Free Air Corp. v. Federal Communications Commission

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 20, 1997 Decided November 12, 1997

No. 96-1311

Free Air Corporation,

Appellant

v.

Federal Communications Commission,

Appellee

James S. Lee, et al.,

Intervenors

Appeal of an Order of the

Federal Communications Commission

Stephen T. Yelverton argued the cause and filed the briefs
for appellant.

David Silberman, Counsel, Federal Communications Com-
mission, argued the cause for appellee. With him on the brief

were William E. Kennard, General Counsel, and Daniel M.
Armstrong, Associate General Counsel.

Before: Silberman, Williams and Rogers, Circuit Judges.

Opinion for the Court filed by Circuit Judge Williams.

Williams, Circuit Judge: Free Air Corporation, Bernard
Dawson, and thirteen others applied to the Federal Commu-
nications Commission for an FM radio broadcast license in
Raleigh, North Carolina. In 1995 Free Air's application was
dismissed with prejudice for failure to prosecute, a dismissal
which Free Air appealed through the judicial system without
success. Meanwhile, the field having been winnowed to five
applicants, those five entered into settlement agreements that
would give the license to a newly formed company headed by
Dawson in exchange for payments by Dawson's firm to the
other four. The Commission approved both Dawson's reor-
ganization and the settlement plan; now Free Air wants to
challenge that approval. Because Free Air lacks standing,
we dismiss the appeal.

* * *

Free Air filed its initial application for the Raleigh channel
in July 1986. In September 1994 the FCC's Review Board
ordered an administrative law judge ("ALJ") to hold a hear-
ing on Free Air's financial eligibility. Rem Malloy Broad-
casting, 9 F.C.C.R. 4822, 4827-30 (Rev. Bd. 1994). After
Free Air failed to show up at the hearing or offer any
evidence on its finances, the Commission dismissed its appli-
cation with prejudice for failure to prosecute. Rem Malloy
Broadcasting, Memorandum Opinion and Order, FCC
95M-60 (ALJ, Feb. 23, 1995), appeal denied, 10 F.C.C.R.
4974 (Rev. Bd. 1995), review denied, 10 F.C.C.R. 9502 (1995).
We summarily affirmed the dismissal and the Supreme Court
denied certiorari. Free Air Corp. v. FCC, No. 95-1490 (D.C.
Cir., Nov. 9, 1995), cert. denied, 66 U.S.L.W. 3254 (U.S. Oct.
6, 1997) (No. 96-1717).

After Free Air was dismissed, five applications remained,
of which Dawson's was the only one not to have been denied
by the ALJ. (The denials of the other four were not--and

still are not--final, as those applicants have not exercised
their rights to secure review by the full Commission.) See
Rem Malloy Broadcasting, Initial Decision, 4 F.C.C.R. 8423
(ALJ 1989); Supplemental Initial Decision, 6 F.C.C.R. 2247
(ALJ 1991); Further Supplemental Initial Decision, 7
F.C.C.R. 8024 (ALJ 1992); Second Further Supplemental
Initial Decision, 10 F.C.C.R. 9369 (ALJ 1995). In December
1995 Dawson petitioned the FCC for leave to amend his
application to reflect the formation of Triangle FM Broad-
casters, a limited liability company in which Dawson would
hold a 51% ownership interest. The five survivors then all
asked the FCC to approve a settlement agreement whereby
Dawson's application (as amended to substitute Triangle for
Dawson) would be granted and the other four would volun-
tarily dismiss their applications in return for payments from
Triangle.

The Commission approved the settlement and granted
Dawson's amended application. Rem Malloy Broadcasting,
11 F.C.C.R. 4064 (Rev. Bd. 1996), reconsideration denied, 11
F.C.C.R. 10823 (1996). Free Air attacks the Commission's
ruling, arguing that Dawson did not show good cause to
amend his application, made misrepresentations in connection
with his amended application, and will not exercise the requi-
site control over the station. Free Air also accuses the FCC
of violating its own procedural rules in dealing with Dawson's
application. We do not address these claims, however, be-
cause of Free Air's lack of standing.1

To have standing under Article III of the Constitution, a
litigant must allege an "injury in fact" fairly traceable to the
challenged action and likely to be redressed by the requested
relief. Allen v. Wright, 468 U.S. 737, 751 (1984). The injury
must not be "abstract," "conjectural" or "hypothetical." Los
Angeles v. Lyons, 461 U.S. 95, 101-02 (1983). And "it must
be likely, as opposed to merely speculative, that the injury
will be redressed by a favorable decision." Lujan v. Defend-

__________
1 Because we find that Free Air lacks standing under Article III,
it is unnecessary to address its statutory standing under 47 U.S.C.
s 402(b)(6). See, e.g., SunCom Mobile & Data, Inc. v. FCC, 87
F.3d 1386 (D.C. Cir. 1996).

ers of Wildlife, 504 U.S. 555, 561 (1992) (internal quotes and
citation omitted).

It is important to distinguish between the two separate
challenges that have been brought by Free Air. The first
was Free Air's challenge to the dismissal of its own applica-
tion. The dismissal directly injured Free Air, removing it
from the competition for the license, and a judicial decision
overturning it and remanding for further proceedings would
have redressed the injury. Thus, the dismissal presumptively
established Article III standing. (Of course such an injury
would amount to nothing if Free Air's application were so
feeble that it obviously never had a chance--but even that is
the sort of thing a court can normally decide only by reaching
the merits. Cf. Claybrook v. Slater, 111 F.3d 904, 906-07
(D.C. Cir. 1997).) Free Air had every right to appeal its
dismissal all the way to the Supreme Court--and it did so, to
no avail.

Free Air's second challenge, however, is to decisions by the
Commission concerning other competitors in a process from
which Free Air had been validly excluded. Its standing to
challenge those decisions rests on a different and more tenu-
ous ground, for the approval of the settlement and the
accompanying grant of Dawson's application injure Free Air
only in that they foreclose Free Air's opportunity to apply for
the channel in the future.

Free Air relies on our decision in Orange Park Florida
T.V., Inc. v. FCC, 811 F.2d 664 (D.C. Cir. 1987), for its claim
that its status as a rejected applicant is nonetheless enough to
confer standing. There two firms--Orange Park and Clay--
applied to the FCC for a permit to construct a television
station. An administrative law judge denied Orange Park's
application because its proposed antenna was too close to one
already proposed in an application for a different channel.
Rather than amend its application to fix the antenna spacing
problem, Orange Park asked for a waiver of the FCC's
spacing rules. The Commission denied the waiver request
and found that Orange Park was not technically qualified to
be a licensee. The ALJ had also initially rejected Clay's

application because it proposed a major change in owner-
ship structure. The Commission, however, ruled that the
ownership-change rule should not have been applied to Clay.
It permitted Clay to amend its application and remanded to
the ALJ, who found Clay otherwise qualified and awarded it
the permit as the sole surviving applicant. Id. at 667.
Orange Park then challenged the Commission's grant of
Clay's application. This court held that Orange Park had
standing to attack the award.

Free Air says its situation is just like Orange Park's. We
disagree. Unlike Orange Park, Free Air has been irrevoca-
bly ousted from the licensing contest in which it had been a
participant. This court in Orange Park proceeded on the
understanding that if the award to Clay were reversed,
Orange Park could cure the defect in its application by a
simple process of amendment. See, e.g., Orange Park, 811
F.2d at 671 ("Orange Park specifically alleges that dismissing
Clay's application would have made it easier for Orange Park
to amend its application to specify a fully-spaced site ... and
that Orange Park was willing to make such an amendment
had Clay's application been dismissed"); id. ("Orange Park
... was deprived by award to a competitor of the opportunity
to cure the remediable defect in [its] initial application"). In
short, but for the Commission's alleged error in allowing the
winning applicant to make a curative amendment, Orange
Park could have returned to the ongoing contest simply by
making an amendment curing its only apparent deficiency.
The grant to Clay injured Orange Park uniquely, because it
denied Orange Park alone the opportunity to so amend.

By contrast, Free Air's application has been dismissed
outright. It cannot get back into contention with a simple
curative amendment; unlike Orange Park, it is truly on the
outside looking in. Free Air's position is thus no better than
that of any would-be first-time applicant complaining that the
Commission's grant of a license deprives it of the opportunity
that would arise if the license were to go ungranted and a
new contest open to all comers were someday to be an-
nounced. It is true that the grant of a broadcasting license
forecloses later opportunities to compete in a possible new

licensing proceeding; we hold, however, that such a foreclo-
sure is too speculative an injury for Article III standing.

It is true that the Orange Park decision contains language
indicating that the denial of the opportunity to apply some-
time in the future is a sufficient injury to create standing.
See, e.g., 811 F.2d at 672 (Commission's grant "deprived
Orange Park of a second chance to apply" for the permit); id.
("[V]acating the award to Clay will redress Orange Park's
injury by affording it the opportunity to reapply for the
construction permit, which Orange Park has indicated it
stands ready, willing and able to do."). But since the grant of
a license effectively denies the entire world the opportunity to
apply at some later date, we read Orange Park more narrow-
ly, as having located the Article III injury in the denial of
Orange Park's opportunity to renew its participation in an
ongoing licensing proceeding.

Free Air fares no better under our cases discussing the
standing of disappointed bidders for government contracts.
See, e.g., National Federation of Federal Employees v. Che-
ney, 883 F.2d 1038, 1052-54 (D.C. Cir. 1989); National
Maritime Union v. Commander, Military Sealift Command,
824 F.2d 1228, 1236-38 (D.C. Cir. 1987); Scanwell Laborato-
ries, Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970). Those
cases make clear that a disappointed bidder whose own
application was within the zone of active consideration may
seek judicial vindication of its right "to have its bid consid-
ered solely on its merits." National Maritime Union, 824
F.2d at 1237 (quoting CACI, Inc.-Federal v. United States,
719 F.2d 1567, 1575 (Fed. Cir. 1983)).2 In other words,
sufficiently viable runners-up in a procurement process have

__________
2 The "zone of active consideration" requirement is not applicable
in its conventional form where the would-be bidder claims that an
allegedly unlawful program has systematically reduced the range of
contracts on which the would-be bidder could compete. See North-
eastern Fla. Chapter of Assoc. Gen. Contractors of America v. City
of Jacksonville, 508 U.S. 656 (1993); Dynalantic Corp. v. Depart-
ment of Defense, 115 F.3d 1012, 1014-17 (D.C. Cir. 1997). Free Air
makes no analogous claim here.

standing to allege that an illegality in the process caused the
contract to go to someone else and not to them. Here,
however, Free Air is not a runner-up. It was removed from
competition on the basis of a decision (challenged in court and
upheld) wholly independent of the decisions leading to the
award of the license.3 The disappointed bidder cases do not
give Free Air standing to challenge these entirely separate
aspects of the licensing process.

The appeal is

Dismissed.

__________
3 Free Air's lack of standing has nothing to do with the fortuity
that there have been two separate lawsuits, one in which Free Air
challenged the decision excluding it, and a second in which it attacks
the Commission's other decisions awarding the license. The fatal
factor--that the grant of the license to Dawson deprived Free Air
only of a distant and speculative opportunity to reapply--would be
present even if both challenges were brought together.