Standard Appeals HDO to Full FCC, Asks Commissioners to Force Vote

The full FCC should review and overturn the Standard/Tegna hearing designation order (HDO) by March 27 or the broadcasters will seek judicial review and challenge the constitutionality of the FCC’s administrative law judge, said Standard General, Tegna and Cox Media Group Friday in an application for review and motion for waiver and expedited review (see 2303160077). The HDO denies the transaction “without due process” and the FCC “should swiftly correct that overreach,” said the broadcasters. “If the Commission has not done so by 5:00 p.m. on March 27, applicants will have no choice but to seek judicial relief.”

A full commission vote on the applications would likely require Commissioner Geoffrey Starks to join with the FCC Republicans to force the item onto the FCC’s agenda, which is considered unlikely. It would also require the agency to waive some of its rules and ignore precedent since the hearing proceeding hasn’t concluded and ALJ Jane Halprin already ruled the HDO wouldn’t be certified to the full commission.

In a separate motion, the broadcasters asked the agency to waive the requirement for certification. “Denial of an opportunity to raise these issues before the Commission based on the ALJ’s failure to certify would amount to a complete denial of the opportunity to ever challenge them,” said the motion. The broadcasters also asked the agency to waive the five-page limit on the length of their application for review.

“Our applications comply with all FCC rules and deserve a vote by the FCC Commissioners, which any three Commissioners can request,” emailed a Standard General spokesperson. The HDO is endangering the deal’s public interest benefits “through a transparent effort to exercise an unlawful, unprecedented and indefensible pocket-veto,” Standard said. The FCC, the unions opposing the deal and Halprin declined to comment. The individual commissioner offices didn’t respond to queries.

If the FCC doesn’t grant the applications before the May 22 final extension date, “the financing obligations of more than a dozen lenders helping to fund the transactions will expire as well,” said the Standard filings. In 30 years, the shortest time between HDO issuance and action on the associated applications was 358 days, and the average time 799 days, Standard said. Rules that bar FCC decisions from being appealed until they're final are “wholly inadequate when the Applicants’ transaction will be dead long before the hearing even gets underway,” Standard said. “The expiration of the transaction agreements and 11th hour nature of the HDO justifies the Commission’s urgent action, without which review will never occur.”

Putting the matter before the full commission would protect the FCC’s ALJ from a constitutional challenge based on prior rulings by the U.S. Supreme Court and the 5th U.S. Circuit Court of Appeals decision in Jarkesy v. SEC (see 2211030063). Those rulings turned on arguments about the constitutionality of federal officers who can’t be directly removed by the U.S president. FCC commissioners, who can’t themselves be directly removed by the president, appoint ALJs, so the FCC’s ALJ would fall on the wrong side of Jarkesy, the broadcasters said. “The answer to that issue decides whether the hearing can lawfully be held at all,” said Standard. “Rather than turn a blind eye to it, the Commission should avoid the need for a court to decide it here by promptly vacating or rescinding the HDO and granting the Applications itself.” The broadcasters’ latest filings show Standard has added Gibson Dunn attorney Miguel Estrada, who has argued 24 cases before the Supreme Court, to its legal team.

Halprin erred by ruling that only the matter of ALJ constitutionality was a question of law that could be certified to the full FCC, the broadcasters said. “The sufficiency of evidence presents a legal, not a factual question,” said the broadcasters. The ALJ “was also mistaken in her apparent belief” the broadcasters had to show “that each and every question they presented independently meets the standard for certification,” the filings said.

The full FCC should also rule on the HDO because it's novel and “inconsistent with decades of commission precedent,” the broadcasters said. The concerns raised in the HDO over retransmission consent, staffing and private equity “have no relationship to the FCC’s public interest mandate or jurisdiction,” and were mooted by the concessions the broadcasters offered up, the filings said. The impact of after-acquired clauses “had they not been waived is irrelevant to whether the Transactions currently before the FCC would serve the public interest,” the filings said. The HDO makes a “novel assertion that the FCC should discriminate between broadcasters based on their investor base when reviewing license transfers,” the broadcasters said. “If the FCC had authority to intervene in matters relating to retransmission consent fees or station staffing, its concerns could have been resolved through conditions,” the broadcasters said. “But it does not have that authority.”