In September, a three-judge panel of the US Court of Appeals for the Third Circuit released a 2-1 decision overturning the FCC’s 2017 decision modifying many of its ownership rules (see our summary of the Court decision here, and our review of the 2017 decision here). The Court’s decision not only upset the plans of many media companies for acquisitions based on the changes adopted in the 2017 decision, but also dashed the hope of many radio companies for timely changes in the radio ownership rules that are under consideration by the FCC in its next Quadrennial Review of its ownership rules (see our summary of the issues in the current Quadrennial Review here). Last week, both the FCC and a number of industry groups who were parties to the Third Circuit case filed Petitions asking that all of the sitting judges on the Third Circuit vote to rehear the decision of the three-judge panel.
The panel’s decision did not find that any of the rule changes adopted by the Commission (including the abolition of the newspaper-broadcast cross-ownership prohibition) were not justified by changes in the media marketplace. Instead, the panel voided the FCC’s decision because it did not believe that the FCC had enough historical data on minority and female ownership to be able to judge the affects of any ownership changes on diversity of ownership in the media industry. The FCC Petition for Rehearing centered on an argument that the Commission had plenty of data to support its conclusions – and that Courts have never required government agencies to have perfect information in making any decision. Instead, agencies are only required to have sufficient factual data to justify their conclusions. The FCC argued that, where the information that is sought by the panel might simply not exist and where the panel’s insistence on the information has held up the FCC’s attempts to modernize its media ownership rules for a decade and a half as the same judges keep rejecting FCC attempts to justify its ownership decisions, the full Court should step in and conduct a rehearing. The industry parties emphasized how the decision was overbroad – overturning all aspects of the FCC’s decision – even parts that had not been challenged by the petitioning parties. The industry participants also pointed to the fact that real hardships were being imposed on media companies as the FCC had not been able make changes in its ownership rules to reflect the changes in the industry that had occurred in what may have been the most dynamic 15 years in the history of the mass media. With these requests for rehearing on file, what is next?
Courts are not on any timetable to make a decision on petitions like these. A decision could come quickly (most likely if the other Judges just decide not to review the decision of their colleagues) or it could take months, particularly if there are judges who want to write opinions that differ from whatever the majority of the Court decides. This kind of “rehearing on banc” is rare, but this is an unusual case where the same three judges have overseen an agency’s decision making for so many years. If the full Third Circuit does decide to rehear the case, they could ask for additional oral argument or potentially even additional briefing before making a final decision.
So, even if successful, this process could take a while. If unsuccessful, the FCC could appeal to the Supreme Court (though the Supreme Court only takes a limited number of cases every year, and this one may not be the type of broad issue that is most usually reviewed by the high court). Otherwise, the FCC would have to once again try to justify its ownership rule changes by trying to gather and assess the information which the Court has sought. In any event, unless the rehearing petitions are acted on in record time, don’t look for a resolution of the ownership issues this year. Any decision next year could be complicated by the campaign for next November’s elections, during which controversial decisions tend to be deferred. Any potential for imminent resolution of the fate of the 2017 ownership decision is thus dependent on the Third Circuit, and review beyond that is likely much further in the future.