A federal appeals court on Wednesday dismissed a legal challenge brought by a public interest group against the Federal Communications Commission (FCC) over the agency’s approval of Nexstar Media Group’s $6.2 billion acquisition of TEGNA last summer.
The order, issued by the D.C Circuit Court of Appeals on Thursday, does not materially affect an ongoing lawsuit brought by several state attorneys general and DIRECTV in Northern California over the same transaction, with Nexstar still bound by a preliminary injunction issued in that case.
The lawsuit brought in D.C. by an organization called Free Press was largely aimed at a sign-off by the FCC’s Media Bureau, which was made without a full commission vote. Attorneys representing the FCC said the lawsuit was premature because of the absence of a full vote. Lawyers representing Nexstar said the case was effectively superseded by the one brought in Sacramento where the injunction was issued.
In the order handed down on Thursday, the D.C. Circuit Court of Appeals pointed to the injunction issued in California, saying Nexstar is still required to maintain separate operations from TEGNA, with few exceptions. The court also rejected a petition for a writ of mandamus that sought to compel the FCC to rule immediately on an application for review of the Media Bureau’s March 19 merger approval.
The appeals court affirmed the FCC has not yet carried out a full commission vote, but noted current federal law doesn’t establish a firm deadline for doing so. The court also cited the FCC’s representation that it expects to issue a decision before the end of the year, concluding that the approximately three-month delay did not warrant the extraordinary remedy of mandamus.
Most significantly, the panel determined it lacks jurisdiction to hear the underlying appeals because Congress requires parties challenging an FCC bureau-level decision to first obtain a ruling from the full Commission before seeking judicial review.
The dismissal does not resolve the underlying dispute over the merger.
This week, Nexstar filed a reply brief in its ongoing court saga in California, reaffirming its belief that the lower court’s injunction should be narrowed in scope so that it only applies to around three dozen stations that are located in areas where Nexstar and TEGNA hold broadcast licenses. Currently, the injunction prohibits Nexstar from having direct operational control of all TEGNA stations, even in areas where its own broadcast licenses do not overlap, while granting it limited abilities to preserve TEGNA as a subsidiary business for now.
As a subsidiary business, TEGNA has established a separate board of directors and appointed its own C-suite executives, including a Chief Executive Officer, in the weeks since the injunction was issued. Nexstar is allowed to receive limited financial information from TEGNA while the injunction is in place, but can only use that information to comply with federal reporting requirements as a publicly-traded company.
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