Standard/Tegna Motion Has Slim Chances, Attorneys Say
The Standard/Tegna broadcasters’ motion seeking a full FCC vote on the Media Bureau’s hearing designation order (HDO) (see 2303060051) is considered a long shot due to the deal’s tight clock and the agency's current makeup but could have a slim chance, attorneys told us. The matter could also threaten the FCC’s merger review powers and use of administrative law judges, attorneys and academics said. Challenges to the constitutionality of ALJs “are happening at every agency right now,” said American University administrative law professor Jeffrey Lubbers: “If you’re facing a hearing, why wouldn’t you?”
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“There is absolutely no precedent for the way the Bureau has handled our application, and we do not believe the courts or the ALJ through inaction or delay will allow this abuse to stand and become the precedent for future commissions,” said a Standard General spokesperson. “We intend to vigorously pursue this matter, and are confident that our rights will be vindicated in a timely manner.”
For the motion to work, FCC ALJ Jane Halprin would have to rule that the HDO “involves a controlling question of law as to which there is substantial ground for difference of opinion” and that immediate consideration of the matter would expedite the litigation's resolution, according to FCC rules. If she decides those categories don’t apply to the HDO, that decision is “not appealable,” the regulations say. Ruling that the deal should go before the commission is considered unlikely, but the HDO also is an unusual break from precedent, said broadcast attorney Jack Goodman, echoed by many broadcast lawyers. “Hail Mary” passes are sometimes caught, one attorney said.
If Halprin does send the application for review of the HDO to the FCC, Chairwoman Jessica Rosenworcel -- thought to have directed issuance of the HDO in the first place -- would need to put it to a commissioners' vote. The agency in the past has had a “must-vote” system where commissioners could push the chair to hold a vote on an item, but it requires three votes and for the item to sit for nearly a month. Attorneys said the must-vote process is also largely a matter of custom and at the chairwoman’s discretion.
If the matter were put before the commissioners, it would take three votes to roll back the HDO, which would be difficult to attain, FCC watchers said, even though Commission Republicans -- Brendan Carr and Nathan Simington -- condemned the HDO, and Democrat Geoffrey Starks has declined to comment on the deal. Starks has been a vocal proponent of minority broadcast ownership. He listed dismal numbers on Asian-owned stations -- Standard General Managing Partner Soohyung Kim is Korean -- in a recent speech, but he has also consistently voted with Rosenworcel on FCC decisions for years, and is soon up for renomination for another term at the agency. His office didn’t comment Tuesday.
If the FCC doesn’t act in Standard’s favor, the broadcasters could seek relief from the courts, but that option is also considered fraught, attorneys said. The broadcasters would likely seek a writ of mandamus to compel the agency to act, but such rulings usually only come after the agency has stalled a decision for years, Goodman said.
The HDO could also draw attacks on the FCC’s powers, attorneys said. In its motion, Standard threatens to challenge the constitutionality of the FCC’s ALJ, an threat thought to have traction because of decisions at the U.S. Supreme Court and 5th U.S. Circuit Court of Appeals. In Jarkesy v. SEC, the 5th Circuit ruled last year ALJs are unconstitutional because the president can’t directly remove them from office. In 2010, SCOTUS came to similar conclusions about other federal officials in Free Enterprise Fund v. Public Company Oversight Board. SCOTUS is thought to be primed to rule on ALJ constitutionality, and that prospect has become a common argument in ALJ cases, Lubbers said. Standard's motion said certifying the application for review would “avoid any need for the courts upon review to confront and decide the issue in this case, leaving the constitutionality of the Commission’s ALJ for a later day.”
If the ALJ, FCC or courts went Standard General’s way, the transaction could still have a time issue, broadcast attorneys said. The agreement has a May 22 “final extension date” that can't be extended further, Standard said in the motion. Proceedings before the ALJ take time, and the unions and public interest groups will likely seek to oppose Standard’s motion. Going through the HDO hearing would take even more time. ALJ Halprin “is very quick and efficient but even optimistically” the process is likely to take longer than the merger agreement will allow, said Rini O’Neil broadcast attorney David O’Neil. The HDO’s issuance also gives either party the ability to walk away from the deal. Tegna said in a recent earnings release it was considering the matter but joined in the certification motion with Standard and Cox Media Group.
Lubbers said such arguments are likely to come up in future ALJ matters at the FCC and other agencies: “This isn’t going away.” Being unable to refer matters to an ALJ would hurt the FCC, one attorney said. The HDO could also create concerns for the agency by drawing scrutiny from lawmakers, attorneys said. NAB urged lawmakers to narrow the definition of the public interest standard in response to the order, and several attorneys said they expect the matter to arise in oversight hearings.