On May 24, 2012, a Form 345 filing was made with the FCC signaling the desire of Patrick Sullivan to sell a 185-watt FM translator in a large Alabama city to Lake Broadcasting for $1,000.
A single purchase agreement form, signed by both parties, was submitted for approval.
While this deal appeared to be simple, the assignee made this a most difficult and time-consuming matter for the Commission. That’s because Lake Broadcasting is an entity led by an individual who had his five licenses revoked in 2001 for criminal misconduct conducted between 1985 and 1990.
The matter has finally been resolved, and that led Commissioner Michael O’Rielly to issue a statement criticizing the FCC’s Administrative Law Judge for its role in the situation.
In the original Form 345 filing made nearly three years ago, a document with lengthy responses to Section III, Questions 12 and 13 — which refer to “Character Issues” and “Adverse Filings” — offered a brief history of Rice’s radio station ownership.
From 1971 through 2001, Mike Rice owned AM and FM stations in Indiana and Missouri. In October 2001, the FCC finalized a revocation of these licenses — nearly two years after his Dec. 29, 1999 release from prison.
Why was he incarcerated? Rice in 1994 was found guilty of multiple counts of sexual contact with five teens aged 14 to 16. Rice, who spent five years in prison, said in 2012 that he’s been rehabilitated. His right to vote was restored in August 2002. To further his fight, supporting letters from Rice’s psychiatrist, neighbors, friends and colleagues were submitted to the FCC.
“For nearly 21 years Mike Rice has done everything humanly possible to overcome his mental illnesses and to rehabilitate himself. And he has succeeded,” the document stated.
However, the FCC states that it revoked Rice’s licenses not only on the basis of his felony convictions but also for “misrepresentations to and lack of candor before the Commission.”
On May 23, 2014, the Media Bureau initiated a hearing before the FCC’s Administrative Law Judge, Richard L. Sippel, to determine whether the application for assignment should be granted.
The first prehearing conference was scheduled for June 24, 2014. A lengthy
prehearing process followed. Over the next three years, Lake Broadcasting and the Enforcement Bureau sought resolution of numerous discovery and evidentiary disputes from the ALJ. A hearing finally commenced on May 3, 2017.
Two days later, Lake’s counsel stated that his client — Rice — had decided to “withdraw
his application and withdraw from the proceeding, thereby ending the case.” This led Lake on May 8, 2017 to file a Motion to Dismiss the assignment application.
This led Sullivan to file a “Further Motion to Dismiss” and declared his intention to
sell the FM translator, W238CE at 95.5 MHz in Montgomery, Ala., to a third party.
Interestingly, Sippel denied both motions — on the ground that “put[ting] off the trial of [Rice’s] character issues would run the risk of losing witnesses and/or their recollections, and other relevant evidence becoming stale.”
One day later, on May 9, Lake Broadcasting filed a Motion to Disqualify the Presiding Judge. The motion claimed that the ALJ made “such serious errors and flagrant abuse of discretion … that the ineluctable conclusion must be reached that the [ALJ] has become prejudiced and biased against [LBI] and [Rice].”
The declaration described two fundamental bases for Lake’s charge: first, that the ALJ acted in an inappropriate manner toward Lake’s counsel and witnesses; and that the ALJ made interlocutory rulings that were not in favor of Lake.
Finally, on Sept. 11, 2017, the ALJ certified Lake’s appeal to the Commission.
The burden on such challenges is on the party alleging bias, and in its review the Commission determined that no such bias was presented to Rice.
“LBI claims that the ALJ acted in an inappropriate manner toward LBI’s counsel and witnesses,” the Commission decision made April 20 and released late Thursday (4/26) states. “Second, LBI alleges that the ALJ made numerous interlocutory rulings that were not in its favor. As stated, because LBI has not alleged that the ALJ has relied on knowledge acquired outside of this proceeding, the relevant standard is whether the
ALJ has displayed ‘favoritism or antagonism that would make fair judgment impossible’ … we find that the ALJ has displayed no such favoritism or antagonism.”
Sippel explained that he “was only performing his duties to understand the issues, to avoid undue delay in the proceedings, and to protect witnesses from undue inconvenience.”
In the Commission’s view, Lake Broadcasting’s allegations of improper ALJ conduct “fall short of the standard required for disqualification.”
Thus, even with the desire by Rice to withdraw and allow Sullivan to sell the translator to a third party, Sippel will move forward with rendering an opinion that could effectively bar Rice from any further attempt to purchase a radio station.
SHOULD THE FCC DUMP THE ALJ?
While he agreed with the decision to deny Rice’s appeal, Republican Commissioner O’Rielly felt it was important “to make a few observations.”
In short, he slammed Sippel for not dismissing the hearing.
“While the bias burden may not have been met because it rightfully remains high, I am concerned that the ALJ took unnecessary actions in these situations,” he said. “For example, denying a motion to dismiss in order to pursue a case on the character of someone who decided to withdraw his application to be a Commission licensee appears to me to be a questionable use of resources.”
O’Rielly also criticized Sippel for a “lengthy prehearing process” of over three years.
O’Rielly said, “Three years! This is an absurd amount of time needed to resolve such a matter and reinforces to me the need to fully weigh the costs and benefits of the ALJ process. On a larger scale, complaints about the ALJ process are not isolated incidents but paint a picture of questionable decisions coupled with an elevated level of inefficiency.
“It seems to me that too often the Commission has had to reverse the decisions of the ALJ or address one ALJ decision or another,” O’Rielly concluded. “To its credit, the media bureau has begun to use paper hearings to completely avoid this bureaucratic mess. This reality only reaffirms my call to consider eliminating the ALJ process altogether.”
