Sundance Associates, Inc. v. Reno

• Decision Date: 23 March 1998
• Docket Number: No. 96-1501,96-1501
• Citation: 139 F.3d 804
• Parties: 26 Media L. Rep. 1564, 98 CJ C.A.R. 1415 SUNDANCE ASSOCIATES, INC., a Colorado corporation, Plaintiff-Appellee, v. Janet RENO, Attorney General of the United States, in her official capacity only; United States Department Of Justice, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 804

139 F.3d 804

26 Media L. Rep. 1564, 98 CJ C.A.R. 1415

SUNDANCE ASSOCIATES, INC., a Colorado corporation, Plaintiff-Appellee, v. Janet RENO, Attorney General of the United States, in her official capacity only; United States Department Of Justice, Defendants-Appellants.

No. 96-1501.

United States Court of Appeals Tenth Circuit.

March 23, 1998.

Arthur M. Schwartz (Michael W. Gross, Cindy D. Schwartz, and Gary M. Kramer, with him on the brief), Arthur M. Schwartz, P.C., Denver, CO, for Plaintiff-Appellee.

Anne M. Lobell (Jacob M. Lewis with her on the briefs), United States Department of Justice, Washington, DC, for Defendants-Appellants.

Before BALDOCK and BRORBY, Circuit Judges, and BROWN, ^* District Judge.

BRORBY, Circuit Judge.

The Attorney General and the United States Department of Justice ("the government") appeal the United States District Court for the District of Colorado's award of summary judgment for Sundance Associates ("Sundance"), holding 28 C.F.R. § 75.1(c)(4)(iii) is an invalid implementation of 18 U.S.C. § 2257. This court assumes jurisdiction pursuant to 28 U.S.C. § 1291 and affirms.

Concerned about the exploitation of children by pornographers, Congress enacted the Child Protection and Obscenity Enforcement Act of 1988, Pub.L. No. 100-690, Title VII, § 7513(a), 102 Stat. 4187, 4485-4503 (significantly amended by the Child Protection Restoration and Penalties Enhancement Act of 1990, Pub.L. No. 101-647, Title III, §§ 301(b), 311, 104 Stat. 4808, 4816-17) to require producers of sexually explicit matter to maintain certain records concerning the performers ¹ that might help law enforcement agencies monitor the industry. See 18 U.S.C. § 2257. Violations of these record keeping requirements are criminal offenses punishable by imprisonment for up to two years for first-time offenders and up to five years for repeat offenders. ² See 18 U.S.C. § 2257(i).

The record keeping requirements apply to "[w]hoever produces " the material in question. 18 U.S.C. § 2257(a) (emphasis added). The statute defines "produces" as

to produce, manufacture, or publish any book, magazine, periodical, film, video tape or other similar matter and includes the duplication, reproduction, or reissuing of any such matter, but does not include mere distribution or any other activity which does not involve hiring, contracting for[,] managing, or otherwise arranging for the participation of the performers depicted.

18 U.S.C. § 2257(h)(3).

Pursuant to her authority to issue regulations to carry out the statutory requirements, see 18 U.S.C. § 2257(g), the Attorney General issued regulations implementing the statute on April 24, 1992. ³ See 57 Fed.Reg. 15017-022 (1992); 28 C.F.R. § 75.

The extent to which the record keeping requirements apply to various persons and businesses is one area the regulations attempt to define. Under the regulatory language, the requirements apply to "[a]ny producer of any book, magazine, periodical, film, videotape, or other matter that contains one or more visual depictions of actual sexually explicit conduct made after November 1, 1990." 28 C.F.R. § 75.2(a) (emphasis added). The regulation defines "producer" as:

[A] person, including any individual, corporation, or other organization, who is a primary producer or a secondary producer.

(1) A primary producer is any person who actually films, videotapes, or photographs a visual depiction of actual sexually explicit conduct.

(2) A secondary producer is any person who produces, assembles, manufactures, publishes, duplicates, reproduces, or reissues a book, magazine, periodical, film, videotape, or other matter intended for commercial distribution that contains a visual depiction of actual sexually explicit conduct.

(3) The same person may be both a primary and a secondary producer.

(4) Producer does not include persons whose activities relating to the visual depiction of actual sexually explicit conduct are limited to the following:

(i) Photo processing;

(ii) Distribution; or

(iii) Any activity, other than those activities identified in paragraphs (c)(1) and (2) of this section, that does not involve the hiring, contracting for, managing, or otherwise arranging for the participation of the depicted performers.

28 C.F.R. § 75.1(c) (emphasis in original). The ultimate question in this case is whether this definition of "producer" clashes impermissibly with the statutory definition of "produces."

Sundance publishes five magazines: Odyssey, Odyssey Express, Connexion, Looking Glass, and UnReal People. These magazines print personal or commercial announcements by individuals seeking to contact others with similar sexual interests. The announcements are typically accompanied by pictures, most of which are sexually explicit. The pictures are submitted voluntarily to Sundance by the individuals advertising in the magazines. Sundance, therefore, does not participate in the production of the photographs it publishes in its various magazines.

Facing possible criminal liability as a "secondary producer" under the regulation, Sundance filed a complaint seeking declaratory relief in the district court. The parties filed cross-motions for summary judgment in the district court.

The court ruled for Sundance, finding 28 C.F.R. § 75.1(c)(4)(iii) to be an invalid implementation of 18 U.S.C. § 2257. ⁴ Applying Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), the district court found the intent of Congress to be clear from the language of the statute and, consequently, did not inquire into the legislative history of the Act. Finding "[t]he plain meaning of this section of the Restoration Act clearly exempts persons whose activities '... include mere distribution or any other activity which does not involve hiring, contracting for[,] managing, or otherwise arranging for the participation of the performers depicted,' " the court determined the scope of the regulation's coverage to be impermissibly broader than that intended by the statute.

The government raises one issue on appeal: whether the district court erred in finding 28 C.F.R. § 75.1(c)(4)(iii) to be an invalid implementation of 18 U.S.C. § 2257. ⁵

This court reviews the grant of a motion for summary judgment de novo, applying the same legal standard used by the district court. See Kaul v. Stephan, 83 F.3d 1208, 1212 (10th Cir.1996). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "When applying this standard, we examine the factual record and reasonable inferences therefrom in the light most favorable to the party opposing summary judgment. If there is no genuine issue of material fact in dispute, then we next determine if the substantive law was correctly applied by the district court." Kaul, 83 F.3d at 1212 (quoting Wolf v. Prudential Ins. Co., 50 F.3d 793, 796 (10th Cir.1995)).

The facts in this case are not in dispute. The only question is whether the district court was correct in its legal analysis of the statute and regulation. We review de novo a district court's interpretation of a statute. See United States v. Diaz, 989 F.2d 391, 392 (10th Cir.1993).

When faced with a challenge to the validity of a regulation, we apply the analytical framework provided by the United States Supreme Court in Chevron. As an initial matter, we decide "whether Congress has directly spoken to the precise question at issue." Chevron, 467 U.S. at 842, 104 S.Ct. at 2781. " 'If the statute is clear and unambiguous "that is the end of the matter, for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." ... The traditional deference courts pay to agency interpretation is not to be applied to alter the clearly expressed intent of Congress.' " K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291, 108 S.Ct. 1811, 1817, 100 L.Ed.2d 313 (1988) (quoting Board of Governors of Fed. Reserve System v. Dimension Financial Corp., 474 U.S. 361, 368, 106 S.Ct. 681, 685, 88 L.Ed.2d 691 (1986) (quoting Chevron, 467 U.S. at 842-43, 104 S.Ct. at 2781-82)). If, however, the statute does not speak directly to the question at issue or is ambiguous, the court, giving considerable weight to the agency's interpretation, must decide if the agency's answer is "a permissible construction of the statute." Chevron, 467 U.S. at 843, 104 S.Ct. at 2782.

In this case, we need go no further than the initial analysis. "[T]he text and reasonable inferences from it give a clear answer against the Government, and that ... is 'the end of the matter.' " Brown v. Gardner, 513 U.S. 115, 120, 115 S.Ct. 552, 556, 130 L.Ed.2d 462 (1994) (quoting Good Samaritan Hosp. v. Shalala, 508 U.S. 402, 409, 113 S.Ct. 2151, 2157, 124 L.Ed.2d 368 (1993)) (quoting Chevron, 467 U.S. at 842, 104 S.Ct. at 2781)). We agree with the district court that "[t]he plain meaning of [ § 2257((h)(3) ] clearly exempts persons whose activities '... include mere distribution or any other activity which does not involve hiring, contracting for[,] managing, or otherwise arranging for the participation of the performers depicted.' "

Under the statutory scheme, the requirements apply to persons or organizations who "produce, manufacture, or publish" any of the identified matter, including those involved in "duplication, reproduction, or reissuing" of the matter, but not including those who merely distribute or whose activity "does not involve hiring, contracting for[,] managing, or otherwise arranging for the participation of the performers depicted." 18 U.S.C. § 2257(h)(3). The plain language of the statute establishes a group possibly subject to its requirements (including those who "produce,...