David Oxenford

By: David Oxenford, Wilkinson Barker Knauer

The FCC’s 2024 decision to reinstate Form 395-B, after its use had been paused for over 20 years, was invalidated this week by a decision of the US Court of Appeals for the Fifth Circuit.  In yet another instance of courts limiting the authority of administrative agencies, the Fifth Circuit judges found that the FCC has no statutory authority to require the filing and public posting of the form requiring broadcasters to report on the race and gender of all of their employees.  In reaching this decision, the Court made clear that the FCC’s authority to regulate “in the public interest” is not an authority that is unlimited, but instead is one that must be grounded in specific duties that the FCC has been given by Congress in the Communications Act.  The Commission cannot impose obligations on broadcasters under the public interest standard simply because a majority of the Commissioners believe that new rules would somehow make broadcast service better – they can only act in areas that Congress specifically said that they can act.  That aspect of the Court’s decision may have a significant impact in assessing the validity of current and future obligations imposed by the FCC on broadcasters.

The FCC’s decision to reinstate the Form 395-B was very controversial.  In the late 1990s and early 2000s, the FCC’s EEO policies were twice struck down by the courts as unconstitutional as they forced hiring based on racial or gender.  The Form 395-B provided the information used by the FCC to make the decisions that the courts found to be discriminatory.  Given the form’s direct relationship with the FCC actions that had been found unconstitutional, after these court decisions, the FCC suspended the use of the form.

When use of the form was suspended, the FCC said that it believed that the collection of employment profiles was still required so that the FCC could assess the racial and gender makeup of the overall broadcast industry workforce.  For years, the Commission searched for ways to collect that information without fears that it could be used to pressure broadcasters to hire women and minorities.  Several times, FCC representatives suggested that it might be able to collect the information from stations for an overall industry analysis without making that information public in connection with any specific station – but for over 20 years it did not revive the form, until the 2024 decision.

Not only did that decision bring back Form 395-B, but it brought it back in a way that tied it directly to stations, because the form was to be uploaded to a station’s public file.  While the FCC pledged not to routinely use this information to assess the hiring practices of FCC licensees, the reinstatement of the form in such a public manner caused dissents from the two Republican Commissioner, one being the current Chair of the FCC, who thought that the public nature of this information would almost assuredly lead to someone raising issues about hiring practices at stations – whether before the FCC or before some other government agency – meaning that broadcasters would again be forced to consider race and gender in their hiring decisions to avoid these complaints.  In addition, as we noted in our blog article when this decision was announced, even if the form was not used to assess hiring practices directly, challenges were likely based on a station’s failure to file the form, or arguments that a broadcaster should be penalized for misclassifying the race or gender of station employees (particularly as broadcasters are generally advised to not ask for racial information from their employees but instead to rely on visual determinations as to a person’s race or gender – which might be particularly hard when the Commission also added “nonbinary” and “two or more races” as classifications for employees on the form).

Appeals of the FCC’s decision were brought by the National Religious Broadcasters association and by the Texas Association of Broadcasters arguing, among other things, that the FCC did not have the statutory authority to collect workplace data from broadcasters, or compel the public release of that information, and that the information would violate constitutional rights on some of the same grounds as the courts used to invalidate the FCC’s EEO programs that were in place at the turn of the century.  Those appeals led to this week’s decision, where the Court found that it did not even need to reach the constitutional issues about reverse discrimination because the lack of statutory authority by itself was sufficient to invalidate the reinstatement of the form.

The FCC tried to justify its reimposition of Form 395-B by referring to a provision of the 1992 Cable Act that told the Commission to keep in place EEO forms used by the FCC at that time.  But, the Court reasoned, those forms were ones tied to the FCC’s EEO programs that were found unconstitutional in the early 2000s, so the 1992 Cable Act language could not justify new data collection requirements tied to long-invalidated rules.

Perhaps the more far-reaching portion of the Court’s decision was the determination that the FCC’s general power to regulate in the public interest was not so broad as to justify the use of this form.  The Court said that the public interest standard does not give the FCC unlimited power to determine whether actions of broadcasters should be permitted or not.  Instead, that grant of power only sets the standards by which the FCC can enforce powers explicitly set out in the statute.  While the statute sets out many areas for the FCC to regulate, according to the Court, collecting data on station employee profiles is not one of those powers given to the FCC.

The Court found that, while the FCC is given statutory powers to make sure that broadcasters and other regulated entities do not discriminate in hiring, the FCC’s decision reinstating the Form 395-B explicitly said that the data collected by the Form 395-B would not be used for enforcement of claims of discrimination.  The grant to the FCC of more general power to collect data and conduct investigations also, in the Court’s opinion, did not justify the collection of this data as, like the public interest standard itself, these grants of authority can only be used to further regulation on issues specifically set out in the statute – they did not give the FCC blanket authority to collect data or conduct investigations whenever it wanted.

This decision was written by the Fifth Circuit Court of Appeals, one of 12 such circuits in the US.   It is possible that other Courts of Appeals might not reach the same conclusion as to the scope of the FCC’s powers, and a circuit split could arise, potentially requiring the Supreme Court to resolve the issue.  But the decision does seem to be in line with many recent court decisions narrowing the scope of the authority granted to administrative agencies, so it certainly bears careful review and serious consideration.  If the FCC can only act when given specific statutory authority to do so, many attempts by the FCC to expand its authority could become suspect.  For instance, last year the FCC proposed to adopt new rules about the use of Artificial Intelligence in political advertising (see our article here) – a proposal criticized by then Commissioner, now Chairman, Carr – relying heavily on general public interest authority for the proposed action.  That kind of action would, under this week’s decision, be inherently suspect.   The current administration has talked about holding broadcasters liable if they do not meet some as-yet undefined public interest standard.  The Fifth Circuit decision seems to suggest that the public interest standard does not, in and of itself, give the FCC any authority to establish broadcast codes of conduct except in areas specifically enumerated by the statute.  While in many areas (e.g., interference standards, certain political advertising rules, sponsorship identification) the FCC does have an explicit grant of authority to regulate, in other areas, the authority is less clear.  In light of this decision, there will no doubt be much evaluation of the text of the FCC’s statutory authority to see what rules and what proposals may be on shaky ground.  Watch to see how this issue develops in the near future.

David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline. Access information here. (Members only access). There are no additional costs for the call; the advice is free as part of your MAB membership.