No. 95-1200 In the Supreme Court of the United States OCTOBER TERM, 1995 FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA, PETITIONERS v. ZELL MILLER, ET AL. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT PETITION FOR A WRIT OF CERTIORARI WILLIAM E. KENNARD General Counsel CHRISTOPHER J. WRIGHT Deputy General Counsel DANIEL M. ARMSTRONG Associate General Counsel LAURENCE N. BOURNE Attorney Federal Communications Commission Washington, D.C. 20554 DREW S. DAYS III Solicitor General LAWRENCE G. WALLACE Deputy Solicitor General PAUL R. W. WOLFSON Assistant to the Solicitor General Department of Justice Washington, D.C. 20530 202)514-2217 ---------------------------------------- Page Break ---------------------------------------- QUESTION PRESENTED Section 315(b) of the Communications Act of 1934, as amended, 47 U.S.C. 315(b), provides that, during certain periods, broadcast stations must charge poli- tical candidates, for their campaign advertising, the "lowest unit charge of the station for the same class and amount of time for the same period." The question presented is whether the court of appeals should have upheld the Federal Communications Commission's (FCC) authority to provide, by declar- atory ruling, that causes of action purportedly based on state law but alleging violations of the federal `lowest unit charge" requirement are preempted, and that all disputes over violations of that requirement must be adjudicated by the FCC, subject to judicial review exclusively in the federal courts of appeals. (I) ---------------------------------------- Page Break ---------------------------------------- PARTIES TO THE PROCEEDINGS The United States and the Federal Communica- tions Commission were respondents in the court of appeals. The petitioners in the court of appeals were Zen Miller; Zen Miller For Governor; Pierre Howard; Georgians For Howard '90; Johnny Isakson; Johnny Isakson For Governor; Andrew Young; Young Working For Georgia; Lauren McDonald; Lauren McDonald For Governor; Roy Barnes; Roy Barnes For Governor; Tim Ryles; Tim Ryles For Insurance Commissioner; Warren Evans; Warren Evans Election Committee; William L. Dickinson, Second District Campaign Committee; William J. Cabaniss; Friends of Bill Cabaniss Committee; Spencer T. Bachus, III; Bachus For Attorney General Com- mittee; John Teague; James E. Folsom, Jr.; Jim Folsom, Jr. For Lieutenant Governor Committee Fob James; Fob James For Governor Committee; Kenneth D. Wallis; Alabamians For Ken Wallis Committee; George D.H. McMillan, Jr.; The McMillan Committee; George Wallace, Jr.; Wallace For Treasurer Committee; Charles A. Graddick; Graddick For Governor Committee William J. Baxley; Friends Of Bill Baxley; Paul Hubbert; Richard Shelby; Don Siegelman; Jimmy Sullivan; Sonny Hornsby; Friends of E.C. Sonny Hornsby; Mark Kennedy; Judge Mark Kennedy For Supreme Court; and Friends Of Judge Mark Kennedy. Respondents-interveners in the court of appeals were Capital Cities/ABC, Inc.; Chris-Craft Indus- tries, Inc.; The Times Mirror Company; American Family Broadcast Group, Inc.; Allbritton Communi- cations Company; CBS, Inc.; Chronicle Publishing (II) ---------------------------------------- Page Break ---------------------------------------- Co.; Fox Television Stations, Inc.; Gillett Broad- casting of California, Inc.; Gillett Communications of San Diego, Inc.; Great American Television and Radio Company, Inc.; Kelly Broadcasting Company Kelly Television Company; Lin Television Company McGraw-Hill Broadcasting Company, Inc.; Midwest Television, Inc.; National Broadcasting Company, Inc.; The New York Times Company, Post-Newsweek Stations, Inc.; The Providence Journal Company The Spartan Broadcasting Company Tribune Broadcasting Company; Westinghouse Broadcasting Company, Inc.; WKRG-TV, Inc.; WTVT, Inc.; Meredith Corporation; A.H. Belo Corporation Cosmos Broadcasting Corporation; Cox Enterprises, Inc.; and the National Association of Broadcasters. They are also respondents in this Court under the Court's Rule 12.6 and are filing a separate petition for a writ of certiorari seeking review of the judgment below. (III) ---------------------------------------- Page Break ---------------------------------------- TABLE OF CONTENTS Page Opinions below . . . . 1 Jurisdiction . . . . 2 Statutory provisions involved . . . . 2 Statement . . . . 3 Reasons for granting the petition . . . . 14 Conclusion . . . . 25 Appendix A . . . . 1a Appendix B . . . . 16a Appendix C . . . . 48a Appendix D . . . . 87a TABLE OF AUTHORITIES Cases: Ackerman v. Columbia Broadcasting Sys., 301 F. Supp. 628 (S.D.N.Y. 1969) . . . . 7 Alpha Broadcasting Corp., 102 F.C.C. 2d 18 (1984) . . . . 5 Belluso v. Turner Communications Corp., 633 F.2d 393 (5th Cir. 1980) . . . . 7 Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691 (1984) . . . . 16, 17 Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) . . . . 18-19 Chisholm v. FCC, 538 F.2d 349 (D.C. Cir.), cert. denied, 429 U.S. 890 (1976) . . . . 19 Chronicle Publishing Co., 6 F.C.C. Rcd 7497 (1991) . . . . 5 City of New York v. FCC, 486 U.S. 57 (1988) . . . . 9, 13 15, 16, 17 Community Broadcasting Co., 35 F.C.C.2d 663 (1972) . . . . 5 Daly v. Columbia Broadcasting Sys., 309 F.2d 83 (7th Cir. 1962) . . . . 7 (IV) ---------------------------------------- Page Break ---------------------------------------- V Cases-continued: Page David E. Henderson (Outlet Communications, Inc.), 5 F.C.C. Red 2835 (1990), aff'd, 7 F.C.C. Rcd 632 (1992) . . . . 5 DeYoung v. Patton, 898 F.2d 628 (8th Cir. 1990) . . . . 7 Eugene T. Smith, 34 F.C.C.2d 623 (1972) . . . . 5 Farmers Educ. & Coop. Union v. WDAY, Inc., 360 U.S. 525 (1959) . . . . 4, 15 FCC v. ITT World Communications, Inc., 466 U.S. 463 (1984) . . . . 21 Fidelity Federal Savings & Loan Association v. de la Cuesta, 458 U.S. 141 (1982) . . . . 9, 16, 17 Garner v. Teamsters Local Union No. 776, 346 U.S. 485 (1953) . . . . 16 Health Insurance Ass'n of America v. Shalala, 23 F.3d 412 (D.C. Cir. 1994), cert. denied, 115 S. Ct. 1095 (1995) . . . . 19 Hernstadt v. FCC, 677 F.2d 893 (D.C. Cir. 1980) . . . . 4 Holden E. Sanders v. Station WIXC, 52 F.C.C.2d 592 (1975) . . . . 5 James H. Doyle, 38 Rad. Reg. 2d (P & F) 330 (1976) . . . . 5 KGWA Pub. Broadcasting Serv., Inc., 34 F.C.C. 2d 1103 (1972) . . . . 5 KVUE, Inc. v. Moore, 709 F.2d 922 (5th Cir. 1983), aff'd mem., 465 U.S. 1092 (1984) . . . . 7, 16 Kay v. FCC, 44.3 F.2d 638 (D.C. Cir. 1970) . . . . 9 Ken Jennison, 38 Rad. Reg. 2d (P & F) 1393 (1976) . . . . 5 Kennedy for Pres. Comm. v. FCC, 636 F.2d 417 (D.C. Cir. 1980) . . . . 4 Korral Radio, Inc., 48 F.C.C.2d 531 (1974) . . . . 5 Louisiana Public Service Comm'n v. FCC, 476 U.S. 355 (1986) . . . . 16 ---------------------------------------- Page Break ---------------------------------------- VI Cases-Continued: Page Midnight Sun Broadcasters, Inc., 40 Rad. Reg. 2d (P & F) 660 (1977) . . . . 5 Mississippi Power & Light Co. v. Moore, 487 U.S. 354 (1988) . . . . 10 New York State Comm'n on Cable Television v. FCC: 669 F.2d 58 (2d Cir. 1982) . . . . 19 749 F.2d 804 (D.C. Cir. 1984) . . . . 19 North Carolina Utils. Comm'n v. FCC, 537 F.2d 787 (4th Cir.), cert. denied, 429 U.S. 1027 (1976) . . . . 19 Pennsylvania R.R. v. United States, 363 U.S. 202 (1960) . . . . 18 Permian Basin Area Rate Cases, 390 U.S. 747 (1968) . . . . 22 Port of Boston Marine Terminal Ass'n v. Reder- iaktie Bolaget Transatlantic, 400 U.S. 62 (1970) . . . . 18 Scripps-Howard Radio, Inc. v. FCC, 316 U.S. 4 (1942) . . . . 3 Senator Wendell Anderson, 44 Rad. Reg. 2d (P & F) 831 (1978) . . . . 5 Southern Arkansas Radio Co., 5 F.C.C. Rcd 4643 (1990) . . . . 5 Telecommunications Research and Action Center v. FCC, 26 F.3d 185 (D.C. Cir. 1994) . . . . 19 Turner Communications Corp., 36 Rad. Reg. 2d (P & F) 537 (1976) . . . . 5 United States v. Storer Broadcasting Co., 351 U.S. 192 (1956) . . . . 18, 22 Warren J. Moity, Sr., 46 Rad. Reg. 2d (P & F) 399 (1979) . . . . 5 Weinberger v. Hynson, Westcott & Dunning, 412 U.S. 609 (1973) . . . . 18, 22 Wilson v. A.H. Belo Corp., Civ. No. S-91-1206 (LKK) (E.D. Cal. Apr. 27, 1992) . . . . 21 ---------------------------------------- Page Break ---------------------------------------- VII Statutes: Page U.S. Const., Art. VI, Cl. 2 (Supremacy Clause) . . . . 15, 18 Communications Act of 1934, 47 U.S.C. 151 et seq . . . . 3 312(a)(7), 47 U.S.C. 312(a)(7) . . . . 11, 20 315, 47 U.S.C. 315 . . . . 2, 4, 9 315(a), 47 U.S.C. 315(a) . . . . 4, 7, 19 315(b), 47 U.S.C. 315(b) (1958) . . . . 4 315(b), 47 U.S.C. 315(b) . . . . passim 315(b)(1), 47 U.S.C. 315(b)(1) . . . . 4 315(b)(2), 47 U.S.C. 315(b)(2) . . . . 5 315(d), 47 U.S.C. 315(d) . . . . 9 402(a), 47 U.S.C. 402(a) . . . . 3, 11, 14, 20 Communications Act Amendments of 1952, Pub. L. No. 82-554, 11, 66 Stat. 717 . . . . 4 Federal Election Campaign Act, Pub. L. No. 92-225, 104, 86 Stat. 7 . . . . 4 5 U.S.C. 554(e) . . . . 22 28 U.S.C. 2342 . . . . 3, 11, 14, 20 28 U.S.C. 2344 . . . . 19 Miscellaneous: Codification of the Co-remission's Political Program- ming Policies In re: 6 F.C.C. Rcd 5707 (1991) . . . . 6 7 F.C.C. Rcd 678 (1991) . . . . 6, 7 7 F.C.C. Rcd 4611 (1992) . . . . 6, 7 Law of Political Broadcasting & Cablecasting, 69 F.C.C.2d 2209 (1978) . . . . 6 The Law of Political Broadcasting and Cablecasting: A Political Primer, 100 F.C.C. 2d 1476 (1984) . . . . 6, 7 Licensees and Cable Operators Reminded of Lowest Unit Charge Obligations, 4 F.C.C. Rcd 3823 (1988) . . . . 6 Mass Media Bureau Report on Political Program- ming Audit, 68 Rad. Reg. 2d (P & F) 113 (1990) . . . . 5 Questions and Answers Relating to Political Pro- gramming Law, 68 Rad. Reg. 2d (P & F) 188 (1990) . . . . 6 ---------------------------------------- Page Break ---------------------------------------- VIII Miscellaneous: Page Radio Station WBGR, 36 Rad. Reg. 2d (P & F) 388 (1976) . . . . 5 S. Rep. No. 96, 92d Cong., 1st Sess. (1972) . . . . 20 Use of Broadcast and Cablecast Facilities By Candi- dates for Public Office, 34 F.C.C. Rcd 510 (1972) . . . . 6 ---------------------------------------- Page Break ---------------------------------------- In the Supreme Court of the United States OCTOBER TERM, 1995 No. FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA, PETITIONERS v. ZELL MILLER, ET AL. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT PETITION FOR A WRIT OF CERTIORARI The Solicitor General, on behalf of the Federal Communications Commission (FCC) and the United States of America, respectfully petitions for a writ of certiorari to review the judgment of the Court of Appeals for the Eleventh Circuit in this case. OPINIONS BELOW The opinion of the court of appeals (App., infra, 1a- 15a) is reported at 66 F.3d 1140. The declaratory ruling of the FCC (App., infra, 16a-97a) is reported at 6 F.C.C. Red 7511. The FCC's order on recon- sideration (App., infra, 48a-86a) is reported at 7 (1) ---------------------------------------- Page Break ---------------------------------------- 2 F.C.C. Rcd 4123. The FCC's notice of its intention to issue a declaratory ruling (App., infra, 87a-94a) is reported at 6 F.C.C. Rcd 5954. JURISDICTION The judgment of the court of appeals was entered on September 29, 1995. On December 21, 1995, Justice Kennedy entered an order extending the time within which to file a petition for a writ of certiorari to and including January 26, 1996. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATUTORY PROVISIONS INVOLVED 1. Section 315 of Title 47, United States Code, provides in part: (b) Broadcast media rates The charges made for the use of any broad- casting station by any person who is a legally qualified candidate for any public office in connection with his campaign for nomination for election, or election to such office shall not exceed- (1) during the forty-five days preceding the date of a primary or primary runoff election and during the sixty days pre- ceding the date of a general or special election in which such person is a candi- date, the lowest unit charge of the station for the same class and amount of time' for the same period; and (2) at any other time, the charges made for comparable use of such station by other users thereof. * * * * * ---------------------------------------- Page Break ---------------------------------------- 3 (d) Rules and regulations The Commission shall prescribe appro- priate rules and regulations to carry out the provisions of this section. 2. Section 402(a) of Title 47, United States Code, provides: Any proceeding to enjoin, set aside, annul, or suspend any order of the Commission under this chapter (except those appealable under subsection (b) of this section) shall be brought as provided by and in the manner prescribed in Chapter 158 of Title 28. 3. Section 2342 of Title 28, United States Code, provides in part: The court of appeals (other than the United States Court of Appeals for the Federal Circuit) has exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part) or to determine the validity of (1) all final orders of the Federal Com- munications Commission made reviewable by Sec- tion 402(a) of title 47. STATEMENT 1. The Communications Act of 1934, as amended, 47 U.S.C. 151 et seq., "established a comprehensive sys- tem for the regulation of communication by wire and radio," and "created a new agency, the Federal Com- munications Commission," to carry out its underly- ing policies. Scripps-Howard Radio, Inc. v. FCC, 316 U.S. 4, 6 (1942). Within that "comprehensive scheme," both Congress and the FCC have paid spe- ---------------------------------------- Page Break ---------------------------------------- 4 cial attention to broadcasts of political campaign advertising, and in particular to problems of dis- criminatory obstacles to such advertising. Section 315 of the Communications Act, 47 U.S.C. 315, is addressed to those problems. Section 315(a) (the "equal time" provision), which was enacted as part of the original Communications Act of 1934, provides that (with certain exceptions), if a station permits a legally qualified candidate "to use a broadcasting station," that station "shall afford equal opportunities to all other such candidates for that office in the use of such broadcasting station." 47 U.S.C. 315(a); see generally Farmers Educ. & Coop. Union v. WDAY, Inc., 360 U.S. 525 (1959); Kennedy for Pres. Comm. v. FCC, 636 F.2d 417 (D.C. Cir. 1980). In 1952, Congress added Section 315(b), which, as originally enacted, prohibited broadcasters from charging candidates for federal, state, or local office higher rates than those charged to other advertisers "for comparable use of such station." Pub. L. No. 82-554, 11, 66 Stat. 717. "This 'compar- able use' provision was designed to protect candidates from discriminatory rates." Hernstadt v. FCC, 677 F.2d 893, 895 (D.C. Cir. 1980) (footnotes omitted). In 1972, Congress amended Section 315(b) (1958) of the Communications Act to add, as Section 315(b)(1), the "lowest unit charge" provision that is the subject of this case. See Federal Election Campaign Act, Pub. L. No. 92-225, 104, 86 Stat., 7. Section 315(b)(1) provides that, during the 45 days before primary and runoff elections and the 60 days before general and special elections, broadcast stations must charge legally qualified political candidates "the lowest unit charge of the station for the same class and amount of time for the same period." 47 U.S.C. 315(b)(1). ---------------------------------------- Page Break ---------------------------------------- 5 Outside those specified periods, the "comparable use" provision enacted in 1952 (and remodified as Section 315(b)(2)) continues to apply. Since its enactment, the lowest unit charge rule has been the focus of sustained regulatory attention. The FCC has issued several interpretive rulings respecting that rule in response to inquiries from candidates and broadcasters. 1. It has adjudicated nu- merous disputes between candidates and broadcasters over political advertising charges. 2. It has ordered rebates to candidates and has imposed fines on broadcasters for some violations of Section 315(b). 3. It has conducted a broad-based audit of the political advertising charges of randomly selected broadcast stations. 4. And it has periodically provided and updated comprehensive guidance to candidates and ___________________(footnotes) 1 See, e.g., Community Broadcasting Co., 35 F.C.C.2d 663 (1972); Eugene T. Smith, 34 F.C.C.2d 622 (1972); KGWA Pub. Broadcasting Serv., Inc., 34 F.C.C.2d 1103 (1972); Korral Radio, Inc., 48 F.C.C.2d 531 (1974); Ken Jennison, 38 Rad. Reg. 2d (P & F) 1393 (1976); Radio Station WBGR, 36 Rad. Reg. 2d (P & F) 388 (1976). 2 See, e.g., Holden E. Sanders v. Station WIXC, 52 F.C.C.2d 592 (1975); Turner Communications Corp., 36 Rad. Reg. 2d (P & F) 537 (1976); James H. Doyle, 38 Rad. Reg. 2d (P & F) 330 (1976); Midnight Sun Broadcasters, Inc., 40 Rad. Reg. 2d (P & F) 660 (1977); Senator Wendell Anderson, 44 Rad. Reg. 2d (P & F) 831 (1978); Warren J. Moity, Sr., 46 Rad. Reg. 2d (P & F) 399 (1979). 3 See, e.g., Southern Arkansas Radio Co., 5 F.C.C. Rcd 4643 (1990); David E. Henderson (Outlet Communications, Inc.), 5 F.C.C. Rcd 2835 (1990), aff'd, 7 F.C.C. Rcd 632 (1992); Alpha Broadcasting Corp., 102 F.C.C.2d 18, 26 (1984). See also Chronicle Publishing Co., 6 F.C.C. Rcd 7497, 7499 (1991). 4 Mass Media Bureau Report on Political Programming Audit, 68 Rad. Reg. 2d (P & F) 113 (1990). ---------------------------------------- Page Break ---------------------------------------- 6 broadcasters through, among other things, the issu- ance of public notices 5. and a "Political Primer," 6. the publication of frequently encountered "Questions and Answers," 7. and the codification of political broad- casting rules. 8. The guidance provided by the FCC in its admin- istrative proceedings has been detailed and far- reaching. Because there is great variety in broad- casters' advertising practices, the FCC has found that it is necessary to examine those practices closely to determine whether any particular rate charged by a broadcast station is or is not the station's lowest unit charge. See App., infra, 24a (noting that broadcast advertising charges are "com- plex and often arcane"). The FCC "has, in fact, concluded that, in investigating alleged violations of Section 315(b)j it will consider a great number of factors, including (1) the rate offered to the station's most favored advertiser, (2) classes of time offered by the station, (3) weekly rotations of time offered to ___________________(footnotes) 5 Use of Broadcast and Cablecast Facilities By Candidates for Public Office, 34 F.C.C.2d 510 (1972); Licensees and Cable Operators Reminded of Lowest Unit Charge Obligations, 4 F.C.C. Rcd 3823 (1988). 6 Law of Political Broadcasting & Cablecasting, 69 F.C.C.2d 2209 (1978); The Law of Political Broadcasting and Cablecasting: A Political Primer, 100 F.C.C.2d 1476 (1984) (Political Primer). 7 Questions and Answers Relating to Political Program- ming Law, 68 Rad. Reg. 2d (P & F) 188 (1990). 8 In re Codification of the Commission's Political Program- ming Policies, Notice of Proposed Rulemaking, 6 F.C.C. Rcd 5707 (1991); Report and Order, 7 F.C.C. Rcd 678 (1991) (Political Programming Policies Order), on reconsideration, 7 F.C.C. Rcd 4611 (1992) (Political Programming Policies Recon- sideration Order). ---------------------------------------- Page Break ---------------------------------------- 7 advertisers, (4) increases in rates during election periods, including any increases that are the result of "ordinary business practices," (5) calculation of rebates, (6) package plans, (7) "bonus" advertising spots, (8) "fire sale" last-minute discounts, (9) "make good" spots for preempted advertising, and (10) broadcasters' practices with respect to purportedly "sold out" preemptible time, 9. Moreover, industry practices and market conditions change frequently, and the FCC has noted that "each day usually brings at least one new question of interpretation." 10. 2. Before 1990, lowest unit charge standards were promulgated and enforced exclusively by the FCC (with the exception of one Texas statute that was ultimately held to be preempted by Section 315(b)). 11. Several courts had also ruled that the companion "equal time" rule of Section 315(a) created no private right of action for damages, and that the FCC had exclusive authority to enforce the rule. 12. Beginning in 1990, however, candidates for public office began filing lawsuits against broadcasters in state and federal courts, arguing either that the broadcasters had violated Section 315(b) (which was said to have created a private right of action) or, more commonly, ___________________(footnotes) 9 See Political Programming Policies Order, 7 F.C.C. Rcd at 688-698; Political Programming Policies Reconsideration Or- der, 7 F.C.C. Rcd at 4614-4620. 10 Political primer, 100 F.C.C.2d at 1478. 11 See KVUE, Inc. v. Moore, 709 F.2d 922 (5th Cir. 1983), aff'd mem., 465 U.S. 1092 (1984). 12 See DeYoung v. Patton, 898 F.2d 628, 633-635 (8th Cir. 1950); Belluso v. Turner Communications Corp., 633 F.2d 393, 396-397 (5th Cir. 1980); Daly v. Columbia Broadcasting Sys., 309 F.2d 83, 85-86 (7th Cir. 1962); Ackerman v. Columbia Broadcasting Sys., 301 F. Supp. 628, 631 (S.D.N.Y. 1969). ---------------------------------------- Page Break ---------------------------------------- 8 that the broadcasters had violated their contractual obligations, enforceable understate law, to adhere to the lowest unit charge rule. See App., infra, 88a-89a (FCC's notice of intention to issue declaratory rul- ing, discussing federal and state court lowest unit charge litigation). In one of those cases, brought by respondent Zell Miller, the federal district court dismissed the complaint and held that the FCC had exclusive authority to provide a remedy for violations of Section 315(b), but in another case brought by respondent William Dickinson, the district court held that the lawsuit did not present a question arising under federal law, and remanded it to the state courts, where the case is still pending. Ibid. Noting "the inconsistencies among these federal and state court decisions and the likely proliferation of similar suits in a number of jurisdictions," App., infra, 87a-88a, the FCC initiated a declaratory ruling proceeding to address "whether its jurisdiction to determine the lawfulness of political advertising charges is exclusive. and whether federal and state courts must refer the liability question to the FCC in any case alleging that charges for political adver- tising are excessive: id. at 88a. The FCC also asked commenters to address whether. "its exclusive juris- diction should extend beyond the basic liability question and, if so, whether the Commission should preempt any cause of action in any court in which an alleged violation of Section 315(b) is an essential element." Ibid. (footnote omitted). 3. The FCC subsequently issued a declaratory ruling that "any state cause of action dependent on any determination of the lowest unit charge under Section 315(b) * * * is preempted by federal law," and that "[t]he sole forum for adjudicating such ---------------------------------------- Page Break ---------------------------------------- 9 matters shall be [the FCC]." App., infra, 16a. In that ruling, the FCC first concluded that "Congress by implication" preempted state causes of action of which alleged violations of Section 315(b) are an integral part." Id. at 19a. It explained that private litigation in courts around the country over the requirements of Section 315(b) would conflict with Congress's establishment of the FCC as the "centralizing authority" overseeing the "unified and comprehensive regulatory system" governing interstate communi- cations, and in particular political broadcasting. ld. at 20a. It also found that Section 315 "itself embodies Congress' mandate that uniform federal policies gov- ern political broadcasting rates," since Section 315(d) directs the FCC to "make rules and regulations to carry [Section 315] into effect." App., infra, 20a. That "narrowly focused directive; the FCC observed, is "something more than the usual delegation of rule- making authority," and "amounts to a congressional direction to the FCC to recognize the importance of this particular section of the statute and prescribe separate rules and regulations to deal with the multi- tudinous situations that arise in applying it to all federal state and local candidates for office through- out the nation." Ibid. (quoting Kay v. FCC, 443 F.2d 638, 643-644 (D.C. Cir. 1970)) (emphasis omitted). The FCC also concluded that it should exercise its own authority to preempt state law claims based on violations of Section 315(b), whether or not Con- gress expressly or by implication had preempted such claims. App., infra, 21a-25a. In reaching that conclusion, it noted that, in City of New York v. FCC, 486 U.S. 57 (1988), and Fidelity Federal Savings & Loan Association v. de la Cuesta, 458 U.S. 141 (1982), this Court upheld the authority of federal admin- ---------------------------------------- Page Break ---------------------------------------- 10 istrative agencies (specifically including the FCC) to preempt state regulation, as long as the decision to preempt represents "a reasonable accommodation of conflicting policies that were committed to the agency's care." App., infra, 21a. Addressing whether preemption would be an appro- priate exercise of its regulatory authority, the FCC stated that preemption of state law with respect to political broadcasting charges "is necessary to allow the Commission to 'achieve its purposes' by develop- ing uniform standards for interpreting and enforcing Section 315(b)." App., infra, 22a. Absent preemption, the FCC found, "[r]ulings by courts in numerous jurisdictions around the country almost certainly would produce varying and possibly conflicting deter- minations" that "would leave both candidates and broadcasters unsure of their respective rights and responsibilities." Id. at 22a-23a. Moreover, the FCC pointed out, lawsuits in various states would disserve Congress's objective of removing obstacles to polit- ical broadcasting, because it would be "difficult, if not perilous, for broadcasters who serve more than one jurisdiction to provide various candidates prompt, authoritative quotes for the lowest unit charge available to them" (id. at 23a), and the prospect of such lawsuits around the country "might encourage some stations simply to refuse to accept political advertisements" (id. at 24a). The FCC therefore "f[oun]d that state court adjudication of claims of which alleged violations of Section 315(b) are an integral part would 'conflict with the basic objectives of federal policy' with respect to political adver- tising." Id. at 23a (footnote omitted). The FCC also found it "now clear" that the consid- erations supporting preemption of substantive state ---------------------------------------- Page Break ---------------------------------------- 11 law required preemption of judicial remedies as well. App., infra, 25a. In the FCC's view, "[s]tate efforts to provide their own remedies for a violation of the lowest unit charge requirement * * * would interfere with uniform enforcement of the Act by the Commission just as surely as would state determina- tions of the initial question of whether Section 315(b) has been violated." Id. at 25a-26a. It pointed to this Court's similar conclusion in Farmers Educational & Cooperative Union, supra, in which the Court held that Section 315(a) preempts libel actions against broadcast licensees for the content of paid political advertisements, and concluded that a judicial remedy against broadcasters for libel in such situations would "hamper the Congressional plan to develop broadcasting as a political outlet." App., infra, 26a. 13. 4. The court of appeals dismissed a petition for review of the declaratory ruling brought by a group of political candidates. App., infra, 1a-15a. After re- viewing the proceedings before the FCC, the court considered its own jurisdiction to review the declara- tory ruling under 47 U.S.C. 402(a) and 28 U.S.C. 2342(1), which, taken together, vest jurisdiction over. challenges to most FCC orders exclusively in the courts of appeals. See id. at 9a; p. 3, supra. The Court ___________________(footnotes) 13 In the declaratory ruling, the FCC also established new procedures for adjudication of administrative complaints based on alleged violations of Section 315(b). App., infra, 27a-29a. It subsequently denied petitions for reconsideration (id. at 49a- 67a) and affirmed "in its entirety the holding of the Declar- atory Ruling" (id. at 50a). In particular, it reaffirmed that, "regardless of whether Congress expressly or by implication preempted state law claims based upon alleged violations of Section 315(b)," it had properly exercised its "independent authority to preempt state causes of action." Id. at 62a, ---------------------------------------- Page Break ---------------------------------------- 12 remarked that "it is, necessary to characterize. appropriately the FCC action [under review]" (App., infra, 9a-10a), and stated: The Commission's declaratory ruling-that Con- gress (or the Commission itself) has preempted the jurisdiction of state courts and federal district courts, in diversity cases, when the candidate claims that the broadcaster's rates exceeded the lowest unit charge-is not a regulation promulgated pursuant to section 315(d). * * * [T]he, ruling does not define statutory terms, dictate the use of certain indus- try practices, or prescribe appropriate methods for calculating the lowest unit charge. Further- more, the declaratory ruling is not an adjudi- cation of a pending case involving a dispute between a candidate and a broadcast station licensee. It is not a decision, a letter of admoni- tion, or an order levying a penalty of forfeiture, a loss of operating authority, or a refund to a candidate. Id. at 10a. The court then remarked: Because it is axiomatic that Congress has not delegated, and could not delegate, the power to any agency to oust state courts and federal dis- trict courts of subject matter jurisdiction, the FCC's declaratory ruling amounts to an agency opinion-a pronouncement interpreting the Com- munications Act to the effect that Congress im- pliedly abolished state and federal court jurisdic- tion over lowest unit charge violations. Ibid. The court cited no authority for its "axiomatic" proposition. It did state in a footnote that the FCC's ---------------------------------------- Page Break ---------------------------------------- 13 action was "thus distinguishable from prior cases involving the preemptive effect of the Commu- nications Act in other contexts." Ibid. n.4 (citing, inter alia, City of New York v. FCC, 486 U.S. 57 (1988)). Having thus "characterize[d]" the FCC's action, the court of appeals concluded that it lacked juris- diction over the petition for review, because (it be- lieved) there was no case or controversy present. The court stated that, "[e]ssentially, [the candidates] ask this court to declare whether, at some future date, a candidate may bring a breach of contract action in state court contending that a broadcaster's rates exceeded the lowest unit charge and seeking recovery of the overcharge." App., infra, 12a. It also remarked that the only question presented in such a case would be "whether Congress has foreclosed the power of the state court[s]" to entertain suits by candidates against broadcasters. Id. at 12a-13a. But, disre- garding the fact that at least one of the candidates before the court had (and has) just such a lawsuit against a broadcaster pending in Alabama state court (id. at 6a n.2), the court concluded that, "[b]y asking this court to decide what another court should do in a future case, [the candidates] are posing a hypothetical question, the answer to which would be an advisory opinion." Id. at 13a. Although the court therefore stated that it would refuse to rule on the petition for review, it also remarked that its "refusal to answer the question [the candidates] pose will not preclude them from obtaining an answer. Any of them who have been or may in the future be overcharged by a broadcaster while running for public office may seek judicial relief." App., infra, 15a. But, repeating its conclu- ---------------------------------------- Page Break ---------------------------------------- 14 sion that "no case controversy is presented," the Court stated, "we DISMISS the petition for review." Ibid. REASONS FOR GRANTING THE PETITION In its declaratory riding, the FCC concluded, in light of its extensive experience, that predictable and uniform enforcement of the lowest unit charge rule of Section 315(b) is threatened by inconsistent and conflicting judicial interpretations of that require- ment. It therefore held the administrative procedure at the FCC for adjudication of Section 315(b) com- plaints to be exclusive, with the results of its adjudi- cation of those complaints subject, to judicial review in the federal courts of appeals, pursuant to 28 U.S.C. 2342(1) and 47 U.S.C. 402(a). The court of appeals nonetheless held the it was "axiomatic" that Con- gress had no power to authorize, and had not author- ized, the FCC to establish such,. an exclusive admin- istrative mechanism. And, insofar as the FCC had based its preemption ruling on an interpretation of the statute, the court characterized" the declaratory ruling as an action without substantive effect, a mere expression of opinion about the reach of a statute without regulatory significance. The court of appeals' decision encourages candi- dates to pursue remedies against broadcasters direct- ly in state and federal courts around the country- precisely the situation that the FCC's declaratory ruling seeks to avoid. Its decision has also created considerable confusion about the basis of the FCC's declaratory ruling. Certiorari is warranted in this case to correct the court of appeals' serious errors on important questions of law and to prevent the sig- nificant and adverse practical consequences for ---------------------------------------- Page Break ---------------------------------------- 15 political broadcasting that necessarily flow from those errors. 1. a. The court of appeals' characterization of the FCC's declaratory ruling as a mere expression of opinion about the preemptive effect of Section 315(b) was premised on its conclusion that, insofar as the FCC itself (as opposed to Congress) had purported to preempt judicial jurisdiction over lowest unit charge claims, that action was a nullity. The court of appeals emphasized that "Congress has not delegated, and could not delegate, the power to any agency to oust state courts and federal district courts of subject matter jurisdiction." App., infra, 10a. That holding conflicts with this Court's precedents (relied on by the FCC in the declaratory ruling) holding that "a federal agency acting within * * * its con- gressionally delegated authority may pre-empt state regulation and hence render unenforceable state or local laws that are not otherwise inconsistent with federal law." City of New York v. FCC, 486 U.S. 57, 63-64 (1988) (internal quotations omitted); accord Fidelity Federal Savings & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 153-154 (1982). There can be no doubt that Congress has the auth- ority, under the Supremacy Clause of the Consti- tution, U.S. Const., Art. VI, Cl. 2, to preempt state law. And this Court has specifically upheld con- gressional authority under the Communications Act to preempt state law in the political broadcasting context. See Farmers Educ. & Coop. Union v. WDAY, Inc., 360 U.S. 525 (1959) (holding that the "equal time" provision of Section 315(a) preempts libel suits against stations for defamatory statements made by candidates); KVUE, Inc. v. Moore, 709 F.2d 922 (5th Cir. 1983), aff'd mem., 465 U.S. 1092 (1984). It ---------------------------------------- Page Break ---------------------------------------- 16 also is well established that Congress may "confide primary interpretation and application of [federal statutory] rules to a specific and specially constituted tribunal," if Congress "consider[s] that centralized administration of specially designated procedures [is] necessary to obtain uniform application of its substantive rules and to avoid th[o]se diversities and conflicts likely to result from a variety of local procedures and attitudes." Garner v. Teamsters Local Union No. 776, 346 U.S. 485, 490 (1953). As the Court there observed, "[a] multiplicity of tribunals and a diversity of procedures are quite apt to produce incompatible or conflicting adjudications as are different rules of substantive law." Id. at 490-491. See also Mississippi Power & Light Co. v. Moore, 487 U.S. 354, 375 (1988). Congress, therefore, may pre- empt state and federal trial courts from exercising jurisdiction over controversies involving federal sta- tutory questions, and may give a federal adminis- trative agency exclusive authority to decide such questions, at least in the first instance and subject to judicial review in the federal system. A federal agency acting pursuant to its delegated powers has similar authority to conclude that the statutory policies entrusted to its administration require that certain controversies be resolved in the first instance exclusively by the agency. "Federal regulations have no less pre-emptive effect than federal statutes." Fidelity Federal 458 U.S. at 153. See also City of New York, 486 U.S. at 63-64; Louisiana Public Service Comm'n v. FCC', 476 U.S. 355, 369 (1986); Capital Cities Cable, Inc. v. Crisp, 46'7 U.S. 691, 700-705 (1984). Where Congress has direc- ted an administrator to exercise his discretion, his judgments are subject to judicial review only to ---------------------------------------- Page Break ---------------------------------------- 17 determine whether he has exceeded his statutory authority or acted arbitrarily." Fidelity Federal, 458 U.S. at 153-154. Under that standard, if the agency's decision to preempt "represents a reasonable accom- modation of conflicting policies that were committed to the agency's care by statute," the courts "should not disturb it unless it appears from the statute or its legislative history that the accommodation is not one that Congress would have sanctioned." City of New York, 486 U.S. at 64; see also Capital Cities Cable, 467 U.S. at 700. The court of appeals' categorical holding (App., infra, 10a) that "Congress has not delegated, and could not delegate, the power" to the FCC to preempt judicial proceedings over state law claims requiring a determination of the lowest unit charge is untenable in light of that precedent. The rule established by this Court's decisions in Fidelity Federal and City of New York, upholding federal agencies' authority to preempt state regulation, applies to all state law, including judge-made law. 14. Congress therefore does have the power to delegate to the FCC the authority to preempt state regulatory authority over political broadcasting, including the authority to impose reme- ___________________(footnotes) 14 Indeed, Fidelity Federal involved the Federal Home Loan Bank Board's preemption of the California Supreme Court's "Wellenkamp rule, " in which that court, held that due-on-sale clauses in residential mortgages violated California's prohibi- tion against unreasonable restraints on alienation of property. See 458 U.S. at 144, 148-149. The Wellenkamp decision inter- preted a rule of property law codified in a California statute, but this Court understood the question presented in Fidelity Federal to involve the Board's authority to "displace restric- tions imposed by the California Supreme Court on the exercise of [due-on-sale] clauses." Id. at 144. ---------------------------------------- Page Break ---------------------------------------- 18 dies for violations of Section 315(b). And, in analysis that the court of appeals never attempted to engage, the FCC demonstrated that Congress, in fact, had delegated such authority to it. See App., infra, 20a- 27a; pp. 9-10, supra. b. The foregoing erroneous premise led to the court of appeals' further error in concluding that the FCC's declaratory ruling was a mere "opinion" be- yond the court's jurisdiction to review. The FCC's declaratory ruling was designed to have the binding effect of preempting state-law claims; it was issued to settle a previously uncertain question of law, and to establish definitively that the FCC has exclusive authority to adjudicate controversies arising under Section 315(b). Even though the FCC did not announce its inter- pretation in the course of an adjudication of a con- troversy between two parties, legal consequences nonetheless flow from its interpretation of Section 315(%). See Pennsylvania R.R. v. United States, 363 U.S. 202, 205 (1960); Port of Boston Marine Terminal Ass'n v. Rederiaktie Bolaget Transatlantic, 400 U.S. 62, 71 (1970); see also United States v. Storer Broadcasting Co., 351 U.S. 192, 198-200 (1956); Weinberger v. Hynson, Westcott & Dunning, 412 U.S. 609, 624-625 (1973). The agency arrived at an interpretation of Section 315(b) that must be applied by state and federal courts under well settled principles of deference to an agency's reasonable interpretation of its governing statute. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). 15. Thus, far from being a mere ___________________(footnotes) 15 Therefore, even if a candidate did sue a broadcaster in state court, that court would still have to consider whether its ---------------------------------------- Page Break ---------------------------------------- 19 expression of opinion, the FCC's interpretive ruling regarding its governing statute "changes the legal landscape." Health Insurance Ass'n of America v. Shalala, 23 F.3d 412, 423 (D.C. Cir. 1994), cert. denied, 115 S. Ct. 1095 (1995). Other courts of appeals have, accordingly, reviewed similar FCC declaratory rulings interpreting the Communications Act, including declaratory rulings with preemptive effect. See, e.g., Chisholm v. FCC, 538 F.2d 349, 351, 353-355 (D.C. Cir.) (reviewing FCC declaratory ruling interpreting "equal time" provi- sion of Section 315(a)), cert. denied, 429 U.S. 890 (1976); Telecommunications Research and Action Center v. FCC, 26 F.3d 185, 187 (D.C. Cir. 1994) (same); see also North Carolina Utils. Comm'n v. FCC, 537 F.2d 787, 790-791 & n.2 (4th Cir.), cert. denied, 429 U.S. 1027 (1976); New York State Comm'n on Cable Television v. FCC, 749 F.2d 804, 815 (D.C. Cir. 1984); New York State Comm'n on Cable Television v. FCC, 669 F.2d 58, 62 & n.9 (2d Cir. 1982). In doing so, those reviewing courts have also properly fulfilled their obligation to observe the limited time for review of FCC orders that Congress established in 28 U.S.C. 2344, which requires that petitions for review of FCC orders be filed within 60 days after entry of the order. The court of appeals' refusal to follow that course in this case cannot be reconciled with those decisions in other circuits. 2. The court of appeals' decision will have signifi- cant adverse consequences. First, the court of ___________________(footnotes) jurisdiction over the suit had been ousted by the declaratory ruling. Under the Supremacy Clause, the state court would be obliged to give effect to the FCC's interpretation of Section 315(b) and its declaratory ruling, and to dismiss the case. ---------------------------------------- Page Break ---------------------------------------- 20 appeals' conclusion that the FCC lacks authority to preempt judicial jurisdiction over state-law com- plaints, and its characterization of the FCC's decla- ratory ruling as a mere expression of opinion without legal consequence, undermine the FCC's ability to bring consistency and uniformity to interpretations of Section 315(b). The court of appeals has effectively invited candidates to continue to file lawsuits against broadcasters in state and federal trial courts around the nation. That is the very result that the FCC had sought to avoid by its declaratory ruling, in which it stressed the potential for uncertainty for both broadcasters and candidates that would be created by inconsistent judicial rulings. In the FCC's judgment, that inconsistency and uncertainty threaten to deter broadcasters from making substantial amounts of advertising time available to candidates. See App., infra, 24a. 16. That consequence would be directly contrary to Congress's objective in Section 315 of reducing barriers to broadcast advertising by polit- ical candidates. See id. at 41a (citing S. Rep. No. 96, 92d Cong., 1st Sess. 20 (1972)). Second, state and federal courts hearing lawsuits against broadcasters will have to review the validity of the FCC's interpretation of Section 315(b), That result is also contrary to Congress's policy, ex- pressed in 28 U.S.C. 2342(1) and 47 U.S.C, 402(a), of placing judicial review of FCC orders (including declaratory rulings interpreting the Communications Act) exclusively in the federal courts of appeals. See ___________________(footnotes) 16 Section 312(a)(7) of the Communications Act affords a right of "reasonable access" to broadcast facilities to candidates for federal office. 47 U.S.C. 312(a)(7). The Act creates no access rights for other candidates. ---------------------------------------- Page Break ---------------------------------------- 21 generally FCC v. ITT World Communications, Inc., 466 U.S. 463, 468 (1984). The court of appeals' misconstruction of the FCC's declaratory ruling as a mere expression of opinion may therefore have a serious adverse impact on the ability of federal agen- cies to issue definitive decisions on the preemptive effect of federal law, since those decisions will be subjected to second-guessing in state and federal courts around the country, rather than reviewed pursuant to the specific path for judicial review established by Congress. 17. The court of appeals also east doubt on the FCC's authority to proceed by way of declaratory ruling, rather than rulemaking or adjudication, to conclude that state law is preempted under Section 315(b). The court of appeals evidently believed that the FCC's ___________________(footnotes) 17 One case demonstrating that potential effect is currently pending in the Ninth Circuit. In Wilson v. A. H. Belo Corp., No. 92-16040 (9th Cir.), the federal district court dismissed the claims of several political candidates, premised upon Section 315(b) and state common law, that broadcasters had charged them rates in excess of the lowest unit charge. The district court concluded that it lacked subject matter jurisdiction over the complaints because a decision on the merits of the candidates' claims would effectively require the court to review the validity of the FCC's declaratory order. Accordingly, the district court concluded that the candidates' sole means of reviewing the declaratory ruling was by means of a petition for review filed in the court of appeals. Wilson v. A.H. Belo Corp., Order, No. Civ. S-91-1206 (LKK) (E.D. Cal. Apr. 27, 1992). On appeal (which was stayed pending the Eleventh Circuit's decision in this case), the candidates are contending that the district court erred in dismissing the case, because the FCC's declaratory ruling is not a reviewable order and, thus, the lawsuit creates no conflict with the statutory provisions vesting review of FCC orders exclusively in the courts of appeals. ---------------------------------------- Page Break ---------------------------------------- 22 interpretation of Section 315(b) would have been on sounder footing had it been formally promulgated as a regulation. See App., infra, 10a. But nothing in the Communications Act or in the Administrative Procedure Act requires the FCC to announce its interpretation of Section 315(b) in a regulation or an adjudication of a particular controversy rather than a declaratory ruling. To the contrary, the Adminis- trative Procedure Act expressly states that a declaratory order issued by an agency "to terminate a controversy or remove uncertainty" has the same "effect as in the case of other orders." 5 U.S.C. 554(e). 18. And, as this Court has stated, courts "may not impose methods of regulation upon the discretion of the Commission for purposes of judicial review, the validity of [an agency] order is determined by the result reached not the method employed.'" Permian Basin Area Rate Cases, 390 US. 747, 775 (1968); see also Storer Broadcasting, 351 U.S. at 202-205; Hynson, Westcott & Dunning, 41.2 U.S. at 609. Because the court of appeals' decision has cast doubt on the authority of federal agencies to issue declar- atory rulings with substantive effect, that decision warrants review by this Court. 3. Although the court of appeals held that the FCC has no authority to provide, by declaratory ruling, that state-court jurisdiction over Section 315(b) complaints is preempted, it also stated that it was presented with only a hypothetical dispute over Congress's authority to preempt state jurisdiction. ___________________(footnotes) 18 The declaratory ruling was, in any event, issued after the notice and comment anticipated by the Administrative Proced- ure Act. See App., infra, 87a (notice establishing comment period); id. at 18-19a, 23a, 25a (discussion of filed comments). ---------------------------------------- Page Break ---------------------------------------- 23 The court's conclusion that no case or controversy was presented as to Congress's power, however, was based squarely on its "characteriz[ation]" of the FCC's declaratory ruling as a mere expression of opinion, without legal consequence. Moreover, it was able to reach that conclusion only by first holding that Congress cannot delegate preemptive authority to the FCC. If the issue of the validity of the FCC's preemption ruling were to arise again in the Eleventh Circuit, that court would presumably be bound, under prin- ciples of stare decisis, by the panel's conclusion that the FCC could not preempt judicial jurisdiction over complaints arising under Section 315(b). A subse- quent panel would thus be limited to considering whether Congress itself had preempted judicial jurisdiction. See App., infra, 12a (noting that con- gressional intent would be "[t]he question facing the court" when a live controversy was presented). But the FCC expressly concluded that it should exercise its own delegated authority of preemption, whether or not Congress had implicitly concluded that judicial jurisdiction over state-law complaints should be preempted. App., infra, 21a. In effect, therefore, the court of appeals granted the candidates' petition for review in part (by holding invalid that part of the FCC's preemption ruling in which the FCC stated that it had preempted state law under authority delegated to it by Congress), and dismissed the petition in part (insofar as the petition challenged the FCC's conclusion that Congress itself had preempted state law). That split decision by the court of appeals, which should not be obscured by the fact that the court chose to articulate its judgment merely as a dismissal of the petition (see App., infra, ---------------------------------------- Page Break ---------------------------------------- 24 which the FCC stated that it had preempted state law under authority delegated to it by Congress), and dismissed the petition in part (insofar as the petition challenged the FCC's conclusion that Congress itself had preempted state law). That split decision by the court of appeals, which should not be obscured by the fact that the court chose to articulate its judgment merely as a dismissal of the petition (see App., infra, 15a), is in our view insupportable; and it will cause considerable confusion in subsequent proceedings about the basis and validity of the FCC's declaratory ruling. 19. That confusion provides an additional reason why review by this Court is warranted. ___________________(footnotes) 19 The court of appeals also erred as a factual matter in concluding that no case or controversy was presented. Before the court was at least one candidate, William L. Dickinson, with a live controversy against a broadcaster, Cosmos Broadcasting Co., also a party in the court of appeals. The FCC's declaratory ruling had an immediate effect on Dickinson's lawsuit against Cosmos in the Alabama state courts, and Dickinson had standing to seek judicial review of the declaratory ruling in the court of appeals. We can discern no basis for distinguishing between Dickinson's standing to challenge the FCC's decision to preempt state jurisdiction under. its own initiative, and his standing to challenge the FCC's conclusion that Congress itself had preempted state jurisdiction in Section 315(b). We also discern no basis for the court of appeals' evident conclusion that it had jurisdiction to consider the first challenge but not the second. ---------------------------------------- Page Break ---------------------------------------- 25 CONCLUSION The petition for a writ of certiorari should be granted. WILLIAM E. KENNARD General Counsel CHRISTOPHER J. WRIGHT Deputy General Counsel DANIEL M. ARMSTRONG Associate General Counsel LAURENCE N. BOURNE Attorney Federal Communications Commission DREW S. DAYS, III Solicitor General LAWRENCE G. WALLACE Deputy Solicitor General PAUL R.Q. WOLFSON Assistant to the Solicitor General JANUARY 1996 ---------------------------------------- Page Break ---------------------------------------- APPENDIX A UNITED STATES COURT OF APPEALS ELEVENTH CIRCUIT No. 92-8777 ZELL MILLER, ZELL MILLER FOR GOVERNOR, PIERRE HOWARD, GEORGIANS FOR HOWARD '90, JOHNNY ISAKSON, JOHNNY ISAKSON FOR GOVERNOR, ANDREW- YOUNG, YOUNG WORKING FOR GEORGIA, LAUREN MCDONALD, LAUREN MCDONALD FOR GOVERNOR, ROY BARNES, ROY BARNES FOR GOVERNOR, TIM RYLES, TIM RYLES FOR INSURANCE COMMISSIONER, WARREN EVANS, WARREN EVANS ELECTION COMMITTEE, WILLIAM L. DICKINSON, SECOND DISTRICT CAMPAIGN COMMITTEE, WILLIAM J. CABANISS, FRIENDS OF BILL CABANISS COMMITTEE, SPENCER T. BACHUS, III, BACHUS FOR ATTORNEY GENERAL COMMITTEE, JOHN TEAGUE, JAMES E. FOLSOM, JR., JIM FOLSOM, JR., FOR LIEUTENANT GOVERNOR COMMITTEE, FOB JAMES, FOB JAMES FOR GOVERNOR COMMITTEE, KENNETH D. WALLIS, ALABAMIANS FOR KEN WALLIS COMMITTEE, GEORGE D.H. MCMILLAN, JR., THE MCMILLAN COMMITTEE, GEORGE WALLACE, JR., WALLACE FOR TREASURER COMMITTEE, CHARLES A. GRADDICK, GRADDICK FOR GOVERNOR COMMITTEE, WILLIAM J. BAXLEY, FRIENDS OF BILL BAXLEY, PAUL HUBBERT, RICHARD SHELBY, DON SIEGELMAN, JIMMY SULLIVAN, SONNY HORNSBY, FRIENDS OF E.C. SONNY HORNSBY, MARK KENNEDY, JUDGE MARK KENNEDY FOR SUPREME COURT AND FRIENDS OF JUDGE MARK KENNEDY, CANDIDATES FOR PUBLIC OFFICE IN GEORGIA AND ALABAMA AND THEIR RESPECTIVE CAMPAIGN COMMITTEES, PETITIONERS, 1a ---------------------------------------- Page Break ---------------------------------------- 2a v. FEDERAL COMMUNICATIONS COMMISSION, RESPONDENT, CAPITAL CITIES/ABC, INC., CHRIS-CRAFT INDUSTRIES, INC., THE TIMES MIRROR COMPANY, AMERICAN FAMILY BROADCAST GROUP, INC., ALLBRITTON COMMUNICATIONS COMPANY, CBS, INC., CHRONICLE PUBLISHING Co., FOX TELEVISION STATIONS, INC., GILLETT BROADCASTING OF CALIFORNIA, INC., GILLETT COMMUNICATIONS OF SAN DIEGO, INC., GREAT AMERICAN TELEVISION AND RADIO COMPANY, INC., KELLY BROADCASTING COMPANY, KELLY TELEVISION COMPANY, LIN TELEVISION CORPORATION, MCGRAW-HILL BROADCASTING COMPANY, INC., MIDWEST TELEVISION, INC., NATIONAL BROADCASTING COMPANY, INC., THE NEW YORK TIMES COMPANY, POST-NEWSWEEK STATIONS, INC., THE PROVIDENCE JOURNAL COMPANY, THE SPARTAN BROADCASTING COMPANY, TRIBUNE BROADCASTING COMPANY, WESTINGHOUSE BROADCASTING COMPANY, INC., WKRG-TV, INC., WTVT, INC., MEREDITH CORPORATION, A.H. BELO CORPORATION, COSMOS BROADCASTING CORPORATION, COX ENTERPRISES, INC., NATIONAL ASSOCIATION OF BROADCASTERS (NAB), INTERVENERS. [Filed: Sept. 29, 1995] Before: TJOFLAT, Chief Judge, KRAVITCH, Circuit Judge, and CLARK, Senior Circuit Judge. ---------------------------------------- Page Break ---------------------------------------- 3a TJOFLAT, Chief Judge: This case involves a challenge to the Federal Com- munications Commission's (the "FCC" or "Commis- sion") interpretation of section 315(b) of the Commun- ications Act of 1934, 47 U.S.C. 315(b), which estab- lishes a limit on the amount that a broadcast station may charge a political candidate for campaign adver- tisements-the lowest unit charge. Petitioners, twenty-five candidates for various public offices in Georgia and Alabama along with their campaign com- mittees, seek review of a declaratory ruling by the FCC concluding that federal law preempts all state causes of action that require, as a condition of gran- ting relief, a determination of the lowest unit charge under section 315(b) and that the FCC is the exclu- sive forum for adjudicating section 315(b) liability determinations. The FCC and the United States as respondents, joined by a group of broadcast station licensees, their parent corporations, and a national association representing broadcasters as interveners, defend the issuance of the declaratory ruling as within the agency's delegated powers. We conclude that the issue presented by petitioners constitutes a hypothetical question rather than an actual case or controversy. Based on the constitutional prohibition against advisory opinions, we cannot decide this hypothetical question. I. A. Section 315 of the Communications Act establishes certain requirements governing broadcast station licensees' treatment of candidates for public office. Section 315(a) requires that, subject to enumerated ---------------------------------------- Page Break ---------------------------------------- 4a exceptions, licensees provide equal opportunities to all legally qualified candidates for a particular public office and prohibits censorship of candidate broad- casts. 47 U.S.C. 315(a). The provision at issue in this case, section 315(b), regulates broadcast media rates as follows: The charges made for the use of any broad- casting station by any person who is a legally qualified candidate for any public office in connec- tion with his campaign for nomination for elec- tion, or election to such office shall not exceed- (1) during the forty-five days preceding the date of a primary or primary runoff election and during the sixty days preceding the date of a general or special election in which such per- son is a candidate, the lowest unit charge of the station for the same class and amount of time for the same period; and (2) at any other time, the charges made for comparable use of such station by other users thereof. Id. 315(b). Section 315(b)(1) is commonly known as the "lowest unit charge" provision. Section 315(c) defines relevant terms, and section 315(d) states that "[t]he Commission Shall prescribe appropriate rules and regulations to carry out the provisions of this section." Id. 315(c), (d). The comparable use requirement of section 315(b) was enacted as part of the Communications Act Amendments of 1952," Pub.L. No. 82-554, 11, 66 Stat. 711, 717 (codified as amended at 47 U.S.C. 315(b)(2)), to prevent broadcast licensees from charging political candidates higher rates than those charged to com- ---------------------------------------- Page Break ---------------------------------------- 5a mercial advertisers. 1. S.Rep. No. 96, 92d Cong., 2d Sess. 22 (1971), reprinted in 1972 U.S.C.C.A.N. 1773, 1775. The lowest unit charge provision was added by the Federal Election Campaign Act (FECA) of 1971, Pub.L. No. 92-225, 103(a)(1), 86 Stat. 3, 4 (1972) (codified as amended at 47 U.S.C. 315(b)(1)), which had the dual purpose of reducing the costs of cam- paigns and increasing candidates' access to the broad- cast media. S.Rep. No. 96, at 20, reprinted in 1972 U.S.C.C.A.N. at 1774. B. Since shortly after the enactment of the lowest unit charge provision, the FCC has promulgated var- ious regulations regarding the determination of the lowest unit charge, including two "political primers" dealing with all political programming requirements as well as notices dealing exclusively with section 315(b)(1). See, e.g., Use of Broadcast and Cablecast Facilities by Candidates for Public Office, 34 F.C.C.2d 510 (1972); The Law of Political Broad- casting and Cablecasting, 69 F.C.C.2d 2209 (1978); Political Primer 1984, 100 F.C.C.2d 1476 (1984); Licensees and Cable Operators Reminded of Lowest Unit Charge Obligations, 4 F.C.C.R. 3823 (1988). These FCC issuances describe broadcast station li- censees' obligations under section 315(b), dictate how those obligations affect certain advertisement sales practices in the broadcast industry, and illustrate the appropriate determination of the lowest unit charge. ___________________(footnotes) 1 Although the FCC's declaratory ruling focuses almost exclusively on the lowest unit charge provision of 315(b)(1) rather than on the comparable use requirement of 315(b)(2), we note that the rationale underlying the ruling would also apply in the comparable use context. ---------------------------------------- Page Break ---------------------------------------- 6a The FCC codified its political programming policies in a separate report and order, which was adopted contemporaneously with the ruling at issue in this case. See Codification of the Commission's Political Programming Policies, 7 F.C.C.R. 678 (1991); see also Codification of the Commission's Political Program- ming Policies, 7 F.C.C.R. 4611 (1992) (memorandum opinion and order on reconsideration). On October 10, 1991, the FCC released a public notice stating that "[t]he Commission is considering issuing on its own motion a declaratory ruling con- firming its earlier conclusion that it has exclusive jurisdiction to determine questions of liability for violations of Section 315(b) of the Communications Act." Notice of Intention to Issue Declaratory Ruling With Respect to Exclusive Authority of FCC to Determine Whether Broadcasters Have Violated Lowest Unit Charge Requirement of Section 315(b), 6 F.C.C.R. 5954 (1991). The notice also indicated that the Commission was considering "preempt[ing] any cause of action in which an alleged violation of Section 315(b) is an essential element." Id. As the impetus for the FCC's action, the notice cited inconsistent decisions in state and federal court litigation 2. brought by candidates alleging over- ___________________(footnotes) 2 The FCC cited the following two decisions from federal district courts as examples of inconsistent results: Zell Miller for Governor v. Pacific & Southern Co., No. 1:91-CV-267-RLV (N.D.Ga. June 4, 1991) (granting defendant broadcaster's mo- tion to dismiss after holding that plaintiffs had no implied right of action under 315(b)), vacated as moot, No. 91-8561 (11th Cir. Dec. 28, 1992); and Dickinson v. Cosmos Broadcasting Co., No. 91-T-072-N (M.D.Ala. Apr. 1, 1991) (remanding the case to the state court after concluding that there was no federal question at issue). ---------------------------------------- Page Break ---------------------------------------- 7a charging by broadcast stations. The Commission commented that "[t]his exclusive jurisdiction over Section 315(b) liability determinations, moreover, must be recognized by both federal and state courts." Id. at 5955 n. 7 (emphasis added). The FCC requested comments as to whether its jurisdiction over section 315(b) is exclusive and whether the Commission should declare that all causes of action based on section 315(b) violations are preempted. Id. at 5954. The FCC followed this notice with a declaratory ruling adopted December 12, 1991, which stated: By this ruling the Federal Communications Commission declares that any state cause of ac- tion dependent on any determination of the lowest unit charge under Section 315(b) of the Commun- ications Act, or of some other duty arising under that subsection, is preempted by federal law. The sole forum for adjudicating such matters shall be this Commission. Exclusive Jurisdiction With Respect to Potential Violations of the Lowest Unit Charge Requirements of Section 315(b) of the Communications Act of 1934, as amended, 6 F.C.C.R. 7511 (1991). In addition, the FCC announced that state causes of action based on section 315(b) violations filed in federal district court under diversity jurisdiction are preempted. Id. at 7520 n. 8. The Commission limited the scope of the ruling by concluding that "[o]ther claims, such as standard breach of contract actions, not dependent upon the determination of the lowest unit charge or some other duty arising under Section 315(b) are not preempted." Id. at 7511. The ruling also established procedures for filing complaints with the Commis- ---------------------------------------- Page Break ---------------------------------------- 8a sion's Mass Media Bureau regarding alleged section 315(b) violations. Id. at 7513-14. To justify its preemption decision, the Commission stated that Congress had preempted the relevant causes of action by implication because: (1) the purpose and character of the federal law revealed an intent to preempt (2) potentially inconsistent inter- pretations of federal law could result from state court litigation; and (3) state causes of action would create an obstacle to fulfilling Congress' objectives under the federal statute. Id. at 7511. The FCC also relied on its broad rulemaking authority under section 315(d), as well as that of sections 4(i) and 303(f) of the Communications Act, 47 U.S.C. 154(i) & 303(f), as evidence of Congress' intent to preempt state court actions. Id. at 7512. Moreover, the FCC concluded: [Regardless of whether Congress-either explicitly or by implication-has preempted state law claims based upon violations of Section 315(b), the Commission itself has authority to preempt such claims. Substantial judicial precedent makes clear that an agency may preempt state action under the Supremacy Clause whether or not an intention to preempt can be found in the govern- ing statute or its legislative history. Id. (citing Fidelity Fed. Sav. & Loan v. de la Cuesta, 458 U.S. 141,102 S.Ct. 3014, 73 L.Ed.2d 664 (1982)). In an order adopted on May 14, 1992, the FCC denied two petitions for reconsideration filed by the petition- ers in this case. Exclusive Jurisdiction With Re - spect to Potential Violations of the Lowest Unit Charge Requirements of Section 315(b) of the Com- munications Act of 1934, as amended, 7 F.C.C.R. 4123 (1992) (order on reconsideration). The Commis- ---------------------------------------- Page Break ---------------------------------------- 9a sion rejected all of the arguments raised in the petitions for reconsideration, which are essentially the same as the arguments petitioners advance before this court. II. A. Petitioners assert that this court has jurisdiction to review the declaratory ruling under 47 U.S.C. 402(a) and 28 U.S.C. 2342(l). Section 402(a) provides that: Any proceeding to enjoin, set aside, annul, or suspend any order of the Commission under this chapter (except those appealable under subsection (b) of this section) shall be brought as provided by and in the manner prescribed in chapter 158 of title 28. 47 U.S.C. 402(a). 3. Section 2342(1) states that: The court of appeals . . . has exclusive jurisdic- tion to enjoin, set aside, suspend (in whole or in part), or to determine the validity of- (1) all final orders of the Federal Communi- cation Commission made reviewable by section 402(a) of title 47 . . . . 28 U.S.C. 2342(1). Before addressing the constitutional considera- tions affecting whether this court has jurisdiction over petitioners' challenge, it is necessary to charac- ___________________(footnotes) 3 Section 402(b) specifies that certain FCC decisions, such as those involving licenses or permits, must be. appealed to the Court of Appeals for the District of Columbia Circuit. 47 U.S.C. 402(b). ---------------------------------------- Page Break ---------------------------------------- 10a terize appropriately the FCC action. The Commis- sion's declaratory ruling-that Congress (or the Commission itself,) has preempted the jurisdiction of state courts and federal district courts, in diversity cases, when the candidate claims that the broad- caster's rates exceeded the lowest unit charge-is not a regulation promulgated pursuant to section 315(d). Unlike the regulations found at 47 C.F.R. 73.1942, 76.206 (1994), the ruling does not define relevant statutory terms, dictate the use of certain industry practices, or prescribe appropriate methods for calculating the lowest unit charge. Furthermore, the declaratory ruling is not an adjudication of a pending case involving a dispute between a candidate and a broadcast station licensee. It is not a decision, a letter of admonition, or an order levying a penalty of forfeiture, a loss of operating authority, or a refund to the candidate. Because it is axiomatic that Congress has not delegated, and could not delegate, the power to any agency to oust state courts and federal district courts of subject matter jurisdiction, the FCC's de- claratory ruling amounts to an agency opinion-a pronouncement interpreting the Communications Act to the effect that Congress impliedly abolished state and federal court jurisdiction over lowest unit charge violations. 4. ___________________(footnotes) 4 The FCC's action in this case is thus distinguishable from prior cases involving the preemptive effect of the Communi- cations Act in other contexts. See, e.g., City of New York v. FCC, 486 U.S. 57, 108 S.Ct. 1637, 100 L.Ed.2d 48 (1988) (Up- holding the preemptive effect of FCC regulations that conflicted with local regulations regarding technical standards for cable television); Farmers Educ. & Coop. Union of Am. v. WDAY, Inc., 360 U.S. 525, 79 S. Ct. 1302, 3 L.Ed.2d 1407 (1959) (holding that 315(a)'s prohibition on censorship preempts ---------------------------------------- Page Break ---------------------------------------- 11a B. Petitioners challenge the declaratory ruling based on the following arguments: (1) there can be no preemption by implication from the legislative scheme because section 315(b)(1) was enacted as part of the Federal Election Campaign Act, rather than as one of the Communications Act Amendments, and thus the relevant legislative scheme is FECA rather than the Communications Act; (2) the doctrine of primary jurisdiction would provide sufficient uni- formity and allow the FCC to determine whether lowest unit charge violations have occurred without completely removing cases from federal and state courts; (3) the FCC cannot grant adequate relief for section 315(b)(1) violations because the relevant provisions of the Communications Act do not author- ize the FCC to order refunds of overcharges; (4) the ruling impermissible removes federal question jurisdiction from an Article III court; and (5) the power to preempt state law claims is not within the authority delegated by Congress to the FCC. To support the Commission's power of preemption in this context, respondents and interveners repeat many of the rationales from the declaratory ruling, including the following (1) federal law occupies the field; (2) state activity in this area would frustrate uniform enforcement and create inconsistent inter- pretations of the statute, thereby harming the goal of ___________________(footnotes) state libel suits arising from broadcasts by political candidates); KVUE, Inc. v. Moore, 709 F.2d 922 (5th Cir. 1983) (upholding preemption of a state statute mandating use of the lowest unit charge on a year-round basis rather than only within the 45- to 60-day period before a primary or an election), aff'd mem., 465 U.S. 1092, 104 S. Ct. 1580, 80 L. Ed.2d 114 (1984). ---------------------------------------- Page Break ---------------------------------------- 12a increased candidate access to the broadcast media; (3) the complexity of determining lowest unit charge violations requires the expertise of the FCC; (4) the FCC has broad enforcement authority under section 315(d) and broad remedial powers under other pro- visions of the Communications Act; and (5) adjudi- cation at the FCC is the exclusive remedy for lowest unit charge violations because section 315(b) provides no implied right of action. C. Section 315(b) addresses situations in which candidates enter into contracts with broadcast sta- tions for the purchase of airtime for political adver- tisements; the statutory language requires that the price stated in the contract "shall not exceed . . . the lowest unit charge." 5. Essentially, petitioners ask this court to declare whether, at some future date, a candidate may bring a breach of contract action in state court 6. contending that a broadcaster's rates exceeded the lowest unit charge and seeking recovery of the overcharge. 7. The question facing the court in such a case would be whether Congress has fore- ___________________(footnotes) 5 This implicit adoption of section 315(b)'s lowest unit charge obligation is analogous to statutes requiring that con- tracts, such as insurance policies, contain certain provisions. 6 Petitioners also ask whether a candidate could sue in federal district court under diversity jurisdiction. Our refer- ences herein to suits in state court include diversity suits in federal district court. 7 In such a suit, the lowest unit charge determination would be a question of fact. Absent the presence of FCC regulations governing the determination of the lowest tit charge, the court would simply look to the statute for guidance. Other- wise, the court, pursuant to the Supremacy Clause, would apply the FCC regulations. ---------------------------------------- Page Break ---------------------------------------- 13a closed the power of the state court to entertain that suit. Petitioners invite us to decide whether the state court would have to dismiss the candidate's claim on the broadcaster's motion or sua sponte for want of subject matter jurisdiction. By asking this court to decide what another court should do in a future case, petitioners are posing a hypothetical question, the answer to which would be an advisory opinion. Article III of the Constitution limits the juris- diction of the federal courts to actual "cases" or "controversies." Although "those two words have an iceberg quality, containing beneath their surface simplicity submerged complexities which go to the very heart of our constitutional form of government," the purpose of the requirement is readily apparent- to limit the federal courts to deciding issues pre- sented in an adversary framework amenable to judi- cial resolution and to maintain separation of powers among the three branches of government. Flast v. Cohen, 392 U.S. 83, 94-95, 88 S. Ct. 1942, 1949-50, 20 L.Ed.2d 947 (1968); see also Graham v. Butterworth, 5 F.3d 496, 498-99 (11th Cir.1993), cert. denied,-U.S-, 114 S. Ct. 2136, 128 L.Ed.2d 866 (1994). The prohibition on advisory opinions is a logical corollary of the case or controversy requirement. "Thus, no justifiable controversy is presented . . . when the parties are asking for an advisory opinion, . . . . " Flast, 392 U.S. at 95, 88 S. Ct. at 1950. These Article III requirements apply with the same stringency in the administrative law context. See Region 8 Forest Serv. Timber Purchasers Council v. Alcock, 993 F.2d 800, 804 (11th Cir.1993) ("[T]he 'case or controversy' requirement is of special. importance in cases where a federal court is ---------------------------------------- Page Break ---------------------------------------- 14a being asked to rule on the legality of an act of the executive branch."), cert. denied,-U.S-, 114 S. Ct. 683, 126 L.Ed.2d 651 (1994); New Jersey Speech- Language-Hearing Ass'n v. Prudential Ins. Co., 724 F.2d 383, 385 (3d Cir. 1983) ("Parties seeking to chal- lenge administrative actions must satisfy the consti- tutional prerequisites derived from the 'case or con- troversy' clause of Article III, as well as a set of prudential requirements adopted by the courts . . . . "); see also R.T. Vanderbilt Co. v. Occupational Safety & Health Review Comm'n, 708 F.2d 570, 574 (11th Cir. 1983) (prohibition on advisory opinions); Alabama Power Co. v. FERC, 685 F.2d 1311, 1314-15 (11th Cir. 1982) (ripeness), cert. denied, 463 U.S. 1230, 103 S. Ct. 3573, 3574, 77 L.Ed.2d 1415 (1983); Branton v. FCC, 953 F.2d 906, 909 (D.C. Cir. 1993) (standing), cert. denied,-U.S-, 114 S.Ct. 1610, 128 L.Ed.2d 338 (1994). Federal courts simply are not permitted to render advisory opinions regarding agency pro- nouncements. See, e.g., Town of Deerfield v. FCC, 992 F.2d 420, 429 (2d Cir.1993) ("[T]he Commission plainly has no power to request or require such a court to render an opinion that is merely advisory."); City of Peoria v. General Elec. Cablevision Corp. (GECCO), 690 F.2d 116, 120 (7th Cir. 1982) (A Party "cannot simply put to the district court the abstract question whether [a rule] is valid, for it cannot re- ceive an advisory opinion from a federal court ."); American President Lines v. Federal Maritime Bd., 112 F. Supp. 346, 348 (D.D.C.1953) ("The courts may not pass upon the legality of official action merely because some one desires a judicial opinion on the subject."). Consequently, we are prohibited from determining the propriety of the FCC's declaratory ---------------------------------------- Page Break ---------------------------------------- 15a ruling given the abstract circumstances in which this issue is presented. It should be obvious from the foregoing discussion that our refusal to answer the question petitioners pose will not preclude them from obtaining an answer. Any of them who have been or may in the future be overcharged by a broadcaster while running for public office may seek judicial relief. In such a case, the court can determine whether Congress, in enacting section 315(b), has foreclosed the courts from grant- ing relief by giving the Commission exclusive juris- diction to adjudicate overcharge disputes. Because we conclude that no case or controversy is presented, we DISMISS the petition for review. IT IS SO ORDERED. ---------------------------------------- Page Break ---------------------------------------- 16a APPENDIX B BEFORE THE FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554 In Re: Exclusive Jurisdiction With Respect to Potential Violations of the Lowest Unit Charge Requirements of Section 315(b) of the Communications Act of 1934, as amended DECLARATORY RULING Adopted: December 12, 1991; Released December 13, 1991 By the Commission Commissioner Quello dissent- ing in part and issuing a statement; Commissioner Marshall issuing a statement. 1. By this ruling the Federal Communications Commission declares that any state cause of action dependent on any determination of the lowest unit charge under Section: 315(b) of the Communications Act, or of some other duty arising under that subsec- tion, is preempted by federal law. The sole forum for adjudicating such matters shall be this Commission. ---------------------------------------- Page Break ---------------------------------------- 17a BACKGROUND 2. Under Section 315(b) of the Communications Act, a broadcast station's charges for advertising time purchased for candidate uses while campaigning for political office during the last 45 days of a primary campaign or the last 60 days of a general election campaign may not exceed "the lowest unit charge of the station for the same class and amount of time for the same period." Outside those immediate pre- election periods, the charges to such candidates may not exceed "the charges made for comparable use of such station by other users." Subsection (d) of Sec- tion 315 directs the Commission to prescribe rules to implement the statute. The Commission over the years has adopted rules, provided general guidance and issued rulings both orally and in writing in response to complaints and requests for declaratory relief in particular cases arising under Section-315(b) (as well as Sections 315(a) and 312(a)(7)). In its continuing attention to political broadcasting issues, the Commission is in the process of updating its guidelines and regulatory policies regarding current and possible future advertising practices with respect to political programming. 1. 3. In a Public Notice released on October 10, 1991, 2. the Commission stated that it was considering issu- ing, on its own motion, a declaratory ruling con- firming its earlier conclusions that it has exclusive jurisdiction to determine questions of liability for violations of Section 315(b). Citing litigation in several states where candidates for elective office have sued broadcast stations for charging rates allegedly in excess of those permitted under Section 315(b), and the inconsistent rulings with regard to ---------------------------------------- Page Break ---------------------------------------- 18a jurisdiction that have been issued to date in such litigation, the Commission specifically sought public cement upon the following issues: (1) whether its jurisdiction to determine the lawfulness of political advertising charges is exclusive; (2) whether federal and state courts must. refer the liability question to the FCC in any case alleging that charges for polit- ical advertising are excessive; and (3) whether its exclusive jurisdiction should extend beyond the basic liability question and, if so, whether the Commission should preempt any cause of action in any court in which an alleged violation of Section 315(b) is an essential element. 4. Comments were received on October 21, 1991. 4. The 27 sets of cements filed on behalf or by broadcasting interests argued that the Commission has exclusive jurisdiction over all aspects of com- plaints alleging excessive political advertising charg- es and urged the Commission to preempt completely any such cause of action in any court. 5. The joint candidate commenters stated that the FCC does not have exclusive jurisdiction over Section 315(b) mat- ters and that it lacks the authority to confer upon itself exclusive jurisdiction over any matters. 6. Fin- ally, one commenter did not address the merits of the legal questions posed in the Public Notice, but requested instead that the Commission not issue any declaratory ruling to assert exclusive or primary jurisdiction until it provides "express authority for a candidate and a candidate's representatives to have access to a station's commercial files. upon reasonable request." 7. 5. On the basis of our review of the comments and our own independent legal analysis, as set forth be- low, the Commission has concluded that any state ---------------------------------------- Page Break ---------------------------------------- 19a cause of action dependent on any determination of the lowest unit charge under Section 315(b) or of some other duty arising under that subsection should be preempted. 8. Other claims, such as standard breach of contract actions, not dependent upon the determin- ation of the lowest unit charge or some other duty arising under Section 315(b) are not preempted. 9. DISCUSSION 6. The preemption doctrine has its roots in the Supremacy Clause of the Constitution. U.S. Const., Art. VI, cl. 2. Preemption may be either express or implied, and it is "compelled whether Congress' com- mand is explicitly stated in the statute's language or implicitly contained in its structure and purpose." 10. In the absence of express preemptive language, an intention by Congress to supersede state law may be inferred because of the pervasiveness of the federal regulatory scheme, because the federal interest is so dominant, or because the purpose of the federal law and the character of its obligations reveal an intent to preempt. 11. Furthermore, a court will find preemption where state law would actually conflict with federal law or would stand as an obstacle to the accomp- lishment of the full purposes and objectives of Congress. 12. 7. We find that Congress by implication preempted state causes of action of which alleged violations of Section 315(b) are an integral part because: (1) the purpose of the federal law and the character of its obligations reveal an intention to preempt such causes of action (2) allowing actions to proceed in state courts would result in potentially inconsistent interpretations of federal law and (3) such actions would stand as an obstacle to the realization of the ---------------------------------------- Page Break ---------------------------------------- 20a full objectives of Congress. The express language of Section I of the Communications Act provides that, for purposes of "centralizing authority" with respect to interstate communications, Congress created the FCC "which shall execute and enforce the provisions of [the] Act." Moreover, the Supreme Court has held that, in adopting the Act, Congress "formulated a unified and comprehensive regulatory system for the [broadcasting] industry" to be administered by the Commission. 13. As to Section 315 in particular, courts have held that the Commission's authority is exclu- sive with respect to matters addressed specifically by the Act and, thus, that it preempts state and local regulation of those matters. 14. 8. Section 315 itself embodies Congress' mandate that uniform federal policies govern political broad- casting rates. In particular, Section 315(d) specific- ally directs the FCC to "make rules and regulations to carry this provision [Section 315] into effect." This narrowly focused directive, which exists in addition to the more general grant of Rule Making authority in Sections- 4(i) and 303(f) of the Act, 47 U.S.C. 154(i) and 303(r), is "something more" than the usual delegation of Rule Making authority. 15. Rather, it "amounts to a congressional direction to the FCC to recognize the importance of this partic- ular section of the statute and to prescribe separate rules and regulations to deal with the multitudinous situations that arise in applying it to all federal, state and local candidates for office throughout the nation." 16. In view of this comprehensive regulatory and enforcement scheme, we find that Congress' pur- poses and objectives in adopting Section 315(b) re- veal an intention to preempt state litigation over ---------------------------------------- Page Break ---------------------------------------- 21a the charges for the broadcast of political adver- tisements. 17. 9. We further find that, regardless of whether Congress-either explicitly or by implication-has preempted state law claims based upon violations of Section 315(b), the Commission itself has authority to preempt such claims. Substantial judicial precedent makes clear that an agency may preempt state action under the Supremacy Clause whether or not an intention to preempt can be found in the governing statute or its legislative history. The leading case on agency preemption is Fidelity Federal Savings & Loan Ass'n v. de la Cuesta, 458 U.S. 141 (1982). The Supreme Court in that case held that "[f]ederal regu- lations have no less preemptive effect than federal statutes." 458 U.S. at 153. The Court held further that if the agency has not exceeded its statutory authority or acted arbitrarily, its preemption order should be upheld. 458 U.S. at 154. 10. The Supreme Court applied the rule estab- lished in de la Cuesta to affirm this Commission's preemption of some aspects of state regulation of cable television in City of New York v. FCC. 18. In proper circumstances, the Court said, the agency itself may determine "that its authority is exclusive and preempts any state efforts to regulate in the forbidden area." 19. The Court also stated that a federal agency acting within its delegated authority is empowered to preempt state laws "to the extent it is believed that such action is necessary to achieve its purposes." 20. In reviewing agency preemption orders, moreover, the Court said that it would not disturb an agency's decision to preempt if that decision repre- sents "a reasonable accommodation of conflicting policies that were committed to the agency's care," ---------------------------------------- Page Break ---------------------------------------- 22a unless it appears "from the statute or its legislative history that the accommodation is not one that Congress would have sanctioned." 21. 11. Commission preemption of state claims aris- ing under Section 315(b) meets the standards established in City of New York. First, as the Court stated in that case, a federal agency acting within the scope of its delegated authority may preempt state regulation. 22. Here, the Commission clearly has auth- ority to enforce the lowest unit charge requirement as it applies to all broadcasters and all candidates; 23. indeed, it has explicit authority to prescribe appro- priate rules and regulations "to carry this provision into effect." 24. The Commission's efforts over the years to provide guidance as well as to take en- forcement actions with respect to Section 315(b) are evidence both of its authority under the statute and of its commitment to uniform enforcement of its regulation in this important policy area. Thus, the Commission is action well within its delegated authority when it enforces Section 315(b). 12. Moreover, preemption is necessary to allow the Commission to "achieve its purposes" by developing uniform standards for interpreting and enforcing Section 315(b). The importance of having uniform standards that are understood throughout the broad- cast industry is underscored by the Commission's pending Rule Making into political broadcasting, which seeks, inter alia, to provide certainty and consistency in this important area of regulation. 25. Rulings by courts in numerous jurisdictions around the country almost certainly would produce varying and possibly conflicting determinations among state courts and between those courts and the Commission, ---------------------------------------- Page Break ---------------------------------------- 23a thereby frustrating the objectives of certainty and uniformity. 26. 13. As various commenters have pointed out, inconsistency in the enforcement of Section 315(b) would leave both candidates and broadcasters unsure of. their respective rights and responsibilities under the lowest unit charge requirement. 27. The prospect of lawsuits in various states might make it difficult, if not perilous, for broadcasters who serve more than one jurisdiction to provide various candidates prompt, authoritative quotes for the lowest unit charge available to them. We thus find that state court adjudication of claims of which alleged violations of Section 315(b) are an integral part would "conflict with the basic objectives of federal policy" 28 with respect to political broadcasting. The development and enforcement of consistent guidelines by this agency, in contrast, would provide critical certainty: to candidates the certainty that they are indeed receiving the lowest unit charge; and to broadcasters, the certainty that they are fully complying with the law. 14. Preemption also is necessary for another important reason. While there is no express statu- tory right of candidate access to broadcast facilities beyond the "reasonable" access provisions of Section 312(a)(7) of the Act for federal candidates, there is a public good in the dissemination of information regarding political campaigns. Indeed, the legislative history of the political broadcasting laws suggests that one purpose of those laws was "to give candidates for public office greater access to the media" and "to halt the spiraling cost of campaigning for public office." 29. We believe that the comments of some broadcasters are correct in pointing out that ---------------------------------------- Page Break ---------------------------------------- 24a inconsistent rulings on Section 315(b) lawsuits might encourage some stations simply to refuse to accept political advertisements, or at least, in the case of federal candidates, to curtail such advertisements to a bare minimum. Such a response to state lawsuits, we believe, would frustrate the Congressional intention to encourage greater (and less costly) access for candidates. 30. We conclude, therefore, that we should preempt state lawsuits of which allegations of viola- tions of Section 315(b) are an integral part to avoid frustration of this federal purpose. 31. 15. As the Court observed in City of New York, "it has long been recognized that many of the respon- sibilities conferred upon federal agencies involve a broad grant of authority to reconcile conflicting policies." 32. In this case, the Commission's deter- mination that preemption is necessary to avoid dis- ruption or frustration of its enforcement of Section 315(b) is a "reasonable. accommodation of conflicting policies." 33. The emergence of civil litigation in a number of courts around the country raises a real possibility of conflicting rulings as to what consti- tutes the "lowest unit charge" and what remedies are appropriate for violations of the statutory require- ment. The FCC is the authority specifically desig- nated by Congress to enforce the lowest unit charge requirement, 34. however, precisely because it has the expertise necessary to make such determinations based upon its understanding of the complex and often arcane practices of the broadcast advertising industry. Preempting claims arising under Section 315(b) represents a reasonable approach to avoiding conflicting policies in the interpretation and enforcement of the lowest unit charge requirement, ---------------------------------------- Page Break ---------------------------------------- 25a 16. There also is no basis for believing that preemption is "an accommodation of policies that Con- gress would not have sanctioned." 35. The Supreme Court in other contexts has found that Congress intended in adopting the Communications Act to give the FCC broad authority to provide "a unified and comprehensive regulatory system for the [broad- casting] industry." 36. Although in adopting Section 315(b) Congress did not expressly preempt state regulation, neither did it indicate any intention that the Commission refrain from preempting if the Com- mission believes such action is necessary or approp- riate to its enforcement of that section. 37. 17. We recognize that, in our "previous con- sideration of this matter, 38. we limited our conclusion in favor of preemption to the issue of liability and did not find it necessary to decide whether preemption should also extend to efforts to obtain state law remedies for the violation of federal requirements relating to lowest unit charge. After considering the comments submitted in response to the Public Notice, however, we have had an opportunity to thoroughly analyze the reasons that support preemption in this area. It is now clear to us that those considerations support preempting state law remedies for the vio- lations of the lowest unit charge requirement or of some other federal duty arising under Section 315(b). 18. The Commission has been specifically desig- nated by Congress-as the authority responsible for enforcing Section 315(b), and a determination of the appropriate remedy for a violation of Section 315(b) is an integral part of that enforcement, State efforts to provide their own remedies for a violation of the lowest unit charge requirement of Section 315(b), or of other duties arising thereunder, would interfere ---------------------------------------- Page Break ---------------------------------------- 26a with uniform enforcement of the Act by the Com- mission just as surely as would state determinations of the initial question of whether Section 315(b) has been violated. 19. The Supreme Court recognized a related policy concern. when it upheld the preemption of judicial remedies for defamation arising from political broad- casts in Farmers Educational & Coop. Union v. WDAY, Inc. 39. In that case, the Court found that allowing a separate judicial remedy would "hamper the Congressional plan to develop broadcasting as a political outlet." 40. Therefore, the Court affirmed the preemption of local lawsuits that stand "as an ob- stacle to the accomplishment and execution of the full purposes and objectives of Congress." 41. We believe that allowing state courts, to impose additional remedies for violations of Section 315(b) might en- courage stations to refuse to carry political adver- tising, and thereby would frustrate the Congressional intent to foster dissemination of information regard- ing political campaigns. 42. Thus, we conclude that our preemption should extend to remedies as well as to the determination of liability. 20. Finally, we note that Section 414 of the Act, which preserves remedies "existing at common law or by statute," does not foreclose our preemptive action here. Such "savings clauses" do not preclude pre- emption where allowing state remedies would lead to a conflict with or frustration of statutory purposes. 43. In any event, the lawsuits we preempt here have no meaning apart from Section 315(b) and thus derive not from any "existing" state common law or statutory origin, but solely from the federal statute. 44. State actions to enforce the Section 315(b) obligations of broadcasters are far removed from the traditional ---------------------------------------- Page Break ---------------------------------------- 27a state remedies that are preserved by the "savings clause." See, e.g., Arrow Transp. Co. v. Southern R. Co., 372 U.S. 658, 671 n. 22 (1963). Section 414 cannot have been intended to "create" new state causes of action based on legal obligations established under federal law and enforced by this Commission. 45. PROCEDURES 21. The Commission finds that it will further our ability to promptly and fairly dispose of Section 315(b) complaints brought to us as" a consequence of this ruling (and all other Section 315(b) claims) by setting out the procedural framework for resolution of such complaints. 22. In order to invoke the Commission's enforce- ment procedures, complainants alleging a violation of Section 315(b) will be required to make a prima facie case. 46. This must, at minimum, consist of a short, plain statement of the claim sufficient to show that the complainant is entitled to the relief requested. This requirement could be met by a simple recitation of a sequence of events showing that, if all allegations are accepted as true and all inferences are drawn in the complainant's favor, the complaint would reason- ably lie. 47. The complainant will be required to serve the complaint upon the station, and the station will be given ten days to answer the complaint if it so desires. If, after reviewing the complaint and answer (if filed), the Mass Media Bureau ("Bureau") finds that a prima facie case has been made, it will issue an Order that will give the parties the opportunity to elect one of two alternative procedures to resolve the complaint: mediation (Alternative Dispute Resolu- tion); 48. or evaluation and disposition by the Bureau subject, of course, to review by the full Commission. ---------------------------------------- Page Break ---------------------------------------- 28a 23. Under either process, once a prima facie showing has been made, the complainant will be entitled to limited discovery subject to specific con- ditions. The Bureau's Order will establish the limitations on and timetable for discovery. 49. Docu- ments subject to discovery will consist of the sta- tion's records related to rates, terms and conditions for any advertising, commercial or political, broadcast during the 45-or 60-day period pertinent to the complaint. The station will be permitted to redact its records prior to production by deleting the identities of commercial advertisers and other proprietary information not relevant to the resolution of the complaint. Document production will be subject to a protective order limiting its examination to parties designated in the order (as well as the Commission), and prohibiting further dissemination of the infor- mation revealed thereby. 50. 24. Within 30 days after the completion of dis- covery, the complainant will be required to file an amended complaint alleging specific facts based on the information discovered, stating the nature of the Section 315(b) violation and the amounts. said to be owed. The station complained against will be given a 15 day opportunity to respond. If the parties have not elected to pursue mediation, 51. the Bureau will either impose an appropriate sanction where it finds the rules have been violated, or issue an appropriate order dismissing the complaint where it finds no violation. 52. In appropriate circumstances, the dispute may be referred to the Administrative Law Judges (ALJs) for resolution. 25. The sanctions available to the Commission for Section 315(b) violations (in addition to the rebate of any amounts found to have been charged in violation ---------------------------------------- Page Break ---------------------------------------- 29a of Section 315(b) include forfeitures, letters of admon- ition, short-term renewal, and designation of the station's license for revocation. Any decision ren- dered by the Bureau or an ALJ may be appealed directly to the full Commission. 53. 26. Accordingly, pursuant to Sections 1, 4(i), 303(r), and 315(b) and (d) of the Communications. Act, 47 U.S.C. 151, 154(i), 303(r), and 315(b) and (d); Section 5(e) of the Administrative Procedure Act, 5 U.S.C. 556(e); and Section 1.2 of the Commission's rules, 47 C.F.R. 1.2, IT IS DECLARED- that state causes of action involving alleged violations of the lowest unit charge requirement or of some other duty arising under Section 315(b) ARE PREEMPTED to the extent indicated above. FEDERAL COMMUNICATIONS COMMISSION Donna R. Searcy Secretary ---------------------------------------- Page Break ---------------------------------------- 30a APPENDIX I [TO THE FCC DECLARATORY RULING] COMMENTS FILED IN INTENTION TO ISSUE DECLARATORY RULING WITH RESPECT TO EXCLUSIVE AUTHORITY OF FCC TO DETERMINE WHETHER BROADCASTERS HAVE VIOLATED LOWEST UNIT CHARGE REQUIREMENT OF SECTION 316(b) 1. CBS, Inc. 2. Northern Television, Inc. 3. Association of Independent Television Stations 4. Barnes, Browning, Tanksley & Casurella Long, Aldridge & Norman Savell & Williams Venema, Towery, Thompson & Chambliss 5. Gillett Communications of Atlanta, Inc. Gillett Communications of Boston, Inc. Gillett Communications of San Diego, Inc. Gillett Communications of Ohio, Inc. Gillett Communications of Detroit, Inc. Gillett Communications of Milwaukee, Inc. KSBY, Inc KSBW, Inc. WTVT License, Inc. 6. Busse Broadcasting Corporation 7. Fox Television Stations, Inc. Allbritton Communications Company Federal Broadcasting Company 8. WMUR-TV, Inc., Manchester, New Hampshire 9. Benedek Broadcasting Group Lin Broadcasting Corporation Midwest Television, Inc. Paducah Newspapers, Inc. ---------------------------------------- Page Break ---------------------------------------- 31a Post-Newsweek Stations, Inc. Providence Journal Company The Spartan Radiocasting Company 10. National Broadcasting Company Inc. 11. American Family Broadcast Group, Inc. 12. Nationwide Communications, Inc. 13. Freedom Newspapers, Inc. 14. Tribune Broadcasting Company Gray Communications Systems, Inc. Gannett Co., Inc. The Spartan Radiocasting Company The Providence Journal Company Westinghouse Broadcasting Company, Inc. Burnham Broadcasting Company, A Limited Partnership Post-Newsweek Stations, Inc. 15. Niels C. Holch, McGuiness & Holch 16. Osborn Communications Corporation 17. State Broadcasting Associations California Broadcasters Association Connecticut Broadcasters Association Florida Association of Broadcasters Illinois Broadcasters Association Iowa Broadcasters Association Louisiana Association of Broadcasters Maine Association of Broadcasters Maryland/District of Columbia Delaware Broadcasters Association Michigan Association of Broadcasters Minnesota Broadcasters Association Missouri Broadcasters Association Nebraska Broadcasters Association New Hampshire Association of Broadcasters New Jersey Broadcasters Association New York State Broadcasters Association ---------------------------------------- Page Break ---------------------------------------- 32a Oklahoma Association of Broadcasters Pennsylvania Association of Broadcasters Tennessee Association of Broadcasters Texas Association of Broadcasters Utah Broadcasters Association Washington State Association of Broadcasters West Virginia Broadcasters Association Wisconsin Broadcasters Association 18. Minnesota Broadcasters Association 19. Great American Television and Radio Company, Inc. Kelly Broadcasting Company McGraw-Hill Broadcasting Company, Inc. The New York Times Company 20. Capital Cities/ABC, Inc. Chris-Craft Industries, Inc. The Times-Mirror Company 21. WCOV-TV, Montgomery, Alabama (Woods Communications Corp.) 22. Mobile Video Tapes, Inc. Louisiana Television Broadcasting Corporation Clear Channel Television, Inc. Rocket City Television, Inc. 23. A.H. Belo Corporation Booth American Company Broad Street Television, L.P. Cosmos Broadcasting Corporation Cox Enterprises, Inc. Diversified Communications Evening Post Publishing Company First Media Corporation H & C Communications, Inc. Multimedia, Inc. Nebraska Television Corporation ---------------------------------------- Page Break ---------------------------------------- 33a River City Broadcasting, L.P. 24. National Association of Broadcasters 25. WKRG-TV, Inc. 26. Woods Communications Group, Inc. LATE FILED COMMENTS ** 1. Pulitzer Broadcasting Company and WDSU Television, Inc. 2. Westinghouse Broadcasting Company, Inc. ** Late-filed comments were treated as informal comments. ---------------------------------------- Page Break ---------------------------------------- 34a Separate Statement of Commissioner James H. Quello, Dissenting in part. In re: Exclusive Jurisdiction With Respect to Potential Violations of the Lowest Unit Charge Requirements of Section 315(b) of the Communications Act of 1934, as amended. By this Declaratory Ruling ("Ruling"), the Com- mission is taking the important step of reaffirming our exclusive jurisdiction to enforce violations of Section 315 of the Communications Act. To the extent it does so, the Ruling is fully supported by law and represents sound policy. I can support this aspect of the Ruling without reservation. I think it is important to emphasize that this action does not represent a new assertion of FCC authority. Section 315 never has been considered to have created a private right of action separate from our admin- istrative processes. See, e.g., Belluso v. Turner Communications Corp., 633 F.2d 393, 397 (5th Cir. 1980). Until recently, no one had ever sought a judicial remedy for purported lowest unit charge violations. In the two decades since Section 315(b) was enacted, the Commission has provided the sole remedy. So in many ways this Ruling merely recognizes the obvious. It certainly is no departure from the Commission's historic view of its jurisdiction and statutory responsibilities. This necessarily means that the Commission is not "taking away" any existing remedy. ---------------------------------------- Page Break ---------------------------------------- 35a Conspicuously absent from the Ruling is any discussion of the Commission's existing complaint procedures or any suggestion that they have been in some way inadequate. Perhaps the reason for this omission is the fact that the Commission did not request comment on the question of procedures, nor did it engage in much internal analysis on this point. 1. It has been suggested that the FCC is not obligated to provide parties an opportunity to comment on procedural issues. Whether or not this claim is true in this context, the Commission has been rather erratic in this proceeding in deciding when to solicit and when to forego public input. For example, there is no requirement that the Commission receive com- ments in order to promulgate a declaratory ruling, yet we chose to do so here. Also, in our Notice of Proposed Rulemaking, the Commission solicited advice on procedures for implementing sponsorship ID and other requirements. In all of our current proceedings, the question of complaint procedures is the only significant subject on which we did not request comment. If, as some have suggested, our current proceedings "may be the most important determinations made since the enactment of the lowest unit charge standard," this omission is exceedingly strange. At this point, the new procedural guidelines raise more questions than they answer. For example, the Ruling encourages the use of Alternative Dispute . Resolution at a time when the Commission's policy on such procedures is essentially conceptual. There is no discussion of how discovery will be limited to relevant documents or how the Commission will enforce such limits. Moreover, although the Ruling expresses concern with the potential administrative ---------------------------------------- Page Break ---------------------------------------- 36a burden created by complaints, it establishes a new multi-stage procedure that includes a complaint, discovery, an amended complaint and several levels of Commission decisions including the possibility of hearings. I dissent from the hastily made decision to adopt procedures because we do not yet know whether the new guidelines will help or make matters worse. Will the new procedures allow candidates to make a prima facie case and obtain quick relief or will they delay matters? Will they encourage the filing of specu- lative complaints, thus requiring the extension of our abuse of process rules? Will the number of com- plaints diminish now that the Commission is clarify- ing the political rules or will the volume of complaints under the new procedures create an administrative nightmare? We simply do not know. And, unfortu- nately, there was insufficient interest at the Com- mission in taking the time to find out. I would have preferred to adopt the Declaratory Ruling on preemption and at the same time, issue a Further Notice to explore these issues. I believe that candidates, broadcasters and other interested parties would have welcomed the opportunity to comment on the issue of procedures. Ironically, the internal pressure to adopt pro- cedures intensified at the very time that the Com- mission is clearing up the confusion that prompted this Declaratory Ruling. Along with this Ruling and the Report and Order, the Commission is releasing a number of enforcement, actions arising from the 1990 political broadcasting audit. Contrary to the exag- gerated claims that 80 percent of television and 50 percent of radio stations overcharged candidates, the Bureau is assessing fines for overcharging in only ---------------------------------------- Page Break ---------------------------------------- 37a two cases-about 7 percent of the stations audited. All together, the Bureau is issuing Notices of Apparent Liability to five of the thirty stations we examined, two for lowest unit charge violations and three for political file violations. In short, the level of rule violations by broadcasters is far below what some suggested in the wake of the audit. For this reason I wonder whether the rush to adopt new procedures may be premature. We are doing the right thing by making clear that the Commission has exclusive jurisdiction to deter- mine both liability and damages in complaints that implicate Section 315(b). Although I would not have taken the additional step of adopting procedures just yet, I am hopeful that they can be administered efficiently, and in a way that is fair to all concerned. ___________________(footnotes) 1 To put the issue into some perspective, the-Corn mission adopted the Notice of Proposed Rulemaking on our political broadcasting policies last June. The Commission began examining the issue of jurisdic- tion in July and released the Notice of Intent to Issue a Declaratory Ruling in October. By sharp contrast, a draft order proposing new procedures was circu- lated less than a week ago at a time when other press- ing matters were under consideration. ---------------------------------------- Page Break ---------------------------------------- 38a SEPARATE STATEMENT OF COMMISSIONER SHERRIE P. MARSHALL RE: DECLARATORY RULING ON FCC PREEMPTION OF CLAIMS DEPENDENT ON SECTION 315(b) Today's declaratory ruling should not be inter- preted as the generous act of a Federal agency intent on providing shelter to broadcasters charged with price gouging. To the contrary, I write separately to emphasize that the Commission is asserting its juris- diction over all claims sounding in 47 USC 315(b) so as to vigorously prosecute such claims, not bury them. I joined in calling for this full extension of the Commission's preemptive authority only after I was confident that the Commission possessed the legal authority, the administrative wherewithal, and the institutional resolve to adjudicate Section 315 claims fairly and competently. Our declaratory ruling itself recounts in detail the weighty record compiled in support of Commission preemption of all claims arising from the statutory duty of broadcasters to provide candidates with the lowest unit charge for political advertisements. That ruling also details the efficient, yet fair administrative processes the Commission has estab- lished for prompt resolution of bona fide overcharge grievances. Moreover, the fines and rebates we are separately ordering today for past violations of 315(b) clearly demonstrate this Commission's com- mitment to enforcing the legal obligations our licens- ees owe candidates for public office. While we stand prepared to provide for a timely and thorough resolution of all candidate overcharge ---------------------------------------- Page Break ---------------------------------------- 39a claims, I would not deny that the recent surge of such allegations could create a substantial burden on the Commission's ever scarce resources. Thus, I strong- ly endorse the Commission's offer of an alternative dispute resolution process to both candidates and respondent broadcast stations. I also wish to underscore the sincerity of the commission's suggestion that stations and candi- dates should attempt to reach a mutually satisfactory settlement of their overcharge disputes. As our declaratory ruling explains, the Commission will look favorably upon the private settlement of these dis- putes in reviewing any overcharge claims brought to its attention. Indeed, in light of the flood of claims that might immediately follow our issuance of this preemption ruling, this Commissioner, for one, will be disinclined to impose any additional sanctions on licensees who act promptly to rebate funds or other- wise redress the bona fide claims of aggrieved candi- dates pursuant to such a settlement. Let us move with dispatch to dispose of these past grievances and ensure-through our newly revised. political broadcast rules-clear regulatory guidance to broadcasters and candidates alike for the upcoming and future political campaign seasons. ---------------------------------------- Page Break ---------------------------------------- 40a FOOTNOTES 1 See Codification of the Commission's Political Programming Policies (MM Docket No. 91-168), 6 FCC Rcd 5707 (1991). A Report and Order revising and codifying these policies is being adopted contemporaneously with this Declaratory Ruling. 2 Public Notice, FCC No. 91-326, 6 FCC Rcd 5954 (1991), 56 Fed. Reg. 51895 (October 16, 1991) (hereinafter "Public Notice"). 3 News Release, Report No. GN-74, June 6, 1991. 4 A list of the Comments received is attached as Appendix 1. 5 See, e.g., Comments of National Association of Broadcasters; Association of Independent Television Stations; Busse Broadcasting Corporation A.H. Belo Corporation, et. al.; Capital Cities/ABC Inc., et. al.; Tribune Broadcasting-Company, Inc. 6 See Comments jointly filed by the law firms of Barnes, Browning, Tanksley & Casurella; Long, Aldridge & Normal; Savell & Williams; and Venema, Towery, Thompson & Chambliss (hereinafter "Kahn and Jablonski"), on behalf of various candidates seeking refunds for alleged overcharges. 7 See Comments filed by Niels Holch, on behalf of certain candidates. 8 Similarly, any state cause of action dependent on any determination of the lowest unit charge under Section 315(b) or of some other duty arising under that subsection that is initiated in a federal court pursuant to diversity jurisdiction also is preempted and should be dismissed. Moreover, because Section 315(b) does not give rise to a private federal cause of action, any federal lawsuit based directly upon allegations of violations of Section 315(b) should be ---------------------------------------- Page Break ---------------------------------------- 41a dismissed. See Zen Miller for Governor v. Pacific & So. Co., No. 1:91-CV-RLV (N.D. Ga., June 4, 1991), slip opinion at 15 (citing Belluso v. Turner Communications Corp., 633 F.2d 393, 397 (5th Cir. 1980)), appeal pending. See also William L. Dickinson v. Cosmos Broadcasting Co., C.A. No. 91-T-072-N (M.D. Ala., April 1, 1991), slip opinion at 18. 9 As the court made clear in Zen Miller for Governor, supra, claims that stem from Section 315(b) cannot be converted to state law claims simply because "the plaintiff may have artfully cast his essentially federal law claims as state law claims." Slip Opinion at 11-12. 10 Jones v. Ruth Packing Co., 430 U.S. 519, 525 (1977). 11 See Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947). 12 See Hines v. Davidowitz, 312 U.S. 52, 57 (1941). 13 FCC v. Pottsville Broadcasting Co., 309 U.S. 134, 137 (1940). See also Scripps-Howard Radio, Inc. v. FCC, 316 U.S. 4, 6 (1942). 14 E.g., Belluso v. Turner Communications Corp., 633 F.2d 393, 396 (5th Cir. 1980). 15 Kay v. FCC, 443 F.2d 638, 643-44 (D.C. Cir. 1970). 16 Id. (emphasis supplied). 17 In adopting the current version of Section 315(b), Congress indicated that the ability of the Commission to enforce that provision was an important consideration. Pointing out the importance of having restrictions that were "workable and enforceable," the Senate committee took comfort in assurance: by the Commission's chairman that the broadcast provisions "were enforceable by the Commission." S. Rept. No. 96, 92d Cong., 1st Sess. 20, reprinted, 1972 ---------------------------------------- Page Break ---------------------------------------- 42a U.S. Code Cong. & Admin. News at 1786 (1971). We note in addition the decision in Belluso v. Turner Communications Corp., 633 F.2d 393, where the court held that Congress did not intend to create a private federal cause of action for damages as a remedy for a violation of Section 315(a) of the Communications Act and opted instead for an exclusive administrative remedy. The court's reasoning is equally applicable to Section 315(b). Thus, because we conclude that Congress did not intend for a private federal cause of action for damages to be available as an additional remedy when Section 315(b) is violated, it would seem anomalous if Congress did not also preempt the states from providing an additional remedy in the form of a private state cause of action that is predicated on establishing a violation of Section 315(b). See also discussion in paragraph 20 infra. 18 486 U.S. 57 (1988). 19 Id 486 U.S. at 64, citing Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 700 (1984), and de la Cuesta, 458 U.S. at 152-54. 20 486 U.S. at 63. 21 486 U.S. at 64. See also, e.g., Computer & Communications Industry Ass'n v. FCC, 693 F.2d 198 (D.C. Cir. 1982), cert. denied, 461 U.S. 938 (1983); North Carolina Utilities Comm'n v. FCC, 552 F.2d 1036 (4th Cir.), cert. denied, 434 U.S. 874 (1977). 22 486 U.S. at 63, citing Louisiana Public Service Commission v. FCC, 476 U.S. 355, 368-369 (1986). The decision in Louisiana that the FCC had exceeded its authority to preempt relied upon an express reservation in the Communications Act of authority for the states to regulate intrastate common carrier ---------------------------------------- Page Break ---------------------------------------- 43a service. 47 U.S.C. 152(b)(l). No such provision applies to the regulation of broadcasters. 23 See FCC v. Pottsville Broadcasting Co., 309 U.S. at 137. 24 47 U.S.C. 315(d). See also Kay v. FCC, 443 F.2d at 643-44. 25 See Codification of the Commission's Political Programming Policies, 6 FCC Rcd at 5710 (a purpose of the Rule Making is to develop a "single, up-to-date written source to which the public can turn for guidance" on how to comply with Section 315(b)). 26 Cf. Belluso v. Turner Communications Corp., 633 F.2d at 396 (administrative remedies before FCC for violations of Section 315(a) are exclusive); KVUE, Inc. v. Austin Broadcasting Corp., 709 F.2d 922, 934-36 (5th Cir. 1983) (state law extending "lowest unit charge" availability beyond statutory period under Section 315(b) preempted as an obstacle to achievement of purpose of federal statute). 27 A multiplicity of tribunals and a diversity of procedures "are quite as apt to produce incompatible or conflicting adjudication as are different rules of substantive law." Gardner v. Teamsters Union, 346 U.S. 485, 490-91 (1953). 28 City of New York v. FCC, supra, 486 U.S. at 69. 29 See S. Rept. No. 96, 92d Cong., 1st Sess., at 20, reprinted, 1972 U.S. Code Cong. & Admin. News at 1774. 30 Cf. Farmers Educational & Coop. Union v. WDAY, Inc., 360 U.S. 525, 534-35 (1959); KVUE v. Austin Broadcasting, 709 F.2d at 936 n. 65. We recognize that, apart from the equal opportunities provision of Section 315(a), Congress chose not to require that stations afford access rights to individual state and local candidates. Nevertheless, ---------------------------------------- Page Break ---------------------------------------- 44a Congress clearly wanted to foster and encourage candidates' access to the broadcast media, and the state lawsuits conflict with that objective. 31 See City of New York v. FCC, 486 U.S. at 64. 32 486 U.S. at 64. 33 Id. 34 See 47 U.S.C. 315(d). 35 See City of New York v. FCC, 486 U.S. at 64. 36 U.S. v. Southwestern Cable Co., 392 U.S. 157, 168 (1968), quoting FCC v. Pottsville Broadcasting Co., 309 U.S. at 137. See. also Farmers Educational & Coop. Union v. WDAY, Inc., 360 U.S. at 529 (state libel actions preempted to avoid undermining a "basic purpose" of Section 315, even though an express provision preempting such actions had been deleted from final version of statute). 37 City of New York v. FCC, 486 U.S. at 69. 37 See News Release, Report No. GN-74, June 6, 1991 (cited inn. 3, supra). 39 360 U.S. at 534-35. 40 360 U.S. at 535. 41 Id. (citation omitted). 42 See KVUE v. Austin Broadcasting, 709 F.2d at 936 n.65. 43 See, e.g., Texas & Pacific Railroad Co. v. Abilene Cotton Oil Co., 204 U.S. 427 (1907); Pennsylvania Railroad v. Puritan Coal Mining Co., 237 U.S. 121, 129 (1915); In re Long Distance Telecommunications Litigation, 831 F.2d 627 (6th Cir. 1987); Comtronics, Inc. v. Puerto Rico Telephone Co., 553 F.2d 701, 707-08 n. 6 (1st Cir. 1977); Blackburn v. Doubleday Broadcasting, Inc., 353 N.W.2d 550 (Minn. 1984). 44 Zen Miller for Governor, supra, slip op. at 11-12. ---------------------------------------- Page Break ---------------------------------------- 45a 45 See Comtronics, Inc. v. Puerto Rico Tel. Co., 553 F.2d at 708 n. 6. We also reject the argument that we should not preempt because only the courts can finally determine the extent of our authority. Our preemption order clearly is subject to judicial review pursuant to Section 402(a) of the Communications Act, 47 U.S.C. 402(a). See also 28 U.S.C, 2342 et. seq. But that fact neither disables us from making a declaratory ruling as to our view of our authority nor excuses us of our obligation to clarify an issue in dispute. 46 As a matter of general policy, we also believe that complainants should bring any lowest unit charge complaints in a timely manner. It would not serve the public interest to attempt to resolve such complaints on the basis of a stale record, and by requiring timely action we ensure that the Commission is able "to remedy violations before a pattern of abuse develops." National Citizens Committee for Broadcasting v. FCC, 567 F.2d 1095, 1116 (D.C. Cir. 1977), cert. denied, 436 U.S. 926 (1978). 47 We intend to apply a standard similar to that imposed by Section 8(a)(2) of the Federal Rules of Civil Procedure. Thus, a complainant would be required to describe the factual basis for its belief that a specific station has committed a violation, rather than, for example, merely accusing a station of overcharging candidates based upon general information released in the Mass Media Bureau's 1990 Audit Report. Similarly, the fact that a station made efforts to settle overcharge claims would not be considered in deciding whether a complainant has established a prima facie case. ---------------------------------------- Page Break ---------------------------------------- 46a In the past, candidates have relied upon invoices or other information demonstrating inconsistencies in lowest unit charges. In addition, a complainant could make a prima facie case by using generally-available industry or statistical data on average rates to support its belief that the rate paid by a candidate was higher than the average rate charged by the station for the same class of time. These examples, of course, are not the sole means by which a prima facie case could be established; rather, they are merely intended to serve as a useful guide to interested parties. 48 In this regard, the Commission believes that time-limited mediation may be the most efficient means of resolving complaints, particularly where the circumstances of a given case are fairly straightforward. Therefore, the Commission's proposed Alternative Dispute Resolution process (ADR) may provide a useful vehicle to resolve these complaints in a fair and expeditious manner. See Initial Policy Statement and Order, FCC Release No. 91-304, 56 Fed. Reg. 51178 (October 10, 1991). 49 No more than sixty days will be allowed for discovery. 50 Failure to abide by the terms of the protective order may result in the imposition of sanctions which could include those set forth in 47 C.F.R. 1.24 (censure, suspension or disbarment of persons practicing before the Commission) or possible dismissal of the complaint. 51 Even if the parties elect to resolve a dispute through mediation, we of course retain our jurisdiction to enforce the requirements of Section 315(b). 52 Given the substantial demand on agency resources which Section 315(b) cases might create, ---------------------------------------- Page Break ---------------------------------------- 47a the Commission would welcome bona fide, mutually satisfactory settlements of overcharge disputes between complainant candidates and respondent broadcasters. Thus, while retaining our discretion to determine whether additional sanctions are warranted, the Commission would be inclined to look with favor upon such settlements in making that determination. 53 See 47 C.F.R. 1.115. ---------------------------------------- Page Break ---------------------------------------- 48a APPENDIX C Before the Federal Communications Commission Washington, D.C. 20554 In Re: Exclusive Jurisdiction With Respect to Potential Violations of the Lowest Unit Charge Requirements of Section 315(b) of the Communications Act of 1934, as amended ORDER ON RECONSIDERATION Adopted: May 14, 1992; Released: June 12, 1992 By the Commission Commissioner Quello issuing a statement. ---------------------------------------- Page Break ---------------------------------------- 49a TABLE OF CONTENTS Topic Paragraph No. I. INTRODUCTION 1 [50a] II. BACKGROUND 2-4 III. DISCUSSION [50a-51a] 5-27 [51a-66a] A. Preemption of State Causes of Action Involving Breaches of Duties Under Section 315(b) 6-23 [52a-64a] 1. Congressional Preemption 6-20 [52a-62a] a. Congressional Intent 7-13 [53a-57a] b. Potential for Inconsistent Interpretations 14-18 [57a-61a] c. State Actions as an Obstacle to the Realization of the Full Objectives of Congress 19-20 [61a-62a] 2. Preemption as an Exercise of the Commission's Authority 21-23 [62a-64a] B. Procedures Governing Complaints Alleging Section 315(b) Violations 24-27 [64a-66a] IV. CONCLUSION 28 [66a] V. ORDERING CLAUSES 29-30 [67a] ---------------------------------------- Page Break ---------------------------------------- 50a I. INTRODUCTION 1. In this Order, we deny two petitions for recon- sideration of our Declaratory Ruling in this pro- ceeding. 1. In that decision, we held that federal law preempts state causes of action dependent on any determination of the "lowest unit charge" under Section 315(b) of the Communications Act, or of some other duty arising under that subsection. 2. Petitions for reconsideration were fried jointly by certain candidates for public office in Georgia and Alabama and their respective campaign committees. In denying the petitions, we affirm in its entirety the holding of the Declaratory Ruling and the analysis set forth therein. II. BACKGROUND 2. We issued the Declaratory Ruling in con- junction with our comprehensive examination of Commission guidelines and regulatory policies re- garding broadcaster and cable operator practices with respect to the sale of political programming and advertising time to political candidates. 3. Our decision to consider issuing a declaratory ruling regarding Section 315(b) was prompted by litigation in several states where candidates for elective office had sued broadcast stations for charging rates allegedly in excess of those permitted under Section 315(b) and the inconsistent court rulings with regard to jurisdiction resulting from such litigation, Accord- ingly, we issued a Public Notice in October 1991 stating that we were considering issuing, on our own motion, a declaratory ruling confirming that the Commission has exclusive jurisdiction to determine questions of liability for violations of Section 315(b) ---------------------------------------- Page Break ---------------------------------------- 51a and inviting public comment on several related issues. 4. 3. After examining comments filed by interested persons in response to the Public Notice, we issued the Declaratory Ruling on December 13, 1991, 5. pre- empting "any state cause of action dependent on any determination of the lowest unit charge under Section 315(b) of the Communications Act, or of some other duty arising under that subsection . . . ." 6. We further declared that "[t]he sole forum for adjudi- cating such matters shall be this Commission." 7. The preemption encompassed both determinations of lia- bility under Section 315(b) and remedies for enforcing the statutes Additionally, we established procedures governing complaints against. broadcast stations filed with the Commission alleging violations of the lowest unit charge requirements of Section 315(b). 9. 4. Petitioners filed the instant petitions for reconsideration on January 15, 1992. We published public notice of the petitions in the Federal Register 10. and established a pleading cycle in accordance with Section 1.429 of our rules. 11. Oppositions were filed by three groups of broadcasters, and the petitioners replied. 12. III. DISCUSSION 5. Petitioners maintain that the Commission erroneously concluded that Congress by implication preempted state causes of action which include as an element alleged violations of Section 315(b). Peti- tioners further contend that the Commission lacks authority to confer upon itself exclusive jurisdiction over matters related to Section 315(b). Finally, peti- tioners assert that the procedures established by the Commission are not adequate to enforce the rights of ---------------------------------------- Page Break ---------------------------------------- 52a candidates and would stand as an obstacle to the realization of the full objectives of Congress in enact- ing Section 315(b). Accordingly, petitioners seek reconsideration and withdrawal of the Declaratory Ruling. We consider and reject petitioners' argu- ments below. A. Preemption of State Causes of Action Involving Breaches of Duties Arising Under Section 315(b) 1. Congressional Preemption 6. Our preemption ruling was based, first, on a finding that Congress by implication preempted state causes of action dependent on any determination of the lowest unit charge under Section 315(b), or of some other duty arising under that subsection. Spe- cifically, we found that: (1) the purpose of the federal law and the character of its obligations reveal a congressional intention to preempt such causes of action; (2) allowing such actions to proceed in state courts would result in potentially inconsistent interpretations of federal law, and (3) such actions would stand as an obstacle to the realization of the full objectives of Congress. 13. Petitioners challenge each of these findings, which we reaffirm below. a. Congressional Intent 7. Petitioners assert that a proper analysis of congressional intent regarding preemption must focus exclusively on the Federal Election Campaign Act of 1971 ("FECA"), which enacted the current version of Section 315(b), and its legislative history. The legislative history of FECA petitioners main- ---------------------------------------- Page Break ---------------------------------------- 53a tain, is silent regarding any congressional purpose to provide uniform regulation of broadcast issues by the Commission. Petitioners also contend that the legislative goals of FECA and therefore Section 315(b), are different from those of the Communi- cations Act of 1934. The basic thrust of petitioners' argument is that the Commission improperly exam- ined Section 315(b) in the context of the general regulatory scheme adopted by the Communications Act of 1934 rather than relying solely on the purposes and objectives of FECA and its legislative history. 14. 8. We are not persuaded by this argument. Peti- tioners, in effect, ask us to disregard a fundamental purpose of the Communications. Act to provide a uniform scheme of federal regulation and enforcement over radio communications matters simply because the lowest unit charge provision of the Act was added as part of FE CA. This ignores the fact that Congress elected to adopt Section 315(b) as an amendment to the Communications Act and fit it within the existing structure of that statute. We thus reject the notion that the lowest unit charge provision of Section 315(b) must be considered in isolation either from other provisions of Section 315 or other sections of the Communications Act that demonstrate congressional intent with regard to the overall scheme of broadcast regulation and the Act's enforcement. Rather, Sec- tion 315(b), which is an integral part of the compre- hensive regulatory and enforcement scheme regard- ing broadcasting contained in the Communications Act, properly is examined within the context of the statute in which Congress chose to codify it. In this regard, we thoroughly examined in the Declaratory Ruling the nature and purpose of the comprehensive and centralized statutory scheme governing broad- ---------------------------------------- Page Break ---------------------------------------- 54a casting set forth in the Communications Act, includ- ing the express statutory language providing that the Commission shall execute and enforce the provisions of the Act. 15. For the reasons set forth in the Declaratory Ruling, we affirm our prior conclusion that "the purpose of the federal law and the character of its obligations reveal an intention to preempt [state] causes of action" involving alleged violations of Section 315(b). 16. 9. We agree with petitioners that the legislative history and statutory objectives of FECA also are relevant to the preemption analysis; however, as we found in the Declaratory Ruling, they too support our decision to preempt. In this regard, we discussed in the Declaratory Ruling relevant portions of FECA's legislative history. For example, we cited language from the Senate report revealing that Congress expressly relied upon the assurances of the then-Chairman of the FCC that the "broadcast pro- visions" of FECA would be enforceable by the Com- mission. 17. Congress's reliance on this statement indicates its clear understanding that the Com- mission would be the body responsible for enforcing Section 315(b). Moreover, by ensuring uniform interpretation and enforcement of Section 315(b), preemption will further the expressed objectives of Congress in enacting FECA-"to give candidates for public office greater access to the media" and "to halt the spiraling cost of campaigning for public office." 18. 10. Congress also vested in the Commission explicit authority to implement and enforce the substantive requirements of Section 315-authority that was not diminished in any way in the adoption of FECA. 19. As the United States Court of Appeals for the District of Columbia Circuit has noted, the ---------------------------------------- Page Break ---------------------------------------- 55a authority contained in Section 315(d) "amounts to a congressional direction to the FCC to recognize the importance of this particular section of the statute and to prescribe separate rules and regulations to deal with the multitudinous situations that arise in applying it to all federal, state and local candidates for office throughout the nation." 20. This explicit grant of enforcement authority reinforces our conclusion that Congress intended the Commission, and not the many state courts, to resolve any issues concerning the lowest unit charges for the broadcast of political advertisements. 11. We reject petitioners' claim that because the language of Section 315(d) was enacted prior to the lowest unit charge requirement of Section. 315(b), subsection (d) does not reveal any congressional intent with respect to subsection (b). 21. Petitioners once again ignore the context of the statute and unpersuasively suggest that we view separate subsec tions of Section 315 in isolation. By placing the lowest unit charge requirement in Section 315, congress clearly intended the existing rulemaking authority contained in subsection (d) to apply to subsection (b), 22. and petitioners have cited nothing that suggests otherwise. Moreover, the lowest unit charge requirement was merely a change in the standard for measuring the lawfulness of charges for political advertisements. Section 315(b) itself existed long before Congress enacted FECA. Prior to the FECA amendment, that provision limited the rates for political advertising to "the charges made for comparable use of such station for other purposes." 23. There is no basis for concluding that in amending that standard in Section 315(b) to include the "lowest unit charge" concept, Congress in the FECA intend- ---------------------------------------- Page Break ---------------------------------------- 56a ed to deprive the Commission of its existing authority under Section 315(d) to enforce all the substantive requirements of Section 315. Indeed, in our view, the explicit enforcement authority contained in Section 315(d) is strong evidence of Congress's intent to provide for uniform implementation and enforcement of subsection (b). 12. Similarly, we reject petitioners' assertion that we improperly relied on Belluso v. Turner Com- munications Corp. 24. to support our conclusion that Congress by implication preempted state causes of action involving breaches of duties arising under Section 315(b). 25. As we noted in the Declaratory Ruling, in Belluso the court held that Congress had not intended to create a private federal cause of action for damages as a remedy for a violation of Section 315(a) of the Communications Act and had opted instead for an exclusive administrative remedy. 26. Petitioners claim that Belluso is. distinguishable because Section 315(a) was enacted as part of the original Communications Act, whereas the lowest unit charge requirement of Section 315(b) was added to the Act through FECA. As indicated above, we find such distinctions unpersuasive. We affirm our prior conclusion that the court's reasoning in Belluso is equally applicable to Section 315(b). Whether the statutory provision involved is Section 315(a) or Section 315(b), in our view the statute reveals a congressional intention to achieve uniform implemen- tation and enforcement through this Commission. 27. 13. Finally, we reject petitioners' claim that Section 414 of the Act, which preserves remedies "now existing at common law or by statute," 28. is inconsistent with a congressional desire to preempt state causes of action involving Section 315(b) deter- ---------------------------------------- Page Break ---------------------------------------- 57a minations. 29. Such a "savings clause" does not pre- serve lawsuits that are predicated on a federal statutory right, rather than "existing" state Common law. 30. A savings clause does not convert federal, law claims into state causes of action. 31. Also, as we noted in the Declaratory Ruling, "such 'savings clauses' do not preclude preemption where allowing state rem- edies would lead to a conflict with or frustration of statutory purposes." 32. Moreover, the determination of whether a broadcaster has complied with" its Section 315(b) "lowest unit charge" obligations. in- volves resolution of "issues call[ing] for the type of administrative evaluations and conclusions that Congress has entrusted to the informed discretion of the Commission" and therefore is outside the scope of the savings clause. See Chicago & North Western Transportation Co. v. Kalo Brick & Tile Co., .450 U.S. 311, 330 (1981). 33. In this regard, "we pointed out in the Declaratory Ruling that the Commission has been designated to enforce the lowest unit charge requirement "precisely because it has the. expertise necessary to make such determinations based, upon its understanding of the complex and often arcane practices of the broadcast industry." 34. Accordingly, we affirm our prior conclusion that Section 414 does not foreclose our preemptive action concerning Section 315(b). 35. b. Potential for Inconsistent Interpretations 14. Petitioners next dispute our. expressed con- cern that "[r]ulings by courts in numerous juris- dictions around the country almost certainly would produce varying and possibly conflicting determin- ations among state courts and between those courts ---------------------------------------- Page Break ---------------------------------------- 58a and the Commission, thereby frustrating the objec- tives of certainty and uniformity." 36. Petitioners offer the following arguments in support of their conten- tion that there is no danger of inconsistent interpre- tations of Section 315(b): (1) counts have little latitude in interpreting Section 315(b) because they act in an adjudicatory, rather than a Rule Making, context; (2) the regulations governing Section 315(b) are easily understandable and applied, (3) all interpretations of Section 315(b) are subject to ultimate review by the United States Supreme Court; (4) the inclusion of a federal statute as a standard in a state cause of action is not uncommon and (5) the doctrine of primary jurisdiction is available to ensure uniformity, if necessary. 37. 15. These arguments are not persuasive. First, the fact that state courts would make determinations under Section 315(b) in an adjudicatory rather than a Rule Making role does not diminish the possibility of disparate rulings on the issues of liability and reme- dies. Multiple adjudications by numerous courts could easily produce inconsistent decisions in various jurisdictions, thereby creating inconsistent rights and responsibilities for political candidates and broad- casters, respectively. In addition, contrary to peti- tioners' position, Congress expressly recognized in enacting current Section 315(b) that "[t]he determin- ation of what is a broadcasting station's lowest unit charge can be a very complicated matter." 38. Our recent effort to provide comprehensive guidance in this area 39. underscores the need to centralize inter- pretation and enforcement of the lowest unit charge requirement of Section 315(b) in order to achieve uniformity and certainty. 40. ---------------------------------------- Page Break ---------------------------------------- 59a 16. We recognize that the Supreme Court has ultimate authority to review state court decisions, but this fact does not change our analysis. 41. As a. practical matter, the Supreme Court cannot and certainly will not review a multitude of inconsistent state court decisions involving Section 315(b) deter- minations. Even if the Supreme Court were to review a particular state court ruling involving the lowest unit charge requirement, various other decisions by state courts would remain unaffected, or at least there could be extensive litigation and prolonged uncertainty as to whether those decisions were implicated by the Supreme Court's decision. We thus remain convinced of the potential for candidates and broadcasters to be subject to differing standards in different jurisdictions. Centralizing determinations of liability in this Commission will avoid this problem and avoid frustration of Congress's objective of en- suring uniform application and enforcement of the Act's provisions, including Section 315(b). 42. 17. We recognize, as petitioners observe, that state courts in some circumstances may be called upon to construe federal law in the context of hearing causes of action grounded in state law. 43. However, state court consideration of such matters is not permitted when Congress has preempted state law, nor when a federal agency acting within its authority has preempted state law. Since we have determined that Congress has by implication preempted state causes of action related to Section 315(b), and further, that we have independent authority to preempt such causes of action, which we have exercised, 44. state courts in this instance may not entertain deter- minations of liability and remedies under Section 315(b). 45. ---------------------------------------- Page Break ---------------------------------------- 60a 18. We also are not persuaded by petitioners' argument that, if state court enforcement of Section 315(b) implicates concerns for uniformity, we should rely instead on the doctrine of primary jurisdiction in lieu of preemption. We have determined in this case that state court jurisdiction over lowest unit charge claims has been preempted totally by federal law. Primary jurisdiction would be applicable only if both the state courts and the Commission had jurisdiction over lowest unit charge controversies. That doctrine is a means of accommodating concurrent jurisdiction between courts and the Commission-not a com- promise situation that gives state courts jurisdiction over matters preempted by federal law. Furthermore, as the Supreme Court has noted, "[n]o fixed formula exists for applying the doctrine of primary juris- diction." 46. There is thus no assurance that a particular court would refer the liability issue under Section 315(b) to the Commission in the first instance. 47. Moreover, we have determined that this procedure would not "ensure uniform enforcement of Section 315(b), as courts would be free to fashion remedies inconsistent with those deemed appropriate by the federal agency charged with implementing and enforcing the statute. In extending the preemptive effect of the Declaratory Ruling to remedies, we specifically found that allowing state courts to impose additional remedies for violations of Section 315(b) might discourage broadcasters from carrying politi- cal advertising, thereby frustrating Congress's in- tent to foster dissemination of information regarding political campaigns. 48. We reject petitioners' sugges- tion' that the doctrine of primary jurisdiction is an appropriate vehicle to ensure uniformity in this area. ---------------------------------------- Page Break ---------------------------------------- 61a c. State Actions as an Obstacle to the Realization of the Frill Objectives of Congress 19. Finally, petitioners maintain that state actions would not stand as an obstacle to the realization of the full objectives of Congress in enacting, Section 315(b), but rather would serve Congress's goal of reducing campaign spending. 49. In this regard, petitioners claim that administrative remedies available from the Com- mission would not be as effective because the Com- mission does not have authority to order that broad- casters pay refunds to candidates who are overcharged. 50. 20. Petitioners' argument ignores the breadth of the Commission's authority in this area. The Com- mission has a wide range of tools, including the authority to require rebates for overcharges, to ensure effective and uniform enforcement of Section 315(b). The Commission has upheld Mass Media Bureau actions in which rebates had been required and no broadcaster has ever challenged that author- ity. 51. Section 315(b) itself mandates that charges to candidates "shall not exceed" the lowest unit charge, and the Commission is charged with the respon- sibility to execute and enforce the Act's provisions. 52. In addition, Section 4(i) of the Act expressly author- izes the Commission to issue such orders "not in- consistent with this Act, as may be necessary in the execution of its functions." 53. Requiring broadcasters to return overcharges to candidates effectuates the express requirement of Section 315(b) and is well within the Commission's authority. "The United States Court of Appeals for the District of Columbia ---------------------------------------- Page Break ---------------------------------------- 62a Circuit has held in a different regulatory context that Section 4(i) authorizes the Commission to order refunds to enforce statutory requirements in the absence of express refund authority. New England Tel. & Tel. Co. v. FCC, 826 F.2d 1101 (D.C. Cir. 1987), cart. denied, 490 U.S. 1039. (1989). 54. We conclude that we may require refunds to enforce the lowest unit charge provisions of Section 315(b) pursuant to our authority under Sections 1, 4(i) and 315(d) of the Act. 55. 2. Preemption as an Exercise of the Commission's Authority 21. As an independent basis for our action, we explained that, regardless of whether Congress expressly or by implication preempted state law claims based upon alleged violations of Section 315(b), substantial judicial precedent establishes that the Commission itself has authority to preempt such claims. See, e.g., City of New York v. FCC, 486 U.S. 57 (1988); Fidelity Federal Savings & Loan Ass'n. v. de la Cuesta, 458 U.S. 141 (1982). Consistent with this precedent, we concluded that preemption was well within our delegated authority under the Com- munications Act to enforce Section 315(b) and was necessary to achieve our purpose of ensuring uniform standards for interpreting and enforcing the lowest unit charge requirement. Accordingly, we exercised our independent authority to preempt state causes of action involving breaches of duties arising under Section 315(b) and declared that the Commission shall be the sole forum for adjudicating such matters. 56. 22. Petitioners argue that the Commission lacks authority to confer upon itself exclusive jurisdiction over Section 315(b) matters. 57. It is beyond dispute, of ---------------------------------------- Page Break ---------------------------------------- 63a course, that "[a]n agency may not confer power upon itself." Louisiana Public Service Commission v. FCC, 476 U.S. 355, 374 (1986). 58. However, in preempting state causes of action related to Section 315(b), we are in no way conferring power upon ourselves but rather are acting pursuant to the authority granted us by Congress. As we explained in the Declaratory Ruling, the Communications Act's regulatory scheme setting forth Commission author- ity to enforce the Act, and the provisions of Section 315 specifically, provide the necessary delegation of authority to support our decision to preempt. 59. Consistent with City of New York and other Supreme Court decisions, the Commission may in proper circumstances determine "that its authority, is exclusive and pre-empts any state efforts to regulate in the forbidden area." 60. In preempting state causes of action involving breaches of duties arising under Section 315(b) and declaring that the" Com- mission shall be the sole forum for adjudicating such matters, we acted squarely within the authority delegated to us by Congress and in harmony with the standards enunciated by the Supreme Court in City of New York and related decisions. 61. 23. Finally, petitioners' attempts to distinguish City of New York and de la Cuesta are unavailing. 62. Petitioners maintain that, unlike the situation in those cases, here there is no conflicting state policy with respect to Section 315(b). To the contrary, as discussed above, we conclude that a multiplicity of state court rulings almost certainly would produce varying and possibly conflicting determinations among state courts and between those courts and the Commission. 63. Such a result necessarily would frus- trate federal interpretation and enforcement of ---------------------------------------- Page Break ---------------------------------------- 64a Section 315(b). Just as importantly, it would conflict with Congress's objective to create a unified scheme of regulation for communications by vesting in the Commission exclusive jurisdiction to enforce the Act, thereby leading to uniformity, certainty and consis- tency with respect to the lowest unit charge and other requirements of the Act. Additionally, incon- sistent state court determinations of liability and remedies under Section 315(b) might well discourage broadcast stations from accepting political advertise- ments, thus frustrating a central congressional policy underlying Section 315(b) of encouraging greater and less costly access for candidates to broad- cast facilities. 64. We therefore affirm our preemption decision. B. Procedures Governing Complaints Alleging Section 315(b) Violations 24. In the Declaratory Ruling, we found that setting out a procedural framework for ruling on Section 315(b) complaints "will further our ability to promptly and fairly dispose of Section 315(b) complaints brought to us as a consequence of this ruling . . . . " 65. Accordingly, we established procedures which set forth pleading requirements for making a prima facie case, established pleading timetables, provided for limited discovery of station records pertaining directly to the complaint, and offered parties the opportunity to pursue mediation as an alternative to adjudication of a complaint by the Mass Media Bureau. 66. As discussed below, we affirm those procedures in their entirety. 25. Petitioners contend that the procedures set forth in the Declaratory Ruling are inadequate be- ---------------------------------------- Page Break ---------------------------------------- 65a cause they are not the same as those afforded litigants under state law and the Federal Rules of civil Procedure. 67. However, there is no requirement in either the Communications Act or the Adminis- trative Procedure Act ("APA'') 68. that the Commis- sion's procedures replicate procedures available to civil litigants in state or federal courts, and petitioners offer no authority for such a proposition. Civil court procedures necessarily are drafted broad- ly so as to accommodate a wide variety of civil causes of action. In contrast, we are concerned here with alleged violations of a specific provision of the Communications Act. On the basis of our experience in enforcing Section 315(b), we were able to craft procedures designed expressly to facilitate resolution of such claims. 69. 26. We likewise reject petitioners' assertion that our Section 315(b) procedures conflict with the APA and the Commission's existing procedural rules. 70. Section 315 does not require lowest unit charge disputes to be determined "on the record after opportunity for an agency hearing." 71. The procedures governing adjudications and hearings specified in Section 554 and 556 of the APA 72. thus are not re- quired in Section 315(b) cases. Moreover, we do not anticipate the need to hold formal adjudicatory hear- ings in the majority of complaints arising under Section 315(b). Petitioners' claim that our Section 315(b) procedures differ from other procedures specified in our rules is irrelevant. 73. The Commission has broad authority to establish individually tailored procedures to carry out its responsibilities under the Act, including the enforcement of Section 315. 74. In other contexts, we have crafted procedural require- ments governing specific types of complaints which ---------------------------------------- Page Break ---------------------------------------- 66a differ from our procedural rules governing pleadings generally or our rules governing formal hearings. 75. 27. Contrary to petitioners' claims, 76. the procedures set forth in the Declaratory Ruling fully protect the rights of parties and should facilitate timely and fair resolution of such complaints, thus advancing the interests of the parties and the public interest. These procedures are tailored to address the specific factual and legal issues that arise. in Section 315(b) disputes. For example, at the heart of any Section 315(b) dispute is whether the station has charged the complaining candidate the "lowest unit charge" as prescribed by the statute. Accordingly, our procedures provide for limited discovery designed to enable the candidate to examine station records directly pertaining to this issue, while protecting broadcasters from potentially harmful public dis- closure of proprietary information or the identity of their advertising customers. In this manner, our procedures are designed to protect the legitimate interests of both parties to the complaint. If actual experience indicates areas where our Section 315(b) procedures should be revised, we will revisit them. 77. IV. CONCLUSION 28. We have reviewed petitioners' arguments and conclude that they do not support reconsideration of the Declaratory Ruling. We thus affirm our prior ruling in its entirety, including our holding that fed- eral law preempts state causes of action dependent on any determination of the lowest unit charge or any other duty arising under Section 315(b) of the Com- munications Act. ---------------------------------------- Page Break ---------------------------------------- 67a V. ORDERING CLAUSES 29. Accordingly, IT IS ORDERED, pursuant to Section 405 of the Communications Act of 1934, as amended, 47 U.S.C. 405, that the petitions for reconsideration filed on January 15, 1992, by certain candidates for political office in Georgia and Alabama and their respective campaign committee: ARE DENIED. 30. IT IS FURTHER ORDERED, pursuant to- Sections 1, 4(i) and (j), 303(r), and 315(b) and (d) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i) and (j), 303(r), and 315(b) and (d); Section 5(e) of the Administrative Procedure Act, 5 U.S. C. 556(e); and Section 1.2 of the Commission's rules, 47 C.F.R. 1.2, that the Declaratory Ruling in this proceeding IS AFFIRMED. FEDERAL COMMUNICATIONS COMMISSION Donna R. Searcy Secretary ---------------------------------------- Page Break ---------------------------------------- 68a APPENDIX Petitions for Reconsideration 1. Zen Miller, Zen Miller for Governor, Pierre Howard, Georgians For Howard '90, Johnny Isakson, Johnny Isakson For Governor, Andrew Young, Young Working For Georgia, Lauren McDonald, Lauren McDonald For Governor, Roy Barnes, Roy Barnes For Governor, Tim Ryles, Tim Ryles For Insurance Commissioner, Warren Evans, Warren Evans Election Committee, William L. Dickinson, Second District Campaign Committee, William J. Cabaniss, Friends of Bill Cabaniss Committee, Ronnie Flippo, Flippo for Governor Committee, Spencer T. Bachus, III, Bachus for Attorney General Committee, John Teague, Jeremiah A. Denton, Denton for Senate Committee, James E. Folsom, Jr., Jim Folsom, Jr. for Lieutenant Governor Committee, Fob James, Fob James for Governor Committee, Kenneth D. Wallis, Alabamians for Ken Wallis Committee, George D.H. McMillan, Jr., The McMillan Committee, George Wallace, Jr., Wallace for Treasurer Committee, Charles A Graddick, Graddick for Governor Committee, William J. Baxley, Friends of Bill Baxley, Paul Hubbert, Richard Shelby, Don Siegelman, Jimmy Sullivan, candidates for public office in Georgia and Alabama and their respective campaign committees (January 15, 1992) 2. Sonny Hornsby, Friends of E.C. Sonny Hornsby, Mark Kennedy, Judge Mark Kennedy for Supreme Court and Friends of Judge Mark Kennedy (adopting, incorporating and joining the petition for ---------------------------------------- Page Break ---------------------------------------- 69a reconsideration of Zen Miller, et al.) (January 15, 1992) Oppositions 1. Capital Cities/ABC, Inc., Chris-Craft Indus- tries, Inc., and the Times Mirror Company (March 5, 1992) 2. A.H. Belo Corporation, Booth American Com- pany, Cosmos Broadcasting Corporation, Cox Enter- prises, Inc., Evening Post Publishing Company and River City License Partnership (March 6, 1992) 3. American Family Broadcast Group, Inc., Tribune Broadcasting Company, Great American Television and Radio Company, Inc., Kelly Broad- casting Company, Kelly Television Company, McGraw-Hill Broadcasting Company, Inc., The New York Times Company, SCI Television, Inc., WTVT, Inc., Gillett Broadcasting of California, Inc., National Association of Broadcasters, Westinghouse Broad- casting Company, Inc., The Spartan Radiocasting Company, The Providence Journal Company, Post-Newsweek Stations, Inc., and Fox Television Stations Inc. (March 6, 1992) Reply 1. Zen Miller, et al., candidates for public office in Georgia and Alabama and their respective campaign committees (March 20, 1992) ---------------------------------------- Page Break ---------------------------------------- 70a FOOTNOTES 1 6 FCC Rcd 7511 (1991). 2 Section 315(b) provides that a broadcast station's charges for advertising time purchased by candidates for political office during certain specified periods before primary and general elections may not exceed "the lowest unit charge of the station for the same class and amount of time for the same period." At all other times, the charges to such candidates may not exceed "the charges made for comparable use of such station by other users," 47 U.S.C. 315(b). Section 315(b) applies both to over-the-air broadcast stations and cable system operators. See 47 U.S.C. 315(c). The terms "broadcast stations," "broadcasters," or "licensees," as used in this document, are thus meant to include cable operators as well. 3 See Codification of the Commission's Political Programming Policies, MM Docket No. 91-168, 7 FCC Rcd 678 (1991), Erratum, 7 FCC Rcd 920 (M.M.B. 1992), reconsidered in part, 7 FCC Rcd 1616 (1992), further reconsideration, FCC 92-210 (adopted May 14, 1992). 46 FCC Rcd 5954 (1991), 56 Fed. Reg. 51895 (Oct. 16, 1991). 5 A summary of the Declaratory Ruling was published in the Federal Register on January 14, 1992.57 Fed. Reg. 1478 (1992). 6 Declaratory Ruling, 6 FCC Rcd at 7511, para. 1. 7 Id. 8 Id., 6 FCC Rcd at 7513, paras. 17-19. 9 Id., 6 FCC Rcd at 7513-14, paras. 21-25. 1057 Fed. Reg. 6121 (Feb. 20, 1992). 11 47 C.F.R. 1.429 (1991). ---------------------------------------- Page Break ---------------------------------------- 71a 12 A list of persons joining in the petitions for reconsideration and the oppositions is attached as an appendix. Further references herein to "petition" or "petitioners'' refer to the petition filed by Zen Miller. _. et al., since the petition filed by Sonny Hornsby et al. offers no separate substantive arguments but rather adopts, incorporates and joins the Zen Miller pleading. 13 Declaratory Ruling, 6 FCC Red at 7511-12, paras. 7-8. 14 Petition at 2-5. 15 6 FCC Rcd at 7511-12, paras. 7-8 (citing, among other statutory provisions, Section 315(d) of the Act). 16 6 FCC Red at 7511, para. 7. 17 Declaratory Ruling, 6 FCC Rcd at 7512, para. 8 n.17 (citing S. Rep. No. 96, 92d Cong., 1st Sess. (1971), reprinted in 1972 U.S. Code Cong. & Ad. News 1773, 1786). Petitioners assert that this passage from the Senate report is considered out of context and refers to the spending limitations contained in the legislation rather than Section 315(b). Petition at 9-10. The Commission's Chairman, however, was referring to enforcement of the legislation's broadcast provisions, of which the lowest unit charge requirement of current Section 315(b) was an integral part. There would have been no reason for the Commission's Chairman to testify about FECA'S spending limitations, because the Commission has no jurisdiction over those provisions. 18 See Declaratory Ruling, 6 FCC Rcd at 7512, para. 14 (quoting S. Rep. No. 96, 92d Cong., 1st Sess. (1971), reprinted in 1972 U.S. Code Cong. & Ad. News at 1774). 19 See 47 U.S.C. 315(d) (directing the FCC to "make rules and regulations to carry this provision ---------------------------------------- Page Break ---------------------------------------- 72a [Section 315] into effect."); Declaratory Ruling, 6 FCC Rcd at 7512, paras. 8, 11. 20 Kay v. FCC, 443 F.2d 638, 643-44 (D.C. Cir. 1970). 21 See Petition at 8-9. 22 See Sutherland Stat. Const. 22.34 (4th Ed.) (amendment should be, construed together with unchanged provisions of original section); id. at 22.35 (amendment should be construed as if part of original enactment). 23 47 U.S.C. 315(b) (1952). 24 633 F.2d 393 (5th Cir. 1980). 25 See Petition at 7-8. 26 6 FCC Rcd at 7512, para. 8 n.17. 27 As we have pointed out, moreover, Section 315(b) restricted the charges broadcasters could assess for political advertisements long before FECA was adopted. 28 47 U.S.C. 414. 29 See Petition at 6-7. 30 Zell Miller for Governor v. Pacific & Southern Co., Inc., No. 1:91-CV-267-RLV, slip op. at 11-12 (N.D. Ga. June 4, 1991); Declaratory Ruling, 6 FCC Red at 7513, para. 20 & n. 44. 31 Id., 6 FCC Red at 7513, para. 20 & n. 45. See Arrow Transp. CO. v. Southern R. Co., 372 U.S. 658, 671 n. 22 (1963); Comtronics, Inc. v. Puerto Rico Tel. Co., 553 F.2d 701,707-8 n.6 (1st Cir. 1977). 32 Declaratory Ruling, 6 FCC Rcd at 7513, para. 20 & n.43 (citing Texas & Pacific Railroad Co. v. Abilene Cotton Oil Co., 204 U.S. 427 (1907); Pennsylvania Railroad v. Puritan Coal Mining Co., 237 U.S. 121, 129 (1915); In re Long Distance Telecommunications Litigation, 831 F.2d. 627 (6th Cir. 1987); Comtronics, Inc., 553 F.2d at 707-08 n.6 (1st ---------------------------------------- Page Break ---------------------------------------- 73a Cir. 1977); Blackburn v. Doubleday Broadcasting, Inc., 353 N.W.2d 550 (Minn. 1984)). 33 In Kalo Brick, the Supreme Court held that a state statutory remedy and certain common law causes of action for damages against a railroad carrier were preempted despite a savings clause in the Interstate Commerce Act containing language identical to that contained in Section 414 of the Communications Act. 34 Declaratory Ruling, 6 FCC RCd at 7513, para. 15. 35 Petitioners' reliance on Nader v. Allegheny Airlines, Inc., 426 U.S. 290 (1976), and similar cases is misplaced. See Petition at 7 n.2. In Nader, the Supreme Court held that a common law action for fraudulent misrepresentation against an air carrier need not be stayed pending reference to the Civil Aeronautics Board for determination whether the practice is deceptive within the meaning of the Federal Aviation Act. Emphasizing that a violation of the relevant statutory provision was not coextensive with a breach of duty under the common law, the Court found no "irreconcilable conflict between the statutory scheme and the persistence of common law remedies." Id., 426 U.S. at 299. Thus, in Nader and other cases cited by petitioners, the alleged breach of duties under state law were distinguishable from those created under federal law and involved different elements of proof. See, e.g., Nepera Chemical, Inc. v. Sea-Land Service, Inc., 794 F.2d 688 (D.C. Cir. 1986); Bruss Co. v. Allnet Communication Services, Inc., 606 F.Supp. 401 (N.D. 111. 1985); Kaplan v,. ITT-US Transmission Systems Inc., 589 F. Supp. 729 (E.D N.Y. 1984). In contrast, we held in the Declaratory Ruling that state causes of action are preempted to the extent they involve alleged breaches of duty under ---------------------------------------- Page Break ---------------------------------------- 74a state law that are dependent on proof of a violation of some duty arising under Section 315(b). That is, unlike in Nader, we are dealing with causes of action for which no conceivable liability may attach under state law without the central finding of a Section 315(b) violation. Indeed, petitioners do not even attempt to demonstrate that the state causes of action they espouse are distinct from complaints of Section 315(b) violations. Petitioners acknowledge instead that their objective is to provide "a convenient [state] forum for candidates to seek redress for alleged violations of Section 315(b)." Petition at 16. Petitioners' objection to the Declaratory Ruling thus is based fundamentally on their view that "Congress did not intend to give the Commission exclusive jurisdiction over such [Section 315(b)] claims." Petition at 5. We accordingly conclude that Nader and similar cases are not controlling here. 36 Declaratory Ruling, 6 FCC Rcd 7512, para. 12. We discussed this concern primarily in the context of our discussion in the Declaratory Ruling regarding the exercise of our independent authority to preempt in order to achieve the purpose of developing uniform standards for interpreting and enforcing Section 315(b). Furthermore, whatever the potential for inconsistent interpretations of Section 315(b), Congress centralized in the Commission implemen- tation and enforcement authority with respect to the Communications Act generally and Section 315 specifically, and thus impliedly preempted state causes of action involving breaches of duties arising under Section 315(b). 37 Petition at 10-15; Reply at 3. ---------------------------------------- Page Break ---------------------------------------- 75a 38 S. Rep. No. 96, 92d Cong., 1st Sess. (1971), reprinted in 1972 U.S. Code Cong. & Ad. News at 1780. 39 See Codification of the Commission's Political Programming Policies, 7 FCC Rcd at 687-98, paras. 50-119; 7 FCC Red at 701-2 (Appendix B) (text of new rule concerning the lowest unit charge requirement to be codified at 47 C.F.R. 73.1942). 40 We do not suggest, of course, that state counts are incapable of resolving such "complicated" questions. Our point is that uniformity and certainty in this area are such important considerations that the entire enforcement function has been centralized in this agency. State courts could resolve lowest unit charge questions in a manner that would be perfectly reasonable in the abstract but unacceptably inconsistent with the Commission's standards for enforcement of Section 315(b). 41 Petitioners cite Tafflin v. Levitt,. 493 U.S. 455 (1990), and Pan American Petroleum Corp. v. Superior Court of Delaware, 366 U.S. 656 (1961), for the proposition that the availability of Supreme Court review of any erroneous state court decisions obviates the need for federal preemption. See Petition at 13. Those cases, however, involved questions of whether state courts had concurrent jurisdiction with federal courts, not, as here, whether state courts are preempted from acting in an area where Congress has given a single federal agency exclusive jurisdiction over an area of regulation. See, e.g., FCC v. Pottsville Broadcasting Co., 309 U.S. 134, 137 (1940) (in adopting the Communications Act, Congress "formulated a unified and comprehensive regulatory system for the [broadcasting] industry" to be administered by the FCC). ---------------------------------------- Page Break ---------------------------------------- 76a 42 Final decisions of the Commission concerning Section 315(b), including this declaratory ruling, are of course subject to judicial review by the United States Court of Appeals and, ultimately, the United States Supreme Court. 47 U.S.C. 402(a); 28 U.S.C. 2342(1). 43 See Petition at 13-14 & n.7. 44 See Section III.A.2., infra. 45 The eases cited by petitioner involving state court construction of federal statutes do not involve situations where, as here, Congress has given exclusive jurisdiction to a federal regulatory agency, and thus are inapposite. See Petition at 14 n.7. Moreover, in those cases the courts found that the causes of action at issue were clearly based on state law and the alleged violation of federal law was "merely one of the props" utilized to support the state law claim. Owens v. New York Central Railroad Company, 267 F. Supp. 252, 255 (E.D. III. 1967) (cause of action grounded in negligence). See, e.g., Moore v. Chesapeake & Ohio Railway Co., 193 U.S. 205 (1934) (relevant cause of action based on state statute which incorporated language from similar federal statute); Moody v. McDaniel, 190 F.Supp. 24 (N.D. Miss. 1960) (cause of action based on state wrongful death statute); Tri-State Motor Transit Co. v. Maclif Industries, 534 F. Supp. 283 (S.D. Tex. 1982) (court . held that cause of action may be resolved wholly in terms of principles of state common law of contract). Here, in contrast, the lawsuits at issue derive fundamentally from Section 315(b)'s lowest unit charge requirement, not from existing state common or statutory law. 46 United States v. Western Pacific Railroad Co., 352 U.S. 59, 64 (1956). ---------------------------------------- Page Break ---------------------------------------- 77a 47 Indeed, in recent state court litigation involving Section 315(b), the court, supported by certain of the petitioners in this proceeding, refuses a request by the Commission to invoke the doctrine of primary jurisdiction and defer to the agency on the issue of liability. See Dickinson v. Cosmos Broadcasting Co., No. CV-91-67-P (Ala. Cir. Ct. Sept. 23, 1991). The Commission suggested a primary jurisdiction referral in that case because it had not yet considered whether state actions were preempted. 48 Declaratory Ruling, 6 FCC Red at 7513, para. 19. 49 Petition at 15-16. 50 Id.; see also Petition at 23-24. 51 See, e.g., Outlet Communications, Inc., 5 FCC Rcd 2835 (M.M.B. 1990), affirmed, 7 FCC Rcd 632 (1992); Alfa Broadcasting Corp., 55 RR 2d 599 (M.M.B.), review denied, 102 FCC 2d 18 (1984). See also Chronicle Publishing Co., 6 FCC Rcd 7497, 7499 (1991) (directing licensee to advise Commission of actions taken to refund Section 315(b) overcharges); South Arkansas Radio Company, 5 FCC Rcd 4643, 4643 (M.M.B. 1990) (requiring rebates of Section 315(b) overcharges). 52 See 47 U.S.C. 315(d). See also Section 1 of the Act, 47 U.S.C. 151. 53 47 U.S.C. 154(i). 54 The fact that Title III of the Act relating to broadcasters does not mirror the remedial procedures for common carriers specified in Title II,. which include an express provision for damages in some circumstances, does not change our conclusion. See Petition at 5-6. In New England Telephone, the court held that, pursuant to Section 4(i), the Commission may require carriers to refund earnings in excess of a Commission-prescribed authorized rate-of-return ---------------------------------------- Page Break ---------------------------------------- 78a even though refunds are not expressly authorized, and even though another part of Title II expressly permits an award of damages against carriers for other types of violations. Thus, the mere fact that one part of the Act expressly provides for damages does not justify an inference that the Commission's authority under Section 4(i) is not broad enough to permit the Commission to order refunds in other circumstances, especially where refunds are necessary in order to achieve compliance with the Act's express requirements. Petitioners' citation to TVA v. Hill, 437 U.S. 153, 188 (1978), is inapposite. Under the Endangered Species Act at issue in that case, Congress had acted to limit the reach of the statute in certain well-defined instances, and the court recognized such congressional exceptions to federal jurisdiction. In the Communications Act, in contrast, Congress has granted the Commission broad and exclusive power to implement and enforce the provisions of Section 315(b) without exceptions. 55 Further, as we explained above in Section III.A.1.b, the prospect of differing remedies imposed by various state courts would frustrate the congressional goals of uniformity and certainty in the application and enforcement of Section 315(b) and might well impede, rather than foster, the dissemination of information regarding political campaigns favored by Congress. Moreover, we are not persuaded by petitioners' argument that our preemption decision unfairly requires candidates around the country to litigate their claims in Washington, D.C. before the Commission rather than in more convenient state courts. See Petition at 16; Reply at 5-6. We perceive no hardship in requiring candidates to file their complaints with the ---------------------------------------- Page Break ---------------------------------------- 79a Commission in accordance with the procedures established in the Declaratory Ruling. We-anticipate that most such claims can be adjudicated on the basis of a written record and would not require travel to Washington. 56 Declaratory Ruling, 6 FCC R-cd at 7512-13, paras. 9-16. 57 Petition at 16-20. 58 The Louisiana case, of course, involved statutory language in which the Court held that Congress expressly had denied power to the Commission to regulate the activity in question. 486. U.S. at 374. It was in that context that the Court asserted that the agency "may not confer power upon itself." Neither Section 315 nor any other provision of the Act denies the Commission power over the lowest unit charge requirement. On the contrary, the Act establishes the Commission as the enforcer of that requirement. 59 6 FCC Rcd at 7512, para. 11. 60 486 U.S. at 64 (citing Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 700 (1984), and de la Cuesta, 458 U.S. at 152-54). 61 petitioners maintain that "whether a state cause of action is pre-empted by federal law is not determinative of whether judicial remedies to enforce possible federal causes of action should be foreclosed. Exclusive jurisdiction and pre-emption are two entirely different things." Petition at 18. However, we expressed the view in the Declaratory Ruling that Section 315(b) does not give rise to a private federal cause of action and that any federal lawsuit based directly upon allegations of violations of Section 315(b) therefore should be dismissed. 6 FCC Rcd at 7511, para. 5 n.8, and 7512,. para. 8 n.17. Consistent with our expressed view, a federal district ---------------------------------------- Page Break ---------------------------------------- 80a court on its own recently determined that it lacked subject matter jurisdiction over an action predicated on alleged violations of Section 315(b) and dismissed the case. Pete Wilson v. A.H. Belo Corp., No. CIV S-91-1206 LKK (E.D. Cal. April 27, 1992). 62 Petition at 19-20. 63 See Section 111. A.1.b., supra Declaratory Ruling, 6 FCC Rcd at 7512, para. 12. 64 Declaratory Ruling, 6 FCC Rcd at 7512, para. 14. See Farmers Educational & Coop. Union v. WDAY, Inc., 360 U.S. 525, 534-35 (1959). 65 6 FCC Rcd at 7513, para. 21. 66 Declaratory Ruling, 6 FCC Rcd at 7513-14, paras. 21-25. 67 Petition at 22-23. 68 5 U.S.C. 551-559. 69 Petitioners also suggest that the Declaratory Ruling creates uncertainty as to the applicable statute of limitations for Section 315(b) complaints and "can potentially be read to shorten the amount of time which would otherwise be applicable under state law." Petition at 22. As petitioners note, however, the Commission did "not specif[y] a specific statute of limitations." Id. Rather, we stated "[a]s a matter of general policy" that "complainants should file lowest unit charge complaints in a timely manner." Declaratory Ruling, 6 FCC Rcd at 7513, para. 22 n.46. We note that licensees are accountable for their performance throughout their five-year or seven-year license terms, 47 U.S.C. 307, and are subject to forfeitures for up to three years following a violation of the Act, 47 U.S.C. 503. However, licensees are required by our regulations to retain political file documents only for a period of two years. 47 C.F.R. 73.1943(c) (formerly codified at 47 C.F.R. 73.1940). ---------------------------------------- Page Break ---------------------------------------- 81a 70 Petition at 20-22. 71 5 U.S.C. 554. 72 See 5 U.S.C. 554, 556. 73 See Petition at 20-21. Petitioners refer to existing procedural rules governing pleadings generally and other rules addressing formal hearings before administrative law judges. 74 See 47 U.S.C. 315(d); see also 47 U.S.C. 154(i), (j). 75 See, e.g., 47 C.F.R. 1.720-1.734 (1991) (procedures governing formal complaints brought against common carriers under Section 208); 47 C.F.R. 1.1401-1.1415 (1991) (procedures governing pole attachment complaints brought under Section 224). 76 See, e.g., Reply at 5-8. 77 In any event, we note that the adequacy and lawfulness of our procedures governing complaints brought under Section 315(b) has no bearing on our preemption analysis set forth in Sections III.A, supra. Any infirmities in the Section 315(b) procedures would not justify alteration of our decision to preempt state causes of action involving breaches of duties arising under Section 315(b). ---------------------------------------- Page Break ---------------------------------------- 82a SEPARATE STATEMENT OF COMMISSIONER JAMES H. QUELLO In re: Exclusive Jurisdiction With Respect to Potential Violations of the Lowest Unit Charge Requirements of Section 315(b) of the Communications Act of 1934, as amended. I fully agree with the Commissions reaffirmation of the Declaratory Ruling and the denial of the petitions for reconsideration. I am writing separately only to clarify one issue regarding the procedures for filing complaints. In the current Order, the Commission notes that "we reaffirm those procedures in their entirely." Order on Reconsideration at "Par." 24. Because I dis- sented from the procedural section of the Declaratory Ruling, I am somewhat less enthusiastic in my support. Thus, I agree with the current Order insofar as it dismisses petitions that would reduce due process safeguards-but I do not now endorse the procedures "in their entirety." As I noted in my separate statement accompanying the Declaratory Ruling: [A]lthough the Ruling expresses concern with the administrative burden created by complaints, it establishes a new multi-stage procedure that includes a complaint, discovery, an amended com- plaint and several levels of Commission decisions including the possibility of hearings. I dissent from the hastily made decision to adopt procedures because we do not yet know whether the new guidelines will help or make matters worse. Will the new procedures allow candidates ---------------------------------------- Page Break ---------------------------------------- to make a prima facie case obtain quick relief or will they delay matters? Will they encourage the filing of speculative complaints, thus requiring the application of settlement limits? Will the number of complaints diminish now that the Com- mission is clarifying the political rules or will the volume of complaints under the new procedures create an administrative nightmare? We simply do not know. Declaratory Ruling, 6 FCC 7511, 7516-17 (1991) (Separate Statement of Commissioner James H. Quello, dissenting in part) (citation omitted). Although such questions apparently did not trouble the Commission in this case, we have expressed similar concerns in the past: Each year the Commission receives a sub- stantial number of petitions or complaints against broadcast licensees. Although we would not anti- cipate that every petitioner or complainant would request discovery, it seems clear to us that if a substantial number did so it would require an inordinate amount of time and effort to determine whether the requests would properly lie for the production of such records. Citizens Communications Center, 61 F.C.C.2d 1112, 1126-27 (1976). Such problems were avoided, it seems to me, under our previous approach for handling complaints. The U.S. Court of Appeals for the D.C. Circuit has noted that "the FCC generally has elected to resolve factual uncertainties by conducting its own inquiry, rather than by affording petitioners discovery." Bilingual Bicultural Coalition on Mass Media Inc. v. FCC, 595 F.2d 621, 634 (D.C. Cir. 1978) (en banc). ---------------------------------------- Page Break ---------------------------------------- 84a "For several reasons," according to the court, "this usually will be the preferable course: the Commis- sion's questions are likely to be more expert, the licensees' answers more uniform and comparable. In addition, licensee cooperation is likely to be fuller and more prompt." Id. I have seen nothing in the record of this proceeding to dispute these points. Indeed, the Commission inex- plicably found it unnecessary even to entertain com- ments on the procedural issue. With respect to this issue, however, the current Order only dismisses petitions seeking to eliminate procedural safeguards. In that result, I can agree. ---------------------------------------- Page Break ---------------------------------------- 85a DISCLOSURE STATEMENT PURSUANT TO RULE 29.6 A.H. Belo Corporation has no parent corporation or non-wholly owned subsidiaries. Allbritton Communications Corporation's parent corporation is Perpetual Corporation. Allbritton has no non-wholly owned subsidiaries. American Family Broadcast Group, Inc. has no parent corporation or non-wholly owned subsidiaries. Capital Cities/ABC, Inc.'s parent corporation is Walt Disney Co. and it identifies the following as its only non-wholly owned subsidiary: Worldwide Television News Corp. Chris-Craft Industries, Inc. has no parent corporation or non-wholly owned subsidiaries. Chronicle Publishing Co., Inc. is a subsidiary of Twin States Publishing Co., Inc. which is in turn a subsidiary of Nixon Enterprises, Inc. Chronicle Publishing Co. has no non-wholly owned subsidiaries. Citicasters Co. is a subsidiary of Great American Broadcasting Co. which is in turn a subsidiary of Citicasters Inc. Citicasters Co. has "no non-wholly owned, subsidiaries. Cox Enterprises, Inc. has no parent corporation and identifies the following as its non-wholly owned subsidiaries: Cox Cable Spokane Inc.; Manheim Auctions, Inc. (a subsidiary of Cox Communications Inc., which is in turn a subsidiary of Cox Enterprises, Inc.); and Manheim Investments, Inc. (a subsidiary of Cox Communications Inc., which is in turn a subsidiary of Cox Enterprises, Inc.). ---------------------------------------- Page Break ---------------------------------------- 86a Fox Television Stations, Ins.'s parent corporation is News Corp. Limited and it has no non-wholly owned subsidiaries. LIN Television Corporation's parent corporation is AT&T Corp. and it has no non-wholly owned subsidiaries. McGraw-Hill Broadcasting Co.'s parent corporation is McGraw-Hill Inc. and it has no non-wholly owned subsidiaries. Meredith Corporation has no parent corporation or non-wholly owned subsidiaries. Midwest Television, Inc. has no parent corporation or non-wholly owned subsidiaries. National Association of Broadcasters has no parent corporation or non-wholly owned subsidiaries. National Broadcasting Co., Inc.'s parent corporation is General Electric Company and it has no non-wholly owned subsidiaries. New World Television Inc.'s parent corporation is New World Communications Group Inc. and it has no non-wholly owned subsidiaries. New York Times Co., Inc. has no parent corporation or non-wholly owned subsidiaries. Post-Newsweek Stations Inc.'s parent corporation is Washington Post Co., Inc. and it has no non-wholly owned subsidiaries. Providence Journal Broadcasting Co. has no parent corporation of non-wholly owned subsidiaries. WKRG-TV, Inc. has no parent corporation or non- wholly owned subsidiaries. ---------------------------------------- Page Break ---------------------------------------- 87a APPENDIX D Before the Federal Communications Commission Washington, D.C. 20554 PUBLIC NOTICE Released: October 10, 1991 NOTICE OF INTENTION TO ISSUE DECLARATORY RULING WITH RESPECT TO EXCLUSIVE AUTHORITY OF FCC TO DETERMINE WHETHER BROADCASTERS HAVE VIOLATED LOWEST UNIT CHARGE REQUIREMENT OF SECTION 315(B) Comment Period Establish Comments due: October 21, 1991 The Commission is considering issuing on its own motion a declaratory ruling confirming its earlier conclusion that it has exclusive jurisdiction to deter- mine questions of liability for violations of Section 315(b) of the Communications Act. News Release, Report No. GN-74, June 6, 1991. The Commission also is considering whether its exclusive jurisdiction should extend beyond the basic liability question and, if so, whether it should preempt any cause of action in which an alleged violation of Section 315(b) is an essential element. This Public Notice invites inter- ested parties to cement on these issues by October 21, 1991. ---------------------------------------- Page Break ---------------------------------------- 88a Candidates for elective office in several states have sued broadcast stations, on various legal theories, for allegedly overcharging the candidates for political advertisements. The lawsuits, some of them in state courts and others in federal courts, are based ulti- mately on allegations that the stations charged the candidates more than the "lowest unit charge" or the charge for "comparable use" of the station-stan- dards that are set forth in Section 315(b) of the Communications Act and enforced by the Federal Communications Commission. In one of these cases, the United States District Court for the Northern District of Georgia held that the Commission has exclusive jurisdiction to deter- mine whether a station has violated Section 315(b). 1. The court held further that the Commission's pro- cedures are the exclusive remedy for violations of Section 315(b). In particular, the court found that state court complaints brought by candidates against broadcasters for alleged violations of Section 315(b) present a federal question and noted that "enforce- ment of the [Communications Act] and vindication of the public interest are vested in the Federal Com- munications Commission." 2. Pointing to the "perva- sive statutory and administrative scheme to enforce section 315," the court cited cases in which the Commission has ruled on candidates' complaints about overcharges and in which rebates have been ordered. 3. The court dismissed the complaint and held that the Commission provides candidates an exclusive remedy for violations of Section 315(b). That decision is now on appeal to the United States Court of Appeals for the Eleventh Circuit. 4. In contrast, in a second case, the United States District Court for the Middle District of Alabama ---------------------------------------- Page Break ---------------------------------------- 89a held that complaints filed in state court by political candidates against broadcasters for, alleged adver- tising overcharges did not present a federal question warranting removal of the case by the defendants to federal district court. 5. That court held that the complaints were "essentially local to the state," even though resolution of the claims probably would re- quire some application of federal statutes and regulations. 6. It accordingly remanded the case to the Alabama state court for further proceedings. In the wake of that remand, the Commission appeared before the Alabama state court as amicus curiae and argued that the issue of whether a broadcaster had violated Section 315(b) was within the exclusive primary jurisdiction of the FCC and should be referred to the agency for determination. The Commission stated that consistency in the applica- tion and enforcement of Section 315(b) requires that the Commission in every instance. make the basic liability determination in cases alleging overcharges for political advertisements. The Commission thus concluded that, in order to fulfill its own responsi- bilities under the Act, it must assert its exclusive primary jurisdiction to determine the question of liability. 7. Compare Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 700 (1984); City of New York v. FCC, 486 U.S. 57, 63-64 (1988), citing Fidelity Federal Savings and Loan Assn. v. De la Cuesta, 458 U.S. 141, 154 (1982). Nonetheless, although the Alaba- ma state court recognized the Commission's "strong interest" in enforcing Section 315(b), it has not referred the liability determination to the Commis- sion and has not stayed its own proceedings to permit the agency to make such a determination. 8. ---------------------------------------- Page Break ---------------------------------------- 90a In view of the inconsistencies among these federal and state court decisions and the likely proliferation of similar suits in a number of jurisdictions, the Commission is now considering issuing a declaratory ruling to clarify its role in resolving these political broadcasting controversies. It accordingly requests cement on whether its jurisdiction to determine the lawfulness of political advertising charges is exclu- sive and whether federal and state courts must refer the liability question to the FCC in any case alleging that charges for political advertising are excessive. The Commission also seeks comments on whether its exclusive jurisdiction should extend beyond the basic liability question and, if so, whether the Commission should preempt any cause of action in any court in which an alleged violation of Section 315(b) is an essential element. 9. Interested parties may file comments in this mat- ter no later than October 21, 1991. Reply comments will not be accepted, and no extensions of this com- ment period are contemplated. An original and four copies of all comments must be filed in accordance with Section 1.51(c) of the Commission's Rules. In addition, copies of each plead- ing must be filed as follows: one copy with the Downtown Copy Center (DCC), the Commission's duplicating contractor, at its office in Room 246, 1919 M Street, N.W., Washington, D.C. 20554; one copy with the Office of General Counsel, Room 614, 1919 M Street, N.W., Washington, D.C. 20554; and one copy with the Mass Media Bureau, Room 314, 1919 M Street, N.W., Washington, D.C. 20554. Copies of comments may be obtained from DCC. The documents will be available for public inspection and copying in Room 614, 1919 M Street, N.W. ---------------------------------------- Page Break ---------------------------------------- 91a For further information, contact Diane L. Hofbauer, Office of General Counsel, at (202) 632-7020. FEDERAL COMMUNICATIONS COMMISSION ---------------------------------------- Page Break ---------------------------------------- 92a SEPARATE STATEMENT OF CHAIRMAN ALFRED C. SIKES AND COMMISSIONER ANDREW C. BARRETT ON NOTICE OF INTENTION TO ISSUE DECLARATORY RULING WITH RESPECT TO EXCLUSIVE AUTHORITY OF FCC TO DETERMINE VIOLATIONS OF SECTION 315(B) OF COMMUNICATIONS ACT We have no objection to asking whether or not the Commission's exclusive jurisdiction can or should be "extend[ed] beyond the basic liability question" of whether there has been a violation of Section 315(b). However, we write to emphasize that asking this question should not be read as concluding that the Commission has the ability or should exercise that ability-to totally preempt state or federal judicial proceedings with respect to both liability and dam- ages in this area. ---------------------------------------- Page Break ---------------------------------------- 93a FOOTNOTES 1 Zen Miller for Governor, et-al. v. Pacific and Southern Company, Civil Action No. 1:91-CV-267- RLV (N.D. Ga.) (Order, released June 4, 1991). 2 Id., slip op. at 13, quoting Belluso v. Turner Communications Corp., 633 F.2d 393, 397 (5th Cir. 1980). 3 Slip op. at 13-14, citing Hernstadt v. FCC, 677 F.2d 893 (D.C. Cir. 1980); Atlin Communications, Inc., 5 FCC Rcd 2835 (M.M.B. 1990); Southern Arkansas Radio Co., 5 FCC Red 4643 (M.M.B. 1990). 4 No. 91-8561 (llth Cir., filed June 27, 1991). 5 William Dickinson v. Cosmos Broadcasting Co., Civil Action No. 91-T-072-N (M.D. Ala.) (Order, re- leased April 1, 1991). 6 Id., slip op. at 17. 7 This exclusive jurisdiction over Section 315(b) liability determinations, moreover, must be recog- nized by both federal and state courts. 8 See William L. Dickinson v. Cosmos Broad- casting Co., Circuit Court for Montgomery, Alabama, Case No. CV-91-67-P (Order, released September 23, 1991). It was "significant" to the state court that the Commission "has not taken a position here that the claims of the Plaintiffs are preempted by the Com- munications Act." Slip op. at 3. That order denied motions to dismiss, filed by the defendants, arguing that state court actions for overcharges for political advertising were preempted. The defendants have asked the Alabama Supreme Court to review the denial of their motions to dismiss. 9 In this regard the Commission believes it would be advisable for courts to stay any ongoing proceedings ---------------------------------------- Page Break ---------------------------------------- 94a pending the issuance of any declaratory ruling as a result of this notice. ---------------------------------------- Page Break ---------------------------------------- No. 95-1200 In the Supreme Court of the United States OCTOBER TERM, 1995 FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA, PETITIONERS v. ZELL MILLER, ET AL. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT REPLY BRIEF FOR THE PETITIONERS DREW S. DAYS, III Solicitor General Department of Justice Washington, D.C. 20530 (202)514-2217 ---------------------------------------- Page Break ---------------------------------------- TABLE OF AUTHORITIES Cases Page Adams Fruit Co. v. Barrett, 494 U.S. 638 (1990) . . . . 6, 7 Centel Cable Television Co. v. Admiral's Cove Assocs., 835 F.2d 1359 (11th Cir. 1988) . . . . 8 Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) . . . . 6 City of New York v. FCC, 486 U.S. 57 (1988) . . . . 4, 5 Farmers Educ. & Coop. Union v. WDAY, Inc., 360 U.S. 525 (1959) . . . . 5 Fidelity Federal Saw. & Loan Ass'n v. de la Cuesta, 458 U.S. 141 (1982) . . . . 5 Houston Post Co. v. United States, 79 F. Supp. 199 (D. Tex. 1948) . . . . 3 Howard v. Uniroyal, Inc., 719 F.2d 1552 (11th Cir. 1983) . . . . 10 Kay v., FCC, 443 F.2d 638 (D.C. Cir. 1970) . . . . 6 Louisiana Public Service Commission v. FCC, 476 U.S. 355 (1986) . . . . 4 Maryland v. Louisiana, 451 U.S. 725 (1981) . . . . 5 New England Tel. & Tel. Co. v. FCC, 826 F.2d 1101 (D.C. Cir. 1987), cert. denied, 490 U.S. 1039 (1989) . . . . 9 Plaut v. Spendthrift Farm, Inc., 115 S. Ct. 1447 (1995) . . . . 6 San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959) . . . . 6 Tafflin v. Levitt, 493 U.S. 455 (1990) . . . . 5 Time Warner Entertainment Co., L.P. v. FCC, 56 F.3d 151 (D.C. Cir. 1995), cert. denied, l16 S. Ct. 911 (1996) . . . . 9 Town of Deerfield v. FCC, 992 F.2d 420 (2d. Cir. 1993) . . . . 6 (I) ---------------------------------------- Page Break ---------------------------------------- II Constitution and statutes: Page U.S. Const. Art. VI, Cl. 2 (Supremacy Clause) . . . . 5 Communications Act of 1934, 47 U.S.C. 151 et seq.: 47 U.S.C. 154(i) . . . . 9 47 U.S.C. 315(b) . . . . 2, 3, 5, 6, 7, 8, 9, 10 47 U.S.C. 414 . . . . 7 Rehabilitation Act of 1973, 29 U.S.C. 701 et seq . . . . 10 ---------------------------------------- Page Break ---------------------------------------- In the Supreme Court of the United States OCTOBER TERM, 1995 No. 95-1200 FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA, PETITIONERS v. ZELL MILLER, ET AL. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT REPLY BRIEF FOR THE PETITIONERS 1. In our certiorari petition, we show (at 14, 22-24) that, although the court of appeals ostensibly "dis- missed]" respondents' petition for review of the Federal Communications Commission's (FCC) de- claratory ruling (see Pet. App. 15a), 1. it actually granted their petition for review, insofar as they chal- lenged the FCC's authority to preempt state-law ___________________(footnotes) 1 In this brief, "Pet." refers to the petition for a writ of certiorari in No. 95-1200, and "Pet. App." refers to the appen- dix to that petition. "Br. in Opp." refers to the candidates' brief in opposition to the petitions in No. 95-1197 and No. 95- 1200. "Cross-Pet." refers to the cross-petition, No. 95-1361. (1) ---------------------------------------- Page Break ---------------------------------------- 2 causes of action dependent on a determination of a broadcast station's lowest unit charge under 47 U.S.C. 315(b). Respondents agree that the court of appeals ruled in their favor on that issue. See Br. in Opp. 3 (noting that the court of appeals "actually addressed" the FCC's authority to preempt state law); id. at 4 (arguing that court of appeals "concluded correctly that the FCC had no authority to issue the Declaratory Ruling"). They accept, therefore, that the issue of the FCC's authority to preempt state-law causes of action (as well as the propriety of doing so by the declaratory ruling) is properly presented for review by this Court. Respondents argue, however, that the Court should not grant the government's or the broadcasters' peti- tion unless it also addresses the court of appeals' jurisdiction to review the case and the merits of the FCC's decision to preempt state law. See Br. in Opp. 5 n.2; Cross-Pet. i, 6. In our view, both issues are sub- sumed within the questions presented by the initial petitions. We do not, however, oppose the granting of the cross-petition in order to make clear that the parties may address those questions. The cross-petition also presents the issue of Con- gress's intent on the question of preemption. See Cross-Pet. i, 11. Because judicial economy and regu- latory certainty would be served by the Court's resolution of the entire preemption question, in both its statutory and administrative aspects, we also do not oppose the granting of the cross-petition on that issue. The FCC's declaratory ruling was intended to provide definitive guidance as to Congress's intent in Section 315(b). The FCC's analysis of Congress's preemptive intent was closely connected to its deci- sion on its own initiative to preempt state law, in that ---------------------------------------- Page Break ---------------------------------------- 3 both conclusions involved the agency's analysis of Congress's objectives. See, e.g., Pet. App. 192-20a. 22a-23a (declaratory ruling's discussion, in both contexts, of statutory objectives of consistency, cer- tainty, and uniformity). Although the court of ap- peals concluded that no case or controversy was presented as to congressional intent and therefore did not address that issue, the court's failure to reach the issue was error, as we have explained (Pet. 18-19, 24 n.19). 2. ___________________(footnotes) 2 Respondents argue (Br. in Opp. 4-5) that, although the court of appeals "concluded correctly that the FCC had no authority to issue the Declaratory Ruling," that court "prop- perly declined to render an advisory opinion on the issue of Congressional intent" to preempt state-law causes of action under Section 315(b). See also Cross-Pet. 7. Respondents do not explain, however, how there could be a case or controversy as to the former issue but not the latter-especially since the FCC concluded, in is declaratory ruling, that Congress itself preempted state law in Section 315(b). See Pet. App. 19a-21a. This case is not like Houston Post Co. v. United States, 79 F. Supp. 199 (D. Tex. 1948), in which a three-judge district court dismissed a petition for review of an FCC licensing order for lack of a justiciable controversy. In that case, the petitioner radio station's objection was directed not to the FCC's action (renewing another station's license) but to the possible prec- edential effect of some of the FCC's accompanying statutory analysis. The district court relied on representations by agency counsel that the FCC "did not intend to, nor did it, by giving expression as to its opinion as to [the meaning of the statute], add anything either of substance or of sanction to, the law." Id. at 202. By contrast, here the FCC intended its interpretation of Section 315(b) to have actual, present effect, including the dismissal of lawsuits predicated on alleged violations of that Section. "[T]he pronouncement was in fact and in law intended to be, and was, an order laying down a positive rule of law." 79 F. Supp. at 203. ---------------------------------------- Page Break ---------------------------------------- 4 2. Respondents do not dispute that the preemption questions at issue in this case are important. Rather, they present several arguments in defense of the judgment below; because those arguments go to the merits of the case, we will address them only briefly. a. Respondents argue (Br. in Opp. 5-6) that the FCC has no authority to preempt "state causes of action or the jurisdiction of any court" because Con- gress has not expressly delegated it such authority. The proper analysis, however, focuses not merely on whether such authority has been expressly delegated, but on whether the FCC's preemption decision "rep- resents a reasonable accommodation of conflicting policies that were committed to the agency's care by the statute." City of New York v. FCC, 486 U.S. 57, Service Commission v. FCC, 476 U.S. 355, 374 (1986), but that case, as the Court explained in City of New York, 486 U.S. at 66, involved a provision "in which Congress appeared to have expressly limited the Commission's jurisdiction, so as to prohibit it from preempting" certain state laws. Because the pro- vision at issue in the Louisiana case was a "con- gressional denial of power to the FCC," the Court there rejected the argument that "the FCC may nevertheless take action which it thinks will best effectuate a federal policy." 476 U.S. at 374. No corresponding limit on the FCC's authority to preempt state law is a tissue in this case, and so, under the proper analysis, the courts should not disturb the FCC's judgment unless "the accommoda- tion [of policies] is not one that Congress would have sanctioned." City of New York, 486 U.S. at 64. Respondents do not dispute that Congress may confide the initial responsibility for resolving federal ---------------------------------------- Page Break ---------------------------------------- 5 statutory issues to a federal agency, subject to review only in the federal courts. See Pet. 15-16. This Court has also made clear that , under the Supremacy Clause, "[f]ederal regulations have no less pre- emptive effect than federal statutes." Fidelity Federal Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 153 (1982). It is simply incorrect, therefore, to say (as did the court of appeals) that Congress "could not delegate[] the power to any agency to oust state courts and federal district courts of subject matter jurisdiction." Pet. App. 10a. That "ouster" of judicial jurisdiction is merely the necessary consequence of the FCC's determination that state-law causes of action should be preempted. Because the FCC has concluded that certain causes of action related to Section 315(b) should be preempted, courts should dismiss suits to the extent that they attempt to raise such claims. See Pet. App. 24a-26a, 59a; cf. Farmers Educ. & Coop. Union v. WDAY, Inc., 360 U.S. 525, 527 (1959). Respondents err in relying (Br. in Opp. 5) on cases such as Tafflin v. Levitt, 493 U.S. 455, 459 (1990), and Maryland v. Louisiana, 451 U.S. 725 (1981), for a presumption that "Congress did not intend to displace state law." That presumption is an interpretive canon used in implied preemption cases, in the ab- sence of an express preemption provision, to deter- mine whether state law has been displaced. It has no bearing in this case, since the FCC unambiguously stated its intent to preempt state-law claims that are dependent upon a determination of the lowest unit charge under Section 315(b). Cf. City of New York, 486 U.S. at 65. b. Respondents argue (Br. in Opp. 6-8, 11-12) that, as applied to cases in the federal courts, the FCC's ---------------------------------------- Page Break ---------------------------------------- 6 preemption of state-law causes of action violated the separation of powers by interfering with the power of the federal courts to render final judgments. That contention is without merit. Unlike the statute at issue in Plaut v. Spendthrift Farm, Inc., 115 S. Ct. 1447 (1995), or the FCC order on review in Town of Deerfield v. FCC, 992 F.2d 420 (2d Cir. 1993), the declaratory ruling at issue here does not purport to revise or reopen any final, unappealable judgment based on a prior construction of federal law. Al- though the FCC in its ruling did state that state-law causes of action based on the lowest-unit-charge rule should be dismissed (see Br. in Opp. 8; Pet. App. 402- 41a n.8), that remark merely explained the necessary effect of the FCC's preemption ruling on a future or ongoing case, just as a lawsuit raising issues of federal labor law should be dismissed if those issues must be considered in the first instance by the National Labor Relations Board. See San Diego Building Trades Council v. Garmon, 359 U.S. 236, 246 (1959). c. Respondents also argue (Br. in Opp. 9-10) that federal agencies have no authority to issue "[b]inding [i]nterpretation[s] of [c]ongressional [i]ntent" on the question of preemption. Whether or not the FCC's interpretation of Section 315(b) is "binding," it is entitled to deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), for Congress has vested the FCC with the authority to enforce the substantive provisions of Section 315(b) with respect to "all federal, state and local candidates for office throughout the nation." Kay v. FCC, 443 F.2d 638, 643-644 (D.C. Cir. 1970). By contrast, in Adams Fruit Co. v. Barrett, 494 U.S. 638 (1990), the principal case relied on by respondents, the ---------------------------------------- Page Break ---------------------------------------- 7 Court stated that it would not defer to the Depart- ment of Labor's view on whether a federal statutory private right of action is precluded by receipt of state workers' compensation benefits because Congress had "expressly established the Judiciary and not the Department of Labor as the adjudicator" of private rights under the statute. Id. at 649. Respondents attempt to distinguish the numerous cases in which the courts have upheld agencies' authority to preempt state regulatory authority or common-law causes of action on the ground that those cases did not implicate the courts' power to exercise judicial jurisdiction. Br. in Opp. 10-11. They do not explain, however, why the FCC should unquestion- able have the authority to preempt the exercise of regulatory authority under state law by state utility commissioners, which otherwise could give rise to enforcement actions in the state courts (or by federal courts sitting in diversity). Indeed, this case presents a compelling case for preemption of state remedies, for the causes of action that re- spondents wish to advance, although nominally aris- ing under state law, are in fact predicated on the federal lowest-unit-charge rule of Section 315(b). 3. ___________________(footnotes) 3 For the same reason, respondents err in suggesting (Br. in Opp. 6) that 47 U.S.C. 414, which provides that "[n]othing in th[e] [Communications Act] shall in any way abridge or alter the remedies now existing at common law," negates FCC authority to preempt state causes of action requiring a deter- mination of the lowest unit charge. As the FCC explained, the savings clause has no bearing on state-law causes of action that "have no meaning apart from Section 315(b) and thus derive ---------------------------------------- Page Break ---------------------------------------- 8 d. In their cross-petition, respondents argue (at 9- 10) that the FCC must lack authority to preempt state-law causes of action predicated on a determina- tion of the lowest unit charge because it also lacks authority to order an adequate replacement remedy, such as a refund to overcharged candidates. In fact, the FCC does have authority to order broadcasters to provide rebates to candidates to remedy violations of the lowest-unit-charge rule, and it has exercised that authority in the past. See Pet. 5 & n.3; Pet. App. 61a, 77a n.51. Thus, this is not a situation in which the agency action under review "does not provide access to any type of administrative process." Centel Cable Television Co. v. Admiral's Cove Assoc., 835 F.2d 1359, 1363 (11th Cir. 1988). 4. Respondents stress (Cross-Pet. 9) that the FCC's express refund authority under the Communications Act applies only to common carriers, and not broad- casters. The fact that Congress expressly gave the FCC authority to order rebates by common carriers, ___________________(footnotes) not from any 'existing' state common law or statutory origin, but solely from the federal statute." Pet. App. 26a. 4 Respondents suggest (Cross-pet.9) that the FCC did not provide a remedy for a broadcaster in the situation in which a candidate refuses to pay for advertising and claims that the broadcaster's rate exceeded the lowest unit charge. They sug- gest that the broadcaster in that situation would be deprived of its remedy under state law (such as a collection action) without any adequate replacement. That case, however, would arise only when the candidate declines to invoke the FCC's jurisdiction to adjudicate a claim that the broadcaster violated Section 315(b) and instead relies on the self-help remedy of withholding payment. Such a party would not be well situated to complain that a collection action could not be brought in state court because it would raise the lowest-unit-charge issue as a defense. ---------------------------------------- Page Break ---------------------------------------- 9 however, does not justify an inference that it intended to preclude the FCC from ordering rebates by broadcasters. The FCC's general authority under 47 U.S.C. 154(i) to "issue such orders * * * as may be necessary in the execution of its functions" has been held sufficient to sustain rebate orders. See New England Tel. & Tel. Co. v. FCC, 826 F.2d 1101, 1107- 1108 (D.C. Cir. 1987), cert. denied, 490 U.S. 1039 (1989); cf. Time Warner Entertainment Co., L.P. v. FCC, 56 F.3d 151, 196 (D.C. Cir. 1995) (upholding FCC authority to order refunds for unlawful basic cable television rates, even though statute expressly authorized refunds only for premium cable rates), cert. denied, 116 S. Ct. 911 (1996). e. Respondents suggest that primary jurisdiction, rather than preemption, is the proper response to concerns about uniform construction of Section 315(b). The FCC found, however, that because the doctrine of primary jurisdiction is of uncertain appli- cation, there could be no assurance that a particular court would refer the liability issue under Section 315(b) to the FCC in the first instance. The FCC also noted the danger that state courts could issue remedies inconsistent with those deemed appropriate by the FCC; that possibility might discourage broad- casters from carrying political advertising, thereby frustrating Congress's purpose of "foster[ing] dis- semination of information regarding political cam- paigns." Pet. App. 60a. f. Finally, respondents make a broad-gauged attack on the reasoning employed by the FCC in concluding that state-law causes of action were (by Congress) and should be (by the agency) preempted. They argue, for example (Cross-Pet. 11-13), that the question of the existence of an implied private right of ---------------------------------------- Page Break ---------------------------------------- 10 action is irrelevant to the preemption issue. We agree that the two questions are distinct, but they are related; indeed, in Howard v. Uniroyal, Inc., 719 F.2d 1552, 1556 (11th Cir. 1983), relied on by res- pondents (Cross-Pet. 11), the court concluded that the same evidence concerning the "legislative history, structure, purpose and scope" of the Rehabilitation Act of 1973 both supported preemption of state-law claims and negated the existence of an implied federal cause of action. The two issues are related because they both implicate Congress's intent to "centralize" enforcement of Section 315(b) in the FCC, rather than in private actions pursued in the courts (state or federal). See Pet. App. 56a. * * * * * For the foregoing reasons, and also for the reasons set forth in the petition, the petition for a writ of certiorari should be granted. Respectfully submitted. DREW S. DAYS, III Solicitor General March 1996 ---------------------------------------- Page Break ----------------------------------------