The U.S. Court of Appeals for the 2nd Circuit last week prohibited bankrupt NextWave Telecom Inc.’s counsel from arguing a crucial opposition to the Federal Communications Commission.
The court is set to hear oral arguments from NextWave soon. The bankrupt C-block company opposes a petition the FCC filed with the court asking it to specifically give the commission the right to cancel and reauction NextWave’s 90 C- and F-block licenses.
NextWave recently retained the services of an appellate specialist firm, Gibson, Dunn & Crutcher L.L.P., believing the entire case would eventually end up in the Supreme Court. NextWave and the FCC have been battling for control of the licenses since the company filed for bankruptcy in 1998.
The court ruled last week, however, that the law firm’s participation in the upcoming oral argument called into question the ability of one of the three judges on the court’s panel to serve on the appeal. Judge Robert Sack was a partner with the firm. It has banned the law firm from appearing in the matter.
Sack was already assigned to the panel, said the court, and NextWave retained the law firm after this. This is a circumstance that should have been known to the firm at the time of its retention, said the court. NextWave was given four business days from March 14 to find a new lawyer or continue with its bankruptcy lawyer.
“We make no finding as to good faith or intent by the estimable lawyers of Gibson, Dunn,” wrote the court. “It is clear, however, that tactical abuse becomes possible if a lawyer’s appearance can influence the recusal of a judge known to be on the panel. Litigants might retain new counsel for rehearing for the very purpose of disqualifying a judge who ruled against them.”
NextWave has asked for a stay of the ruling. The company said it retained the law firm in good faith without any attempt to manipulate the court’s recusal policies.
NextWave claims no third panel member, Sack, was ever announced in connection with the FCC’s request for a writ of mandamus. Sack had previously not participated in the issuance of the FCC’s motion, announcing his recusal in connection with Gibson, Dunn. NextWave said it had no basis for assuming that he had any intention to participate further in the matter.
NextWave also said it retained the services of the new law firm two weeks prior to the FCC’s first attempt to file a petition for a mandamus, which is not an appeal, but the “FCC’s attempt to avoid the normal appellate process,” said NextWave.
The FCC announced Jan. 12 that it was canceling NextWave’s C- and F-block licenses and would reauction them on July 26. The FCC based its action on the December opinion from the 2nd Circuit court, saying bankruptcy law could not be used in the licensing and regulating of spectrum governed by communications law.
