The Five-Year Enforcement Shot Clock: Has the FCC Finally Begun to Acknowledge It?

Forfeiture cancellations suggest possible path to clearing backlogged complaints (and enforcement holds).

It appears that the Commission may have taken the first steps – baby steps carefully cloaked from public view, perhaps, but steps nonetheless – toward addressing its hopeless backlog of broadcast complaints. In a series of super-low-key actions in recent weeks, the Media Bureau has quietly cancelled a number of previously assessed forfeitures. The actions have been reflected in terse (and we do mean terse – check out this example) letters that provide no explanation for the cancellations. But based on the answers we got to some informal inquiries, we figure that these cancellations could be the harbinger of considerably more dramatic developments on the complaints front.

It appears that the recent forfeiture cancellations have all involved the same general fact pattern. The Bureau issued a notice of apparent liability (NAL) and/or forfeiture order for violations which occurred significantly more than five years ago. The target licensee responded by arguing that, thanks to 28 U.S.C. §2462, the FCC is statutorily prevented from collecting the fines, so they should be cancelled. That argument has been initially rejected by the Bureau in some cases (here’s an example), but the licensees have pressed their argument before the Commission in applications for review. 

And now, we understand that the Bureau has been directed by higher-ups in the agency to cancel the forfeitures in light of that Section 2462 argument. The Bureau’s cancellation letters are, we are told, the result of that direction.

For readers not familiar with Section 2462, check out Steve Lovelady’s post on the topic from a couple three years ago. Essentially, Congress has told the Department of Justice that DoJ can’t initiate any lawsuit to enforce a civil fine, penalty or forfeiture later than five years after the underlying claims accrue. That’s important because Congress (in 47 U.S.C. §504(a)) has also told the FCC that, if the FCC fines a licensee and the licensee declines to pay – which is an option accorded to licensees by Congress – the FCC can collect only by getting DoJ to sue the licensee to collect the fine. Perhaps more importantly for FCC licensees, Section 504(c) of the Communications Act clearly and unequivocally provides that, if a licensee has not paid the fine and no court has ordered that the fine be paid, then the fact that the Commission may have imposed a forfeiture in the first place “shall not be used, in any other proceeding before the Commission, to the prejudice of the person to whom such notice was issued”.

Get the picture?

If the licensee doesn’t pay the fine voluntarily, the only way the FCC can collect is through a lawsuit. But if the claim underlying that lawsuit arose more than five years earlier, the FCC (acting through DoJ) can’t even start such a lawsuit, much less collect through it. And if the lawsuit can’t get started, then, under Section 504(c), whether or not the rules may have been violated makes no difference: the mere fact that an NAL (or, presumably, forfeiture order) was issued cannot be “used . . . to the prejudice” of the supposed violator.

Truth be told, this is a pretty simple concept, made even simpler by the clarity of the two statutes in question. But historically the Commission appears to have ignored it. You can understand why. 

The Commission has tended to take a leisurely approach to forfeitures. The Communications Act, after all, technically permits the Commission to issue fines for licensee misconduct that occurred at any time during a license term as long as the next license term hasn’t already started. (Remember, Section 2462 relates to collecting fines, not imposing them in the first place.) In order to preserve its ability to issue fines, then, the FCC has imposed the dreaded “enforcement hold” on pending renewal applications, meaning that it has simply declined to grant renewal where the possibility of some violation might exist. By doing this, the FCC has been able to (a) avoid the commencement of a new license term and, thus, (b) keep open the option of maybe someday getting around to considering whether a fine may or may not be appropriate.

(Relevant illustrative factoid:  According to CDBS, there are more than 300 TV renewal applications still pending from the 2004-2007 application season. Our guess is that most, if not all, of those have been hung up on “enforcement holds” – but since the Commission doesn’t generally disclose why any renewal has been held up, your guess is as good as ours.)

By invoking such “holds”, the Commission has been able to avoid resolving, or even addressing, vast numbers of complaints and violations (admitted or otherwise) that have piled up for a decade or more. And since many of those complaints involve issues like indecency, the Commission has also been able to avoid the difficult political and legal considerations attendant to such controversial topics.

Think of all those distasteful chores that you put off by relegating them to the basement, or a closet, or the garage, always with the promise that you really will get around to them someday, but also always with the tacit understanding that that “someday” probably won’t be anytime soon, particularly as the basement/closet/garage gets more and more jam-packed with chores. That’s essentially what the “enforcement hold” has let the FCC do with hundreds of thousands, possibly millions, of complaints.

The five-year shot clock imposed by Section 2462 obviously messes that up big time. If that statute of limitations on collection actions really means what it says, then any complaint filed with the Commission more than five years ago, and any forfeiture proceeding initiated more than five years ago, is at a dead end if the case hasn’t already resulted in payment of a forfeiture or the filing of a collection suit. Logically and legally, the only available course for the Commission would appear to be to summarily toss any such complaint or forfeiture proceeding.

Which is just what the Media Bureau has done with the dozen or so forfeitures which it recently cancelled. And that’s why those mysterious, unexplained cancellations could portend an important shift in the FCC’s handling of old complaints.

Bear in mind that the Bureau had already considered, and rejected, the Section 2462 argument in at least some, if not all, of those cases, insisting instead that the FCC could reach back indefinitely to penalize misconduct. But that’s not what 28 U.S.C. §2462 and 47 U.S.C. §504(c) provide. And we understand that at least some folks in the General Counsel’s office may now recognize and accept that limitation – and that the Bureau’s recent forfeiture cancellations are a result of that recognition and acceptance.

That’s the good news: Some fines have been cancelled for reasons which should lead to further cancellations of previously issued fines or previously-initiated-but-still-pending inquiries.

The bad news is that the Commission may still be reluctant to follow up with those other cancellations.

The Commission appears still to be loath to state conclusively that Section 2462 imposes a five-year shot clock on the FCC collection process. We understand from conversations with folks involved in the Bureau’s recent cancellations that Section 2462 was the reason for those cancellations, but you won’t find any reference to that section in any of the cancellation letters. And to avoid even having to refer to the arguments that had been presented concerning Section 2462, when it issued its cancellation letters the Bureau called on the various beneficiaries of those letters to request withdrawal of their respective, still-pending pleadings in which those arguments had been advanced.

What’s up with that? As best we can figure, the Commission believed that, if it had to dispose of those arguments on their merits, it would have to publicly acknowledge that Section 2462 does indeed impose a five-year shot clock. But if the Bureau instead offered to simply cancel the fines without explanation, it could call upon the affected licensees to withdraw their pleadings, thus obviating the need to address their arguments. And those licensees could be expected to comply happily – they are, after all, getting off the hook for the fines they had been assessed, so why should they care whether the FCC formally acknowledges the reason for that?

The Commission’s reticence is not encouraging, but to some degree understandable. Formal acceptance of the five-year shot clock would affect the Commission both retrospectively and prospectively. 

Looking back, the Commission would be required to sort through its various enforcement files, searching for any complaints, inquiries, etc., that involve potential misconduct that occurred more than five years ago and as to which no collection lawsuit has yet been filed. All such complaints, inquiries, etc. would then have to be summarily dismissed, no questions asked. Back the dump trucks up to the Portals and start tossing files out the window. We’re probably talking about hundreds of thousands, maybe millions, of complaints or other potential violations. Problems involving indecency, sponsorship ID, kidvid reports, public files, etc., etc., etc. Kiss them good-bye and color them gone.

That’s a lot of work in and of itself. And if the Commission were to do that, the result would likely be a public relations nightmare. Various self-appointed guardians of the public interest would almost certainly rise up on their hind legs and complain vigorously about the impropriety of allowing scofflaws – including pornographers! – to avoid any penalty for their supposedly vile misdeeds. And some members of Congress might respond to such complaints by asking pointed questions of the Commission: how, after all, did the FCC get itself into this mess? A preference to avoid this scenario is understandable.

And looking forward, the Commission would be acknowledging that it is in fact subject to a five-year shot clock. That would mean that the Commission would have to veer sharply away from its decades-long lackadaisical approach to enforcement. Instead, it would have to commit staff and resources sufficient to process complaints and related matters on a super fast-track. Suffice it to say that the FCC has seldom demonstrated the inclination or ability to do much of anything on a super fast-track, particularly in the enforcement area.

Remember, Section 2462 requires that the collection lawsuit be initiated within five years. So the Commission would have to investigate potential misconduct, issue an NAL, consider the licensee’s response, issue a Forfeiture Order, maybe address any petition for reconsideration, determine that the licensee wasn’t going to pay, and then convince DoJ to free up attorneys to file the suit, all within five years. A preference to avoid this scenario is likewise understandable.

Such preferences may be understandable, but they are also unrealistic and just plain silly. After all, the law says what the law says, and it’s said it for years. If the recent forfeiture cancellations do in fact reflect an acknowledgement by senior agency officials that the constraints of Section 2462 apply, we can see no valid distinction between those proceedings and the myriad other long-pending complaints, investigations, etc., that have been gathering dust at the Commission for more than five years.

It would be nice if the Commission, in the much-vaunted spirit of transparency, were to issue a public notice or some other statement explaining the recent cancellations, acknowledging the impact of Section 2462 on its enforcement activities, and committing to prompt steps consistent with those statutory obligations. It would also be nice if the Commission were simply to start taking such steps, fanfare or no. Whether it will do so obviously remains to be seen. Let’s all keep our fingers crossed.

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