DC Circuit Reverses Dismissal of VTEL Claims of AWS-3 Fraud

Vermont National Telephone claims of fraud by big winners in the 2015 AWS-3 auction are heading back to the U.S. District Court for the District of Columbia as the U.S. Court of Appeals for the D.C. Circuit on Tuesday reversed the lower court's dismissal of VTEL's Fair Claims Act suit. The FCC doesn't have the authority to assess financial civil penalties during licensing proceedings, so its evaluation of Northstar Wireless and SNR Wireless long-form applications and of petitions to deny them doesn't count as an "administrative civil money penalty proceeding" under the federal False Claims Act, the D.C. Circuit said (docket 21-7039). The act doesn't allow actions based on allegations or transactions subject to a civil suit or an administrative civil money penalty proceeding where the government is a party. The Circuit Court said it disagreed with the lower court finding that VTEL hadn't plausibly alleged any false claims that could influence Northstar and SNR eligibility for bidding credits in the auction. They said there are perhaps other reasonable justifications for SNR and Northstar actions in the auction, but VTEL allegations of undisclosed agreements to act on behalf of Dish Network and transfer AWS-3 spectrum rights to Dish are plausible. "We are pleased with the D.C. Circuit’s decision, and Vermont National Telephone Company looks forward to pursuing its claims against DISH and other defendants in federal district court," VTEL outside counsel emailed. Northstar, SNR and Dish outside counsel didn't comment. Deciding the appeal were D.C. Circuit Judges David Tatel, Judith Rogers and Cornelia PIllard, with Tatel penning the decision. Oral argument was March 3. The Dish designated entities are separately challenging the FCC's 2020 rejection of the AWS-3 bidding credits -- the second time the agency did so (see 2011230062).