(Cite as: 254 F.3d 89, 349 U.S.App.D.C. 12)
United States Court of Appeals,
District of Columbia Circuit.
BUILDING OWNERS AND MANAGERS ASSOCIATION INTERNATIONAL, et al., Petitioners,
v.
FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents.
Satellite Broadcasting and Communications Association, et al., Intervenors.
Nos. 99-1009, 99-1021.
Argued March 5, 2001.
Decided July 6, 2001
Landlords' associations brought facial challenge against Federal Communications Commission's (FCC) extension to leased property of rule prohibiting restrictions on direct-to-home satellite broadcasts. The Court of Appeals, Rogers, Circuit Judge, held that: (1) FCC had authority under Telecommunications Act to extend rule to leased properties; (2) extension of rule did not constitute per se taking of landlords' property; and (3) Chevron analysis applied to landlords' regulatory taking claim.
Petition denied.
Randolph, Circuit Judge, filed concurring opinion.
West Headnotes
[1] Statutes 219(1)
361k219(1)
To determine whether federal agency acted within its legally delegated authority in promulgating rule, court employs Chevron analysis, inquiring first whether Congress has spoken directly to precise issue presented, in which case court defers to unambiguously expressed intent of Congress; if delegating legislation is silent or ambiguous with respect to specific issue at hand, court inquires whether agency reasonably exercised its discretion in construing statute.
[2] Telecommunications 460
372k460
(Formerly 372k449.20)
Federal Communications Commission (FCC) could, under Telecommunications Act, extend to leased property its regulation prohibiting restrictions on direct-to- home satellite broadcasts, even though extension could have effect of altering property rights created under state law by requiring landlords to permit tenants to install receiving devices in areas controlled by tenants; Act expressly vested FCC with authority to insure that viewers could access such services, and rule was reasonable interpretation of that authority. Communications Act of 1934, § § 2(a), 4(i), 303(v), as amended, 47 U.S.C.A. § § 152(a), 154(i), 303(v); 47 C.F.R. § 1.4000(a)(1).
[3] Eminent Domain 2(1.1)
148k2(1.1)
Federal Communications Commission's (FCC) extension to leased property of regulation prohibiting restrictions on direct-to-home satellite broadcasts did not constitute per se taking of landlords' property; landlords had already consented to occupation of property by leasing it, no physical intrusion by third party was involved, and government could regulate terms of landlord- tenant relationship without triggering right to compensation or interfering with landlords' right to exclude. U.S.C.A. Const.Amend. 5; Communications Act of 1934, § § 4(i), 303(v), as amended, 47 U.S.C.A. § § 154(i), 303(v); 47 C.F.R. § 1.4000(a)(1).
[4] Eminent Domain 2(1.1)
148k2(1.1)
[4] Statutes 219(6.1)
361k219(6.1)
Landlords' claim that Federal Communications Commission's (FCC) extension to leased property of regulation prohibiting restrictions on direct-to-home satellite broadcasts constituted regulatory taking was subject to Chevron analysis; claim required factual assessments and thus extension of rule could not be said to create identifiable class of parties harmed by alleged taking, as required to support facial challenge. U.S.C.A. Const.Amend. 5; Communications Act of 1934, § § 4(i), 303(v), as amended, 47 U.S.C.A. § § 154(i), 303(v); 47 C.F.R. § 1.4000(a)(1)..
*90 **13 On Petitions for Review of an Order of the Federal Communications Commission.
Matthew C. Ames argued the cause for petitioners. With him on the brief were William Malone and Nicholas P. Miller.
Gregory M. Christopher, Counsel, Federal Communications Commission, argued the cause for respondents. With him on the brief were Christopher J. Wright, General Counsel, Daniel M. Armstrong, Associate General Counsel, A. Douglas Melamed, Acting Assistant Attorney General, United States Department of Justice, Robert B. Nicholson and Robert J. Wiggers, Attorneys. John E. Ingle, Deputy Associate General Counsel, Federal Communications Commission, Catherine G. O'Sullivan and Nancy C. Garrison, Attorneys, United States Department of Justice, entered appearances.
Richard P. Bress argued the cause for intervenors, DIRECTV, Inc., et al. With him on the brief were James H. Barker, Margaret L. Tobey, Joan E. Neal, Cristina Chou Pauze, Timothy R. Graham, Joseph M. Sandri, Jr., Barry J. Ohlson, David Alan Nall, Jonathan Jacob Nadler and Benigno *91 **14 E. Bartolome, Jr. Philip L. Verveer and Theodore C. Whitehouse entered appearances.
Before: RANDOLPH, ROGERS and GARLAND, Circuit Judges.
Opinion for the Court filed by Circuit Judge ROGERS.
Concurring opinion filed by Circuit Judge RANDOLPH.
ROGERS, Circuit Judge:
Following enactment of the Telecommunications Act of 1996, the Federal Communications Commission promulgated a rule prohibiting restrictions on certain over-the-air reception devices ("OTARD"). The rule invalidated
[a]ny restriction, including but not limited to any state or local law or regulation, including zoning, land-use or building regulation, or any private covenant, homeowners' association rule or similar restriction on property within the exclusive use or control of the antenna user where the user has a direct or indirect ownership interest in the property that impairs the installation, maintenance, or use of [antennas that are designed to receive direct broadcast satellite service, video programming services via multipoint distribution services, or television broadcast signals]....
Preemption of Local Zoning Regulation of Satellite Earth Stations, Implementation of Section 207 of the Telecommunications Act of 1996: Restrictions on Over-the-Air Reception Devices: Television Broadcast Service and Multichannel Multipoint Distribution Service, 11 F.C.C.R. 19276 (1996) ( "First OTARD Order"). In 1998, the Commission extended the prohibition, with certain exceptions, to "lease provision[s] ... where the [antenna] user has a ... leasehold interest in the property." In the Matter of Implementation of Section 207 of the Telecommunications Act of 1996--Restrictions on Over-the- Air Reception Devices: Television Broadcast, Multichannel Multipoint Distribution and Direct Broadcast Satellite Services, 13 F.C.C.R. 23874 (1998) ("Second OTARD Order").
Several trade associations representing real estate owners and property managers [FN1] appeal the Second OTARD Order, contending that the rule, as amended, is invalid on its face. They contend, first, that the Commission exceeded its statutory authority in extending the OTARD rule to leased property; second, that the amended rule violates the Takings Clause of the Fifth Amendment of the United States Constitution; [FN2] and third, if there is no taking, that the Commission acted arbitrarily and capriciously in extending the rule to leaseholds. Finding unpersuasive these facial challenges to the amended OTARD rule, we deny the petition.
FN1. Petitioners are the Building Owners and Managers Association International, the Institute of Real Estate Management, the National Apartment Association, the American Seniors Housing Association, the National Multi Housing Council, the National Association of Realtors, the Real Estate Roundtable, and the National Association of Home Builders.
FN2. "[N]or shall private property be taken for public use, without just compensation." U.S. Const. amend. V.
I.
In promulgating the OTARD rules, the Commission relied on § 207 of the Telecommunications Act of 1996, Pub.L. No. 104-104, 110 Stat. 56 (the "1996 Act"), which provides:
Within 180 days after the date of enactment of this Act, the Commission shall, pursuant to Section 303 of the Communications *92 **15 Act of 1934, promulgate regulations to prohibit restrictions that impair a viewer's ability to receive video programming services through devices designed for over-the-air reception of television broadcast signals, multichannel multipoint distribution service, or direct broadcast satellite services.
The 1996 Act also added a new subsection 303(v) to the Communications Act of 1934, granting the Commission
exclusive jurisdiction to regulate the provision of direct-to-home satellite services ... [T]he term "direct-to-home satellite services" means the distribution or broadcasting of programming or services by satellite directly to the subscriber's premises without the use of ground receiving or distribution equipment . . . .
47 U.S.C. § 303(v). The 1996 Act left undisturbed the broad statutory directives contained in the Communications Act of 1934, including the Commission's mandate to "make [communications services] available ... to all the people of the United States," 47 U.S.C. § 151, and the Commission's authority to "perform any and all acts, make such rules and regulations, and issue such orders . . . as may be necessary in the execution of its functions." Id. § 154(i).
As early as the 1980s, the Commission had begun restricting potential barriers to the development of satellite-based residential video programming. See, e.g., Preemption of Local Zoning or Other Regulation of Receive-Only Satellite Earth Stations, 51 Fed.Reg. 5519 (1986). In direct response to the directives in the 1996 Act, the Commission promulgated rules to safeguard viewers' ability to use devices designed for direct broadcast satellite services, television broadcast services, and multichannel multipoint distribution services (collectively, "§ 207 devices"). See, e.g., Preemption of Local Zoning Regulation of Satellite Earth Stations, 11 F.C.C.R. 5809 (1996); Implementation of Section 207 of the Telecommunications Act of 1996: Restrictions on Over-the-Air Reception Devices: Television Broadcast and Multichannel Multipoint Distribution Service, Notice of Proposed Rulemaking, 11 F.C.C.R. 6357 (1996). The Commission adopted its first rule implementing § 207 on August 5, 1996. See First OTARD Order, 11 F.C.C.R. 19276 (1996). The first OTARD rule provided:
Any restriction, including but not limited to any state or local law or regulation, including zoning, land-use or building regulation, or any private covenant, homeowners' association rule or similar restriction on property within the exclusive use or control of the antenna user where the user has a direct or indirect ownership interest in the property, that impairs the installation, maintenance, or use of [a § 207 device] ... is prohibited....
47 C.F.R. § 1.4000 (1996). The prohibitions in the first OTARD rule applied only to property in which the "user" of satellite services (i.e., the "viewer" for purposes of § 207) had an ownership interest. Despite its stated prohibition of "any" restriction, the rule allowed for several exceptions: Restrictions on § 207 devices were permissible if they served a "clearly defined safety objective" and were administered "in a nondiscriminatory manner to other . . . devices . . . that [we]re comparable in size, weight and appearance," or if they were "necessary to preserve an historic district," and if the restrictions were no more burdensome than necessary. Id. § 1.4000(b)(1)-(3). [FN3] In addition, the *93 **16 OTARD rule permitted waiver by the Commission upon the request of local governments or associations. See id. § 1.4000(c).
FN3. In the Second OTARD Order, the Commission amended § 1.4000(b)(2) to except "a prehistoric or historic district, site, building, structure or object included in, or eligible for inclusion on, the National Register of Historic Places...."
The first OTARD rule left unresolved whether the § 207 prohibition should apply to "property not within the exclusive [use or] control of a person with an ownership interest," such as common areas or rental properties. First OTARD Order, 11 F.C.C.R. at 19311; see also id. at 19314. On November 20, 1998, after notice and comment, the Commission expanded the OTARD prohibition to include restrictions on § 207 reception devices on rental property that is within the exclusive use or control of the tenant who has a leasehold interest in the property. See Second OTARD Order, 13 F.C.C.R. 23874 (1998). The amended OTARD rule provides in relevant part:
(a)(1) Any restriction, including but not limited to any state or local law or regulation, including zoning, landuse, or building regulations, or any private covenant, contract provision, lease provision, homeowners' association rule or similar restriction, on property within the exclusive use or control of the antenna user where the user has a direct or indirect ownership interest or leasehold interest in the property that impairs the installation, maintenance, or use of [a § 207 device] ... is prohibited....
47 C.F.R. § 1.4000(a)(1) (1998) (new language italicized). Under the amended OTARD rule, tenants are able, subject to some restrictions, to install § 207 devices "wherever they rent space outside of a building, such as balcony railings, patios, yards, gardens, or any other similar area" and, in some instances, inside rental units. Second OTARD Order, 13 F.C.C.R. at 23875. [FN4] The Commission did not, however, extend the OTARD rule to the placement of antennas on common property such as outside walls (where viewers may have access but not possession and exclusive rights of use or control) or restricted access areas such as rooftops (where viewers generally do not have access or possession). See id. at 23893 ¶ 35.
FN4. For tenants who do not lease outside rental space, the Commission noted that "our new rules permit the installation of Section 207 devices inside rental units and anticipate the development of future technology that will create devices capable of receiving video programming signals inside buildings." Second OTARD Order , 13 F.C.C.R. at 23875- 76. The Commission noted that one such device already permits inside receipt of signals. Id. at 23876.
Following the Commission's denial of petitions for reconsideration of the Second OTARD Order, petitioners filed this appeal.
II.
[1] Petitioners contend that the Commission exceeded its statutory authority by extending the OTARD prohibition to leased property. To determine whether the Commission acted within its legally delegated authority in promulgating the amended OTARD rule, the court employs the familiar test outlined by the Supreme Court in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984): If, through the Communications Act, Congress has spoken directly to the precise issue presented by petitioners, "that is the end of the matter," and the court defers to the "unambiguously expressed intent of Congress." Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778. If, however, the Communications Act "is silent or ambiguous with *94 **17 respect to the specific issue" at hand, the Commission may exercise its reasonable discretion in construing the statute. [FN5] ID. as petitioners coNtend--and as the commission implicItly concedes, see Second OTARD Order, 13 F.C.C.R. at 23880--the Communications Act does not explicitly address the landlord-tenant relationship, nor does it explicitly grant the Commission jurisdiction over the real estate industry, an area that is normally outside the Commission's scope of authority. See, e.g., Illinois Citizens Comm. for Broad. v. FCC, 467 F.2d 1397, 1400 (7th Cir.1972). Hence, the court's focus is on whether, in implementing § 207, the Commission reasonably interpreted its statutory authority. We look to the text of the Communications Act of 1934 and the Telecommunications Act of 1996, and to the legislative history of § 207.