Case: 10-1151 Document: 1302778 Filed: 04/12/2011 Page: 1
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 8, 2011
Decided April 12, 2011
FEDERAL COMMUNICATIONS COMMISSION,
SCOTT SAVAGE, RECEIVER FOR TAMA BROADCASTING, INC.,
Appeal of Orders of the Federal Communications
Dennis J. Kelly
argued the cause and filed the briefs for
, Counsel, Federal Communications
Commission, argued the cause for appellee. With him on the
brief were Austin C. Schlick
, General Counsel, Peter Karanjia
Deputy General Counsel, and Richard K. Welch
Associate General Counsel.
Mark J. Prak
, Julia C. Ambrose
, and Eric M. David
the brief for intervenor.
Case: 10-1151 Document: 1302778 Filed: 04/12/2011 Page: 2
Before: SENTELLE, Chief Judge
, TATEL, Circuit Judge
EDWARDS, Senior Circuit Judge
Opinion for the Court filed by Senior Circuit Judge
EDWARDS, Senior Circuit Judge
: In September 2008, as
part of a judicial foreclosure action brought against Tama
Broadcasting, Inc. ("Tama") by its creditor, D.B. Zwirn Special
Opportunities Fund, L.P. ("Zwirn"), the Supreme Court of the
County of New York granted Zwirn's request for the
appointment of a receiver to take control of Tama's assets.
Pursuant to 47 U.S.C. 310(d), the receiver then sought
approval from the Federal Communications Commission
("FCC" or "Commission") for the involuntary assignment of
nine radio broadcast licenses from Tama to the receiver. The
Audio Division of the FCC's Media Bureau ("Media Bureau")
approved the assignment applications in February 2009.
Appellant Glenn Cherry, a shareholder and former chief
executive officer of Tama, then filed an application for review
with the Commission, challenging the Media Bureau's approval
of the assignment applications. The Commission dismissed the
application for review, finding it both procedurally defective and
substantively without merit. Tama Radio Licenses of Tampa,
"), 25 FCC Rcd. 7588 (June 1, 2010).
Cherry now appeals the Commission's decision.
We dismiss Cherry's appeal because he lacks Article III
standing. Cherry alleges that, because of the involuntary
assignment of the radio broadcast licenses from Tama to the
receiver, he has suffered losses of ownership and voting rights
as a Tama shareholder. However, these injuries cannot be traced
to the FCC's approval of the license assignments. Instead, the
alleged injuries were caused by Tama's default on its loan
payments, Zwirn's foreclosure action, and the New York court's
appointment of a receiver. This court has no authority to review
Case: 10-1151 Document: 1302778 Filed: 04/12/2011 Page: 3
these actions. Therefore, even if this court were to overturn the
FCC's action, this would not afford Cherry the relief that he
seeks. The appointment of a receiver to take control of Tama's
assets came as a result of action taken by the New York state
court, not the FCC. Accordingly, Cherry's appeal must be
dismissed for lack of standing.
In 2004, Zwirn, a hedge fund, and Tama, the corporate
owner of multiple radio stations in Florida and Georgia, entered
into a financing arrangement whereby Zwirn agreed to lend
Tama $21 million, and Tama pledged as collateral all of its
accounts and assets, including several FCC broadcast licenses.
After the deal had been struck, Zwirn, Tama, and Cherry
encountered problems and disagreements, which resulted in
litigation. See, e.g.
, D.B. Zwirn Special Opportunities Fund,
L.P. v. Tama Broadcasting, Inc.
"), 550 F.
Supp. 2d 481 (S.D.N.Y. 2008) (describing some of the legal
actions involving Zwirn, Tama, and Cherry). In one of these
actions, Zwirn brought a breach of contract suit against Tama in
the Supreme Court for the County of New York, seeking judicial
foreclosure on the loan collateral. Zwirn alleged that Tama had
defaulted on its loan obligation and requested the appointment
of a temporary receiver to "preserve and protect the property
pending the outcome of the litigation." SDNY Opinion
, 550 F.
Supp. 2d at 492 (citation omitted).
The New York court granted Zwirn's motion for the
appointment of a receiver to take control of Tama's assets. See
Order Pursuant to CPLR 6401 Appointing a Temporary
Receiver ("Receiver Order"), D.B. Zwirn Special Opportunities
Fund, L.P. v. Tama Broad. Inc.
, No. 600692/2008 (N.Y. Sup. Ct.
Sept. 5, 2008), reprinted in
Joint Appendix ("J.A.") 30-36.
Under the terms of the court's order, the receiver took
immediate control over Tama's bank accounts and contracts and
assumed all ownership authority over the pledged collateral. Id.
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at 2-4, J.A. 31-33. Pursuant to 47 U.S.C. 310(d), which states
that "[n]o . . . station license, or any rights thereunder, shall be
transferred, assigned, or disposed of in any manner, voluntarily
or involuntarily, directly or indirectly, or by transfer of control
of any corporation holding such permit or license, to any person
except upon application to the Commission," the receiver
promptly filed applications with the FCC's Media Bureau
seeking approval of the involuntary assignments of Tama's radio
Form 316 Application for Involuntary Assignment
of Tama Radio Licenses of Jacksonville, FL, Inc., Oct. 2, 2008,reprinted in
J.A. 38-53; Form 316 Application for Involuntary
Assignment of Tama Radio Licenses of Savannah, GA, Inc.,
Oct. 2, 2008, reprinted in
J.A. 54-68; Form 316 Application for
Involuntary Assignment of Tama Radio Licenses of Tampa, FL,
Inc., Oct. 2, 2008, reprinted in
J.A. 69-84 (collectively "Form
Cherry filed a timely objection to the receiver's Form 316
Applications. He contended that Zwirn had violated section
310(d) by prematurely taking control of the Tama stations, and
that the Form 316 Applications were simply Zwirn's attempt to
"cover up" these violations. Glenn Cherry Objection to 316
Filing of Tama Broadcasting, Inc., Oct. 17, 2008, at 2, reprinted
J.A. 86. After reviewing the parties' submissions, the Media
Bureau approved the Form 316 Applications. In rejecting
Cherry's objections, the Media Bureau stated:
[It] is well-established that the Commission will
accommodate court decrees, such as the instant
appointment of the Receiver for the [Tama] Stations, unless
a public interest determination compels a different
result. . . . Cherry has not raised a substantial and material
question of fact warranting further inquiry . . . [or]
demonstrate[d] that grant of the Assignment Applications
would be inconsistent with the public interest.
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Letter to Percy Squire, Esq.
, 24 FCC Rcd. 2453, 2455 (Feb. 26,
2009) (footnote omitted).
Cherry then filed an application for review under 47 C.F.R.
1.115, requesting the FCC to stay the approval of the license
transfers until the pending litigation involving Zwirn and Tama
had been fully settled. Application for Review (Mar. 24, 2009),reprinted in
J.A. 127-29. On June 1, 2010, the Commission
dismissed Cherry's application for review, finding it both
procedurally defective and substantively without merit. Tama
, 25 FCC Rcd. at 7588. The Commission's order
explained that Cherry had failed to "specify with particularity
the grounds warranting Commission review," as required by
section 1.115, and that, as a result, "the application for review is
subject to dismissal." Id.
at 7589. The Commission also held
that, on a substantive review of the entire record, "the [Media
Bureau's] staff properly decided the matters raised below." Id.
Cherry now appeals the Commission's order.
In order to pursue a cause of action in federal court, a party
must have Article III standing. Lujan v. Defenders of Wildlife
504 U.S. 555, 561 (1992). To establish standing under Article
III, a party like Cherry must demonstrate an injury in fact that is
fairly traceable to the challenged agency action, and he must
show that it is "likely, as opposed to merely speculative, that the
injury will be redressed by a favorable decision" from this court.Nat'l Wrestling Coaches Ass'n v. Dep't of Educ.
, 366 F.3d 930,
937 (D.C. Cir. 2004) (citation and internal quotation marks
omitted). Article III standing is a jurisdictional requirement that
cannot be waived by the parties. Doe by Fein v. Dist. of
, 93 F.3d 861, 871 (D.C. Cir. 1996) (per curiam).
Cherry, as the party pursuing this action, bears the burden of
establishing standing. Lujan
, 504 U.S. at 561. He has failed to
do so here.
Case: 10-1151 Document: 1302778 Filed: 04/12/2011 Page: 6
In American Airways Charters, Inc. v. Regan
, 746 F.2d 865,
873 n.14 (D.C. Cir. 1984), this court held that "[n]o shareholder
not even a sole shareholder has standing in the usual case to
bring suit in his individual capacity on a claim that belongs to
the corporation." In Whelan v. Abell
, 953 F.2d 663, 671-72
(D.C. Cir. 1992), however, we acknowledged that shareholder
issues of the sort raised in Regan
may not always implicate
Article III standing. Rather, according to Whelan
regarding shareholder claims often involve "real party in
interest" inquiries under Rule 17(a) of the Federal Rules of Civil
Procedure, and turn on "considerations and conventions of
corporate law." Id
. at 672. We need not ponder the
applicability of Rule 17(a) here, because it is clear that Cherry
lacks Article III standing quite apart from the considerations
raised in Whelan
. See Bhd. of Locomotive Eng'rs and Trainmen
, 457 F.3d 24, 27 (D.C. Cir. 2006) (passing over the
agency's prudential standing argument where the petitioner
lacked Article III standing).
Even if we accept Cherry's contention that he suffered an
injury-in-fact as a result of his losses of "ownership and voting
interests" in the Tama stations, Appellant's Br. at 18, he has still
failed to satisfy the causation and redressability prongs of
Article III standing. Cherry alleges that the FCC's actions
"caused a concrete economic injury," because "[h]ad the FCC
not granted the Assignment Applications, the Receiver could not
have exercised control over the Radio Stations." Id.
This argument is superficially appealing, but inaccurate. In fact,
Cherry's losses of ownership and voting interests in the Tama
stations came as a result of Tama's default on its loan
obligations, Zwirn's foreclosure action, and the New York
court's appointment of a receiver.
This court's decision in Microwave Acquisition Corp. v.
, 145 F.3d 1410 (D.C. Cir. 1998), is instructive. In that
case, the FCC approved an application from MCI
Case: 10-1151 Document: 1302778 Filed: 04/12/2011 Page: 7
Communications Corporation ("MCI"), filed pursuant to 47
U.S.C. 310(d), transferring certain licenses to Southern Pacific
Telecommunications Company ("SP"), in connection with
MCI's sale of a service provider to SP. Microwave Acquisition
Corporation ("MAC") objected, arguing that it had previously
contracted to purchase the service provider from MCI and that
MCI's subsequent sale and license transfer to SP was a breach
of this contract. Id.
at 1411-12. The FCC denied MAC's
application for review of the transfer approval, and MAC sought
relief before this court. We held that MAC did not have Article
III standing because its alleged loss the contractual right to
acquire the service provider was attributable "not to any action
of the Commission but to MCI's alleged breach of its
contract . . . . The transfer proceeding could not have caused the
alleged breach which occurred before the transfer application
was ever filed and would have continued whatever the
Commission's decision." Id.
In this case, Cherry's alleged injuries are not attributable to
the Commission's approval of the license assignments, but
rather to the judicial foreclosure action before the New York
court and that court's appointment of a temporary receiver to
control Tama's assets. Even without FCC approval, control of
the Tama stations would remain with the court-appointed
Receiver Order, at 2, J.A. 60 (granting receiver
control of Tama's assets, including its stations, bank accounts,
and contracts with third parties); see also Arecibo Radio Corp.
101 FCC 2d 545, 548, 550 (Aug. 13, 1985) (acknowledging that
"breach of contract questions are matters for the courts to decide
under state and local law," and that court-ordered license
transfers generally will be honored because "a station's
operating authorization must usually accompany its physical
assets") (brackets and citation omitted). Where the alleged
injuries here, the losses of ownership and voting interests in
the Tama stations "occurred before, existed at the time of, and
continued unchanged after the challenged Commission action,"
Case: 10-1151 Document: 1302778 Filed: 04/12/2011 Page: 8
they "cannot be fairly traced to the transfer approval."Microwave
, 145 F.3d at 1412 (citation omitted).
In addition, even if causation were properly established, the
relief that this court might give Cherry would not remedy the
injuries alleged, because this court has no authority over Zwirn's
foreclosure action or the New York court's appointment of a
receiver. As we noted in Microwave
, "[r]edressability examines
whether the relief sought, assuming that the court chooses to
grant it, will likely alleviate the particularized injury alleged by
the [appellant]." 145 F.3d at 1413 (citation omitted). Cherry
posits that reversal of the FCC's approval would restore his
property interest in the nine Tama broadcast stations.
Appellant's Br. at 19. But, as noted above, even if the FCC
declined to approve the assignment applications, the receiver
would retain control over Tama's assets and operations pursuant
to the order of the New York court. Where "we have no reason
to believe that [the appellant] would even reap his desired
[relief], he flunks the redressability criterion." Huddy v. FCC
236 F.3d 720, 724 (D.C. Cir. 2001).
Finally, we note that, during oral argument before this
court, Cherry's counsel did not dispute that Cherry failed to
specify with particularity the grounds warranting Commission
review. Nor did counsel dispute that such a failure would
require the dismissal of Cherry's appeal on the merits. See
BDPCS, Inc. v. FCC
, 351 F.3d 1177, 1182-84 (D.C. Cir. 2003)
(explaining that a court must affirm an agency decision properly
dismissing a suit on procedural grounds regardless of the
agency's consideration of the substantive merits). We need not
address this apparent procedural infirmity, however, because we
have found that Cherry lacks Article III standing. Steel Co. v.
Citizens for a Better Env't
, 523 U.S. 83, 88-89 (1998) (noting
that standing is "a threshold question that must be resolved"
before a court may proceed to the merits).
Case: 10-1151 Document: 1302778 Filed: 04/12/2011 Page: 9
The case is hereby dismissed because the appellant lacks
Article III standing.