Fidelity Television, Inc., Appellant, v. Federal Communications Commission, Appellee, Rko General,inc., Intervenor, 502 F.2d 443 (D.C. Cir. 1974)

The history of the administrative proceeding out of which this case arises is one of inordinate delay which has considerably tried this court's patience. Several panels of this court, at differing stages, have reviewed the underlying controversy in connection with a petition for writ of mandamus brought by Fidelity Television, Inc., to compel the Federal Communications Commission to issue a decision in that proceeding which had been pending before it for almost eight years. The court ultimately dismissed the mandamus petition as moot when the Commission finally rendered a decision on 6 December 1973.

Fidelity subsequently filed a petition to review the 6 December order in this court. Contending that the decision is not a final order after all, the Commission now moves to dismiss the petition for lack of jurisdiction. We hold that the Commission's decision of 6 December contituted a final order for purposes of judicial review, and accordingly deny the motion to dismiss.

There are in fact two Commission proceedings involved in this matter. The 6 December order at issue emanated from what we shall refer to as the Los Angeles proceeding, which was initiated in 1965 by the filing of an application by RKO General, Inc., for renewal of its license to operate station KHJ-TV in Los Angeles¹  and of the mutually exclusive application by Fidelity for a construction permit to operate on the same frequency.²  Under consideration in another proceeding still pending before the Commission, which we shall designate the Boston proceeding, are a license renewal application filed by RKO for station WNAC-TV in Boston and mutually exclusive applications filed by two other corporations.³ 

Comparative hearings were held in the Los Angeles proceeding in 1967, which culminated in a decision by the Hearing Examiner⁴  on 13 August 1969, five years ago, awarding the license to Fidelity as the preferable applicant on a comparative basis.⁵  Pending appeal to the Commission, however, RKE was permitted to continue operation of KHJ-TV pursuant to 47 U.S.C. 307(d);⁶  that interim authority continues to date. In addition to consideration of RKO's past service and comparison of RKO and Fidelity in the areas of local ownership, diversification of mass communications media, and local support, the Hearing Examiner's decision was based in part on evidence of alleged coercive reciprocal trade practices between RKO and its parent corporation, General Tire and Rubber Company,⁷  as those practices affected RKO's qualifications to operate KHJ-TV.⁸  That evidence of anti-trust activity persuaded the Department of Justice to file a brief amicus curiae with the Commission urging it to disqualify RKO as a licensee.

Evidence of RKO's alleged antitrust activities and other corporate misconduct was also adduced on a broader scope in hearings in the Boston proceeding, which began in 1971, to determine whether RKO should be disqualified as a licensee of WNAC-TV. On the basis of the more extensive evidence being produced in that proceeding, the Commission's Broadcast Bureau petitioned the Commission to reopen the record in the Los Angeles proceeding-- which was then before the Commission on review of the Hearing Examiner's decision-- to introduce the additional evidence.

By order of 2 August 1971⁹  the Commission denied the Bureau's request, resolving instead to proceed expeditiously with its review. The Commission stated that the Boston proceeding was immaterial to its evaluation of the record in the Los Angeles proceeding and the Hearing Examiner's decision, and that it would become material only if the Commission reversed the Hearing Examiner and concluded on the basis of the Los Angeles record that RKO was the preferable applicant. The order provided that if the Commission did determine that RKO was to be preferred, award of its license would be subject to the outcome of the Boston proceeding and its revelations concerning the antitrust allegations.¹⁰ 

It is significant to note for purposes of the motion before us that the Commission's 1971 order neither consolidated the two proceedings, nor permitted the record to be reopened for receiving the antitrust evidence from the Boston proceeding, though it did permit Fidelity to participate in that aspect of the Boston proceeding which pertained to RKO's alleged antitrust activity.¹¹ 

In August 1971 RKO filed with the Commission, and subsequently supplemented, a petition to dismiss Fidelity's application or, alternatively, to enlarge the issued and reopen the record for further hearings, alleging that Fidelity had failed timely to report to the Commission changes in its corporate structure and acquisition of certain newspaper interests by one of its stockholders. On 28 September 1971 the Commission ordered that the issue be addressed at oral argument, which was held on 12 October 1971, over two years after the Hearing examiner's decision. The Commission did not act on RKO's petition until two years after argument, when it dismissed the petition as moot.¹² 

On 22 March 1973, nearly two years after the Commission's announced decision (2 August 1971) to proceed expeditiously with its review of the Hearing Examiner's decision, Fidelity filed in this court a petition for writ of mandamus to compel the Commission to reach a final decision. The sole explanation for the delay offered by the Commission was that it was simply adhering to the procedure it had announced in its order of 2 August 1971. As the Commission then interpreted that order, it had decided to await the termination of the Boston proceeding before reviewing the Hearing Examiner's decision in the Los Angeles proceeding.

In view of the Commission's unequivocal statement in its 2 August order that it would 'proceed with a disposition of the Los Angeles proceeding on the basis of the evidence now of record,'¹³  and that the Boston proceeding would be relevant only if, after review of that record, the Commission reversed the Hearing Examiner on the merits,¹⁴  this court concluded in an order released 11 June 1973¹⁵  that the Commission's decision in the Los Angeles proceeding had been unreasonably delayed in contravention of section 10(e) of the Administrative Procedure Act.¹⁶  But, 'being satisfied that (the Commission would) act in accord with' that finding 'without the necessity of the issuance of a writ of mandamus' to compel a final decision, the court ordered the petition held in abeyance for 30 days during which time the Commission was directed to file a statement of the action it had taken in the matter.

Exactly 30 days later, the Commission represented to the court that on 2 July it had 'instructed the staff to prepare a written decision as expeditiously as possible.' On the basis of that representation, and in the belief that it was made in good faith and that the Commission intended to fulfill its directive, the court denied the petition for writ of mandamus on 20 September 1973, 'without prejudice to its renewal in the event a final decision on petitioner's application is further unreasonably delayed'.

Two months later, when it had been in excess of four years since the Hearing Examiner's initial decision, over five months since this court's determination that the final decision had been unreasonably delayed, and more than four months from the date the Commission ordered its staff to prepare a decision, Fidelity renewed its petition for writ of mandamus in accordance with this court's order of 20 September 1973. On 10 December, as a ruling on Fidelity's petition was about to issue, the court received a letter from Fidelity's counsel notifying the court that the Commission, by a three-to-two vote, rendered a decision reversing the, hearing Examiner.¹⁷  The commission concluded that RKO was the preferable applicant on a comparative basis,¹⁸  and in view of that conclusion dismissed as moot RKO's petition to dismiss Fidelity's application.¹⁹  Commissioner Reid joined in the decision by Commissioner Robert E. Lee. Chairman Burch, who had since left the Commission, concurred in the result only. Commissioners Johnson and H. Rex Lee, who have since resigned, vigorously dissented.²⁰ 

Fidelity's notification, a copy of which was sent to counsel for the Commission and for RKO, requested the court to dismiss its renewed petition for writ of mandamus 'as moot' in light of the 6 December order. The Commission did not respond in any fashion to the notification or the request to dismiss. Accordingly, the court on 21 December dismissed the renewed petition for mandamus as moot. The Commission now contends, in the instant motion filed two months after the petition for review was filed by Fidelity, that its 6 December order is not a final decision and therefore is not properly before the court at this time.

II. FINALITY OF THE ORDER OF 6 DECEMBER 1973

This court's jurisdiction over decisions by the Commission is controlled by section 402(b) (1) of the Federal Communications Act of 1934, as amended,²¹  section 10 of the Administrative Procedure Act,²²  and judicial interpretations of these statutes. Section 402(b) (1) provides:

Appeals may be taken from decisions and orders of the Commission to the United States Court of Appeals for the District of Columbia in any of the following cases:

(1) By any applicant for a construction permit or station license, whose application is denied by the Commission.

Under section 10, 'agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review . . ..'

The 6 December order reversed the Hearing Examiner's conclusion that on a comparative basis Fidelity should be preferred over RKO, the only other applicant in the Los Angeles proceeding. Yet the Commission steadfastly maintains that the decision is not presently reviewable because it did not finally 'deny' Fidelity's application within the meaning of section 402(b) (1). Counsel point to the concluding paragraph of the 6 December order which reads:

(It is ordered:)

(d) That the application of RKO General, Inc. . . . IS DEEMED TO BE GRANTED, and that the application of fidelity Television, Inc. . . . IS DEEMED TO BE DENIED, subject to whatever action may be deemed appropriate following resolution of the matters in (the Boston proceeding).²³ 

To bolster their position, counsel include as part of their motion the affidavit of Vincent J. Mullins, Secretary of the Commission, which asserts, inter alia, that 'no license has been issued, on condition or otherwise.' Additionally, they argue that the Commission could not finally grant RKO's application because of the outstanding antitrust issues in the Boston proceeding which could lead to disqualification of or a comparative demerit against RKO with respect to its operation of KHJ-TV. Nor could the Commission grant Fidelity's application, it is urged, where RKO's petition to reject Fidelity's application, which alleged misconduct on the part of Fidelity, was dismissed as moot.

The principle of finality in administrative law is not, however, governed by the administrative agency's characterization of its action, but rather by a realistic assessment of the nature and effect of the order sought to be reviewed.²⁴  Hence, 'a final order need not necessarily be the very last order' in an agency proceeding,²⁵  but rather, is final for purposes of judicial review when it 'imposes(s) ans obligation, den(ies) a right, or fix(es) some legal relationship as a consummation of the administrative process.'²⁶  The Commission's appraisal of its order ignores these principles and the immediate and continuing impact of the order on Fidelity.

A. Indicia of Finality Within the Order Itself and Its Historical context

That the 6 December order is final for purposes of judicial review is demonstrated on the face of the order itself and as read in light of past orders of this court and the Commission in this case.

As we noted earlier,²⁷  by its order of 2 August 1971, the Commission elected to 'proceed to the disposition of the Los Angeles proceeding on the absis of the evidence' produced in that proceeding, rather than reopen the record or consolidate the case with the Boston proceeding for a more comprehensive inquiry into the allegations of RKO's antitrust activities. The Commission now contends that it is the lack of such an expanded inquiry in the Los Angeles proceeding which renders the 6 December order inappropriate for judicial review. However, it is clear that the 2 August order contemplated a final evaluation of the Hearing Examiner's decision, and that the outcome of the Boston proceeding would act only as a possible condition subsequent in the event the Commission reversed the Hearing Examiner's award to Fidelity. The merit of Fidelity's application simply was never made contingent in any manner on the Boston proceeding.

The 6 December order itself purports to be a complete review of the Hearing Examiner's decision in favor of Fidelity. The Commission adopted his findings of facts, with certain modifications, but reversed his conclusions.²⁸  Except for the question of general anticompetitive activity being investigated in the Boston proceeding and the questions raised by RKO's petition to dismiss and rejected by the Commission as moot, all the comparative qualifications of RKO and Fidelity were evaluated at length by the Hearing Examiner and on review by the Commission,²⁹  which concluded on the basis of this extensive evaluation that RKO was the preferred applicant. The finality of that determination is manifest in the 6 December order.³⁰  If the Commission intended merely an interim appraisal of the competing applications on the basis of the Los Angeles record, we are at a loss to decipher why the Commission undertook such a thorough review of each applicant's qualifications.

Moreover, an interim decision is not what was involved in the two mandamus proceedings. The Commission was confronted by two decisions of this court wherein we unequivocally concluded that a final order in the Los Angeles proceeding must issue, but declined to so order the Commission on the basis of its representations that a final decision was forthcoming.³¹  The 6 December Commission order either expressed the Commission's purported effort to comply with this court's implied directives,³²  or was a deliberate effort to deceive this court or evade its decision.

Fidelity interpreted the 6 December order as final. As we noted earlier,³³  in November 1973, four months after the Commission's representation that it would reach an expeditious decision in the Los Angeles proceeding, Fidelity renewed its efforts to compel a final decision. When it learned that the 6 December order had issued, it felt that the relief it sought-- release of a final order-- had been provided by the Commission, and accordingly requested the court to dismiss its renewed petition for writ of mandamus as moot. Had the Commission felt that the order was not a final determination, we fail to perceive why the Commission did not respond to this request. Regarding the Commission's silence as indicative of its concurrence, we dismissed the petition as moot. The Commission's attempt at this late stage to hinder Fidelity's efforts to obtain judicial review on the ground that the order is not final is perturbing, to say the least.

Another aspect of the 6 December order which reveals its finality is its disposition of RKO's petition to dismiss Fidelity's application for a license as moot. If the 6 December order was not a final resolution of the Los Angeles proceeding, the Commission's rationale indismissing RKO's petition escapes us, since such a dismissal is logical only if a final decision on the basis of that record had been made. The order suggests that absent this court's past orders in this case, the Commission would 'ordinarily enlarge the issues and remand (the record to the Hearing Examiner) for a further hearing to determine all of the facts surrounding (RKO's allegations) and their impact upon both the basic and comparative qualifications of Fidelity before considering a grant of its application.'³⁴  Yet the Commission sat on RKO's petition for over two years before acting. The Commission has never explained to this court why it did not attempt a further inquiry during that time. Thus, it cannot at this point rely on the absence of a complete record on that issue as grounds for dismissing this appeal. Furthermore, although RKO's petition was dismissed by the Commission 'as moot,' according to the 6 December order the Commission did consider the allegations contained in the petition and addressed during argument on 12 October 1971 in its evaluation of Fidelity's qualifications.³⁵  As Commissioner H. Rex Lee demurred in his dissent to the 6 December order, the Commission 'cannot reject or dismiss requests for hearing issues and then use the questions raised by the requests against the applicant in the comparative evaluation.'³⁶ 

The impact of the 6 December order on Fidelity buttresses our conclusion that the order is presently reviewable. Even if the order 'deeming' the denial of Fidelity's application is eventually reversed in the event RKO's award is vacated as a result of the Boston proceeding, Fidelity has felt and will continue to experience for some time the consequences of the 6 December order. Five years ago the Hearing Examiner concluded that Fidelity's application should be granted. However, RKO was permitted to continue its operation of KHJ-TV pending appeal to the Commission. That operation will continue at least until the Boston proceeding is terminated.

Therefore, the fact that no award has actually been granted RKO is irrelevant since, under the Commission's characterization of the 6 December order, an award is presently unnecessary.³⁷  Inasmuch as the Boston proceeding began six years after the Los Angeles proceeding, and involves a considerably broader investigation, it is unlikely that the Boston proceeding will terminate in the near future.³⁸  Until that time, Fidelity is denied the right to construct its station to which the Hearing Examiner concluded it was entitled. Hence, the effect of the 6 December order will be felt in a concrete way for quite some time.

C. Effect of Review on the Administrative Process

The 6 December order may not be the very last order issued by the Commission in the Los Angeles proceeding if RKO ultimately loses its license for KHJ-TV as a result of the Boston proceeding. But as we have endeavored to emphasize, this eventuality does not defeat review at this time. The order was promulgated at the highest level of the Commission after complete evaluation of the entire evidence produced in a proceeding which, as early as 1971, the Commission decided to isolate from the Boston proceeding. That the only applicants involved in the Los Angeles proceeding were RKO and Fidelity, whose comparative qualifications have now been resolved on the basis of the complete record compiled in that proceeding, is persuasive of the order's finality. There simply will be no further orders based on that record.

The Commission nevertheless persists in its view that the contingency of the Boston proceeding renders the 6 December order an interim, and hence unreviewable, decision. While it is true that an agency decision is inappropriate for judicial scrutiny where the court's intervention would 'disrupt the orderly process of adjudication,'³⁹  an analysis of the alternatives remaining to the Commission belie the Commission's asserted fears in this case.

In response to our question at oral argument on this motion,⁴⁰  counsel for the Commission assured the court that if, as a result of the Boston proceeding, the 6 December award to RKO for renewal of KHJ-TV were vacated, and if Fidelity were not otherwise disqualified. Fedelity, the only remaining applicant, would be granted a construction permit for Channel 9. Accepting this representation as true, and while we need not speculate at this stage exactly how the court may ultimately dispose of the appeal, we foresee the following eventualities, none of which would be disturbed by review of the 6 December order at this time.

First, in the event the court affirms the Commission and no decisive evidence of anticompetitive activity on the part of RKO is developed in the Boston proceeding, RKO preserves its license for KHJ-TV. Second, even if the court affirms the Commission and the revelations of the Boston proceeding subsequently compel the Commission to vacate the 6 December order, then fidelity, as the lone survivor of the Los Angeles proceeding, will simply obtain its construction permit, if it is not otherwise disqualified, in accordance with the Commission's representations to this court at oral argument. Third, assuming the court reverses the 6 December decision that RKO is the preferable applicant on the basis of the Los Angeles record and remands the case to the Commission for further proceedings, then regardless of the outcome of the Boston proceeding, Fidelity, the only other contender in the Los Angeles proceeding, would obtain its license if it is not otherwise disqualified. These are the possibilities; none would cause disruption in the Commission's adjudication of the Los Angeles proceeding.

The tardigrade pace taken by the Commission with respect to Fidelity's repeated efforts just to obtain a ruling has now consumed nine years. The Commission took over two years before hearing argument in October 1971 on exceptions to the Hearing Examiner's decision, and lingered another two years over the decision it resolved in 1971 on reach expeditiously, which it handed down only after prodding by this court. While assuring the court that it would reach the final decision we determined was mandatory, the Commission now maintains that the decision in fact is not final, since Fidelity's application is only 'deemed' to be denied. We cannot condone the Commission's attempted eradication of Fidelity's right to judicial review simply by its coinage of the phrase 'deem to deny,' in apparent defiance of this court's determination that a final decision should issue.

Not only has the Commission procrastinated in ruling on Fidelity's application, but we find the Commission's arguments, its characterizations of events and the numerous orders involved in this case, and its various actions throughout this controversy to have been less than candid. It has been given the benefit of the doubt in the past by being afforded the opportunity to explain its delay and to reach a decision without being ordered to do so by this court, despite our finding that a final decision had been unreasonably delayed. The only explanation it ever offered for the delay was a patent misreading of its 2 August 1971 order.⁴¹ 

Despite the labels the Commission affixes to its various actions in this matter and the 6 December order, it is clear beyond peradventure that the December order is a final determination of Fidelity's application on the basis of the record in the Los Angeles proceeding. The Hearing Examiner considered that record sufficient for his decision. The Justice Department was persuaded by that record to recommend that RKO be disqualified. The Commission felt that the record was sufficient for it to review and overturn the Hearing Examiner's decision, without reopening the record or consolidating the case with the Boston proceeding. Hence, that record should be sufficient for this court to undertake a meaningful review. If the 6 December order cannot be sustained on the record compiled in the Los Angeles proceeding, the sole basis for the order, it will fall.

The Commission's 6 December 1973 order will be set for full review on the merits in September 1974.

So ordered.