In March, Nexstar Media Group formally requested to the FCC that its proposed $720,000 forfeiture resulting from an alleged violation of the Commission’s “Good Faith” negotiations with a MVPD in the nation’s 50th state be lessened or erased.
Now, Nexstar, via its legal counsel at Wiley Law, says the Notice of Apparent Liability for Forfeiture should be rescinded. Period. Why? The Supreme Court of the United States’ recent decisions limiting the power of agency delegated authority dictates so.
The “Supplement to Response to Memorandum Opinion and Order” and NALF was uploaded to the FCC’s ECFS on Friday (8/30) by Gregory Masters, Kathleen Kirby and Eve Reed at Wiley Law, on the grounds that both Loper Bright Enterprises et. al. v. Raimondo and SEC v. Jarkesy limit the authority of the Media Bureau to serve as the final arbiter in the matter.
FCC Media Bureau Chief Holly Saurer determined that Nexstar violated the Commission’s good faith rules while engaging in retransmission consent negotiations with Hawaiian Telcom Services Company, Inc. (HTSC).
Nexstar challenged the FCC’s decision, which involves six stations serving the Hawaiian Islands, on two fronts. First, it disputes the FCC’s determination of a violation concerning the good faith negotiation requirement. Nexstar contends that its negotiations with HTSC were indeed conducted in good faith, particularly noting that its proposal for a mutual release provision – aimed at resolving the dispute as part of a renewal agreement – was reasonable under the circumstances. Second, Nexstar argues that the forfeiture amount is excessive, exceeding the FCC’s authority and failing to adhere to principles of rationality and fairness.
The disagreement arose during negotiations between Nexstar and HTSC in May 2023. After Hawaiian Telcom’s requests for a week-long extension were denied, and subsequent short-term extensions failed to lead to an agreement, transmission of Nexstar’s stations — by law — ceased. This led to Hawaiian Telcom’s complaint to the FCC in July and an amended complaint following new proposals from Nexstar, which culminated in the current forfeiture proposal.
Despite reaching a renewal agreement without the contested mutual release provision, the FCC issued a Notice of Apparent Liability to Nexstar, primarily focusing on a component of the proposed release provision that would restrict further FCC complaints related to the negotiation and renewal agreement.
Now, with the Jarkesy and Loper Bright decisions fundamentally changing the dynamic of federal agency delegated authority, Wiley attorneys representing Nexstar assert that the Seventh Amendment’s jury trial guarantee must be applied here. Accordingly, the FCC can only impose penalties after a jury trial.
Thus, the so-called “Chevron deference,” which was tossed in Loper Bright, can no longer be considered the ultimate arbitration point when seeking to penalize Nexstar, the Wiley attorneys say. Thus, “independent judgment” is the decider in this matter, they argue.
The eight-page supplement restates points made in the original March filing contesting the NALF, while establishing one new point it could not have made six months ago: “The Supreme Court’s decision in Loper Bright made clear that under the Administrative
Procedure Act, courts, not agencies, will decide ‘all relevant questions of law’ arising on review of agency action … The NAL Response established that the Bureau erred in multiple respects in finding that Nexstar violated the good faith negotiation requirement and in assessing a fine of $720,000 for the alleged misconduct, and the legality of the Bureau’s decision presents a ‘relevant question of law’ that any reviewing court should decide based on its own independent judgment.”
