SCOTUS Focuses on APA in 'Prometheus' Argument

“Given that the commission had considered minority and female ownership for some time, wasn’t it under some obligation to explain why it was not focusing on or even weighing that interest in 2017?” asked Chief Justice John Roberts. Oral argument was by phone under the court’s regular procedure during the COVID-19 pandemic.

“It is good news that all of the justices seemed to consider this an Administrative Procedure Act issue,” said United Church of Christ attorney Cheryl Leanza, who represented the public interest groups before the 3rd Circuit, in an interview. The questions made it “seem likely” that a majority of the justices were skeptical of the original 3rd Circuit decision, said broadcast petitioners lawyer Jack Goodman. He and others cautioned that predicting a case based on oral argument is speculation. University of Minnesota School of Journalism assistant professor-media law Christopher Terry is "expecting a relatively narrow decision." The FCC didn't comment.

Justices Brett Kavanaugh and Neil Gorsuch said the language in the Telecom Act is very broad and suggested the federal agencies generally receive deference on their decisions in such circumstances. “How can we, sitting here, second-guess that?” Kavanaugh said. Justice Elena Kagan asked attorney Ruthanne Deutsch, who represented public interest groups, whether the FCC was obligated to collect data on minority ownership if the data they already had was insufficient, as Deutsch argued. The agency should have acknowledged the possible harms to minority and female ownership from deregulation, Deutsch said. “Why isn’t what they did better than what we have?” asked Gorsuch, noting ownership rules date from “the 1970s.” Since there was an absence of predictive analysis about how repealing ownership rules would affect minority and female ownership, wasn’t the FCC correct to act, asked Justice Amy Coney Barrett.

Gorsuch and Justice Sonia Sotomayor were the only ones to show interest in the issue of the 3rd Circuit’s retention of jurisdiction over the case for 17 years, which was raised by the FCC and the broadcasters. The FCC repeatedly acceded to requests to shift jurisdiction back to the 3rd Circuit, noted Sotomayor. “I don’t think you can blame the 3rd Circuit when the government agreed to it,” she said. “It does seem unusual” for the same circuit to keep the case for so long, Gorsuch said. Industry lawyers think it’s unlikely SCOTUS will act to prevent future cases -- such as a challenge to a 2022 quadrennial review -- from going to the 3rd Circuit or say other courts don’t have to transfer such cases there.

The justices didn’t appear to either side with questions or interruptions. TechFreedom Internet Policy Counsel Corbin Barthold said SCOTUS pandemic procedures make it harder to use that as a metric to gauge individual justices on a case. For the telephonic oral argument, each justice gets a set amount of time to question each speaker, so they each generally each do so, he said. TechFreedom filed an amicus brief in support of the commission.

Observers said FCC and NAB arguments appeared to have shifted to be closer together. Justices asked Deputy Solicitor General Malcolm Stewart, who argued the FCC case, and NAB attorney Helgi Walker of Gibson Dunn about the differences. Walker said broadcasters want the court to decide the case “on statutory grounds” rather than ruling only that the FCC had done enough to justify the policy shift. In his rebuttal, Stewart clarified the government’s position that ownership diversity wasn’t one of the reasons cross-ownership rules were originally adopted.

If SCOTUS doesn’t affirm the 3rd Circuit’s ruling, it's likely station owners and allies won’t have to return to the 3rd Circuit to challenge future quadrennial reviews, industry lawyers noted. That's likely the true goal of the case for broadcasters, Terry said. “They can’t win in the 3rd Circuit.” Walker, who represented NAB in the case, said during oral argument that too narrow a ruling could lead to future court cases. “If this court doesn’t clarify, we’ll be back in next review,” she said. Broadcasters want the court to rule that diversity isn’t one of the factors the FCC is required to consider, she said. It's possible the court could remand the case to the FCC and require some action from the agency, but none of the discussion during oral argument alluded to that possibility, observers said

“Our side did an excellent job of demonstrating that the FCC didn’t have a reasoned basis” for relaxing ownership rules, said Leanza. Fletcher Heald broadcast attorney Davina Sashkin said she felt the FCC might not have done enough to make its case. “This case is a simple question of whether the FCC did its job, followed the objectives it set for itself, and provided a rational explanation for its decision making,” said Common Cause Special Adviser and former FCC Commissioner Mike Copps in a release. "The questions indicated that the Justices understand that this case turns on the FCC’s analysis of the case record,” said Benton Institute for Broadband & Society Senior Counselor Andrew Schwartzman. “My prediction is that the FCC wins at least 7-2 and that the long industry nightmare of the Third Circuit ends!” tweeted longtime broadcast industry official Preston Padden.

Argument focused on whether FCC actions were consistent with APA procedural requirements, said Americans for Prosperity Foundation Regulatory Counsel Michael Pepson. APF filed an amicus brief supporting the FCC position. "At times, justices appeared to be searching for a narrow path to resolve the case without breaking new ground in administrative law," Pepson wrote. "A possible outcome is that the Court may hold that the FCC adequately explained its decision without definitively construing the statute, which would set the stage for the FCC's next review and invite future litigation."

A ruling is expected by June and could come as early as April..