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U.S. v. Jerry and Deborah Stevens

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Released: August 17, 2012
Case: 11-50862 Document: 00511958876 Page: 1 Date Filed: 08/16/2012



United States Court of Appeals

Fifth Circuit


August 16, 2012
No. 11-50862
Lyle W. Cayce
Appeal from the United States District Court for the
Western District of Texas
USDC No. 1:10-cv-00964
Before DAVIS, SMITH, and DENNIS, Circuit Judges.
DENNIS, Circuit Judge:
A Federal Communications Commission (“FCC”) investigation concluded
that appellants Jerry and Deborah Stevens operated an unlicensed FM radio
station from their Austin, Texas residence in violation of § 301 of the
Communications Act of 1934, as amended, 47 U.S.C. § 301. The FCC issued a
Forfeiture Order in the amount of $10,000. Thereafter, the government brought
an action to enforce the forfeiture in district court pursuant to 47 U.S.C.
§ 504(a). The Stevenses moved to dismiss the enforcement action, arguing that
the FCC lacks jurisdiction to regulate intrastate broadcasts and that § 301 does
not apply to radio broadcasts. The district court determined that it did not have

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No. 11-50862
jurisdiction to consider such legal challenges to the validity of an FCC forfeiture
order in a § 504(a) enforcement action. The Stevenses appeal from the district
court’s denial of their motion to dismiss, but do not challenge the factual basis
for the Forfeiture Order. We affirm.


FCC investigations conducted in 2009 revealed that the Stevenses were
broadcasting radio signals whose strength far exceeded the limits allowed for
unlicensed radio operators. On August 31, 2009, the FCC sent the Stevenses
a “Notice of Unlicensed Operation” that informed them of the violations,
instructed them to cease operating the unlicensed radio station, warned them
that they would be subject to a substantial monetary forfeiture if they failed to
do so, and gave them ten days to respond. The Stevenses responded with an
affidavit acknowledging that they were operating an unlicensed “intrastate”
radio station, but challenging the FCC to establish its jurisdiction over
intrastate broadcasting.
On November 10, 2009, after measuring excessive signal strength on two
more occasions, the FCC sent the Stevenses a Notice of Apparent Liability for
Forfeiture, indicating that their conduct made them liable for a $10,000
forfeiture penalty. On January 7, 2010, the FCC issued a Forfeiture Order
informing the Stevenses of a $10,000 monetary forfeiture against them. On
December 20, 2010, the government filed suit in federal district court to enforce
the forfeiture penalty. See 47 U.S.C. § 504(a) (providing that FCC forfeitures
“shall be recoverable[] . . . in a civil suit in the name of the United States” in
federal district court).
In the district court, the Stevenses did not deny that they had been

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No. 11-50862
operating an unlicensed radio station. Rather, they moved to dismiss the
enforcement action on the grounds that the FCC lacked authority under the
Commerce Clause to regulate intrastate radio broadcasts and that § 301 of the
Communications Act does not apply to intrastate radio broadcasts but only to
targeted “point to point” intrastate communications. The district court
determined that it did not have jurisdiction to review the Stevenses’ legal
challenges to the forfeiture order in the § 504(a) proceeding. Instead, the court
determined that such challenges should have been raised via an administrative
appeal of the forfeiture order itself, which would be subject to judicial review in
this court, and that its own jurisdiction in the enforcement action was limited
to factual determinations. The district court concluded that the undisputed facts
established that the Stevenses had violated the regulations as alleged by the
FCC and entered judgment for the government.


After reviewing the relevant statutory and regulatory framework, we
agree with the district court that its jurisdiction was limited to considering the
factual basis for the agency action. Therefore, the district court properly refused
to consider the Stevenses’ legal arguments.
Congress has provided that “[a]ny proceeding to enjoin, set aside, annul,
or suspend any order of the [FCC] . . . shall be brought as provided by and in the
manner prescribed in chapter 158 of Title 28.” 47 U.S.C. § 402(a). Chapter 158
of Title 28 in turns provides that “[t]he court of appeals . . . has exclusive
jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the
validity of . . . all final orders of the [FCC] made reviewable by section 402(a) of
title 47.” 28 U.S.C. § 2342. That chapter further provides that “[a]ny party

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No. 11-50862
aggrieved by [a] final order may, within 60 days after its entry, file a petition to
review the order in the court of appeals wherein venue lies.” Id. § 2344.
Only proceedings to enforce and recover on a monetary forfeiture order are
to be brought by the government in district court. 47 U.S.C. § 504(a). Section
504(a) permits broadcasters an opportunity to present a factual defense to
enforcement of the forfeiture. See id.; see also Radar Solutions, Ltd. v. FCC, 368
F. App’x 480, 485 (5th Cir. 2010) (unpublished) (“The district court can hear a
factual dispute as to whether a defendant has violated the [FCC]’s rules.”).
However, an FCC “notice of forfeiture is clearly a final agency order
reviewable under [47 U.S.C. §] 402(a).” Dougan v. FCC, 21 F.3d 1488, 1490 (9th
Cir. 1994). Therefore, to permit a broadcaster to challenge the legal validity of
a forfeiture order as a defense to the government’s enforcement action would
permit it an end run around the “court[s] of appeals[’] . . . exclusive jurisdiction
. . . to determine the validity of” final FCC forfeiture orders, see 28 U.S.C. § 2342,
and enable them to raise such challenges much later than they would have been
required to had they followed the proper channels, see id. § 2344. Cf. United
States v. Any and All Radio Station Transmission Equip., 207 F.3d 458, 463 (8th
Cir. 2000) (“Laurel Avenue”) (stating that “[a] defensive attack on the FCC
regulations is . . . an evasion of the exclusive jurisdiction of the Court of
Appeals”). As the district court recognized, it would be anomalous to permit an
unlicensed broadcaster to circumvent the congressionally-mandated judicial
review scheme and corresponding deadlines simply because the government
must go to district court to recover the monetary penalty.
1The court below discussed what it considered to be a circuit split on the question of
whether district courts have jurisdiction to entertain legal defenses in § 504(a) have
jurisdiction to consider challenges to the validity of FCC orders and regulations. The district

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No. 11-50862


Persons aggrieved by a final FCC forfeiture order must raise legal
challenges to the validity of the order in a timely petition for review in the
appropriate court of appeals. See 47 U.S.C. § 402(a); 28 U.S.C. § 2344. The
Stevenses failed to do so. The district court correctly determined that it lacked
jurisdiction to consider the Stevenses’ legal defenses in the government’s action
to enforce the forfeiture order. Accordingly, the judgment of the district court
court cited decisions from the Sixth and D.C. Circuits as contrary to its own interpretation of
the judicial review scheme. See United States v. Any and All Radio Station Transmission
, 204 F.3d 658, 667 (6th Cir. 2000) (“Bent Oak”); Action for Children’s Television v. FCC,
59 F.3d 1249, 1256 (D.C. Cir. 1995). In an unpublished opinion, a panel of this circuit
previously cited these same cases in stating that “[o]ur sister circuits have split” on the issue;
that panel ultimately determined that it did not “need [to] . . . decide the question.” Radar
, 368 F. App’x at 485-86.
Our further review of our sister circuits’ precedents indicates that they present no
conflict with our decision here. First, subsequent to Bent Oak, the Sixth Circuit has clarified
that its holding in that case is limited to situations in which “the FCC does not proceed
administratively against an unlicensed microbroadcaster, but instead initiates an in rem
action in the district court seeking the forfeiture of offending broadcasting equipment to
government suits to enforce final administrative orders.” La Voz Radio de la Comunidad v.
, 223 F.3d 313, 319 (6th Cir. 2000); see also id. at 320 (“Of critical importance in [Bent
] was the fact that no FCC order was being challenged.” (citing Bent Oak, 204 F.3d at
667)); Bent Oak, 204 F.3d at 667 (“The district court concluded[] . . . that it lacked jurisdiction
to entertain [the broadcaster’s] constitutional defenses because 28 U.S.C. § 2342 provides that
the courts of appeals have exclusive jurisdiction ‘to enjoin, set aside, suspend . . . or to
determine the validity of . . . all final orders of the [FCC]. . . .’ We disagree, ‘for the simple
reason that no FCC order is being challenged.’” (alterations in original) (quoting Laurel
, 169 F.3d at 554 (Arnold, J., concurring in the result))). Second, the D.C. Circuit’s
decision in Action for Children’s Television arose from an affirmative lawsuit brought by
broadcasters challenging the FCC enforcement scheme, such that the court in that case had
no occasion to decide the distinct jurisdictional question presented here. Action for Children’s
, 59 F.3d at 1252; see also Radar Solutions, 368 F. App’x at 486 (describing the
relevant portions of Action for Children’s Television as “[d]icta . . . suggest[ing] that [the D.C.
Circuit] would side with the 6th Circuit[’s decision in Bent Oak]”). Finally, although the Ninth
Circuit had previously suggested that district courts might have jurisdiction to consider
challenges to the validity of agency regulations in a § 504(a) enforcement action, see Dougan,
21 F.3d at 1490-91, it has since retreated from that view. United States v. Dunifer, 219 F.3d
1004, 1007-08 & n.8 (9th Cir. 2000).

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No. 11-50862

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