KERM, Inc. v. Federal Communications Commission

Notice: This opinion is subject to formal revision before publication in the
Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify
the Clerk of any formal errors in order that corrections may be made
before the bound volumes go to press.

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 5, 2003 Decided January 9, 2004

No. 03-1028

KERM, INC.,
PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND
UNITED STATES OF AMERICA,
RESPONDENTS

On Petition for Review of an Order of the
Federal Communications Commission

Dan J. Alpert argued the cause and filed the briefs for
petitioner.
Louis E. Peraertz, Special Counsel, Federal Communica-
tions Commission, argued the cause for respondents. With
him on the brief were Robert H. Pate III, Assistant Attorney
General, Robert B. Nicholson and Robert J. Wiggers, Attor-
neys, John A. Rogovin, General Counsel, Federal Communi-

Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
 2

cations Commission, and Daniel M. Armstrong, Associate
General Counsel.
Before: EDWARDS, SENTELLE, and TATEL, Circuit Judges.
Opinion for the Court filed by Circuit Judge EDWARDS.
EDWARDS, Circuit Judge: Petitioner KERM, Inc.
(‘‘KERM’’) filed a complaint with the Federal Communica-
tions Commission (‘‘FCC’’ or ‘‘Commission’’) alleging that
radio station KAYH-FM (‘‘KAYH’’) unlawfully aired 11 an-
nouncements that constituted commercial advertisements in
violation of the Communications Act of 1934. The Commis-
sion found that 10 of the 11 announcements did not violate the
Act. The Commission further held that no enforcement
action was warranted with respect to the single remaining
announcement that was found to be an impermissible adver-
tisement. KERM seeks review of the Commission’s decision.
We hold that KERM lacks standing under Article III to
pursue this petition for review. KERM cannot establish
standing as a listener of KAYH, because KERM alleges only
a discrete, past violation of the Act. Nor can KERM demon-
strate standing as a competitor of KAYH, because it has not
indicated how, if at all, it has suffered any competitive injury
as a result of that violation. Indeed, KERM alleges no
particularized injury whatsoever, short of a generalized inter-
est in the faithful enforcement of the law. We therefore
dismiss the petition for review.

I. BACKGROUND
The Communications Act of 1934 (‘‘Act’’) prohibits noncom-
mercial educational broadcast stations from broadcasting ‘‘ad-
vertisements.’’ 47 U.S.C. § 399b(b)(2) (2000). The Act de-
fines prohibited advertisements as program material that is
broadcast ‘‘in exchange for any remuneration’’ and ‘‘intended
to promote any service, facility, or product’’ of for-profit
entities. 47 U.S.C. § 399b(a). So long as they do not consti-
tute advertisements, however, a noncommercial educational
broadcast station may broadcast acknowledgments of donors
or underwriters. Such acknowledgments may identify, but
 3

not promote, the contributor’s products, services, or business.
See Tri-State Inspirational Broad. Corp., 16 F.C.C.R. 16,800,
16,800 (2001). The Commission has articulated in various
rules and orders specific guidelines regarding the difference
between permissible underwriter announcements and imper-
missible commercial advertisements. See generally Comm’n
Policy Concerning the Noncommercial Nature of Educ.
Broad. Stations, 7 F.C.C.R. 827 (1992).
KAYH, operated by Family Vision Ministries, Inc. (‘‘Family
Vision’’), is a noncommercial educational broadcast radio sta-
tion located in Fayetteville, Arkansas. Petitioner KERM is
the licensee and operator of several commercial radio broad-
cast stations in Arkansas whose listening audiences overlap
with that of KAYH. On October 9, 2001, KERM filed a
formal complaint with the Commission asserting that KAYH
had aired 11 underwriter announcements during an August
30, 2001, football game that constituted impermissible com-
mercial advertisements in violation of the Act. See Appendix
(‘‘App.’’) 1-5. KERM requested that the Commission conduct
an investigation and impose a forfeiture on Family Vision in
the amount of $2,000 per violation. App. 5.
Upon consideration of KERM’s complaint, the FCC’s En-
forcement Bureau (‘‘Bureau’’) ruled that 10 of the 11 disputed
announcements did not violate the Act. See Family Vision
Ministries, Inc., EB-01-IH-0629-KMS (May 15, 2002) (letter
ruling), reprinted in App. 12-13. Although one announce-
ment was found to constitute a prohibited advertisement, the
Bureau concluded that no enforcement action was warranted
because the single violation was an ‘‘isolated occurrence.’’
App. 13. KERM filed an application for review before the
Commission, arguing that the Bureau’s ruling was arbitrary
and capricious and contrary to the Act, case law, and Com-
mission regulations. Family Vision filed an opposition to
KERM’s application for review, in which it stated that, imme-
diately after the disputed announcements aired, it had re-
placed the announcements and instituted new review proce-
dures to ensure compliance with the Act. See App. 27-28.
The Commission denied KERM’s application for review. See
Family Vision Ministries, Inc., 18 F.C.C.R. 1418 (2003),
 4

reprinted in App. 46-48. Specifically, the Commission agreed
with the Bureau that 10 of the 11 announcements were
permissible under the Act and that the remaining violation
did not warrant the imposition of any sanction. Id. at 1419,
App. 47. KERM filed this petition for review.

II. ANALYSIS
KERM lacks standing under Article III to challenge the
Commission’s order. We therefore dismiss the petition for
review. To establish standing under Article III, a petitioner
must demonstrate (1) an injury in fact that is (2) fairly
traceable to the challenged action and (3) likely to be re-
dressed by the requested relief. See Steel Co. v. Citizens for
a Better Env’t, 523 U.S. 83, 102-03 (1998); Jaramillo v. FCC,
162 F.3d 675, 676 (D.C. Cir. 1998). That a petitioner partici-
pated in administrative proceedings before an agency does
not establish that the petitioner has constitutional standing to
challenge those proceedings in federal court. See Fund
Democracy, LLC v. SEC, 278 F.3d 21, 27 (D.C. Cir. 2002).
Where a petitioner is not subject to the administrative deci-
sion it challenges, courts are particularly disinclined to find
that the requirements of standing are satisfied. Branton v.
FCC, 993 F.2d 906, 910-11 (D.C. Cir. 1993); see also Steel Co.,
523 U.S. at 107; Linda R.S. v. Richard D., 410 U.S. 614, 619
(1973) (‘‘[A] citizen lacks standing to contest the policies of
the prosecuting authority when he himself is neither prose-
cuted nor threatened with prosecution.’’).
A petitioner bears the burden of establishing its standing.
Steel Co., 523 U.S. at 104. Under Sierra Club v. EPA, 292
F.3d 895 (D.C. Cir. 2002), we require petitioners whose
standing is not self-evident to establish standing by the
submission of affidavits or other evidence ‘‘at the first appro-
priate point in the review proceeding.’’ Id. at 900. Where no
motion to dismiss has been made, the petitioner’s first oppor-
tunity will be its opening brief, not its reply brief. Id.
Although KERM was reminded of this obligation in the
court’s order establishing the briefing schedule for this case,
see KERM, Inc. v. FCC, No. 03-1028 (D.C. Cir. Jun. 30, 2003),
 5

reprinted in App. 49, KERM nonetheless failed to offer
anything in its opening brief to support standing. In re-
sponse to the FCC’s brief, KERM belatedly asserted stand-
ing in its reply brief. But, even there, KERM offered
nothing concrete to establish Article III standing.
KERM has provided no explanation for its failure to com-
ply with Sierra Club. Even were we to excuse this oversight
on the tenuous assumption that KERM reasonably failed to
comprehend that standing was far from self-evident, there is
nothing in the record of this case to indicate that KERM
satisfies the requirements of Article III. Neither the record
of administrative proceedings nor KERM’s briefs before this
court even assert that KERM has suffered any particularized
injury.
KERM describes itself as a ‘‘listener’’ and ‘‘competitor’’ of
KAYH, suggesting that it has standing on these bases.
There is no doubt that both listeners and competitors may, in
appropriate cases, demonstrate standing to challenge actions
of the FCC under the Communications Act. See New World
Radio, Inc. v. FCC, 294 F.3d 164, 170 (D.C. Cir. 2002)
(competitor standing); Huddy v. FCC, 236 F.3d 720, 722
(D.C. Cir. 2001) (listener standing). In this case, however,
KERM has offered nothing to support its assertion of stand-
ing on either ground.
KERM cannot prevail on a theory of listener standing
because it challenges only a discrete, past injury and alleges
no continuing violations. In Branton, we held that petition-
ers who challenged the FCC’s refusal to take action against a
radio station for unlawfully broadcasting indecent language
did not have standing. 993 F.2d at 908. Noting that the
petitioners were not themselves subject to the challenged
decision, we held that petitioners could not satisfy the re-
quirements of standing where they alleged only a discrete,
past injury. Id. at 909-12. Similarly, in Jaramillo, we held
that petitioners who sought review of an FCC decision autho-
rizing assignment of a radio license to a third party had no
standing to challenge the FCC’s decision. 162 F.3d at 676-77.
Again, we rejected the petitioners’ claim to listener standing
 6

because they challenged an irremediable past injury and
asserted no ongoing violations. Id. at 677. We further held
that the mere possibility of a marginal deterrent effect did
not satisfy the requirements of Article III standing. Id.
As with the petitioners in these cases, KERM cannot
establish standing here as a listener of KAYH (assuming a
corporate entity can be a listener), because it has not alleged
any continuing wrongs. Indeed, the record reflects that
KAYH immediately took corrective measures after broadcast-
ing the disputed announcements. See App. 27-28. Without
any assertion of ongoing injury, KERM cannot establish
listener standing. Jaramillo, 162 F.3d at 676-77; Branton,
993 F.2d at 909.
KERM fares no better under a theory of competitor stand-
ing. A party seeking to establish standing on this basis must
demonstrate that it is ‘‘a direct and current competitor whose
bottom line may be adversely affected by the challenged
government action.’’ New World Radio, 294 F.3d at 170.
While a party that is ‘‘likely to be financially injured’’ by a
Commission decision may have competitor standing to chal-
lenge Commission actions under the Act, see FCC v. Sanders
Bros. Radio Station, 309 U.S. 470, 477 (1940), that party must
make a concrete showing that it is in fact likely to suffer
financial injury as a result of the challenged action, see New
World Radio, 294 F.3d at 170-72; see also Sanders Bros., 309
U.S. at 471-72 (finding standing where a party presented
evidence of economic injury as a result of competition).
KERM might have satisfied the requirements of competitor
standing if it had introduced evidence that KAYH’s broadcast
of the disputed announcements resulted in lost advertising
revenues for KERM or otherwise adversely affected KERM’s
financial interests. KERM offered no such evidence. Rath-
er, KERM vaguely asserts only that it competes with KAYH
and that its own radio stations serve much of the same
audience as KAYH. Such ‘‘[b]are allegations are insufficient
TTT to establish a petitioner’s standing to seek judicial review
of administrative action.’’ Sierra Club, 292 F.3d at 898; see
also New World Radio, 294 F.3d at 170-72 (finding that a
 7

petitioner lacked competitor standing where it did not allege
any financial injury). KERM thus fails to establish standing
on the basis of any competitive injury.
Rather than advancing any cognizable injury, KERM pur-
ports to act ‘‘as an interested party seeking to assist the
Commission in its fair, reasonable, and equitable enforcement
of its rules.’’ Reply Br. at 2. While it is true that the
Commission relies on public participation to assist in its
enforcement of the Act, see L.B. Wilson, Inc. v. FCC, 397
F.2d 717, 719 (D.C. Cir. 1968), this does not obviate the need
for a petitioner to establish Article III standing as a prerequi-
site to judicial review in federal court. And KERM cannot
establish standing simply by asserting a role as public om-
budsman. See Sierra Club v. Morton, 405 U.S. 727, 736-38
(1972). KERM has failed to assert any injury that is suffi-
ciently unique as to distinguish KERM from any other public-
minded potential litigant interested in ensuring the faithful
enforcement of the Act. See Steel Co., 523 U.S. at 107. This
is insufficient to demonstrate standing under Article III.
In Office of Communication of the United Church of Christ
v. FCC, 359 F.2d 994 (D.C. Cir. 1966) (‘‘UCC’’), we stated that
the ‘‘traditionally narrow view of standing’’ should not pre-
clude aggrieved members of the listening public from chal-
lenging FCC actions. See id. at 1000-01. KERM cites UCC
in support of its assertion of standing. Even assuming that
UCC is applicable to our analysis of KERM’s constitutional
standing, see Rainbow/PUSH Coalition v. FCC, 330 F.3d 539,
542 n.* (D.C. Cir. 2003); UCC, 359 F.2d at 1000 n.8, the case
is easily distinguished. The petitioners in UCC proffered
convincing evidence that the challenged FCC action would
result in substantial and ongoing injuries. See UCC, 359 F.2d
at 997-99 & 998 n.4. Having asserted only a single, past
violation of the Act, KERM falls well short of this standard.
See Branton, 993 F.2d at 910 (distinguishing UCC on the
grounds that it involved allegations of continuing violations).
The remaining cases KERM cites deal only with questions of
statutory interpretation and prudential standing, see Busse
Broad. Corp. v. FCC, 87 F.3d 1456, 1462-63 (D.C. Cir. 1996);
Maier v. FCC, 735 F.2d 220, 227-30 & 229 n.13 (7th Cir. 1984),
 8

and provide no support for KERM’s claim of standing under
Article III. KERM therefore has failed to establish standing
to pursue this petition for review.

III. CONCLUSION
For the foregoing reasons, we dismiss the petition for
review.