******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In re Application of ) ) RAY M. STANFIELD, RECEIVER ) (ASSIGNOR) ) ) and ) File No. BAL - 950705ED ) ROBESON/SUTTLES ) BROADCASTING, INC. ) (ASSIGNEE) ) ) For assignment of license of Station) KMET(AM), Banning, California ) MEMORANDUM OPINION AND ORDER Adopted: February 24, 1997 Released: March 10, 1997 By the Commission: 1. The Commission has under consideration an application for review filed on April 26, 1996 by Joseph D. Jones ("Jones"), requesting review of a staff decision dated March 26, 1996. The staff decision dismissed a petition for reconsideration filed by Jones and let stand a grant of the above-captioned application to assign the license of KMET(AM), Banning, California, from Ray M. Stanfield, Receiver ("Stanfield"), to Robeson/Suttles Broadcasting, Inc. ("Robeson"). 2. Jones asserts that the staff committed four errors in dismissing his petition for reconsideration. Specifically, Jones asserts: (1) that the staff failed to first consider his pending application for review of a prior assignment of the license for KMET to Stanfield, the assignor in the instant transaction; (2) that the staff failed to consider a "Petition for Review" of the grant to Stanfield that Jones filed in the U. S. Court of Appeals for the District of Columbia Circuit; (3) that the prior grant to Stanfield and the instant transaction are contrary to Commission policy because the staff acted upon assignment applications prior to the adjudication of pending legal matters in state court; and (4) that the staff treated the parties differently by dismissing his late-filed petition to deny while allowing opposing counsel to make late filings. We deny Jones' application for review for the reasons discussed below. 3. Background. Stanfield filed the above-captioned application to assign the license of KMET(AM), Banning, California to Robeson/Suttles Broadcasting, Inc. ("Robeson") on July 5, 1995. Jones filed a petition to deny the application on August 17, 1995, one day after the deadline for filing such a petition. In his late-filed petition, Jones alleged that Frederick Cote, a principal of the former licensee, KOLA, Inc., was a convicted felon who would benefit from the KMET assignment in violation of Commission policy. Jones also alleged that Stanfield, who had been appointed receiver of the assets of KOLA, Inc. by the California Superior Court, had assumed premature control of KMET-AM and KOLA(FM), San Bernardino, California, another station owned by KOLA, Inc. In addition, Jones attempted to incorporate by reference portions of his then- pending petition to deny the assignment of KOLA from Stanfield to Inland Empire Broadcasting Corp. ("Inland"). In his reply pleading filed September 15, 1995, Jones acknowledged that his petition to deny had been filed late and, for the first time, requested an extension of time to file. 4. On November 8, 1995, the staff issued a decision dismissing Jones' petition to deny as untimely, citing 47 C.F.R. Section 73.3584(a). The staff denied Jones' post-hoc request for an extension of time, but considered his pleading as an informal objection, and denied the informal objection on its merits. The staff noted that Jones' allegations concerning Cote repeated issues that had already been resolved in its decision approving the assignment of KOLA. See Letter from Roy J. Stewart, Chief, Mass Media Bureau, to Joseph D. Jones et al. dated June 29, 1995 ("KOLA Letter"), review denied, KOLA, Inc., 11 FCC Rcd 14297 (1996), appeal docketed, No. 96-1436 (D.C. Cir. Nov. 25, 1996). In that letter, the staff concluded that the assignment of KOLA from the Receiver, Stanfield, to Inland was permissible under the Commission's Second Thursday policy because, under the terms of the sale, all proceeds would be paid to innocent creditors and the wrongdoer, Cote, would receive no direct or indirect benefit from the assignment. That determination and others made by the staff in the KOLA Letter have been affirmed by the Commission. See KOLA, Inc., 11 FCC Rcd 14297. With respect to Jones' challenge to the California court's appointment of Stanfield as receiver, the staff stated that it would not substitute its judgment for that of the state court. The staff also rejected Jones' argument that Stanfield had prematurely assumed control of KMET. The staff noted that Stanfield had merely conducted an inventory of the assets of KOLA, Inc. at the court's direction during the period between his appointment as receiver and the Commission's grant of short-form assignments of the licenses of KOLA and KMET to Stanfield, and that such action did not constitute a premature transfer of control. Thus, the staff granted the assignment of KMET to Robeson conditioned on an accounting to be provided to the staff within 90 days of consummation of the assignment of KMET to Robeson to ensure that Cote would receive no benefit. The 90-day condition paralleled a condition imposed in the KOLA Letter to ensure that the sale of KOLA to Inland did not result in Cote benefiting from that sale. 5. Jones filed a petition for reconsideration of the November 8, 1995 staff decision on December 12, 1995, raising essentially the same allegations he had raised in his petition to deny. The staff dismissed Jones' petition for reconsideration for lack of standing in a letter dated March 26, 1996. The staff explained that as an informal objector to the assignment application, Jones was not a party to the proceeding who was entitled to file a petition for reconsideration under 47 U.S.C. Section 405 and 47 C.F.R. Section 1.106. Furthermore, the staff noted that Jones had not made the showing required of a party attempting to enter a proceeding for the first time at the petition for reconsideration stage. Specifically, Jones had failed to demonstrate that his interests were adversely affected by the staff's November 8, 1995 action and that there was good reason why it was not possible for him to have participated in the assignment proceeding as a petitioner to deny. See 47 C.F.R. Section 1.106(b)(1); Montgomery County Broadcasting Corp., 5 FCC Rcd 876 (1977). 6. Discussion. Jones raises four challenges to the March 26, 1996 staff decision dismissing his petition for reconsideration. We have examined his four arguments and conclude that they are without merit. 7. First, Jones asserts that the staff erred by failing to consider that he had a pending application for review of a prior assignment grant involving KMET, i.e., the assignment from KOLA, Inc. to the court-appointed receiver, Stanfield. Jones references "File No. BALH- 940513EC," which concerns the assignment of license of KOLA from KOLA, Inc. to Stanfield. Jones filed a "Petition for Administrative Review" on August 7, 1995 challenging certain actions taken in the KOLA Letter. Jones' petition, which most closely resembles an application for review, has, as noted, been denied by the Commission. See KOLA, Inc., 11 FCC Rcd 14297 (1996). In any event, the application for review involved KOLA, not KMET. Jones in fact has never challenged the assignment of the KMET license to Stanfield either at the staff level or at the Commission level. He did not file a petition to deny the assignment of license of either KOLA or KMET to Stanfield, and though he filed a petition for reconsideration subsequent to the grant of the assignment of KOLA's license to Stanfield, Jones did not seek reconsideration of the grant of the assignment of KMET's license to Stanfield. Thus, there was no impediment to the staff's grant of the assignment of the KMET license from Stanfield to Robeson. Furthermore, the filing of an appeal does not stay the effectiveness of a staff decision, so the staff's grant of a subsequent assignment from Stanfield to Robeson would not have been in error even if Jones had filed an appeal of the KMET assignment grant to Stanfield. See Chapman S. Root, 8 FCC Rcd 4223 (1993) (holding that pending appeal of grants of license renewals did not undermine effectiveness of subsequent assignment grants); 47 C.F.R. Section 1.102(b) ("Effective dates of actions taken pursuant to delegated authority"). See also Committee to Save WEAM v. FCC, 808 F.2d 113, 119 (D.C. Cir. 1986) (upholding Section 1.102(b) of the Commission's rules and finding that it "merely prevent[s] [an] appellant from insisting on the maintenance of the status quo pending review" and does not "deprive [an] appellant of the opportunity to challenge [an] assignment before the Commission and the [court of appeals]."). 8. Secondly, Jones asserts that the staff failed to consider a "Petition for Review" of the grant of the assignment of the KOLA and KMET licenses from KOLA, Inc. to Stanfield that Jones filed in the U. S. Court of Appeals for the District of Columbia Circuit on November 11, 1995. As stated in the foregoing paragraph, the filing of an appeal does not stay the effectiveness of a staff decision, so the staff was warranted in granting a subsequent assignment of the license of KMET notwithstanding Jones' "Petition for Review" of the grant of license of KMET to Stanfield. Furthermore, the "Petition for Review" has since been dismissed by the appeals court on the grounds that Jones had not yet exhausted his administrative remedies. See Joseph D. Jones v. FCC, No. 95- 1572, 1996 WL 523826 (D.C. Cir. Aug. 28, 1996) (per curiam). See also 47 U.S.C. Section 155(c)(7) (application for review of F.C.C. bureau decision is a "condition precedent to judicial review"); Committee to Save WEAM v. FCC, 808 F.2d at 115-16 (dismissing petition where appellant failed to seek full Commission review of FCC staff decision). Therefore, Jones' argument that he has been prejudiced by the staff's grant of a subsequent assignment is moot as a result of the court's action dismissing his appeal of the prior assignment. 9. Thirdly, Jones asserts that the staff's grant of the KMET license to Stanfield as receiver violated the Arecibo Radio policy because the staff acted prematurely in accepting the court's appointment of Stanfield while Jones had filed a pending appeal of the appointment. Jones also asserts that the staff did not provide a reasoned explanation for its action granting the subsequent assignment from Stanfield to Robeson, which violated the same policy. The Commission's policy, as stated in Arecibo Radio, is "to accommodate state and local court decrees adjudicating disputes over contract and property rights, unless a public interest determination . . . compels a different result." Arecibo Radio Corp., 101 FCC 2d at 550 n.12. Contrary to Jones' contention, the staff's actions in this case were consistent with the decisions of local courts which appointed Stanfield as a receiver and supervised his actions in disposal of the stations. We note in this regard that Jones has apparently failed in his attempts to challenge the California court's appointment of Stanfield as receiver in the state courts. Further, Jones has presented nothing to warrant departure from the Commission's policy of deferral to the state courts in determining the legitimacy of Stanfield's appointment. See H. Edward Dillon, 42 FCC 2d 203, 205 (1973). See also KOLA Letter (rejecting Jones' attempts to deny assignment of KOLA, Inc. assets to Stanfield). 10. Fourthly, Jones asserts that the staff's treatment of this case was unfair in that it dismissed his petition to deny as untimely while accepting "late-filed documents" from opposing counsel without imposing sanctions. Jones states that he advised the Commission on April 14, 1995 that KMET was off the air, but that Stanfield "failed to report to the Commission that KMET had been off the air for weeks." Stanfield has not filed any documents late in connection with this proceeding or in connection with the silent status of KMET. As Stanfield states in his opposition pleading, he informed Commission staff by letter on March 30, 1995 that KMET-AM had gone dark on March 20, 1995. On April 19, 1995, Stanfield requested permission for KMET to remain dark for an additional 90 days, which the staff granted on May 19, 1995. Stanfield reports that KMET- AM resumed operation on June 5, 1995. Broadcast licensees are required to notify the Commission not later than the 10th day of limited or discontinued operation. See 47 C.F.R. Section 73.1740(a)(4). Stanfield acted in compliance with this rule. Therefore, we do not find any merit in Jones' assertion that he was treated differently from other parties because we dismissed his late-filed petition to deny as untimely. In any case, full consideration has been given to the substance of his objections concerning the instant transaction. 11. Accordingly, IT IS ORDERED that pursuant to Section 1.115(g) of the Commission's Rules, 47 C.F.R. Section 1.115(g), the Application for Review filed by Joseph D. Jones on April 26, 1996 IS HEREBY DENIED. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary