Court Of Appeals Nixes Challenge To FCC Approval Of Dallas AMs' 2006 Transfers

Appeal Dismissed

The U.S. Court of Appeals in the DISTRICT OF COLUMBIA Circuit has dismissed DAVID ALAN SCHUM's appeal of the FCC's approval of the 2006 transfer of KFCD-A/FARMERVILLE, TX-DALLAS and KHSE-A/WYLIE, TX-DALLAS from DFW RADIO LICENSE, LLC to BERNARD DALLAS, LLC.

SCHUM, sole owner of DFW RADIO, INC., general partner of THE WATCH, LTD., alleged that the FCC's approval of the transfer terminated fees due under the terms of bankruptcy proceedings from BERNARD to THE WATCH; that the entry in TEXAS state court of a $3.5 million personal judgment against him (guarantor of a loan) lost him two job opportunities; and that the situation led to a drastic fall in THE WATCH's valuation.  But the court said that SCHUM "cannot show injury in fact regarding either the loss of fees or the decline in the value of THE WATCH. Those injuries are not personal, but merely derivative of harm suffered by the company. The well-established shareholder standing rule therefore bars recovery."  The loss of job possibilities and the fall in THE WATCH's value was, the court said, "caused by the associated bankruptcy proceedings, not the FCC’s approval of the transfer of the radio license."   And the court wondered why an FCC denial of the transfer "would prompt the TEXAS state court to set aside its own judgment against SCHUM personally."

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