Opinion for the Court filed by Circuit Judge STARR.
STARR, Circuit Judge:
A precept which lies at the foundation of the modern administrative state is that agencies must abide by their rules and regulations. We have frequently been called upon to apply that venerable principle of law and common sense, and the appeal before us today fits squarely into that long line of cases. We hold that the Federal Communications Commission improperly breached this fundamental precept of administrative law in what turns out to have been a misguided effort to achieve a fair resolution of a dispute between two competing license applicants.
The warring contestants are Reuters Limited, who appeals from the FCC's adverse action,
The background of the dispute can be briefly stated. Following a lengthy period when its earlier applications lay dormant at the Commission, Reuters filed new applications, pursuant to the Commission's order, for microwave radio licenses for a single channel in each of thirteen cities across the Nation. The applications were duly accepted for filing and listed on a Public Notice dated August 12, 1983. In the following month, on September 23, 1983, the Commission's Private Radio Bureau approved all thirteen applications.
On that same day, as coincidence would have it, Associated submitted thirty-nine applications for each of the available channels in the same thirteen cities for which Reuters had applied the preceding month. Associated's applications, as it turned out, were misfiled, having been submitted to the Commission's offices in Washington, D.C., whereas applicable FCC rules required that such applications be filed 80 miles to the north at the FCC's offices in Gettysburg, Pennsylvania. Thus it was that Associated's competing applications were not effectively filed until five days later — on September 28, 1983 — when its thirty-nine applications found their way to Gettysburg. As a result, at the time of the grant to Reuters, no competing applications
With its competitor thus in possession of the thirteen licenses, Associated vehemently protested the grant. Associated contended that the Commission acted improperly in granting the licenses prior to the expiration of sixty days following the date on which new applications were accepted. In Associated's view, the Commission had represented quite clearly in a rulemaking proceeding that a full sixty-day period for filing applications would be allowed. Associated had specifically relied, it maintained, upon the Commission's statements to that effect in timing its thirty-nine applications. As Associated therefore saw it, the Private Radio Bureau had jumped the gun in issuing Reuters the thirteen licenses before the requisite sixty days had expired.
In stark contrast to this view, Reuters maintained that the Commission's rules governing microwave radio licenses expressly permitted licenses to be awarded after the expiration of thirty days following an application. At the time the Private Radio Bureau acted on Reuters' application, two critical factors were present: first, more than thirty days had expired from the initial date for accepting applications, as provided by the Commission's rules; and second, no competing applications were on file as of the date of the grant. In Reuters' view, therefore, Associated's complaints were belied by the Commission's express rules which spoke with crystalline clarity to the question at hand.
With the issue thus joined, the Private Radio Bureau resolved the dispute in favor of Associated. Rejecting outright Associated's broad contention that the Commission's rules and pronouncements did not admit of a license grant prior to expiration of the sixty-day period, the Bureau nonetheless concluded that Associated's applications were, in fact, mutually exclusive to those of Reuters inasmuch as the former's applications were on file in Gettysburg prior to the time the licenses were actually issued by and mailed from the Commission. While thus rejecting the thrust of Associated's arguments, the Bureau set aside Reuters' thirteen licenses and designated Associated's applications as mutually exclusive.
Reuters appealed to the full Commission. Invoking the FCC's rules with respect to the effective dates of licenses, Reuters maintained that the Private Radio Bureau had expressly designated an effective date for the licenses of September 23, 1983, not the date of mailing. As it had before the Bureau, Reuters won the specific legal battles but lost the war. Specifically, the FCC agreed that the Bureau could lawfully issue a license any time after thirty days following the Commission's announced date on which applications would be received. So too, the Commission rejected Associated's argument that the FCC's more recent pronouncements in its rulemaking proceeding had altered the long-standing rules governing the timing of license grants. Reuters likewise won the point that the effective date of its licenses was September 23, 1983, as opposed to a date tied to the later mailing of the licenses by the FCC, and that Associated's applications were not effectively filed until they reached Gettysburg, five days after the effective date of Reuters' licenses.
But Reuters' arguments, tied in lawyerly fashion to the Commission's pertinent rules, in the end fell short. The Commission concluded that considerations of fairness required evisceration of the Reuters license grants and that Associated be permitted to stand alongside Reuters as a full competitor for these licenses.
Both to understand the Commission's rationale and to set the stage for our resolution of this appeal, we pause to enter the somewhat labyrinthine paths of the Commission's rules and pronouncements which guided these two contenders along rather different roads in the application process. It will be recalled that Reuters' applications lay dormant at the Commission for some considerable period prior to the events which generated the case at hand. The reason for this period of Commission in-action, it would appear, was regulatory
At length, the Commission came to rest in the rulemaking proceeding, identified as Docket No. 19671. The Commission's Memorandum Opinion and Order in that docket FCC No. 83-245, 48 Fed.Reg. 32578 (July 18, 1983), opened up these particular channels for point-to-multipoint systems, subject to a two-year period when only applicants seeking to provide data and other information-type services would be licensed in this particular part of the spectrum (2.5 GHz band). To carry out this new approach, the Commission returned all pending applications (including Reuters') and established a new filing period — to begin August 1, 1983 — for applicants seeking to employ these channels for data or information distribution services.
In language which was destined to sow seeds of confusion, the rulemaking Memorandum Opinion and Order stated that the Commission would "strictly apply the cutoff procedures detailed in § 1.227(b)(4) of the Commission's Rules." 48 Fed.Reg. 32,578, 32,584 (July 18, 1983).
Faced with these divergent approaches, the Commission concluded that considerations of fairness warranted rescission of Reuters' licenses. While the award to Reuters was entirely in keeping with applicable rules,
FCC Brief at 16.
We are constrained to disagree with the Commission's understandable effort to achieve a just resolution of this unfortunate turn of events. The reason for our disagreement is simple but emphatic: the Commission properly granted licenses to Reuters pursuant to the express provisions of its rules. What is more, neither the Private Radio Bureau nor the Commission itself embraced the proposition that the Memorandum Opinion and Order was intended to alter the FCC's long-standing rules governing applications. That is not surprising, for the August public notice expressly stated that these filings were subject to the notice and petition procedures under section 309 of the Communications Act. 47 U.S.C. § 309 (1982).
As we stated at the outset, it is elementary that an agency must adhere to its own rules and regulations. Ad hoc departures from those rules, even to achieve laudable aims, cannot be sanctioned, Teleprompter Cable Systems v. FCC, 543 F.2d 1379, 1387 (D.C.Cir.1976),
Associated's invocation of well-settled principles of judicial deference to agency interpretations, Associated Brief at 3-6, is therefore quite beside the point. What is before us is not an agency interpretation of its own rules which Reuters is inviting us to override. Quite to the contrary. The agency has authoritatively interpreted its rules in a manner which favors entirely Reuters' position. What Associated would thus have us do, on analysis, is to permit the agency to deviate from its rules in order to achieve what it deems to be justice in the individual case. The agency has, in effect, said that its rules permitted the license awards granted to Reuters, but that the circumstances at hand warrant the Commission's walking away from the metes and bounds which otherwise constrain it. This we cannot sanction.
The remaining arguments advanced on appeal need not detain us. Succumbing wholesale to the temptation to indulge in the forbidden sin of post hoc rationalizations, the Commission invokes no lesser authority than the Supreme Court's venerable decision in Ashbacker to justify what occurred here. Ashbacker Radio Corp. v. FCC, 326 U.S. 327, 66 S.Ct. 148, 90 L.Ed. 108 (1945). In a murky line of argumentation, the FCC has now been moved to the position that the agency was required to rescind Reuters' duly issued licenses since Associated would otherwise be denied the Ashbacker-mandated right to a comparative hearing. It should have caused counsel some pause in this free-form flight of legal creativity that this bedrock principle never occurred to the Commission itself. We also note, by the by, that able counsel for Associated has not been inspired by the Ashbacker muse. Indeed, this appears not to have been some legal oversight by an overworked Commission, but rather a sadly misguided argument in the first instance. Ashbacker's teaching applies not to prospective applicants, but only to parties whose applications have been declared mutually exclusive. That foundational requirement — mutually exclusive applications — is not met here; it could only be met by an inadmissable exercise of bootstrapping the "fairness" argument onto Ashbacker's holding to transform Associated, nunc pro tunc as it were, into a mutually exclusive applicant. This cannot be done, for as we have seen, the Commission had acted formally and officially in granting the licenses to Reuters before Associated's applications were on file in Gettysburg. To put it plainly, counsel's imaginative theory is decimated at the outset by the hard, cold fact that Associated was five days late in getting its applications on file. In short, as far as the well-established and vital rights conferred by Ashbacker are concerned, the horse left the barn on September 23, 1983, when the licenses were awarded to Reuters.
Associated, wisely, does not indulge in such unorthodox legal gymnastics as its imaginative Commission comrades; it invokes, more prudently, specific Commission precedent to seek to justify what has been done here. Specifically, Associated maintains that the Commission was within its lawful prerogative in rescinding the Reuters licenses because Associated filed a petition for reconsideration in timely fashion, in light of this court's decision in Gardner v. F.C.C., 530 F.2d 1086 (D.C.Cir.1976).
At the outset, Associated's argument is fatally affected by our holding that the Commission was not at liberty to depart from its rules in the first instance. But what is more, the vehicle employed by Associated to secure the Commission's revisitation of Reuters' licenses was itself defective. The reason is that, under the express terms of the Communications Act, petitions for reconsideration must be filed "within thirty days from the date upon which public notice is given of the order,
In response to Reuters' argument that the Commission was barred by express statutory limitations from acting on the petition for reconsideration, Associated invokes Gardner to justify its delay. There, this court found "extraordinary circumstances" under which "the seemingly mandatory language of Section 405 does not prevent the entertainment of rehearing petitions beyond the statutory period." 530 F.2d at 1091.
We are unpersuaded that Gardner can avail for Associated. There, the court took great pains in the clearest of language to limit its holding to the highly unusual circumstances presented there of the affected party's being situated in Alabama, unrepresented by counsel, and with the Commission failing to provide the customary notice to the party of its action. See id. at 1091-92 & n. 24. The Gardner court further emphasized that the party there, upon receiving by fortuitous circumstances informal notice of the Commission's action, immediately engaged counsel who very promptly filed the requisite petition. Id. at 1091. Without rehearsing in detail the facts of our case, involving a sophisticated business concern represented all the while by distinguished Washington, D.C. counsel, suffice it to say that we cannot in conscience cut Gardner from its express moorings. See National Black Media Coalition v. FCC, 760 F.2d 1297 (D.C.Cir.1985) (construing 47 U.S.C. § 402(c) governing appellate jurisdiction). As a result, we conclude that the Commission acted beyond its lawful authority when it entertained the belated petition for reconsideration.
We are therefore obligated to reject the various arguments proffered to buttress the Commission's action in this case. Under these circumstances, we hold that the Commission erred in rescinding Reuters' licenses and that the Commission is therefore bound by its previous, lawful grant. In sum, Reuters is entitled to its previously issued thirteen licenses.
In cases of applications filed in the Private Radio Services, except as otherwise provided in § 1.972, any application that is mutually exclusive with another application or applications will be consolidated for hearing with such other application or applications only if the later application in question is substantially complete and tendered for filing by whichever date is earlier: (i) Not later than the close of business 1 business day before the Commission adopted an order which first designated for hearing the prior application or applications with which such application is in conflict; or (ii) within 60 days after the date of public notice listing the first prior filed application (with which subsequent applications are in conflict) as having been accepted for filing.
47 C.F.R. § 1.227(b)(4) (1983).
47 C.F.R. § 1.227(b)(4)(1984).
In a submission filed January 14, 1986, counsel for Associated Information Services Corporation have argued that the recent decision of this court in Salzer v. FCC, 778 F.2d 869 (D.C.Cir.1985), is relevant to our analysis of the adequacy of notice of the cut-off period for the licenses at stake here. In Salzer, we upheld the Commission's authority to adopt a "letter-perfect" rule for LPTV applications. We stated that "the quid pro quo for stringent acceptability criteria is explicit notice of all application requirements.... The less forgiving the FCC's acceptability standard, the more precise its requirements must be." Salzer, at 875. In Salzer, we found that the FCC provided no notice at all of when and how the required information was to be provided. Here there was no such notice problem; the timing of the application and selection was and had always been governed by the Communications Act and longstanding regulations. Salzer also did not involve a revocation of a properly granted license; such a vested interest must be given due weight in any consideration of fundamental fairness.