                UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT
                                         

No. 92-2225

              ACTION FOR CHILDREN'S TELEVISION,

                         Petitioner,

                              v.

          FEDERAL COMMUNICATIONS COMMISSION, ET AL.,

                         Respondents.

                                         

               COALITION ON SMOKING OR HEALTH,

                         Intervenor.
                                         

              ON PETITION FOR REVIEW OF AN ORDER
           OF THE FEDERAL COMMUNICATIONS COMMISSION

                                         

                            Before

                    Boudin, Circuit Judge,
                                         
               Campbell, Senior Circuit Judge,
                                             
                  and Stahl, Circuit Judge.
                                          

                                         

Sharon  L. Webber with  whom Angela  J. Campbell  and Henry Geller
                                                                  
were on brief for petitioner and intervenor.
C.  Grey  Pash, Jr.,  Counsel, Federal  Communications Commission,
                  
with whom Renee Licht,  Acting General Counsel, Federal Communications
                 
Commission,  Daniel M. Armstrong,  Associate General  Counsel, Federal
                            
Communications  Commission,  Robert  B.  Nicholson,  Attorney,  United
                                              
States Department of  Justice, and Marion L.  Jetton, Attorney, United
                                                
States Department of Justice, were on brief for respondents.

                                         

                        July 22, 1993
                                         

     BOUDIN, Circuit Judge.  Action for Children's Television
                          

("ACT") petitions for  review of the decision of  the Federal

Communications Commission denying ACT's request that the  FCC

take action to combat "hidden commercials" on television that

promote smoking.  We deny the petition. 

     In  1966, acting on a private  citizen petition, the FCC

required broadcasters, under the  "fairness doctrine," to air

anti-smoking  messages  in  response  to   advertisements  by

cigarette companies.  See Banzhaf v. FCC, 405 F.2d 1082 (D.C.
                                        

Cir. 1968), cert.  denied, 396  U.S. 842 (1969).1   In  1969,
                         

Congress enacted the  Cigarette Labeling and  Advertising Act

("the  Cigarette Act"),  15  U.S.C.     1331  et seq.,  which
                                                    

pertinently provided that "it  shall be unlawful to advertise

cigarettes  or little  cigars over  any medium  of electronic

communication  subject  to the  jurisdiction  of  the Federal

Communications Commission."  15 U.S.C.   1335.  

     In 1970,  an organization  called Action on  Smoking and

Health ("ASH") petitioned the  FCC to require broadcasters to

continue   to  air   anti-smoking   messages,   despite   the

prohibition  contained in  the Cigarette  Act, partly  on the

ground  that   the  cigarette  industry  was   using  "hidden

                    

     1The   fairness  doctrine  was  an  FCC  rule  requiring
broadcasters  to  air  contrasting views  when  controversial
issues were addressed.  See Red Lion Broadcasting Co. v. FCC,
                                                            
395  U.S.  367  (1968).    The  rule  was  abandoned  by  the
Commission in  August 1987.   See Syracuse  Peace Council  v.
                                                             
FCC,  867 F.2d 654 (D.C.  Cir. 1989), cert.  denied, 493 U.S.
                                                   
1019 (1990).  

                             -2-

commercials" to circumvent  the Act.   The quoted phrase,  as

ACT  uses  it, refers  to  cigarette  company sponsorship  of

sporting events during which the cigarette brand name or logo

is displayed on signs or banners, which in turn are broadcast

during  televised  coverage  of  these events,  such  as  the

Marlboro  Grand Prix auto race and  the Virginia Slims tennis

tournament.  The FCC denied the ASH request.  The agency said

that  it found  no  hard  evidence  of  the  use  of  "hidden

commercials"  by the cigarette  industry, and  concluded that

"if such  abuses do occur .  . . , the  appropriate action in

such an  eventuality would  be to secure  full and  effective

compliance with  the 1969 law,  and not  to deal  with it  by

offsetting   anti-smoking   messages."       Formulation   of
                                                             

Appropriate Further Regulatory Policies  Concerning Cigarette
                                                             

Advertising and  Antismoking Presentations, 27  F.C.C.2d 453,
                                          

458 n.5 (1970). 

     In 1990, ACT filed with the FCC the petition at issue in

this  case.    ACT claimed  that  there  is  now indisputable

evidence  that   the  cigarette  industry  is  using  "hidden

commercials."   According to  the petition the  Department of

Justice has never initiated any enforcement proceedings under

the  Cigarette Act  and therefore  appears to  have concluded

that hidden commercials do  not violate the statute, creating

the need  for FCC action.   ACT requested the FCC  to issue a

"declaratory  ruling" requiring licensees to air anti-smoking

                             -3-

messages to offset the harm caused by the hidden advertising.

Because the fairness doctrine was no longer in existence, ACT

relied on  the "public  interest standard"  set forth  in the

Communications  Act  of 1934  to  govern  the regulation  and

licensing of broadcasters.   47 U.S.C.   303; see also id.   
                                                         

307(a), 309(a), 310(d). 

     ACT's petition  was denied  by the Commission  in August

1992.  In re Petition For Declaratory  Relief Regarding Anti-
                                                             

Smoking Messages Filed by Action for Children's Television, 7
                                                          

F.C.C.R.  5466 (1992).  The FCC said that this issue had been

raised and resolved  in the 1970 proceedings brought  by ASH,

and  that ACT  had  presented nothing  new.   The  Commission

stated that it "continue[d] to believe that the Cigarette Act

itself is  properly looked  to as  defining both  the conduct

that is prohibited  [with respect  to cigarette  advertising]

and the  remedies that are available  to redress violations."

Id.  It is undisputed that the Department of Justice, not the
  

FCC, is exclusively charged  with enforcing the provisions of

the Cigarette Act.  See 15 U.S.C.   1339.   ACT now petitions
                       

this court for review.2 

                    

     2It  appears that  ACT, which  had been  a Massachusetts
corporation, was formally dissolved  as of December 31, 1992,
after its petition was filed  in this court.  By  letter, the
FCC says that ACT's  dissolution "raises the question whether
it  continues to be a  party aggrieved" by  the FCC's action.
In response ACT  points out that  under Massachusetts law,  a
dissolved corporation  "shall nevertheless be continued  as a
body corporate  for three years  . .   . for  the purpose  of
prosecuting or defending suits by or against it."  Mass. G.L.

                             -4-

     An  agency's decision  not to  undertake a  new project,
                               

regulation, or enforcement action  has been treated by courts

as  a somewhat  unusual  animal in  the  menagerie of  agency

actions  that may  be  presented  for  judicial review.    Of

course, where there  is a statutory obligation  on the agency

to take  a relatively specific  action, a court  might easily

conclude that it  had both a standard to  apply to a shirking

agency  and  a duty  to enforce  the  standard.   More often,

agencies  make  decisions  not  to  act  under  rather  broad

statutory standards  or, as is typically  true of enforcement

actions, under a general mandate to enforce the law. 

     In such cases courts have been reluctant to second-guess

agencies  when   they  decline  to  act.     In  some  areas,

paralleling  prosecutorial decisions not  to seek indictment,

courts are  reluctant to intervene  at all;  in others,  they

have  recognized  great  discretion  in the  agency  when  it

declines to act and required only minimal justification.  See
                                                             

Heckler v.  Chaney, 470  U.S. 821  (1985);  United Church  of
                                                             

Christ v. FCC, 911 F.2d 813 (D.C. Cir. 1990).  As the circuit
             

most  experienced  in these  matters  said  in another  case,

                    

ch. 155,   51; see also City Communications, Inc. v. Detroit,
                                                            
888  F.2d 1081,  1086-87 (6th  Cir. 1989)  (looking to  state
corporate    law   to   determine   standing   of   dissolved
corporation).    Given the  statute  coupled  with the  FCC's
posture on the issue, we think that denial of the petition on
the merits is the proper course.

                             -5-

Natural  Resources Defense  Council,  Inc. v.  SEC, 606  F.2d
                                                  

1031, 1046 (D.C. Cir. 1979) (citations omitted):

     An agency's discretionary  decision not to regulate
                                            
     a  given activity  is  inevitably  based, in  large
     measure, on factors  not inherently susceptible  to
     judicial  resolution  -- e.g.,  internal management
                                  
     considerations   as   to   budget  and   personnel;
     evaluations  of its  own  competence;  weighing  of
     competing   policies   within  a   broad  statutory
     framework.  

     This court  has made  similar  observations, see,  e.g.,
                                                            

Ward v. Skinner,  943 F.2d 157, 161 (1st Cir.  1991), and the
               

standard of  deference thus adopted  controls this case.   We

need not conclude that the FCC's refusal to undertake a rule-

making  is  automatically  immune  from judicial  review,  no

matter  how  egregious  the  occasion or  how  troubling  the

agency's explanation.   Here, the FCC's  explanation is quite

rational.   In sum, the agency ruled that Congress provided a

general  ban on television cigarette advertising as part of a

"comprehensive" federal  program, 15  U.S.C.   1331,  and, if

the ban  is being  infringed  at the  margins, Department  of

Justice  enforcement is  the  preferable course.   Given  the

FCC's broad  discretion  as  to  how to  deploy  its  limited

resources, this is an adequate explanation.

     ACT  says that the  explanation is faulty  to the extent

that  hidden commercials are a "loophole" in the law and thus

                             -6-

beyond  the reach  of the  Department of  Justice.3   Even if

this  were  so,   it  would  not  make  the   FCC's  position

unreasonable.  Instead, it could rationally leave to Congress

the  task   of  adjusting  the  balance  it   struck  in  its

"comprehensive" statute.  Plugging  loopholes might also be a
                                                        

rational goal for  the agency  (we have no  occasion here  to

consider  preemption arguments);  but  agency  resources  are

limited and selecting which rational goals to  pursue is part

of the agency's function.

     There is  even less to ACT's  alternative criticism that

the  FCC's decision  in this  case  is inconsistent  with its

reasoning in its  earlier decision declining to  act on ASH's

petition.   ACT  argues that  the FCC  there declined  to act

because it found  a lack of evidence  that hidden commercials

were a significant problem and, ACT says, it has now provided

the missing evidence.   But the FCC went on to say in the ASH
                                                             

case  that, if the problem proved real, the solution would be

"to secure full and  effective compliance with the 1969  law,

and not to deal with it by offsetting anti-smoking messages."

27 F.C.C.2d at 458 n.5.  There is no inconsistency.

     The petition for review is denied.
                                      

                    

     3There is in fact some indication that the Department of
Justice has  taken the  view that hidden  commercials violate
the  statute  and  has  written to  cigarette  companies  and
broadcasters  warning them of  its position.   Whether or not
this is the Department's present view is not material.

                             -7-
