                            UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT


                            No. 06-2098



CENTENNIAL BROADCASTING, LLC,

                                               Plaintiff - Appellee,

          versus


GARY   E.    BURNS;    3    DAUGHTERS     MEDIA,
INCORPORATED,

                                            Defendants - Appellants.



Appeal from the United States District Court for the Western
District of Virginia, at Lynchburg.  Norman K. Moon, District
Judge. (6:06-cv-00006-nkm)


Submitted:   September 19, 2007         Decided:    November 16, 2007


Before WILLIAMS, Chief Judge, SHEDD, Circuit Judge, and Joseph F.
ANDERSON, Jr., United States District Judge for the District of
South Carolina, sitting by designation.


Affirmed by unpublished per curiam opinion.


Mark J. Prak, Coe W. Ramsey, Charles E. Coble, BROOKS, PIERCE,
MCLENDON, HUMPHREY & LEONARD, L.L.P., Raleigh, North Carolina, for
Appellants. Virginia W. Hoptman, Jerry W. Boykin, Erin Roberts,
WOMBLE, CARLYLE, SANDRIDGE & RICE, Tysons Corner, Virginia, for
Appellee.


Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

     Appellants Gary E. Burns and 3 Daughters Media, Inc. (“3

Daughters”) (collectively “Appellants”) appeal the district court’s

grant of a permanent injunction to Centennial Broadcasting, LLC

(“Centennial”) enforcing a covenant not to compete between Burns

and Centennial.     Appellants argue that the district court erred in

concluding that the covenant’s terms are unambiguous and that Burns

failed to comply with those terms.                 They also challenge the

validity of the non-competition agreement on a number of grounds.

For the reasons that follow, we affirm.



                                        I.

     In   October    2004,    Centennial     and    Burns   entered    into   an

agreement (the “Asset Purchase Agreement” or “APA”) pursuant to

which Burns was to sell Centennial substantially all of the assets,

property,   and   rights     of   the   radio   station     WLNI-FM   (“WLNI”),

“licensed by the Federal Communications Commission (“FCC”) to

Lynchburg, Virginia.”1        (J.A. at 10.)2         On February 28, 2005,

Centennial closed on the purchase of WLNI for approximately $4.4



     1
      The APA initially provided for the sale of two additional
radio stations, WMNA-FM and WMNA-AM, “licensed by the FCC to
Gretna, VA” (the “Gretna stations”) as well. (J.A. at 10.) In
January 2005, however, the parties amended the APA to exclude the
Gretna stations from the transaction.
     2
      Citations to the “J.A.” refer to the contents of the joint
appendix filed by the parties to this appeal.

                                        2
million.   The parties allocated $4.135 million for WLNI’s FCC

license, $180,000 for the broadcasting equipment, $50,000 for the

tower antenna, and $35,000 for office and miscellaneous equipment.

     As a condition of the sale, the parties entered into an

ancillary agreement entitled the “Non-Solicitation and Consulting

Agreement.” Centennial paid Burns $25,000 as consideration for his

compliance with the covenants contained in the agreement. Only one

of the Non-Solicitation and Consulting Agreement’s three primary

restrictions is relevant to this appeal.    Paragraph 2 (“the non-

competition agreement”) provides that:

     Except as provided in the next sentence, Covenantor
     [Burns] further agrees that at no time during the
     Restricted Period will he directly or indirectly, whether
     as owner licensee, principal, agent, consultant,
     employee, proprietor, partner, lender, or shareholder,
     director or officer of a corporation (or similar position
     in any other entity), or in any other capacity, other
     than as employee or contractor of Buyer, engage in, own,
     manage, operate, control or otherwise participate in or
     be in any manner connected with the ownership, operation,
     management or control of any commercial AM or FM
     broadcast business at any radio broadcasting station that
     is included in the Roanoke-Lynchburg Arbitron Metro radio
     market if such station utilizes a programming format
     substantially similar to any format used by the Station
     on the date Buyer acquires the Station; provided,
     however, that ownership of less than 5% of the
     outstanding stock of any publicly traded corporation
     shall not be prohibited solely by reason thereof.
     Covenantor’s ownership and operation of Radio Stations
     WMNA-FM and WMNA(AM), Gretna, Virginia, are specifically
     excluded from the restrictions in this paragraph.3


     3
      The “Restricted Period” represents a five-year period running
from the date the parties signed the Non-Solicitation and
Consulting Agreement until the fifth anniversary of the closing
under the APA.

                                3
(J.A. at 23 (emphasis added).)            At the time of the sale, WLNI’s

programming consisted primarily of talk shows, although the station

also sometimes broadcasted sports events.

     In November 2005, Centennial learned through a newspaper

article that Burns, acting through 3 Daughters, a company he owns,

had purchased the radio station WBLT-AM (“WBLT”) in Bedford,

Virginia.    WBLT’s signal reached into the area encompassed by the

Roanoke-Lynchburg Arbitron Metro radio market.4 And, although WBLT

had been one of the few music stations remaining on the AM dial,

Burns    shifted   its   programming       to   primarily   talk    radio   upon

purchasing the station.      Burns told the article’s author that he

instituted the format change because he had “been very successful

with news and talk radio.”         (J.A. at 40.)

     Centennial believed that Burns’s operation of WBLT as a talk

radio station violated the non-competition agreement. Accordingly,

on February 17, 2006, Centennial filed a complaint for damages and

injunctive relief against Appellants in the United States District

Court for the Western District of Virginia, claiming diversity of

citizenship    between    itself    and     Appellants   and   an    amount   in

controversy over $75,000.     Centennial’s        complaint asserted claims


     4
      “‘Arbitron’ is a national radio audience measurement company”
that relies on biannual “sweeps” of radio listeners to measure the
market share of radio stations. (J.A. at 301.)     Arbitron defines
the Roanoke-Lynchburg radio market “as encompassing the cities of
Roanoke, Lynchburg, Bedford, and Salem, and six Virginia counties:
Roanoke, Boutetourt, Bedford, Campbell, Amherst and Appomattox.”
(J.A. at 301.)

                                       4
against Burns for breaches of the non-competition agreement, the

APA, and the APA’s implied covenant of good faith and fair dealing

(Counts I-III) and a claim against 3 Daughters for violations of

Centennial’s rights under the APA and the non-competition agreement

(Count IV).     On the same day, Centennial filed a Motion for

Temporary Restraining Order (TRO) and a Motion for Preliminary

Injunction    enjoining   Appellants       “from   further   use   of     a    Talk

programming format” on WBLT.         (J.A. at 28, 30.)

     On March 13, 2006, the district court conducted a hearing on

Centennial’s motions for a TRO and for a preliminary injunction.

Centennial provided evidence that it had monitored WBLT for 24

hours and learned that “it ha[d] 21 hours of syndicated talk and

three hours of music.”          (J.A. at 128.)         Moreover, WBLT was

“duplicating a number of talk show programs broadcast on WLNI.”

(J.A. at 35.)     Burns did not dispute that a number of the talk

programs aired on WBLT were the same as those aired on WLNI. He

also admitted that the bulk of WBLT’s programming on Monday through

Friday was syndicated talk shows.            (J.A. at 240.)        Burns took

issue, however, with Centennial’s assertion, grounded in a list of

radio formats set forth in “Radio & Records” (which Centennial

described as “the leading magazine in the radio industry,” (J.A. at

138)), that there existed a single talk radio format which both

WLNI and WBLT employed.        Burns supplied an article from “Talkers

Magazine”    (whose   slogan    is   “the    [B]ible   of    the   talk       radio


                                       5
business,” (J.A. at 207)) that “broke[] down on-air talk talent to

nine major categories,” (J.A. at 73); he argued that each category

represented a distinct radio format and that when these categories

were used to define WBLT and WLNI’s respective formats, the two

were not substantially similar. At the close of the hearing, the

district court determined that Burns had clearly violated the non-

competition agreement and issued a TRO.                 On March 20, 2006, the

district    court      granted   Centennial’s       motion     for   a   preliminary

injunction.

     Prior to the March 13, 2006 hearing, the district court had

notified the parties that it would “be considering the possibility

of consolidating the request for a preliminary injunction with

trial on the merits of the request for a permanent injunction,” but

understood that because expert witnesses might be unavailable at

the hearing, the parties might need to submit deposition testimony

relevant    to   the    merits   within       a   reasonable    period    after   the

hearing.5   (J.A. at 326.)        A subsequent Opinion and Order provided

that in considering whether consolidation was appropriate, the

district court would consider only the evidence offered at the

March 13, 2006 hearing, the deposition testimony of Appellants’

expert witness, and Centennial’s rebuttal evidence, if any was


     5
      Pursuant to Fed. R. Civ. P. 65(a)(2), “Before or after the
commencement of the hearing of an application for a preliminary
injunction, the court may order the trial of the action on the
merits to be advanced and consolidated with the hearing of the
application.”

                                          6
offered.    If, after considering that evidence, the district court

concluded that the language of the non-competition agreement was

unambiguous, it would decide the merits of the request for a

permanent injunction.     If, however, it determined that disposition

of the merits required further development of the record, it would

permit the parties to conduct further discovery.

     Accordingly,    Burns   submitted   the   deposition     testimony   of

expert witness Michael Harrison, publisher of “Talkers Magazine.”

Harrison    identified   eleven   different    talk   radio   formats,    but

suggested that there were “probably more.”              (J.A. at 576.)

According, to Harrison, “radio is a minute to minute competition,”

so stations should be compared on a minute to minute basis.          (J.A.

at 599.)     He had not, however, compared WLNI and WBLT in this

manner.    When asked if it was “a fair statement to say that both of

these formats for WBLT and for WLNI are general issues political

talk even under [Harrison’s] definitions,” (J.A. at 612), Harrison

acknowledged that “[i]t [wa]s possible,” (J.A. at 613), but stated

that “it all depends on actually analyzing the actual number of

hours that they do the different shows,” and that he had not

conducted that analysis.     (J.A. at 612-13.)

     As rebuttal evidence, Centennial submitted the deposition

testimony of Walter Sabo, CEO of Sabo Media, a programming and

management company specializing in profitable contents solutions

for talk-radio stations. Sabo listed five formats that he believed


                                    7
existed within the talk radio format and indicated that there were

“probably more.”   (J.A. at 733.)   Sabo opined that WLNI and WBLT

had substantially similar formats, basing his conclusion on “[t]wo

things” -- “that many of the[] shows cover the same subject area,

and . . . the way the shows are scheduled.” (J.A. at 707.)         He

described the content of both stations as being primarily political

and the structure of the two stations as “amazingly similar.”

(J.A. at 709.)

     After the deposition testimony was taken, Centennial filed a

Motion for a Permanent Injunction Pursuant to [Federal Rule of

Civil Procedure] 65(a)(2) and to Render Final Judgment in Favor of

Plaintiffs on the Merits.    On September 29, 2006, the district

court granted Centennial’s motion to consolidate trial on the

merits with the preliminary injunction hearing and issued an

opinion and order permanently enjoining Burns from “participating

in or being in any manner connected with the ownership, operation,

management or control of any commercial AM or FM broadcast business

at any broadcasting station that is included in the Roanoke-

Lynchburg Arbitron Metro radio market for a period of five years if

that business station uses the following programming formats . . .

: All talk, News/Talk, Full Service Talk, or Specialized Talk with

a focus on current events and/or politics.”   (J.A. at 941-42.)6   3


     6
      In crafting the injunction, the district court sought to use
terms that reflected Burns’s understanding of the different types
of radio station programming formats. The district court’s Opinion

                                8
Daughters Media was permanently enjoined “from the same” so long as

Burns remained affiliated with the company.           (J.A. at 942.)       In a

separate order, the district court referred Centennial’s claim for

costs and attorneys’ fees to a magistrate judge.

     Burns and 3 Daughters timely appealed the district court’s

order     granting   Centennial    a    permanent    injunction.     We    have

jurisdiction pursuant to 28 U.S.C.A § 1292(a)(1) (West 2006).



                                       II.

     “[W]e review the grant of a permanent injunction for abuse of

discretion.”     Virginia Soc’y for Human Life, Inc. v. F.E.C., 263

F.3d 379, 392 (4th Cir. 2001).         In so doing, we review the district

court’s    underlying   factual    findings    for   clear   error   and    its

conclusions of law de novo.       Id.   “[A] mistake of law by a district

court is per se an abuse of discretion.”             Dixon v. Edwards, 290

F.3d 699, 718 (4th Cir. 2002).

     Appellants argue that the district court abused its discretion

in granting Centennial a permanent injunction because the district


and Order defined, in a footnote, the formats that Burns was
enjoined from using. It took both the format categories and their
definitions from a website on which Burns had relied in an
affidavit supporting his response in opposition to Centennial’s
motion for a preliminary injunction. In the affidavit, Burns used
the website in asserting that “All Talk” and “News Talk” were
distinct formats and that WLNI used an “All Talk” format at the
time that he sold it. Accordingly, the district court concluded
that Burns “accept[ed] [the website]’s breakdown of talk
programming formats into All Talk, News/Talk, Full Service,
Specialized, and Sports.” (J.A. at 933.)

                                        9
court’s       decision       rests     on    erroneous   legal    conclusions.

Specifically, Appellants contend that the district court erred in

concluding that the non-competition agreement’s reference to a

“programming format substantially similar [to that of WLNI],” (J.A.

at 23), was unambiguous.             The ambiguity of the contract language,

according to Appellants, not only compels reversal of the district

court’s conclusion that no reasonable jury could find that WLNI and

WBLT did not have substantially similar programming formats, but

also       renders   the    non-competition      agreement   unenforceable   as

violative of Virginia public policy and Burns’s First Amendment

rights. Appellants further contend that the Federal Communications

Act (“FCA”), 47 U.S.C.A. § 310(d) (West 2001), and FCC decisions

and policy preempt enforcement of the non-competition agreement.

Because Appellants’ contention that the non-competition agreement

is ambiguous permeates their arguments on appeal, we first address

Appellant’s challenge to the district court’s conclusion to the

contrary before considering the question of preemption.

                                            A.

       Because this is a diversity suit, we apply the substantive law

of the state of Virginia.            See Wells v. Liddy, 186 F.3d 505, 527-28

(4th Cir. 1999).7          Under Virginia law, when the terms of a contract

are clear and unambiguous, the interpretation of those terms


       7
      The Non-Solicitation and Consulting Agreement contains a
choice of law provision specifying that Virginia law governs the
parties’ disputes.

                                            10
presents a question of law.    Musselman v. Glass Works, L.L.C., 533

S.E.2d 919, 921 (Va. 2000).      Whether a contractual provision is

ambiguous is also a question of law.        Id.

     Virginia considers the language of a contract ambiguous “if it

may be understood in more than one way or when it refers to two or

more things at the same time.”            Video Zone, Inc. v. KF & F

Properties,   L.C.,   594   S.E.2d   921,   923   (Va.   2004)   (internal

quotation marks omitted).     “Such an ambiguity, if it exists, must

appear on the face of the instrument.”            Id. at 924.       “Parol

evidence cannot be used to first create an ambiguity and then

remove it.”   Cohan v. Thurston, 292 S.E.2d 45, 46 (Va. 1982).

Moreover, “a document is not ambiguous merely because the parties

disagree as to the meaning of the language employed by them in

expressing their agreement.”     Amos v. Coffey, 320 S.E.2d 335, 337

(Va. 1984) (internal quotation marks omitted).

     Appellants argue that the district court’s finding that the

relevant sworn statements and expert testimony were “mutually

incompatible and irreconcilable” reveals that the term “programming

format” in the non-competition agreement is ambiguous.           (J.A. at

939.)   For further support, they cite to F.C.C. v. WNCN Listeners

Guild, 450 U.S. 582 (1981), in which the Supreme Court upheld the

FCC’s decision to abandon regulation of radio station formats, a

policy change grounded in part in the difficulty the FCC had

experienced in defining and categorizing programming formats.         See


                                     11
Dev.   of   Policy    re:    Changes   in    the   Entm’t   Formats    of    Broad.

Stations,     57   F.C.C.2d     580,   583   ¶    12   (1976)   (concluding   that

labeling     radio    station    formats     is    a   difficult    task    because

“[d]istinctions in this field are extremely hazy and subjective”).

       The district court rejected Appellants’ invitation to look to

external sources, rather than the contract itself, to resolve the

issue.      It found that “[t]he contract refers to the programming

format of [WLNI] on the date of transfer of ownership,” and “[o]n

that date, [WLNI] had a programming format known to both parties.”

(J.A. at 939.) Accordingly, the district court concluded that just

because “the experts . . . [did] not agree on the proper pigeonhole

into which that format should be placed d[id] not make the contract

ambiguous.”        (J.A. at 939.)       The court reasoned that “[WLNI]’s

format may (or may not) defy categorization, but it is possessed of

some format which Burns is forbidden to imitate.”                  (J.A. at 939.)

It further determined that the phrase “substantially similar” was

unambiguous, as “[i]ts ordinary and plain meaning can be gleaned by

resort to dictionary definitions and common usage.” (J.A. at 939.)

       We agree with the reasoning of the district court.                      The

dictionary defines “format” in the media context as a “general plan

of organization, arrangement, or choice of material (as for a

television show).”          Merriam-Webster’s Collegiate Dictionary 492

(11th ed. 2004).            The non-competition agreement identified a

particular general plan of organization or choice of material –-


                                        12
that of WLNI’s programming format on the date Burns sold the

station to Centennial -- with which both parties were familiar.

The difficulty of affixing a mutually-agreeable label to the

programming format identified in the non-competition agreement does

not render the agreement itself ambiguous.

     We also agree with the district court that, however the two

stations’ formats are categorized, no reasonable jury could find

that they are not substantially similar.       Appellants argue that,

under Harrison’s approach to format categorization, the stations’

programming formats could be found to differ because Harrison’s

testimony indicates that WLNI and WBLT broadcasted substantially

different programs during as many as eleven hours of the day.     They

offer no basis, however, on which to refute the district court’s

finding that because “‘programming’ is distinct from ‘programming

format,’” different programs may share the same programming format.

(J.A. at 933.)   That the two stations did not air the same programs

at the same time during a substantial portion of the day does not

demonstrate that they do not utilize the same or substantially

similar programming formats.     The district court found that, under

Harrison’s   approach,   “both    WLNI   and   WBLT   use   a   General

Issues/Political Talk programming format, because each airs talk

shows with current events and politics subject matters for a

majority of the time and with significant hour-by-hour overlap.”

(J.A. at 934.)    Appellants’ arguments regarding the differences


                                  13
between the particular programs do not render this finding clearly

erroneous.

      We therefore agree with the district court that Appellants

breached the non-competition agreement, and the differences in the

format definitions and modes of comparison advanced by the parties

do not render the violation any less clear.               Because we conclude

that the language of the non-competition agreement is unambiguous,

we need not address Appellants’ argument that, under Virginia law,

an ambiguous restrictive covenant offends public policy and cannot

be   enforced.       For    the   same   reason,     we   decline   to   address

Appellants’       contention      that    the     non-competition     agreement

represents a waiver of their First Amendment rights that cannot be

enforced because it is ambiguous.

                                         B.

      We   next   address    Appellants’        contention   that   federal   law

preempts the enforcement of the non-competition agreement under

state contract law.        Under the Supremacy Clause, federal statutes

and regulations displace conflicting state law.                See U.S. Const.

art. VI, cl. 2; English v. Gen. Elec. Co., 496 U.S. 72, 79 (1990)

(explaining that “state law is pre-empted to the extent that it

actually conflicts with federal law”).              Such a conflict exists in

two circumstances -- where “compliance with both federal and state

regulations is a physical impossibility,” Florida Lime & Avocado

Growers, Inc. v. Paul, 373 U.S. 132, 142-43 (1963), and where state


                                         14
law “stands as an obstacle to the accomplishment and execution of

the full purposes and objectives of Congress,” Hines v. Davidowitz,

312 U.S. 52, 67 (1941); Gade v. Nat’l Solid Wastes Mgmt. Ass’n, 505

U.S. 88, 103 (1992).

     Burns argues that both circumstances are present in this case

because enforcement of the non-competition agreement would (1)

conflict with and frustrate the purpose of § 310(d) of the FCA and

(2) violate the FCC policy of prohibiting contractual restrictions

on radio-formatting discretion. Section 310(d) of the FCA provides

that “[n]o construction permit or station license, or any rights

thereunder, shall be transferred, assigned, or disposed of in any

manner, voluntarily or involuntarily, directly or indirectly, . .

. to any person except upon application to the Commission and upon

finding by the Commission that the public interest, convenience,

and necessity will be served thereby.”               47 U.S.C.A § 310(d).

Further, the FCC has a longstanding policy of requiring that a

licensee “retain control over programming content at all times.”

In re Cosmopolitan Broadcasting Corp., 59 F.C.C.2d 558, 561 (1976).

Accordingly,   it    will   not   grant   licenses   to   applicants    whose

contractual obligations limit their ability to maintain ultimate

control over programming decisions.         See Cumulus Licensing L.L.C.,

21 F.C.C.R. 2998, 3005 (2006) (finding that a contractual provision

prohibiting a buyer of a radio station (and any successor in

interest)   from    “instituting    an    adult   contemporary   or   country


                                     15
program format, or any similar or derivative format . . . for a

period   of   five   years”   improperly    infringed     upon   the   buyer’s

programming    responsibilities    and     conditioning    approval    of   the

parties’ application to transfer the station’s license on the

deletion of the restriction).

     The district court rejected both arguments. It concluded that

neither the FCA nor FCC policy preempts the enforcement of the non-

competition agreement, because although the FCC will not approve

license applications from or transfers to would-be licensees whose

programming discretion is unduly inhibited by contractual terms, no

FCC rules or decisions purport to alter state contract law or to

bind the courts.      (J.A. at 937.)       To the contrary, the FCC has

stated that “there is no conflict between State and Federal policy

as to the covenant not to compete.”          (J.A. at 937 (quoting In re

Roman, 38 F.C.C. 290 (1965)); see also In re Cmty. Broad. of

Coastal Bend, Inc., 4 F.C.C.R. 3619, 3621 (1989) (stating that

“there is no conflict between state and federal policy as to a

covenant not to compete”).

     Again, we agree with the reasoning of the district court.               As

the district court explained, the FCC has conditioned approval of

license transfers on the transferee’s ability to extract himself

from non-competition agreements that limit programming discretion

precisely because these types of agreements are enforceable.                See

Regents of Univ. Sys. of Ga. v. Carroll, 338 U.S. 586, 600 (1950)


                                    16
(stating that “[t]he [FCC] may impose on an applicant conditions

which it must meet before it will be granted a license, but the

imposition of the conditions cannot directly affect the applicant’s

responsibilities to a third party dealing with the applicant”).8

     Thus,    whether      the   non-competition    agreement        would     unduly

infringe upon Appellants’ ability to program WBLT was a question

for the FCC to resolve in determining whether to approve the

transfer   of      the   station’s   license.      It   is    not    a   ground   to

invalidate the non-competition agreement.                    We agree with the

district court that any conflict between 3 Daughters’s duties as a

licensee     and    Burns’s      contractual    obligations         resulted     from

Appellants’ failure to inform the FCC of the non-competition

agreement’s restrictions and is thus of their own making.                         We




     8
      Appellants rely heavily on In re Citicasters Co., 16 F.C.C.R.
3415 (2001). Citicasters, however, is not contrary to Regents of
University System of Georgia v. Carroll, 338 U.S. 586 (1950). In
Citicasters, the FCC stated that

     Where a contractual dispute is before a court, the
     licensee must retain actual control of essential station
     functions unless the Commission gives prior consent to
     the assignment or transfer of control of the station.
     Thus, it is a violation of the Communications Act to
     invoke remedies for breach, including injunctive or other
     equitable relief, that impinge on such control, without
     obtaining prior Commission consent.

16 F.C.C.R. at 3420. That a party may violate the FCA by invoking
equitable remedies for breach of contract without obtaining the
FCC’s consent has no bearing on the enforceability of the
underlying contract.

                                        17
therefore conclude that the district court did not abuse its

discretion in granting Centennial a permanent injunction.



                                  III.

     In sum, we conclude that the non-competition agreement’s

reference to a “programming format substantially similar to [that

of WLNI on the date of its sale to Centennial],” (J.A. at 23), was

unambiguous.    We further conclude that no reasonable jury could

find that WBLT’s format was not substantially similar to WLNI’s

programming    format,   and   that    federal   law   does   not     preempt

enforcement of the non-competition agreement.           Accordingly, the

judgment of the district court is

                                                                    AFFIRMED.




                                      18
