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01/09/87 American Legal Foundation, v. Federal Communications

January 9, 1987




Before: STARR and BUCKLEY, Circuit Judges, and PARSONS,* Senior District Judge.


COMPANIES, INC., Intervenors 1987.CDC.9

Petition for Review of an Order of the Federal Communications Commission



Opinion for the Court filed by Circuit Judge STARR.

STARR, Circuit Judge :

We have before us a petition for review by the American Legal Foundation . ALF challenges a decision by the Federal Communications Commission not to initiate an investigation of the Foundation's administrative complaint, which charged the American Broadcasting Companies, Inc. with news distortion, news suppression, and violation of the fairness doctrine in a series of nationally televised news broadcasts pertaining to the Central Intelligence Agency. The FCC has moved to dismiss the petition on the ground that the Foundation lacks standing the seek review of the Commission's decision. We agree that ALF lacks standing and therefore dismiss the petition. I

Four broadcasts during September and November 1984 on ABC's "World News Tonight" sparked the controversy that led to this litigation. Those broadcasts reported allegations of CIA involvement with a Honolulu investment firm that went bankrupt and which was accused of defrauding investors of $22 million. Specifically, on ABC's "World News Tonight" on September 19, 1984, the network broadcast an interview with one Ronald Rewald, former president of the ill-starred film. In that interview, Rewald claimed that he was a CIA agent and that his investment firm had served as a cover for foreign and domestic CIA operations, some of them illegal.

The second ABC report aired on September 20, 1984. It reported Rewald's explosive charge that, following allegations that his Honolulu firm had swindled numerous investors, the CIA decided to assassinate him. A former Honolulu prison guard, Scott Barnes, purported to corroborate Rewald's accusation by claiming to have been hired by the CIA to kill Rewald. Yet another interviewee, Ted Frigard, similarly claimed that a CIA representative threatened his life in order to discourage him from pursuing a lawsuit against the investment firm and the Agency.

In a third broadcast on September 26, 1984, ABC reported that the CIA had publicly denied what the network had reported in the previous two broadcasts. At the same time, ABC announced that it was standing by its earlier reports. Finally, on November 21, 1984, ABC aired what it called an "update and clarification," in which the network admitted that it had been unable to corroborate Scott Barnes' story. ABC further conceded that the network had no reason to doubt the CIA's denial of Barnes' provocative allegations. *fn1

Dissatisfied with ABC's apparent partial retraction, the CIA filed a complaint against ABC with the FCC. *fn2 The CIA claimed that ABC had deliberately reported false information about the CIA's ties with Rewald's investment firm. The CIA advanced four assertions to buttress its claim: (1) ABC never attempted to verify the claims made by Rewald and others whom the network interviewed; (2) ABC improperly refused to accept as true the CIA's vigorous denial of these claims; (3) ABC ignored information available in public documents tending to show that the CIA was not significantly involved in the Rewald firm; and (4) ABC unquestioningly broadcast statements by Scott Barnes when it knew that he was a completely untrustworthy source. *fn3

The CIA argued that these defects demonstrated that ABC had deliberately distorted and suppressed news in violation of well-settled Commission policy. See, e.g., Black Producer's Association, 70 F.C.C.2d 1920, 1921 (1979) (distortion); Wayne Lemons, 67 F.C.C.2d 160, 165 (1977) (suppression); Hunger in America, 20 F.C.C. 2d 143 (1969) (staging and distortion); Network Coverage of the Democratic National Convention, 16 F.C.C.2d 650 (1969) (same). Moreover, in the CIA's view, ABC's suppression of evidence tending to disprove CIA involvement in illegal activities violated the Commission's much-debated fairness doctrine, which in pertinent part requires a licensee presenting one side of a controversial issue of public importance to afford a reasonable opportunity for the presentation of contrasting views. See, e.g., Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 375-79, 23 L. Ed. 2d 371, 89 S. Ct. 1794 (1969); American Security Council Education Foundation v. FCC, 197 U.S. App. D.C. 124, 607 F.2d 438, 443 & n.12 (D.C. Cir. 1979), cert. denied, 444 U.S. 1013, 62 L. Ed. 2d 642, 100 S. Ct. 662 (1980). Finally, since ABC's series of reports impugned the character and integrity of the CIA, the broadcasts were denounced as contravening the personal attack rule, a component of the fairness doctrine under which a licensee engaging in such attacks must notify the entity (or person) attacked and permit it to respond. 47 C.F. R. § 73.1920 (1984); see also Red Lion, 395 U.S. at 378; Galloway v. FCC, 250 U.S. App. D.C. 143, 778 F.2d 16, 18 (D.C.Cir. 1985). The CIA requested an investigative hearing on ABC's production of the broadcasts. It also asked the Commission to consider the alleged abuses in ruling on applications by ABC stations for license renewal. See 47 U.S.C. §§ 308, 309 (1982 & Supp. III 1985); see also Hunger in America, 20 F.C.C.2d at 151 n.6.

The CIA's complaint prompted filings by a number of media groups, including the American Legal Foundation. These filings raised, among other things, the issue whether government agencies such as the CIA had standing to file administrative complaints with the Commission. The Commission staff denied the CIA's complaint. *fn4 It found that the CIA enjoyed standing but had failed to ...

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