first its concerns Gencom (D.C.Cir.1987); agency that afforded 186-87 Freeman Commission so Eng’g, (petitioner at 182 was re opportunity any to cure defect” and that 103 F.3d given opportunity quired present to ... claim the FCC FCC must be “the why competitor’s it a precursor explain failed to treated any correct error” in its order as a ignores three The dissent these cases. differently give opinion suggests should, as the proposal similar FCC court’s defect”). But might prove politically “an to cure because it unpopular” cf. FCC, 362, or, 773 F.2d petitioner,” Alabama Power Co. because “we not like do it (D.C.Cir.1985) (argument 368 & n. 12 petition a argued could be seeking wholly per- irrelevant Commission used “a brought question truly into new centage figure” certain costs hand, to discount did issue of law. On the other we have not need to be for recon- raised party warned that a must be careful on re- sideration). mand to raise issues before the Commission they to us. come back See Illinois up, To sum in our section 405 cases Bell Tel. v.Co. n. we have asked the issue that a whether (D.C.Cir.1993).7 petitioner “flagged,” brings to us or to up,” sports metaphor, use a “teed unnecessary It is for us to decide whether complains petitioner Commission. But if put our remand the issue howev- mistake, procedural a technical or such apparently er. recognized The Commission specific of a as an obvious violation APA that rationale of decision did not requirement, party insisted that a we have easily support it the distinction wished to precise raise the claim before the Commis draw, petitioner’s supposed and that “conces- necessary, motion for sion—if in a reconsid sion” confronting allowed it to avoid eration—because we assume Commission problem. question no there is that the simply requirement. overlooked the expressly decided the concession instances, those concerned .the we are petitioner issue—whether seeking even us, petitioner, by issue bringing the first to And, deficiency. recover its revenue If, however, playing game “gotcha.” regard, petitioner agree that the petitioner challenge makes a basic to a Com interpretation petitioner’s FCC’s motion policy, mission but the formulation of the expedition in this court filed was a disin- presented precisely issue to us was not as genuous gimmick principled to avoid a used presented to the we ask wheth (Indeed, response to our remand. as we necessarily er a reasonable Commission noted, appears that the Commission would have seen the raised before took Time Warner’s statement its motion part us as of the case to it. context.) expedite out of The truth is that parties often claim drastic harm will question We think it a close here expedited seeking occur when thought whether our. consideration. remand itself be should have, least, interpret it is rather to adequately farfetched such the predictions imposition. petitioner of whether as consent their the “issue” case, fully suspect petitioner In this gap entitled to recover the excluded was re- period flecting convincing external cost increases. We never a natural fear the explicitly scope remedy, operators the Commission to cable addressed authorize logic opinion—that fully their.past of our it was recover losses from consum- minimum, chancy ers justify proposition—at unreasonable for the Commission to was a a permit operators politically ap- its refusal to cable to recov that action is troublesome. It gap pears by seizing upon er external on cost increases administra us that Time War- concession, purported tive grounds—applies equally past burden ner’s the Commission If addressing scope ques- losses and future ones. the Commission avoided relief consideration, way. had relied on a new other than tion in an unfair Illinois Public Cf. burden, the discredited administrative that Telecommunications Ass’n v. matter, (D.C.Cir.1997) not; (rejecting would be but it another did 565-66 FCC’s beyond reasoning argument petitioner offered no its “concession” .had abandoned its Surely argument merely selectively rationale. if the FCC had because FCC had relief, grant quoted petitioner’s petition). that “we full from said do not wish We do cases, apparent 7. Given the tension in our consideration Commission. prudent in doubt should seek re- counsel when challenged far portions the order in so to the Commission sympathetically not look full re- as the Commission has not allowed The Commission playing “gotcha” either. operators rate to recover their reve- of duction opportunity to had an peti- nue allowed to re- deficiencies. remainder operators should be whether deficiencies, but chose to tion is denied. cover their revenue point not duck—its failure to address ordered. So mistake. accidental view as to whether Our is different RANDOLPH, Judge, concurring Circuit opportunity, fair the Commission had part part: dissenting and argument Time Warner’s consider (cid:127) Warner’s claim—that Federal Time unreasonably denied tran Order on Remand have al- Communications Commission should any recovery of operators sition rate-based recoup cost lowed external increases it. period cost increases. Pe gap external “gap” period— occurring during the so-called any party not that it or titioner does claim not been considered this should have argument this to the Commis ever raised court. sion, again arguing that our decision in the during once and Not administrative the Commis put first this issue before case judicial up to proceedings leading this case may have been true as to sion. While that- claim, single did Time Warner make that opinion scope argument, our did relief argument support during it—not full recognize a distinction between even original rulemaking, petition not in its first and rate- reduction rate-based transition court, in its for review this' motion operators, hardly it can be based so said-that consideration, expedited in its briefs in put second opinion our this issue before court, during pro- riot this Commission’s Indeed, opinion con Commission. remand, ceedings on and not in a problem as it affected the former sidered opinion administrative reconsideration. Our operators. Nor is issue class of this neces Warner Entertainment Co. v. Time sarily general implicated by petitioner’s more nothing said above, supra As argument. we noted note usually subject, good We reason. explains that transition Commission’s counsel pronounce questions no do not one rates, operators’ set without ref rate-based presented. 30,1992, September already reflect erence during cost increases incurred external case, Time After remanded Warner objects gap period. Time Warner placed supporting its claim and its could “post-hoe explanation,” argues arguments before the Commission. operators gap, that transition rate do have a surely allowing knew of the rules explana albeit a different one. But counsel’s (1995). this. See C.F.R. 1.1206 Yet legitimate persuasive why as to months, eighteen during ensuing while thought the Commission would not have this remained’pending the ease before the Com- resolving petitioner’s issue essential to more mission, nothing. Time to do Warner chose general complaint. scope of Unlike the relief again, We held in involv- have time cases question, perceive we do not that here the ing agencies, this and other administrative trying vexing to avoid a Commission was party an argue that if a does raise and problem. simply It went unaddressed be agency, before court issue will apparently cause the Commission did See, e.g., consider it. cases cited below. an Time understand it was issue. War nonstatutory “common law” or rule of That ner have it therefore should raised exhaustion, apply appeals a rule we petition in a Commission reconsideration. court, preclude enough from the district is ^ »!(cid:127) ^ is Time Warner’s claim this court. There why grant respect still another reason we should not con-

We with scope the claim. Even after the Commission question. of relief Because Com- sider Remand, Time argue chose not merits in the issued its Order on Warner mission alternative, a motion for reconsideration. we have no choice but vacate could filed Again, alley searching it chose to remain silent. Section 405 for a distinction between Communications Act therefore stands something called a “technical” defect and judicial an additional bar to review of as something “policy” described as a difference. recoupment Time claim. In the Warner’s maj. op. See at 80-81. As I best can make §‘405, § of 47 U.S.C. the Commis words out, majority thinks it has discovered a opportunity pass” upon “no sion had litigants trend: trying to raise “technical” “legal questions” by arguments raised Time defects court without having raised them making Warner now for the first time lose, litigants Commission will legal arguments this court. Those consist of raising “policy” differences for the first time analogies dealing to Commission decisions court, without having presented their ar- “Exchange with the Network Facilities for guments to .the might.just get Access,” to of Interstate decisions the Feder away with it.2 Energy Regulatory allowing al gas pipelines impose tell, retroactive sur So far as I can this technical-policy obvious, charges, and so on. To state the up playing trend winds no discernible role Commission never had a chance to Still, on the outcome. a few words about the legal arguments concerning Time Warner’s majority’s digression are order. For agency’s remedial discretion because starters, the distinction any lacks coherent argu never those rationale. majority suggests The that re is,” ments to the Commission. “It we recent quiring litigant procedural to raise a or reiterated, ly “only through the adversarial point “technical” agency may with the allow (or circumstances) process analogous that the agency to correct its error before the Commission is such an afforded maj. case reaches op. the court. See at 80- meaning § within the of 405.” Bartholdi true, 81. This is but it is also true about (D.C.Cir. Cable Co. v. 114 F.3d “policy” Besides, or “substantive” mistakes. 1997). up We also that it stressed is not knows, as student of administrative law pleadings Commission to and docu “sift allowing agency the chance to correct its predict might ments” an effort to what only many errors is one of reasons behind argued litigant have been if the had taken instance, the raise-it-or-waive-it rule. For 279; present the claim. trouble Id. at recognizes “exhaustion doctrine the no also, e.g., Vintage Russian River Broad tion, grounded Congress’ in deference to del (D.C.Cir. casting v. egation authority of to coordinate branches 1993).1 Government, courts, agencies, not the majority ought primary responsibility refuses to follow this well- to have for the Instead, path. up programs marked it Congress charged heads blind them to review, majority quite supposing judicial parties present 1. The mistaken in must those judicially-imposed § require- 405 ousts the claims to the renders its parties present rulemaking adjudicatory light ment their claims to decision. statutory gap, may agency the federal courts fill it Commission before the decides the mat- insisting parties that if to raise Maj. op. fail their claims ter. at 79 n.5. Section 405 deals action, prior agency reconsideration, to final those will not petitions agency claims which judicial McCarthy be considered on review. necessarily come after the Commission's deci- Madigan, 503 U.S. 112 S.Ct. majority sion. To read 405 as the does sub 1085-86, (1992), very 117 L.Ed.2d 291 made this parties silentio is to render it senseless: would be point, adopting Justice White's statement in Pat contentions,’ say nothing free to hide their Florida, sy Regents v. Board 457 U.S. proceedings way while the wind their to a final 2557, 2568-69, 102 S.Ct. 73 L.Ed.2d 172 decision, then, agency only after the decision (1982) part), (concurring in that "exhaustion is a down, spring arguments comes on the administration,' judicial ‘rule of ... and unless Commission and march into court when the otherwise, Congress rightfully subject directs Commission refuses to consider them. The Here, by crafting judges." Congress has appeals anything courts of do not allow directed otherwise. is, arguments'—that arguments sort. New that not—may could have been made but were not be majority suggests 2. The that exhaustion is entire- petitions rehearing. raised in for statute, n.5, ly by maj. op. controlled see at 79 ques- 405 by proposing Section thus does not deal with the and then contradicts itself a techni- whether, cal-policy order to have claims considered distinction found no statute. 84 169, (D.C.Cir.1997), McCarthy Madigan, v. 503 182 treated a socalled administer.” 1086-87, 1081, 117 (petitioner argued S.Ct. defect” that the 112 “technical U.S. see, (1992); v. e.g., McKart L.Ed.2d 291 to address certain record Commission failed 185, 192-95, States, 89 S.Ct. U.S. evidence) 395 United alleged error an substantive (1969). “Ex- 1657, 1661-63, 194 23 L.Ed.2d (petitioner the Commission treated claimed concerns,” Supreme add- the Court haustion similarly than other situated him different ed, when the “apply particular force identically: that applicants) court held under involves exercise action review petitioner claims waived both were because discretionary power or when agency’s to -raise them first before the Commis failed proceedings allow agency de v. In Alianza Federal Mercedes sion. apply special expertise.” agency (D.C.Cir.1976), FCC, 732, we 539 F.2d 739 145, at 1086. McCarthy, at 112 S.Ct. 503 U.S. given that the had held not been brief, treats the Commis- In its Time Warner opportunity” pass petitioner’s a “fair a authority recoupment as allow sion’s to. e first argument, for the tim before raised agency matter of “discretion” so. court, that a television station’s broad McCarthy had should have Court’s words license not have been renewed should cast things, Of all remedial particular force here. public it offered a minimal amount of because in this claims of the sort Warner raises minority programming interest devoted to ought top to be at the of the list court community problems com where minorities litigant must first items raise Washington In prised 40% of the market. Commission.3 FCC, v. 712 Ass’n Television & Children hardly care surprising It is therefore F.2d 680-81 we held attention to our decisions reveals that ful precluded considering § 405 the chal doqs technical-policy majority’s line not exist. lenge to the renewals Commission’s license Take, instance, Petroleum Communica ground television had that the stations FCC, (D.C.Cir. tions, 22 F.3d Inc. v. 1164 weekday provided inadequate programming 1994), petitioners claimed a case in which Telephone for children. In Illinois Bell Co. to give had failed notice and (D.C.Cir. FCC, n. 1264 12 v. F.2d promul an to comment before 1993), exhaustion we invoked the doctrine mere ac gating rule—a “technical defect” allegations refuse that the Com majority. maj. op. cording to See at 80- “impermissibly mission had inconsis been majority forgotten 81. The seems Telephone tent.” Northwestern Indiana cage. the balance of the The Petroleum (D.C.Cir. FCC, 1205, 1210 Co. v. F.2d n. 8 petitioners argued that Communications 1987), we to reach merits of declined discriminatory applied had the rule been argument petitioners’ last minute Communications, fashion. See Petroleum the First Commission violated Amendment. F.3d at 1171. Both claims were raised for Petitioners, held, “bypass could not statu the first time for-review. We tory requirements.” exhaustion Id. And merits

refused reach the of either issue (D.C.Cir. v. 46 F.3d ASTV reasons,” namely “substantially the same 1995), argu to consider ASTVs refused “petitioners failed to their reme exhaust system’ ment that “wireless cable is ‘cable by alleged declining bring ... [the dies Act, to raise under because ASTV failed first Id. To error] before Commission.” case, Engi Commission”—surely a substan take another recent Freeman Associates, tive, neering “policy” Inc. v. matter rather than what Cisneros, Darby inoperative pending v. 113 S.Ct. review.” U.S. made (1993), by the ma 125 L.Ed.2d 113 cited S.Ct. at 2548. Marine U.S. See footnote, n.5,. jority maj. op. in a at 79 Conservancy, Department Mammal Inc. nothing Darby interpreted to do with this case. (D.C.Cir. 1998). Agric., 134 No Act, 10(c) § of the Administrative Procedure have, saying should or could one is Time Warner 706(2)(A), appeal U.S.C. to mean that an "an have, perfected intra-agency appeal—the superior agency authority’ prerequisite is a Commission rendered decision under review judicial expressly required when course, superior and the appeal agency requires statute when an rule agency authority. before review and the administrative action a mere “technical’ majority would treat as

peccadillo. AMERICAN FEDERATION OF GOV EMPLOYEES, ERNMENT LO majority ultimately comes to rest on The 2343, Petitioner, CAL technical-policy than grounds other its di- chotomy. loses it The Commission because something “gotcha,” playing called “unfair,” its of the matter was view FEDERAL LABOR RELATIONS “farfetched,” “disingenuous it relied on a AUTHORITY, Respondent. Maj. gimmick.” op. at 81-82. All this ex- No. 97-1355. at a footnote in the citement directed Commission’s decision remand. Appeals, United States Court of quoted a footnote Time Warner motion con- District of Columbia Circuit. ceding operators recoup that cable could they incurring “they even if the losses were Argued March 1998. ultimately persuading succeed in this Court favor,” to rule Memorandum of Law May Decided Company, of Time Entertainment Warner Support Emergency L.P. of Its Motion Consideration, Expedited pp. 17-18. directly

That concession contradicts Time position. current Warner’s The Commission rightly took the statement context: Time referring delay- Warner was to the effect of ing “rate-regulation review of the entire is,” Id. rulemaking.” at 17. “The truth according majority, parties “that often

claim that drastic harm will occur when

seeking expedited Maj. op. consideration.” so, Maybe point. at 81. but that misses the If Time Warner believed that it was entitled' losses, recoup company its if thought open despite was still what it court, upon told this it was incumbent to make its views known to the ample opportunity Commission. It had so, pend- do while the matter was remand, ing agency but also after the Commission handed down deci-

sion. Time Warner nevertheless remained mute. simple, majority

Pure and has offered good rejecting no reason for the Commis- legal sion’s determination not to decide claim sup- Time Warner neither raised nor ported pertinent “got- authorities. If “disingenuous gimmick”

cha” and are meant embody legal principle, I confess—the principle eludes me. I therefore dissent portion majority opinion.

from this

Case Details

Case Name: Time Warner Entertainment Co. v. Federal Communications Commission

Court Name: Court of Appeals for the D.C. Circuit

Date Published: May 22, 1998

Citation: 144 F.3d 75

Docket Number: 97-1263

Court Abbreviation: D.C. Cir.