Metro Broadcasting, Inc. v. Federal Communications Commission

PETITIONER:Metro Broadcasting, Inc.
RESPONDENT:Federal Communications Commission
LOCATION:State Highway 55, LaGrange, NY

DOCKET NO.: 89-700
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit

CITATION: 497 US 547 (1990)
ARGUED: Mar 28, 1990
DECIDED: Jun 27, 1990

ADVOCATES:
Harry F. Cole – Argued the cause for the respondents
Mr. J. Roger Wollenberg –

Facts of the case

In an effort to comply by its duty to promote programming diversity, under the Communications Act of 1934, the Federal Communications Commission (FCC) adopted two minority preference policies. The first policy awarded preferences to minority ownership bids for licenses for new radio or television broadcasting stations. The second policy allowed radio or television broadcasters with questionable license qualifications, to avoid an FCC investigation of their actions by making a “distress sale” of their licenses to a legitimate minority outfit. Upon FCC approval, Faith Center Inc. “distress sold” its television license to Astroline’s minority-owned outfit. Shurberg, a nonminority applicant for a similar license, sought appellate review of Astroline’s award. The appellate court agreed, and invalidated the distress sale policy as unconstitutional. Astroline appealed and the Supreme Court granted certiorari.

Question

Does the FCC’s minority preference policy, giving preference to minority ownership bids for new radio or television broadcasting licenses and permitting “distress sales” to minority owned enterprises only, violate a nonminority bidder’s’ Fifth Amendment equal protection rights?

William H. Rehnquist:

We’ll hear argument next in Number 89-700, Astroline Communications Company v. Shurberg Broadcasting.

Mr. Wollenberg, you may proceed whenever you’re ready.

Mr. J. Roger Wollenberg:

Mr. Chief Justice, and may it please the Court:

I would like to start… in light of the discussion in the previous case, before turning to the specifics of the Astroline case, I would like to start with a little more discussion of the nature of the Communications Act.

The Communications Act is unique in our governmental system.

It was essentially a structure invented by Herbert Hoover a long time ago, and it attempts to handle a dilemma of major proportions, which is the dilemma of the necessity of a licensing scheme for broadcast frequencies to avoid a total interference and total chaos, a licensing scheme which, since it goes over the whole country, must be federally applied, and the fact that the resulting broadcast activities have enormous First Amendment implications because the broadcasting industry is very, very significant agency for informing the American people.

And this has resulted in compromises, if you like, in treatment over the years that is different from other areas.

It is different from industries not so effective.

It is different from the newspaper industry, which doesn’t have a licensing problem.

So way back in NBC v. United States, this Court said that the FCC is not a mere traffic cop.

It’s concerned with the nature of the traffic, as well as its distribution.

This Court in Red Lion… excuse me… this Court in Red Lion upheld a very significant action by the Commission in requiring what was called the Fairness Doctrine, which meant in substance that if one side of a controversial issue was discussed, that it would be necessary to provide discussion of other viewpoints.

In other words, a diversity of viewpoints was imposed by the Commission and upheld by this Court in Red Lion.

Of course, that can be called content control.

It is not saying what position should be taken.

It is not a very precise or detailed form of content control, but it’s a form of content control.

It was mentioned earlier today, the Listeners Guild case, and with deference, I think it was not accurately described.

The suggestion was that in the Listeners Guild case that this Court said that it is wonderful… not wonderful, it is appropriate for the Commission to leave entirely to the marketplace what goes out over the air.

A closer examination of the Listeners Guild case will reveal that the subject of it was entertainment programming and that the Court, in upholding the Commission’s decision to leave entertainment to the marketplace, was not dealing with the nonentertainment aspects of it.

Now, it’s perfectly true that the Commission over the years and to some degree the Court over the years have gone up and down on the question of the degree of intrusiveness which is appropriate and permissible on the part of the Commission in order to carry out what one of the arguments this morning referred to as the trustee notion of broadcasting.

It was suggested from the bench that what we are all in for is to make the maximum money and therefore the only test that will be applied by a broadcaster, regardless of origins, is to make the most money.

I would hope that there are other factors which enter into it, but be that as it may, I suggest that with the licensing necessity, and with the Communications Act and its structure having been upheld over the years, that the determination of that question is a question for Congress.

I think there has been unfortunately, today, because Congress isn’t here except through an extremely impressive and comprehensive brief by the United States Senate… not a senator, but by the United States Senate… on the subject.

Because the Congress isn’t here and the representative of the FCC is here, there is a tendency of the Court to treat this as an FCC matter.

It really, as the brief for the Senate shows and as Mr. Armstrong’s argument made clear, it is not an FCC matter.

The FCC received large numbers of signals over the years that it should pay more attention to the composition of ownership of broadcast stations, and when the FCC adopted the policies that have been discussed this morning and then at a later time a differently composed Commission looked as though it was going to change those policies, Congress stepped in and very explicitly told it not to.

Now–

Sandra Day O’Connor:

Mr. Wollenberg, do you think Congress acted under its Fourteenth Amendment, Section 5 powers in this case?

Mr. J. Roger Wollenberg:

–Justice O’Connor, I find it impossible to comprehend or accept the notion that Congress’ powers are somehow greater under Section 5 when dealing with Federal areas.

This Court–

Sandra Day O’Connor:

It perhaps acted under its commerce clause powers?

Mr. J. Roger Wollenberg:

–Under its commerce clause, under its spending powers–

Sandra Day O’Connor:

And I suppose even Congress is bound by the equal protection component of the Fifth Amendment.

Mr. J. Roger Wollenberg:

–Yes, and when we say equal protection component, we have to say component, because this Court, quite properly, read the equal protection clause of the Fourteenth Amendment into the Fifth Amendment, just as it has read the Amendments to the Bill of Rights into the Civil War Amendments, and just yesterday there was a jury trial… I’m sorry, an election spending requirement of a state that was subjected to analysis under the First Amendment.

So I think it is one Constitution, now, and I think any notion that somehow or other the Congress has greater power in its own areas because of the Fourteenth Amendment, or needs to rely on the Fourteenth Amendment, I think is not well taken.

I think that the Congress is functioning here… there has been a good deal of discussion this morning on the question of remedial, and I think some of the terminology gets confusing, or imprecise, as to what kind of remedial we mean.

No one is contending–

Sandra Day O’Connor:

Well, I guess… I guess the FCC, at least, stands before us on the premise that it’s furthering a goal of program diversity.

Mr. J. Roger Wollenberg:

–No, I think not, Your Honor.

I think the FCC stands here defending the requirement that Congress has imposed.

And contrary to the suggestion that Congress just late some night did something in an Appropriations Act saying don’t change your policies, contrary to that suggestion, in Congressional Reports and testimony and so forth before Congress, the focus has been very definitely on diversity and on remedial in the sense that, not that the FCC has discriminated, not that broadcasters have discriminated, but that as a result of society-wide discrimination, which we all know about and which this Court has mentioned in a variety of contexts, that at the beginning at least there was an extraordinarily small percentage of broadcast ownership by minorities.

Sandra Day O’Connor:

Well, I thought I heard a spokesman for the FCC at oral argument in the preceding case tell us that the FCC did not rely on some remedial program for prior discrimination, that we should take this case on the basis that the goal of the FCC set-aside here and in the multiple factor policy in the preceding case was to achieve better program diversity through minority ownership.

Now, I thought that was how we took the case.

You say that isn’t so?

Mr. J. Roger Wollenberg:

I do.

The Senate report on the ’82 Act said,

“A third important factor in diversifying the media of mass communications is promoting ownership by racial and ethnic minorities, groups which… that traditionally have been extremely underrepresented in the ownership of telecommunication facilities and media properties. “

“The policy of encouraging diversity of information sources is best served by not only awarding preferences based on the number of properties already owned, but also by assuring that minority and ethnic groups that have been unable to acquire any significant degree of media ownership are provided an increased opportunity to do so. “

“It is hoped that this approach to enhancing the diversity through such structural means will, in turn, broaden the nature and type of information and programming disseminated to the public. “

Anthony M. Kennedy:

Wouldn’t it still be fair to say, then, that diversity of ownership is not an end in itself?

Mr. J. Roger Wollenberg:

I think that’s absolutely correct.

I think that that is true in jury cases, too, if, Your Honor please.

In other words, when the Sixth Amendment impartial trial is concerned, while the Court may differ as to whether it applies to the panel or the venire, the approach is that to have an impartial jury, some degree of representation is… is significant.

And that’s a judgment which is not empirically demonstrable… demonstrable.

It is not something that can be proved.

It’s thought to be a part of the concept.

And I think that the notion of having minorities in employment… it was mentioned earlier today that this Court, without disagreement on this point by any member of the Court in NAACP v. Federal Power Commission, said of equal employment regulations by the Federal Power Commission, this wasn’t part of your mandate from Congress.

It could, of course, in the opinion of Justice–

Anthony M. Kennedy:

Mr. Wollenberg–

–It sounded to me like you said that it is an end in itself.

Mr. J. Roger Wollenberg:

–I beg your pardon.

Anthony M. Kennedy:

It sounded to me–

Mr. J. Roger Wollenberg:

No, I was… working the long way around, perhaps, Justice Kennedy, to say that the reference to the FCC in its function in NAACP v. FPC was, it is different with the Federal Communications Commission, because employment can be important in its impact on programming.

Now, surely no one would argue that… whether half of your janitors or even half of your salesmen represent minorities, is necessarily more significant… is ultimately affecting programming, than who controls the station, who is the owner.

William H. Rehnquist:

–Mr…. Mr. Wollenberg, a moment ago you read some language from a Senate report in connection with… was it a 1982 act of Congress?

Mr. J. Roger Wollenberg:

Yes.

William H. Rehnquist:

And what did that act provide, so far as minority preferences was concerned?

Mr. J. Roger Wollenberg:

That had to do with granting permission to process competing applications by lotteries.

William H. Rehnquist:

And is that what was… what was involved in this particular case before us?

Did the Commission–

Mr. J. Roger Wollenberg:

No.

In this particular case, what is before us is the distressed sale policy of the Commission.

But the point that I–

William H. Rehnquist:

–Was the distress sale policy similarly authorized by Congress?

Mr. J. Roger Wollenberg:

–The distress sale policy was not specifically mandated by Congress… not authorized, mandated by Congress until three successive budget acts, the ’87 act, the ’88 act and the ’89 act, where it was made very clear that Congress, which I, with deference, I think was fully informed… maybe not everyone who voted for it was fully informed, but the relevant people were fully informed.

Congress made the judgment that we do not want those policies changed.

William H. Rehnquist:

Congress cut off funding for the Commission’s effort to reconsider the policy.

Mr. J. Roger Wollenberg:

Not just to reconsider it or to change it.

I mean, it is absolutely explicit.

You can decide that Congress didn’t make the kind of evidentiary findings which has been indicated from the bench Congress doesn’t have to make, or you can say that it was wrong because it’s not going to have anything to do with programming.

Or you can say that you can’t prove that it did have to do with programming.

And there obviously is force to all of that, but, as the plurality opinion said in CBS v. DNC, which was another case that strongly indicated the importance of Congress and the Commission in carrying out the First Amendment aspects… interests of the act–

William H. Rehnquist:

But… but nothing before us in this particular case depends on the lottery act?

Mr. J. Roger Wollenberg:

–No.

William H. Rehnquist:

From which you read the history?

Mr. J. Roger Wollenberg:

That’s right.

It’s a part, as the Senate brief makes so very clear, of the fact that Congress, rightly or wrongly, was very much aware.

And on the remedial question–

Antonin Scalia:

But the only statute that Congress passed that has to do with this case is an appropriations act.

Mr. J. Roger Wollenberg:

–That has to do–

Antonin Scalia:

And the only law of Congress that binds us here is the law that says the FCC won’t use any funds in each of these annual appropriations… and the current one has the same thing, I gather… in order to consider this policy.

That’s the only formal expression of Congress’ view, in law, that we have.

Mr. J. Roger Wollenberg:

–It’s the only formal expression that… that relates directly to this case, because it said don’t change the distress sale policy.

But the reports leading to that, and the… the Kerner Commission report, the FCC’s 1978 policy statement–

Antonin Scalia:

When was the Kerner Commission report?

Mr. J. Roger Wollenberg:

–It was about 20 years ago, I think.

Antonin Scalia:

About 20 years ago.

Since which time the FCC has been on the other side of this issue, right?

Mr. J. Roger Wollenberg:

Well, the FCC–

Antonin Scalia:

Which is why Congress passed the appropriations?

Mr. J. Roger Wollenberg:

–Well, the FCC… when you say since that time, the FCC has unquestionably, with different members, been on both sides of the… of the case.

I think that this Court made very clear that there’s a big difference between subordinate agencies and the Congress of the United States that supposedly represents us all, even if it sits at home making its decisions.

And the FCC, arguably, may be more like the school board in Wygant, or the city counsel in Richmond, or the Board of Regents of the University of California in Bakke, but we’re dealing here with Congress.

And to say that the only thing that binds us… binds you… is the appropriations act, it’s the only thing that directly relates to this… this case… but in terms of whether it was a considered decision and whether it should have the weight and deference that a considered decision that is reflective of the culmination of policy discussions over many years, it seems to me would be–

Antonin Scalia:

Mr. Wollenberg, could I… let me tell you the thing that… that most troubles me about this case.

And maybe you can tell me how we can distinguish it from other situations.

If we accept in this case the legitimacy of making a prediction about a person’s action on the basis of his or her blood, what other fields of public policy may we use that kind of a presumption in?

I know of no other area where we’ve allowed it to be done.

To say on… not as a remedial matter, but on the basis of predicting behavior, if a person is of a certain blood, he will put on a certain programming.

I don’t know of any other field where we’ve done that.

Now, how can… if we adopt such a principle, and say that is legitimate for Congress or the FCC or anybody to do that, what other fields might… might we do that in?

Or why might we not do it in other fields, as well?

Mr. J. Roger Wollenberg:

–Justice Scalia, I can’t think of any.

I think that the… the strange, unique situation that exists with the Communications Act in licensing, and the necessity to be as unintrusive as possible, suggests that the… and it’s been done over the years… that the Commission has a great interest in the kind of people… their relationships to the community, and these other factors that have been discussed, who will own the stations.

And I think that race in this situation is justified… remedial in the very broad sense that the groups that Congress has identified, and maybe it should have included Portuguese, but the groups that Congress has identified have really and truly not had an equal break in our society, and therefore, they may be somewhat isolated–

Antonin Scalia:

And–

Mr. J. Roger Wollenberg:

–they may be somewhat isolated in their attitudes.

And if they’re permitted to participate in ownership, it may affect what goes out on the air, and it’s going to be very difficult to prove this minority station did something different.

But when one of the–

Antonin Scalia:

–I’m not worried about proving it, I’m worried about extending that principle to other fields.

Mr. J. Roger Wollenberg:

–And I–

Antonin Scalia:

And I’d like you to tell me how it can be limited to this one field, once we accept that Congress may predict human behavior on the basis of human blood–

Mr. J. Roger Wollenberg:

–And I–

Antonin Scalia:

–for this purpose, why may not it do it for other purposes?

Mr. J. Roger Wollenberg:

–And I respond, Your Honor, on the basis of the special licensing responsibility that means that the people that are put in charge of the air, like the decision in… in Red Lion upholding the fairness doctrine, which is the kind of interference that would… we would all rather question with newspapers.

When the fairness doctrine… when the other Commission activities were upheld, it was on the notion that they’re going to make a try at assuring that broadcasting is representative.

When this Court in Bakke refused to uphold the injunction against considering race on the medical school class in Davis, it didn’t like the quotas and the fixed numbers, it… it made a kind of a race-conscious statement.

The truth is, that while the Constitution may be colorblind, that race is with us.

And we read every morning in the newspapers about enormous new tensions related to race.

And it seems to me, to the Congress of the United States, on a considered basis, to say that it… it… it may help in our licensing field, and to avoid program intrusion, to open up this field to ownership of people who have been fairly conspicuously subjected to society-wide discrimination, it seems to me that that’s what–

Antonin Scalia:

Tell me how it’s going to help to announce that, yes, indeed race does make a difference, that you can indeed predict how people will act on the basis of their blood, that’s going to help the situation of racism that you’re concerned about.

Mr. J. Roger Wollenberg:

–I think only with… only with respect to… to sensitivity.

The people who own a newspaper or own a station are obviously going to be affected by their background and environment, and Congress can’t run around taking care of every group.

But it… it–

Antonin Scalia:

Blood, Mr. Wollenberg, blood, not background and environment, isn’t that right?

It doesn’t matter where the person of that race was raised, in the most privileged family in the most exclusive residential community.

Blood.

Mr. J. Roger Wollenberg:

–I think the congressional judgment, while not applying to everybody, the congressional judgment is that groups with particular kind of blood were treated rather differently in this country for a rather long time.

Some of them were brought over as slaves and the rest.

I come from California and in California Orientals were not terribly well treated over a period of time.

And therefore, people, even wealthy, brought-up-in-Scarsdale Orientals may have a slightly different perspective to what’s of interest.

The plurality in CBS v. DNC says for better or for worse, editing is what editors are for.

I submit that for better or worse this subject is one that is… for better or for worse… is what Congress is for.

May I reserve the rest of my time for–

Thurgood Marshall:

Everybody… one point.

You are constantly talking about blood.

What statistic or… do you have that there’s a difference in people’s blood?

Mr. J. Roger Wollenberg:

–I’m not talking blood, Your Honor.

Thurgood Marshall:

Sir?

Mr. J. Roger Wollenberg:

I said I’m not talking blood.

Mr. J. Roger Wollenberg:

I am not suggesting a difference in blood.

Thurgood Marshall:

Well, is there any difference in blood?

Mr. J. Roger Wollenberg:

I’m not aware of any difference in blood.

What I was suggesting was that people… using Justice Scalia’s term of blood, that people with particular kind of blood are more particularly perhaps particular kinds of skins have been treated rather differently in the United States over a period of time and where Congress is trying to ameliorate that situation, and in that sense what Congress has done is largely ameliorate it.

And because of the magnitude of these problems I haven’t really been able to get to the specifics of the situation in Shurberg, and I’ll try to do that in my reply time.

William H. Rehnquist:

Very well, Mr. Wollenberg.

Mr. Cole.

Harry F. Cole:

Thank you, Mr. Chief Justice, and may it please the Court:

In December of 1983 my client, Alan Shurberg, who is the respondent here, applied for a TV station in Hartford, Connecticut.

He’s a lifelong resident of Hartford, and in 1984 the FCC refused even to consider his application because Mr. Shurberg is white.

At the same time, though, the FCC granted Petitioner Astroline’s mutually exclusive application because one Richard Ramirez, a Boston resident who had been recruited to serve as Astroline’s supposedly controlling general partner was said to be Hispanic-American.

That was the sole difference between the two applications and the sole distinguishing factor.

Harry A. Blackmun:

You said he was said to be.

Was he in fact?

Harry F. Cole:

The record only reflects that he was said to be Hispanic-American, Your Honor.

There is no… the FCC did not require any further discussion of that and–

Sandra Day O’Connor:

Does the FCC policy require more than examining the surname to see if it’s Hispanic?

Harry F. Cole:

–No, Justice O’Connor.

In fact, that’s all that was reviewed in this case.

Sandra Day O’Connor:

So someone could… a woman could marry an Hispanic and pick up an Hispanic surname and qualify under the FCC policy?

Harry F. Cole:

In an uncontested situation I believe that would be correct.

Harry A. Blackmun:

Or vice versa, or vice versa.

Harry F. Cole:

That a Caucasian–

Harry A. Blackmun:

That a Hispanic woman could marry Mr. Smith and not qualify.

Harry F. Cole:

–No.

What would then happen or what is my experience in that situation is that the Hispanic woman makes clear on the face of her application that she is, in fact, Hispanic herself and that her name merely reflects her marital status.

And in those situations the FCC, at least in my experience, would tend to accord that person minority status.

Harry A. Blackmun:

But isn’t the name–

–Well, then why the emphasis on surnamed all the time?

It’s always bothered me because I think it makes no sense.

Harry F. Cole:

Well, I would agree with Your Honor.

And in fact, the FCC initially used surname in the 1978 articulation of the policy and ultimately abandoned that I believe in 1982 just to use the term Hispanic.

Antonin Scalia:

So it’s determined on the basis of dissent, is that right?

Harry F. Cole:

It would appear to be the case although again, in this situation all that was stated in the application was Mr. Ramirez is an Hispanic-American.

Antonin Scalia:

What… what if your… one of your great grandparents was Hispanic.

Is that enough?

Harry F. Cole:

I could not tell you that, Justice Scalia.

I knew… we stated in our brief–

Antonin Scalia:

There must be some rules about that, mustn’t there?

What degree of… of… of the race you have to be in order to qualify?

Harry F. Cole:

–Not to my knowledge.

In fact, we said in our brief the Storer broadcasting case where the FCC reviewed a family’s lineage back to 1492 to determine that a… a family named Lieberman was, in fact, Hispanic.

William H. Rehnquist:

Well, Mr. Cole, would you have had an opportunity at some stage in the FCC proceedings to challenge the status of Mr. Ramirez as being a Hispanic had you chosen to do so?

Harry F. Cole:

Conceivably… actually, no, I don’t believe that would be the case, Chief Justice Rehnquist.

We filed a petition to deny, obviously, raising a number of questions including the constitutionality of the distress sale.

And we had no other information… we had no information on which to challenge his… his racial or ethnic status.

We were certainly not willing to concede his racial or ethnic status without examination.

We had no discovery rights, we had no cross-examination rights.

We had only what we could dig up out and about.

William H. Rehnquist:

But had you been able to dig up something, you might have had an opportunity to challenge.

Harry F. Cole:

Had we been able to dig something, we might… presumably we could have disclosed that to the FCC, and we might have made some headway.

We might not have.

I would be speculative if I guessed.

The basis for the disparate treatment between Shurberg on the one hand and Astroline on the other was the FCC’s minority distress sale policy.

Anthony M. Kennedy:

May I… may I just ask you, on the joint exhibit… Joint Appendix 68 there’s a chart which shows capital contributions and percentage interests.

Harry F. Cole:

Yes, sir.

Anthony M. Kennedy:

And I see Mr. Ramirez made a contribution of $210 and had a 21 percent percentage interest and a Mr. and Mrs. Rose had an $830,000 contribution for a 6 percent interest.

What… what… is this just voting, voting power?

Harry F. Cole:

The way as I understand the partnership setup… and again, this is not my client so it’s… all I can tell you is what I understand through the pleadings.

As I understand, the way the partnership was initially conceived, it was a limited partnership, and the… Mr. Ramirez was said to own 21 percent overall equity, but 70 percent voting equity, whereas the rest of the people were–

Anthony M. Kennedy:

So the percentage interest appears to be ownership equity–

Harry F. Cole:

–That’s correct.

Anthony M. Kennedy:

–so far as your understanding?

Harry F. Cole:

That’s correct.

Anthony M. Kennedy:

Thank you.

But he got this for $210?

Harry F. Cole:

That’s correct.

And also I should point out, Justice Kennedy, that this is a 1987 or 1986-87 document.

The more recent document on file with the FCC shows the total capital contributions by the so-called limited partner is in the range of $24 million, and Mr. Ramirez’s remains at $210.

Now, that’s… that’s among the documents which we lodge with the Court as supplemental materials with our brief.

In acting as it did in 1984, the FCC stated that on balance the minority distress sale policy and the agency’s general interest in increasing minority ownership in broadcast stations outweighed the statutorily mandated interest inherent in considering competing applications such as Mr. Shurberg’s.

In so doing the FCC affirmed what the minority distress sale basically says on its face, and that is that white people need not apply when the minority distress sale policy is involved.

The FCC’s action and the policy underlying it are the guts of our case at this point, and our argument is a simple one.

The Constitution prohibits racial discrimination by the government.

The distress sale policy is a governmental policy which discriminated against Mr. Shurberg on the basis of his race, pretty much under discussion.

Sandra Day O’Connor:

Well, of course, the Court has recognized the need and the possibility of some remedial action for past discrimination or for, in some cases, prima facie evidence of such discrimination.

Now, is that a possibility that that is what underlay the policy in this case?

Harry F. Cole:

Well, Justice O’Connor, I have to say I’ve sat through four separate arguments, four separate presentations this morning to the court, and I think the one lesson that I’ve learned is that there is no basis for saying exactly what the FCC was doing.

The FCC itself, as I believe you’ve noted in the last presentation, had specifically disclaimed here this morning that its minority ownership policies are remedial in nature, and we would tend to agree with that, although some of the briefs in this case have indicated that they believe there is some remedial component.

In any event, even if it were remedial and even if it could be said that there is some effort to correct remediation, it is not at all narrowly tailored to that purpose.

In other words, there’s no showing… again, going back to what was shown in the application… all that was said is Mr. Ramirez is an Hispanic-American.

It doesn’t say Mr. Ramirez is an Hispanic-American who has suffered discrimination, who has been the victim of any kind of disadvantage at all.

And the FCC policy specifically doesn’t get into that.

In other words, it is not… even if it were remedial in nature… and we do not agree that it is… it is not at all narrowly tailored to correct remediation or, I’m sorry, to correct conceivable discrimination which has occurred.

Before I get into the substance of my argument I think it may be appropriate to… to discuss very briefly the standard of review because there has been a lot of discussion this morning, but not much directed to precisely what issues are before the Court.

As I understand the standard of review with respect to race-based governmental classifications, it is incumbent upon the proponent of that classification, whether it’s an agency, local government or even the federal government to come forward and explain what in compelling governmental interest the classification is directed to, and then to… to demonstrate that, in fact, the classification is narrowly tailored with a good degree of precision to achieve that compelling governmental interest.

That… that, at least, is my understanding of the strict scrutiny standard.

Now, in this case, as I just mentioned to Justice O’Connor, there appears to be some confusion as to exactly what compelling governmental interest is supposedly being advanced.

And I think we can take as a given at least based on the Commission’s presentation this morning that it is not remedial… a remedial purpose to… to correct past discrimination although I’m certainly happy to discuss that if anyone has questions.

Rather, what appears to be the Commission’s position now is that it is… the distress sale policy in particularly in the minority ownership policies as a whole are directed to the advancement of program diversity, and that is the compelling governmental interest.

Harry F. Cole:

And the citation is to the First Amendment and the diversity of voices and a multiplicity of voices and so forth.

I want to say right off the top that Shurberg is not averse.

We do not dispute the value or the desirability, especially in a democratic society of diversity of voices.

A multiplicity of voices is clearly the way that our society has chosen to govern itself, and we support that.

Our problem is that race-based classifications are completely and utterly inappropriate and unnecessary for the advancement of that interest.

There is absolutely no rational connection at all between the asserted goal and the policy.

So from that point of view we would challenge the notion of… of… of program diversity as… as a valid compelling governmental interest.

John Paul Stevens:

May I ask a question there?

Harry F. Cole:

Certainly.

John Paul Stevens:

Supposing two alternatives: one, that all of the broadcast media in the country were owned by white males, 100 percent, and the second hypothesis, that 80 percent were owned by white males and 20 percent were owned by minority groups of various characteristics.

Do you think it is safe to say that there will be no difference in the diversity of programming between the two hypotheses?

Harry F. Cole:

We’re talking commercial stations, sir?

John Paul Stevens:

Just whatever… the whole spectrum that the FCC licenses.

Harry F. Cole:

Well, if I may at least initially restrict my… my… my response to commercial stations, in the commercial broadcast area, broadcast programming is market driven.

Even Mr. Wollenberg in his amicus brief for Capital Cities in the Metro case concedes that point.

They’re market-driven considerations.

John Paul Stevens:

He said they weren’t exclusively, but he said primarily, yes.

Harry F. Cole:

I would have to get his brief out, but… I… there is–

John Paul Stevens:

Well, in any event, are they entirely market driven?

Harry F. Cole:

–I believe so or certainly–

John Paul Stevens:

So your answer then is you can safely predict there would be no difference between the programs in the two hypotheses.

Harry F. Cole:

–I will accept that, yes, sir.

John Paul Stevens:

Yeah.

Is that critical to your argument that we accept that as a factual premise?

Harry F. Cole:

No.

In fact, it may be that the… there would be vast differences in programming, but the vast differences might arise not because… have nothing to do with the race of the owners.

For instance, the FCC’s review board has specifically found that in at least two instances that were… that were subjects of litigation, nonminority white owners had provided what was referred to as extraordinary program service to a Hispanic and to a black audience.

In fact, even here in the Washington, D.C. market, there are… I’m aware of two stations one of which is owned by whites but programs primarily for a black audience and–

John Paul Stevens:

Of course, there’s no doubt.

Obviously you’re correct there.

John Paul Stevens:

But your feeling is that the program ownership is totally irrelevant to the… to the programming?

Harry F. Cole:

–Yes.

It should be presumed to be so for… for regulatory purposes.

John Paul Stevens:

Would it be true also, I suppose, if 100 percent of the stations were owned by Democrats and then in the other alternative would be 100 or 80 percent Democrats and 20 Republicans.

We’d also assume there’d be absolutely no difference in the programming?

[Laughter]

Harry F. Cole:

I suppose that would depend on the Republicans and the Democrats.

John Paul Stevens:

Well, of course that depends on the whites and the blacks or not.

Harry F. Cole:

That may be, but again, there is no constitutional problem with… the Constitution is not–

John Paul Stevens:

But supposing the Commission went out and that survey and found out they were all owned by Democrats and they decided to set aside a few for Republicans?

Harry F. Cole:

–That would raise… that would raise First Amendment problems, but not equal protection problems.

John Paul Stevens:

They’re just interested in diversity?

Harry F. Cole:

Well, the… I’m sorry?

John Paul Stevens:

They’re just interested in diversity, I say, and you’d say that’s totally irrational to assume that would produce any diversity because everybody’s market driven.

Politics, race, all these things don’t make any difference at all in program planning.

Harry F. Cole:

In the Republican-Democrat situation I would suggest that a different standard of review might conceivably apply because again there are no equal protection problems or considerations raised on the face of that hypothetical.

Now–

John Paul Stevens:

I suppose Democrats and Republicans are entitled to be treated equally.

Harry F. Cole:

–But the Constitution does not mandate that.

John Paul Stevens:

And does the personnel of the Commission have to be politically… isn’t there some requirement that different parties be represented?

Harry F. Cole:

I believe there is a requirement of at least some… some split.

Antonin Scalia:

There’s some reason to think that Republicans and Democrats thinking differently, isn’t there?

Harry F. Cole:

Yes, there is.

[Laughter]

One problem or a threshold problem with the notion of program diversity, even assuming that there were some… some basis for it, is a valid, compelling governmental interest for strict scrutiny purposes is that this court has never approved race-based classifications just because they might achieve some good or desirable goal.

Such an approach would enable Congress to enact a wide variety of racial classifications.

As Justice Scalia suggested in questioning Petitioner’s counsel, it is conceivable under the same rationale, program diversity rationale if it’s accepted here, that ten years from now the Commission could state that… issue a policy statement saying that there are too few white upper-middle class classical music stations in the major urban areas and that, therefore, we’re going to set aside a certain number of those for… in order to promote diversity in that respect because we see a lack there.

And again, if the policies are affirmed today, then presumably that policy would be affirmed as well.

By the same token, it is conceivable that this could extend outward to other important institutions beyond the broadcasting range.

For example, federal judgeships.

Harry F. Cole:

If it is desirable to have a multiplicity of… of people or representative voices in some… in some respect along those lines, then very conceivably it… that… that rationale could be extended to include–

Byron R. White:

Well, are there some signs in the cable industry?

Harry F. Cole:

–There are minority ownership policies, I believe–

Byron R. White:

No, I mean… I mean not… not on the minority basis, but are there set-asides for local stations or local channels or–

Harry F. Cole:

–You mean carriage provisions for so that a local cable system will have to carry?

No.

Those have been… those are the former “must-carry” provisions, and those have eliminated, Justice White.

Byron R. White:

–But there used to be?

Harry F. Cole:

There used to be, yes.

Yes.

Byron R. White:

Were those unconstitutional do you think?

Harry F. Cole:

I have not researched or briefed that point.

My… my gut reaction is that that is not, again, a race-sensitive issue that raises on its face equal protection problems.

Byron R. White:

Well, you were talking about music stations.

Harry F. Cole:

Well, I had thrown in… used the term white, upper-middle class music stations.

In that–

Antonin Scalia:

Mr. Cole, would you have an objection to this if the Commission had set it up a different way, that there is a preference for, let’s say, people who are leaders in Hispanic cultural affairs, whether they’re Hispanic or not or a preference for people who’ve taken particular interest and done particular study in black history?

Harry F. Cole:

–That would certainly be far less objectionable.

It might arise in–

Antonin Scalia:

Would it be objectionable at all–

Harry F. Cole:

–It might be.

Antonin Scalia:

–And it would be more likely to have a direct effect on what the programming would be, wouldn’t it, than just… just the race of the person?

Harry F. Cole:

Yes.

That’s correct.

It might raise some content regulation problems.

But certainly from an equal protection point of view, I would have no problem with it.

Antonin Scalia:

But there’s no reason to think that this policy is that at all?

Harry F. Cole:

No.

This policy inquires only as to racial or ethnic status, and that’s the end of the discussion.

And that brings me to the second objectionable aspect of… of… of program diversity as a compelling governmental interest.

Harry F. Cole:

It is based on a racist assumption.

It assumes that each racial or ethnic group has its own minority viewpoint and that that minority viewpoint will ultimately be reflected in Mr. Shurberg.

That is nothing less than a racist attitude which ignores individual traits and abilities and instead substitutes invidious stereotypes rather than consideration of the individual.

William H. Rehnquist:

You’re not saying that certain types, whether it be, you know, Hispanics, white, upper-middle class, blacks, don’t like certain kinds of programs, but you’re saying they could be provided by people who aren’t necessarily of that… of that group?

Harry F. Cole:

I’m saying two things, Chief Justice Rehnquist.

First, I’m saying that that’s correct, that those kind of programs can be provided and may very likely be provided by any number of different people from different groups, but I’m also saying that it’s inappropriate to assume, certainly as a legislative constitutional matter, that all black people like soul music, that that is… that’s not a rational conclusion.

Black people like all kinds of music, as do white people, as do Hispanic people.

There–

John Paul Stevens:

May I ask, is it… is it irrational to assume that a greater percentage of black people like that kind of music than the same corresponding percentage of white people?

Harry F. Cole:

–Yes, I would say that is–

John Paul Stevens:

That’s irrational?

Harry F. Cole:

–That is a presumption which would offend the equal protection clause.

William H. Rehnquist:

Even if it were… supposing it weren’t a presumption.

Suppose you went out and took a survey of an area which was, say, very much majority black and the response of those people was we all… or, say, 85 percent of them say we want soul music, we want rap, something like that.

Now, if that isn’t being provided at all in that community, could the Commission take that into consideration?

Harry F. Cole:

Sure.

The need for programming as perceived by the actual audience itself is… is… is certainly a consideration which might be taken into account.

But again, the need for programming, for any particular programming, may not be racially driven.

Even though you interview 75 percent of the people in Washington, D.C. and in that survey obtain a… a skewed heavily toward blacks, even if they all happen to say, yes, we like X kind of music, that doesn’t necessarily mean that all blacks… that that is racially driven.

That may be class driven, geographically driven, economically driven.

There are any number of other factors which enter into it other than race, and that’s all we’re saying, that race is irrelevant, and race should be irrelevant.

The range of viewpoints that… that are available in any particular race or ethnic group is, in our view, at least, similar if not identical to the equivalent range in other groups.

For example, you have David Duke.

You have Louis Farrakhan.

You have Abbey Hoffman.

You’ve got Eldridge Cleaver.

You have Admiral William Crowley.

You have General Colin Powell.

You’ve got George Wallace.

You have Gus Savage.

Harry F. Cole:

There are ranges, and certainly just because–

Antonin Scalia:

I think your argument is really… I just think it’s not true if… if you’re saying that there are not some generalizations that could be made validly if you wanted and were permitted to make the generalizations.

I suppose you could say that a higher percentage of one group would like a certain percent… kind of programming than another.

I had thought your point is that that is simply the kind of a generalization that our government is not allowed to make.

We can’t send people to school on that basis.

We can’t program on that basis.

We cannot make racial generalizations.

If that isn’t your point, I think… and you’re going to argue it on the basis of probabilities, you know, I’d say it’s maybe not a high probability, but if you pick somebody with a Hispanic surname, you know, 60/40 they would like mariachi bands.

I don’t know.

Harry F. Cole:

–Justice Scalia–

Antonin Scalia:

If I had to bet on it, that’s how I’d put my money.

Harry F. Cole:

–I’m not arguing that the government can take these into account at all.

I believe you understood my point precisely, that… that I’m not arguing that these factors can be taken into account.

William H. Rehnquist:

You’re saying that the government cannot take those factors into account?

Harry F. Cole:

That’s correct.

William H. Rehnquist:

Well, supposing that there’s… that there’s… take a community in the southwest and take Justice Scalia’s hypothesis where there’s an actual survey that… and it happens to be largely Hispanic, that there are 100,000 people there, 80,000 of them prefer mariachi bands and there’s no station providing mariachi bands.

Can’t the FCC make some requirement that the station provide mariachi bands?

Harry F. Cole:

I suppose it could, but what it can’t do is compel that the license which is issued by the FCC go to a Hispanic or Mexican or what… or any particular ethnic group because of the assumption that that ethnic group will provide mariachi music.

William H. Rehnquist:

But it could put in some condition that an applicant, at least be favored… if it, regardless of who the applicant was, if it would be put in some mariachi band music?

Harry F. Cole:

From an equal protection point of view I have no objection to that.

From a content regulation point of view, that may raise other questions, depending on the structure of the policy.

And the Commission has, as the Court is aware in the WNCN case, has moved itself completely away from government regulation of entertainment formats.

Antonin Scalia:

Because the market takes care of it, but before it came to that… that… that conclusion, it had indeed licensed stations on basis of format.

Harry F. Cole:

That’s correct.

Antonin Scalia:

What kind of… you know, different kind of music; indeed, different degrees of rap… of rock music.

I forget how many there were.

But it used to do that, right?

Harry F. Cole:

That’s correct.

Antonin Scalia:

But not on the basis of race, just on the basis of the kind of programming that was promised.

Harry F. Cole:

That’s correct.

Harry F. Cole:

The bottom line as far as the compelling interest is concerned, in our view, is it can be reduced to two questions.

Why is Alan Shurberg any less capable of increasing program diversity just because he is white, and why is Astroline any more capable of doing so just because it is… its supposedly controlling principal has a Spanish-sounding last name?

And I think that… that presents that point as clearly as I can.

I would like to proceed to the second aspect of the strict scrutiny standard, which is the narrow tailoring, that even if it is accepted for the sake of argument, that the program diversity is a valid, compelling governmental interest sufficient to support race-based classifications, it still has to be… the program still has to be narrowly tailored to meet that.

The distress sale policy is not narrowly tailored in any sense, meaningful or otherwise.

The only requirement that needs to be… that is imposed on a minority distress sale applicant is that it is assert that it is minority controlled.

There is nothing about any program commitments.

The applicant does not have to show in his application what he expects to do or what he may do or what he’d like to do, and, in fact, as we’ve indicated in the… in our brief, the… what Astroline ultimately came up with in the way of programing in our view shows not a tremendous sensitivity to minorities.

Secondly, there is no limit on the number of other stations that might be owned by the distress sale applicant.

In other words, if I’m a distress sale applicant and I own 35 other stations, AM, FM and TV stations, I’m still qualified for an absolutely dispositive preference under the distress sale policy as against somebody who’s white but doesn’t own any stations.

This makes no sense as far as program diversity is concerned.

Second, there’s… or third, there’s no need for a showing of the need for the programming.

In other words, for example, assume a community with three radio stations, all of which are playing rock and roll music of a similar genre, and a distress sale applicant comes in and says I want to come in.

He’s not required to show that he’s going to anything other than rock and roll music of that genre.

There’s no… there’s nothing at the… at the door when he walks into the Commission to indicate to the Commission that program diversity will be increased in the least.

Anthony M. Kennedy:

Is there any requirement that the station… the property be held for a particular amount of time?

Harry F. Cole:

No, Your Honor.

Anthony M. Kennedy:

If it becomes profitable, if it can be sold?

Harry F. Cole:

I’m sorry.

I correct myself.

There is a one-year holding period.

Anthony M. Kennedy:

But after one year the new owners are free to sell it?

Harry F. Cole:

That’s correct, for whatever dollar value to whomever.

Let the marketplace govern.

And as we’ve indicated in the brief that people who have taken advantage of the distress sale have made out quite well.

One entity bought a station for $3.5 million and sold it five, six years later for $35 million, so it’s in the nature of, not so much programming–

Byron R. White:

I would hope that they improved the station immensely.

Harry F. Cole:

–I would hope so, Your Honor, for that amount of money.

There’s no indication required that the distressed sale applicant demonstrate an ability or familiarity with the local… an ability to serve the local community or familiarity with the local community.

This is a… a similar component is imposed in the comparative preferences area so that a white person who is a local resident of the area is deemed by the FCC to have the equivalent enhancement value as a minority who is not from the area.

Harry F. Cole:

There is no… that doesn’t enter into the matrix in the distress sale policy.

If I might, there are alternative measures.

If the FCC really wants to get to minority… or, diverse programming, there is one very simple expedient which it could use.

It could say only… it could reduce to one the maximum number of stations that any individual or entity could own.

Just reduce it to one and say, that is all there is.

One per person, come and get them.

If the theory of program diversity is that the maximum number of owners leads to the maximum amount of diversity, that would be the way to do it.

It could be done on a race-neutral basis, and it could be done tomorrow.

The FCC has not done that.

To the contrary, over the last five years it has increased the number of stations that can be owned by any particular entity, almost doubling them from seven to 12, and in some situations as many as 14 can be owned.

That being the case, it would appear that the FCC is not as concerned about diversity as it would have the general public believe.

I would like to address very briefly the 3.5 percent figure, because I think it’s an important one if the question of remediation arises at any point.

Ms. Polivy during the Metro argument referenced the fact that only 3.5 percent of the broadcast stations in the country are owned by minorities, and this is asserted in some of the briefs as a basis for concluding there is an underrepresentation.

I don’t want the Court to go away thinking that that is in fact a valid assessment of the situation.

In fact, the congressional research study report indicates, I believe… and it’s cited by the FCC in its own brief… that minority participation in the broadcast industry may be somewhere between 13 and 15 percent.

The 2 to 3.5 percent figure which is so frequently cited by the various supporters of the policy relates only to those situations in which the minority person or people exercise what the FCC defines as control of the license, control being defined as 50 percent or more ownership.

So that if a minority individual happened to own 49.9 percent of a chain of stations that amounted to 25, 35 stations, that ownership would not be reflected at all.

William H. Rehnquist:

Thank you, Mr. Cole.

Harry F. Cole:

Thank you.

William H. Rehnquist:

Mr. Wollenberg, you have seven minutes remaining.

Mr. J. Roger Wollenberg:

If the Court please:

I think it’s important to realize that in the circumstances of this case, contrary to the suggestions of counsel, that Mr. Shurberg was not burdened because he was white.

He was not treated differently from a hypothetical black who at the same time that Mr. Shurberg came in had come in in the same fashion.

They both would have been turned down, because under the Commission’s procedures, the time when the window opens for coming in against a renewal had passed.

So that when, after the 1977 renewal of Faith Center, which was the old licensee, after the time for that had passed, it was too late for someone else to come in, and if Mr. Shurberg had come in then, which he didn’t, and someone else had come in then who was black, they both would have been turned down.

The Court below, while it found the Commission’s distress sale unconstitutional… policy unconstitutional… I prefer to call it the congressional policy now, and in that regard I hope the Court will take the time to read the conference report on the ’82 Act which is even more explicit than the Senate report that I was reading from.

Congress knew what it was doing, it knew it was remediation for society-wide discrimination and because it thought it would help with programming.

Counsel referred to some things not in the record about individuals.

I guess it’s permissible for me to mention that in the last few days there was a story in the Washington newspapers about a conservative radio station where the personality made an invidious remark referring to an anchor person on one of the networks as “Connie Chink”.

It’s barely possible that if an Oriental had owned that station, that that at least would either not have been done, or might not have been repeated, and it’s even possible if a Hispanic owned the station.

Mr. J. Roger Wollenberg:

It’s also possible if a white owned the station.

But sensitivity is something that I think, just as with juries, I think that Congress is entitled to some interest in sensitivity.

Byron R. White:

Did you finish what you wanted to say about the fact that this client of your friend here wouldn’t have been considered in any event?

Mr. J. Roger Wollenberg:

No, I hadn’t finished, and I thank Your Honor.

Mr. Shurberg and later his company did not come in at renewal time against Faith Center–

Byron R. White:

Why didn’t that serve to disqualify him completely, without even getting to any of the–

Mr. J. Roger Wollenberg:

–Well, there was a long, complicated procedure.

Under the distress sale policy, if a licensee’s renewal is designated for hearing on qualifications issues, then competing applicants can’t come in until the matter is settled.

The court below has upheld that.

Byron R. White:

–But he didn’t lose… his client… your opposition didn’t lose on that basis, I guess.

Mr. J. Roger Wollenberg:

Well, he did in a way, because there were three distress sales.

The first two fell through–

Byron R. White:

Well, on that basis we shouldn’t have taken the case.

Is that it?

Mr. J. Roger Wollenberg:

–And when he got to the third distressed sale, which was a distress sale to Astroline, the normal renewal time would come up, but the Commission does not engage in taking competing applications and the Court below held this, when the case is in a hearing status, so that under the distress sale policy, when the Commission approved the distress sale to Astroline, Mr. Shurberg couldn’t come in and demand a hearing and no one else could, white or black.

William H. Rehnquist:

Are you saying that the minority set aside program made no difference in the outcome of this case?

Mr. J. Roger Wollenberg:

I think it made no difference in the outcome of what Mr. Shurberg was trying to do.

He never offered to buy the station.

William H. Rehnquist:

Well, but I said, did it make any difference in the outcome of this case, of the award of this franchise?

Mr. J. Roger Wollenberg:

Well, had the… had there been no distress sale policy, then what would have happened was–

William H. Rehnquist:

Couldn’t you answer my question a yes or a no?

Mr. J. Roger Wollenberg:

–Would you repeat it?

I’m sorry.

William H. Rehnquist:

Yes.

Are you saying that the Commission’s minority set-aside policy and distress case sales made no difference in the outcome of this case?

Mr. J. Roger Wollenberg:

It made no necessary difference in the outcome as far as Shurberg was concerned, because if there had been no distress sale the Faith Center renewal hearing on qualifications would have gone through.

If Faith Center won, it would be renewed.

If Faith Center lost, then at that point Shurberg and everybody else in the world could come and apply.

So that would have made a difference, but it wouldn’t necessarily mean that Shurberg would have gotten the station.

He never offered to buy it.

Byron R. White:

You’re the plaintiff… I mean, you’re the petitioner in this case and you didn’t raise any of this in your petition.

Mr. J. Roger Wollenberg:

Oh, no.

We didn’t have to, because the court below… I’m glad you make that point, because this Court has admonished recently that you like to stick to what the petition is granted on.

The court below found that what the Commission had done was entirely appropriate under the Communications Act and its procedures and there was no violation of the act.

It held only that the distress sale policy was unconstitutional, and that’s all that we’re here on.

So we’re not asking this Court to reverse the Court below on the question of whether Mr. Shurberg would have been allowed under the Communications Act to do something different.

What we’re here asking is that this Court determine the distress sale policy is (1) nonrigid, nonquota, on very small… about four times a year, when a station is in trouble, the Commission may or may not permit a distress sale.

On one of the other Faith Center things it didn’t.

It passes on each case, on its own facts, and if the distress sale applicant is qualified, if the licensee’s putative sins aren’t deemed to be too heinous and the distress sale applicant is fully qualified, the Commission may approve it.

It may not, it may go ahead and order a comparative hearing when, as and if the station comes up for regular renewal.

William H. Rehnquist:

Thank you, Mr. Wollenberg.

The case is submitted.

The honorable court is now adjourned until Monday next at ten o’clock.