APPEALS COURT GRILLS LANDLORDS AND FCC ON TV RECEPTION RULES
In case closely watched by satellite TV industry, U.S. Appeals Court, D.C., quizzed lawyers on both sides Mon. over FCC rules that preempt landlords, building managers and homeowner groups from blocking renters from installing DBS dishes and other types of TV antennas. Hearing oral argument in case, panel of 3 judges particularly grilled attorneys for Building Owners & Managers Assn. International, which brought suit against govt.’s regulations for over-the-air reception devices (OTARD). While judges also questioned attorneys for FCC and DirecTV, they directed most of their attention to building owners and wondered aloud why they hadn’t taken complaints about OTARD rules and supporting statutes to other forums. They also asked why landlords didn’t simply raise their rents to cover cost of alleged “physical taking” of their property and interference with their contractual relationship with tenants.
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Taking lead, Judges Raymond Randolph and Merrick Garland bombarded building owners’ counsel Matthew Ames with skeptical questions, asking him why FCC couldn’t set OTARD rules for renters under 2 sections of Telecom Act. Randolph also questioned illegal “physical taking” argument advanced by landlords. “There’s nothing unconstitutional about a taking,” he said. “The only thing unconstitutional is if you don’t pay for it.” Randolph said Congress passed on chance to overturn OTARD rules and expressed doubt that court even had authority to rule on “physical taking” argument.
Garland wondered how far building owners would go in pressing their case that tenants couldn’t attach things to their walls or bring in things that physically occupied space without landlord permission. Did that mean that tenants couldn’t install rabbit ears on their TV sets or fire extinguishers on their walls? he asked. Did “physical taking” of space argument apply when tenants brought home their children? “Why is a child different from a satellite dish?” Garland asked. “That’s sort of a cosmic question.”
Ames argued that “the Commission has essentially regulated every owner of rental property in the country” by giving tenants nearly “unlimited rights” to install DBS, MMDS and other TV antennas in and around their homes and apartments. Contending that FCC had “effectively broadened the scope of tenancy,” he complained that landlords “have lost all control over the property.” Ames also questioned FCC’s authority to intervene in landlord-tenant relationship, saying Congress never granted agency that specific power. “We're simply saying the Commission doesn’t have the authority to adopt the rules,” he said.
Judges Garland, Randolph and Judith Rogers questioned FCC Counsel Gregory Christopher about Commission’s statutory authority to impose restrictions on landlords. They asked whether agency was concerned that it had acted too late to assert its authority because it missed Congress’s 180-day deadline. They also wondered whether FCC worried that its rules amounted to “physical taking” of landlord property. Christopher said that wasn’t concern, arguing that rules were “simply entitlement” of tenants.
Latham & Watkins attorney Richard Bress, representing DirecTV in support of FCC’s rules, came in for little questioning. He said federal govt. had right to preempt state and local property laws to favor tenants. He also said Congress may have wanted to remove restrictions on tenant viewing options even if that meant imposing physical taking on landlords.