[00:00:00] Speaker 00: Case number 21-1171, National Association of Broadcasters et al. [00:00:06] Speaker 00: Petitioners versus Federal Communications Commission and United States of America. [00:00:11] Speaker 00: Mr. Kamir for the petitioners, Mr. Scherr for the respondents. [00:00:16] Speaker 03: Thank you. [00:00:17] Speaker 03: May it please the court. [00:00:19] Speaker 03: Section 317C of the Communications Act defines precisely broadcasters' duty and diligence [00:00:27] Speaker 03: in obtaining information necessary to announce the sponsor of paid programming. [00:00:33] Speaker 03: The broadcaster, quote, shall exercise reasonable diligence to obtain from its employees and from other persons with whom it deals directly, end quote, the necessary information. [00:00:46] Speaker 03: As this quote held in Love Day, the language of 317C does not impose any duty of independent investigation. [00:00:54] Speaker 03: And Congress restricted the broadcasters' duty for a reason. [00:00:58] Speaker 03: Broadcasters are not investigatory bodies that are capable of determining the facts of private transaction, and especially in 1960. [00:01:09] Speaker 03: Congress would have understood that broadcasters, particularly in radio stations, were often small, sometimes single-person operations. [00:01:20] Speaker 03: These are country music, [00:01:22] Speaker 03: DJs, local businessmen in small towns who sell advertising, they're not lawyers and analysts, certainly not capable of doing the sophisticated legal investigation that the order commands. [00:01:37] Speaker 03: And while the government attempts to downplay the investigations, paragraph 42 specifically says, we require the licensee to investigate the nature of the party leasing the airtime. [00:01:51] Speaker 03: And while every search of a database is an investigation, it is indisputable that if you get a hit in your search results, you have to conduct a full-fledged investigation. [00:02:07] Speaker 03: And for this regulation to have any arguable worth, [00:02:11] Speaker 03: You have to posit that there will be such hits, however implausible. [00:02:15] Speaker 03: And I think it's worth spending with the court a moment to understand what happens when you get a hit. [00:02:22] Speaker 03: And the broadcaster first has to then retrieve, locate, registration statements of potentially multiple [00:02:31] Speaker 03: foreign principles. [00:02:33] Speaker 03: It has to know that there are six-month supplements that are filed and that it has to investigate these standard form exhibits A and B, disclose information about the principle and the activities undertaken. [00:02:48] Speaker 03: It then has to apply a specialized legal definition, which you can find at JA 237, [00:02:56] Speaker 03: That covers only a subset of fairer registrants. [00:03:01] Speaker 03: It's only those with principles that are foreign governments, foreign political parties, or an entity that's controlled, operated, or financed by such a government or political party. [00:03:13] Speaker 03: And then, critically, there's the final element of the definition, which says you have to be acting [00:03:20] Speaker 03: as an agent in this transaction, in your capacity as an agent. [00:03:25] Speaker 03: Now that itself is a complex analysis because you had to apply the FARA exemptions. [00:03:31] Speaker 03: For example, the exemption for programming for fine arts, religious programming, scientific programming. [00:03:39] Speaker 03: But even then you can't get an answer. [00:03:41] Speaker 03: Because the prospective information you need about this prospective program is not to be found in the historical documents in the FLARA or Section 722 database. [00:03:54] Speaker 05: I can't quite tell if you're challenging the disclosure obligation or the specific language of the disclosure or if you're just challenging the investigation. [00:04:08] Speaker 03: We are challenging the investigational [00:04:10] Speaker 03: requirements. [00:04:11] Speaker 03: We would have no problem simply with an expanded disclosure. [00:04:14] Speaker 03: But we are challenging also the fact that we have to make compelled speech on our own behalf after undertaking this investigation that this program, specific programming, was paid for by person X on behalf of [00:04:31] Speaker 05: Why is why is it compelled speech if it's a disclosure after the investigation, but it's not compelled speech if it's disclosure absent It would be compelled speech either way, but I thought you just said you were not challenging the disclosure obligation So no, it just had a disclosure obligation. [00:04:52] Speaker 03: I think that would be narrowly tailored but if you have to do a disclosure of [00:04:56] Speaker 03: After investigation and this is the critical point investigation that can't yield the information to make the disclosure and so what's going to happen. [00:05:06] Speaker 03: A broadcaster. [00:05:09] Speaker 03: is subject to forfeiture if it is found by the commission after the fact. [00:05:14] Speaker 01: Why can't it yield? [00:05:15] Speaker 01: And maybe that's what you were just explaining, but why can the investigation not yield the information that you'd have to discuss? [00:05:22] Speaker 03: Because the investigation, first of all, the documents in these databases are historical. [00:05:27] Speaker 03: You file a registration statement, you update it every six months. [00:05:31] Speaker 03: When you're approached with a proposed lease, that's prospect. [00:05:36] Speaker 03: Let's say, you know, I want to air this program. [00:05:40] Speaker 03: That's not going to be in there. [00:05:42] Speaker 03: You know, whether you're the agent, who you're acting on behalf of with there, you can't find that out from the documents. [00:05:49] Speaker 02: So it just, that's something. [00:05:50] Speaker 02: Is there any disclosure to the FCC before the program airs under the current regime? [00:05:58] Speaker 03: No. [00:05:59] Speaker 03: And that would have been something they could have adopted, something like that. [00:06:03] Speaker 02: Well, yeah. [00:06:04] Speaker 02: And the reason I'm thinking is that you just identify the entity that is getting the lease and submit that to the FCC. [00:06:12] Speaker 02: And the FCC can do its investigation. [00:06:15] Speaker 03: But the FCC didn't consider that kind of alternative. [00:06:19] Speaker 02: Is there any information in the record regarding voluntary or investigations by major broadcasting [00:06:29] Speaker 02: stations? [00:06:31] Speaker 03: There isn't anything like that because it's simply not required. [00:06:34] Speaker 02: It's not required, but it strikes me that it would be prudent whether it was required or not, because if the program airs and it later turns out that it's Russian propaganda, that's not really in the interests of the station, so they may [00:06:53] Speaker 02: conduct the investigation anyway, just to cover themselves. [00:06:58] Speaker 03: But there's nothing in the record indicating that. [00:07:01] Speaker 03: The record doesn't indicate any voluntary investigation. [00:07:05] Speaker 01: So Mr. Kanaya, I take it the core of your case is about the narrow scope of the diligence to obtain from employees or lessees. [00:07:16] Speaker 01: Could, is it within the commission's authority to, in obtaining information from Lessees to require that Lessees submit a screenshot of the page of the FARA where the sponsors would appear alphabetically, you know, and just to show that they're not on the FARA list? [00:07:38] Speaker 03: Absolutely. [00:07:39] Speaker 03: They could have imposed that kind of obligation on Lessees and derived from section 507. [00:07:44] Speaker 03: where you have to disclose any information you have about the payor. [00:07:48] Speaker 03: That would have been perfectly reasonable to do. [00:07:50] Speaker 01: And is that meaningfully different from what the rule does require? [00:07:54] Speaker 03: I think it would achieve the same results, but it wouldn't burden the speech or broadcast. [00:08:00] Speaker 03: I'd like to emphasize the point about forfeitures. [00:08:03] Speaker 03: Generally, forfeitures under Section 503 of the Act require [00:08:07] Speaker 03: willful or repeated violations of a regulation. [00:08:11] Speaker 03: But Congress in 1960, when it created Section 317C, created effectively a strict liability forfeiture for violations of 317C, which underscores the narrowness of that provision. [00:08:31] Speaker 03: But it also shows you the risk to the [00:08:35] Speaker 03: broadcaster if it's not certain in terms of whether there's a foreign governmental entity. [00:08:43] Speaker 03: And so the default is, hey, if this is a close call, I'm just not going to carry the programming. [00:08:49] Speaker 03: And so that's going to chill speech. [00:08:51] Speaker 03: Are they going to carry the local Vietnamese immigrant community if they think, you know, I'm not confident I can find this in the fair database. [00:08:59] Speaker 03: So that's part of the chilling of speech. [00:09:01] Speaker 03: I would also emphasize three points with regards to chilling. [00:09:06] Speaker 03: The first is that any restriction on speech has to be to identify real harms and alleviate them [00:09:16] Speaker 03: material degree because the commission and narrow the scope of the investigation it. [00:09:22] Speaker 03: It basically is limited it the fair registrants who lot lie about their own status something never known to occur. [00:09:31] Speaker 03: not predicted to occur. [00:09:32] Speaker 03: I see I'm into my time, so. [00:09:34] Speaker 01: Well, or people who have obtained information from someone that they didn't realize was a fire registrant. [00:09:39] Speaker 01: It seems like that's the more likely situation. [00:09:42] Speaker 01: I mean, you're right that somebody could be just lying, but they could also be getting information, getting programming that was developed as propaganda that they don't realize was developed. [00:09:52] Speaker 03: That's quite possible, Your Honor. [00:09:54] Speaker 03: Yeah. [00:09:54] Speaker 03: And I think there's also the fact that, as I mentioned, you can't actually get the information from the prescribed investigation. [00:10:03] Speaker 03: And finally, it's such an overkill, because by triggering investigations universally after every denial in an industry where almost all leasing is by domestic or private transactions, you're going to burden a lot more species. [00:10:16] Speaker 02: What's your response to the FCC's claim that the [00:10:22] Speaker 02: the boilerplate language that you find in many statutes that says you must promulgate appropriate rules and regulations to carry out the provisions. [00:10:32] Speaker 02: It's the morning versus family publication service issue. [00:10:37] Speaker 03: I think, of course, presidents are clear that it doesn't allow you to overcome limitations in the statute that you're carrying out. [00:10:44] Speaker 03: They can't erase the restriction. [00:10:47] Speaker 03: And reasonable diligence has to have a predicate. [00:10:50] Speaker 03: There has to be diligence to do something [00:10:52] Speaker 03: And Congress defined that predicate was to obtain from specific sources. [00:10:57] Speaker 03: So the commission's not entitled to violate. [00:10:59] Speaker 02: Your position, as I understand, is pretty simple. [00:11:02] Speaker 02: Under the statute, the only information that you're required to get is from the individual seeking to lease. [00:11:09] Speaker 02: Right. [00:11:09] Speaker 02: Right. [00:11:10] Speaker 02: That's right. [00:11:11] Speaker 02: And that's it. [00:11:12] Speaker 02: That's it. [00:11:13] Speaker 02: To get it from the database at the Department of Justice on the Foreign Agents Registration Act, that's not getting it from them. [00:11:21] Speaker 02: Exactly. [00:11:22] Speaker 02: That's getting it from the government. [00:11:23] Speaker 03: Right. [00:11:23] Speaker 03: There's a bright line. [00:11:25] Speaker 03: And if the court were to accept the commission's erasure of the bright line, that's going to inject uncertainty beyond this rule. [00:11:32] Speaker 03: Because in case by case, if reasonable diligence can include online searches, then in every case, the broadcaster asks, well, for this particular transaction, do I have to do an internet search or a public database search? [00:11:44] Speaker 03: So really, I think the commission has to abide by the [00:11:47] Speaker 03: language that Congress imposed. [00:11:50] Speaker 01: Mr. Gunner, do you know why the statute includes the due diligence from the licensees' employees? [00:12:02] Speaker 03: Yes, that's primarily [00:12:07] Speaker 03: pertains to Section 317, I think it's D, where if the payment is not made to the licensee itself, you also have to disclose if it was made to somebody else. [00:12:19] Speaker 03: So this goes back to the payola scandals where record companies, for example, were paying off DJs and they weren't necessarily paying the licensee himself. [00:12:28] Speaker 03: So you want to have reasonable diligence to uncover any payments to the employees that are not payments [00:12:35] Speaker 03: to this licensee, because you have to make that separate announcement under 317. [00:12:39] Speaker 03: I forget whether it's a fan, whether it's C or D, but it's different from the payments to the licensee. [00:12:46] Speaker 01: Thank you. [00:12:47] Speaker 03: Thank you. [00:12:47] Speaker 01: We'll give you a little bit of time for rebuttal. [00:12:58] Speaker 04: Morning. [00:12:59] Speaker 04: Morning, may it please the court, Bill Scherer on behalf of respondents. [00:13:04] Speaker 04: The FCC adopted the challenge rule in response to reports that foreign governments are sponsoring broadcast programs without announcement of their role. [00:13:13] Speaker 04: The rule requires, among other things, a simple name check to confirm that an entity leasing airtime is not registered as a foreign agent or a US-based foreign media. [00:13:24] Speaker 04: To be clear, the name check is the only statutory issue in this case. [00:13:28] Speaker 04: The rules of the reasonable diligence requirements involve increased less Cs, which pose no problem even under NAB's reading of the statute. [00:13:37] Speaker 04: The name check requirement is consistent with the statute. [00:13:40] Speaker 04: Section 317C imposes a duty on licensees to diligently seek sponsorship information from persons with whom they deal direct. [00:13:48] Speaker 04: The name check is integral to that duty. [00:13:51] Speaker 04: It confirms the information that licensees obtain from the source the statute specifies. [00:13:57] Speaker 04: Now, NABR is the plain language of 317C bar such a requirement, but the statute doesn't use the word only or provide any other clue that Congress intended to shield licensees from ever having to confirm sponsorship information. [00:14:13] Speaker 05: Why doesn't that make the phrase from the employees or the people it deals with directly surplusage? [00:14:21] Speaker 04: The phrase from persons with whom it deals directly specifies the nature of the duty. [00:14:29] Speaker 04: Licensees must seek sponsorship information from those particular individuals. [00:14:35] Speaker 04: And it matches up with the disclosure obligation imposed by other provisions of the statute, Section 508. [00:14:41] Speaker 04: But there's nothing restrictive about the specification, the description. [00:14:48] Speaker 04: And in fact, if you [00:14:50] Speaker 04: If you flip it and read from persons with whom it deals directly as restrictive, I think then you end up with surplusage with the term reasonable diligence. [00:15:01] Speaker 04: Because if Congress meant to strictly limit the duty to simply asking for sponsorship information from a certain source and never checking it, then it's not clear why Congress would have used a broad term. [00:15:16] Speaker 04: like reasonable diligence. [00:15:17] Speaker 04: So there's some tension there. [00:15:19] Speaker 04: And we would also maintain that there's tension between a restrictive reading of the statute and Section 317E, which gives the commission authority to implement the sponsorship identification requirement. [00:15:31] Speaker 05: If the statute said I could get a broadcast license from the FCC, assuming I meet certain criteria, could I then go to the FEC and ask them for a broadcast license under the argument that, well, it didn't say I could only obtain a license [00:15:46] Speaker 04: I don't know if that's the case. [00:15:53] Speaker 04: I don't know if that's the case. [00:16:00] Speaker 04: You see. [00:16:03] Speaker 04: why is allowed. [00:16:04] Speaker 04: But under the case law, in order to find that the specification of one thing excludes another thing, the negative inference, there has to be some clue in the statute that Congress's intent was, in fact, restrictive. [00:16:19] Speaker 04: And we would maintain that the dependent clause in and of itself is not inherently restrictive. [00:16:25] Speaker 04: And there's simply no other statutory clues to a restrictive intent. [00:16:29] Speaker 05: You are conceding a sense that [00:16:33] Speaker 05: What the FCC is requiring here goes beyond an obligation to obtain information from the licensees, employees, and beyond an obligation to obtain information from the people the licensee deals with. [00:16:52] Speaker 04: No, your honor. [00:16:52] Speaker 04: We have two arguments. [00:16:54] Speaker 04: Our first argument is that the name check is integral, is corollary to the express duty that the statute imposes to seek information from the persons that the statute is not in the alternative. [00:17:08] Speaker 04: So in the alternative, if the court finds that Section 317 C silent or doesn't [00:17:15] Speaker 04: The breadth of the duty that's expressly or implicitly imposed by 317C doesn't encompass a name check. [00:17:24] Speaker 04: It's our position that the commission still has the authority to impose a name check under 317E, provided that 317C isn't read as a prescription on that. [00:17:35] Speaker 04: But again, it's our position that there's... Do you have any kind of limiting principle on how far the FCC could go with that second theory? [00:17:43] Speaker 04: Well, certainly the FCC couldn't require broadcasters to seek information from elsewhere instead of the statutory obligation. [00:17:56] Speaker 04: And that actually leads me into the nature of the investigation that we're talking about here. [00:18:03] Speaker 04: The name check requirement, under the rule, broadcasters, if they receive a negative response to their inquiries, [00:18:12] Speaker 04: as to whether the lessee is a registered agent or US-based media outlet are required to type in a name into the FAR database. [00:18:26] Speaker 04: And that is the only inquiry that the rule requires. [00:18:32] Speaker 05: I get that that's this case and the broadcasters say, well, there's more to it than that. [00:18:36] Speaker 05: But I want to go back a second. [00:18:38] Speaker 05: I'm not sure I heard a limiting principle because [00:18:41] Speaker 05: what you said is well it wouldn't be proper for the FCC to do less. [00:18:48] Speaker 05: But I'm asking is there any limit on how much more they could. [00:18:54] Speaker 04: I think that certainly the commission would run into the kind of [00:19:04] Speaker 04: constitutional problems that the love date court articulated if it were to require the kind of open-ended investigation. [00:19:12] Speaker 04: That's the only limit. [00:19:14] Speaker 05: The statute is limitless until it hits the constitutional limit. [00:19:18] Speaker 04: I don't think that the statute imposes an express limit. [00:19:28] Speaker 04: I think the commission could not override the express duty that it imposes. [00:19:35] Speaker 01: And do you agree with Mr. Canard about the employees designation in the statute, which puzzled me in reading it? [00:19:43] Speaker 04: Your Honor, my understanding is that Congress, when it amended the sponsorship identification regulations in 1960, there was a recognition that [00:19:55] Speaker 04: Payments were being made in the chain of program production. [00:19:59] Speaker 04: Payments were being made to employees specifically and not to licensees. [00:20:04] Speaker 04: And so Congress imposed a duty to seek out information from sources other than the licensee. [00:20:09] Speaker 04: And there's a, I think it's 317B, requires that if a payment is made, that if it were made to the licensee itself, to an employee or some other person, that an announcement is required regardless. [00:20:24] Speaker 01: And in, so am I correct that your argument, your statutory argument before you revert to 317E is basically to say the licensee shall exercise reasonable diligence to obtain valid information from employees and lessees. [00:20:43] Speaker 01: And that it's still only getting the information from the employees and lessees, but it has this sort of minimal [00:20:54] Speaker 01: obligation to backstop that by looking at the FAR register. [00:21:00] Speaker 04: That's exactly right, Your Honor. [00:21:01] Speaker 04: In a situation like this where the Commission has defined foreign governmental entities based on appearance on our list of registered agents, we would maintain that reasonable diligence means ordinary prudence under the circumstances. [00:21:19] Speaker 04: And when there's readily available evidence, and the only burden is to type a name into a government list, we would maintain that a reasonably diligent broadcaster would do that in order to be sure of the credibility of the sponsorship information. [00:21:33] Speaker 01: And what are your responses, Mr. Gennadyev? [00:21:36] Speaker 01: Kinnaird made a couple of arguments about the FARA registry not even being up to the minute in terms of accuracy, and that if you do get a hit, you have to do a whole bunch of other investigations. [00:21:47] Speaker 01: So you're characterizing this as a very, very minimal additional burden, and he's characterizing it as a very onerous and amorphous obligation. [00:21:59] Speaker 01: Can you respond to his arguments on that regard? [00:22:01] Speaker 04: Yes, Your Honor. [00:22:04] Speaker 04: Again, as I started off saying, the statutory issue here is the independent investigation, the requirement to look outside of what the lessee has responded to the licensee. [00:22:19] Speaker 04: The name check is the beginning and the end of that requirement in terms of what the rule actually insists on. [00:22:26] Speaker 04: So in the event that [00:22:29] Speaker 04: a lessee's name turns up in the far database. [00:22:33] Speaker 04: That means that an alarm has gone off. [00:22:37] Speaker 04: The lessee has informed the licensee, I'm not registered. [00:22:40] Speaker 04: The lessee's name has appeared. [00:22:42] Speaker 04: So in that situation, there's an alarm. [00:22:46] Speaker 04: And I think that the necessity for the importance of the rule [00:22:51] Speaker 04: has been served and at that point what the licensees obligation is tracks the statute completely the let the licensees obligation is to exercise reasonable diligence to get sponsorship information and to make the announcement that's part of the commission's rules have imposed an obligation to [00:23:13] Speaker 04: identify and announce the true sponsor rather than the name sponsor if the licensee is aware of the true sponsor since 1975. [00:23:20] Speaker 04: And the commission's rule and the order don't impose any requirement. [00:23:29] Speaker 04: I mean, the FARAT statute, I think, contemplates that the information the licensee would need should be available in the registration statement. [00:23:40] Speaker 04: They're not that complicated. [00:23:43] Speaker 04: The important point, I think, is that the rule doesn't actually require licensees to dig any further in the FAR database than the name search. [00:23:52] Speaker 04: In the event that alarm goes off, all the licensee is required to do is to exercise reasonable diligence to make an announcement. [00:24:01] Speaker 04: If it goes further in the FAR database and discovers that there's an announcement necessary, it can make that announcement, it can go back [00:24:10] Speaker 04: to the lessee and make additional inquiries if it needs to. [00:24:14] Speaker 01: And would it serve the government's interest to, were you to not prevail? [00:24:19] Speaker 01: I mean, just hypothetically, were you not to prevail in this case? [00:24:22] Speaker 01: Would it serve the commission's interest and would it be consistent with the statute in your view if the commission required licensees to ask, as I mentioned to Mr. Canary, to ask lessees to provide [00:24:38] Speaker 01: the relevant FARA page showing that their sponsors are not listed where they would otherwise appear. [00:24:45] Speaker 04: I think that that would accomplish [00:24:49] Speaker 04: the exact same thing. [00:24:50] Speaker 04: And the only thing that I would add to Mr. Kinnard's response is that that would have to be a requirement that licensees obtain the information from the lessee. [00:25:02] Speaker 04: So if the lessee, if the licensee were to make the required inquiries and to also say I'm going to need proof in the form of a [00:25:11] Speaker 04: website snapshot or whatever it is. [00:25:15] Speaker 04: And you have to submit that to me. [00:25:16] Speaker 04: I think that would accomplish the same thing as long as it was a requirement on the licensee because the statute imposes requirements directly on licensees. [00:25:27] Speaker 01: So the licensees shall require that lessees provide to them this information. [00:25:34] Speaker 04: I think that that would accomplish the exact same thing. [00:25:37] Speaker 04: Yeah. [00:25:39] Speaker 04: I think that points out how limited [00:25:42] Speaker 04: the scope of the required independent inquiry is. [00:25:48] Speaker 04: I see that my time is up. [00:25:51] Speaker 05: A couple times, maybe more than a couple times, you've suggested this is a pretty simple, quick, easy name search. [00:26:01] Speaker 05: And I'm not going to do justice to the broadcasters' argument. [00:26:05] Speaker 05: I'll let them maybe mention this in their bottle. [00:26:07] Speaker 05: But you know what it is, so you can anticipate it. [00:26:09] Speaker 05: They say, well, you might go to FARA [00:26:12] Speaker 05: And you might find that the lessee's name is there. [00:26:17] Speaker 05: It doesn't necessarily mean that the lessee is acting as an agent of a foreign government in the context of the broadcast in question. [00:26:26] Speaker 05: And there might be 2,000 pages on FARA dealing with that lessee's relationships with foreign governments. [00:26:34] Speaker 05: And so it's not like you look in the phone book, their name is there, or it's not there. [00:26:40] Speaker 05: It might be, look at FARA, their name is there, [00:26:43] Speaker 05: And you've got 40 more hours of investigation to go before you can figure out whether there's some kind of duty trigger. [00:26:50] Speaker 05: So what's your response to that? [00:26:52] Speaker 04: So a couple of things, Your Honor. [00:26:53] Speaker 04: First of all, the rule doesn't require licensees to do any further investigation on that database. [00:27:00] Speaker 04: They can simply go back to the lessee at that point and make further inquiries of the lessee. [00:27:07] Speaker 04: And the broadcasters are not arguing that the inquiries to a lessee are outside of the scope of the statute or that they violate the constitutionally. [00:27:21] Speaker 04: In addition, if you look at the bar of statute, it specifically requires that the registration statement provide a clear explanation of who an agent's foreign principles are [00:27:35] Speaker 04: what its activities are on behalf of each one, and whether any of those activities are connected to a foreign government or a foreign political party. [00:27:47] Speaker 04: The registration statements are not long in general, and I recognize that there's a burden entailed, but it's a burden [00:27:57] Speaker 04: It's essentially, we would sort of argue, no harm, no foul. [00:28:00] Speaker 04: The additional burden is going to attach when an alarm has gone off. [00:28:07] Speaker 04: And these licensees, our public trustees, these sponsorship identification regulations have applied to them for over 80 years. [00:28:18] Speaker 04: And the commission believes that this is an area. [00:28:21] Speaker 04: I just want to make sure I understood the first part. [00:28:23] Speaker 05: I don't think this matters. [00:28:27] Speaker 05: but if we were to get to the APA or maybe the First Amendment question, it might matter. [00:28:33] Speaker 05: You're saying if the licensee found a hit on FARA, just they found that the lessee's name was on the phone. [00:28:45] Speaker 05: Rather than digging through possibly 2,000 pages of FARA information about that lessee, [00:28:51] Speaker 05: They could just go to the lessee, say, we found your name on FARA. [00:28:55] Speaker 05: Are you an agent of a foreign government? [00:28:57] Speaker 05: The lessee says no. [00:28:58] Speaker 05: And that's the end of the investigation. [00:29:00] Speaker 05: That would be enough? [00:29:02] Speaker 04: Your Honor, whether it's enough would depend on the statutory standard of reasonable diligence. [00:29:11] Speaker 04: But we said in our brief, and I'll repeat, that the rule doesn't require any further digging in the FARA database. [00:29:20] Speaker 04: further investigation in the FAR database occurs is up to the discretion of the broadcaster in the particular case. [00:29:28] Speaker 04: It may be that the lessee says, oh yeah, it turns out I am a registered agent. [00:29:36] Speaker 04: It's for different activities. [00:29:37] Speaker 04: Let me provide you with a statement about that end of story. [00:29:42] Speaker 04: If the lessee doesn't have any explanation, then a reasonably diligent broadcaster might want to take another look at the FAR database. [00:29:50] Speaker 01: As part of your point, Mr. Chair, that the burden is not a burden specific to alarms that are set off by a FAR listing. [00:29:57] Speaker 01: It's a burden whenever an alarm about foreign ownership or sponsorship arises, and therefore it's not specific to this rule. [00:30:09] Speaker 04: It's specific to the rule, but I guess my point is that the government's interest is heightened in cases where the alarm has gone on. [00:30:22] Speaker 04: And so there is a greater duty of diligence because there is a greater risk that hidden foreign governmental sponsorship could be going on. [00:30:33] Speaker 01: Because there's been a failure of a relevant disclosure? [00:30:36] Speaker 01: No. [00:30:39] Speaker 04: Yes, because the fact of registration indicates a risk that there is an entity that's acting on behalf of a foreign government, and also because, well, that's the reason. [00:30:57] Speaker 01: I thought you were making an argument about the burden not being a burden associated with this particular incremental [00:31:04] Speaker 01: rule, and that if somebody, for example, discloses, you know, I got this programming from so-and-so, who by the way is on the VARA list, that there would be, and they would say, well, but not with respect to this, or that's an old list, you know, that in that situation, which doesn't implicate the challenge rule, all the burdens would be the same. [00:31:29] Speaker 04: Yes, that's correct. [00:31:31] Speaker 04: Under the framework of the pre-existing rules, there was a duty of reasonable diligence. [00:31:36] Speaker 04: There was a requirement to make a sponsorship announcement. [00:31:40] Speaker 04: What the rule does is essentially clarify the nature of that duty by defining what a foreign governmental entity is with respect to an objective source. [00:31:52] Speaker 04: Thank you. [00:31:53] Speaker 01: Thank you. [00:31:58] Speaker 01: So Mr. Kinnair, you've used your time, but as I said, we'll give you a couple of minutes for rebuttal. [00:32:05] Speaker 03: Thank you. [00:32:06] Speaker 03: I'd like to make just four quick points. [00:32:08] Speaker 03: I heard my colleagues say that the statute imposes reasonable diligence to get the sponsorship information. [00:32:15] Speaker 03: That's not what the statute says. [00:32:16] Speaker 03: The commission is excising the front clause. [00:32:20] Speaker 03: And to Judge Walker's point, there is no limiting principle of the commission's construction. [00:32:28] Speaker 03: advert the court to JA 162, an earlier version of this order, where in addition to the FARA searches, they would have commissioned proposed internet searches. [00:32:39] Speaker 03: And they haven't disclaimed that that's part of their authority. [00:32:42] Speaker 03: Second, in terms, and I would also add, they said the statute does not use the word only. [00:32:48] Speaker 03: Well, if you use the word only, you would preclude the kind of voluntary due diligence that Judge Randolph [00:32:53] Speaker 03: discussed. [00:32:55] Speaker 03: The reasonable diligence, they define the scope of it. [00:32:58] Speaker 03: Commission has to obey that bright line. [00:33:01] Speaker 03: On the point about the 1975 regulation and always having a rule to go and exercise diligence to find the true sponsor, if you look at 73.1212 B and E, you can see that's only diligence to make inquiries [00:33:21] Speaker 03: to the persons with whom you deal directly. [00:33:25] Speaker 03: I heard my colleagues agree with Judge Pilar that it would be sufficient to just ask the licensee to disclose that information. [00:33:37] Speaker 03: I think that answers the question about whether this is narrowly tailored. [00:33:41] Speaker 03: There's a less restrictive means. [00:33:43] Speaker 03: And I don't think that the commission is really grappling [00:33:47] Speaker 03: with what happens because of the radical indeterminacy of these investigations. [00:33:53] Speaker 03: He said today, well, you could just go back to the licensee. [00:33:56] Speaker 03: The order doesn't say that. [00:33:58] Speaker 03: That's an APA violation failure to explain. [00:34:00] Speaker 03: But even in their brief, put note four on page 11 says, you can go back to the licensee or you can take other appropriate steps. [00:34:10] Speaker 03: Indeterminate, but it's certainly an investigation beyond the purview of the statute. [00:34:16] Speaker 03: And so, and I would just, [00:34:17] Speaker 03: First, there is no simple name check except for the extreme overkill of this regulation that triggers investigations for truly domestic lessees for your George Foreman Grill infomercial or your local Baptist Church. [00:34:32] Speaker 03: This is an ill-conceived regulation that is unlawful in multiple dimensions. [00:34:38] Speaker 01: Thank you. [00:34:40] Speaker 01: Thank you. [00:34:41] Speaker 01: The case is submitted.