United States v. Zenith Radio Corporation et al. 12 F. 2d 614 (1926)
FACTS: The US is charging Zenith with violating Section 1 of the Radio Act of 1912. On Dec. 19, 1925, Zenith operated a station that was not in accordance with its license. It also violated the terms of its license on several other occasions. Specifically, Zenith was licensed to operate only on Thursday nights from 10 to 12 pm CST and then only when GE's Denver station wasn't using the wavelength. Zenith readily admitted its violations.
ISSUES: Did Zenith violate the terms of its license? Does the Secretary of Commerce and Labor have the authority to specify terms?
DECISION/RESULTS: No! No.
RATIONALE/REASONS: Section 1 stated that violation of the Act was a misdemeanor. The penalty for violation was a $500 fine. Section 2 stated that the license would specify the wavelength, the hours of operation and the power (range) of the station. Section 4 gave the Secretary of Commerce and Labor the power to enforce Section 2. The penalties for violation were a $100 fine. Repeated violations could lead to the license being revoked. The Secretary of Commerce and Labor had no authority to create regulations. The regulations were specified in Section 4 (the case quotes the first, second twelfth and fifteenth regulations from Section 4). The court found that Zenith was in violation of the fifteenth regulation. However, Section 2 does not specify how the Secretary of Commerce and Labor should determine hours of operation. Nothing is said to give the Secretary the discretion to decide between two stations wanting the same hours. When a statute is ambiguous, no violation is possible.
NOTE: none
PHILOSOPHY: Constructionist. The Court looked at the "plain" meaning of the Act saying, "Reference has been made to the rule of practical construction. It is sufficient to say that administrative rulings cannot add to the terms of an act of Congress and make conduct criminal which such laws leave untouched."
THEORY: Ad hoc balancing theory. The Court is trying to weigh the various sections of the Act in balance to see if they give the Secretary any leeway in terms of enforcement.
IMPACT: Chaos! The Courts had essentially said that the Act was poorly written and that the Secretary of Commerce and Labor couldn't punish anyone for violating the restrictions of their license. As a result, Congress was forced to deal with the problem and the Radio Act of 1927 was passed. This Act created a temporary agency, the Federal Radio Commission, empowered to bring order to the spectrum. After one year, power was to revert back to the Secretary of Commerce and Labor. It never did. The 1927 Radio Act was tested in court and held up well. In 1933 FDR looked at government involvement in communications and saw that several agencies were involved. He formed a committee which recommended that one Federal Agency should oversee all of communications. This led to the 1934 Communication Act and the enabling of the FCC. The 1934 Communications Act contained much of the court tested 1927 Act.