Case No. 19-1231 | 3d Cir.
January 19, 2021
Preview by Amy Orlov, Online Editor
This case concerns agency reason-giving requirements under the Administrative Procedure Act’s arbitrary and capricious standard. The facts stem from the Federal Communications Commission’s (“FCC”) regulatory actions with respect to the Telecommunications Act of 1996. 47 U.S.C. § 303 note. Through its regulations, the FCC governs the ownership of broadcast media to promote “competition, diversity, and localism in broadcast services.” See In re 2002 Biennial Regulatory Review, 18 FCC Rcd. 13,620, 13,645 (2003). Section 202(h) of the 1996 law requires the FCC to review its rules governing broadcast media ownership every four years and to repeal and modify any regulations that it deems are no longer in the public interest.
Many entities, including Prometheus Radio Project, have litigated against the FCC for rule changes under the 1996 Act since the start of the 21st century. This case concerns a 2017 FCC order repealing and relaxing several of the Commission’s ownership rules, including rules concerning newspapers, television, and radio stations to permit greater consolidation in media markets. The respondents, Prometheus Radio Projects and others, challenged various FCC regulatory changes on the basis that the Commission did not sufficiently consider the effects that the changes would have on broadcast media ownership diversity when it attempted to repeal and modify the already-existing rules.
The U.S. Court of Appeals for the Third Circuit found that although the FCC purportedly considered the effects of its rule changes on broadcast media ownership by women and racial minorities, its analysis was “so insubstantial” that it could not provide a reasonable foundation for the modifications. Prometheus Radio Project v. FCC, 939 F.3d 567, 573 (3d Cir. 2019). As such, the Court held that the FCC’s rule changes were arbitrary and capricious in violation of the Administrative Procedure Act (“APA”) and vacated the order. See id. at 589.
The question on appeal is rather specific. The Supreme Court must decide whether the Third Circuit erred in vacating the FCC’s order on grounds that it was arbitrary and capricious. The FCC argues that the APA grants much deference to the agency’s decisions, especially when the agency acts in the public interest as specified by the Telecommunications Act. See Brief for the Petitioners at 21, 23, FCC v. Prometheus Radio Project, No. 19-1231 (U.S. filed Nov. 16, 2020). The Commission further argues that its actions were not arbitrary and capricious because it made reasonable policy judgments based on the facts and evidence available concerning ownership diversity. See id. at 27. Prometheus Radio Project argues that the FCC falsely reinterpreted the facts leading to its rule changes and arbitrarily assessed past evidence. See Brief for Respondents Prometheus Radio Project, et al. at 31–36, 43–46, FCC v. Prometheus Radio Project, No. 19-1231 (U.S. filed Dec. 16, 2020).
While this case continues a long line of litigation against the FCC for rule changes concerning broadcast media, it also represents another action against the Trump administration for improper promulgation of regulations. Although the issue here is narrow, this case provides another opportunity for the Supreme Court to sharpen its definition of arbitrary and capricious rulemaking and APA requirements more broadly.