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Argument analysis: Justices sympathetic to FCC in media ownership dispute

The Supreme Court heard oral argument on Tuesday morning in a dispute arising from the Federal Communications Commission’s attempts to deregulate local media ownership. After nearly an hour and a half of debate, the justices seemed inclined to uphold the FCC’s efforts – even if not on the ground that big broadcasters would prefer.

FCC v. Prometheus Radio Project and National Association of Broadcasters v. Prometheus Radio Project, which the court consolidated for oral argument, center on the FCC’s 2017 orders that repealed rules governing “cross-ownership,” which bar the same entity from owning both a daily newspaper and either a radio or television station within the same market and also limit ownership of both radio and television stations in the same market. The FCC also modified rules limiting how many television stations one entity can own in the same local market. The FCC pointed to the decline of the newspaper industry and the proliferation of other media outlets as reasons for the change. On appeal, a divided three-judge panel of the U.S. Court of Appeals for the 3rd Circuit vacated the orders, with the majority holding that the FCC had failed to adequately consider the effect that repealing or loosening the ownership rules would have on media ownership by women and minorities.

The justices spent a sizable portion of Tuesday’s argument trying to clarify the parties’ positions on whether, and in what context, the FCC had previously considered how changes to the media ownership rules might affect ownership by women and minorities, and whether the agency was required to consider those effects. Malcolm Stewart, the deputy U.S. solicitor general who represented the FCC, emphasized that nothing in Section 202(h) of the Telecommunications Act of 1996, which directs the FCC to review its media ownership rules every four years and to determine “whether any of such rules are necessary in the public interest as a result of competition,” obligated the FCC to consider the impact of its 2017 changes on minority and female media ownership. On the other hand, Stewart acknowledged, the FCC had considered the impact in this case; it simply concluded, “based on the evidence we have,” that “there will not be a substantial effect” on ownership diversity from the changes.

Justice Sonia Sotomayor was skeptical of Stewart’s argument that the court should defer to the FCC’s decision to deregulate media ownership. The FCC has said that ownership diversity is a factor to be considered when deciding whether to deregulate, Sotomayor observed, and the court has “a legion of cases that say” that before an agency can reject one position, it must “give it adequate consideration.”

Sotomayor’s colleagues, however, were more sympathetic to the government’s position. In his questions for Ruthanne Deutsch, who represented the advocacy groups challenging the FCC’s orders, Chief Justice John Roberts pushed back against the groups’ contention that the FCC needed to provide a detailed explanation for its changes to the media ownership rules. If the FCC has two different priorities and it decides to focus on one, Roberts told Deutsch, “you seem to be suggesting that as a matter of policy,” it needs “to justify a determination that A is more important than B, when reasonable people can differ … on that.”

Justice Elena Kagan had a similar line of questions for Deutsch. If the FCC has historically considered ownership diversity as one factor in its broader analysis of whether retaining media ownership rules would serve the public interest, but in this case the FCC says that what little data that is available suggests that the changes to its rules won’t have an effect on ownership by women and minorities, Kagan queried, “Why isn’t that enough?”

Justice Neil Gorsuch followed, noting that the FCC and broadcasters were “stuck with rules from the 1970s that, 20 years ago, 25 years ago, Congress said were outdated.” If the FCC determines “in its best considered judgment, after multiple rounds of remands and multiple rounds of data collection and public comment, that it earnestly believes that these rules aren’t going to negatively impact anyone, it might actually benefit most people,” why shouldn’t it be allowed to “experiment with that for four years” and then “see what actually happened”?

Justice Brett Kavanaugh chimed in, noting that federal courts do not make “policy calls.” “We defer to agency policy judgments within the constraints imposed by Congress” as a general matter, Kavanaugh noted, and in this case Congress instructed the FCC to work in the “public interest” – “the broadest possible language” and “not much of a constraint at all” on the FCC’s discretion. “How can we, sitting here,” Kavanaugh concluded, “second-guess all that?”

Justice Amy Coney Barrett was skeptical about Deutsch’s citation to a study that would, Deutsch said, support the groups’ contention that the changes to the ownership rules would hurt minority and female ownership. “I thought,” Barrett said, that the study “was largely backward-looking.” And if it was, Barrett continued, then “why isn’t the Commission correct that there was no evidence in the record that showed there would be harm” from the changes?

Arguing for a trade association of TV and radio broadcasters, lawyer Helgi Walker urged the court to uphold the FCC’s changes to the media ownership rules, but she offered a different reason for the court to do so. In Walker’s view, the 3rd Circuit’s ruling was wrong because nothing in the text of Section 202(h) indicates that the FCC was required to consider the effect of its changes on ownership diversity. Pushing back against a suggestion from Sotomayor that a ruling based on the text of Section 202(h) would be more complicated than a decision deferring to the FCC’s interpretation of the law, Walker emphasized that the broadcasters wanted the court to clarify what Section 202(h) does or does not require precisely because the dispute has been going on so long. Otherwise, she cautioned, the litigation will continue after the next periodic review. Congress intended Section 202(h) to “drive real reform with a focus on competition,” she told the justices, but instead broadcasters were “labor[ing] under these rules that literally go back to the 1940s,” in contrast to “completely unregulated” new media outlets.

Gorsuch also focused on a separate issue: whether the 3rd Circuit should have control over this case and earlier challenges to the FCC’s orders following other periodic reviews. What authority, Gorsuch asked Deutsch dubiously, does the 3rd Circuit have to keep jurisdiction over three different rulemakings over the course of 15 years?

Sotomayor also pushed Walker to draw a line regarding when the courts of appeals should or should not retain jurisdiction in a complex case. Walker responded that this case was an easy one, because a scenario in which one panel holds control over the FCC’s rulemaking for 17 years is “excessive by any standard.”

Although the court after oral argument seemed likely to rule for the FCC and reinstate the 2017 orders, the FCC – which will soon be under Democratic control – is in the middle of the 2018 periodic review required by Section 202(h). In that scenario, more litigation could follow, which would be precisely the result that the broadcasters are hoping to avoid.

This article was originally published at Howe on the Court.

Posted in Federal Communications Commission v. Prometheus Radio Project, National Association of Broadcasters v. Prometheus Radio Project, Featured, Merits Cases

Recommended Citation: Amy Howe, Argument analysis: Justices sympathetic to FCC in media ownership dispute, SCOTUSblog (Jan. 19, 2021, 6:53 PM), https://www.scotusblog.com/2021/01/argument-analysis-justices-sympathetic-to-fcc-in-media-ownership-dispute/

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