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Paul Hastings Secures Appellate Victory for the National Association of Broadcasters on Sponsor Disclosure Requirements

July 13, 2022

Washington, D.C. – Paul Hastings LLP, a leading global law firm, secured a victory for the National Association of Broadcasters (NAB), with the D.C. Circuit of the U.S. Court of Appeals ruling that the Federal Communications Commission (FCC) cannot require radio broadcasters to check federal sources to verify sponsors’ identities.

The NAB successfully challenged the FCC’s order on sponsor disclosure requirements for leased programming, which imposed onerous rules on every broadcaster to make specified inquiries and conduct independent research on all entities to determine whether the sponsor of the programming is a foreign governmental entity or its agent.

D.C. Circuit Judge Justin Walker cited § 317(c) of the Communications Act, which requires that broadcasters must “exercise reasonable diligence to obtain from its employees, and from other persons with whom it deals directly…information to enable [the broadcaster] to make the announcement required by this section.” Judge Walker ruled that broadcasters do not need to exercise due diligence in general and do not need to make a diligent effort to obtain the information from any possible source, and that the FCC ignored the limits of the statute by seeking information from two federal sources in addition to the two sources prescribed by statute.

Appellate Partner Stephen Kinnaird represented the National Association of Broadcasters.

“We are gratified that the DC Circuit vindicated the plain language of the statute, which limits the duty of broadcasters with regard to securing program sponsor information to exercising reasonable diligence to obtain the information from the persons with whom they deal directly,” said Stephen Kinnaird, partner, Paul Hastings LLP. “Broadcasters have no duty of outside investigation.”

About Paul Hastings

Dedicated to providing intellectual capital and superior execution to the world’s leading Wall Street and global investment banks, asset managers and corporations, Paul Hastings is a premier global finance law firm with elite teams in finance, mergers and acquisitions, private equity and litigation. It is one of only a handful of law firms ranked across multiple core finance areas including: structured credit, leveraged finance, private credit, capital markets, and real estate finance.

Paul Hastings is ranked as one of the top firms in the world in The American Lawyer’s “Premier League” for momentum, profit and prestige amongst firms in the 2022 American Lawyer 100.

 

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