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FCC v. Prometheus Radio Project

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Supreme Court of the United States
FCC v. Prometheus Radio Project
Term: 2020
Important Dates
Argument: January 19, 2021
Decided: April 1, 2021
Outcome
Third Circuit judgment reversed
Vote
9-0
Majority
Chief Justice John G. Roberts • Clarence Thomas • Stephen Breyer • Samuel Alito • Sonia Sotomayor • Elena Kagan • Neil Gorsuch • Brett Kavanaugh • Amy Coney Barrett
Concurring
Clarence Thomas


FCC v. Prometheus Radio Project is a U.S. Supreme Court case about how courts should review the actions administrative agencies take. The case came out of 17 years of attempts by the Federal Communications Commission (FCC) to change regulations that govern ownership of broadcast media and involved whether the FCC adequately considered how its rule changes would affect broadcast media firms owned by women or minorities.

Justice Brett Kavanaugh delivered the unanimous opinion of the court, which ruled that the FCC did not violate the arbitrary-or-capricious test that comes from the Administrative Procedure Act (APA) and that the agency considered the effects of its orders properly.[1] Justice Clarence Thomas wrote a concurring opinion arguing that the 3rd Circuit did not have legal authority to require the FCC to consider ownership diversity.[1]

The case was argued before the Supreme Court of the United States on January 19, 2021, during the court's October 2020-2021 term. The case came on a writ of certiorari to the 3rd Circuit. It was consolidated with National Association of Broadcasters v. Prometheus Radio Project.

HIGHLIGHTS
  • The case: The Federal Communications Commission ("FCC") issued modifications and orders following its 2016 quadrennial review of rules governing ownership of broadcast media under the Communications Act of 1934 and the Telecommunications Act of 1996. A group challenged several of the FCC's rule changes before the U.S. Court of Appeals for the 3rd Circuit. The 3rd Circuit held that the FCC had not sufficiently considered the rule changes' effect on women- and minority-owned media. The court blocked the FCC's orders and sent them back to the agency for reconsideration along with its definition of "eligible entities". The FCC appealed to the U.S. Supreme Court, asking whether the 3rd Circuit blocked their rule changes properly.
  • The issue: "Whether the court of appeals erred in vacating as arbitrary and capricious the FCC orders under review, which, among other things, relaxed the agency's cross-ownership restrictions to accommodate changed market conditions."[2]
  • The outcome: The U.S. Supreme Court reversed the 3rd Circuit's decision, holding that the FCC orders were not arbitrary and capricious under the APA.[1]


    • You can review the lower court's opinion in the consolidated cases FCC v. Prometheus Radio Project and National Association of Broadcasters v. Prometheus Radio Project here.[3]


    Why it matters: The decision in favor of the FCC said federal agencies can pass the arbitrary-or-capricious test even if they do not have to have perfect empirical data before they make reasonable decisions.[1]

    Timeline

    The following timeline details key events in the consolidated cases FCC v. Prometheus Radio Project and National Association of Broadcasters v. Prometheus Radio Project:

    • April 1, 2021: The U.S. Supreme Court reversed the 3rd Circuit's decision.
    • January 19, 2021: The U.S. Supreme Court heard oral argument.
    • October 2, 2020: The U.S. Supreme Court agreed to hear the case.
    • April 17, 2020: The Federal Communications Commission and the National Association of Broadcasters filed petitions with the U.S. Supreme Court.
    • September 23, 2019: The United States Court of Appeals for the 3rd Circuit vacated and remanded the FCC's orders that were under review, and declined the request to appoint a special master to oversee the FCC's work on remand.

    Background

    1996: Congress delegates power to set and review broadcast ownership rules to the FCC

    The Federal Communications Commission ("FCC") set rules governing ownership of broadcast media under the Communications Act of 1934. The rules aim to prevent any single entity from owning more than a certain amount of broadcast media, limit consolidation, and promote "competition, diversity, and localism."[3] Section 202(h) of the Telecommunications Act of 1996 requires that the FCC review broadcast ownership rules on a regular basis to determine whether keeping the rules promotes the public interest.[3][4] The FCC's review reports are subject to judicial review by the United States Court of Appeals for the 3rd Circuit. The 3rd Circuit reviewed the results of the FCC's 2002 review cycle, (known as Prometheus I), and in the 2006 review cycle (known as Prometheus II). The FCC did not complete its 2010 review cycle, (known as Prometheus III), prior to the start of the 2014 cycle.[3]

    2016: 3rd Circuit instructs FCC to act on broadcast rules review

    The 3rd Circuit reviewed the FCC's decisions in 2014 and the years following regarding broadcast rules and held that the FCC had unreasonably delayed action on the most recent review cycles. The court also held that the agency unreasonably delayed updating its definition of eligible entities. The court remanded the case to the FCC with an order to determine its definition of "eligible entities", and concluded that the FCC still needed to decide whether to keep that the local ownership rule and to reconsider the joint sales agreement component of its rule.[3]

    2016: FCC changes some ownership rules and industry groups ask the agency to reconsider

    Three months later, the FCC took final action based on the 2010 and 2014 review cycles. It retained the newspaper/broadcast cross-ownership rule, the radio/television cross-ownership rule, the local radio ownership rule, and the local television ownership rule in their existing forms; it adopted a definition of "eligible entities" based on revenue, it declined to adopt an "incubator program" where established broadcasters would be encouraged to help new industry entrants, and it reviewed several proposals to increase ownership diversity. The FCC also called for public comments on a proposal to extend cable procurement rules to broadcast media.[3]

    In 2017, the FCC granted a petition for rehearing that was filed by industry groups in its Reconsideration Order. The Order eliminated the newspaper/broadcast and television/radio cross-ownership rules, removed the eight voices test from the local television ownership rule while keeping the top-four component, though they created a waiver process for that restriction.[3] Finally, the FCC announced that it wanted to create an incubator program and requested comments on who should be eligible and on how to encourage participation in the program from established broadcasters.[3]

    2018: FCC creates an incubator program to encourage new broadcasters

    In 2018, the FCC issued the Incubator Order, which established a radio incubator program that encouraged broadcasters to provide assistance to new industry entrants.[3] The order got established broadcasters to participate by granting waivers from local radio ownership rules. The broadcasters could use their new waivers in any qualifying comparable market.[3]

    Prometheus Radio Project sued FCC over actions that began in 2016

    Following the publication of the FCC's 2016 report, Prometheus Radio Project ("Prometheus"), a nonprofit organization that aims to advocate on behalf of community radio stations, and nine other petitioners asked the 3rd Circuit to review the FCC's actions.[5] Prometheus and three other petitioners petitioned the 3rd Circuit again after the Reconsideration Order was issued in 2017. They argued that the FCC had not sufficiently considered how their rule changes might affect broadcast media ownership by women and racial minorities, that the Incubator Order's definition of comparable markets was unlawful, and that the FCC had unreasonably delayed action on a proposal to extend cable procurement rules to broadcast media. Independent Television Group, one of the petitioners, also challenged the FCC's decision to keep the top-four portion of the local television rule. The FCC and a group of third party entities argued that the petitioners, other than Independent Television Group, lacked standing.[3]

    2019: 3rd Circuit ruled that FCC failed to consider the effect of rule changes on diversity

    In 2019, the 3rd Circuit ruled that the petitioners challenging the FCC actions had standing. The court also held that the FCC’s retention of its local television ownership rule's top-four component passed the arbitrary-or-capricious test, that the Incubator Order’s definition of comparable markets was not arbitrary and capricious, and that the FCC had not unreasonably delayed action on procurement rules. However, the court concluded that the FCC had not yet shown that it had adequately considered the effect its post-Prometheus III actions would have on diversity in broadcast media ownership. The court vacated and remanded the Reconsideration and Incubator Orders in their entirety, as well as the "eligible entity" definition from the FCC's 2016 report.[3]

    2020: FCC appealed 3rd Circuit's ruling to the U.S. Supreme Court

    On April 17, 2020, the FCC and the National Association of Broadcasters asked the Supreme Court of the United States to review the case. On October 2, 2020, the Supreme Court granted review and consolidated similar cases.

    Legal definitions

    Telecommunications Act of 1996

    The following quote is from the Telecommunications Act, Section 202(h):[3][4][6]

    “ (h) FURTHER COMMISSION REVIEW - The Commission shall review its rules adopted pursuant to this section and all of its ownership rules biennially as part of its regulatory reform review under section 11 of the Communications Act of 1934 and shall determine whether any of such rules are necessary in the public interest as the result of competition. The Commission shall repeal or modify any regulation it determines to be no longer in the public interest.[7] ”
    —Telecommunications Act of 1996

    Questions presented

    The petitioner presented the following questions to the court:

    Questions presented:
    • "Whether the court of appeals erred in vacating as arbitrary and capricious the FCC orders under review, which, among other things, relaxed the agency's cross-ownership restrictions to accommodate changed market conditions."[2]

    Outcome

    The decision of the U.S. Supreme Court to reverse the 3rd Circuit's ruling was unanimous.

    Justice Brett Kavanaugh delivered the opinion of the court and Justice Clarence Thomas wrote a concurring opinion.[1]

    Opinions

    Opinion of the court

    Justice Brett Kavanaugh delivered the opinion of the court, which reversed the 3rd Circuit and held that the 2017 FCC order repealing certain broadcast ownership rules was reasonable and reasonably explained, so the agency did not fail the Administrative Procedure Act's (APA) arbitrary-and-capricious standard.[1]

    The arbitrary-or-capricious test is a legal standard of review used by judges to assess the actions of administrative agencies. It was originally defined in a provision of the 1946 APA that instructs courts reviewing agency actions to invalidate any that they find to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."

    Kavanaugh wrote, "Judicial review under that standard is deferential, and a court may not substitute its own policy judgment for that of the agency. A court simply ensures that the agency has acted within a zone of reasonableness and, in particular, has reasonably considered the relevant issues and reasonably explained the decision."[1]

    Applying that standard, Kavanaugh held that "The FCC considered the record evidence on competition, localism, viewpoint diversity, and minority and female ownership, and reasonably concluded that the three ownership rules no longer serve the public interest. [...] The Commission further explained that its best estimate, based on the sparse record evidence, was that repealing or modifying the three rules at issue here was not likely to harm minority and female ownership. The APA requires no more."[1]

    Kavanaugh ended his opinion by writing that the APA does not require agencies to commission their own scientific studies or to make decisions only after reviewing perfect empirical or statistical data.[1]

    Concurring opinion

    Justice Clarence Thomas wrote a concurring opinion agreeing with the court's decision to reverse the ruling from the 3rd Circuit but adding that he believed the 3rd Circuit "improperly imposed nonstatutory procedural requirements on the FCC by forcing it to consider ownership diversity in the first place."[1]

    Thomas argued that the 3rd Circuit overstepped its authority because "[c]ourts have no authority to impose 'judge-made procedure[es]' on agencies."[1]

    Text of the opinion

    Read the full opinion here.

    Oral argument

    Audio

    • Audio of oral argument:[8]

    Transcript

    • Transcript of oral argument:[9]

    Commentary about the case

    This section contains a selection of opinions from scholars, journalists, and others about the potential implications of this court case.

    Pre-decision commentary

    Amy Howe, writing for SCOTUSblog, said that how the U.S. Supreme Court rules in the case "could affect who owns local newspapers and radio and television stations – which could in turn influence how Americans get their news from those outlets."[10]

    Howe also said, "As a statistical matter, the Supreme Court is more likely to grant review to reverse the lower court’s decision. That fact, plus the absence of any reference in the text of Section 202(h) to ownership diversity, suggests that the court’s conservative majority is more likely to be sympathetic to the FCC and the NAB." She concluded that the inauguration of Joe Biden, however, might lead to future litigation.[10]

    Post-decision commentary

    Claim: Kavanaugh opinion creates a possible new approach to arbitrary-or-capricious review

    Law professor Josh Blackman, writing for Reason, argued that "Justice Kavanaugh has quietly rephrased the Court's approach to A&C review. The Court had never adopted this test before. But now lower courts will have to determine what the 'zone of reasonableness' is."[11] Blackman cited earlier Kavanaugh legal opinions evaluating agency decisions based on whether they fell within a zone of reasonableness to show that Kavanaugh had been thinking this way about arbitrary-or-capricious review for years.[11]

    Claim: U.S. Supreme Court reaffirmed judicial deference to agencies

    FCC Commissioner Geoffrey Starks said, "The Supreme Court spoke clearly, coming out strongly in favor of agency deference under the Administrative Procedure Act. We can now move forward confidently to address media ownership in future Quadrennial Reviews in a manner that is data-driven and otherwise fully consistent with our duty to promote and ensure competition, localism, and diversity in the public interest."[12]

    See also

    External links

    Footnotes

    1. ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 U.S. Supreme Court, "FCC v. Prometheus Radio Project," April 1, 2021
    2. ↑ 2.0 2.1 Supreme Court of the United States, "FCC v. Prometheus Radio Project: Petition for a writ of certiorari," accessed October 5, 2020
    3. ↑ 3.00 3.01 3.02 3.03 3.04 3.05 3.06 3.07 3.08 3.09 3.10 3.11 3.12 U.S. Court of Appeals for the 3rd Circuit, Prometheus Radio Project v. Fed. Commc'ns Comm'n, decided September 23, 2019
    4. ↑ 4.0 4.1 Federal Communications Commission, "Telecommunications Act, Section 202(h)," accessed October 5, 2020
    5. ↑ SCOTUSblog "Justices add seven new cases to docket, including major voting-rights dispute," October 2, 2020
    6. ↑ In 2004, the section was amended to adjust the frequency of reviews from biennial to quadrennial.
    7. ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    8. ↑ Supreme Court of the United States, FCC v. Prometheus Radio Project, argued January 19, 2021
    9. ↑ Supreme Court of the United States, FCC v. Prometheus Radio Project, argued January 19, 2021
    10. ↑ 10.0 10.1 SCOTUSblog, "Case preview: Clash over media ownership rules arrives at the court," January 18, 2021
    11. ↑ 11.0 11.1 Reason, "Justice Kavanaugh quietly rephrased the arbitrary-and-capricious standard in FCC v. Prometheus," April 1, 2021
    12. ↑ Federal Communications Commission, "COMMISSIONER STARKS ISSUES STATEMENT ON FCC V. PROMETHEUS RADIO PROJECT DECISION," April 2, 2021
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