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North American Catholic Educational Programming Foundation, Inc v. Womble Carlyle Sandridge & Rice

August 5, 2011

NORTH AMERICAN CATHOLIC EDUCATIONAL PROGRAMMING FOUNDATION, INC., PLAINTIFF,
v.
WOMBLE CARLYLE SANDRIDGE & RICE, PLLC, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Signed by Royce C. Lamberth, Chief Judge,

MEMORANDUM OPINION

I. INTRODUCTION

This case's roots can be traced to a Federal Communications Commission ("FCC") action that was initiated nearly twenty years ago. In 1992, plaintiff North American Catholic Education Programming Foundation, Inc. ("NACEPF") applied for a license for Instructional Television Fixed Service ("ITFS") channels around Las Vegas, Nevada. The licenses were instead given to Clark County School District ("CCSD"), and after unsuccessfully exhausting its administrative remedies, plaintiff appealed the Commission's decision to the United States Court of Appeals for the District of Columbia Circuit. Unfortunately, defendant Howard J. Barr-then counsel to plaintiff and an attorney with co-defendant Womble, Carlyle, Sandridge & Rice, PLLC ("Womble")-filed the notice of appeal two days late, and the court dismissed the appeal as untimely filed. N. Am. Catholic Educ. Programming Found., Inc. v. FCC, 437 F.3d 1206 (D.C. Cir. 2006). NACEPF then initiated the current legal malpractice suit, arguing-among other things-that it was harmed by defendants' failure to file the notice of appeal in a timely manner.

Because the Court has determined that the D.C. Circuit would not have granted plaintiff relief even had the notice been timely filed, however, plaintiff has not stated a claim upon which relief can be granted. NACEPF's motion for partial summary judgment will be denied, and the Court will grant defendants their motion for partial dismissal.

II. BACKGROUND

On May 13, 1992, NACEPF applied to the FCC for an ITFS license for four channels in the area of Las Vegas, Nevada. Pl.'s Statement of Material Facts as to Which There Is No Genuine Issue ¶ 7, ECF No. 17, Sep. 18, 2009 ("Mat. Facts"). On December 30, 1993, CCSD filed a competing application, along with a request for the FCC to waive the rule that limited the number of ITFS licenses a single entity could hold in a certain region. Pl.'s Mem. P. & A. Opp. Def.'s Mot. Partial Summ. J. ("Summ. J. Mem.") Ex. H at 1, Sep. 18, 2009, ECF No. 17-12 ("Waiver App."). At the time of CCSD's waiver application there were nearly 150,000 students enrolled in the more than 150 schools that constituted the school district, see N. Am. Catholic Educ. Programming Found., Inc., 12 FCC Rcd. 24449, 24450 (1997), and CCSD was already authorized to use eight ITFS channels (the maximum allowed is four). See Waiver App. 1. Plaintiff filed a petition to deny the waiver request, arguing that waiver was not in the public interest and that CCSD had not met the "exceedingly high burden" required in order for waiver to be granted. Summ. J. Mem. Ex. I at 7, ECF No. 17-13 ("Pet. Deny"). At that time, NACEPF was represented by Howard Barr, then an attorney at Pepper & Corazzini, a law firm that would merge with defendant Womble in March 2002. Mat. Facts ¶ 10. The Video Services Division of the Commission's Mass Media Bureau ("MMB") granted CCSD's waiver request, and after following the procedure for deciding between competing applications, determined that CCSD was the tentative selectee. NACEPF, 12 FCC Rcd. at 24453.

Plaintiff-with defendants as counsel-petitioned the MMB to reconsider its decision to waive the four-channel rule. Summ. J. Mem. Ex. K, ECF No. 17-15 ("MMB Pet. Recons."). Plaintiff argued that the Division failed to apply the Commission's four-channel waiver rule, that Supreme Court and D.C. Circuit precedent required the Division to apply an "exceedingly high" standard, that the Division's decision did not genuinely engage in reasoned decision-making, and that the decision contravened the Commission's goal of diversity. Id. The MMB affirmed, finding "that there are no errors of law or new facts that would warrant reversing the staff action." Clark Cnty. Sch. Dist., 17 FCC Rcd. 5325 (2002). The MMB held that "the Commission properly found that the requested channels are necessary to be able to provide the wide range instructional programming proposed," and stated that "the public interest is best served by granting CCSD a waiver of the four-channel rule." Id. at 5327 (emphasis added).

At this point, plaintiff enlisted new counsel and filed an Application for Review ("AFR") to the full Commission. Summ. J. Mem. Ex. M at 9, ECF No. 17-17 ("AFR"). Among other things, plaintiff argued that the MMB had not applied the "exceedingly high burden" test and had not analyzed CCSD's need for new channels in terms of the public interest. Plaintiff further argued that the fact that CCSD aired some duplicate programs meant it did not actually need the new channels. The Commission denied the AFR, finding that the grant of waiver was "consistent with the Commission's Rules and precedent." Clark Cnty. Sch. Dist., 18 FCC Rcd. 18815, 18819 (2003). The Commission said that NACEPF had cited no authority in support of its argument based on duplicate programming, and found that in accordance with its precedent, "full utilization of the currently assigned channels [was] not a prerequisite to an applicant's request for additional channels." Id. at 18820. The Commission also determined that "Clark County's use of the channels at issue was reasonable and consistent with both precedent and furtherance of the public interest." Id. at 18821.

NACEPF then rehired defendants and filed a Petition for Reconsideration ("PFR") to the Commission. Summ. J. Mem. Ex. O, ECF No. 17-19 ("PFR"). On October 8, 2004, the Commission held, in accordance with its precedent, that the PFR would be denied because it did not "present any new facts or changed circumstances," and raised new arguments that should have been raised before the MMB in the first instance. 19 FCC Rcd. 20169, 20173 (2004).

On November 9, 2004, thirty-two days after the Commission's denial of the PFR, defendant Howard Barr filed a notice of appeal on behalf of plaintiff with the D.C. Circuit. The Circuit dismissed the appeal as untimely on January 31, 2006. NACEPF, 437 F.3d 1206. On June 26, 2009, plaintiff filed the instant suit for legal malpractice, breach of contract, breach of fiduciary duty, and breach of implied covenant of good faith and fair dealing against Howard Barr and his firm, Womble. The complaint contains several allegations, but because the current motions pertain only to the Las Vegas application, it suffices to say that the other claims concern other license applications in which defendant allegedly made errors in its work on behalf of NACEPF. Defendants moved for partial dismissal on July 28, 2009, and plaintiff filed its motion for summary judgment and opposition to the motion for partial dismissal on September 19, 2009. The Court will deal with plaintiff's arguments in turn, first reaching its argument that the D.C. Circuit-had it not dismissed plaintiff's appeal as untimely-would have overturned the FCC's decision based on Northeast Cellular Tel. Co. v. FCC, 897 F.2d 1164 (D.C. Cir. 1990), and WAIT Radio v. FCC, 418 F.2d 1153 (D.C. Cir. 1969). It will then discuss plaintiff's argument that the FCC followed unlawful precedent, and finally deal with any remaining arguments plaintiff made before the D.C. Circuit and in its motion for partial summary judgment.

III. LEGAL STANDARD

Review of a magistrate judge's report and recommendation for a dispositive motion is de novo. Fed. R. Civ. P. 72(b)(3); see also 28 U.S.C § 636(b)(1); United States v. Wheeler, 746 F. Supp. 2d 159, 161 (D.D.C. 2010). However, the Court may only review those parts of the report and recommendation that the parties have properly objected to. See Aikens v. Shalala, 956 F. Supp. 14, 19 (D.D.C. 1997).

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). To satisfy this test, a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[W]hen ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint," Atherton v. District of Columbia, 567 F.3d 672, 681 (D.C. Cir. 2009), and grant a plaintiff "the benefit of all inferences that can be derived from the facts alleged." Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). However, a court may not "accept inferences drawn by plaintiffs if such inferences are unsupported by the facts set out in the complaint." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). In other words, "only a complaint that states a ...


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