Court Rejects Challenge to FCC’s 800 MHz Band Realignment

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit today rejected a challenge to the agency’s realignment of the 800 megahertz band, ruling that that the petitioner lacked standing.

The court said that when James Kay Jr. “first petitioned this court in 2006, he personally held affected licenses. Kay, however, now concedes that he no longer owns any licenses in his personal capacity. Instead, Kay purports to maintain ‘control and ultimate beneficial ownership’ of Third District Enterprises (‘Third District’), a Nevada limited liability company that holds 800 MHz licenses. According to Kay, his ownership of Third District gives him continued standing to bring this suit in his personal capacity because he is, allegedly, the company’s sole member.

“But it is hornbook corporate law that a corporation, whether large, closely held, or solely owned, is a separate juridical entity from its shareholders. As a result, a shareholder cannot bring a personal suit in his own name to vindicate the rights of that separate legal entity except under limited exceptions,” the court said in its two-page judgment.  “Kay makes no effort to assert that he falls under any of the traditional exceptions to this rule, and we find no evidence in the record that might support such a contention. When Kay transferred his licenses to Third District, his claim thus became moot as surely as if he had sold those licenses to a large public corporation.”

The FCC had argued that Mr. Kay lacked standing to bring the challenge in “James A. Kay Jr. v. FCC” (no. 06-1076) (TRDaily, March 10).

The judgment was issued by Chief Judge Merrick B. Garland, Circuit Judge Thomas B. Griffith, and Senior Judge David B. Sentelle. – Paul Kirby, paul.kirby@wolterskluwer.com

Courtesy TRDailu