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Minority Television Project, Inc. v. F.C.C.

United States Court of Appeals, Ninth Circuit

December 2, 2013

FEDERAL COMMUNICATIONS COMMISSION; United States of America, Defendants-Appellees, and Lincoln Broadcasting Company, Intervenor.

Argued and Submitted En Banc March 19, 2013.

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[Copyrighted Material Omitted]

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Walter Elmer Diercks (argued), Rubin, Winston, Diercks, Harris & Cooke, LLP, Washington, D.C.; John L. Fitzgerald, Pinnacle Law Group, San Francisco, CA, for Plaintiff-Appellant.

Mark B. Stern (argued) and Samantha L. Chaifetz, Attorneys, Appellate Staff, United States Department of Justice, Civil Division, Washington, D.C.; Joseph P. Russoniello, United States Attorney; Tony West, Assistant Attorney General; Austin C. Schlick, General Counsel, Jacob M. Lewis, Acting Deputy General Counsel, Joel Marcus, Attorney, and Maureen K. Flood, Attorney, Federal Communications Commission, Washington, D.C., for Defendants-Appellees.

Joyce Slocum and Gregory Allan Lewis, National Public Radio, Inc., Washington, D.C.; Katherine Lauderdale and Thomas Rosen, Public Broadcasting Service, Arlington, VA, for Amici Curiae National Public Radio, Inc., and Public Broadcasting Service.

Appeal from the United States District Court for the Northern District of California, Elizabeth D. Laporte, Magistrate Judge, Presiding. D.C. No. 3:06-cv-02699-EDL.



McKEOWN, Circuit Judge:

Public television— a fixture of American life for decades— has showcased Masterpiece Theater, PBS NewsHour, children's programs such as Sesame Street and Curious George, and many more audience favorites. The hallmark of public broadcasting has been a longstanding restriction on paid advertising to minimize commercialization. In a classic case of " follow the money," Congress recognized that advertising would change the character of public broadcast programming and undermine the intended distinction between commercial and noncommercial broadcasting.

Public broadcast radio and television stations are regulated by federal statute. Under 47 U.S.C. § 399b, public stations are prohibited from transmitting paid advertisements for for-profit entities, issues of public importance or interest, and political candidates. These restrictions were adopted to minimize commercialization of public broadcast stations, also known as noncommercial educational (" NCE" ) stations because they are " used primarily to serve the educational needs of the community; for the advancement of educational programs; and to furnish a nonprofit and noncommercial television broadcast service." 47 C.F.R. § 73.621.

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Minority Television Project (" Minority TV" ), a public television broadcaster, challenges the advertising restrictions as facially unconstitutional under the First Amendment. Applying intermediate scrutiny, as counseled by the Supreme Court in FCC v. League of Women Voters, 468 U.S. 364, 104 S.Ct. 3106, 82 L.Ed.2d 278 (1984), we uphold the advertising ban as constitutional. We also affirm the district court's dismissal of Minority TV's as-applied challenges to § 399b and its challenge to the related regulation, 47 C.F.R. § 73.621(e).



For three-quarters of a century, the Federal Communications Commission (" FCC" ) has set aside broadcasting channels for noncommercial educational stations. See 3 Fed.Reg. 364 (Feb. 9, 1938) (reserving channels for NCE FM radio stations); Sixth Report & Order, 41 F.C.C. 148, 158-59 (1952) (reserving channels for NCE television stations); see also 47 U.S.C. § 303(a)-(b) (authorizing the FCC to classify radio stations and " [p]rescribe the nature of the service to be rendered by each class of licensed stations" ). The FCC explained that it was reserving a portion of the broadcast spectrum for NCE television stations because of " the important contributions which noncommercial educational television stations can make in educating the people both in school— at all levels— and also the adult public," and the " high quality type of programming" available on NCE stations— " programming of an entirely different character from that available on most commercial stations." Third Notice of Further Proposed Rulemaking, 16 Fed.Reg. 3072, 3079 (1951).

From the start, the FCC recognized that allowing NCE stations to " operate in substantially the same manner as commercial applicants" would not further its goal of ensuring high quality educational programming. 41 F.C.C. at 166 (1952). Initially, NCE stations were prohibited from airing any promotional content— even if it was unpaid— and were only permitted to identify program underwriters by name. See 17 Fed.Reg. 4062 (1952); Commission Policy Concerning the Noncommercial Nature of Educational Broadcast Stations, 86 F.C.C.2d 141, 142, 154 (1981).

In response to concerns that this restriction was broader than necessary to achieve its purpose, the FCC embarked on an extensive notice and comment proceeding between 1978 and 1981. See 86 F.C.C.2d at 141; Commission Policy Concerning the Noncommercial Nature of Educational Broadcast Stations, 90 F.C.C.2d 895, 909 (1982). The FCC undertook this effort " with an eye toward striking a reasonable balance between the financial needs of such stations and their obligation to provide an essentially noncommercial broadcast service." 86 F.C.C.2d at 141. In crafting new rules, the FCC noted that its " interest in creating a ‘ noncommercial’ service has been to remove the programming decisions of public broadcasters from the normal kinds of commercial market pressures under which broadcasters in the unreserved spectrum usually operate." Id. at 142. Cognizant of First Amendment concerns, the FCC stated that it was adopting " the minimum regulatory structure that preserves a reasonable distinction between commercial and noncommercial broadcasting." Id. at 144. At the end of lengthy deliberation, the FCC in 1981 set out a new, liberalized broadcast advertising framework. Id. Later that year, after two days of hearings,[1] Congress essentially

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codified the FCC's new framework in 47 U.S.C. §§ 399a and 399b.[2]

Section 399b— the heart of this case— prohibits paid advertising, except for advertising for goods and services offered by non-profit organizations. An " advertisement" is defined as material transmitted in exchange for remuneration that is intended:

(1) to promote any service, facility, or product offered by any person who is engaged in such offering for profit;
(2) to express the views of any person with respect to any matter of public importance or interest; or
(3) to support or oppose any candidate for political office.

§ 399b(a). Section 399b allows the airing of promotional content for which consideration is not received. Section 399a, which is not at issue here, permits the use of non-promotional identifying information in donor acknowledgments (for example, logograms and location information). This scheme has been the law for more than 30 years.


Minority TV is the licensee of a noncommercial educational television station in San Francisco subject to the advertising restrictions in 47 U.S.C. § 399b and 47 C.F.R. § 73.621(e). After another broadcaster complained to the FCC about Minority TV's underwriting announcements, the FCC commenced a proceeding against Minority TV. The FCC's Enforcement Bureau found that Minority TV had broadcast announcements that violated § 399b and § 73.621(e) more than 1,911 times, and issued a Notice of Apparent Liability for Forfeiture in the amount of $10,000. 17 FCC Rcd. 15646 ¶¶ 30, 33 (2002). Minority TV's announcements were in exchange for consideration and on behalf of for-profit corporations such as Chevrolet, Ford, and Korean Airlines. Id. ¶ 14. The FCC found that the advertisements included improper promotional language. Id. ¶¶ 9, 15. The FCC rejected nearly all of Minority TV's challenges and issued a forfeiture order for $10,000. 18 FCC Rcd. 26611 (2003). The FCC denied Minority TV's application for review and petition for reconsideration. 20 FCC Rcd. 16923 (2005); 19 FCC Rcd. 25116 (2004).

Minority TV then filed in this court a petition for review of the FCC orders. After filing the petition, Minority TV paid the $10,000 forfeiture to the FCC in full. We transferred the case to district court.[3]

The district court dismissed Minority TV's challenges to the notice and the forfeiture order, its as-applied challenges to § 399b, and its facial and as-applied challenges to § 73.621(e) for lack of jurisdiction because the courts of appeals have

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exclusive jurisdiction to review FCC regulations and orders. 47 U.S.C. § 402(a). The court explained that § 504(a), the carve-out allowing district courts to review forfeiture orders, applied only to unpaid forfeiture actions. 47 U.S.C. § 504(a).

On cross-motions for summary judgment, the district court granted summary judgment for the FCC on Minority TV's facial challenges to § 399b. Minority Television Project, Inc. v. FCC, 649 F.Supp.2d 1025, 1048 (N.D.Cal.2009). Invoking the intermediate scrutiny test from League of Women Voters, the court held that the statute was " narrowly tailored to further a substantial government interest." Id. at 1042. The court pointed to the ample evidence before Congress showing that " the advertising prohibitions were necessary to preserve the unique programming presented by public stations," id. at 1037, and to " additional material before the Court demonstrat[ing] that the legislative conclusions are supported by substantial evidence," id. at 1039. In addition, the court held that the statute was not unconstitutionally vague. Id. at 1048.

Minority TV appealed. The panel upheld the ban on for-profit goods and services advertising. Two members of the divided panel issued separate opinions striking down the statute's ban on issue and political advertising. Minority Television Project, Inc. v. FCC, 676 F.3d 869 (9th Cir.2012). In dissent, Judge Paez determined that §§ 399b(a)(2) and (3) were neither " patently overinclusive [nor] underinclusive," and that there were no " ‘ less restrictive means' to § 399b that [were] readily available.’ " Id. at 893-95 (Paez, J., dissenting) (citation omitted). Unlike the panel majority, Judge Paez found substantial record evidence to support § 399b's narrow tailoring. Id. at 896-97. In an unpublished memorandum disposition, the panel unanimously held that the district court correctly dismissed Minority TV's as-applied challenges to § 399b and its challenges to 47 C.F.R. § 73.621(e), and that § 399b was not unconstitutionally vague.[4] A majority of nonrecused active judges voted in favor of rehearing en banc. 704 F.3d 1009 (9th Cir.2012).




1. Intermediate Scrutiny Test for Broadcast Regulation

The Supreme Court laid down the standard for evaluating the constitutionality of § 399b— intermediate scrutiny— in League of Women Voters, 468 U.S. at 380, 104 S.Ct. 3106. That case involved a First Amendment challenge to a statutory provision forbidding all NCE stations that received grants from the Corporation for Public Broadcasting from " engag[ing] in editorializing." Id. at 366, 104 S.Ct. 3106 (citing 47 U.S.C. § 399 (1980)). The Court declined to apply strict scrutiny even though the statute was content-based and " plainly operate[d] to restrict the expression of editorial opinion on matters of public importance" — a form of speech " entitled to the most exacting degree of First Amendment protection." Id. at 375-76, 104 S.Ct. 3106. It explained that, " because broadcast regulation involves unique considerations, our cases have not followed precisely the same approach that we have applied to other media and have never gone so far as to demand that such regulations

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serve ‘ compelling’ governmental interests." Id. at 376, 104 S.Ct. 3106.

The Court struck down the ban on editorialization because it was not " sufficiently tailored to the harms it s[ought] to prevent to justify its substantial interference with broadcasters' speech." Id. at 392, 104 S.Ct. 3106. In particular, the ban was " manifest[ly] imprecis[e]" — both " patent[ly] overinclusive[ ] and underinclusive[ ]." Id. at 392, 396, 104 S.Ct. 3106. The government's substantial interest in ensuring that viewers did not think broadcasters' editorials reflected the views of the government could " be fully satisfied by less restrictive means that [were] readily available." Id. at 395, 104 S.Ct. 3106.

Like the statute at issue in League of Women Voters, § 399b is a content-based broadcast regulation, and we may uphold the statute's restrictions on advertising only if we are satisfied that they are " narrowly tailored to further a substantial governmental interest." Id. at 380, 104 S.Ct. 3106. In addition, because subsections (a)(2) and (a)(3) burden public issue and political speech, we must be " particularly wary in assessing [the statute] to determine whether it reflects an impermissible attempt ‘ to allow a government [to] control ... the search for political truth.’ " Id. at 384, 104 S.Ct. 3106 (quoting Consolidated Edison Co. v. Public Service Comm'n of N.Y., 447 U.S. 530, 538, 100 S.Ct. 2326, 65 L.Ed.2d 319 (1980) (alteration in original)).

Minority TV urges us to adopt a strict scrutiny standard. We do not credit Minority TV's argument that Citizens United v. Federal Election Comm'n, 558 U.S. 310, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010), overruled decades of precedent sub silentio— especially given that the Court there expressly overruled two other cases with no mention of League of Women Voters or an intent to change the level of scrutiny for broadcasting. Citizens United was not about broadcast regulation; it was about the validity of a statute banning political speech by corporations. Had Citizens United changed the standard for broadcast regulation, presumably the Supreme Court would have recognized as much two years later in FCC v. Fox Television Stations, --- U.S. ----, 132 S.Ct. 2307, 2320, 183 L.Ed.2d 234 (2012), rather than declining to address the broadcasters' claim that precedent providing for less rigorous scrutiny of broadcast regulation " should be overruled because the rationale of that case has been overtaken by technological change." The Supreme Court has not gone there and neither should we, absent a complete record on the subject and a change of direction by the Supreme Court. This case is not a suitable one for such fundamental reconsideration of longstanding precedent.[5]

2. Scope of the Record

We are presented with an ample record to support § 399b, consisting both of evidence that was before Congress in 1981 and evidence before the district court that covered the period after enactment. Following the Supreme Court's lead, we look to " the evidence before Congress and then the further evidence presented to the District Court."

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Turner Broadcasting Sys. v. FCC, 520 U.S. 180, 196, 117 S.Ct. 1174, 137 L.Ed.2d 369 (1997) (" Turner II " ). As a matter of course, in multiple First Amendment cases, the Court has looked beyond the record before Congress at the time of enactment. See, e.g., League of Women Voters, 468 U.S. at 387 & n. 18, 390 & n. 19, 392 n. 21, 393 n. 22, 104 S.Ct. 3106 (looking to testimony before Congress as well as reports and other evidence following the statute's enactment), and United States v. Playboy Ent. Grp., 529 U.S. 803, 821-22, 120 S.Ct. 1878, 146 L.Ed.2d 865 (2000) (faulting the government for failing to produce additional " probative evidence" to supplement the " near barren legislative record" in applying strict scrutiny).

Congress enacted §§ 399a and 399b after a two-year FCC notice and comment proceeding, days of hearings, and a thoughtful committee report. Indeed, the record before Congress provides a sufficient basis to uphold the statute even without the supplemental evidence offered in the district court. This case " does not present a close call" requiring us to elaborate on what evidentiary burden Congress bears in enacting a law that implicates First Amendment rights. Nixon v. Shrink Missouri Gov't PAC, 528 U.S. 377, 393, 120 S.Ct. 897, 145 L.Ed.2d 886 (2000); see also Sable Comm. of Cal., Inc. v. FCC, 492 U.S. 115, 133, 109 S.Ct. 2829, 106 L.Ed.2d 93 (1989) (Scalia, J., concurring) (" Neither due process nor the First Amendment requires legislation to be supported by committee reports, floor debates, or even consideration, but only by a vote." ).

It is clear, however, that Congress is " not obligated, when enacting its statutes, to make a record of the type that an administrative agency or court does to accommodate judicial review." Turner Broadcasting Sys. v. FCC, 512 U.S. 622, 666, 114 S.Ct. 2445, 129 L.Ed.2d 497 (1994) (" Turner I " ). We reject Minority TV's suggestions to the contrary. The dissent's insistence on " evidence" in the technical sense is misplaced. We are not abdicating to a congressional whim or succumbing to some notion that " judges like public radio and television," Dissent at 1212, simply because we give credence to congressional findings. Pure and simple, the dissent doesn't like what Congress found after considering extensive FCC administrative proceedings, holding its own hearings, and preparing a committee report. Congress is a political body that operates through hearings, findings, and legislation; it is not a court of law bound by federal rules of evidence. Ignoring fundamental principles of separation of powers, the dissent would rewrite the legislation, ignore the congressional evidence, and substitute pop culture and its own policy judgment for that of Congress.

In enacting §§ 399a and 399b, Congress made a prediction about the effects of underwriting announcements, logograms, and advertising on public broadcast programming. We must accord deference " to [Congress's] findings as to the harm to be avoided and to the remedial measures adopted for that end, lest we infringe on traditional legislative authority to make predictive judgments when enacting nationwide regulatory policy." Turner II, 520 U.S. at 196, 117 S.Ct. 1174. Congressional concern and prognostication was well informed, but the information before Congress was necessarily limited because advertising had never been allowed on NCE stations. The First Amendment does not require Congress to wait for a feared harm to take place before it can act. Such a high bar would make little practical sense— it would tie Congress in knots and strip it of its ability to adopt forward thinking public policy. " Sound policymaking often requires legislators to forecast future events and to anticipate the likely impact of these events based on deductions and inferences for which complete empirical

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support may be unavailable." Turner I, 512 U.S. at 665, 114 S.Ct. 2445.

Apart from the evidence that was before Congress in 1981, the government presented significant additional evidence, including a 2007 report by the Government Accountability Office (" GAO" ) on public television; the report of the Temporary Commission on Alternative Financing for Public Telecommunications, which oversaw an experiment with limited advertising on public television; information about political advertising; an expert report from a Stanford University professor emeritus with over 40 years of experience in studying the economics of broadcasting and public television; and a declaration from a vice president of a foundation that operates numerous noncommercial educational radio and television stations.

We conclude that substantial evidence before Congress supported the conclusion that the advertising prohibited by § 399b posed a threat to the noncommercial, educational nature of NCE programming and that the additional evidence bears out Congress's predictive judgment in enacting § 399b. Minority TV's scant evidentiary showing reinforces this conclusion. See Nixon, 528 U.S. at 394, 120 S.Ct. 897 (noting that more extensive evidence might be required if the parties challenging the statute " had made any showing of their own to cast doubt" on the evidence supporting it). Similarly, the dissent offers only speculation not substance for its view that permitting unfettered advertising wouldn't lead to distortion and perverse incentives. Poking holes in the congressional evidence is hardly a substitute for the scrutiny required of this court.


We now turn to a more detailed analysis of whether § 399b is " narrowly tailored to further a substantial governmental interest." League of Women Voters, 468 U.S. at 380, 104 S.Ct. 3106.Section 399b was enacted in 1981 against the backdrop of declining federal support for public broadcasting. Congress was acutely aware that public broadcasting needed new sources of revenue to survive, but it was also worried about undermining the essential nature of public broadcast programming. The FCC had just promulgated new, liberalized regulations that were " designed to further the important governmental interest in preserving the essentially noncommercial nature of public broadcasting within a minimal regulatory framework by insulating public broadcasters from commercial marketplace pressures and decisions." 90 F.C.C.2d 895, 896 (1982) (statement by FCC Commissioner Washburn clarifying the impact of the Public Broadcasting Amendments Act on the recently issued regulations) (emphasis in original). The FCC believed the liberalized advertising restrictions " satisf[ied] constitutional objections." Id. Congress agreed, and so do we.

1. Substantial Governmental Interest

Federal regulation of the broadcast spectrum, a scarce public resource, is entitled to more deferential First Amendment review than regulation of other types of media. See Reno v. ACLU, 521 U.S. 844, 868, 117 S.Ct. 2329, 138 L.Ed.2d 874 (1997) (highlighting the " special justifications for regulation of the broadcast media that are not applicable to other speakers," including the " history of extensive Government regulation of the broadcast medium," " the scarcity of available frequencies at its inception," and " its ‘ invasive’ nature" ) (citations omitted); Turner I, 512 U.S. at 637, 114 S.Ct. 2445 (noting that the " justification for [the Court's] distinct approach to broadcast regulation rests on the unique physical limitations of the broadcast medium" ). This deferential review is not strict scrutiny light, but instead requires us to

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benchmark the statute against the requirements of League of Women Voters, including the government's substantial interest. Section 399b's advertising restrictions speak directly to the government's substantial interest in maintaining the unique, free programming niche filled by public television and radio. That Minority TV does not contest the government's substantial interest in ensuring the diversity and quality of public broadcast programming is no surprise. Nonetheless, it is useful to detail ...

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