United States v. Storer Broadcasting Co.
351 U.S. 192 (1956)
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Rule of Law:
An administrative agency may use its rulemaking authority to establish clear standards of eligibility for licenses, and it is not required to provide a full evidentiary hearing to an applicant who is admittedly not in compliance with those standards, provided a mechanism exists for seeking a waiver of the rule.
Facts:
- The Federal Communications Commission (FCC) initiated a rulemaking process to amend its "Multiple Ownership Rules."
- The purpose of the rules was to avoid overconcentration of broadcasting facilities by setting numerical limits on the number of AM, FM, and television stations a single entity could own.
- Storer Broadcasting Company was a licensee that already owned the maximum number of television stations (five) and standard radio stations (seven) permitted under the proposed rules.
- Storer participated in the rulemaking process, objecting that the rules were invalid because they would deny it a statutory right to a hearing on future applications for additional stations.
- The FCC formally adopted the Multiple Ownership Rules, which stated that owning more than the specified number of stations would be considered a "concentration of control contrary to the public interest, convenience or necessity."
Procedural Posture:
- Storer Broadcasting Company filed a petition in the U.S. Court of Appeals for the District of Columbia Circuit to review the FCC's order adopting the Multiple Ownership Rules.
- On the same day the rules were adopted, the FCC dismissed a separate, pending application from Storer for an additional television station, citing the new rules as the basis for the dismissal.
- The Court of Appeals held in favor of Storer, finding that the rules' conclusive presumption against applicants exceeding the ownership cap violated the 'full hearing' requirement of the Communications Act.
- The Court of Appeals remanded the case to the FCC with directions to eliminate the challenged language from the rules.
- The United States (on behalf of the FCC, as petitioner) sought and was granted a writ of certiorari by the U.S. Supreme Court.
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Issue:
Does the Communications Act's requirement for a "full hearing" before denying a license application prevent the Federal Communications Commission from promulgating a substantive rule that automatically disqualifies applicants who exceed a set ownership limit?
Opinions:
Majority - Mr. Justice Reed
Yes, the Federal Communications Commission has the authority to promulgate such rules. The statutory hearing requirement does not withdraw the Commission's rulemaking authority, which is necessary for the orderly conduct of its business. The Communications Act must be read as a whole, allowing the FCC to give concreteness to the "public interest" standard by creating rules that limit the concentration of station control. The Court held that it would be a waste of administrative resources to hold a full hearing for an applicant who admittedly does not meet the standards of a validly promulgated rule. This holding is consistent with precedent in National Broadcasting Co. v. United States, which upheld similar prohibitory regulations. Crucially, the right to a hearing is preserved because the FCC's regulations provide a procedure for an applicant to request a waiver or amendment of the rules by showing adequate reasons why the rule should not apply to their specific circumstances.
Concurring-in-part-and-dissenting-in-part - Mr. Justice Harlan
This opinion dissents on the jurisdictional issue but concurs on the merits. Storer was not a "party aggrieved" and therefore lacked standing to seek review of the regulations. The rules themselves are not a reviewable "order" because they do not require Storer to do or refrain from doing anything; they are merely a statement of future Commission policy. Unlike the regulations in Columbia Broadcasting System v. United States, these rules have no immediate coercive effect. Storer's alleged injury is the mere possibility of a future license denial, which is not a present harm sufficient to establish standing. However, since the majority found jurisdiction, this opinion concurs with the majority's reasoning that the FCC's rules are a valid exercise of its authority.
Dissenting - Mr. Justice Frankfurter
This opinion dissents on jurisdictional grounds and does not reach the merits. Storer was not a "party aggrieved" under the relevant statute and therefore the Court of Appeals should not have entertained the petition for review. Jurisdictional limitations are not mere technicalities; they are essential for keeping the courts within their appropriate constitutional and statutory limits. The Court should not express views on the merits of a case when it lacks the jurisdiction to hear it in the first place.
Analysis:
This is a landmark administrative law case that validates an agency's power to use substantive rulemaking to resolve issues that would otherwise require repetitive, individual adjudications. The decision empowers agencies to create firm eligibility criteria through rules, thereby streamlining their processes by avoiding hearings for applicants who are clearly disqualified. This case establishes the principle that as long as a procedural avenue exists for seeking a waiver, a general rule can effectively foreclose an adjudicatory hearing. This balance between administrative efficiency and individual due process rights has profoundly shaped the scope of agency rulemaking authority.
