United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 22, 1999 Decided July 23, 1999
No. 98-1246
QUALCOMM Incorporated,
Petitioner
v.
Federal Communications Commission and
United States of America,
Respondents
PrimeCo Personal Communications, L.P., and
Sprint Spectrum L.P.,
Intervenors
On Petition for Review of Orders of the
Federal Communications Commission
Veronica M. Ahern argued the cause and filed the briefs
for petitioner.
James M. Carr, Counsel, Federal Communications Com-
mission, argued the cause for respondents. With him on the
brief were Joel I. Klein, Assistant Attorney General, U.S.
Department of Justice, Robert B. Nicholson and Robert J.
Wiggers, Attorneys, Christopher J. Wright, General Counsel,
Federal Communications Commission, Daniel M. Armstrong,
Associate General Counsel, and John E. Ingle, Deputy Asso-
ciate General Counsel.
Robert A. Long, Jr. argued the cause for intervenors. On
the brief was Luisa L. Lancetti. Andrew J. Heimert entered
an appearance.
Before: Edwards, Chief Judge, Wald and Rogers, Circuit
Judges.
Opinion for the Court filed by Circuit Judge Rogers.
Rogers, Circuit Judge: In Freeman Engineering Associ-
ates v. FCC, 103 F.3d 169 (D.C. Cir. 1997), the court held that
although the Federal Communications Commission ("FCC")
could reasonably interpret its rules for awarding pioneer's
preferences to mean that adaptations of technology are not
innovative, it had not applied the interpretation equally
among all preference applicants to QUALCOMM's detriment.
See id. at 180. The court granted QUALCOMM's petition for
review, vacated that part of the FCC's decision denying
QUALCOMM's preference request, and remanded "for fur-
ther proceedings to remedy this inconsistency." Id. Before
the FCC granted such a remedy, but after the court's man-
date issued in Freeman Engineering, Congress advanced the
sunset date for the FCC's authority to award pioneer's pref-
erences and the FCC dismissed all pending preference appli-
cations, including QUALCOMM's. We grant QUALCOMM's
petition for review of this dismissal because the FCC misin-
terpreted Freeman Engineering as ordering no more than a
general remand for further proceedings, and thereby misap-
plied the sunset provision withdrawing its authority to award
new pioneer's preferences to a final judgment that entitled
QUALCOMM to a pioneer's preference under the rules then
in effect.
I.
The background for this appeal is set forth in Freeman
Engineering, and therefore we summarize only four relevant
areas. First, the FCC promulgated the pioneer's preference
rules in 1991 in an effort "to reduce the risk and uncertainty
innovating parties face in our existing rulemaking and licens-
ing procedures, and therefore to encourage the development
of new services and new technologies." Establishment of
Procedures to Provide a Preference to Applicants Proposing
an Allocation for New Services, 6 F.C.C.R. 3488, 3492 (1991)
("Pioneer's Preference Order"). Thus, an applicant demon-
strating "that it (or its predecessor-in-interest) has developed
an innovative proposal that leads to the establishment of a
service not currently provided or a substantial enhancement
of an existing service," id. at 3494, would "effectively ... [be]
guarantee[d] ... a license in the new service (assuming it is
otherwise qualified) by permitting the recipient of a pioneer's
preference to file a license application without being subject
to competing applications." Id. at 3492; see also 47 C.F.R.
s 1.402(a) (1995); Adams Telcom, Inc. v. FCC, 38 F.3d 576,
578 (D.C. Cir. 1994).
Second, QUALCOMM applied for a pioneer's preference,
the FCC denied it, and on appeal QUALCOMM prevailed.
QUALCOMM requested a pioneer's preference for a license
in the Southern Florida Major Trading Area ("MTA") based
on technology developed for use in broadband (2 GHz) per-
sonal communications services ("PCS"). See Request for a
Pioneer's Preference for a Personal Communications Ser-
vices System, Gen. Docket 90-314 (May 4, 1992). In 1992,
the FCC tentatively granted three pioneer's preferences--to
American Personal Communications ("APC"), Cox Enterpris-
es, Inc. ("Cox"), and Omnipoint Communications, Inc. ("Omni-
point")--and dismissed the remaining applications. See
Amendment of the Commission's Rules to Establish New
Personal Communications Services: Tentative Decision and
Memorandum Opinion and Order, 7 F.C.C.R. 7794, 7797-
7809 (1992) ("Tentative Decision"). The FCC explained in
rejecting QUALCOMM's application that its proposed tech-
nology was "essentially ... identical to that which it already
... developed for use in the 800 MHz cellular bands." Id. at
7807. In 1994, the FCC affirmed its decision granting prefer-
ences to APC, Cox, and Omnipoint, and denying
QUALCOMM a preference because its work was merely an
adaptation of previously developed technology. See Amend-
ment of the Commission's Rules to Establish New Personal
Communications Services: Third Report and Order, 9
F.C.C.R. 1337, 1339-48, 1368-70 (1994) ("Third Report and
Order"). After the FCC denied its petition for reconsidera-
tion, see Amendment of the Commission's Rules to Establish
New Personal Communications Services: Memorandum
Opinion and Order, 9 F.C.C.R. 7805, 7810-11 (1994) ("Recon-
sideration Order"), QUALCOMM petitioned for review by
this court.
On appeal, the court vacated that part of the FCC's deci-
sion denying QUALCOMM's preference application, conclud-
ing that although the FCC could reasonably interpret its
pioneer's preference rules to mean that adaptation of technol-
ogy was not innovative, it could not discriminate among
preference applicants in applying its rules. See Freeman
Eng'g, 103 F.3d at 178-80. Because Omnipoint had also
based its 2 GHz application on technology adapted from work
it had done on 900 MHz cellular bands tested at 900 MHz, in
part prior to the promulgation of the pioneer's preference
rules, the court concluded that the FCC had acted arbitrarily
and capriciously in denying QUALCOMM's application on the
ground that its "proposed technology was a non-innovative
adaptation" because it " 'ha[d] been developing its ... tech-
nology since 1985' and had 'validated [it] for 800 MHz.' " Id.
at 180 (quoting Reconsideration Order, 9 F.C.C.R. at 7811).
The court noted that although "[n]umerous parties to the
FCC proceedings pointed out this disparate treatment to the
Commission," the FCC had responded not by applying the
"developed specifically for a particular service" test applied to
QUALCOMM, but by reverting to the "associated with" test,
noting that " 'Omnipoint has demonstrated that it performed
significant new work related to 2 GHz PCS after adoption of
the pioneer's preference rules.' " Id. (quoting Third Report
and Order, 9 F.C.C.R. at 1346). Yet, the court noted, the
same could be said of QUALCOMM: its "adaptation was also
'significant new work related to 2 GHz PCS.' " Id. Conclud-
ing that the FCC "applied a newly developed (and questiona-
ble) interpretation of its pioneer's preference rules" only to
QUALCOMM, the court observed that "[w]ere this case
remanded, it is not at all clear whether the Commission would
continue to adhere to this interpretation of the pioneer's
preference rules." Id. The court's disposition in granting
QUALCOMM's petition read:
[W]e find reasonable the Commission's interpretation of
the pioneer's preference rules such that adaptations of
technology are not innovative and thus not deserving of a
preference. However, we conclude that the Commission
failed to apply this interpretation consistently to the
detriment of QUALCOMM's application for a preference.
We therefore vacate that portion of the Commission's
decision denying QUALCOMM's preference request.
We remand for further proceedings to remedy this incon-
sistency.
Id. The court's mandate issued April 18, 1997.
Third, Congress changed the landscape of the pioneer's
preference program in two ways relevant here, the first
occurring before the court issued its mandate, and the second
occurring after. As to auctions, before the court's mandate,
Congress authorized the FCC in 1993 to auction licenses for
radio spectrum. See Omnibus Budget Reconciliation Act of
1993, Pub. L. No. 103-66, s 6002, 107 Stat. 312, 387-392
(codified at 47 U.S.C. s 309(j)(1)-(12) (1994)); see also
Amendment of the Commission's Rules to Establish New
Personal Communications Services: Second Report & Order,
8 F.C.C.R. 7700, 7707-09 (1993). One of the auctions resulted
in the issuance of a license for the area sought by
QUALCOMM, the Miami-Fort Lauderdale MTA, to PrimeCo
Personal Communications and Sprint Spectrum, intervenors
in this appeal.
In addition, Congress precluded review of granted prefer-
ences and established a sunset date for the FCC's authority
to grant preferences. After the first auction for narrowband
PCS generated over $650 million,1 see FCC Report to Con-
gress on Spectrum Auctions, FCC 97-353 at 10 (Sept. 30,
1997), and in view of the fact that "pioneers" received the
license of their choice without payment, Congress amended
the Communications Act in 1994 to require the FCC to
"recover for the public a portion of the value of the public
spectrum resource" from pioneers, with provisions for install-
ment payments over a five year period. Uruguay Round
Agreements Act, Pub. L. No. 103-465, s 801, 108 Stat. 4809,
5050-51 ("GATT") (codified at 47 U.S.C. s 309(j)(13) (B) &
(C) (1994)); see also H.R. Rep. No. 103-826, pt. 2, at 26
(1994). Congress also directed the FCC to award licenses
within fifteen days to those granted preferences in the Third
Report and Order (namely, APC, Cox, and Omnipoint) and
prohibited further agency or judicial review of those prefer-
ences and licenses. See GATT, 108 Stat. at 5051 (codified at
47 U.S.C. s 309(j)(13)(E)(i)). Further, Congress added a
sunset provision, terminating the FCC's authority to grant
pioneer's preferences after September 30, 1998. See id. at
5052 (codified at 47 U.S.C. s 309(j)(13)(F)). After the court
issued its mandate, Congress advanced the sunset date from
September 1998 to August 5, 1997. See Balanced Budget Act
of 1997, Pub. L. No. 105-33, s 3002(a)(1)(F), 111 Stat. 251,
259 (1997) (amending 47 U.S.C. s 309(j)(13)(F)).
Fourth, on remand, despite QUALCOMM's urging of the
FCC to comply with 47 U.S.C. s 402(h),2 by "forthwith"
__________
1 As of September 30, 1997, winning net bids in FCC spectrum
auctions totaled almost $23 billion. See FCC Report to Congress on
Spectrum Auctions, FCC 97-353 at 10-11 (Sept. 30, 1997).
2 Section 402(h) provides:
In the event that the court shall render a decision and enter an
order reversing the order of the Commission, it shall remand
the case to the Commission to carry out the judgment of the
court and it shall be the duty of the Commission, in the absence
of the proceedings to review such judgment, to forthwith give
effect thereto, and unless otherwise ordered by the court, to do
so upon the basis of the proceedings already had and the
record upon which said appeal was heard and determined.
granting it a pioneer's preference, the FCC reopened the
proceedings for comment on QUALCOMM's application and
ultimately dismissed QUALCOMM's application for lack of
power to act. From the start of the remand proceedings,
QUALCOMM sought prompt agency action to implement
Freeman Engineering. In responding to a February 25,
1997, request of the General Counsel and the Office of
Engineering and Technology ("OET"), QUALCOMM summa-
rized their meeting on January 31, 1997, (24 days after the
court issued its decision in Freeman Engineering and almost
three months before the mandate issued on April 18, 1997),
when QUALCOMM advised that it sought a preference for its
pioneering work and emphasized the need for a quick award
to minimize prejudice to QUALCOMM in the marketplace.
At that meeting QUALCOMM also advised that it was willing
to work with the FCC on alternative remedies that did not
require rescission of Sprint's Miami license, referring specifi-
cally to available C Block Basic Trading Area ("BTA") licens-
es and the Phoenix BTA. In response to OET's February 18,
1997, notice announcing a filing period for comments on
QUALCOMM's preference application, see Public Notice DA
97-351, 12 F.C.C.R. 2364 (1997), PrimeCo and Sprint submit-
ted comments on March 20, 1997, recommending that, assum-
ing the FCC found that QUALCOMM was entitled to a
preference, it award QUALCOMM a license for alternative
spectrum.3 QUALCOMM in its comments stated that under
Freeman Engineering, it was entitled to be treated in the
same manner as Omnipoint and, thus, to have its preference
granted.
__________
47 U.S.C. s 402(h).
3 QUALCOMM objected to reopening the proceeding on the
grounds that (1) three years had passed since the FCC denied
QUALCOMM's preference, (2) the court's vacation and remand
were narrow, requiring no further factual development, and (3) the
FCC's obligation under s 402(h) did not contemplate reopening the
proceeding. The FCC nonetheless reopened the proceeding and
made Sprint and PrimeCo parties. See QUALCOMM Inc., Request
for Pioneer's Preference, Public Notice DA 97-423, 12 F.C.C.R.
2417 (1997).
On April 15, 1997, OET advised QUALCOMM that it was
"actively working" on the remand and that FCC "action
c[ould] be anticipated 'by summer.' "4 On May 27, 1998,
QUALCOMM wrote directly to the Chairman of the FCC
that it "should grant QUALCOMM's preference application
promptly, with the understanding that" while "the substantive
decision is foreordained by the record, ... we recognize that
implementation of the decision has certain practical ramifica-
tions," and that "QUALCOMM is willing to discuss substitu-
tion of presently unlicenced service areas of comparable
significance [to the MTA in South Florida]."
On September 11, 1997, the FCC dismissed all pending
pioneer's preference applications, including QUALCOMM's,
on the ground that the Balanced Budget Act of 1997 with-
drew the FCC's authority to grant any preferences. See
Dismissal of All Pending Pioneer's Preference Requests, 12
F.C.C.R. 14006, 14007 (1997) ("Dismissal Order"). As to
QUALCOMM, the FCC noted that although the court had
vacated the denial of QUALCOMM's preference request and
"remanded to the Commission for further consideration ...
[it] no longer ha[d] authority to act on it." Id. at 14008 n.10.
The court denied QUALCOMM's motion to enforce the
mandate in Freeman Engineering for lack of exhaustion
because its petition for reconsideration was pending before
the FCC. See Freeman Eng'g Assocs. v. FCC, No. 94-1779
(D.C. Cir. Nov. 5, 1997). Having been denied reconsidera-
tion, see Dismissal of All Pending Pioneer's Preference Re-
quests, 13 F.C.C.R. 11485 (1998) ("Reconsideration Order"),
QUALCOMM now appeals the FCC's Dismissal and Recon-
sideration Orders of September 11, 1997, and April 23, 1998,
respectively.
__________
4 QUALCOMM had requested a meeting with OET after read-
ing a quote in the April 7 issue of Wireless World from an FCC
staff member that resolution of the matter could take "a year or
two." See Letter from Richard M. Smith, Chief of OET, to
Veronica M. Ahern, Counsel for QUALCOMM (Apr. 15, 1997).
II.
Under Chevron, the court must first determine "whether
Congress has directly spoken to the precise question at
issue." Chevron, U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837, 842 (1984). "If the intent of
Congress is clear, that is the end of the matter; for the court,
as well as the agency, must give effect to the unambiguously
expressed intent of Congress." Id. at 842-43. There is no
dispute here that the Budget Act of 1997 terminated the
FCC's authority, effective August 5, 1997, to grant pioneer's
preferences. Because the statute is silent, however, with
respect to QUALCOMM's situation, the question is whether
the FCC properly interpreted the sunset provision to apply to
QUALCOMM's application; in other words, the question is
whether Congress intended its withdrawal of the FCC's
authority to grant pioneer's preferences to foreclose the FCC
from carrying out the mandate of a final judicial decision.
See id. at 843.
Rejecting QUALCOMM's contentions of entitlement aris-
ing from the court's mandate, the FCC maintains that its
interpretation of the sunset provision is entitled to deference
under Chevron, id. at 842-45 (1984), because Congress unam-
biguously intended to extinguish the FCC's authority to grant
pioneer's preferences after August 5, 1997. In the FCC's
view, QUALCOMM's application was no different from the
other pending applications inasmuch as the court in Freeman
Engineering had "simply directed the FCC to reconsider
whether QUALCOMM was entitled to the same sort of
pioneer's preference that Omnipoint received--an opportunity
to obtain a broadband PCS license without having to face
competing applications" and it was "required ... only to
consider whether QUALCOMM was entitled to the pioneer's
preference for which it applied." Respondents' Brief at 24,
26.
Although a court will generally defer to an agency's reason-
able interpretation of a statute, the effect of such deference
here would be to make retroactive a statute that does not
expressly call for it, see Landgraf v. USI Film Prod., Inc.,
511 U.S. 244 (1994), and to pose a constitutional question of
whether Congress could change the result of a final judicial
decision, see Plaut v. Spendthrift Farm, Inc., 514 U.S. 211,
240 (1995). While we agree with the FCC that the sunset
provision extinguished its authority to grant preferences, we
disagree that it applied to QUALCOMM's application. The
mandate in Freeman Engineering provided the FCC with the
authority it required to carry out the court's instruction to
"remedy this inconsistency" by granting QUALCOMM a
pioneer's preference and awarding a license for a suitable
spectrum. The court had subject matter jurisdiction and
ordered a remedy that was within its discretion. We hold,
therefore, that the sunset provision did not extinguish
QUALCOMM's entitlement to a preference, much less the
FCC's authority and duty to provide a remedy for
QUALCOMM under the mandate in Freeman Engineering.
Accordingly, we grant QUALCOMM's petition and remand
for the FCC "forthwith" to grant QUALCOMM a pioneer's
preference and to identify and award an appropriate license
to it, commensurate with the spectrum it had requested in its
application.
A.
The only plausible reading of Freeman Engineering re-
quired the FCC to grant QUALCOMM a pioneer's preference
under either of two theories. First, the FCC could abandon
the "newly developed" and "questionable" interpretation of its
pioneer's preference rules that it had applied to
QUALCOMM and award QUALCOMM a preference under
the same interpretation of the rules that permitted the award
of a preference to Omnipoint. Freeman Eng'g, 103 F.3d at
180. Second, the FCC could adhere to its newly developed
interpretation, but it still had to award QUALCOMM a
preference "to remedy th[e] inconsistency" in its treatment of
two similarly situated applicants, QUALCOMM and Omni-
point. Id. As the FCC made clear in its brief in Freeman
Engineering, Congress had precluded reconsideration of the
awards to the three original preference recipients, including
Omnipoint. See 47 U.S.C. s 309(j)(13)(E)(i); Respondents'
Brief in Freeman Engineering at 18, 54 n.59.
Contrary to its apparent assumption, the FCC had no
discretion on remand to reevaluate QUALCOMM's applica-
tion; it had previously ruled, explaining its reasons for deny-
ing QUALCOMM a pioneer's preference, and it had reaffirm-
ed its ruling and reasoning on reconsideration. The court
nonetheless agreed with QUALCOMM's claim of discrimina-
tory treatment and on remand did not accord to the FCC
another bite at the explanation apple. In Freeman Engineer-
ing, the FCC did not raise the possibility of further evalua-
tion on remand in its brief on appeal. Nor did the FCC have
discretion on remand to show that there was no inconsistency
because Omnipoint satisfied the pioneer's preference rules as
newly interpreted and applied to QUALCOMM; this argu-
ment was raised and rejected in Freeman Engineering, 103
F.3d at 180. Although the FCC did maintain that if
QUALCOMM and Omnipoint were similarly situated, then
the FCC would have been required to deny both applications,
see Respondents' Brief in Freeman Engineering at 54, nei-
ther the FCC nor QUALCOMM claimed that Omnipoint was
not entitled to a pioneer's preference under the FCC's rules.
See id.; Petitioners' Reply Brief at 23.
The FCC's sole discretion on remand, therefore, was to
fashion an appropriate remedy for QUALCOMM in view of
the fact that the Miami-Fort Lauderdale MTA sought by
QUALCOMM had been awarded as a result of an auction to
Sprint. QUALCOMM and the intervenors argued on re-
mand, and the FCC did not claim to the contrary, that the
FCC had authority to grant QUALCOMM alternative relief.
QUALCOMM repeatedly indicated its willingness to accept
relief comparable to the original license sought in its prefer-
ence application, suggesting several specific alternatives. Ac-
cording to the FCC at oral argument, this could have been
technically achieved by allowing QUALCOMM to amend its
application, and at that point, the FCC could have awarded
the pioneer's preference. Even if the identification of an
appropriate alternative spectrum could not be accomplished
"forthwith"--a claim the FCC does not make--
QUALCOMM's May 1997 letter to the FCC chairman made
clear that the grant of a pioneer's preference and the grant of
a license were not inseparable: the FCC could formally grant
QUALCOMM a pioneer's preference based on the work
identified in its preference application and award a license for
a specific spectrum at a later time. Indeed, to the extent that
the FCC did not dispute QUALCOMM's recitation of its
January 31, 1997 meeting, the FCC initially appeared to be
proceeding on remand to craft a remedy, but somehow be-
came diverted when, contrary to s 402(h), it reopened the
proceedings, over QUALCOMM's objection, issuing a public
notice for comment and joining the intervenors as parties.
The FCC's contention that the mandate in Freeman Engi-
neering was not to grant QUALCOMM a pioneer's prefer-
ence per se because the language of the court's opinion was
rather vague, remanding for "further proceedings," which the
FCC has now interpreted to give it greater remedial discre-
tion, reveals its misunderstanding of the mandate. The FCC
chooses to focus on only the first part of the court's express
and pointed instruction to the FCC in Freeman Engineering.
The court did not remand generally for "further proceed-
ings," but rather for "further proceedings to remedy this
inconsistency." Freeman Eng'g, 103 F.3d at 180. By noting
the similarities between QUALCOMM's and Omnipoint's ap-
plications, and the FCC's unpersuasive attempts to distin-
guish them during administrative proceedings and on appeal,
the court made clear that it was not remanding for a better
explanation from the FCC of its denial of QUALCOMM's
application, but rather had rejected the FCC's explanations
and instead ordered concrete relief for QUALCOMM. In
addition, the FCC chooses to ignore the effect of its own brief
in Freeman Engineering, which had pointed out that
QUALCOMM's application could not be granted for the origi-
nal license that it sought because that license had been
awarded in auction. See Respondents' Brief in Freeman
Engineering at 20. Hence, the court recognized that alterna-
tive relief remained to be identified and that a remand for
"further proceedings" for that purpose was required. While
all of this appears rather clear from the court's opinion, the
FCC has chosen to ignore both the instructions of the court
and the requirements of s 402(h).
In short, the FCC misinterpreted the mandate in Freeman
Engineering to assign it more than a ministerial role with
regard to the grant of a pioneer's preference to
QUALCOMM. The remand in Freeman Engineering was
not simply "for further proceedings," but to afford
QUALCOMM a remedy in view of the FCC's inconsistent
treatment of it, and that remedy--given the statutory con-
text--meant that QUALCOMM was entitled to a pioneer's
preference. Although the court might have been more explic-
it, its instruction to the FCC to "remedy this inconsistency"
was unusual language and clear in the context of a complex
administrative appeal in which QUALCOMM alone, out of
many petitioners, prevailed and where Congress had barred
the FCC from rescinding Omnipoint's preference.
B.
Had the FCC acted "forthwith" in accordance with the
Freeman Engineering mandate, QUALCOMM would have
been granted its pioneer's preference before Congress ad-
vanced the sunset date in the 1997 Budget Act. By extending
the remand proceeding, however, the FCC created a need to
interpret the new sunset provision, which it read to relieve
itself of the duty to carry out the mandate issued more than
four months previously. This interpretation of Congress'
withdrawal of the FCC's authority to award new pioneer's
preferences is flawed for several reasons.
First, the statute is silent on whether it applies retroactive-
ly to divest QUALCOMM of the fruits of its victory in court.
QUALCOMM's application was different than other pending
applications before the FCC. For the other numerous pend-
ing applications, of course, the mere filing of a license applica-
tion did not give the applicant a vested right to consideration
under then-prevailing standards, see Hispanic Info. & Tele-
comm. Network v. FCC, 865 F.2d 1289, 1294-95 (D.C. Cir.
1989), and the FCC retained discretion to change the stan-
dards during the course of proceedings. See Melcher v. FCC,
134 F.3d 1143, 1164 (D.C. Cir. 1998); Chadmoore Communi-
cations, Inc. v. FCC, 113 F.3d 235, 241 (D.C. Cir. 1997).
QUALCOMM, however, had prevailed on appeal and obtained
an express judicial instruction to the FCC that was more than
a mere opportunity for the FCC to reevaluate its application.
To view the relief that QUALCOMM had obtained in Free-
man Engineering as extinguished by a later-enacted sunset
provision would contravene Supreme Court doctrine govern-
ing interpretation of potentially retroactive statutes. As
Landgraf and similar authority make clear, absent an express
statement that a statute will apply to events preceding its
enactment, it may not be interpreted to impair rights a party
possessed when Congress acted. See Landgraf, 511 U.S. at
280; see also Martin v. Hadix, No. 98-262, 1999 WL 401324
(S. Ct. June 21, 1999); Lindh v. Murphy, 521 U.S. 320, 324-
26 (1997). Congress gave no such express command in either
the 1994 or 1997 sunset provisions. Consequently, because
QUALCOMM's preference application was not simply a pend-
ing application as to which no vested entitlement had at-
tached, the FCC could not properly interpret the sunset
provision to extinguish QUALCOMM's entitlement to a pref-
erence under Freeman Engineering.
Second, the FCC mistakenly conflated the sunset of its
authority to issue new pioneer's preferences and its continu-
ing obligation under the mandate in Freeman Engineering to
"remedy this inconsistency." In the FCC's view, until it
acted to grant QUALCOMM a pioneer's preference on re-
mand, QUALCOMM had no right to one, and once Congress
eliminated the FCC's authority to grant such preferences, the
FCC was without authority to act in accordance with the
mandate of this court. This position overlooks the fact that
Congress amended the Communications Act to add subsection
(h) to s 402 so that the court would remain in control of the
remand and the FCC could not deprive a victor in the courts
of the spoils of its victory. See S. Rep. No. 82-44, at 12
(1951); Greater Boston Television Corp. v. FCC, 463 F.2d
268, 281-82 (D.C. Cir. 1971). As explained in the Senate
Report, subsection (h) was "intended to confer upon the
appellate court a measure of control commensurate with the
dignity and responsibility of that tribunal." S. Rep. No.
82-44, at 12 (1951). In Greater Boston Television Corpora-
tion, the court viewed subsection (h) as designed to "ensure
deference to the court's intention in its disposition...." 463
F.2d at 281-82. Accordingly, on remand, the FCC had "the
duty" to give immediate and effective relief to QUALCOMM
consistent with Freeman Engineering. Id. at 282.
The FCC's contrary interpretation ignores settled law that
the mandate of a court issuing a final judgment carries force
beyond a victory in that immediate court. The "action[s] of a
court in setting aside the order of the Commission [are not]
an empty gesture," but rather a judgment that is the "final
and indisputable basis of action as between the Commission
and the defendant." FPC v. Pacific Power & Light Co., 307
U.S. 156, 160 (1939) (internal quotation omitted); see also
International Union of Mine, Mill & Smelter Workers v.
Eagle-Picher Mining & Smelting Co., 325 U.S. 335, 340-41
(1945). Thus, the court's mandate obliged the FCC to award
QUALCOMM a pioneer's preference with such spectrum
adjustment as was necessitated by the GATT provision bar-
ring the reconsideration or withdrawal of granted prefer-
ences, see 47 U.S.C. s 309(j)(13)(E)(i), and the award of the
original spectrum sought by QUALCOMM to another entity.
Cf. Mefford v. Gardner, 383 F.2d 748, 758 (6th Cir. 1967).
The fact that Congress in the interim extinguished the FCC's
authority to award pioneer's preferences is of no consequence
because s 402(h) provided the FCC with an independent
source of authority to implement the mandate of a court
acting within its jurisdiction and ordering a remedy within its
discretion.
Third, the FCC's interpretation of the sunset provision
raises constitutional concerns under Plaut v. Spendthrift
Farm, warranting application of the canon of constitutional
doubt, which states that ambiguous statutes should not be
read to raise a serious constitutional question when a reason-
able and clearly constitutional alternative is available. See,
e.g., Jones v. United States, 119 S. Ct. 1215, 1222 (1999). In
Plaut, the Supreme Court surveyed the legal history underly-
ing the now settled proposition that a final judgment of a
court cannot be undone by congressional legislation as to the
parties before the court. 514 U.S. at 219-225.5 Distinguish-
ing the rule that changes in statutory law occurring during
the pendency of litigation generally must be applied to that
litigation, see United States v. Schooner Peggy, 5 U.S. (1
Cranch) 103, 110 (1801), the Supreme Court instructed in
Plaut that the separation of powers doctrine embedded in the
Constitution protects the final judgment of Article III courts
from legislative interference.6 Plaut, 514 U.S. at 226. Start-
ing from the premise that Article III establishes a "judicial
__________
5 Plaut concerned Congress' extension of the statute of limita-
tions in civil actions to enforce the federal securities laws. In 1987,
Plaut filed a securities fraud action seeking damages for alleged
violations in 1983 and 1984. See Plaut, 514 U.S. at 213. While the
lawsuit was pending, however, the Supreme Court held in Lampf,
Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350
(1991), that such actions had to be commenced within one year after
the discovery of the facts constituting the violation and within three
years after the violation. See id. at 364. Applying Lampf, the
district court in 1991 dismissed Plaut's complaint with prejudice as
untimely filed; the judgment became final 30 days later. Respond-
ing to Lampf, and after the dismissal order in Plaut become final,
Congress enacted a statute purporting to reinstate the lawsuits
dismissed by reason of Lampf that would have been timely under
the prior limitations period. See Plaut, 514 U.S. at 214. Because
the dismissal of Plaut's complaint had become final before a new
statute that would have precluded dismissal went into effect, the
Court held that Congress had exceeded its authority. See id. at
217-18.
6 Thomas v. Network Solutions, 176 F.3d 500, 506 n.9 (D.C.
Cir. 1999), does not suggest anything to the contrary. The judg-
ment of the district court in that case was pending on appeal and
therefore not final when Congress enacted the statute at issue.
department" with the "province and duty ... to say what the
law is," Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177
(1803), the Court concluded that the historical record "shows
that the Framers crafted this charter of the judicial depart-
ment with an expressed understanding that it gives the
Federal Judiciary the power, not merely to rule on cases, but
to decide them, subject to review only by" superior Article III
courts. Plaut, 514 U.S. at 218-19; see The Federalist No.
81, at 545 (Alexander Hamilton) (J. Cooke ed. 1961). By
passing retroactive legislation affecting a case already finally
adjudicated, Congress had circumvented the fundamental
principle that the judicial power includes the authority to
render dispositive judgments, and had thus violated the prin-
ciple of separation of powers. See Plaut, 514 U.S. at 219.7
The fact that the sunset provision, unlike the statute invali-
dated in Plaut, was not by its terms directed specifically at a
particular disfavored judicial decision is irrelevant; the Su-
preme Court explained in Plaut that Congress' use of more
generally applicable terms does not alter the separation of
powers analysis. See 514 U.S. at 228. The sunset of the
FCC's preference authority did nothing to deprive the FCC
of the intellectual, staffing, or resource capability to take
__________
7 A final judgment for purposes of separation of powers does
not include all forms of judgment by the courts. As stated in Plaut,
a judgment at law is generally immune to subsequent legislative
changes, and an attempt by Congress to alter the legal judgment of
a court implicates separation of powers principles. A judgment
providing prospective equitable relief, however, remains vulnerable
to subsequent legislative action that accordingly would not raise the
same separation of powers concerns. See Plaut, 514 U.S. at 232;
Pennsylvania v. Wheeling & Belmont Bridge Co., 59 U.S. (18 How.)
421, 431 (1855); see also System Fed'n No. 91 v. Wright, 364 U.S.
642, 649-52 (1961); BellSouth Corp. v. FCC, 162 F.3d 678, 692-93
(D.C. Cir. 1998). The mandate in Freeman Engineering to remedy
the FCC's prior inconsistent treatment of QUALCOMM and Omni-
point, and thereby grant QUALCOMM a pioneer's preference, was
a final judgment entitling QUALCOMM to a preference, not a
judgment with prospective effects subject to evolving conduct or
conditions.
appropriate action in QUALCOMM's favor. Nor does the
FCC suggest a lack of capability. Pursuant to the remand in
Freeman Engineering, then, despite intervening congression-
al action taking away its own authority, the FCC was obligat-
ed to act pursuant to the authority of the court. Had
Congress expressly commanded what the FCC contends it
meant by its silence, the court would be forced to decide
whether Congress acted constitutionally in light of Plaut.
However, the sunset provision can reasonably be read not to
bar relief for QUALCOMM, and it should be so read to avoid
imputing to Congress the rare8 intent to undo a final judicial
mandate and the constitutional questions that such an intent
would raise.9
__________
8 Until Plaut, the Supreme Court was unaware of any "instance
in which Congress has attempted to set aside the final judgment of
an Article III court by retroactive legislation." Plaut, 514 U.S. at
230. In light of this historical pattern, and as with retroactive
legislation generally, see Landgraf, 511 U.S. at 277-80, the court
will not read a statute retroactively to alter a final judgement
absent an express statement of intent.
9 Saco River Cellular, Inc. v. FCC, 133 F.3d 25 (D.C. Cir. 1998),
is not to the contrary. In that case, the mandate called for a
remand to afford the FCC an opportunity to provide a better
explanation for its waiver of a financial reporting requirement. See
Northeast Cellular Tel. Co. v. FCC, 897 F.2d 1164, 1167 (D.C. Cir.
1990). Hence, the FCC's subsequent decision to award a license to
a different applicant stemmed from its own reconsideration of the
case rather than a judicial order compelling a specific result. The
direction to "remedy this inconsistency" in Freeman Engineering is
not comparable; it afforded the FCC no opportunity to develop
better reasons for denying QUALCOMM's application, much less to
reevaluate QUALCOMM's application. Rather, the court's instruc-
tion was clear from context: both Omnipoint and QUALCOMM had
sought preferences on the basis of technological modifications on
which work had commenced before the FCC had promulgated its
pioneer's preference rules. Yet the FCC had denied QUALCOMM
a preference on this basis while granting Omnipoint a preference,
and Congress had barred the FCC from rescinding Omnipoint's
preference. While the court afforded the FCC the opportunity to
reevaluate its interpretation of its rules--either to abandon its
Fourth, the legislative history is consistent with our inter-
pretation of the sunset provision inasmuch as Congress
sought to protect settled expectations. When Congress in
1994 set the date for withdrawal of the FCC's authority to
grant new pioneer's preferences, its focus was on increasing
federal revenues and not upsetting settled expectations. It
imposed a new requirement that pioneers pay for part of the
value of the spectrum they received, and it added a sunset
provision ending the FCC's authority to grant pioneer's pref-
erences. Significantly for our purposes, Congress also direct-
ed the FCC not to reconsider the pioneer's preference grants
that it had approved in the Third Report and Order and not
to delay by more than 15 days the issuance of licenses based
on such grants; it also prohibited any further administrative
or judicial review of the preferences that had already been
granted. See 47 U.S.C. s 309(j)(13)(E))(i). In so doing,
Congress made clear its intent not to undo the settled expec-
tations of APC, Cox, and Omnipoint based on final agency
action granting their pioneer's preferences. There is nothing
in the legislative history to suggest that Congress neverthe-
less intended to interfere with settled expectations derived
from a final judicial mandate directing agency action. The
House Report expressly stated that the provision finalizing
the grants in the Third Report and Order was not intended to
"affect the rights of persons who have been denied a pioneer's
preference," such as QUALCOMM; those persons could still
pursue further administrative and judicial review of the denial
of their applications. H.R. Rep. No. 103-826, pt. 2, at 8
(1994). So too, nothing suggests that when Congress ad-
vanced the sunset date in 1997, it intended to upset settled
expectations much less undo the vested rights of an applicant
that had already obtained an entitlement to a pioneer's pref-
__________
"newly developed" and "questionable" interpretation of its prefer-
ence rules that it applied only to QUALCOMM or retain that
interpretation--it required in any event that the FCC grant
QUALCOMM a preference. No such relief was obtained by the
prevailing party in Saco River.
erence under a judicial mandate with which the FCC was
obliged to comply under s 402(h).
Accordingly, we grant QUALCOMM's petition and remand
to the FCC "forthwith" to grant a pioneer's preference to
QUALCOMM and to take prompt action to identify a suitable
spectrum and award QUALCOMM the license for it.