FCC Affirms Forfeiture Regarding WAQY(FM) For Contest Rule Violation
Federal Communications Commission
Federal Communications Commission
Washington, DC 20554In the Matter of
Saga Communications of New England, L.L.C.)
File No. EB-06-IH-0825
NAL Account No. 200732080018
Licensee of Station WAQY(FM),
Facility ID No. 58551
FRN No. 0002749406
ORDER ON REVIEW
Adopted: December 2, 2011
Released: December 5, 2011By the Commission:
In this Order on Review, we deny the Application for Review filed by Saga
Communications of New England, L.L.C. (“Saga”),1 licensee of Station WAQY(FM), Springfield,
Massachusetts (the “Station”). Saga seeks review of a Memorandum Opinion and Order (“MO&O”)
issued by the Enforcement Bureau (“Bureau”) on April 1, 2010.2 In that MO&O, the Bureau denied
Saga’s Petition for Reconsideration of a $4,000 monetary forfeiture for violating section 73.1216 of the
Commission’s rules3 for failure to conduct a broadcast contest substantially as announced. As discussed
below, we deny the Application for Review and affirm the $4,000 forfeiture.
In December 2005, the Bureau received a complaint from Robert Naginewicz alleging
that Station WAQY(FM) failed to conduct a contest broadcast in June and July 2005 according to that
contest’s advertised rules.4 Mr. Naginewicz states that he won the contest’s “Grand Prize Giveaway” on
July 15, 2005. The prizes included (1) a free two-year lease on a 2005 Buick LaCrosse automobile, or its
cash equivalent, from contest co-sponsor Bob Pion Pontiac and (2) a “trunk load full” of Aerosmith
memorabilia.5 Mr. Naginewicz alleges that, although he was assured by the Station’s staff that all of his
1 See Saga Communications of New England, L.L.C., Application for Review (filed May 3, 2010) (“Application for
2 See Saga Communications of New England, L.L.C., Memorandum Opinion and Order, 25 FCC Rcd 3289 (Enf.
Bur. 2010) (“MO&O”), aff’g Saga Communications of New England, L.L.C., Forfeiture Order, 24 FCC Rcd 11934
(Enf. Bur. 2009) (“Forfeiture Order”), aff’g Saga Communications of New England, L.L.C., Notice of Apparent
Liability for Forfeiture, 22 FCC Rcd 4206 (Enf. Bur., Investigations & Hearings Div. 2007) (“NAL”).
3 See 47 C.F.R. § 73.1216. We also refer to Section 73.1216 as “the contest rule.”
4 See Letter from Mr. Robert Naginewicz to the FCC, dated December 31, 2005 (“Complaint ”).
5 See id. at 1-2.
Federal Communications Commission FCC 11-179prizes would be delivered to him by July 22, 2005, he did not receive the monetary portion of his prize6
until August 18, 2005, and that, despite numerous queries made of the Station’s staff, he was still
awaiting delivery of the memorabilia portion as of December 31, 2005.7
Following receipt of Mr. Naginewicz’s complaint, the Bureau sent a letter of inquiry to
Saga concerning the allegations.8 Saga responded, contending that its one-month delay in delivering the
monetary portion of the prize, although less than ideal, was “within the zone of reasonableness.” 9 Saga
acknowledged, however, that its failure to fulfill the memorabilia portion until after Mr. Naginewicz had
contacted the Commission was a “problem” that it claimed to have resolved after the Commission’s
inquiry.10 Saga indicated that, because of its delay in delivering the memorabilia to Mr. Naginewicz, it
had enhanced the award with additional prizes.11
On March 2, 2007, the Bureau issued a Notice of Apparent Liability (“NAL”) for $4,000
against Saga, finding that Saga had apparently violated the Commission’s contest rule.12 In response to
the NAL,13 Saga argued that its failure to award the contest prizes promptly is not a rule violation because
“promptness” is not an enumerated requirement in the contest rule.14 Saga further argued that, even if its
conduct could be deemed to have violated the contest rule, the NAL erred in concluding that Saga acted
“willfully.”15 Saga contended that its failure to promptly award prizes was due to inadvertence and
employee miscommunication, not any deliberate or conscious attempt to avoid its obligations, as
demonstrated by its ultimate award of all promised prizes, including bonus items to compensate the
complainant for the delay.16 Saga urged that the Bureau cancel or substantially reduce the proposed
$4,000 forfeiture amount.17 In the resulting Forfeiture Order, the Bureau rejected Saga’s arguments and
affirmed the $4,000 forfeiture.18
6 Mr. Naginewicz elected to receive the cash equivalent of the two-year lease on a Buick LaCrosse automobile,
which totaled $8,000. See id. at 1-2.
7 See id. at 2-3.
8 See Letter from William D. Freedman, Deputy Chief, Investigations and Hearings Division, Enforcement Bureau,
to Saga Communications of New England, L.L.C., dated January 24, 2006 (“LOI”).
9 See Letter from Lawrence D. Goldberg, Vice President, Saga Communications of New England, L.L.C., to
William D. Freedman, Deputy Chief, Investigations and Hearings Division, Enforcement Bureau, dated February
28, 2006, and filed through its counsel on March 2, 2006, at 4 (“LOI Response”).
10 See id. at 4-5.
11 See id. at 3. The memorabilia portion of the prize was ultimately delivered to Mr. Naginewicz on February 8,
2006. See id.
12 See supra note 2.
13 See Saga Response to Notice of Apparent Liability for Forfeiture, dated April 2, 2007 (“NAL Response”).
14 See id. at 4-6 (citing Nat’l Black Media Coalition v. FCC, 775 F.2d 342, 355 (D.C. Cir. 1985), and Airmark Corp.
v. FAA, 758 F.2d 685, 692 (D.C. Cir. 1985), for the proposition that an agency’s departure from its precedent “must
provide a principled explanation for its change of direction”).
15 See NAL Response at 6-10.
16 See id. at 2.
17 See id. at 6, 10.
18 See Forfeiture Order, 24 FCC Rcd 11934.
Federal Communications Commission FCC 11-1795.
Saga then filed a Petition for Reconsideration with the Bureau, and contended that: (1)
contrary to the Bureau’s finding, promptness is not required by the Commission’s licensee-conducted
contest rule;19 (2) the Bureau incorrectly found that Saga’s own contest rules required it to award its
contest prizes within thirty days;20 (3) the Bureau failed to prove that Saga possessed the requisite scienter
required to establish “willfulness” under section 503(b) of the Communications Act of 1934, as amended
(the “Act”);21 (4) the precedent relied upon by the Bureau regarding “willfulness” is untested by the
courts and is, therefore, unreliable;22 and (5) the Bureau erred in finding that Saga’s misconduct was
“repeated” within the meaning of section 503(b) of the Act.23 The Bureau, in the MO&O, rejected these
arguments and affirmed the Forfeiture Order.24
Pursuant to section 1.115(b)(2) of the Commission’s rules, to obtain relief through an
application for review an aggrieved party must specify, inter alia, how an action taken pursuant to
delegated authority conflicts with a relevant “statute, regulation, case precedent, or established
Commission policy,” or that “the action involves a question of law or policy which has not previously
been resolved by the Commission.”25 In its Application for Review, Saga reiterates arguments previously
raised at the Bureau level. Specifically, Saga repeats its argument that promptness in the awarding of
contest prizes is not required by the Commission’s contest rule.26 It also again contends that its failure to
promptly award the subject prize was not “willful.”27 Although we find that the Bureau fully and
correctly addressed these arguments in the MO&O and Forfeiture Order, we will address them here.
Saga again contends that promptness in the awarding of contest prizes is not required by
the contest rule, and thus the Bureau’s finding of a rule violation in this instance is contrary to both the
contest rule and relevant Commission precedent.28 We disagree with Saga’s previously made arguments
for the reasons set out in the Bureau’s MO&O.29 In its Application for Review, however, Saga now cites
Reuters Limited v. FCC in support of its contention that the forfeiture was inappropriate because the
Bureau may not depart from the Commission’s rules.30 Saga’s reliance on Reuters is misplaced. In
19 See Saga Communications of New England, L.L.C., Petition for Reconsideration (filed Oct. 26, 2009) (“Petition”)
20 See id. at 5.
21 See id. at 7-8.
22 See id. at 7; 47 U.S.C. § 503(b).
23 See Petition at 3; 47 U.S.C. § 503(b).
24 See MO&O, 25 FCC Rcd 3289.
25 See 47 C.F.R. § 1.115(b)(2); Beasley Broadcast Group, Inc., WQAM Limited Partnership, Application for
Renewal of License of Station WQAM(AM), Miami, Florida, Memorandum Opinion and Order, 23 FCC Rcd 15949,
26 See Application for Review at 3-7.
27 See id. at 3, 7-9.
28 See id. at 6-7.
29 See MO&O, 25 FCC Rcd at 3290-91 ¶ 5 (finding that Saga’s contention that the contest rule does not require
prizes to be awarded promptly is incorrect).
30 See Reuters Limited v. FCC, 781 F.2d 946 (D.C. Cir. 1986) (“Reuters”).
Federal Communications Commission FCC 11-179Reuters, the Commission rescinded a license grant in order to allow a second applicant, whose
applications had been filed late, to be considered. The court of appeals reversed that decision, finding that
the Commission could not engage in an ad hoc departure from its licensing rules in order to achieve
“laudable aims” or “justice in the individual case.”31 Notably, in Reuters, the court found that the
Commission departed from an unambiguous requirement found in the licensing rules.32
In the instant case, however, the Bureau did not depart from the contest rule. Instead, the
Bureau properly held that the contest rule itself and the accompanying notes enumerating certain material
terms of broadcast contests do not constitute an exhaustive list of every element that is material to a
contest.33 As the Bureau stated, the rule’s notes explicitly recognize that “material terms may vary widely
depending on the exact nature of the contest” and the terms listed in the rule are merely those that may
“generally” be included in a station’s contest rules.34 The MO&O and Forfeiture Order properly held that
the Commission has consistently maintained that prizes must be awarded promptly.35 Moreover, the
Bureau’s finding was also based on the fact that Saga’s own contest rules created a reasonable expectation
on the part of winners that prizes would be awarded within thirty days.36 In sum, the contest rule
contemplates the existence of material terms other than those specifically listed therein; the Commission
has previously stated that prizes must be awarded promptly;37 and the law is clear that the Commission
may properly interpret its own rules consistent with existing regulation.38
31 See id. at 950-51.
32 See 47 C.F.R. § 1.962(f) (1984). This section provided that “[n]o application subject to the provisions of this
section, as originally filed or substantially amended, will be granted by the Commission prior to the 31st day
following the issuance of public notice of the acceptance for filing of such application.” Id. The court found that
the Commission’s error lay in its ignoring the rule’s express limitation to accept an otherwise untimely application.
See Reuters, 781 F.2d at 950-52.
33 See MO&O, 25 FCC Rcd at 3290-91 ¶ 5.
34 See id. (citing 47 C.F.R. § 73.1216, Note 1(b), which states that “[m]aterial terms include those factors which
define the operation of the contest and which affect participation therein. Although the material terms may vary
widely depending upon the exact nature of the contest, they will generally include: how to enter or participate;
eligibility restrictions; entry deadline dates; whether prizes can be won; when prizes can be won; the extent, nature
and value of prizes; basis for valuation of prizes; time and means of selection of winners; and/or tie-breaking
35 See MO&O, 25 FCC Rcd at 3291 n.17; Forfeiture Order, 24 FCC Rcd at 11936-37 nn.24-25 & 28.
36 See MO&O, 25 FCC Rcd at 3291 ¶ 6 (noting that “Saga’s own contest rule creates a reasonable expectation on the
part of winners that prizes would be awarded within thirty days because winners are explicitly given thirty days in
which to claim prizes, and a prize must be awarded in order to be claimed”).
37 See id. at 3290-91 ¶ 5 (citing Public Notice Concerning Failure of Broadcast Licensees to Conduct Contests
Fairly, Public Notice, 45 FCC 2d 1056 (1974); Amendment of Part 73 of the Commission’s Rules Relating to
Licensee-Conducted Contests, Notice of Proposed Rulemaking, 53 FCC 2d 934 (1975); and Amendment of Part 73
of the Commission’s Rules Relating to Licensee-Conducted Contests, Report and Order, 60 FCC 2d 1072, 1073
38 See MO&O at 3290-91 ¶ 5, citing Cost-Based Terminating Compensation for CMRS Providers; Interconnection
Between Local Exchange Carriers and Commercial Mobile Radio Service Providers; Implementation of the Local
Competition Provisions of the Telecommunications Act of 1996; Calling Party Pays Service Offering in the
Commercial Mobile Radio Services, Order, 18 FCC Rcd 18441, 18450 ¶ 22 (2003):
The D.C. Circuit has repeatedly held that interpretive rulings are properly used to clarify the original
meaning and application of an agency’s substantive rules. The Supreme Court in reaffirming the authority
Federal Communications Commission FCC 11-1799.
In support of its contention that the forfeiture should be reduced or canceled because its
failure to promptly award the subject prize was not “willful,” Saga cites U.S. v. Daniels.39 We find
Daniels inapposite. That case involved the repeated violation of a rule concerning broadcasting hours that
had been recently amended. The licensee in that case lacked actual knowledge of the rule change, had
been complying in good faith with the broadcasting hours permitted under the previous rule, and ceased
broadcasting immediately upon notification of the violation.40 Accordingly, the district court found a
reduction in the forfeiture appropriate due to the “nature of the violations involved here, the lack of
complaints and the [licensee’s] good faith inadvertent mistakes.”41
In this case, however, the rule at issue was well-established, having last been amended in
1976, and Saga’s rule violation resulted in a complaint. Saga also relies on Daniels for the assertion that
a forfeiture cannot be collected until it is afforded a trial de novo in accordance with section 504(a) of the
Act.42 However, section 503(b)(4) of the Act allows the Commission to issue forfeitures without a
hearing, using the notice of apparent liability written response procedures.43 If a party fails to pay a
forfeiture issued in accordance with these procedures, the case will be referred for enforcement to the
U.S. Department of Justice for a trial de novo in federal district court pursuant to section 504(a).44 As
Saga has not paid the forfeiture issued in this case, the government filed a complaint in federal district
court against Saga for enforcement of the $4,000 forfeiture.45 That enforcement proceeding is currently
pending in U.S. District Court. On July 15, 2010, the court issued an “Order to Stay” the district court
case pending the outcome of this proceeding.46
V. ORDERING CLAUSES11.
IT IS ORDEREDthat, pursuant to section 1.115 of the Commission’s
rules,47 the Application for Review filed by Saga Communications of New England, L.L.C.,
and the Bureau’s Memorandum Opinion and Order
Payment of the forfeiture shall be made in the manner provided for in section 1.80 of the
rules within thirty (30) days of the release of this Order on Review. On June 18, 2010, the government
filed a complaint in federal district court against Saga Communications of New England, L.L.C. for
enforcement of the $4,000 forfeiture, U.S. v. Saga Communications of New England, LLC, Civ. No. 10-
12407 (E.D. MI). On July 15, 2010, the court issued an Order to Stay the district court case pending the
(...continued from previous page)
of agencies to interpret their own rules stated that “a new APA rulemaking is required only if an agency
adopt[s] a new position inconsistent with any of the [agency’s] existing regulations” (citations omitted).
39 See Application for Review at 8 (citing U.S. v. Daniels, 418 F. Supp. 1074 (D.S.D. 1976) (“Daniels”)).
40 See Daniels, 418 F. Supp. at 1081.
41 See id.
42 See 47 U.S.C. § 504(a).
43 See 47 U.S.C. § 503(b)(4); 47 C.F.R. § 1.80(e).
44 See 47 U.S.C. § 504(a); 47 C.F.R. § 1.80(f)(5).
45 See U.S. v. Saga Communications of New England, LLC, Civ. No. 10-12407 (E.D. MI).
46 See U.S. v. Saga Communications of New England, LLC, Civ. No. 10-12407 (E.D. MI), Order to Stay (July 15,
47 See 47 C.F.R. § 1.115.
Federal Communications Commission FCC 11-179outcome of the administrative proceeding. Upon timely payment in full of the forfeiture, the government
will dismiss the district court case. Payment of the forfeiture must be made by check or similar
instrument, payable to the order of the Federal Communications Commission. The payment must include
the NAL/Account No. and FRN No. referenced above. Payment by check or money order may be mailed
to Federal Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000. Payment by
overnight mail may be sent to U.S. Bank-Government Lockbox #979088, SL-MO-C2-GL, 1005
Convention Plaza, St. Louis, MO 63101. Payment by wire transfer may be made to ABA Number
021030004, receiving bank TREAS/NYC, and account number 27000001. For payment by credit card,
an FCC Form 159 (Remittance Advice) must be submitted. When completing the FCC Form 159, enter
the NAL/Account Number in block number 24A (payment type code). Saga will also send electronic
notification on the date said payment is made to Theresa.Cavanaugh@fcc.gov,
Kenneth.Scheibel@fcc.gov, and Amelia.Brown@fcc.gov. Requests for full payment under an installment
plan should be sent to: Chief Financial Officer -- Financial Operations, 445 12th Street, S.W., Room 1-
A625, Washington, D.C. 20554. Please contact the Financial Operations Group Help Desk at 1-877-480-
3201 or Email: ARINQUIRIES@fcc.gov with any questions regarding payment procedures.
IT IS FURTHER ORDEREDthat a copy of this Order on Review shall be sent, by
Certified Mail/Return Receipt Requested, to Saga Communications of New England, L.L.C., 73
Kercheval Avenue, Grosse Pointe Farms, Michigan 48236, by regular mail to its counsel, Gary S.
Smithwick, Esq., Smithwick & Belendiuk, P.C., 5028 Wisconsin Avenue, N.W., Suite 301, Washington,
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Note: We are currently transitioning our documents into web compatible formats for easier reading. We have done our best to supply this content to you in a presentable form, but there may be some formatting issues while we improve the technology. The original version of the document is available as a PDF, Word Document, or as plain text.