FCC v. Prometheus Radio Project

Supreme Court of the United States · 2021 · Administrative Law

Administrative LawAdministrative Procedure Actarbitrary and capriciousFCCmedia ownership rulespredictive judgmentzone of reasonablenessrecord evidence

Facts

The FCC has long maintained ownership rules limiting common ownership of newspapers, radio stations, and television stations in local markets. In a 2017 reconsideration order issued under Section 202(h) of the Telecommunications Act of 1996, the FCC concluded that the Newspaper/Broadcast Cross-Ownership Rule and the Radio/Television Cross-Ownership Rule should be repealed and that the Local Television Ownership Rule should be modified because those rules no longer served the public interest goals of competition, localism, and viewpoint diversity. The FCC also considered the likely effect of those changes on minority and female ownership and concluded, based on the record before it, that the rule changes were not likely to harm such ownership. The Third Circuit vacated the order, concluding the record did not support the FCC's assessment regarding minority and female ownership.

Issue

Whether the FCC acted arbitrarily and capriciously under the APA when it repealed or modified three media ownership rules after concluding that the changes were not likely to harm minority and female ownership, despite having limited empirical data on that question.

Rule

Under the APA, agency action is valid if it is reasonable and reasonably explained. Arbitrary-and-capricious review is deferential: a court asks whether the agency acted within a zone of reasonableness, reasonably considered the relevant issues, and reasonably explained its decision; the APA imposes no general obligation on agencies to conduct or commission their own empirical or statistical studies before making predictive judgments unless a statute requires otherwise.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

The Federal Transit Safety Board reviewed a 30-year-old rule limiting joint ownership of local bus depots and commuter rail terminals in regional transportation markets. After compiling evidence that app-based transit, private shuttles, and remote ticketing had transformed the market, the Board repealed the rule and explained that the old restriction no longer advanced competition or service quality.

A public-interest group challenges the repeal because the court believes the Board's policy judgment is unwise. Under the governing APA standard, what is the best answer?

Explanation. Arbitrary-and-capricious review is deferential. A reviewing court may not substitute its own policy judgment for the agency's; it asks whether the agency acted within a zone of reasonableness, reasonably considered the relevant issues, and reasonably explained the decision. A longstanding rule may be changed if the agency's action is reasonable and reasonably explained.