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More on the Verizon Appeal of the Net Neutrality Regulation

By 24 January 2011 4 Comments

Verizon’s action last Wednesday (Jan. 19) in filing an appeal of the FCC’s Net Neutrality rule caught the tech world by surprise.

My post last Friday discussed some aspects of the situation, but a question remains, why did Verizon appeal and no one else? Surely others are aggrieved, so are they slow or is Verizon over-eager?

The answer lies in the rules governing the jurisdiction of Circuit Courts of Appeal over review of agency actions. These rules are tricky and utterly unforgiving. Correct timing is necessary, or the Court of Appeals will lack jurisdiction to hear the case and must dismiss it, with no slack to further the claims of justice or fairness.

For example, in U.S. v Locke, 471 US 84 (1985), http://supreme.justia.com/us/471/84/case.html the statute required that a report concerning a mining claim be filed each year “before December 31.” The claimant filed ON December 31, and the agency rejected it. SCOTUS upheld the agency, on the grounds that any fool could see that “before December 31” meant on December 30 or earlier.  (One might think that the Court’s conclusion that the meaning of the statute was plain was automatically rebutted by the fact that sophisticated lawyers read the language differently, but logic is not a big part of this area of the law.)

This rule was then carried over into appeals under the Mine Safety Act and the Occupational Safety and Health Act, both of which required that appeals be filed “at any time prior to the sixtieth day” after a standard was promulgated. The D.C. Circuit held that this meant on or before day 59, under the precedent set by Locke, and that there is no give in the requirement:

Traditionally, courts have treated statutes of limitations and prescriptions designed to operate as statutes of limitations as flexible, i.e., “subject to waiver, estoppel, and equitable tolling.” . . . By contrast, statutory time limits on petitions for judicial review of agency action have been held “jurisdictional and unalterable” in a parade of this circuit’s decisions. . . . Requirements genuinely “jurisdictional” are not judicially alterable; “[a] court lacks discretion to consider the merits of a case over which it is without jurisdiction….”

However, a party better not appeal too early, or, again, no jurisdiction. Since only final agency actions can be appealed, filing before the date of finality will also get you tossed out of court, as ATT’s lawyers learned in a 1985, in Western Union. And the date of finality is not always crystal clear, especially when one’s fate is in the hands of people who seem to think that 60 not only actually means 59, but clearly means 59.

For the most part, the problem of when the clock starts has been taken care of by a combination of law and agency rule.

For most of the interested parties, an appeal of the Net Neutrality rule is indeed an appeal of a rulemaking, and is made under 47 USC 402(a), which governs “Any proceeding to enjoin, set aside, annul, or suspend any order of the Commission under this chapter (except those appealable under subsection (b) of this section) . . . .”

The timing of such an appeal is settled by law and rule:  the clock starts upon the publication of the final rule in the Federal Register. The reason is that 47 USC § 405 says:

The time within which a petition for review must be filed in a proceeding to which section 402 (a) of this title applies, or within which an appeal must be taken under section 402 (b) of this title in any case, shall be computed from the date upon which the Commission gives public notice of the order, decision, report, or action complained of.

And FCC rule (47 CFR § 1.103) says:

Commission action shall be deemed final, for purposes of seeking reconsideration at the Commission or judicial review, on the date of public notice as defined in §1.4(b) of these rules.

And §1.4(b) says:

The term public notice means . . . For all documents in notice and comment and non-notice and comment rulemaking proceedings required by the Administrative Procedure Act, 5 U.S.C. 552, 553, to be published in the Federal Register . . . the date of publication in the Federal Register.

As noted in the prior post, the Net Neutrality rule has not yet appeared in the Federal Register, so an appeal would be dismissed as premature.

However, Verizon is appealing not just as someone aggrieved by the rule in general, but on the ground that it has  special status as a “holder of any construction permit or station license which has been modified or revoked by the Commission,” status conferred by 47 USC § 402(b). Under this subsection, such a holder can appeal a commission action to the DC Circuit. Furthermore, if the DC Circuit has jurisdiction, then § 402(a) does not apply and no court other than DC can hear the case.

[N.B. One might question whether the term “station license” includes Verizon’s wireless licenses, but the legal definition is in 47 U.S.C. § 153: “(42) Station licenseThe term “station license”, “radio station license”, or “license” means that instrument of authorization required by this chapter or the rules and regulations of the Commission made pursuant to this chapter, for the use or operation of apparatus for transmission of energy, or communications, or signals by radio, by whatever name the instrument may be designated by the Commission.”]

The FCC can modify wireless licenses via a rulemaking proceeding, so that issue is not in doubt, and the Net Neutrality Rule itself relies on this authority. So Verizon has a reasonable claim that its appeal lies under § 402(b).

But this sets up an interesting procedural tangle. An appeal under § 402(b) must be filed “within thirty days from the date upon which public notice is given of the decision or order complained of,” rather than the 60 days granted under § 402(a), and The same FCC Rule § 1.4 says that for non-rulemaking documents the magic date is the date of release to the public, since there is no requirement of Federal Register publication, and that this holds true even if the document is later actually published in the Federal Register.  (In other words, only if the law requires the document to be published in the Federal Register, as is true of final rules, is the date of FR publication the date of public notice; if the agency publishes the document in the FR as a matter of discretion, then the clock started to run earlier, when the document was first released to the public.)

So there is an argument that the “release date” for purposes of an appeal under § 402(b) was the date the NN Rule was made public, which was Dec. 23, and that VZ had 30 days to file its appeal.

Admittedly, this conclusion would somewhat metaphysical. There can be no doubt that other parties, who do not hold affected licenses, can appeal under § 402(a), and for them the term “public notice” must mean the dates of FR publication. So to apply a different standard to Verizon’s § 402(b) appeal would necessarily mean that that the FCC’s action has two natures, a rulemaking nature that governs all parties who do not hold licenses and who want to appeal under 402(a), and a non-rulemaking nature, which applies to any party directly affected in its licenses who wants to appeal under § 402(b).

If the conclusion that the rule has two natures seems silly – well, go back and read Locke and Western Union and the OSHA/Mining cases and decide if you as a lawyer would bet your professional reputation on correctly guessing how a court will untangle all of this.

So all the timing of the appeal shows is that Verizon’s lawyers have read the cases, and are obeying some of the dicta in the DC Circuit opinions which says (roughly translated): “For heaven’s sake — File the Notice of Appeal! Then file again! And if you are still in doubt, do it again! Do you think that judges like dealing with this nonsense or throwing out meritorious appeals?”

And as noted last week, the real procedural issues are tough enough:

But [which court decides which court decides]? Other interested parties will file appeals in other circuits under 402(a), so the lottery will be held. Will the winner of the judicial lottery then decide on Verizon’s claim that D.C. has exclusivity?  Or does the D.C. Circuit decide? Since appeals under (a) and (b) are mutually exclusive, but many parties other than Verizon clearly lack standing under 402(b), is it possible that the circuit that wins the lottery will conduct a parallel review to the D.C. Circuit’s review of the Verizon appeal? Or would a different Court of Appeals decide to transfer the case to D.C. so that everything could be heard together – and how would this mesh with the lottery statute?

Excellent questions, which is why Verizon is being very careful not to get disqualified at the starting gate.

James V. DeLong is a former Director of Research at the Administrative Conference of the United States and author of such exoctica as New Wine for a New Bottle: Judicial Review in the Regulatory State (1986).

Image from Geograph.org.