Supreme Court Will Hear FCC and NAB Appeal of Prometheus IV
The U.S. Supreme Court’s grant of certiorari in the FCC’s and NAB’s appeals of the 3rd U.S. Circuit Court of Appeals Prometheus IV case (see 2004170065) could indicate the court has concerns about the 3rd Circuit’s 17-year retention of the broadcast ownership case, said academics and broadcast and public interest attorneys in interviews Friday. The high court issued an order Friday saying it will take up the matter, consolidating the NAB and FCC cases into one and setting one hour for oral argument. That argument could take place early in 2021 or hold off until spring, attorneys said.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
That means it could take place under a Democratic-controlled FCC, with a solicitor general appointed by Joe Biden if he wins the presidency, but attorneys said that’s unlikely to lead to the matter being withdrawn or rendered moot. If the proceeding is argued early in the year, any Biden appointees would be unlikely to have taken office, said broadcast attorney Jack Goodman, who's involved with the case on the broadcast side. “Changing positions after oral argument has been disfavored historically,” he said. A Democratic-controlled FCC might seek to withdraw any change in ownership rules to make the case moot, but rulemakings take time, said Fletcher Heald broadcast attorney Dan Kirkpatrick, and NAB would remain in the case in the event of a withdrawal.
Opinions differ about what the SCOTUS justices see in the case. Some justices could see it as an opportunity to attack “the bricks of the administrative state” such as Chevron deference, said University of Minnesota School of Journalism assistant professor-media law Christopher Terry. “SCOTUS taking cert on Prometheus can mean anything from reversing Red Lion to reversing Chevron deference,” tweeted Public Knowledge Senior Vice President Harold Feld.
Several other attorneys familiar with the case said Prometheus IV is an unlikely avenue to attack Chevron. “There’s no question the Supreme Court would like to take a run at Chevron, but there are many cases that are better vehicles,” said Benton Institute for Broadband & Society Senior Counselor Andrew Schwartzman, who represents public interest entities in the case. Attorneys said SCOTUS' interest is more likely focused on the question of the 3rd Circuit's ruling or retention of jurisdiction in the case.
The grant of certiorari is seen as a guarantee the agency won’t take up the 2018 quadrennial review this year, leaving broadcast ownership rules such as the eight-voices test and newspaper cross-ownership restrictions in place. Depending on the content of an eventual SCOTUS decision, the high court could affirm the FCC’s elimination of those and other rules, Kirkpatrick said. A Democratic-controlled FCC could make new ownership regulations to replace them, but that would likely take time and involve further litigation, broadcast attorneys said.
Whatever the Supreme Court does, the statute requiring the FCC to review its rules every four years will remain, likely leading to future legal battles, Terry said. If a SCOTUS decision leads to broadcasters no longer being forced to challenge such reviews in the 3rd Circuit, they would likely see that as a win, he said. “There’s no question that the results would be different if these cases had been in the D.C. Circuit,” he said.
The Supreme Court’s cert grant means the fate of many ownership rules won’t be decided for a while, but attorneys and media brokers said it won’t have much material effect on broadcast dealmaking in the meantime. The COVID-19 pandemic has meant few deals taking place now anyway, said Patrick Communications media broker Gregory Guy. Only deals that might brush up against the rules at stake are likely to be affected, said Fletcher Heald's Kirkpatrick. That can be addressed by transaction provisions that trigger in the event the media ownership rules are struck down, he said.
Broadcasters and some FCC officials celebrated the cert announcement Friday, while media consolidation opponents were less than thrilled. “Finally,” tweeted broadcast advocate Preston Padden, while FCC General Counsel Tom Johnson tweeted celebratory rap lyrics. “This is a breakthrough: a real chance to finally have media ownership rules that better match today’s realities,” Chairman Ajit Pai said in a release. The 3rd Circuit “has bungled this matter long enough -- to the detriment of everyone,” said Commissioner Mike O’Rielly in a release. “The FCC continues to hold media ownership diversity as a key priority and yet repeatedly takes action that undermines that goal,” emailed United Church of Christ attorney Cheryl Leanza, who successfully argued for Prometheus Radio Project before the 3rd Circuit. “The Third Circuit's analysis was fully in accord with settled law.”
“The 3rd Circuit was right -- @FCC has repeatedly failed to consider the effect of its ownership rulings on women and minorities, which has impeded greater broadcast diversity,” tweeted FCC Commissioner Geoffrey Starks. “We are disappointed at this additional delay,” said the Benton Institute for Broadband & Society in a release. “But we are confident the court will see that the FCC has failed to obey its mandate to promote diversity in media voices,” it said. “I'm confident SCOTUS will agree there's nothing to fix here,” tweeted Free Press co-CEO Jessica Gonzalez. “Allow the FCC to modernize its rules,” said NAB CEO Gordon Smith in a release.