[00:00:00] Speaker 04:
Our final case for argument is 25-1792, Legato Networks versus the United States.

[00:00:08] Speaker 04:
Mr. Yale, please proceed.

[00:00:10] Speaker 06:
May it please the court.

[00:00:11] Speaker 06:
Legato's complaint in this case suffers from several fatal flaws, and the trial court erred in partially denying the government's motion to dismiss.

[00:00:19] Speaker 06:
First, I'd like to address the court's decision on jurisdiction.

[00:00:24] Speaker 06:
This is a regulatory dispute that belongs at the FCC because Congress channeled these types of disputes through the comprehensive remedial scheme of the Communications Act.

[00:00:35] Speaker 06:
This court, in four separate occasions, has held that the Communications Act is a comprehensive remedial scheme.

[00:00:43] Speaker 06:
And in Alpine and Sandwich Isles, it held that because such a scheme

[00:00:48] Speaker 06:
is comprehensive and remedial, that it displaces Tucker Act jurisdiction, including for takings claims.

[00:00:57] Speaker 01:
It wasn't quite as general as that, was it?

[00:01:00] Speaker 01:
Either of the two decisions you're referring to, Alpine or Sandwich.

[00:01:05] Speaker 01:
It pointed out that in each case,

[00:01:08] Speaker 01:
the relief that was being sought under the Tucker Act was effectively available from the commission.

[00:01:18] Speaker 01:
And I think the sticking point in your jurisdiction argument, the challenge is those decisions don't say that is

[00:01:29] Speaker 01:
when you have a case in which that seems not to be true, there would nevertheless be a Bormez ouster of Tucker Act jurisdiction.

[00:01:40] Speaker 06:
Well, we would agree, Your Honor, that there needs to be adequate relief that could be provided through the Communications Act by the FCC.

[00:01:49] Speaker 06:
We think that there is adequate relief here.

[00:01:53] Speaker 01:
But if they're right on the merits of everything, which is a big, big if,

[00:01:58] Speaker 01:
then you're not suggesting or argue that the FCC could give them years worth of damages for what, by assumption, would be a taking?

[00:02:11] Speaker 06:
Well, I think that the FCC could hear the takings claim.

[00:02:16] Speaker 06:
There's no procedural bar to that.

[00:02:18] Speaker 04:
No, but we're talking about retroactive relief as opposed to prospective use.

[00:02:23] Speaker 04:
How can the FCC give them retroactive relief if they say, we're entitled to $10 billion from DOD's use of the L-band?

[00:02:33] Speaker 04:
Where in the FCC's statute does it have the authority to award damages for past improper use?

[00:02:39] Speaker 06:
Well, we would agree that the FCC doesn't have the authority to cut a check for that amount of money, but it has.

[00:02:45] Speaker 04:
Any amount of money.

[00:02:46] Speaker 06:
But it has a- Any amount of money.

[00:02:48] Speaker 04:
I want you to answer that as a question.

[00:02:50] Speaker 04:
Does the FCC have the ability to give them any damages for DOD's past use if that is determined to be a take?

[00:02:59] Speaker 06:
Money, no.

[00:03:00] Speaker 06:
With the exception of if, in a certain case, I'm not saying that this is the case, that it can refund auctions.

[00:03:07] Speaker 06:
But what it can do is it could reallocate spectrum.

[00:03:10] Speaker 04:
And we- But that's only prospective relief.

[00:03:13] Speaker 06:
Well, if you're being provided

[00:03:16] Speaker 04:
if you're being provided spectrum equal to what the taking was, to me that- Wait, you're saying we're not going to give you the money, but we'll give you a set of new tires and some steak knives, and it all balances out.

[00:03:28] Speaker 06:
Well, respectively- Extremely valuable steak knives.

[00:03:32] Speaker 06:
Well, respectfully, the spectrum is valuable.

[00:03:36] Speaker 06:
I don't think either side disputes that.

[00:03:39] Speaker 06:
And so I think when you have a scheme where Congress is saying,

[00:03:43] Speaker 06:
the FCC is the expert to deal with spectrum interference, to deal with spectrum allocation.

[00:03:52] Speaker 01:
So I'm going to transition now from the jurisdictional question to the property interest question, which does perhaps have something to do with this.

[00:04:02] Speaker 01:
Is this kind of more an FCC issue than a takings court issue?

[00:04:08] Speaker 01:
Some kind of, I don't know, I mean these to be kind of objective, just tell me what the laws say are.

[00:04:21] Speaker 01:
Where is the source of the asserted exclusivity asserted by Legato?

[00:04:32] Speaker 01:
I didn't see it in the April 2020 order.

[00:04:38] Speaker 01:
Is it something in Title 47?

[00:04:44] Speaker 01:
I'm trying to get a baseline here, all as part of trying to think about whether maybe there isn't enough exclusivity.

[00:04:54] Speaker 01:
Any exclusivity that there is runs through the FCC.

[00:05:00] Speaker 01:
Even that is 303Y would allow a second provider or user of the band.

[00:05:11] Speaker 01:
Revocation is possible.

[00:05:13] Speaker 01:
Transfer is conditional on FCC authority.

[00:05:17] Speaker 01:
Maybe at, and a related question, if say a city, a locality,

[00:05:25] Speaker 01:
did what they accused DOD of doing, how would they get relief from that?

[00:05:34] Speaker 01:
Can they go to court?

[00:05:35] Speaker 01:
Is there an action in ejectment?

[00:05:37] Speaker 01:
Is there an equivalent

[00:05:41] Speaker 01:
to what in the patent world is 35 U.S.C.

[00:05:44] Speaker 01:
281.

[00:05:44] Speaker 01:
There are so many questions baked into this.

[00:05:47] Speaker 04:
He's not allowed to answer at least one of them at a time.

[00:05:49] Speaker 04:
I mean, I want answers to all of them.

[00:05:53] Speaker 01:
The nature of the right that's being claimed depends on all of this.

[00:05:57] Speaker 06:
Sure.

[00:05:58] Speaker 06:
The purported nature of the right depends on

[00:06:01] Speaker 06:
It has to only depend on the Communications Act, because there's obviously no state law or common law rights here.

[00:06:08] Speaker 06:
And here, what Congress has done, it's set up a system where the FCC can issue the license.

[00:06:15] Speaker 06:
But it's limited in nature.

[00:06:16] Speaker 06:
There can be modification.

[00:06:18] Speaker 06:
There can be revocation.

[00:06:20] Speaker 01:
Does the license or the statute say, this is exclusively for Magado?

[00:06:28] Speaker 06:
The license grants the ability to use the spectrum for a particular purpose.

[00:06:34] Speaker 06:
But again, when you look at the case law, for example, even in the Kenan Court of... This is exactly your voice, your brief did.

[00:06:42] Speaker 04:
And it was really frustrating, because we're not experts in communications law or in the facts that give rise to these cases.

[00:06:51] Speaker 04:
Throughout his brief, Mr. Verrilli

[00:06:55] Speaker 04:
extensively touted the right to exclude as an important stick in the bundle of property rights and therefore, and the government didn't really ever dispute it.

[00:07:05] Speaker 04:
They said, oh, the FCC could revoke.

[00:07:08] Speaker 04:
Fair enough.

[00:07:08] Speaker 04:
FCC could modify.

[00:07:10] Speaker 04:
But what it never said is FCC did not give you the right to exclude.

[00:07:14] Speaker 04:
They gave you the right to use.

[00:07:15] Speaker 04:
They gave you a bear license.

[00:07:18] Speaker 04:
And that's, you never said that anywhere in your brief.

[00:07:21] Speaker 04:
And we're trying to figure it out because I'll tell you, not only did I read 2020, I read the 1989 thing.

[00:07:25] Speaker 04:
And the word exclusive is nowhere.

[00:07:28] Speaker 04:
Now, there is a paragraph in the 1989 thing that makes it seem like the FCC is saying they might not be giving any other L-band licenses while Legato has this license, but

[00:07:40] Speaker 04:
you didn't dispute the exclusivity.

[00:07:43] Speaker 04:
And we're trying to figure out from whence the exclusivity came, because it's not in the license.

[00:07:49] Speaker 04:
So is it in the technology?

[00:07:50] Speaker 04:
I don't think so.

[00:07:51] Speaker 04:
I mean, I think other people could technically jump on the L-band and use it, but that would probably cause interference to be bad.

[00:07:56] Speaker 04:
But so what we're trying to figure out, because exclusivity, the right to use is a stick in the bundle.

[00:08:02] Speaker 04:
The right to exclude others and use exclusively is a much bigger stick in the bundle.

[00:08:07] Speaker 04:
So can you just focus on that and tell me what the heck is going on with that?

[00:08:11] Speaker 06:
They've been given the right to use, subject to all of the conditions, this particular band of the L band.

[00:08:20] Speaker 06:
There was not a guarantee by the FCC that it's an interest to use.

[00:08:26] Speaker 06:
There's no guarantee by the FCC in the order or in the statute that there could be no future licensees.

[00:08:33] Speaker 06:
Now, there are some practical issues, obviously, in terms of interference or what.

[00:08:38] Speaker 00:
Can I ask you, so right now, for practical purposes, they are the only ones that have been given the right to use this?

[00:08:47] Speaker 06:
License to use for this particular purpose at this point.

[00:08:52] Speaker 00:
But again, I just wanted to make sure I understood that.

[00:08:55] Speaker 06:
Correct.

[00:08:56] Speaker 04:
the FCC has the ability to issue a companion license to someone else and then Legato would have to share the L-band with them?

[00:09:06] Speaker 06:
If that was technically feasible, that's correct.

[00:09:09] Speaker 00:
Would the FCC on their conditions when they'll grant, would they make sure there was no interference?

[00:09:16] Speaker 06:
Yes, your honor.

[00:09:17] Speaker 06:
I mean, what the FCC has been, I mean, these proceedings have been ongoing for a while.

[00:09:22] Speaker 06:
And what the FCC throughout this spectrum allocations is trying to do is to have bands where there's not interference amongst the various users.

[00:09:31] Speaker 04:
So does that mean that technically they do have an exclusive license?

[00:09:35] Speaker 04:
I don't mean de facto exclusive because FCC just has not chosen to distribute any portion of the L-band to somebody else.

[00:09:41] Speaker 04:
I mean you keep saying if it were technically feasible and this is what we we don't really understand and we need help understanding.

[00:09:48] Speaker 04:
Because like for example if I say I can give you this glass of water I may not say it's exclusively yours, but nobody else can have the glass There's just this one glass of water and we drink the water.

[00:09:58] Speaker 04:
It's gone You know what I mean like that's so is it the case that the L band can't FCC really could not Give a license to anyone else because of the nature of the licensing

[00:10:10] Speaker 04:
they gave to legato in its intended use, because if FCC were to do that, it would cause exactly the interference that FCC is trying to police against.

[00:10:20] Speaker 04:
Is that true then?

[00:10:22] Speaker 06:
Well, I don't think that that's in the record per se.

[00:10:26] Speaker 06:
I think essentially what we've pointed out is that at this point, there's only one

[00:10:32] Speaker 06:
They are the exclusive license holder for this type of use in the L-band.

[00:10:38] Speaker 01:
It would be simpler and I think less confusing to say they are at present the only licensed user, full stop.

[00:10:47] Speaker 06:
For that, for this particular use.

[00:10:50] Speaker 01:
For terrestrial MSS, whatever.

[00:10:52] Speaker 06:
That is correct, Your Honor.

[00:10:53] Speaker 06:
So at this point, there's nobody else.

[00:10:54] Speaker 06:
And so in that sense, there is a

[00:10:58] Speaker 04:
But could there be?

[00:10:59] Speaker 04:
Because what matters to me, there's a difference between a bear license and an exclusive license, right?

[00:11:05] Speaker 04:
In assessing property interests.

[00:11:07] Speaker 04:
Isn't there?

[00:11:07] Speaker 04:
Correct, Your Honor.

[00:11:08] Speaker 00:
You're saying that under the record, you're not sure and you can't answer.

[00:11:12] Speaker 00:
Could there be?

[00:11:13] Speaker 00:
Because you just said there's nothing in the record to let you know whether someone else would be able to use that same part of the spectrum without interference.

[00:11:24] Speaker 06:
Well, at this point, there hasn't been any other applications for that.

[00:11:28] Speaker 06:
But what we have focused on is there's an ability to modify the license.

[00:11:36] Speaker 00:
Could they, as a technical matter, license someone else for the same L-band for the same purpose?

[00:11:47] Speaker 06:
I think the FCC would have to look at that.

[00:11:49] Speaker 06:
Here, they've gone through this entire process to get Legato as the sole licensee in this particular band.

[00:11:57] Speaker 06:
So that's what the process is.

[00:12:00] Speaker 01:
So one of the many questions I asked in the little whatever I did before.

[00:12:09] Speaker 01:
They have a license.

[00:12:11] Speaker 01:
Nobody else has a license.

[00:12:14] Speaker 01:
Some intruder starts using the band.

[00:12:19] Speaker 01:
They don't like that.

[00:12:20] Speaker 01:
What can they do?

[00:12:22] Speaker 06:
Well, I think it depends.

[00:12:24] Speaker 06:
who it is.

[00:12:25] Speaker 06:
I mean, if it's a problem.

[00:12:28] Speaker 01:
Assume it's me or the city of New York.

[00:12:32] Speaker 06:
They could go to the FCC.

[00:12:34] Speaker 01:
How?

[00:12:34] Speaker 01:
Under what?

[00:12:35] Speaker 01:
I want statutory or regulatory sites.

[00:12:37] Speaker 06:
401B.

[00:12:39] Speaker 01:
401B allows somebody who's aggrieved to go to the FCC and say, you gave me something.

[00:12:46] Speaker 01:
Somebody else is interfering.

[00:12:47] Speaker 06:
And you can sue in district court.

[00:12:50] Speaker 01:
After the FCC acts, or directly, or what?

[00:12:53] Speaker 06:
Well, I think it's a combination.

[00:12:54] Speaker 06:
You could bring it to the FCC, and the FCC can go.

[00:12:57] Speaker 06:
It could be referred to DOJ, and DOJ can essentially go after the individual as a criminal matter.

[00:13:04] Speaker 01:
So would Legato have a private right of action to sue the intruder in district court without getting an FCC commentary on that?

[00:13:21] Speaker 01:
to get to alleging section 301 says nobody can use this without a license enjoying them.

[00:13:30] Speaker 06:
Yes, they could go to district court, but a

[00:13:33] Speaker 06:
The federal government is not a person under that particular statute.

[00:13:36] Speaker 01:
We are trying so hard here to disaggregate things that are all jumbled up.

[00:13:43] Speaker 01:
That's why I said, me or a city, forget that it's DOD.

[00:13:47] Speaker 06:
That is correct.

[00:13:47] Speaker 01:
Just trying to understand.

[00:13:49] Speaker 01:
So they would actually have a private cause of action to go and exclude.

[00:13:58] Speaker 06:
That's correct, Your Honor.

[00:14:00] Speaker 01:
That's not helpful to you.

[00:14:02] Speaker 06:
Well, again, I think that there is an element of exclusivity here.

[00:14:07] Speaker 06:
But we think that the phishing license cases in a bunch of their cases have looked at the totality of what constant.

[00:14:15] Speaker 02:
Don't worry about the time.

[00:14:16] Speaker 02:
You're going to have a lot more time.

[00:14:18] Speaker 06:
Don't worry about the time.

[00:14:19] Speaker 01:
You said 401?

[00:14:19] Speaker 06:
401.

[00:14:21] Speaker 06:
401 what?

[00:14:23] Speaker 06:
I believe it's D, Your Honor.

[00:14:29] Speaker 06:
Excuse me, it's 401A.

[00:14:32] Speaker 06:
Any procedure to enjoin set aside or null any order of the commission pardonment.

[00:14:38] Speaker 06:
Oh, excuse me, I'm reading the wrong section.

[00:14:40] Speaker 06:
I apologize.

[00:14:41] Speaker 06:
So the district courts of the United States shall have jurisdiction upon application of the attorney general.

[00:14:48] Speaker 01:
That's not what we're talking about.

[00:14:49] Speaker 01:
We're talking about asking about a private right of action.

[00:14:53] Speaker 06:
If any B is if any person fails or neglects to obey any order of the commission, the commission or any.

[00:15:01] Speaker 01:
That's not, that's not what I was, that's not the situation I was asking about.

[00:15:06] Speaker 01:
The intruder is not subject to any order of the commission.

[00:15:09] Speaker 06:
Well, it would be.

[00:15:11] Speaker 06:
It would be subject to under 301.

[00:15:14] Speaker 01:
Does this say that a license holder or anybody else can sue in district court to enforce Section 301's requirement that spectrum not be used without a license?

[00:15:31] Speaker 06:
I don't think it says that specifically.

[00:15:44] Speaker 04:
So I don't think it says that specifically, but I think... So as you stand here, you really can't accurately answer any of the questions we have about enforcement options available to a private party licensee under the FCC, which by the way is really problematic because that whole right to exclude is the most important stick in his bundle and it's throughout his entire brief.

[00:16:11] Speaker 06:
I could say that in general, what 301 through 303 says is that you cannot operate if you don't have a license.

[00:16:20] Speaker 06:
And so if you don't have a license, you're in violation of that.

[00:16:25] Speaker 01:
Let me just tell you why I keep thinking about the private right of action.

[00:16:30] Speaker 01:
You have this language from Sanders Brothers and from mobile radio or something.

[00:16:36] Speaker 01:
And there's a question about how

[00:16:38] Speaker 01:
broadly that language, which is stated in somewhat broad terms, should be read.

[00:16:46] Speaker 01:
One way of understanding the language is the kind of point you were making sort of thematically and with respect to the jurisdictional argument, that what we have here is really an FCC problem, so that maybe

[00:17:01] Speaker 01:
If there's no private right of action, and FCC can revoke, and FCC can add a second licensee, and any transfer is subject to the FCC, and all of this may depend on interference, which really the FCC is going to be a lot better at figuring out than a takings court, maybe that language from Sanders Brothers should be given its

[00:17:24] Speaker 01:
the effect without any qualifications having to do with whether it's a right only against the FCC or just it's not a property right.

[00:17:35] Speaker 01:
So some of these details, this is the picture that's in my mind of a kind of argument for why maybe there isn't actually a takings law protected property interest built up from the

[00:17:54] Speaker 01:
deep role of the FCC in any kind of exclusivity they may have.

[00:18:00] Speaker 04:
No doubt, Mr. Verrilli, you're listening closely because the government's not making this argument, but you're going to be asked about it when you get up here.

[00:18:05] Speaker 04:
Go ahead, Mr. Yale, answer the question if there is one.

[00:18:12] Speaker 06:
We do think that Sanders Brothers overall stands for the fact that when you look at the Communications Act, it doesn't provide any sort of private property, any sort of private right of action against the government.

[00:18:27] Speaker 06:
So the Congress could have set forth a private right of action against the government to enforce it.

[00:18:33] Speaker 06:
They haven't done that.

[00:18:35] Speaker 06:
And we think that that case law, for over 100 years,

[00:18:39] Speaker 06:
Almost 100 years, that's been the case, that no court has held that there's a cognizable property interest.

[00:18:46] Speaker 06:
And we think it's based on the fact that Congress could have supplied that.

[00:18:52] Speaker 06:
It could have supplied a way to sue the government.

[00:18:55] Speaker 06:
It could have provided these private property rights.

[00:18:57] Speaker 06:
But what it essentially provided is what's akin to a revocable privilege.

[00:19:04] Speaker 04:
And so... Can you please explain to me how the NTIA

[00:19:08] Speaker 04:
intersects with the FCC to determine use and in particular I'd like to know whether DOD's use of the L-band as alleged in the complaint was actually authorized by the NTIA.

[00:19:22] Speaker 06:
So government stations under the Communications Act under there's a specific section which says that 301 the licensing doesn't apply to government stations so the president has the ability

[00:19:35] Speaker 06:
to assign that.

[00:19:37] Speaker 06:
NTIA is the agency that assigns the government radio stations.

[00:19:43] Speaker 06:
NTIA has a bunch of other responsibilities.

[00:19:45] Speaker 06:
They coordinate with the FCC about allocations of spectrum.

[00:19:50] Speaker 06:
They provide.

[00:19:52] Speaker 01:
Does the FCC allocate to the government a certain spectrum, and then NTIA

[00:20:02] Speaker 01:
allocates within that the use of that spectrum within the various agencies of the government or does the FCC just say, oh, we're not going to allocate, we're not going to give to any outsider 1625 to whatever.

[00:20:18] Speaker 01:
And so the government just.

[00:20:20] Speaker 01:
has it, because it has it if it's not allocated?

[00:20:23] Speaker 06:
Well, Congress has sort of set up the dual system for government versus private.

[00:20:28] Speaker 06:
So the FCC allocates all of the bans that have been set aside for private use.

[00:20:34] Speaker 06:
There's another big bunch of spectrum that's exclusively for government.

[00:20:40] Speaker 01:
And I'm sorry, is that in the statute by frequency numbers, or what?

[00:20:48] Speaker 06:
I think it's Congress has set forth what particular bans and then you know there's obviously recently there's been statutes about Congress saying that certain bans that both NTIA and the FCC how does that correspond to this case and in particular the L-Bans?

[00:21:11] Speaker 04:
So would the NTIA

[00:21:14] Speaker 04:
NTIA have the ability to authorize DOD's use of the L-band.

[00:21:21] Speaker 06:
I mean the FCC certainly has... I didn't ask anything about the FCC.

[00:21:25] Speaker 04:
The FCC is not relevant for government entities and DOD is a government entity.

[00:21:29] Speaker 04:
Only the NTIA is my understanding.

[00:21:32] Speaker 06:
The NTIA doesn't have the ability to...

[00:21:40] Speaker 06:
Let me take a step back.

[00:21:41] Speaker 06:
There are minor assignments of spectrum that the NTIA can issue that wouldn't interfere with private licensees, emergency type situations.

[00:21:55] Speaker 06:
But with respect to the assignment, the L-band we're talking about here, the FCC is the one who's determining who has

[00:22:06] Speaker 00:
And the NTIA does not have the authority to determine anything with respect to the L-band.

[00:22:12] Speaker 06:
Correct.

[00:22:12] Speaker 06:
They have the ability to set forth their views with respect to the FCC.

[00:22:19] Speaker 06:
And that's what happened in this particular case.

[00:22:21] Speaker 06:
But that band hasn't been set aside for government stations as other bands have.

[00:22:31] Speaker 04:
So if Legato was given a

[00:22:36] Speaker 04:
exclusive right to use the L-band.

[00:22:40] Speaker 04:
And if DoD is now using the L-band, why isn't that compensable somehow to legato?

[00:22:50] Speaker 06:
Well, again, our argument is that that falls under part two of the two-part takings theory, right?

[00:22:58] Speaker 06:
So there has to be a property interest established.

[00:23:02] Speaker 06:
So if there's a property interest established, then it gets to the situation, well, if a government agency is operating within that spectrum or preventing the use of a license, in that situation, there could be a taking.

[00:23:16] Speaker 06:
But our argument here

[00:23:18] Speaker 06:
primarily is that there's no cognizable property interest for the reasons we set forth, including the fact that it's a highly regulated industry.

[00:23:30] Speaker 06:
We have a situation where all of the

[00:23:36] Speaker 06:
potential property interests that Legato is pointing to is coming from Congress, coming through what the FCC has provided.

[00:23:45] Speaker 06:
Those can be taken away.

[00:23:46] Speaker 06:
They can be revoked.

[00:23:47] Speaker 06:
They can be modified.

[00:23:48] Speaker 06:
And that's a function of the Communications Act, because as technology changes... The same is true with patents.

[00:23:55] Speaker 06:
Well, a couple of points on patents.

[00:23:58] Speaker 06:
One, there's a long

[00:24:00] Speaker 06:
There's a long history of the Supreme Court at least weighing in on whether patents are property interests.

[00:24:09] Speaker 06:
The patent statute specifically refers to patents as personal property, or having the attributes of personal property.

[00:24:18] Speaker 06:
And we're also not saying that their argument has never been.

[00:24:22] Speaker 01:
Is it also generally the case that when the PTO takes away a patent, it's on the ground that it never should have been issued in the first place?

[00:24:30] Speaker 06:
Correct.

[00:24:31] Speaker 06:
That's generally the fact for cancellation.

[00:24:34] Speaker 06:
It was never a valid patent in the first place.

[00:24:37] Speaker 06:
A couple of points.

[00:24:39] Speaker 06:
I do want to emphasize, though, we're not saying that Congress could never provide a cognizable property interest for Fifth Amendment purposes.

[00:24:50] Speaker 06:
We're just saying, when you look at this long line of case law, every single case has reached the same conclusion.

[00:24:59] Speaker 06:
And when you look at the- Long line?

[00:25:04] Speaker 01:
Sure, from- I mean, I get Sanders.

[00:25:06] Speaker 01:
I get mobile radio.

[00:25:09] Speaker 01:
other one, maybe also more recent?

[00:25:13] Speaker 06:
Well, we cited the third circuit case that- Wasn't there another DC circuit case following- Mobile Relay.

[00:25:20] Speaker 01:
Mobile Relay following it?

[00:25:22] Speaker 01:
You had a second site in your gray brief.

[00:25:24] Speaker 06:
Yeah, Mobile Relay is the case from the DC circuit.

[00:25:27] Speaker 06:
We cited the Prometheus case- Prometheus.

[00:25:29] Speaker 04:
From the third circuit- But the problem for me with those cases is they're as to the FCC.

[00:25:34] Speaker 04:
And I think it's possible

[00:25:36] Speaker 04:
based on how you've actually just articulated the way the property rights are distributed, that they could have no property interest as against the FCC.

[00:25:46] Speaker 04:
The FCC could revoke or modify or whatever.

[00:25:49] Speaker 04:
But I'm beginning to think they've got a property interest against DOD.

[00:25:53] Speaker 04:
And I didn't come into this argument thinking that.

[00:25:58] Speaker 04:
But this was the benefit of your argument.

[00:26:01] Speaker 06:
Respectfully, when you look at the first step of the property interest argument,

[00:26:06] Speaker 06:
What we're arguing is you have to first look into the fact whether there is property at all.

[00:26:12] Speaker 06:
So for example, when you look at the grazing cases, the fishing license cases, there can be no doubt there that there's no property interest.

[00:26:22] Speaker 06:
But that goes towards the entire federal government.

[00:26:25] Speaker 06:
So for example, if the Navy went and invaded the fishing grounds or whatnot, and the fishing license holder

[00:26:35] Speaker 06:
Whoever held that license said, well, there's a taking here.

[00:26:39] Speaker 06:
The response would be, no, there's no cognizable property.

[00:26:44] Speaker 06:
When you go through the analysis, you reach the same point.

[00:26:47] Speaker 06:
So this issue about there being sort of different actors involved.

[00:26:52] Speaker 01:
And you don't read international paper as running counter to that.

[00:26:58] Speaker 01:
I know it's a fabulous opinion to read, as Holmes' opinions are, and sometimes a little hard to interpret.

[00:27:05] Speaker 01:
That involved a grant of water by a government authority separate from the one that then commandeered the water to get all the power it could out of Niagara Falls.

[00:27:20] Speaker 06:
So we just, when you look at that case, it seems like there's just vast over reading of what's in there.

[00:27:27] Speaker 06:
The water rights there were from state law and there was really no focus on

[00:27:34] Speaker 06:
This court has gone through, and when you look at the- There's no federal grant of water rights there.

[00:27:40] Speaker 06:
There was a federal license, but the initial grant of the water rights was under state law.

[00:27:46] Speaker 01:
I thought you ultimately read it to rest on a sentence that said, what, the Secretary of War or Navy or somebody, war probably, said, I mean to guarantee payment

[00:28:01] Speaker 01:
for all the power that I can get.

[00:28:04] Speaker 01:
Correct, Your Honor.

[00:28:05] Speaker 01:
And that turned out to require taking some of the water that had been diverted to international paper.

[00:28:12] Speaker 06:
And they were essentially viewing it as essentially something along the lines of a contract matter.

[00:28:17] Speaker 06:
But there wasn't the sort of going through that particular license

[00:28:22] Speaker 06:
and looking at all the various attributes of property.

[00:28:25] Speaker 06:
And so we just don't think that there can be much read into that.

[00:28:29] Speaker 06:
I mean, no court after that case has cited international paper for that proposition.

[00:28:34] Speaker 06:
And we think for good reason.

[00:28:36] Speaker 04:
And this court has set forth to- I've got a bunch of factual questions.

[00:28:41] Speaker 04:
Was any money paid for the Legato license?

[00:28:43] Speaker 04:
Was there a spectrum auction?

[00:28:45] Speaker 06:
There was no auction here, Your Honor.

[00:28:47] Speaker 04:
What does- Was any money paid for the Legato license?

[00:28:51] Speaker 06:
Not that, not that we're aware of.

[00:28:54] Speaker 06:
Obviously there might be some sort of nominal fees or something like that, sort of filing fees and things like that.

[00:29:00] Speaker 06:
But when you're talking about sort of free market paying for auction, like in Alpine and like in other cases, no, that didn't

[00:29:07] Speaker 06:
What led to this was the 2003 change in the regulations.

[00:29:10] Speaker 06:
So Legado was operating in the MS, the satellite, had that particular license.

[00:29:19] Speaker 06:
And because they changed the regulations, they were able to apply to get this ATC, this terrestrial use, which the government has obviously

[00:29:29] Speaker 06:
argued interferes with with GPS.

[00:29:32] Speaker 06:
So there was there was no money paid in that sense.

[00:29:35] Speaker 00:
How did we deal with this?

[00:29:36] Speaker 00:
There was money paid for the GPS but not for this additional use?

[00:29:41] Speaker 06:
No, Your Honor.

[00:29:41] Speaker 06:
There was not, I don't believe there was an auction for the MSS in the first place either, but certainly not for this.

[00:29:48] Speaker 06:
This was just strictly a regulatory change and there's no property interest in sort of a regulation or a regulatory change.

[00:29:57] Speaker 04:
How do renewals work?

[00:29:59] Speaker 04:
There's an allegation in Mr. Borrelli's brief that renewals are pretty much guaranteed, pretty close to automatic.

[00:30:05] Speaker 04:
Is that correct?

[00:30:06] Speaker 06:
I don't think that you could square that with Section 304, where applicants have to waive that sort of ability.

[00:30:19] Speaker 06:
They have to waive any claim to a particular spectrum.

[00:30:23] Speaker 06:
And so there are regulations that have set forth that there's sorts of requirements

[00:30:32] Speaker 06:
that sort of weigh in on renewal.

[00:30:37] Speaker 06:
But overall, the statute, which takes precedent, has said that there can be no claim.

[00:30:42] Speaker 06:
And that's what you would have to look at.

[00:30:45] Speaker 01:
Even if there is a recognized, I don't know, I'm not going to get the word right, but expectancy.

[00:30:52] Speaker 01:
The DC Circuit opinion that was cited in the Huber treatise

[00:30:57] Speaker 01:
Victor, maybe, I think, quotes, opinions.

[00:31:03] Speaker 01:
I know I talk a lot, but you've got to let me finish.

[00:31:06] Speaker 01:
There's a long-standing recognition of a balance.

[00:31:13] Speaker 01:
between a expectancy interest that the commission has to draw and the ability to say enough already, we have to go a different direction.

[00:31:27] Speaker 01:
Is that just where the law stands?

[00:31:29] Speaker 06:
Well, I think what that was referring to is sort of subjective renewal.

[00:31:35] Speaker 01:
I'm sorry, subjective?

[00:31:38] Speaker 01:
Well, sort of.

[00:31:39] Speaker 01:
Subjective expectations.

[00:31:41] Speaker 06:
Subjective expectations of renewal.

[00:31:43] Speaker 01:
So I thought the DC Circuit recognized that this was a real world policy for self-evident reasons.

[00:31:54] Speaker 01:
that the commission had to take due account of.

[00:31:58] Speaker 01:
And I take it you're saying sure, but that doesn't turn it into a property, right?

[00:32:03] Speaker 06:
Well, I think when you're looking at the property right, the 304 would have to trump any sort of, sort of what I would deem subjective expectation of renewal because of the fact that

[00:32:17] Speaker 06:
If you have to sign a waiver saying that you don't have a claim subject to the regulatory power of the United States, which is what 304 says, which is what applications have to sign, I think that takes precedent.

[00:32:31] Speaker 06:
Now, as a practical matter, license, I mean, again, we're not disputing licenses are very valuable.

[00:32:37] Speaker 06:
They are often just renewed.

[00:32:41] Speaker 06:
What we're pointing out is sort of the ability to modify the license to not renew and to revoke.

[00:32:50] Speaker 04:
I'd like to revisit FCC enforcement actions.

[00:32:53] Speaker 04:
If Legado came to the FCC, if they identified an unauthorized user on the L-band, if they came to the FCC, is the FCC required to take action against the unauthorized user?

[00:33:12] Speaker 06:
Well, they would be raising a takings claim.

[00:33:16] Speaker 06:
I think what the court held in Alpine is you have to.

[00:33:19] Speaker 01:
I'm sorry.

[00:33:20] Speaker 01:
Why would they be raising a takings claim?

[00:33:22] Speaker 01:
My claim, I thought that the example was somebody else is using the spectrum.

[00:33:28] Speaker 01:
They're violating 301.

[00:33:30] Speaker 01:
They're not allowed to use it without a license.

[00:33:32] Speaker 01:
They don't have one.

[00:33:34] Speaker 01:
What does the FCC do when it receives that?

[00:33:38] Speaker 06:
Well, I think the FCC would investigate and determine what

[00:33:42] Speaker 06:
What would need to be done there?

[00:33:44] Speaker 06:
Investigate, is DOD actually doing this?

[00:33:47] Speaker 06:
They're in the best position to actually see what DOD is or is not doing.

[00:33:53] Speaker 06:
At that point, I mean, they could go to DOD.

[00:33:56] Speaker 04:
I don't think there's any- Are they required to do this?

[00:33:59] Speaker 04:
Is the FCC required to take, to pursue, to perform, to initiate an investigation

[00:34:09] Speaker 04:
if a licensee in legato circumstance brings to the FCC's attention unauthorized use?

[00:34:17] Speaker 06:
I think they would.

[00:34:17] Speaker 06:
I don't know of a statute that would say that they were necessarily required when that individual is another federal agency.

[00:34:28] Speaker 00:
But setting that aside, another federal agency, what if it's anybody, somebody else, another party, a nongovernmental entity?

[00:34:38] Speaker 06:
Yes, I mean, they are under an obligation to look into that.

[00:34:43] Speaker 00:
The SEC is under an obligation to look into it.

[00:34:46] Speaker 06:
when it's brought to the attention, and that can be referred through 401 to the federal government.

[00:34:53] Speaker 06:
The FCC would, at that point, there'd be a petition.

[00:34:57] Speaker 06:
The FCC can issue an order there.

[00:35:00] Speaker 01:
Could the FCC say, oh, you're right about that.

[00:35:03] Speaker 01:
But actually, we think this is a pretty good idea for this intruder to be allowed to do it.

[00:35:08] Speaker 01:
So we will now initiate license modification proceedings or a new

[00:35:15] Speaker 01:
a 303 Y proceeding to authorize the intruder.

[00:35:24] Speaker 06:
They could do that.

[00:35:24] Speaker 06:
They could always do that.

[00:35:26] Speaker 06:
They could always modify.

[00:35:27] Speaker 06:
I mean, on their own, Sue Espante, the FCC can modify the license.

[00:35:32] Speaker 00:
Right, can you do that under 401?

[00:35:35] Speaker 00:
excuse me.

[00:35:37] Speaker 00:
The statutory authority you provided that you said, I'm so sorry, but I'm sorry for interrupting Judge Toronto's question, but you said the FCC would have a duty to look into it under 401.

[00:35:48] Speaker 00:
I thought that's what you said.

[00:35:50] Speaker 00:
What is the statutory basis for the duty to look into the alleged use of a licensee's spectrum by another?

[00:35:58] Speaker 06:
Well, I think it goes down to the fact that unauthorized users of spectrum are, when

[00:36:05] Speaker 06:
when an entity has a license, other users are not supposed to operate within that spectrum.

[00:36:11] Speaker 00:
Where do I see in 401?

[00:36:12] Speaker 00:
I think you cited 401, didn't you?

[00:36:16] Speaker 06:
I did cite 401.

[00:36:17] Speaker 00:
What language in 401 are you relying on?

[00:36:19] Speaker 06:
401, I'm relying on just for the end result of what could be done.

[00:36:24] Speaker 00:
It's 401C?

[00:36:26] Speaker 06:
Correct.

[00:36:27] Speaker 00:
Well, that doesn't say anything.

[00:36:28] Speaker 00:
It just says, upon request of the commission, it shall be the duty of the United States attorney for the law.

[00:36:33] Speaker 00:
It doesn't say what the commission has to do.

[00:36:36] Speaker 06:
Well, this would be initially there's administrative.

[00:36:39] Speaker 00:
So is there some other statutory authority that you're relying on?

[00:36:43] Speaker 06:
I can't point to another statutory authority.

[00:36:46] Speaker 04:
Mr. Yale, how about if we restore the two minutes you requested of rebuttal time and go ahead and hear from Mr. Verralli at this point.

[00:37:03] Speaker 04:
Thank you.

[00:37:03] Speaker 04:
Obviously, before you

[00:37:06] Speaker 04:
Don't worry about the time.

[00:37:07] Speaker 05:
I appreciate that, Your Honor.

[00:37:09] Speaker 05:
Thank you.

[00:37:09] Speaker 05:
Don Verilli for Legato.

[00:37:11] Speaker 05:
I'm happy to answer any questions about jurisdiction, if the court has any.

[00:37:15] Speaker 05:
But perhaps it makes more sense to go straight to the focus so far about the nature of the property right, and perhaps starting with exclusivity would be the best place.

[00:37:27] Speaker 05:
As Your Honor's questions reflect,

[00:37:30] Speaker 05:
The exclusivity flows in a very meaningful sense from the prohibition in Section 301 of any unlicensed person to use the spectrum.

[00:37:39] Speaker 05:
Now, in terms of the enforceability of that provision, Judge Toronto, you asked about that.

[00:37:44] Speaker 05:
Section 402B of 47 USC, as I understand it, I'm doing this from memory, but I believe it's correct.

[00:37:51] Speaker 05:
provides that any injured person, in addition to the attorney general, may bring suit to obtain adjunctive relief for a violation of...

[00:38:04] Speaker 04:
402b says, appeals may be taken from decisions and orders of submission to the DC Circuit.

[00:38:12] Speaker 05:
Then I have the wrong provision.

[00:38:13] Speaker 05:
I'm sorry.

[00:38:13] Speaker 05:
But I believe there is a provision that allows for injunctive relief.

[00:38:17] Speaker 02:
Private act by private actor?

[00:38:19] Speaker 05:
I believe so.

[00:38:20] Speaker 05:
But if I may, I'll follow up on that.

[00:38:23] Speaker 05:
But in all events, the right is exclusive.

[00:38:28] Speaker 04:
with respect.

[00:38:29] Speaker 04:
So it could be de facto exclusive, i.e.

[00:38:33] Speaker 04:
you're the only person that at present the FCC has authorized to UCL banned.

[00:38:38] Speaker 04:
But that doesn't mean you actually have a right to exclude others, because tomorrow the FCC could decide to extend a right to UCL banned to yet another private entity.

[00:38:48] Speaker 05:
Respectfully, Your Honor, I think it's de jure exclusive, because as a legal matter, the license holder

[00:38:55] Speaker 05:
does have the exclusive right to use it unless and until the FCC makes such a change.

[00:39:01] Speaker 05:
Now, that kind of sharing can happen.

[00:39:04] Speaker 05:
There's a statutory provision for it.

[00:39:07] Speaker 05:
But that kind of sharing is quite rare.

[00:39:10] Speaker 05:
It requires all kinds of technical workouts to make sure there isn't interference.

[00:39:16] Speaker 01:
To some extent, this sometimes comes up in patent land as well.

[00:39:20] Speaker 01:
The word exclusive

[00:39:22] Speaker 01:
may not, in fact, is not equivalent to having a right to exclude.

[00:39:28] Speaker 01:
So if you're the only one who has a license to use something, that does not all by itself give you a right to exclude.

[00:39:38] Speaker 01:
And for taking purposes for this property, do you have a property right?

[00:39:42] Speaker 01:
The right to exclude feels like it's extremely important.

[00:39:48] Speaker 01:
Yes, I agree it's quite important.

[00:39:50] Speaker 01:
But you don't get that out of 301 by itself.

[00:39:53] Speaker 05:
Well, I think you get that by the enforcement of 301.

[00:39:55] Speaker 01:
Only if you have a private right of action.

[00:39:58] Speaker 01:
And if the commission doesn't have discretion, even if you go to the commission and say, there's an intruder, the commission may be intervening

[00:40:12] Speaker 01:
I don't mean it was a legal matter.

[00:40:14] Speaker 01:
An intervening roadblock between you and getting that exclusion that you want to be effectuated.

[00:40:21] Speaker 05:
Well, I suppose it's a theoretical possibility, although I'm not aware of it ever actually manifesting itself.

[00:40:27] Speaker 04:
This isn't theoretical possibility.

[00:40:28] Speaker 04:
This is a legal construct we're concerned about.

[00:40:30] Speaker 04:
You're focusing on having a right to exclude, and Judge Toronto just laid out.

[00:40:34] Speaker 05:
Concern that you actually do not have the property right that you and I'm trying to address that I do think that There is a right to exclude in the sense that it is It would be unlawful for say the city of New York to use this spectrum.

[00:40:52] Speaker 05:
It's unlawful so that would be an unlawful intrusion on the right that has been given to us and

[00:40:58] Speaker 05:
any other unlicensed entity.

[00:41:00] Speaker 05:
It's an unlawful intrusion on the right that has been given to us by the license.

[00:41:05] Speaker 05:
That could be enforced through FCC proceedings.

[00:41:07] Speaker 04:
What if the city of New York started using the L-band and they applied to the FCC for a license to do so and the FCC looked at it and said granted?

[00:41:17] Speaker 05:
the FCC has the authority to do that.

[00:41:20] Speaker 05:
That does not mean, and so a couple things about that, if they haven't done it here, obviously, were they to do so, I still think that there is an exclusive right there.

[00:41:31] Speaker 05:
There's a shared exclusive right by the licensees as against the rest of the world.

[00:41:36] Speaker 04:
Well, but the FCC can't grant to DOD.

[00:41:38] Speaker 04:
It's only the NTIA that can grant.

[00:41:41] Speaker 05:
Well, that's the other point, just those sort of

[00:41:44] Speaker 05:
go back to Your Honor's question about the way this works.

[00:41:46] Speaker 05:
I think we tried to lay it out in paragraph 22 of the complaint, the very statutory sites that govern this.

[00:41:52] Speaker 05:
Basically, the way it works is that Congress authorizes NTIA to decide which spectrum is going to be used for commercial use, private use.

[00:42:02] Speaker 05:
The FCC licenses that.

[00:42:05] Speaker 05:
The NTIA separately can allocate certain spectrum to the government for governmental uses, including military uses.

[00:42:12] Speaker 05:
The FCC does have some sort of residual marginal authority to authorize some public use of the spectrum.

[00:42:20] Speaker 05:
But in general, the way the system works is that the FCC is charged by Congress to allocate the spectrum that NTIA has decided will be used for commercial purposes.

[00:42:34] Speaker 05:
The L-band is in that spectrum.

[00:42:37] Speaker 05:
It's been designated to use for commercial purposes.

[00:42:41] Speaker 05:
The FCC licensed its use for commercial purposes.

[00:42:44] Speaker 05:
And our point here, as we've alleged in that complaint, is that DOD is squatting on that spectrum for its own governmental purposes.

[00:42:55] Speaker 04:
Is it clear that the NTIA has not authorized DOD to use whatever it is that you're alleging they're using?

[00:43:03] Speaker 05:
We believe it is clear.

[00:43:05] Speaker 05:
We have alleged that in our complaint.

[00:43:06] Speaker 05:
We're not aware of any NTIA authorization.

[00:43:09] Speaker 05:
My friend on the other side hasn't identified any NTIA authorization to do this.

[00:43:14] Speaker 05:
And so I really think there's an allegation in the complaint.

[00:43:19] Speaker 05:
Of course, we're here on a motion to dismiss.

[00:43:22] Speaker 05:
It's an interlocutory review.

[00:43:23] Speaker 05:
They have to be accepted as true.

[00:43:26] Speaker 05:
They are true.

[00:43:28] Speaker 04:
Is it your view that the NTIA would not be able to assign any portion of the L-band?

[00:43:33] Speaker 04:
Is there, Judge Toronto asked Mr. Hale a question that I was also curious about, which is the different bands are obviously based on different Hertz levels, whatever.

[00:43:48] Speaker 04:
Is it the case that the NTIA

[00:43:51] Speaker 04:
TIA can only authorize use between 500 and 1,500 hertz or something, or whatever it is.

[00:43:57] Speaker 04:
Do you understand what I'm saying?

[00:43:59] Speaker 04:
Could the NTIA authorize government use in the L-band?

[00:44:03] Speaker 05:
I'm not sure about the answer to that.

[00:44:05] Speaker 05:
I think, in theory, they probably could.

[00:44:07] Speaker 05:
Of course, they haven't.

[00:44:09] Speaker 05:
But if they were to have done so, let's say, hypothetically, they were to do so tomorrow with respect to this spectrum, I think that would be quite a bit like, for example,

[00:44:21] Speaker 05:
the Congress enacting a statute shortening the term of a pre-existing patent.

[00:44:27] Speaker 05:
Congress could enact that statute, but the statute would effectuate a taking.

[00:44:30] Speaker 05:
It would be a material change to a pre-existing property right.

[00:44:35] Speaker 04:
So there's an MOU between the FCC and the NTIA.

[00:44:40] Speaker 04:
I don't know if you're familiar with it.

[00:44:41] Speaker 04:
I've read it.

[00:44:43] Speaker 04:
they can collaborate and work together and decide how government uses can be utilized alongside private uses.

[00:44:50] Speaker 04:
So why?

[00:44:52] Speaker 04:
What basis do you have for saying that the NTIA could not allocate to the government the ability to use a portion of that L-band without the FCC's being complicit?

[00:45:05] Speaker 05:
Well, I think the answer to that is that the FCC has the statutory authority

[00:45:13] Speaker 05:
to license the spectrum for commercial use.

[00:45:16] Speaker 05:
And the FCC has done that.

[00:45:17] Speaker 04:
And the NTIA has the statutory authority to license government use.

[00:45:22] Speaker 05:
But it hasn't done that.

[00:45:24] Speaker 05:
It hasn't done that.

[00:45:25] Speaker 05:
And I think the whole way the system works is that they separate out the spectrum that's going to be used for commercial use the NTIA does from the spectrum that's going to be used for government use precisely to avoid problems like the one that the DOD's actions are causing here.

[00:45:40] Speaker 05:
That's the problem.

[00:45:41] Speaker 05:
that this is spectrum that has been allocated for commercial use.

[00:45:45] Speaker 05:
The FCC has the statutory authority to license it for commercial use.

[00:45:48] Speaker 05:
The SEC has licensed it for commercial use, and that license we respectfully submit does create property interest.

[00:45:55] Speaker 05:
We've talked about exclusivity, but also transfer and revocability have come up, and perhaps I could spend a minute addressing those.

[00:46:01] Speaker 05:
With respect to

[00:46:03] Speaker 05:
transferability.

[00:46:04] Speaker 05:
It is true that the FCC has to approve any transfer of a spectrum license, but if one looks at Section 310, which governs transfers,

[00:46:17] Speaker 05:
Section 310 says that basically what the transferee has to do is the license, the transferee has to meet the requirements of Section 308.

[00:46:27] Speaker 05:
Section 308 is the provision of the Communications Act that basically sets forth the necessary qualifications to be a licensee.

[00:46:36] Speaker 05:
So the way this works basically is that if the transferee meets the qualifications to hold the license, then very strong presumption that transfer can occur.

[00:46:46] Speaker 04:
And then I would say... Mr. Verlaine, what do I do about the following?

[00:46:52] Speaker 04:
Mr. Yale stood up here and said a lot of things about what, for example, the NTIA could do or not do that are the opposite of some of the things you're saying.

[00:47:01] Speaker 04:
The funny thing is, you're saying that the government could authorize use in the L-band, but they haven't.

[00:47:09] Speaker 04:
Mr. Yale stood up here and said, no, the government can't authorize use in the L-band.

[00:47:13] Speaker 04:
So I guess what I'm wondering is, since so much in my mind hinges on the exclusivity question for the property interest, maybe the answer, since I don't feel like I've gotten great clarity in this argument, I'm not saying you're not providing great clarity, but I'm saying a lot of the things you're saying are not consistent with what the government said.

[00:47:39] Speaker 04:
And I don't think some of this stuff is briefed.

[00:47:42] Speaker 04:
Maybe the answer is I send this back to the Court of Federal Claims, and I ask them to more thoughtfully and thoroughly consider this property interest question, because I don't know that I'm getting all the answers I need to be able to decide it.

[00:47:57] Speaker 05:
I understand your honest instinct, and there's a lot of sense to that.

[00:48:02] Speaker 05:
I would say, in addition, a lot of the argumentation that the government's making here is about the way in which this license works and about the conditions.

[00:48:17] Speaker 05:
Et cetera.

[00:48:18] Speaker 05:
And there's a whole lot of factual context that surrounds all of that.

[00:48:21] Speaker 05:
If our allegations, for example, are correct, which they are, that the conditions that were imposed that require DOD cooperation are the kinds of conditions that government agencies, including DOD, routinely cooperate to solve, that they were at the margins.

[00:48:41] Speaker 04:
Maybe we could help you all by answering some of the easy questions, like jurisdiction and the Darby question.

[00:48:46] Speaker 04:
but send it back on this property interest thing.

[00:48:49] Speaker 04:
I don't know.

[00:48:49] Speaker 04:
It's a very hard question.

[00:48:51] Speaker 04:
I feel like this case is destined for the Supreme Court.

[00:48:53] Speaker 04:
And I'll be honest.

[00:48:54] Speaker 04:
I don't feel that I have all the information I need to feel confident that I'm deciding it as well as I'd like to.

[00:49:00] Speaker 05:
I appreciate that.

[00:49:01] Speaker 05:
Your Honor, I'm sure, certainly appreciates.

[00:49:04] Speaker 05:
We think that the trial court got it correct with respect to finding property interest.

[00:49:08] Speaker 04:
I knew that.

[00:49:08] Speaker 05:
And regulatory and physical takings.

[00:49:13] Speaker 05:
Of course, we thought the trial court got it incorrect with respect to its legislative taking.

[00:49:16] Speaker 05:
ruling and that was not made part of this.

[00:49:21] Speaker 04:
There's so much money at stake here.

[00:49:22] Speaker 04:
50 billion dollars and that's just the legato scenario.

[00:49:26] Speaker 04:
I mean obviously there are a lot of other telecom giants that are going to be impacted by what gets decided here.

[00:49:34] Speaker 05:
And that does, not quibbling with Your Honor's procedural suggestion, as I said, I think there's a lot of sense in it, but it does bring up some substantive points that I think are worth getting out there and on the table.

[00:49:47] Speaker 05:
One is, Your Honor asked whether these licenses were paid for at auction.

[00:49:51] Speaker 05:
The answer is no with respect to these licenses.

[00:49:54] Speaker 05:
But of course, the FCC's theory would apply in exactly the same way to licenses that were purchased at auction, often for billions of dollars.

[00:50:03] Speaker 05:
And there is, in fact, a major spectrum auction coming up in July at which the government hopes to raise many billions of dollars.

[00:50:12] Speaker 05:
And I would think that a ruling from this court that there's no proper interest in these licenses under any circumstances, which is what the United States is asking me to rule,

[00:50:21] Speaker 05:
would have a serious depressive effect on those options.

[00:50:26] Speaker 05:
And I do think it's significant that U.S.

[00:50:30] Speaker 05:
telecom is in here with its amicus brief telling this court that the major telecom carriers, the wireless carriers

[00:50:40] Speaker 05:
have operated under the assumption that, of course, the Constitution would protect them from the kind of behavior that DOD is alleged to have engaged in here.

[00:50:51] Speaker 05:
It's one thing, and I think it's really important as it goes to jurisdiction, it goes to mobile relay, and Sanders, and Prometheus, all these cases, to distinguish between a situation in which the FCC

[00:51:03] Speaker 05:
is exercising statutory or regulatory authority it has to modify a license or cancel a license.

[00:51:11] Speaker 05:
In Your Honor's Alpine case, of course, that was a license cancellation.

[00:51:14] Speaker 05:
The FCC had the authority to cancel the license.

[00:51:17] Speaker 05:
The statute said license cancellations have to be appealed to the DC Circuit.

[00:51:20] Speaker 05:
I think that disposed of the jurisdiction.

[00:51:22] Speaker 05:
But with respect to the merits and the existence of a property interest,

[00:51:26] Speaker 05:
The property interest, of course, is limited by the conditions of the license, and the FCC has reserved authority under the license to take certain steps.

[00:51:36] Speaker 05:
In Prometheus, it took a step of refusing particular transfers, had the authority to do it.

[00:51:41] Speaker 05:
So, from a takings perspective, I think the right way to think about that case, and I think mobile relay is the same thing, mobile relay was some

[00:51:51] Speaker 05:
reallocation of spectrum that made the spectrum less valuable.

[00:51:55] Speaker 05:
The FCC had retained authority under statutory authority and retained authority under the license to make those kinds of changes.

[00:52:02] Speaker 05:
And so the right way to think about those cases is that the FCC didn't do anything.

[00:52:06] Speaker 05:
The FCC didn't do anything that would take away a property interest that the license had conferred because the license was conditioned on the FCC's residual authority to take those steps.

[00:52:18] Speaker 05:
That's totally different from this case.

[00:52:20] Speaker 05:
In this case, the FCC has granted us this authority, and DOD has, in secret, usurped that.

[00:52:29] Speaker 01:
Why does the secrecy matter?

[00:52:31] Speaker 01:
I mean, I was, I guess, scratching my head maybe even a little bit with a negative scratching of my head about this story you tell about secretiveness

[00:52:44] Speaker 01:
of DOD.

[00:52:44] Speaker 01:
You can't mean that it was they were doing something unauthorized because then you lose your takings case.

[00:52:51] Speaker 01:
So is this just color or I don't see what tell me what the relevance to an element of the takings clause.

[00:53:01] Speaker 05:
If they were doing it openly we would certainly have a takings claim.

[00:53:07] Speaker 05:
I guess the reason it's relevant your honor is because we went through

[00:53:12] Speaker 05:
years of FCC proceedings.

[00:53:15] Speaker 01:
No, I know that you have all kinds of financial pain and you want to complain about it.

[00:53:20] Speaker 05:
No, I was going to say something different about the relevance.

[00:53:23] Speaker 05:
DOD participated in those proceedings.

[00:53:25] Speaker 05:
DOD raised all these interference concerns, as did NTIA.

[00:53:28] Speaker 05:
The FCC, the expert agency worked through them, said there's this residual problem here which can be easily solved and we're going to give you the authorization to use the spectrum and

[00:53:40] Speaker 05:
and ask you to solve that residual problem in cooperation with DOT.

[00:53:45] Speaker 05:
What we have learned since is that while all that was going on, DOT was actually using the spectrum.

[00:53:52] Speaker 01:
I know, but I'm still trying to understand what we should make of that.

[00:53:58] Speaker 01:
I'm not even sure to make something nefarious out of it.

[00:54:01] Speaker 01:
Maybe DOT has super secret military programs.

[00:54:04] Speaker 01:
It was not willing to tell the FCC about it.

[00:54:08] Speaker 01:
It was going to try to get

[00:54:09] Speaker 01:
practical relief from the FCC on a GPS theory.

[00:54:13] Speaker 01:
It got some.

[00:54:14] Speaker 01:
It got a condition that your client could not meet on its own.

[00:54:20] Speaker 01:
It needed cooperation.

[00:54:21] Speaker 01:
Maybe it needed more.

[00:54:22] Speaker 01:
And then it talked to the Armed Services Committee, with whom it was willing to share more information, and got even more relief.

[00:54:30] Speaker 01:
Never mind whether all of that is nefarious, what does it have to do with the Teakins analysis?

[00:54:35] Speaker 05:
Well, you know, I think you're honest right about that, but I guess what all of that goes to, then they may well have a need to keep it secret.

[00:54:43] Speaker 05:
It seems to me this is a classic situation in which the property owner is being forced to bear a cost that the public should bear.

[00:54:54] Speaker 05:
If it is indeed true that they need that spectrum for a secret program, we don't contest that.

[00:55:00] Speaker 05:
If it's true, fine.

[00:55:02] Speaker 05:
They need it for a secret program.

[00:55:04] Speaker 05:
We're not trying to block their use of it.

[00:55:05] Speaker 01:
Can I ask this question?

[00:55:06] Speaker 01:
So suppose that the

[00:55:10] Speaker 01:
But I'd like to try to disaggregate the fact that here the non-cooperator intruder, those are the two basic theories, right?

[00:55:20] Speaker 01:
Non-cooperator intruder.

[00:55:22] Speaker 01:
non-cooperation under a condition that the FCC wrote into the license that you, the licensee, have to secure a certain amount of cooperation which, you know, you're not in control of.

[00:55:35] Speaker 01:
Assume for a minute that it was not DOD, but it was, you know, the city of New York.

[00:55:43] Speaker 01:
How, if at all, does the analysis change?

[00:55:46] Speaker 01:
for takings purposes.

[00:55:48] Speaker 01:
It's the city of New York being a governmental entity, so it's presumably subject to the takings clause.

[00:55:53] Speaker 05:
Yeah, I don't think it does change.

[00:55:55] Speaker 05:
It's a governmental entity that's using spectrum that has been the exclusive authority to use of which has been given to us.

[00:56:04] Speaker 05:
So I don't think it makes a significant difference.

[00:56:09] Speaker 05:
It's a governmental entity that is spotting unlicensed spectrum.

[00:56:16] Speaker 05:
If I might, you know, I'm sorry, please.

[00:56:18] Speaker 01:
No, no, no.

[00:56:19] Speaker 01:
You're going to stay on topic.

[00:56:20] Speaker 01:
I'm going to change topic.

[00:56:21] Speaker 01:
So you stay on topic.

[00:56:22] Speaker 01:
No, I was going to change topic.

[00:56:23] Speaker 01:
So go ahead.

[00:56:25] Speaker 01:
Physical, physical taking.

[00:56:26] Speaker 01:
As I read your, this is count one, I think of your, of your complaint.

[00:56:31] Speaker 01:
consistent with at least my understanding of whatever this category of physical taking is, it's sort of narrow, but it doesn't depend on any actual interference with the property owner's interest.

[00:56:46] Speaker 01:
It's just that the property owner has a property interest including a right to exclude somebody else comes in and

[00:56:54] Speaker 01:
somebody else under state authority comes in and is intruding.

[00:56:59] Speaker 01:
And even if it's putting a cable box on the top of an apartment building, which doesn't in any way interfere, or sending union organizers onto a farm, no disturbance, that that is actually a physical taking.

[00:57:17] Speaker 01:
And the claim, the count, I think, does not in any way invoke

[00:57:24] Speaker 01:
interference with your own use, which you say because of the non-cooperation you weren't able to engage in anyway, what do I make of, is that in fact your claim, that you have a physical taking claim even if your use was not affected because there was some other independent cause?

[00:57:47] Speaker 05:
I guess I would, not fighting the hypothetical but reframe a little bit, it's

[00:57:54] Speaker 05:
I think we would have a physical taking claim even if we weren't yet using the spectrum, because the exclusive right to use it has been allocated to us.

[00:58:05] Speaker 05:
But I do think, as a practical matter, and this links up with the conditions point, which I would appreciate being able to spend a few minutes talking about.

[00:58:13] Speaker 01:
I'm going to ask an intervening question before you turn to that.

[00:58:18] Speaker 05:
But I do think,

[00:58:21] Speaker 05:
the what you know just take a step back we're talking about spectrum and as your honest questions of my friend the other side indicated like the whole idea behind the system is that you've got to allocate exclusive use except under these rare sharing circumstances which requires a lot of technical cooperation very rare the whole point is that you've got to allocate exclusive use because of the interference problem

[00:58:47] Speaker 05:
that.

[00:58:47] Speaker 04:
And so the reason that the physical taking... Well, but that wouldn't... There's de minimis use all the time.

[00:58:52] Speaker 04:
There's individuals that ham radio operators, whatever, that use portions without FCC licenses.

[00:59:00] Speaker 04:
You know what I mean?

[00:59:01] Speaker 05:
So it's not always absolutely... That's of course true, Your Honor, but that's very much at the margins, and this is very much at the core.

[00:59:08] Speaker 04:
Our allocation... Let me ask you a big picture question, which is

[00:59:13] Speaker 04:
To what extent, Mr. Yale was stressing the ability of the FCC to revoke or modify.

[00:59:21] Speaker 04:
You, throughout your brief, stressed the sort of historical understanding of people in the industry, that that does not happen based on serious investment-backed expectations.

[00:59:38] Speaker 04:
To what extent, when I'm trying to think about a property interest,

[00:59:42] Speaker 04:
Do I consider it from the perspective of what the law would allow to happen, i.e.

[00:59:49] Speaker 04:
the FCC could take it away from you tomorrow, modify it tomorrow, give a co-license to somebody else tomorrow versus the historical expectation

[00:59:59] Speaker 04:
that people in the industry have based on historical practice, like for example, that Huber treatise, which talks about how these things are pretty much automatically renewed.

[01:00:09] Speaker 04:
And if they weren't, a company wouldn't invest billions of dollars in building out the infrastructure to be able to supply the 5G, for example.

[01:00:17] Speaker 04:
So I guess my question to you is, from a legal standpoint,

[01:00:21] Speaker 04:
Which of those two perspectives, or must I consider both, what's your best idea on precedent to help me understand to what extent am I looking at the practical realities of how it seems to be working and how they affect people's expectation versus the statute, which might clearly say, you could lose this tomorrow, and we don't even have to tell you why.

[01:00:41] Speaker 04:
Do you understand the difference?

[01:00:43] Speaker 05:
I do.

[01:00:43] Speaker 05:
I think the answer is both.

[01:00:45] Speaker 05:
And I'd like to sort of address each side.

[01:00:48] Speaker 04:
No, I would like you to.

[01:00:49] Speaker 04:
And I'd like you to tell me the best cases that you think exist for helping me frame where I ought to come out on that.

[01:00:55] Speaker 05:
So first, with respect to statute and revocability, I do want to point out, because I think it's really important to the takings analysis, which is in turn important to the reasonable expectations part of it, that revocability is something that the FCC can only do as a matter of statute under very rare circumstances.

[01:01:16] Speaker 05:
Section 312 lays out the grounds for revocation.

[01:01:19] Speaker 05:
It's one type of serious misconduct after another.

[01:01:22] Speaker 05:
Those are the only grounds for revocation.

[01:01:24] Speaker 05:
They can't revoke it, at will.

[01:01:26] Speaker 05:
And in addition, in 312, there are significant.

[01:01:33] Speaker 04:
Can't they allow other people to coexist in the spectrum?

[01:01:36] Speaker 04:
I mean, is there a limitation on their ability to grant another license in the same band?

[01:01:41] Speaker 01:
That would be revoking the exclusivity, to use your word, which doesn't come with that.

[01:01:49] Speaker 05:
I guess I would.

[01:01:52] Speaker 05:
I guess I would push back a little bit.

[01:01:54] Speaker 05:
I don't think it's revoking the exclusivity.

[01:01:56] Speaker 05:
I think it's modifying the exclusivity to let one other person share any exclusivity.

[01:02:01] Speaker 05:
It's still exclusive.

[01:02:02] Speaker 05:
There's still anybody who doesn't have a license is going to be an unlawful user of it.

[01:02:07] Speaker 05:
And so the fact that you have co-tenants in a leased apartment, they would both have a takings claim with the apartment taken.

[01:02:16] Speaker 05:
I think it's in that nature.

[01:02:19] Speaker 05:
And again, Your Honor,

[01:02:20] Speaker 05:
I would respectfully caution that the idea that the spectrum can be that the FCC has the authority to allow sharing the spectrum doesn't seem right to me that that should drive the analysis here because that is a rare thing that happens at the margins.

[01:02:35] Speaker 04:
How do we know that?

[01:02:37] Speaker 04:
How am I supposed to know that?

[01:02:39] Speaker 04:
It's not in the briefs.

[01:02:40] Speaker 04:
It's not in the record.

[01:02:43] Speaker 05:
I understand.

[01:02:45] Speaker 05:
And we have done our best to respond to the arguments that the government has made, to defend the trial court's ruling.

[01:02:54] Speaker 04:
Oh, no.

[01:02:54] Speaker 04:
Look, to your credit, you were like, I mean, almost every other word in your brief was exclusivity.

[01:02:58] Speaker 04:
And the government gave it not a passing thought.

[01:03:00] Speaker 04:
But it's all I spent the last several days on.

[01:03:02] Speaker 05:
I appreciate that.

[01:03:04] Speaker 05:
So as I said, we don't have any objection to further consideration in the trial court of this issue of exclusivity and any other issues the court thinks are important.

[01:03:13] Speaker 01:
Can I come back?

[01:03:14] Speaker 05:
Yes, I know you have a follow-up question, of course.

[01:03:16] Speaker 01:
So on physical takings.

[01:03:19] Speaker 01:
So the entire source of the assertive property right here is the April 2020

[01:03:30] Speaker 01:
order against the background of Title 47.

[01:03:32] Speaker 01:
One way to think about Title 47, expressed in Sanders and Turner and others, is that it is concerned about interfering uses.

[01:03:50] Speaker 01:
That's the point of the regulation.

[01:03:53] Speaker 01:
All the spectrum is ours, and we want to control who gets to use it.

[01:03:57] Speaker 01:
That's what I mean by regulation.

[01:04:01] Speaker 01:
That is a narrower notion than the notion that gives rise to physical takings when there is no actual interfering use at all.

[01:04:15] Speaker 01:
So maybe that makes physical takings doctrine a bad fit for this particular kind of, for our right deriving, this right that you say derives from Title 47 as implemented in an order.

[01:04:32] Speaker 01:
So that, yeah.

[01:04:34] Speaker 01:
Right.

[01:04:35] Speaker 01:
Leaving other kinds of takings claims, which are obviously harder to establish.

[01:04:43] Speaker 05:
So.

[01:04:46] Speaker 05:
First point, the government does not contest that if we have established a property interest, that we have a regulatory takings claim.

[01:04:53] Speaker 05:
And the challenge to that, the only challenge is physical takings.

[01:04:57] Speaker 01:
And even an extreme Lucas claim, they haven't disproved that either.

[01:05:03] Speaker 05:
But I do think it is, physical takings is apt here, Your Honor.

[01:05:07] Speaker 05:
precisely because the electromagnetic spectrum is a physical thing in the world.

[01:05:12] Speaker 05:
And what the FCC allocates is exclusive use of a particular physical thing in the world.

[01:05:19] Speaker 05:
And the unlawful occupation of that licensed allocated spectrum

[01:05:27] Speaker 05:
creates the very interference problem that the regime is designed to protect against.

[01:05:34] Speaker 05:
And so I do think that the physical takings theory actually fits this quite well.

[01:05:39] Speaker 01:
Had there been physical takings claims within the Cosby-based overflight situation where the plane

[01:05:52] Speaker 01:
isn't physically going through the landowner's airspace, but rather going nearby and sound waves are coming across and disturbing the cattle.

[01:06:04] Speaker 05:
I should know the answer to that.

[01:06:05] Speaker 05:
I do not.

[01:06:06] Speaker 04:
You didn't entirely answer my question.

[01:06:09] Speaker 04:
Maybe my question was too long.

[01:06:11] Speaker 04:
But do you have any cases you'd like to direct me to that you think would help inform that question that I had in my brain, which was as between sort of a

[01:06:21] Speaker 04:
Ability of the FCC to revoke change or whatever you answer you then clarified all they can't just revoke for no reason But they could they could add people for no reason theoretically, I think and so between that and then on the other hand I said is investment backed expectations that parties have like that Huber treatise for example do you have any cases that you think inform a

[01:06:45] Speaker 04:
how I have to take all of that into account or how to think about it or which one gets more weight in a property bundle stick analysis or whatever.

[01:06:53] Speaker 04:
Is there anything you'd like to point me to that you think would help me?

[01:06:58] Speaker 05:
Yeah.

[01:07:00] Speaker 05:
I think the right way to think about it is that the point about

[01:07:07] Speaker 05:
investment-backed expectations, which I think the US telecom brief amply demonstrates the existence of here, and which I also think important to consider in thinking about the property right, because while this preventing interference was the genesis of this whole regulatory regime,

[01:07:33] Speaker 05:
It is equally true, has been true for a very long time, and I believe this is part of the foundation for the point Hubert Treatise is making, is that

[01:07:43] Speaker 05:
The point of granting this exclusivity and protecting against unauthorized use is to create a situation in which the licensee has the incentive to make the massive investments that are necessary to ensure that this spectrum serves the public interest.

[01:08:02] Speaker 05:
And that's the critical thing here.

[01:08:05] Speaker 05:
That is where the reasonable investment bank expectations come from.

[01:08:10] Speaker 05:
That is a belief.

[01:08:11] Speaker 05:
That's a statutory.

[01:08:12] Speaker 05:
the statutory exclusivity, the relative freedom of transferability, the strict limits on revocability, creates something.

[01:08:23] Speaker 05:
But you didn't point me to any cases.

[01:08:25] Speaker 01:
Is there any law?

[01:08:25] Speaker 01:
OK.

[01:08:25] Speaker 01:
Oh, you're going to get to a case?

[01:08:26] Speaker 01:
Got it.

[01:08:27] Speaker 05:
Go ahead.

[01:08:27] Speaker 05:
So I think one case to look at for this, though it's not going to discuss the issue in exactly these terms, is the United Nuclear case from this court, in that that was a case in which

[01:08:42] Speaker 05:
an entity bid for and obtained mining rights.

[01:08:46] Speaker 05:
The mining rights were on tribal land.

[01:08:49] Speaker 05:
They obtained a lease from the tribe.

[01:08:52] Speaker 05:
They had to get a mining plan approved before they could actually go in and get the minerals that they were seeking to mine.

[01:09:01] Speaker 01:
Approved by the Secretary.

[01:09:03] Speaker 05:
By the Secretary of the Interior.

[01:09:04] Speaker 05:
The Secretary of the Interior arbitrarily withheld

[01:09:10] Speaker 05:
the grant of the approval of the mining plan.

[01:09:17] Speaker 01:
It wasn't arbitrary.

[01:09:19] Speaker 01:
He just wanted to defer to the Navajo tribal council.

[01:09:22] Speaker 05:
Yes, but I think that that was so far afield from the kinds of considerations that the secretary had previously applied in deciding whether... Right, not just not arbitrary, just a big shift.

[01:09:35] Speaker 05:
Well, I think arguably an arbitrary one, but at a minimum, an extremely unexpected shift.

[01:09:41] Speaker 05:
And the mining company had invested millions of dollars to prepare, to actually engage in the mining.

[01:09:47] Speaker 05:
And as I read this, of course, Holden was essentially saying, look, in this situation, the mining company had an expectation.

[01:09:56] Speaker 05:
It had these rights.

[01:09:57] Speaker 05:
It invested in these rights.

[01:10:00] Speaker 05:
It had an expectation.

[01:10:01] Speaker 05:
that it would get approval for its mining plan, because its mining plan conformed in the respects that it previously led to approval by the Secretary of the Interior.

[01:10:14] Speaker 05:
That approval wasn't forthcoming.

[01:10:16] Speaker 05:
It made the mining rights worth nothing.

[01:10:19] Speaker 05:
That was a taking.

[01:10:20] Speaker 04:
Let me ask you a strategic question, because you don't just want to win.

[01:10:24] Speaker 04:
You need a win that's going to hold up, because this is not the end of the day for this case.

[01:10:31] Speaker 04:
what if in my brain right now I was thinking of two possible options and one option was resolve everything except for this property interest question send it back to a very able judge at the Court of Federal Claims to further develop you know the the arguments on this point in light of a lot of conflicting information that I've gotten at this argument and leave to that judge to sort of do over on the property interest question or

[01:11:00] Speaker 04:
What if I decide all those other issues and I say, based on the arguments that were made today by the government, for example, about exclusivity and about you having a FAA enforcement action that is, even though I have serious doubts that that's all accurate, but the government did make those arguments, what if I say the government has not established that

[01:11:26] Speaker 04:
the Court of Federal Claims got the property interest wrong in light of all the statements at oral argument today.

[01:11:30] Speaker 04:
However, we have questions about whether that's accurate.

[01:11:35] Speaker 04:
And we encourage, since this is only at the 12b stage, the Court of Federal Claims to continue looking at this property interest case as the record develops.

[01:11:43] Speaker 05:
Well, we'd certainly prefer the latter, Your Honor.

[01:11:47] Speaker 05:
But I understand the point about the need for a fuller elaboration.

[01:11:52] Speaker 05:
I think it's part of the reason we suggested to the court that a regulatory review, given all the fact specificity and context here, wasn't the wisest course.

[01:12:02] Speaker 05:
But here we are.

[01:12:04] Speaker 05:
And so I think both of those would

[01:12:07] Speaker 05:
quite sensibly reflect the dilemma that Your Honor is identifying, but I think the latter would more fairly resolve the case, given where it is right now.

[01:12:17] Speaker 05:
We certainly don't have any

[01:12:21] Speaker 05:
concern about the Court of Federal Claims giving the property interest question an additional look based on new arguments if the government's able to come up with them.

[01:12:32] Speaker 05:
I would ask that, you know, I would hope, not technically before the Court, that the same thing would be true about our legislative takings claim.

[01:12:42] Speaker 05:
That if the Court's going to take a further look, take a further look at everything, but at least with respect to the claims that are before this Court now.

[01:12:49] Speaker 05:
That certainly would be a sensible resolution, I think.

[01:12:52] Speaker 03:
Any further questions?

[01:12:54] Speaker 05:
I know I've been up here forever, but there is... Oh, you really want to talk about preconditions, and we never... There is one point I want to make about that.

[01:12:59] Speaker 03:
Is that the one?

[01:13:00] Speaker 03:
Is it preconditions?

[01:13:00] Speaker 03:
Yes, yeah.

[01:13:01] Speaker 05:
Okay, go ahead.

[01:13:02] Speaker 05:
So, I'm going to add to the confusion, and I apologize, Chief Judge Moore, for adding to the confusion, but I just want to make sure... And our briefs were not clear about this, and I apologize for that, too.

[01:13:13] Speaker 05:
But I think there's an important point here with respect to these conditions.

[01:13:18] Speaker 05:
And it's reflected in paragraph 138 of the FCC order.

[01:13:25] Speaker 05:
That's a paragraph that addresses commencement of operations.

[01:13:30] Speaker 05:
And this paragraph.

[01:13:32] Speaker 03:
Is this the immediate question?

[01:13:33] Speaker 03:
Are you going to be addressing the immediacy?

[01:13:37] Speaker 05:
Well, the key point I want to make, and I can go through the language, is that... It's paragraph what?

[01:13:42] Speaker 05:
138.

[01:13:43] Speaker 05:
Thank you.

[01:13:48] Speaker 05:
The conditions that cannot be fulfilled because of DOD non-cooperation apply only to a subset of the licensed spectrum.

[01:14:02] Speaker 05:
This

[01:14:03] Speaker 05:
Right, certain bans.

[01:14:05] Speaker 05:
Yes.

[01:14:06] Speaker 05:
So what this provision provides is that there shall be a prohibition of at least 90 days from release of the order, generally, using this outcome.

[01:14:18] Speaker 05:
That's to conform with 43 USC 343, 47 USC 343.

[01:14:24] Speaker 04:
How does what you're explaining now impact the arguments you've made?

[01:14:27] Speaker 05:
Well, because to the extent the court

[01:14:32] Speaker 05:
It's inclined to agree with the government that there is no property interest here because all of the conditions haven't been fulfilled because DOD hasn't cooperated.

[01:14:40] Speaker 05:
I want to point out that the DOD cooperation limits use only of a subset of the licensed spectrum, only the operations in the 1526 to 1536 band, which is a subset of what we've been licensed to do.

[01:14:57] Speaker 04:
So you're saying that you're licensed for other portions of the L-band beyond just that particular range, and DOD's use of those other portions has no string, or your use of those other portions have no strings attached?

[01:15:10] Speaker 05:
Well, a somewhat modification of that, that I'm going to have to mix metaphors.

[01:15:15] Speaker 05:
I don't know how to do it.

[01:15:17] Speaker 05:
We've satisfied all those conditions.

[01:15:18] Speaker 05:
So if there were strings attached, they're no longer attached.

[01:15:21] Speaker 05:
The strings that still attach are to the subset.

[01:15:23] Speaker 04:
Are you using them, or why aren't you using it?

[01:15:25] Speaker 05:
Because we know we can't use it, because if we did, we would run right into the DOD's use of the spectrum.

[01:15:33] Speaker 04:
What are you talking about?

[01:15:34] Speaker 05:
That doesn't make technological sense to me.

[01:15:37] Speaker 05:
I'm afraid it does, Your Honor, because the DOD is using all of the spectrum, not just the portion that the FCC has identified as in need of further conditioning.

[01:15:48] Speaker 05:
It's using all of the spectrum.

[01:15:50] Speaker 05:
And if we were to use the spectrum, it wouldn't work, because the DOD is using it, and there would be so much interference that we wouldn't be able to provide service.

[01:15:57] Speaker 05:
And we're also trying to be good citizens based on our understanding of what's actually going on with respect to that spectrum.

[01:16:03] Speaker 05:
So I do think that it's important to consider here on thinking about the conditions.

[01:16:09] Speaker 01:
Do you have any further information about when you satisfied the other conditions, the ones outside?

[01:16:17] Speaker 05:
I believe Your Honor that we submitted a letter to the FCC

[01:16:20] Speaker 05:
after 90 days saying we satisfied all conditions we can satisfy and even with respect to DOD we have taken every step that the order requires us to take with respect to DOD.

[01:16:30] Speaker 04:
So you're saying for the spectrums not articulated in paragraph 138 you are fully prepared to be able to utilize that portion which the FCC has authorized you to do and the only reason you can't is because DOD is squatting on it.

[01:16:42] Speaker 05:
Correct.

[01:16:43] Speaker 05:
We've alleged that and you know we would prove that at trial.

[01:16:46] Speaker 01:
And just to be clear, you think that if you told the FCC that the FCC doesn't have authority to tell DoD to stop.

[01:17:00] Speaker 05:
Correct.

[01:17:01] Speaker 05:
And I think that's clear from the government's brief because, and I apologize, it's a little disparaging, but the government said, well, we should go back to the FCC and have them ask DOD to play nice.

[01:17:10] Speaker 05:
I mean, that's essentially what they said.

[01:17:11] Speaker 05:
We should seek as a remedy.

[01:17:13] Speaker 05:
They obviously don't have authority to order DOD to do anything.

[01:17:17] Speaker 01:
Right.

[01:17:17] Speaker 01:
And why does the FCC not have authority to tell a squatter to stop?

[01:17:26] Speaker 05:
Well, I'm sorry.

[01:17:30] Speaker 01:
The government could be, for all kinds of reasons, trying to word very carefully what it's wording.

[01:17:36] Speaker 01:
I guess I want your view about the actual, what you think the FCC has authority to do or not do, to do with respect to the DOD action, the squatting that you allege.

[01:17:48] Speaker 05:
I want to make a point about conditions.

[01:17:49] Speaker 05:
I don't answer about squatting.

[01:17:50] Speaker 05:
I think they can encourage DOD to cooperate to satisfy the conditions, but they can't order them to do so.

[01:17:58] Speaker 05:
That's why the government said what it said about asking to play nice, essentially.

[01:18:01] Speaker 05:
With respect to squatting, I can't think of what authority they would have.

[01:18:07] Speaker 05:
As my friend on the other side said, well, DOD is not a person within the meaning of the statute.

[01:18:12] Speaker 05:
You can't be sued.

[01:18:14] Speaker 05:
I'm not able to conceive of any authority the FCC would be able to invoke to forbid the DOD from conducting this program, which although it's a secret program, presumably they're acting pursuant to some kind of statutory authorization.

[01:18:28] Speaker 01:
Well, your position is they are.

[01:18:30] Speaker 05:
Yes.

[01:18:30] Speaker 05:
Right.

[01:18:30] Speaker 05:
Of course.

[01:18:31] Speaker 05:
Yes.

[01:18:32] Speaker 05:
Thank you.

[01:18:33] Speaker 05:
I very much appreciate all the attention to the case.

[01:18:35] Speaker 05:
Thank you.

[01:18:36] Speaker 05:
All right.

[01:18:37] Speaker 00:
Beautiful, Mr. Yale.

[01:18:44] Speaker 06:
I guess just a couple of points.

[01:18:47] Speaker 06:
I mean, it seems like there are additional questions on some of the statutory authority.

[01:18:52] Speaker 06:
One other option I guess I would just submit would be to submit a supplemental brief on those particular points.

[01:19:01] Speaker 06:
I know there is a lot of various different issues.

[01:19:06] Speaker 06:
On sort of the preconditions, I mean, the trial court held, I mean, we made the argument that Legato has never submitted that it's met those, the commission, those conditions, this program.

[01:19:20] Speaker 06:
The commissions inherit in the license.

[01:19:23] Speaker 06:
That was never disputed.

[01:19:25] Speaker 06:
I mean, the trial court pointed out that Legato never said they actually met those conditions, so I was uncontested at the trial court.

[01:19:32] Speaker 06:
We think that that's a barrier to moving forward with the license because the FCC, who was looking into this interference issue, said that that program had to be set up before operations commence, before there is actually use.

[01:19:52] Speaker 06:
And the property interest, if there is one, could only possibly be the use of the spectrum.

[01:19:57] Speaker 04:
Do you have any thoughts about Judge Toronto's final questions to Mr. Reilly about what the FCC could do if DOD was legitimately squatting?

[01:20:06] Speaker 04:
Like if they had met the preconditions, they had notified the FCC we've met the preconditions, we want to get on the L-band, but we can't because DOD is on there.

[01:20:17] Speaker 04:
What if, and they notify FCC, what if anything could the FCC do about that vis-a-vis DOD?

[01:20:23] Speaker 06:
Well, I think the FCC could work with NTIA and determine, well, does DOD actually need this?

[01:20:31] Speaker 06:
Do they need to get a license?

[01:20:32] Speaker 06:
Does the spectrum need to be reallocated?

[01:20:34] Speaker 04:
If they work with NTIA, at least the allegations in the complaint are DOD does not have NTIA authorization to be using the spectrum.

[01:20:42] Speaker 04:
So why would the FCC need to work with NTIA if NTIA is not considered an awarded use?

[01:20:48] Speaker 06:
NTIA is essentially like the front agency for dealing with the FCC on these spectrum issues.

[01:20:55] Speaker 06:
They could also, DOD has participated in this proceeding.

[01:20:59] Speaker 06:
They could talk to DOD directly as well.

[01:21:05] Speaker 06:
Sort of a couple of points on

[01:21:07] Speaker 06:
Um, just the investment backed expectations.

[01:21:10] Speaker 06:
I mean, I think that's black letter wall that that comes in at sort of step to regulatory taking spin.

[01:21:18] Speaker 06:
I mean, that's right.

[01:21:19] Speaker 06:
That's right from Penn central that, that particular concept.

[01:21:22] Speaker 04:
But what if it, how, if at all though, does it influence whether somebody has a property interest?

[01:21:26] Speaker 04:
I mean, you, do you just, is, is the evaluation purely objective in terms of the license and the terms?

[01:21:37] Speaker 04:
or do I factor in as well, for example, that Uber automatically renewed stuff, right?

[01:21:45] Speaker 04:
That's sort of like if the whole industry has an expectation that they have this license for a long period of time and that's why they're

[01:21:54] Speaker 04:
Does that matter in assessing whether there really is a property interest at heart?

[01:21:58] Speaker 06:
Sure, Your Honor.

[01:21:59] Speaker 06:
Our response would be, it's a legal objective test.

[01:22:01] Speaker 06:
So in Conte and all of these cases, the property interest has to come from a, it doesn't come from the Fifth Amendment.

[01:22:11] Speaker 06:
It doesn't come from people's thoughts or expectations.

[01:22:14] Speaker 06:
It comes from an independent source of law.

[01:22:17] Speaker 06:
Here it would be from the Communications Act primarily.

[01:22:21] Speaker 06:
and looking through those specific provisions.

[01:22:23] Speaker 04:
So if there's not a provision that specifically... So if there isn't a provision that, for example, suggests renewal is automatic, then I should just disregard, even if the Huber Treatise had a survey that said every single one of these in history has been renewed.

[01:22:38] Speaker 04:
And that that's always renewed because people invest $5 billion in it, and if it wasn't renewed, no one would do it.

[01:22:43] Speaker 04:
So if there were that kind of evidence, which I know that's not exactly the evidence in this case, that would be irrelevant to whether there's actually a property interest as long as the statute said it didn't have to be necessarily renewed.

[01:22:54] Speaker 04:
That's what I need to go with.

[01:22:56] Speaker 04:
I'm just trying to understand.

[01:22:58] Speaker 06:
The source of the property interest is important, and it has to come from an independent source.

[01:23:04] Speaker 06:
So here, it has to come from Congress.

[01:23:08] Speaker 06:
It has to come from the statute.

[01:23:10] Speaker 06:
And so it may be the case.

[01:23:13] Speaker 04:
So even a reasonable expectation that you're being awarded a property interest based on past performance of agencies

[01:23:20] Speaker 04:
is irrelevant, you think, to whether a property interest was actually awarded?

[01:23:24] Speaker 06:
Correct, Your Honor, because you have to look specifically at the statutory text.

[01:23:30] Speaker 06:
And again, if you demonstrate a property interest, investment-backed expectations comes in at step two.

[01:23:37] Speaker 06:
I mean, that's one of the three prongs.

[01:23:38] Speaker 06:
And so you can look at that.

[01:23:39] Speaker 06:
And that might go towards whether or not there's a regulatory taking, but it can't go towards whether or not there's a property interest.

[01:23:48] Speaker 04:
If there are.

[01:23:50] Speaker 04:
OK, thank you.

[01:23:51] Speaker 04:
I think, no, you don't get to talk anymore.

[01:23:53] Speaker 05:
I just want to add here.

[01:23:54] Speaker 05:
What?

[01:23:54] Speaker 05:
No, no.

[01:23:55] Speaker 05:
I want to correct an error that I made.

[01:23:57] Speaker 05:
OK.

[01:23:58] Speaker 04:
I want to correct an error you made.

[01:23:59] Speaker 04:
I want to correct an error.

[01:24:00] Speaker 04:
And then he gets to talk after you.

[01:24:01] Speaker 05:
OK, thank you, Your Honor.

[01:24:03] Speaker 05:
I appreciate the graciousness of letting me say this.

[01:24:06] Speaker 05:
When I said the private right of action was 402B, it's 401B.

[01:24:10] Speaker 05:
So I misremembered the statutory site, but there is a private right of action.

[01:24:13] Speaker 04:
Anything you want to say in response to that?

[01:24:14] Speaker 04:
Are you good?

[01:24:15] Speaker 06:
I think at this point, I'm pretty good.

[01:24:18] Speaker 04:
OK, thank you.

[01:24:19] Speaker 04:
Thank the council for taking their submission.