National Broadcasting Co. v. United States

Background

A major radio company that runs two national networks and two other licensed broadcasters sued to set aside the Communications Commission’s Chain Broadcasting Regulations adopted in 1941. The company says its contracts with local stations — including options to use station time on short notice — would force affiliates to break contracts or lose licenses if the rules stand. A three-judge district court dismissed the case as not reviewable but stayed the regulation while the appeal went to this Court.

Reasoning

The central question was whether the district court could hear and decide the company’s challenge to the Commission’s order. The Court held that the district court of three judges can review the order and that the complaint states a valid equitable claim. The Supreme Court reversed the dismissal and sent the case back to the lower court for further proceedings, leaving the existing stay in place under terms to be set by that court.

Real world impact

Practically, the ruling lets the network and its affiliated stations pursue court review of the Commission’s rules instead of being forced immediately to abandon contracts or face license loss. The decision is not a final ruling on the merits of the Regulations; it only opens the way for a full hearing below. The lower court will consider what effect a later Commission minute had on the affiliates’ contract cancellations and whether the other broadcasters are proper plaintiffs.

Dissents or concurrances

Three Justices dissented, adopting the reasons given in the dissenting opinion in the companion Columbia Broadcasting case.