Standard/Tegna Broadcasters Ask D.C. Circuit to Overturn FCC Action

Standard General, Tegna and Cox Media Group, in court filings Monday challenging the FCC’s hearing designation order (HDO), targeted the FCC’s merger review process, Holly Saurer’s dual role as Media Bureau chief and as Chairwoman Jessica Rosenworcel’s media adviser, and the FCC’s administrative law judge. The companies are seeking a ruling from the U.S. Court of Appeals for the D.C. Circuit by April 21.

The Standard/Tegna deal will break up May 22 without judicial action, the broadcasters said in a notice of appeal, petition for writ of mandamus and emergency motion to expedite and consolidate. The FCC hasn’t responded to requests to overrule the Media Bureau, said the mandamus filing. “Rather, it has allowed a bureau chief -- who simultaneously serves on the Chairwoman’s personal staff -- to prevent the full Commission from having its say.”

“Something is terribly wrong at the FCC Media Bureau,” said a Standard General news release Tuesday. The FCC “tried to dodge” its obligation to serve the public interest “in a transparent manner” by using delegated authority to block the deal, it said: “At any time, three FCC Commissioners can decide to do the right thing and demand a vote.” The FCC declined to comment.

The D.C. Circuit has traditionally declined to rule on appeals that aren’t of a final FCC order, writs of mandamus are usually successful only for cases that have been stalled for years, and the courts seldom act quickly, said multiple broadcast attorneys, all suggesting the court appeal is a long shot. The deal is still expected to break up, though attorneys noted Tegna participated in the appeal filings, indicating it's still committed now.

The broadcasters have no remedy but are going through the hearing process if the appeal to the courts fails, Standard said. If the deal isn't approved by May 22, the financing will expire and Standard will have to pay Tegna a $136 million termination fee, Standard told the court. In today’s “markedly different interest-rate environment, those financing commitments cannot be replicated after they expire,” Standard said.

The HDO is a reviewable final order because it “marks the consummation of the agency’s decisionmaking process,” said the broadcaster appeal. “The ‘actions suggest’ that the FCC ‘has made up its mind.’” The filings’ repeated references to Saurer’s roles in both Rosenworcel's office and the bureau is likely an attempt to bolster that argument by suggesting the FCC’s leadership has already decided the matter, a broadcast attorney said.

The FCC “has chosen to kill the deal through calculated inaction on a procedural maneuver, acting through a bureau chief who simultaneously serves on the Chairwoman’s personal staff,” said the mandamus filing. “That is final agency action in every relevant sense.” “The circuit courts, with the exception of the 5th Circuit, seem to want litigants to work things out with the agencies first, before appealing,” said Linda Jellum, administrative law professor at the University of Idaho College of Law.

The broadcaster filings before the D.C. Circuit raise many of the same issues as their FCC appeals about the scope of the FCC’s authority and ALJ constitutionality. “The adjudicator assigned to oversee it cannot lawfully do so, because the Commission’s ALJ is unconstitutionally insulated” from removal by the president, said the mandamus filing. “The lower courts, particularly the D.C. Circuit, have been resistant to these arguments because they would be destabilizing to administrative agencies,” said Jellum.

The transaction's public interest and union opponents will likely soon file to enter the case as intervenors, said an attorney with knowledge of the case. The broadcasters asked that the court consolidate the mandamus and appeal into a single case, but the FCC and the deal opponents object, the filings said.

A D.C. Circuit panel consisting of Judges Cornelia Pillard, Michelle Childs and Florence Pan issued an order Tuesday directing the FCC to respond to the broadcaster's emergency motion to expedite by 5 p.m. EDT Wednesday, and for broadcasters to reply by noon EDT Thursday. The broadcasters asked the court to rule on the emergency motion to expedite by Monday.

The broadcasters filed both an appeal of the HDO and a writ of mandamus asking the court to compel the FCC to act quickly, but their filings urge the court to favor the appeal -- the mandamus is a last resort. They requested a Thursday deadline for their opening brief in the direct appeal and for responses from the FCC to be due April 11. They asked the court to issue a decision on the appeal or mandamus by April 21. If the D.C. Circuit doesn’t take up the appeal, but does grant the petition for mandamus, the court should order the FCC to act by April 28 so “any judicial review of its final action may be sought on an expedited basis before the May 22 deadline for the transaction to close,” the broadcasters said.