United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 5, 2001 Decided July 6, 2001
No. 99-1009
Building Owners and Managers Association
International, et al.,
Petitioners
v.
Federal Communications Commission and
United States of America,
Respondents
Satellite Broadcasting and Communications
Association, et al.,
Intervenors
Consolidated with
No. 99-1021
On Petitions for Review of an Order of the
Federal Communications Commission
---------
Matthew C. Ames argued the cause for petitioners. With
him on the brief were William Malone and Nicholas P.
Miller.
Gregory M. Christopher, Counsel, Federal Communications
Commission, argued the cause for respondents. With him on
the brief were Christopher J. Wright, General Counsel, Dan-
iel M. Armstrong, Associate General Counsel, A. Douglas
Melamed, Acting Assistant Attorney General, United States
Department of Justice, Robert B. Nicholson and Robert J.
Wiggers, Attorneys. John E. Ingle, Deputy Associate Gener-
al Counsel, Federal Communications Commission, Catherine
G. O'Sullivan and Nancy C. Garrison, Attorneys, United
States Department of Justice, entered appearances.
Richard P. Bress argued the cause for intervenors, DI-
RECTV, Inc., et al. With him on the brief were James H.
Barker, Margaret L. Tobey, Joan E. Neal, Cristina Chou
Pauze, Timothy R. Graham, Joseph M. Sandri, Jr., Barry J.
Ohlson, David Alan Nall, Jonathan Jacob Nadler and Benig-
no E. Bartolome, Jr. Philip L. Verveer and Theodore C.
Whitehouse entered appearances.
Before: Randolph, Rogers and Garland, Circuit Judges.
Opinion for the Court filed by Circuit Judge Rogers.
Concurring opinion filed by Circuit Judge Randolph.
Rogers, Circuit Judge: Following enactment of the Tele-
communications Act of 1996, the Federal Communications
Commission promulgated a rule prohibiting restrictions on
certain over-the-air reception devices ("OTARD"). The rule
invalidated
[a]ny restriction, including but not limited to any state or
local law or regulation, including zoning, land-use or build-
ing regulation, or any private covenant, homeowners' asso-
ciation rule or similar restriction on property within the
exclusive use or control of the antenna user where the user
has a direct or indirect ownership interest in the property
that impairs the installation, maintenance, or use of [anten-
nas that are designed to receive direct broadcast satellite
service, video programming services via multipoint distribu-
tion services, or television broadcast signals]....
Preemption of Local Zoning Regulation of Satellite Earth
Stations, Implementation of Section 207 of the Telecommuni-
cations Act of 1996: Restrictions on Over-the-Air Reception
Devices: Television Broadcast Service and Multichannel
Multipoint Distribution Service, 11 F.C.C.R. 19276 (1996)
("First OTARD Order"). In 1998, the Commission extended
the prohibition, with certain exceptions, to "lease provision[s]
... where the [antenna] user has a ... leasehold interest in
the property." In the Matter of Implementation of Section
207 of the Telecommunications Act of 1996--Restrictions on
Over-the-Air Reception Devices: Television Broadcast, Mul-
tichannel Multipoint Distribution and Direct Broadcast Sat-
ellite Services, 13 F.C.C.R. 23874 (1998) ("Second OTARD
Order").
Several trade associations representing real estate owners
and property managers1 appeal the Second OTARD Order,
contending that the rule, as amended, is invalid on its face.
They contend, first, that the Commission exceeded its statuto-
ry authority in extending the OTARD rule to leased property;
second, that the amended rule violates the Takings Clause of
the Fifth Amendment of the United States Constitution;2 and
third, if there is no taking, that the Commission acted arbi-
trarily and capriciously in extending the rule to leaseholds.
Finding unpersuasive these facial challenges to the amended
OTARD rule, we deny the petition.
__________
1 Petitioners are the Building Owners and Managers Associa-
tion International, the Institute of Real Estate Management, the
National Apartment Association, the American Seniors Housing
Association, the National Multi Housing Council, the National Asso-
ciation of Realtors, the Real Estate Roundtable, and the National
Association of Home Builders.
2 "[N]or shall private property be taken for public use, without
just compensation." U.S. Const. amend. V.
I.
In promulgating the OTARD rules, the Commission relied
on s 207 of the Telecommunications Act of 1996, Pub. L. No.
104-104, 110 Stat. 56 (the "1996 Act"), which provides:
Within 180 days after the date of enactment of this Act,
the Commission shall, pursuant to Section 303 of the
Communications Act of 1934, promulgate regulations to
prohibit restrictions that impair a viewer's ability to
receive video programming services through devices de-
signed for over-the-air reception of television broadcast
signals, multichannel multipoint distribution service, or
direct broadcast satellite services.
The 1996 Act also added a new subsection 303(v) to the
Communications Act of 1934, granting the Commission
exclusive jurisdiction to regulate the provision of direct-
to-home satellite services ... [T]he term "direct-to-home
satellite services" means the distribution or broadcasting
of programming or services by satellite directly to the
subscriber's premises without the use of ground receiv-
ing or distribution equipment . . . .
47 U.S.C. s 303(v). The 1996 Act left undisturbed the broad
statutory directives contained in the Communications Act of
1934, including the Commission's mandate to "make [commu-
nications services] available ... to all the people of the
United States," 47 U.S.C. s 151, and the Commission's au-
thority to "perform any and all acts, make such rules and
regulations, and issue such orders . . . as may be necessary in
the execution of its functions." Id. s 154(i).
As early as the 1980s, the Commission had begun restrict-
ing potential barriers to the development of satellite-based
residential video programming. See, e.g., Preemption of Lo-
cal Zoning or Other Regulation of Receive-Only Satellite
Earth Stations, 51 Fed. Reg. 5519 (1986). In direct response
to the directives in the 1996 Act, the Commission promulgat-
ed rules to safeguard viewers' ability to use devices designed
for direct broadcast satellite services, television broadcast
services, and multichannel multipoint distribution services
(collectively, "s 207 devices"). See, e.g., Preemption of Local
Zoning Regulation of Satellite Earth Stations, 11 F.C.C.R.
5809 (1996); Implementation of Section 207 of the Telecom-
munications Act of 1996: Restrictions on Over-the-Air Re-
ception Devices: Television Broadcast and Multichannel
Multipoint Distribution Service, Notice of Proposed Rule-
making, 11 F.C.C.R. 6357 (1996). The Commission adopted
its first rule implementing s 207 on August 5, 1996. See
First OTARD Order, 11 F.C.C.R. 19276 (1996). The first
OTARD rule provided:
Any restriction, including but not limited to any state or
local law or regulation, including zoning, land-use or
building regulation, or any private covenant, home-
owners' association rule or similar restriction on property
within the exclusive use or control of the antenna user
where the user has a direct or indirect ownership inter-
est in the property, that impairs the installation, mainte-
nance, or use of [a s 207 device] ... is prohibited....
47 C.F.R. s 1.4000 (1996). The prohibitions in the first
OTARD rule applied only to property in which the "user" of
satellite services (i.e., the "viewer" for purposes of s 207) had
an ownership interest. Despite its stated prohibition of "any"
restriction, the rule allowed for several exceptions: Restric-
tions on s 207 devices were permissible if they served a
"clearly defined safety objective" and were administered "in a
nondiscriminatory manner to other . . . devices . . . that [we]re
comparable in size, weight and appearance," or if they were
"necessary to preserve an historic district," and if the restric-
tions were no more burdensome than necessary. Id.
s 1.4000(b)(1)-(3).3 In addition, the OTARD rule permitted
waiver by the Commission upon the request of local govern-
ments or associations. See id. s 1.4000(c).
The first OTARD rule left unresolved whether the s 207
prohibition should apply to "property not within the exclusive
__________
3 In the Second OTARD Order, the Commission amended
s 1.4000(b)(2) to except "a prehistoric or historic district, site,
building, structure or object included in, or eligible for inclusion on,
the National Register of Historic Places...."
[use or] control of a person with an ownership interest," such
as common areas or rental properties. First OTARD Order,
11 F.C.C.R. at 19311; see also id. at 19314. On November
20, 1998, after notice and comment, the Commission expanded
the OTARD prohibition to include restrictions on s 207 re-
ception devices on rental property that is within the exclusive
use or control of the tenant who has a leasehold interest in
the property. See Second OTARD Order, 13 F.C.C.R. 23874
(1998). The amended OTARD rule provides in relevant part:
(a)(1) Any restriction, including but not limited to any
state or local law or regulation, including zoning, land-
use, or building regulations, or any private covenant,
contract provision, lease provision, homeowners' associa-
tion rule or similar restriction, on property within the
exclusive use or control of the antenna user where the
user has a direct or indirect ownership interest or lease-
hold interest in the property that impairs the installation,
maintenance, or use of [a s 207 device] ... is prohibit-
ed....
47 C.F.R. s 1.4000(a)(1) (1998) (new language italicized). Un-
der the amended OTARD rule, tenants are able, subject to
some restrictions, to install s 207 devices "wherever they rent
space outside of a building, such as balcony railings, patios,
yards, gardens, or any other similar area" and, in some
instances, inside rental units. Second OTARD Order, 13
F.C.C.R. at 23875.4 The Commission did not, however, ex-
tend the OTARD rule to the placement of antennas on
common property such as outside walls (where viewers may
have access but not possession and exclusive rights of use or
control) or restricted access areas such as rooftops (where
__________
4 For tenants who do not lease outside rental space, the Com-
mission noted that "our new rules permit the installation of Section
207 devices inside rental units and anticipate the development of
future technology that will create devices capable of receiving video
programming signals inside buildings." Second OTARD Order , 13
F.C.C.R. at 23875-76. The Commission noted that one such device
already permits inside receipt of signals. Id. at 23876.
viewers generally do not have access or possession). See id.
at 23893 p 35.
Following the Commission's denial of petitions for reconsid-
eration of the Second OTARD Order, petitioners filed this
appeal.
II.
Petitioners contend that the Commission exceeded its stat-
utory authority by extending the OTARD prohibition to
leased property. To determine whether the Commission
acted within its legally delegated authority in promulgating
the amended OTARD rule, the court employs the familiar
test outlined by the Supreme Court in Chevron U.S.A., Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837 (1984):
If, through the Communications Act, Congress has spoken
directly to the precise issue presented by petitioners, "that is
the end of the matter," and the court defers to the "unambig-
uously expressed intent of Congress." Chevron, 467 U.S. at
842-43. If, however, the Communications Act "is silent or
ambiguous with respect to the specific issue" at hand, the
Commission may exercise its reasonable discretion in constru-
ing the statute.5 Id. As petitioners contend--and as the
Commission implicitly concedes, see Second OTARD Order,
13 F.C.C.R. at 23880--the Communications Act does not
explicitly address the landlord-tenant relationship, nor does it
explicitly grant the Commission jurisdiction over the real
estate industry, an area that is normally outside the Commis-
sion's scope of authority. See, e.g., Illinois Citizens Comm.
for Broad. v. FCC, 467 F.2d 1397, 1400 (7th Cir. 1972).
Hence, the court's focus is on whether, in implementing
s 207, the Commission reasonably interpreted its statutory
authority. We look to the text of the Communications Act of
__________
5 The court properly applies Chevron analysis to the amended
OTARD rule because "Congress delegated authority to [the Com-
mission] generally to make rules carrying the force of law, and [the
OTARD rule] was promulgated in the exercise of that authority."
United States v. Mead Corp., 121 S. Ct. 2164, 2171 (2001); see also
infra Part II.
1934 and the Telecommunications Act of 1996, and to the
legislative history of s 207.
In enacting the Communications Act of 1934, Congress
intended "to confer upon the Commission sweeping authority
to regulate 'in a field of enterprise the dominant characteris-
tic of which was the rapid pace of its unfolding.' " Office of
Communication of the United Church of Christ v. F.C.C., 707
F.2d 1413, 1423 (D.C. Cir. 1983) (quoting National Broad. Co.
v. United States, 319 U.S. 190, 219 (1943)). In accordance
with this goal, the provisions of the Communications Act are
"explicitly applicable to 'all interstate and foreign communica-
tion by wire or radio,' " and the Commission, being the
"single Government agency with 'unified jurisdiction and reg-
ulatory power over all forms of ... communication,' " is
granted "broad authority" to execute its mandate. United
States v. Southwestern Cable Co., 392 U.S. 157, 167-68 (1968)
(quoting 47 U.S.C. s 152(a)) (footnotes omitted); see also
Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 700 (1984);
Metropolitan Council of NAACP Branches v. FCC, 46 F.3d
1154, 1162 (D.C. Cir. 1995); United Video, Inc. v. FCC, 890
F.2d 1173, 1182-83 (D.C. Cir. 1989); National Ass'n of Regu-
latory Utility Comm'rs v. FCC, 746 F.2d 1492, 1499, 1501
(D.C. Cir. 1984); Wold Communications, Inc. v. FCC, 735
F.2d 1465, 1474-76 (D.C. Cir. 1984). The Communications
Act thus directs the Commission to "perform any and all acts,
make such rules and regulations, and issue such orders . . . as
may be necessary in the execution of its functions." 47
U.S.C. s 154(i); see also id. s 303(r).
Congress continued in the 1996 Act to vest broad authority
in the Commission, granting the Commission "exclusive juris-
diction to regulate the provision of direct-to-home satellite
services," 47 U.S.C. s 303(r), and instructing the Commission
promptly to issue regulations to "prohibit restrictions" that
impede "viewer[s]" from using s 207 devices.6 Id. s 207.
Consistent with the broad language of other sections of the
__________
6 The parties' discussion of s 207 is not advanced by emphasis
on whether s 207 is properly labeled as a directive for the Commis-
sion to act pursuant to pre-existing authority, rather than as a
source of independent authority. Whether s 207 is viewed as new
authority or as a directive to act upon existing authority, s 207
Commission's enabling statute, Congress demonstrated no
intent to qualify the terms "viewer" and "restrictions": It did
not specify which types of "viewer[s]" were covered, or which
types of "restrictions" were permissible. Had Congress in-
tended to qualify these terms, it clearly would have done so,
especially in light of the courts' expansive reading of Con-
gress's previous delegations of authority to the Commission.
See generally Commissioner v. Keystone Consol. Indus., 508
U.S. 152, 159 (1993); Cannon v. University of Chicago, 441
U.S. 677, 696-99 (1979); Lorillard v. Pons, 434 U.S. 575, 580-
81 (1978); Sea-Land Service, Inc. v. Department of Transp.,
137 F.3d 640, 645-46 (D.C. Cir. 1998). Having "explicitly left
a gap for [the Commission] to fill," Congress delegated to the
Commission the authority to "elucidate [s 207] by regulation"
and to "address[ ] ambiguity in the statute," United States v.
Mead Corp., 121 S. Ct. 2164, 2171 (2001) (quoting Chevron,
467 U.S. at 843-44), and thus to preempt State enforcement
of lease provisions that place "restrictions on viewers who
wish to install, maintain, or use a [s ] 207 reception device
within their leasehold."7 Second OTARD Order, 13 F.C.C.R.
at 23877.
The legislative history of s 207 reinforces the conclusion
that Congress intended in s 207 to give the Commission a
__________
suffices as a statutory basis for the Second OTARD Order. More-
over, petitioners' belittling of the significance of s 207 on the
ground that, unlike other sections of the 1996 Act, s 207 is uncodi-
fied is misplaced; that the section was not codified in the United
States Code does not detract from s 207's legal authority. See
United States Bank of Oregon v. Independent Ins. Agents of
America, Inc., 508 U.S. 439, 448 (1993).
7 The Commission's statutory authority is, of course, subject to
limitations: It is "restricted to that reasonably ancillary to the
effective performance of [its] various responsibilities." Southwest-
ern Cable Co., 392 U.S. at 178. In light of Congress's explicit (and
exclusive) grant of jurisdiction to the Commission over direct-to-
home satellite services and its broad responsibility to make commu-
nications services available to all individuals, an OTARD rule that
safeguards all viewers' access to these services clearly falls within
this limitation.
very broad mandate. The House Committee Report on s 207
states that:
The Committee intends this section to preempt enforce-
ment of State or local statutes and regulations, or State
or local legal requirements, or restrictive covenants or
encumbrances that prevent the use of antennae designed
for off-the-air reception of television broadcast signals or
of satellite receivers designed for receipt of [direct
broadcast satellite] services. Existing regulations, in-
cluding but not limited to, zoning laws, ordinances, re-
strictive covenants or homeowners' association rules,
shall be unenforceable to the extent contrary to this
section.
H.R. Rep. No. 104-204 at 123-24 (1995). Petitioners read
this statement to reflect Congress's intent to prohibit only
restrictions affecting property owners, such as zoning restric-
tions, covenants, and homeowners' association restrictions,
thereby restoring those individuals' property rights. An
equally plausible reading of the House Report--and one
consistent with the broad authority reflected in the Commis-
sion's statutory mandate--would indicate Congress's intent to
invalidate various types of private contracts under State law,
such as homeowners' association contracts and lease agree-
ments, that might interfere with a viewer's ability to receive
certain types of satellite broadcasting signals.
Petitioners' essential claim is that however broad the Com-
mission's mandate, it may only exercise its authority over
"communications and persons . . . engaged in communica-
tions." 47 U.S.C. s 152(a). This, petitioners contend, does
not include either the real estate industry or the landlord-
tenant relationship, which is a legal allocation of property
rights governed by State law. Petitioners rely on cases in
which courts have denied the Commission the authority "to
determine the validity of contracts between [Commission]
licensees and others," Regents of the Univ. Sys. of Georgia v.
Carroll, 338 U.S. 586, 602 (1950), or to regulate any and all
activities that "substantially affect communications." Illinois
Citizens Comm. for Broad., 467 F.2d at 1400; see also Radio
Station WOW v. Johnson, 326 U.S. 120, 131-32 (1945);
Southwestern Bell Tel. Co. v. FCC, 19 F.3d 1475, 1484 (D.C.
Cir. 1994). In contrast to those cases, however, the issue
here is not the extent to which a ruling by the Commission
affects areas that are tangential to the Commission's jurisdic-
tion, such as the height and location of a building. See, e.g.,
Illinois Citizens Comm. for Broad., 467 F.2d at 1400. Con-
gress has expressly vested the Commission with exclusive
jurisdiction and authority to ensure that all viewers may
access direct-to-home satellite services. See 47 U.S.C.
s 303(v); 1996 Act, Pub. L. No. 104-104, s 207, 110 Stat. 56.
Where the Commission has been instructed by Congress to
prohibit restrictions on the provision of a regulated means of
communication, it may assert jurisdiction over a party that
directly furnishes those restrictions, and, in so doing, the
Commission may alter property rights created under State
law. See Louisiana Pub. Serv. Comm'n v. FCC, 476 U.S.
355, 368-69 (1986); Fidelity Fed. Savings and Loan Ass'n v.
De la Cuesta, 458 U.S. 141, 153-54 (1982); Capital Cities
Cable, 467 U.S. at 698-700; New York State Comm'n on
Cable Television v. FCC, 749 F.2d 804, 807-08 (D.C. Cir.
1984).8
For these reasons, we hold that the Commission could
reasonably construe s 207 to apply to all "viewer[s]," includ-
ing tenants, and to obligate the Commission to prohibit "[a]ny
restriction," including lease provisions, "that impairs the in-
stallation, maintenance, or use of [a s 207 device]." 47
C.F.R. s 1.4000. It follows that the court properly defers to
the Commission's interpretation of its statutory authority.
See Mead Corp., 121 S. Ct. at 2171-73; Chemical Mfrs. Ass'n
v. Natural Resources Defense Council, Inc., 470 U.S. 116, 125
(1985); see also United States v. Riverside Bayview Homes,
Inc., 474 U.S. 121, 131 (1985).
III.
Possibly foreseeing their fate under Chevron, petitioners
contend that our analysis of the amended OTARD rule
__________
8 Petitioners do not rely on s 152(b) as a jurisdictional limita-
tion on the Commission's authority to promulgate the amended
OTARD rule. See Louisiana Pub. Serv. Comm'n., 476 U.S. at 369.
should be guided not by Chevron, but rather by the princi-
ples set forth in Bell Atlantic Telephone Companies v. FCC,
24 F.3d 1441 (D.C. Cir. 1994). In Bell Atlantic, the court
declined to apply Chevron deference to a Commission order
requiring the physical collocation of competitive access pro-
viders to the central offices of local telephone exchange
companies. Faced with a similar statutory silence on the
precise issue at hand, see id. at 1445, the court adopted a
"narrowing construction" of the Communications Act9 be-
cause the Commission's interpretation created an "identifi-
able class" of applications that would "necessarily constitute a
taking." Id. at 1445-46 (quoting Riverside Bayview Homes,
474 U.S. at 128 n.5). Petitioners contend that, as in Bell
Atlantic, the Commission's interpretation of s 207 and of its
authority under the Communications Act creates such an
"identifiable class" and is therefore impermissible. Consis-
tent with Supreme Court instruction, we disagree.
The first obstacle to petitioners' takings claim arises from
their effort to classify the amended OTARD prohibition as a
per se taking under Loretto v. Teleprompter Manhattan
CATV Corp., 458 U.S. 419 (1982). In Loretto, the Supreme
Court held that a "physical intrusion by government [is] a
property restriction of an unusually serious character for
purposes of the Takings Clause." Id. at 426 (internal quota-
tions omitted). The Court further held that "when the physi-
cal intrusion reaches the extreme form of a permanent physi-
cal occupation, a [per se] taking has occurred." Id. Thus, in
Loretto, the Supreme Court invalidated a New York statute
authorizing a cable television company to place cable equip-
ment onto a private property owner's building on the grounds
that the statute constituted a per se taking. Id. at 438-39.
Petitioners contend that a tenant's unauthorized use of the
property, by installing a s 207 device against the express
wishes of the landlord, is an invasion of the property rights
that the landlord has chosen to retain in the leased property
__________
9 At issue in Bell Atlantic was the authority of the Commission,
pursuant to 47 U.S.C. s 201(a), to order carriers "to establish
physical connections with other carriers."
and therefore amounts to a per se taking. Petitioners further
contend that the amended OTARD rule constitutes a per se
taking under Loretto because it enlarges the tenant's rights
beyond the contractual provisions of the lease, thereby strip-
ping landowners of property rights that they rightfully re-
served, and constitutes a taking of the property owner's right
to exclude. None of these contentions suffices to characterize
the amended OTARD rule as a per se taking.
First, petitioners fail to acknowledge a key factor that
places the amended OTARD rule outside the scope of Loretto:
consent to the occupation of the property. The Loretto court
emphasized that the per se taking rule is "very narrow" and
applies only to regulations that "require the landlord to suffer
the physical intrusion of his building by a third party." Id. at
440-41 (emphasis added). Unlike the building owner in Lor-
etto, whose premises were occupied without her consent, the
landlord subject to the amended OTARD rule has ceded
control of his or her property to a tenant with whom the
landlord has a contractual relationship. Thus, no "third
party" stranger to the property is involved. While petition-
ers would label a tenant a "third party" intruder if the tenant
uses the premises in a way that is prohibited by the lease, the
Supreme Court has rejected this characterization. Consensu-
al occupation of the property, as distinct from a "permanent
physical occupation," Loretto, 458 U.S. at 426, occurs once the
landlord voluntarily enters into a lease with the tenant. In
FCC v. Florida Power Corp., 480 U.S. 245 (1981), for exam-
ple, the Supreme Court upheld the Commission's authority
under the Pole Attachments Act, 47 U.S.C. s 224 (1991), to
regulate pole rental fees paid to an electric utility by various
cable television companies using the utility's poles.10 The
__________
10 The Court noted that the Pole Attachments Act was "enacted
by Congress as a solution to a perceived danger of anticompetitive
practices by utilities in connection with cable television service."
Florida Power, 480 U.S. at 247. Prior to that enactment, utility
companies had leased the space on their poles to cable operators,
who claimed that "the utility companies were exploiting their mo-
nopoly position by engaging in widespread overcharging...." Id.
The Commission states in its brief that petitioners are building
Court distinguished Loretto on the grounds that, unlike the
New York statute that allowed cable companies to access an
individual's property, the Pole Attachments Act did not au-
thorize third parties to access the utility poles, but merely
regulated the terms of the rental once cable companies and
the utilities agreed to the rental of the poles. "Required
acquiescence," the Court held, "is at the heart of the [Loretto]
concept of occupation." Id. at 252. It is thus "the invitation,
not the rent, that makes the difference. The line which
separates [landlord-tenant] cases from Loretto is the unam-
biguous distinction between a commercial lessee and an
interloper with a government license." Id. at 252-53 (empha-
sis added). As with the pole rentals in Florida Power, the
landlord affected by the amended OTARD rule will have
voluntarily ceded control of an interest in his or her property
to a tenant. Having ceded such possession of the property, a
landlord thereby submits to the Commission's rightful regula-
tion of a term of that occupation.11 See Florida Power, 480
U.S. at 252.
Second, petitioners ignore the extensive case law upholding
the government's authority to regulate various aspects of the
landlord-tenant relationship "without paying compensation for
__________
owners who seek to maintain bottleneck control over access to
rental buildings by cable and satellite master antenna operators of
the building owners' choosing. See Br. for Respondent at 11-12.
The court has no occasion to evaluate this statement.
11 Contrary to petitioners' contention, Gulf Power Co. v. United
States, 187 F.3d 1324 (11th Cir. 1999), does not imply a different
result. In Gulf Power, the Eleventh Circuit held that a 1996
amendment to the Pole Attachments Act, providing that utilities
must provide telecommunications carriers access to their utility
poles, ducts, conduits, and rights-of-way, effected a per se taking of
the utility's property. See id. at 1329; see also 47 U.S.C.
s 224(f)(1). The court concluded that the 1996 amendment "re-
quire[d] a utility to acquiesce to a permanent, physical occupation of
its property" by a third party. Id. at 1329. This element of
"required acquiescence," the court observed, distinguished the case
from Florida Power and brought the amended statute within the
scope of Loretto. Id. at 1329 (quoting Florida Power, 480 U.S. at
252).
all economic injuries that such regulation entails," Loretto,
458 U.S. at 440, even though some of these regulations
"transfer wealth from the one who is regulated to another."
Yee v. City of Escondido, 503 U.S. 519, 529 (1992). Although
a landlord's lease restrictions are enforceable property rights,
see United States v. General Motors, 323 U.S. 373, 380-82
(1945), governmental restrictions on the exercise of those
rights do not necessarily constitute a per se taking. For
example, "[w]hen a landowner decides to rent his land to
tenants, the government may place ceilings on the rents the
landowner can charge, or require the landowner to accept
tenants he does not like, without [creating a per se taking]."
Yee, 503 U.S. at 529 (citations omitted); see also PruneYard
Shopping Center v. Robins, 447 U.S. 74 (1980); Heart of
Atlanta Motel, Inc. v. United States, 379 U.S. 241, 258 (1964);
McAndrews v. Fleet Bank of Massachusetts, 989 F.2d 13 (1st
Cir. 1993). In light of this precedent, regulation of a single
aspect of the landlord-tenant relationship, enacted pursuant
to the manifest congressional objective of safeguarding view-
ers' access to direct-to-home satellite services, does not result
in a per se taking. See 47 U.S.C. ss 151, 303(v).
Third, the Supreme Court has rejected the contention that
regulation of the terms of a landlord-tenant relationship
constitutes on its face an invasion of the landlord's right to
exclude. See Yee, 503 U.S. at 527-28. In Yee, the Court held
that a rent control ordinance affecting the owners of a mobile
home park, even when considered in light of a State law
restricting the landlords' right of eviction, did not constitute a
taking of the landlords' right to exclude. See id. The Court
stated that "no government has required any physical inva-
sion of petitioners' property. Petitioners' tenants were invit-
ed by petitioners, not forced upon them by the government."
Id. at 528 (citing Florida Power, 480 U.S. at 252-53). Conse-
quently, "[w]hile the 'right to exclude' is doubtless ... 'one of
the most essential sticks in the bundle of rights that are
commonly characterized as property,' ... that right [was not]
taken from petitioners on the mere face of the [regulation]."
Id. (quoting Kaiser Aetna v. United States, 444 U.S. 164, 176
(1979)).
Because the amended OTARD rule does not amount to a
compelled physical invasion of property,12 and hence a per se
taking, petitioners' only potential takings claim is a regulatory
taking claim. That kind of claim requires "ad hoc, factual
inquiries," Penn Central Transp. Co. v. New York City, 438
U.S. 104, 124 (1978),13 and "entails complex factual assess-
ments of the purposes and economic effects of government
action." Yee, 503 U.S. at 523. Because of this context-
specific standard, the amended OTARD rule cannot be said to
create an "identifiable class" of applications that would "nec-
essarily constitute a [regulatory] taking." Bell Atlantic, 24
F.3d at 1445-46 (quoting Riverside Bayview Homes, 474 U.S.
at 128 n.5). For that reason, the Bell Atlantic approach to
statutory interpretation does not apply, and the Chevron
analysis of Part II does.
Petitioners' alternate claim that even if statutorily autho-
rized, the amended OTARD rule is nonetheless an unconstitu-
tional regulatory taking that must be set aside fails for two
independent reasons. First, "in general, '[e]quitable relief is
not available to enjoin an alleged taking of private property
for a public use, duly authorized by law, when a suit for
compensation can be brought against the sovereign subse-
quent to that taking.' " Riverside Bayview Homes, 474 U.S.
__________
12 In the Second OTARD Order, the Commission recognized
the limitations of its new mandate:
In [s] 207, Congress did not direct the Commission to impose
affirmative duties on other parties to install [s] 207 devices or
to grant access to restricted areas to permit the installation of
[s] 207 reception devices, and in particular, Congress did not
direct the Commission to require property owners to subject
property to a Fifth Amendment taking.
Second OTARD Order, 13 F.C.C.R. at 23877.
13 To determine whether a regulation constitutes a regulatory
taking, the court generally evaluates three factors: (1) "the econom-
ic impact of the regulation on the claimant"; (2) "the extent to
which the regulation has interfered with distinct investment-backed
expectations"; and (3) the "character of the governmental action."
Penn Central, 438 U.S. at 124.
at 127-28 (quoting Ruckelshaus v. Monsanto Co., 467 U.S.
986, 1016 (1984)); see also Bell Atlantic, 24 F.3d at 1445 n.1.
Second, because petitioners' regulatory taking claim depends
upon ad hoc, factual inquiries, it cannot satisfy the require-
ments for making the kind of facial challenge petitioners have
brought here. See Yee, 503 U.S. at 533-34; Gulf Power Co.
v. United States, 187 F.2d 1324, 1328 (11th Cir. 1999). Peti-
tioners are still free to make claims for just compensation on
account of regulatory takings with respect to their individual
buildings, but no such claims have been made here, nor could
they be. See Riverside Bayview Homes, 474 U.S. at 128, 129
n.6.
IV.
As an apparent afterthought, petitioners summarily con-
tend that in the absence of a taking, the Commission acted
arbitrarily and capriciously, and abused its discretion, in
promulgating the amended OTARD rule. Petitioners primar-
ily quote what they consider a "tautology" from the Second
OTARD Order: "Removing a restriction on installing an
antenna within a leasehold does not impose a duty on the
landlord to relinquish property because the landlord has
already voluntarily relinquished possession of the leasehold
by virtue of the lease." Second OTARD Order, 13 F.C.C.R.
at 23881. This statement, petitioners assert, demonstrates
that the Commission's rule is "purposeless or illogical": If the
Commission "has taken nothing," petitioners ask, "then why
is the rule necessary?" Petitioners have misconstrued the
Commission's position.
Contrary to petitioners' assertion, the Commission does not
argue that the landlord "gave [ ] away" a property right to
the tenant by relinquishing possession of the property. Rath-
er, the quoted statement represents the Commission's posi-
tion, explained in detail in the subsequent paragraphs of the
Second OTARD Order, that although a landlord may retain
property interests in a leasehold, a restriction on the terms
that the landlord may impose on the tenant is not a physical
occupation giving rise to a per se taking because the landlord
has "voluntarily relinquished possession" of the property.
See Second OTARD Order, 13 F.C.C.R. at 23881-86.
Accordingly, because petitioners' facial challenge fails to
present an "identifiable set of instances in which mere appli-
cation of [the amended OTARD rule] will necessarily or even
probably constitute a taking," Riverside Bayview Homes, 474
U.S. at 128 n.5, we apply Chevron deference to the Commis-
sion's interpretation of s 207 and of its broad mandate under
the Communications Act, and we deny the petition.14
__________
14 In a footnote to their brief, petitioners contend in two brief
sentences, without supporting citation, that the amended OTARD
rule is void for vagueness. The court declines to address an issue
that was presented in such a cursory fashion. See Washington
Legal Clinic for the Homeless v. Barry, 107 F.3d 32, 39 (D.C. Cir.
1997).
Randolph, Circuit Judge, concurring: While I join all of
the court's opinion, I write separately to express my opinion
that Bell Atlantic Telephone Cos. v. FCC, 24 F.3d 1441 (D.C.
Cir. 1994), was wrongly decided and ought to be overruled.
Our opinion in Railway Labor Executives Ass'n v. United
States, 987 F.2d 806, 815-16 (D.C. Cir. 1993) (per curiam),
issued shortly before Bell Atlantic, summarized the govern-
ing principles: "The Fifth Amendment guarantees that when
the government takes private property, it will provide just
compensation. Under the Tucker Act, 28 U.S.C. s 1491(a),
the United States Court of Federal Claims has original
jurisdiction over suits seeking compensation from the United
States under the Constitution. Except for cases in which the
amount in controversy is less than $10,000, in which event
jurisdiction is concurrent with the federal district courts, see
28 U.S.C. s 1346(a)(2), the Federal Claims Court's jurisdic-
tion in such actions is exclusive. '[T]akings claims against the
Federal Government are premature until the property owner
has availed itself of the process provided by the Tucker Act.'
Williamson County Regional Planning Comm'n v. Hamilton
Bank, 473 U.S. 172, 195 (1985)."
"... The Taking Clause does not prohibit the government
from taking private property. The Clause requires only that
the government accomplish the taking in a particular way,
namely, by paying for the property. See First English
Evangelical Lutheran Church v. County of Los Angeles, 482
U.S. 304, 314-15 (1987); Ruckelshaus v. Monsanto Co., 467
U.S. 986, 1020 (1984). There is no constitutional necessity for
payment to be made in advance, at least so long as the
government provides a way for the property owner to recover
just compensation after the taking is completed. See Ruckel-
shaus, 467 U.S. at 1016. As we have said, those adversely
affected by the Commission's action may pursue their claims
in the Federal Claims Court or, depending on the amount at
stake, in the federal district courts."
"There is nothing to petitioners' further point that, at the
least, we ought to construe [the statute] to avoid the possibili-
ty that the [agency] has effectuated a taking in this case.
The argument may rest on the familiar canon that if one
permissible interpretation of statute would render it unconsti-
tutional and another permissible interpretation would make it
constitutional, the latter should prevail because the judiciary
should not assume Congress meant to violate the Constitu-
tion. Blodgett v. Holden, 275 U.S. 142, 147-49 (1927) (opinion
of Holmes, J.). Or the argument may rely on the more
debatable canon of construing statutes to avoid constitutional
doubts. Compare Johnson v. Robison, 415 U.S. 361, 366-67
(1974), with Rust v. Sullivan, 500 U.S. 173, 190-91 (1991). But
these canons do not fit. Because just compensation is pre-
sumptively available under the Tucker Act, there is neither
an unconstitutional result nor a constitutional doubt to be
averted by interpretation. See United States v. Riverside
Bayview Homes, Inc., 474 U.S. 121, 127-28 (1985)."
Doubtless in recognition of these principles, Bell Atlantic
begins with a disclaimer and then adds a qualifier: this court
has no "power" to decide whether an agency regulation rule
"inflicted" a taking of private property within the meaning of
the Fifth Amendment to the Constitution--if the regulation
was within the agency's statutory authority. 24 F.3d at 1444
n.1. How to determine the "if"? According to Bell Atlantic,
not in the usual deference-laced manner because "statutes
will be construed to defeat administrative orders that raise
substantial constitutional questions," id. at 1445. That point
is directly contrary to Railway Labor's recognition that there
is no constitutional doubt to be avoided. And it is also
directly contrary to the Supreme Court's holding in United
States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 128
(1985), that "the possibility that the application of a regulato-
ry program may in some instances result in the taking of ...
property is no justification for the use of narrowing construc-
tions to curtail the program if compensation will in any event
be available in those cases where a taking has occurred."
Bell Atlantic's other rationale for adjudicating whether a
regulation would take property, and for construing the stat-
ute to prevent this, stems from a footnote in Riverside
Bayview Homes, Inc., 474 U.S. at 128 n.5. The Supreme
Court there distinguished United States v. Security Industri-
al Bank, 459 U.S. 70, 78 (1982), on the basis that statutory
interpretation might be affected if "there is an identifiable
class of cases in which application of a statute will necessarily
constitute a taking." The Court described Security Industri-
al Bank as a case in which a narrowing construction was
appropriate because "a particular provision of the Bankruptcy
Code would in every case constitute a taking." Id. This is
reflected in the Court's expression of doubt in Security
Industrial Bank whether so applying a Code provision "com-
ports with the Fifth Amendment." 459 U.S. at 78. Given the
Court's analysis in Riverside Bayview--namely, that only an
uncompensated taking of private property could violate the
Fifth Amendment--the statement in Security Industrial
Bank just quoted has to mean that there would have been no
just compensation for the threatened takings, or that the
Court thought there would not be. This reading is supported
by Louisville Joint Stock Land Bank v. Radford, 295 U.S.
555 (1935), the case Security Industrial Bank relied upon and
reaffirmed. Radford invalidated a retroactive change in the
bankruptcy laws permitting debtors to retain their property
more easily because the "Act as applied ha[d] taken from the
Bank without compensation." Id. at 601 (emphasis added).
In this case there is no doubt that if a taking occurs as a
result of the Commission's rule, the property owner may
receive just compensation. See maj. op. at 17. To my mind,
that ought to end the takings inquiry. I recognize that Bell
Atlantic treats the matter very differently: "Chevron defer-
ence to agency action that creates a broad class of takings
claims, compensable in the Court of Claims, would allow
agencies to use statutory silence or ambiguity to expose the
Treasury to liability both massive and unforeseen." Bell
Atlantic, 24 F.3d at 1445. In other words, the fact that
compensation would be available is a reason for a narrowing
construction--the opposite of what the Supreme Court held.
But my disagreement with Bell Atlantic's theory rests on
more than just its misreading of the Supreme Court's opinion
in Riverside Bayview. It is not clear to me how, in many
instances, we could determine whether an agency rule would
bring about a taking in a "broad" class of cases (a term not
used in Riverside Bayview). Bell Atlantic makes no distinc-
tion between regulatory and per se takings; whether a regu-
latory taking has occurred may depend on the "background
principles" of each state's property law. See Lucas v. South
Carolina Coastal Council, 505 U.S. 1003, 1031 (1992). In how
many states, or in how many instances, there must be a
taking before we find a "broad class of takings" under Bell
Atlantic is a mystery.
I also disagree with the rationale, relied upon in Bell
Atlantic, that it is the business of the federal courts to
protect the government from some imagined risk of agency
encroachment on Congress's taxation and appropriations pow-
ers. By passing the Tucker Act, Congress generally bound
itself to paying for authorized takings by the federal govern-
ment, regardless whether the specific liability in any particu-
lar case was intended or foreseen. See Regional Rail Reor-
ganization Act Cases, 419 U.S. 102, 126-27 (1974). While it
may be the case that the courts must protect one branch from
the aggrandizing actions of another, see generally Mistretta v.
United States, 488 U.S. 361, 380-84 (1989) (collecting cases),
surely it is not the case that the courts must protect Congress
from creating responsibilities for itself (so long as they do not
detract from the other branches' powers or violate the delega-
tion doctrine). Since the political branches have made a
legislative choice to accept federal liability for takings, the
federal courts must respect that determination. Besides, if
Congress disagrees with an agency's subjecting the Treasury
to liability through taking claims, it can always reverse the
agency's rule through legislation, either before the rule takes
effect, see Congressional Review Act, Pub. L. No. 104-121, tit.
II, s 251, 110 Stat. 868 (1996) (codified at 5 U.S.C. ss 801-
808), or afterwards.
Given the opportunity, I would vote to overturn Bell Atlan-
tic.
Bldg Owners Mgr Assn v. FCC
Court: Court of Appeals for the D.C. Circuit
Date filed: 2001-07-06
Citations: 254 F.3d 89
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