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MULTI-STATE COMMUNS., INC. v. UNITED STATES

November 6, 1986

MULTI-STATE COMMUNICATIONS, INC., Plaintiff,
v.
UNITED STATES OF AMERICA, Defendant



The opinion of the court was delivered by: TENNEY

TENNEY, J.

This is an action commenced in December 1985 by Multi-State Communications, Inc. ("Multi-State") against the United States seeking a declaratory ruling pursuant to 28 U.S.C. §§ 2201, 2202 that section 331 of the Communications Act of 1934, 47 U.S.C. § 331 (supp. 1986), *fn1" is unconstitutional "because it is retroactive legislation which has had an continues to have an undue[,] harsh and oppressive impact on" Multi-State; that Multi-State filed its application for a license to operate channel 9, WOR-TV, in reliance on existing principles of law; that it expended large sums of money prosecuting its application; and that § 331 unexpectedly extinguished its right to a hearing. Complaint PP 1, 37. The defendant United States of America ("Government") has moved to dismiss the action pursuant to Fed. R Civ. P. 12(b)(6) and 56(b) for failure to state a claim upon which relief can be granted and upon the grounds of res judicata. The parties having submitted briefs and oral arguments, the Court concludes that the principle of res judicata bars the present action.

BACKGROUND

 Since 1972, Multi-State has undertaken extensive efforts to obtain the license to operate television station WOR-TV, channel 9 ("WOR"), which has been operated by RKO General, Inc. ("RKO") since 1952. However, in the midst of a comparative hearing proceeding before the Federal Communications Commission ("FCC") in which Multi-State attempted to obtain the WOR license by challenging RKO's qualifications to operate the station, legislation was passed by Congress which in effect encouraged licensees to move their stations to states which had no television service. Section 331 of the Communications Act of 1934 accomplished this by streamlining the hearing procedures related to such moves. Multi-State Communications, Inc. v. FCC, 234 U.S. App. D.C. 285, 728 F.2d 1519, 1525 (D.C. Cir. 1984). Since it appeared that RKO's license to operate WOR might be in jeopardy due to Multi-State's opposition, RKO took advantage of the opportunity provided by section 331 to move the station from New York to New Jersey. The FCC, following what it perceived to be the mandate of section 331, awarded RKO a new license for the New Jersey station without a comparative hearing and dismissed Multi-State's competing application to operate WOR as a New York channel on the ground of mootness. Id. at 1522.

 The present action is Multi-State's second attempt to challenge the actions of the Government which prevented it from obtaining the license to operate WOR. In 1984, the D.C. Circuit Court of Appeals held that the FCC correctly interpreted section 331 as requiring it to grant RKO a new five-year license to operate WOR in New Jersey. Multi-State Communications, Inc. v. FCC, 234 U.S. App. D.C. 285, 728 F.2d 1519, 1526 (D.C. Cir. 1984). The court of appeals further held that the dismissal of Multi-State's competing application to operate WOR did not unlawfully deprive it of due process rights. Id. at 1525-26.

 DISCUSSION

 1. The principle of res judicata

 Under the principle of res judicata or claim preclusion, a final judgment on the merits of an action rendered by a court of competent jurisdiction bars the parties to that suit and those in privity with them from relitigating in a subsequent suit any claims that were, or could have been raised in the prior action. See Brontel, Ltd. v. City of New York, 571 F. Supp. 1065, 1067-68 (S.D.N.Y. 1983), aff'd mem., 742 F.2d 1439 (2d Cir.), cert. denied, 469 U.S. 882, 105 S. Ct. 248, 83 L. Ed. 2d 186 (1984). The Supreme Court has articulated the following policy reasons to support application of the res judicata doctrine: "To preclude parties from contesting matters that they have had a full and fair opportunity to litigate protects their adversaries from the expense and vexation attending multiple lawsuits, conserves judicial resources, and fosters reliance on judicial action by minimizing the possibility of inconsistent decisions." Montana v. United States, 440 U.S. 147, 153-54, 59 L. Ed. 2d 210, 99 S. Ct. 970 (1979). Thus, the res judicata doctrine will bar subsequent litigation when there is an identity of claims, a full and fair opportunity to litigate those claims in the first action, and provity between the parties to the two actions. See Expert Electric, inc. v. Levine, 554 F.2d 1227, 1233 (2d Cir. 1977), cert. denied, 434 U.S. 903, 54 L. Ed. 2d 190, 98 S. Ct. 300 (1977).

 2. The prior litigation

 In the prior litigation before the D.C. Circuit Court of Appeals, *fn2" Multi-State articulated a number of different arguments to support its claim that the dismissal of its application for the WOR license was incorrect. Only one of those arguments, the last to be addressed by the court of appeals, concerns us here. In the section of its opinion entitled "The Alleged Constitutional Violation," 721 F.2d at 1525-26, the court of appeals addressed Multi-State's argument that "its constitutional right to due process was violated when the FCC applied section 331 to deprive Multi-State of its vested right to a comparative hearing." Id. at 1525. The court of appeals rejected Multi-State's claim that its right to a hearing before the FCC was constitutionally guaranteed, holding that the hearing right was statutory, and that in the limited context of section 331, Congress had made the statutory hearing procedures moot. Id. The court of appeals further concluded that Congress was exercising its lawful powers under the commerce clause when it passed section 331 and its actions did not offend the due process clause. Id. at 1526, n.12.

 Multi-State then petitioned for a writ of certiorari, which was denied, 105 S. Ct. 431 (1984).

 3. Res judicata effect of the prior litigation

 A. Identity of claims

 Multi-State unconvincingly attempts to recharacterize its due process claim in the present action to differentiate it from the due process claim raised in the prior action. however, this Court has noted on previous occasions that "[a] shift in legal theories or a new or different ground for relief sought does not of itself work magic and dissolve the defense of res judicata. . . . [A] plaintiff cannot 'escape the effect of the adverse determination by clothing the claim in a different garb.'" Brontel, Ltd. v. City of New York, 571 F. Supp. at 1069 n. 11, quoting Goldstein v. ...


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