Chapter 43 - Cengage

Chapter 43
Administrative Law Case 43.1 489 F.3d 444
C.A.2,2007.
United States Court of Appeals,Second Circuit.
FOX TELEVISION STATIONS, INC., CBS Broadcasting, Inc., WLS Television,
Inc., KTRK Television, Inc., KMBC Hearstargyle Television, Inc., ABC, Inc.,
Petitioners,
v.
FEDERAL COMMUNICATIONS COMMISSION, United States of America, Respondents,
NBC Universal, Inc., NBC Telemundo License Co., NBC Television Affiliates,
FBC Television Affiliates Association, CBS Television Network Affiliates,
Center for the Creative Community, Inc., doing business as Center for
Creative Voices in Media, Inc., ABC Television Affiliates Association,
Intervenors.
Docket Nos. 06-1760-ag (L), 06-2750-ag (CON), 06-5358-ag (CON).
Argued: Dec. 20, 2006.
Decided: June 4, 2007.
POOLER, Circuit Judge.
Fox Television Stations, Inc., along with its affiliates FBC Television
Affiliates Association (collectively "Fox"), petition for review of the
November 6, 2006, order of the Federal Communications Commission ("FCC")
issuing notices of apparent liability against two Fox broadcasts for
violating the FCC's indecency and profanity prohibitions.FN2 Fox, along
with other broadcast networks and numerous amici, raise administrative,
statutory, and constitutional challenges to the FCC's indecency regime. The
FCC, also supported by several amici, dispute each of these challenges. We
find that the FCC's new policy regarding "fleeting expletives" represents a
significant departure from positions previously *447 taken by the agency
and relied on by the broadcast industry. We further find that the FCC has
failed to articulate a reasoned basis for this change in policy.
Accordingly, we hold that the FCC's new policy regarding "fleeting
expletives" is arbitrary and capricious under the Administrative Procedure
Act. The petition for review is therefore granted, the order of the FCC is
vacated, and the matter is remanded to the Commission for further
proceedings consistent with this opinion. Because we vacate the FCC's order
on this ground, we do not reach the other challenges to the FCC's indecency
regime raised by petitioners, intervenors, and amici.
FN2. The petitions for review filed by Fox and CBS in Docket No. 06-
1760 and ABC in Docket No. 06-2750 pertain to portions of a prior
order by the FCC that has since been vacated. Accordingly, those
petitions for review are denied as moot. The remainder of this opinion
addresses the petition for review filed by Fox in Docket No. 06-5358.
BACKGROUND
The FCC's policing of "indecent" speech stems from 18 U.S.C. § 1464, which
provides that "[w]hoever utters any obscene, indecent, or profane language
by means of radio communication shall be fined under this title or
imprisoned not more than two years, or both." The FCC's authority to
regulate the broadcast medium is expressly limited by Section 326 of the
Communications Act, which prohibits the FCC from engaging in censorship.
See47 U.S.C. § 326. In 1960, Congress authorized the FCC to impose
forfeiture penalties for violations of Section 1464. See47 U.S.C. §
503(b)(1)(D). The FCC first exercised its statutory authority to sanction
indecent (but non-obscene) speech in 1975, when it found Pacifica
Foundation's radio broadcast of comedian George Carlin's "Filthy Words"
monologue indecent and subject to forfeiture. See Citizen's Complaint
Against Pacifica Found. Station WBAI(FM), N.Y, N.Y., 56 F.C.C.2d 94 (1975).
True to its title, the "Filthy Words" monologue contained numerous
expletives in the course of a 12-minute monologue broadcast on the radio at
2:00 in the afternoon. In ruling on this complaint, the FCC articulated the
following description of "indecent" content:
[T]he concept of 'indecent' is intimately connected with the exposure of
children to language that describes, in terms patently offensive as
measured by contemporary community standards for the broadcast medium,
sexual or excretory activities and organs, at times of the day when there
is a reasonable risk that children may be in the audience. Obnoxious,
gutter language describing these matters has the effect of debasing and
brutalizing human beings by reducing them to their mere bodily functions,
and we believe that such words are indecent within the meaning of the
statute and have no place on radio when children are in the audience.
Id. at ¶ 11 (internal footnote omitted).
Pacifica appealed the FCC's order to the Court of Appeals for the D.C.
Circuit. While that appeal was pending, the FCC issued a "clarification"
order in which it specifically noted that its prior order was intended to
address only the particular facts of the Carlin monologue as broadcast, and
acknowledged the concern that "in some cases, public events likely to
produce offensive speech are covered live, and there is no opportunity for
journalistic editing." 'Petition for Clarification or Reconsideration' of a
Citizen's Complaint against Pacifica Foundation, Station WBAI(FM), N.Y.,
N.Y., 59 F.C.C.2d 892, at ¶ 4 n. 1 (1976) ("Pacifica Clarification Order").
The FCC stated that in such a situation, "we believe that it would be
inequitable for us to hold a licensee responsible for indecent language."
Id.
Although acknowledging the FCC's additional clarification, the D.C. Circuit
nevertheless concluded that the FCC's indecency regime was invalid. See
Pacifica Found. v. FCC, 556 F.2d 9 (D.C.Cir.1977). Labeling the
Commission's actions censorship,*448 the court found the FCC's order both
vague and overbroad, noting that it would prohibit "the uncensored
broadcast of many of the great works of literature including Shakespearian
plays and contemporary plays which have won critical acclaim, the works of
renowned classical and contemporary poets and writers, and passages from
the Bible." Id. at 14.
The Commission appealed this decision to the Supreme Court, which reversed
in a plurality opinion. In its brief to the Supreme Court, the FCC stressed
that its ruling was a narrow one applying only to the specific facts of the
Carlin monologue. See Br. of FCC at 41-49, FCC v. Pacifica Found., No. 77-
528 (U.S. Mar. 3, 1978), available at 1978 WL 206838. The Court took the
Commission at its word and confined its review to the specific question of
whether the Commission could find indecent the Carlin monologue as
broadcast. See FCC v. Pacifica Found., 438 U.S. 726, 732-35, 98 S.Ct. 3026,
57 L.Ed.2d 1073 (1978). The Court first rejected Pacifica's statutory
argument that "indecent" in Section 1464 could not be read to cover speech
that admittedly did not qualify as obscenity. Id. at 739,98 S.Ct. 3026.
Finding that obscene, indecent, and profane have distinct meanings in the
statute, the Court held that the FCC is permitted to sanction speech
without showing that it satisfied the elements of obscenity. Id. at 739-41,
98 S.Ct. 3026. The Court then rejected Pacifica's constitutional
challenges. The Court stated that "of all forms of communication, it is
broadcasting that has received the most limited First Amendment protection"
because the broadcast medium is a "uniquely pervasive presence in the lives
of all Americans" that extends into the privacy of the home and is
"uniquely accessible to children, even those too young to read." Id. at 748-
749, 98 S.Ct. 3026. The Court therefore found that the FCC could,
consistent with the First Amendment, regulate indecent material like the
Carlin monologue. The Court then once again "emphasize[d] the narrowness of
our holding ... We simply hold that when the Commission finds that a pig
has entered the parlor, the exercise of its regulatory power does not
depend on proof that the pig is obscene." Id. at 750-51, 98 S.Ct. 3026.
Justices Powell and Blackmun, who concurred in the judgment and supplied
two of the votes necessary for the 5-4 majority,FN3 also emphasized in
their concurring opinion that the Court's holding was a narrow one limited
to the facts of the Carlin monologue as broadcast. Id. at 755-56, 98 S.Ct.
3026 (Powell J., concurring). Foreshadowing the question now before us,
they explicitly noted that "[t]he Commission's holding, and certainly the
Court's holding today, does not speak to cases involving the isolated use
of a potentially offensive word in the course of a radio broadcast, as
distinguished from the verbal shock treatment administered by respondent
here." Id. at 760-61, 98 S.Ct. 3026 (Powell J., concurring). Furthermore,
citing the FCC's brief to the Court, Justice Powell stated that he did not
foresee an undue chilling effect on broadcasters by the FCC's decision
because "the Commission may be expected to proceed cautiously, as it has in
the past." Id. at 761 n. 4, 98 S.Ct. 3026 (Powell J., concurring).
FN3. The four dissenting justices would have held invalid any attempt
by the FCC to prohibit indecent (non-obscene) speech. See Pacifica,
438 U.S. at 762-80, 98 S.Ct. 3026.
The FCC took the Pacifica Court's admonitions seriously in its subsequent
decisions.FN4 Shortly after the Pacifica ruling, *449 the FCC stated the
following in an opinion rejecting a challenge to a broadcaster's license
renewal on the basis that the broadcaster had aired indecent programming:
FN4. At the time, the Commission interpreted Pacifica as involving a
situation "about as likely to occur again as Halley's Comet." Br. of
Amici Curiae Former FCC Officials at 6 (quoting FCC Chairman Charles
D. Ferris, Speech to New England Broad. Assoc., Boston, Mass. (July
21, 1978)).
With regard to 'indecent' or 'profane' utterances, the First Amendment and
the 'no censorship' provision of Section 326 of the Communications Act
severely limit any role by the Commission and the courts in enforcing the
proscription contained in Section 1464. The Supreme Court's decision in
FCC v. Pacifica Foundation, 46 U.S.L.W. 5018 (1978), No. 77-528, decided
July 3, 1978, affords this