FCC v. Prometheus Radio Project - 141 S. Ct. 1150 (2021)

Rule:

The Administrative Procedure Act's arbitrary-and-capricious standard requires that agency action be reasonable and reasonably explained. Judicial review under that standard is deferential, and a court may not substitute its own policy judgment for that of the agency. A court simply ensures that the agency has acted within a zone of reasonableness and, in particular, has reasonably considered the relevant issues and reasonably explained the decision.

Facts:

Under its broad authority to regulate broadcast media in the public interest, the Federal Communications Commission (FCC) had long maintained several ownership rules that limit the number of radio stations, television stations, and newspapers that a single entity may own in a given market. Section 202(h) of the Telecommunications Act of 1996 directed the FCC to review its media ownership rules every four years and to repeal or modify any rules that no longer serve the public interest. In 2017, the FCC concluded that three of its ownership rules were no longer necessary to promote competition, localism, or viewpoint diversity. The Commission further concluded that the record evidence did not suggest that repealing or modifying those three rules was likely to harm minority and female ownership. Based on that analysis, the agency decided to repeal two of those three ownership rules and modify the third. Prometheus Radio Project and several other public interest and consumer advocacy groups (collectively, Prometheus) petitioned for review, arguing that the FCC's decision to repeal or modify the three rules was arbitrary and capricious under the Administrative Procedure Act (APA). Prometheus contended that the record evidence did not support the FCC’s predictive judgment regarding minority and female ownership. The Third Circuit vacated the FCC's reconsideration order, holding that the record did not support the agency's conclusion that the rule changes would have minimal effect on minority and female ownership.

Issue:

Was FCC’s 2017 order reasonable?

Answer:

Yes.

Conclusion:

The Administrative Procedure Act's arbitrary-and-capricious standard requires that agency action be reasonable and reasonably explained. Judicial review under that standard is deferential, and a court may not substitute its own policy judgment for that of the agency. A court simply ensures that the agency has acted within a zone of reasonableness and, in particular, has reasonably considered the relevant issues and reasonably explained the decision. In analyzing whether to repeal or modify its existing ownership rules, the FCC considered the record evidence and reasonably concluded that the three ownership rules at issue were no longer necessary to serve the agency's public interest goals of competition, localism, and viewpoint diversity, and that the rule changes were not likely to harm minority and female ownership. The FCC did not have perfect empirical or statistical data, but the APA imposed no general obligation on agencies to conduct or commission their own empirical or statistical studies and nothing in the Telecommunications Act required the FCC to conduct such studies before exercising its discretion under Section 202(h). Thus, the Court cannot say that the agency's decision to repeal or modify the ownership rules fell outside the zone of reasonableness for purposes of the APA.