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Federal Communications Commission
Washington, DC 20554
In the Matter of
) File No. EB-06-IH-0825
Saga Communications of New England,
L.L.C. ) NAL Account No. 200732080018
Licensee of Station WAQY(FM), ) Facility ID No. 58551
Springfield, Massachusetts ) FRN No. 0002749406
ORDER ON REVIEW
Adopted: December 2, 2011 Released: December 5, 2011
By the Commission:
1. In this Order on Review, we deny the Application for Review filed by
Saga Communications of New England, L.L.C. ("Saga"), licensee of
Station WAQY(FM), Springfield, Massachusetts (the "Station"). Saga
seeks review of a Memorandum Opinion and Order ("MO&O") issued by the
Enforcement Bureau ("Bureau") on April 1, 2010. In that MO&O, the
Bureau denied Saga's Petition for Reconsideration of a $4,000 monetary
forfeiture for violating section 73.1216 of the Commission's rules for
failure to conduct a broadcast contest substantially as announced. As
discussed below, we deny the Application for Review and affirm the
2. In December 2005, the Bureau received a complaint from Robert
Naginewicz alleging that Station WAQY(FM) failed to conduct a contest
broadcast in June and July 2005 according to that contest's advertised
rules. Mr. Naginewicz states that he won the contest's "Grand Prize
Giveaway" on July 15, 2005. The prizes included (1) a free two-year lease
on a 2005 Buick LaCrosse automobile, or its cash equivalent, from contest
co-sponsor Bob Pion Pontiac and (2) a "trunk load full" of Aerosmith
memorabilia. Mr. Naginewicz alleges that, although he was assured by the
Station's staff that all of his prizes would be delivered to him by July
22, 2005, he did not receive the monetary portion of his prize until
August 18, 2005, and that, despite numerous queries made of the Station's
staff, he was still awaiting delivery of the memorabilia portion as of
December 31, 2005.
3. Following receipt of Mr. Naginewicz's complaint, the Bureau sent a
letter of inquiry to Saga concerning the allegations. Saga responded,
contending that its one-month delay in delivering the monetary portion of
the prize, although less than ideal, was "within the zone of
reasonableness." Saga acknowledged, however, that its failure to fulfill
the memorabilia portion until after Mr. Naginewicz had contacted the
Commission was a "problem" that it claimed to have resolved after the
Commission's inquiry. Saga indicated that, because of its delay in
delivering the memorabilia to Mr. Naginewicz, it had enhanced the award
with additional prizes.
4. On March 2, 2007, the Bureau issued a Notice of Apparent Liability
("NAL") for $4,000 against Saga, finding that Saga had apparently violated
the Commission's contest rule. In response to the NAL, Saga argued that
its failure to award the contest prizes promptly is not a rule violation
because "promptness" is not an enumerated requirement in the contest rule.
Saga further argued that, even if its conduct could be deemed to have
violated the contest rule, the NAL erred in concluding that Saga acted
"willfully." Saga contended that its failure to promptly award prizes was
due to inadvertence and employee miscommunication, not any deliberate or
conscious attempt to avoid its obligations, as demonstrated by its
ultimate award of all promised prizes, including bonus items to compensate
the complainant for the delay. Saga urged that the Bureau cancel or
substantially reduce the proposed $4,000 forfeiture amount. In the
resulting Forfeiture Order, the Bureau rejected Saga's arguments and
affirmed the $4,000 forfeiture.
5. Saga then filed a Petition for Reconsideration with the Bureau, and
contended that: (1) contrary to the Bureau's finding, promptness is not
required by the Commission's licensee-conducted contest rule; (2) the
Bureau incorrectly found that Saga's own contest rules required it to
award its contest prizes within thirty days; (3) the Bureau failed to
prove that Saga possessed the requisite scienter required to establish
"willfulness" under section 503(b) of the Communications Act of 1934, as
amended (the "Act"); (4) the precedent relied upon by the Bureau regarding
"willfulness" is untested by the courts and is, therefore, unreliable; and
(5) the Bureau erred in finding that Saga's misconduct was "repeated"
within the meaning of section 503(b) of the Act. The Bureau, in the MO&O,
rejected these arguments and affirmed the Forfeiture Order.
6. Pursuant to section 1.115(b)(2) of the Commission's rules, to obtain
relief through an application for review an aggrieved party must specify,
inter alia, how an action taken pursuant to delegated authority conflicts
with a relevant "statute, regulation, case precedent, or established
Commission policy," or that "the action involves a question of law or
policy which has not previously been resolved by the Commission." In its
Application for Review, Saga reiterates arguments previously raised at the
Bureau level. Specifically, Saga repeats its argument that promptness in
the awarding of contest prizes is not required by the Commission's contest
rule. It also again contends that its failure to promptly award the
subject prize was not "willful." Although we find that the Bureau fully
and correctly addressed these arguments in the MO&O and Forfeiture Order,
we will address them here.
7. Saga again contends that promptness in the awarding of contest prizes
is not required by the contest rule, and thus the Bureau's finding of
a rule violation in this instance is contrary to both the contest rule
and relevant Commission precedent. We disagree with Saga's previously
made arguments for the reasons set out in the Bureau's MO&O. In its
Application for Review, however, Saga now cites Reuters Limited v. FCC
in support of its contention that the forfeiture was inappropriate
because the Bureau may not depart from the Commission's rules. Saga's
reliance on Reuters is misplaced. In Reuters, the Commission rescinded
a license grant in order to allow a second applicant, whose
applications had been filed late, to be considered. The court of
appeals reversed that decision, finding that the Commission could not
engage in an ad hoc departure from its licensing rules in order to
achieve "laudable aims" or "justice in the individual case." Notably,
in Reuters, the court found that the Commission departed from an
unambiguous requirement found in the licensing rules.
8. In the instant case, however, the Bureau did not depart from the
contest rule. Instead, the Bureau properly held that the contest rule
itself and the accompanying notes enumerating certain material terms
of broadcast contests do not constitute an exhaustive list of every
element that is material to a contest. As the Bureau stated, the
rule's notes explicitly recognize that "material terms may vary widely
depending on the exact nature of the contest" and the terms listed in
the rule are merely those that may "generally" be included in a
station's contest rules. The MO&O and Forfeiture Order properly held
that the Commission has consistently maintained that prizes must be
awarded promptly. Moreover, the Bureau's finding was also based on the
fact that Saga's own contest rules created a reasonable expectation on
the part of winners that prizes would be awarded within thirty days.
In sum, the contest rule contemplates the existence of material terms
other than those specifically listed therein; the Commission has
previously stated that prizes must be awarded promptly; and the law is
clear that the Commission may properly interpret its own rules
consistent with existing regulation.
9. In support of its contention that the forfeiture should be reduced or
canceled because its failure to promptly award the subject prize was
not "willful," Saga cites U.S. v. Daniels. We find Daniels inapposite.
That case involved the repeated violation of a rule concerning
broadcasting hours that had been recently amended. The licensee in
that case lacked actual knowledge of the rule change, had been
complying in good faith with the broadcasting hours permitted under
the previous rule, and ceased broadcasting immediately upon
notification of the violation. Accordingly, the district court found a
reduction in the forfeiture appropriate due to the "nature of the
violations involved here, the lack of complaints and the [licensee's]
good faith inadvertent mistakes."
10. In this case, however, the rule at issue was well-established, having
last been amended in 1976, and Saga's rule violation resulted in a
complaint. Saga also relies on Daniels for the assertion that a
forfeiture cannot be collected until it is afforded a trial de novo in
accordance with section 504(a) of the Act. However, section 503(b)(4)
of the Act allows the Commission to issue forfeitures without a
hearing, using the notice of apparent liability written response
procedures. If a party fails to pay a forfeiture issued in accordance
with these procedures, the case will be referred for enforcement to
the U.S. Department of Justice for a trial de novo in federal district
court pursuant to section 504(a). As Saga has not paid the forfeiture
issued in this case, the government filed a complaint in federal
district court against Saga for enforcement of the $4,000 forfeiture.
That enforcement proceeding is currently pending in U.S. District
Court. On July 15, 2010, the court issued an "Order to Stay" the
district court case pending the outcome of this proceeding.
V. ORDERING CLAUSES
11. Accordingly, IT IS ORDERED that, pursuant to section 1.115 of the
Commission's rules, the Application for Review filed by Saga
Communications of New England, L.L.C., IS DENIED, and the Bureau's
Memorandum Opinion and Order IS AFFIRMED.
12. Payment of the forfeiture shall be made in the manner provided for in
section 1.80 of the rules within thirty (30) days of the release of this
Order on Review. On June 18, 2010, the government filed a complaint in
federal district court against Saga Communications of New England, L.L.C.
for enforcement of the $4,000 forfeiture, U.S. v. Saga Communications of
New England, LLC, Civ. No. 10-12407 (E.D. MI). On July 15, 2010, the court
issued an Order to Stay the district court case pending the outcome of the
administrative proceeding. Upon timely payment in full of the forfeiture,
the government will dismiss the district court case. Payment of the
forfeiture must be made by check or similar instrument, payable to the
order of the Federal Communications Commission. The payment must include
the NAL/Account No. and FRN No. referenced above. Payment by check or
money order may be mailed to Federal Communications Commission, P.O. Box
979088, St. Louis, MO 63197-9000. Payment by overnight mail may be sent to
U.S. Bank-Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza,
St. Louis, MO 63101. Payment by wire transfer may be made to ABA Number
021030004, receiving bank TREAS/NYC, and account number 27000001. For
payment by credit card, an FCC Form 159 (Remittance Advice) must be
submitted. When completing the FCC Form 159, enter the NAL/Account Number
in block number 24A (payment type code). Saga will also send electronic
notification on the date said payment is made to
Theresa.Cavanaugh@fcc.gov, Kenneth.Scheibel@fcc.gov, and
Amelia.Brown@fcc.gov. Requests for full payment under an installment plan
should be sent to: Chief Financial Officer -- Financial Operations, 445
12th Street, S.W., Room 1-A625, Washington, D.C. 20554. Please contact the
Financial Operations Group Help Desk at 1-877-480-3201 or Email:
ARINQUIRIES@fcc.gov with any questions regarding payment procedures.
13. IT IS FURTHER ORDERED that a copy of this Order on Review shall be
sent, by Certified Mail/Return Receipt Requested, to Saga Communications
of New England, L.L.C., 73 Kercheval Avenue, Grosse Pointe Farms, Michigan
48236, by regular mail to its counsel, Gary S. Smithwick, Esq., Smithwick
& Belendiuk, P.C., 5028 Wisconsin Avenue, N.W., Suite 301, Washington,
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
See Saga Communications of New England, L.L.C., Application for Review
(filed May 3, 2010) ("Application for Review").
See Saga Communications of New England, L.L.C., Memorandum Opinion and
Order, 25 FCC Rcd 3289 (Enf. Bur. 2010) ("MO&O"), aff'g Saga
Communications of New England, L.L.C., Forfeiture Order, 24 FCC Rcd 11934
(Enf. Bur. 2009) ("Forfeiture Order"), aff'g Saga Communications of New
England, L.L.C., Notice of Apparent Liability for Forfeiture, 22 FCC Rcd
4206 (Enf. Bur., Investigations & Hearings Div. 2007) ("NAL").
See 47 C.F.R. S: 73.1216. We also refer to Section 73.1216 as "the contest
See Letter from Mr. Robert Naginewicz to the FCC, dated December 31, 2005
See id. at 1-2.
Mr. Naginewicz elected to receive the cash equivalent of the two-year
lease on a Buick LaCrosse automobile, which totaled $8,000. See id. at
See id. at 2-3.
See Letter from William D. Freedman, Deputy Chief, Investigations and
Hearings Division, Enforcement Bureau, to Saga Communications of New
England, L.L.C., dated January 24, 2006 ("LOI").
See Letter from Lawrence D. Goldberg, Vice President, Saga Communications
of New England, L.L.C., to William D. Freedman, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau, dated February
28, 2006, and filed through its counsel on March 2, 2006, at 4 ("LOI
See id. at 4-5.
See id. at 3. The memorabilia portion of the prize was ultimately
delivered to Mr. Naginewicz on February 8, 2006. See id.
See supra note 2.
See Saga Response to Notice of Apparent Liability for Forfeiture, dated
April 2, 2007 ("NAL Response").
See id. at 4-6 (citing Nat'l Black Media Coalition v. FCC, 775 F.2d 342,
355 (D.C. Cir. 1985), and Airmark Corp. v. FAA, 758 F.2d 685, 692 (D.C.
Cir. 1985), for the proposition that an agency's departure from its
precedent "must provide a principled explanation for its change of
See NAL Response at 6-10.
See id. at 2.
See id. at 6, 10.
See Forfeiture Order, 24 FCC Rcd 11934.
See Saga Communications of New England, L.L.C., Petition for
Reconsideration (filed Oct. 26, 2009) ("Petition") at 4.
See id. at 5.
See id. at 7-8.
See id. at 7; 47 U.S.C. S: 503(b).
See Petition at 3; 47 U.S.C. S: 503(b).
See MO&O, 25 FCC Rcd 3289.
See 47 C.F.R. S: 1.115(b)(2); Beasley Broadcast Group, Inc., WQAM Limited
Partnership, Application for Renewal of License of Station WQAM(AM),
Miami, Florida, Memorandum Opinion and Order, 23 FCC Rcd 15949, 15955
See Application for Review at 3-7.
See id. at 3, 7-9.
See id. at 6-7.
See MO&O, 25 FCC Rcd at 3290-91 P: 5 (finding that Saga's contention that
the contest rule does not require prizes to be awarded promptly is
See Reuters Limited v. FCC, 781 F.2d 946 (D.C. Cir. 1986) ("Reuters").
See id. at 950-51.
See 47 C.F.R. S: 1.962(f) (1984). This section provided that "[n]o
application subject to the provisions of this section, as originally filed
or substantially amended, will be granted by the Commission prior to the
31st day following the issuance of public notice of the acceptance for
filing of such application." Id. The court found that the Commission's
error lay in its ignoring the rule's express limitation to accept an
otherwise untimely application. See Reuters, 781 F.2d at 950-52.
See MO&O, 25 FCC Rcd at 3290-91 P: 5.
See id. (citing 47 C.F.R. S: 73.1216, Note 1(b), which states that
"[m]aterial terms include those factors which define the operation of the
contest and which affect participation therein. Although the material
terms may vary widely depending upon the exact nature of the contest, they
will generally include: how to enter or participate; eligibility
restrictions; entry deadline dates; whether prizes can be won; when prizes
can be won; the extent, nature and value of prizes; basis for valuation of
prizes; time and means of selection of winners; and/or tie-breaking
See MO&O, 25 FCC Rcd at 3291 n.17; Forfeiture Order, 24 FCC Rcd at
11936-37 nn.24-25 & 28.
See MO&O, 25 FCC Rcd at 3291 P: 6 (noting that "Saga's own contest rule
creates a reasonable expectation on the part of winners that prizes would
be awarded within thirty days because winners are explicitly given thirty
days in which to claim prizes, and a prize must be awarded in order to be
See id. at 3290-91 P: 5 (citing Public Notice Concerning Failure of
Broadcast Licensees to Conduct Contests Fairly, Public Notice, 45 FCC 2d
1056 (1974); Amendment of Part 73 of the Commission's Rules Relating to
Licensee-Conducted Contests, Notice of Proposed Rulemaking, 53 FCC 2d 934
(1975); and Amendment of Part 73 of the Commission's Rules Relating to
Licensee-Conducted Contests, Report and Order, 60 FCC 2d 1072, 1073
See MO&O at 3290-91 P: 5, citing Cost-Based Terminating Compensation for
CMRS Providers; Interconnection Between Local Exchange Carriers and
Commercial Mobile Radio Service Providers; Implementation of the Local
Competition Provisions of the Telecommunications Act of 1996; Calling
Party Pays Service Offering in the Commercial Mobile Radio Services,
Order, 18 FCC Rcd 18441, 18450 P: 22 (2003):
The D.C. Circuit has repeatedly held that interpretive rulings are
properly used to clarify the original meaning and application of an
agency's substantive rules. The Supreme Court in reaffirming the authority
of agencies to interpret their own rules stated that "a new APA rulemaking
is required only if an agency adopt[s] a new position inconsistent with
any of the [agency's] existing regulations" (citations omitted).
See Application for Review at 8 (citing U.S. v. Daniels, 418 F. Supp. 1074
(D.S.D. 1976) ("Daniels")).
See Daniels, 418 F. Supp. at 1081.
See 47 U.S.C. S: 504(a).
See 47 U.S.C. S: 503(b)(4); 47 C.F.R. S: 1.80(e).
See 47 U.S.C. S: 504(a); 47 C.F.R. S: 1.80(f)(5).
See U.S. v. Saga Communications of New England, LLC, Civ. No. 10-12407
See U.S. v. Saga Communications of New England, LLC, Civ. No. 10-12407
(E.D. MI), Order to Stay (July 15, 2010).
See 47 C.F.R. S: 1.115.
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Federal Communications Commission FCC 11-179
Federal Communications Commission FCC 11-179