467 U.S. 691 (1984), 82-1795, Capital Cities Cable, Inc. v. Crisp

Docket Nº:No. 82-1795
Citation:467 U.S. 691, 104 S.Ct. 2694, 81 L.Ed.2d 580
Party Name:Capital Cities Cable, Inc. v. Crisp
Case Date:June 18, 1984
Court:United States Supreme Court
 
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467 U.S. 691 (1984)

104 S.Ct. 2694, 81 L.Ed.2d 580

Capital Cities Cable, Inc.

v.

Crisp

No. 82-1795

United States Supreme Court

June 18, 1984

Argued February 21, 1984

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

Syllabus

Although Oklahoma does not prohibit the sale and consumption of alcoholic beverages within the State, it prohibits, in general, the advertising of such beverages. In 1980, the Oklahoma Attorney General determined that the State's advertising ban prohibited cable television systems operating in Oklahoma from retransmitting out-of-state signals containing alcoholic beverage commercials, particularly wine commercials. Petitioners, operators of cable television systems in Oklahoma -- who, with other such operators, had been warned by respondent Director of the Oklahoma Alcoholic Beverage Control Board that they would be criminally prosecuted if they carried out-of-state wine advertisements -- filed suit in Federal District Court for declaratory and injunctive relief, alleging that Oklahoma's policy violated various provisions of the Federal Constitution, including the Supremacy Clause and the First Amendment. Granting summary judgment for petitioners, the court held, inter alia, that the State's advertising ban was an unconstitutional restriction on petitioners' right to engage in protected commercial speech. The Court of Appeals reversed.

Held:

1. Even though the Court of Appeals did not address it, this Court will address the question whether the Oklahoma ban as applied here so conflicts with federal regulation of cable television systems that it is preempted, since the conflict between Oklahoma and federal law was plainly raised in petitioners' complaint, it was acknowledged by both the District Court and the Court of Appeals, the District Court made findings on all factual issues necessary to resolve the question, and the parties briefed and argued the question pursuant to this Court's order. Pp. 697-698.

2. Application of Oklahoma's alcoholic beverages advertising ban to out-of-state signals carried by cable operators in Oklahoma is preempted by federal law. Federal regulations have no less preemptive effect than federal statutes, and here the power delegated to the Federal Communications Commission (FCC) under the Communications Act of

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1934 plainly includes authority to regulate cable television systems in order to ensure achievement of the FCC's statutory responsibilities. Pp. 698-711.

(a) The FCC has for the past 20 years unambiguously expressed its intent to preempt state or local regulation of any type of signal carried by cable television systems. Although Oklahoma may, under current FCC rules, regulate such local aspects of cable systems as franchisee selection and construction oversight, nevertheless, by requiring cable television operators to delete commercial advertising contained in signals carried pursuant to federal authority, the State has clearly exceeded its limited jurisdiction and has interfered with a regulatory area that the FCC has explicitly preempted. Pp. 700-705.

(b) Oklahoma's advertising ban also conflicts with specific FCC regulations requiring that certain cable television operators, such as petitioners, carry signals from broadcast stations located nearby in other States, and that such signals be carried in full, including any commercial advertisements. Similarly, Oklahoma's ban conflicts with FCC rulings permitting and encouraging cable television systems to import more distant out-of-state broadcast signals, which, under FCC regulations, must also be carried in full. Enforcement of Oklahoma's ban also would affect nonbroadcast cable services, a source of cable programming over which the FCC has explicitly asserted exclusive jurisdiction. Moreover, it would be a prohibitively burdensome task for a cable operator to monitor each signal it receives and delete every wine commercial, and thus enforcement of Oklahoma's ban might deprive the public of the wide variety of programming options that cable systems make possible. Such a result is wholly at odds with the FCC's regulatory goal of making available the benefits of cable communications on a nationwide basis. Pp. 705-709.

(c) Congress -- through the Copyright Revision Act of 1976 -- has also acted to facilitate the cable industry's ability to distribute broadcast programming on a national basis. The Act establishes a program of compulsory copyright licensing that permits a cable operator to retransmit distant broadcast signals upon payment of royalty fees to a central fund, but requires that the operator refrain from deleting commercial advertising from the signals. Oklahoma's deletion requirement forces cable operators to lose the protections of compulsory licensing, or to abandon their importation of broadcast signals covered by the Act. Such a loss of viewing options would thwart the policy identified by both Congress and the FCC of facilitating and encouraging the importation of distant broadcast signals. Pp. 709-711.

3. The Twenty-first Amendment does not save Oklahoma's advertising ban from preemption. The States enjoy broad power under § 2

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of that Amendment to regulate the importation and use of intoxicating liquor within their borders, but when a State does not attempt directly to regulate the sale or use of liquor, a conflicting exercise of federal authority may prevail. In such a case, the central question is whether the interests implicated by a state regulation are so closely related to the powers reserved by the Amendment that the regulation may prevail, even though its requirements directly conflict with express federal policies. Resolution of this question requires a pragmatic effort to harmonize state and federal powers within the context of the issues and interests at stake. Here, Oklahoma's interest in discouraging consumption of intoxicating liquor is limited, since the State's ban is directed only at occasional wine commercials appearing on out-of-state signals carried by cable operators, while the State permits advertisements for all alcoholic beverages carried in newspapers and other publications printed outside Oklahoma but sold in the State. The State's interest is not of the same stature as the FCC's interest in ensuring widespread availability of diverse cable services throughout the United States. Pp. 711-716.

699 F.2d 490, reversed.

BRENNAN, J., delivered the opinion for a unanimous Court.

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BRENNAN, J., lead opinion

JUSTICE BRENNAN delivered the opinion of the Court.

The question presented in this case is whether Oklahoma may require cable television [104 S.Ct. 2698] operators in that State to delete all advertisements for alcoholic beverages contained in the out-of-state signals that they retransmit by cable to their subscribers. Petitioners contend that Oklahoma's requirement abridges their rights under the First and Fourteenth Amendments and is preempted by federal law. Because we conclude that this state regulation is preempted, we reverse the judgment of the Court of Appeals for the Tenth Circuit, and do not reach the First Amendment question.

I

Since 1959, it has been lawful to sell and consume alcoholic beverages in Oklahoma. The State Constitution, however, as well as implementing statutes, prohibits the advertising of such beverages, except by means of strictly regulated on-premises signs.1 For several years, pursuant to this authority,

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Oklahoma has prohibited television broadcasting stations in the State from broadcasting alcoholic beverage commercials as part of their locally produced programming and has required these stations to block out all such advertising carried on national network programming. See Oklahoma Alcoholic Beverage Control Board v. Heublein Wines, Int'l, 566 P.2d 1158, 1160 (Okla.1977).2 At the same time, the Oklahoma Attorney General has ruled -- principally because of the practical difficulties of enforcement -- that the ban does not apply to alcoholic beverage advertisements appearing in newspapers, magazines, and other publications printed outside Oklahoma but sold and distributed in the State. Consequently, out-of-state publications may be delivered to Oklahoma subscribers and sold at retail outlets within the State even though they contain advertisements for alcoholic beverages. Until 1980, Oklahoma applied a similar policy to cable television operators, who were permitted to retransmit out-of-state signals containing alcoholic beverage commercials to their subscribers. In March of that year, however, the Oklahoma Attorney General issued an opinion in which he concluded that the retransmission of out-of-state alcoholic beverage commercials by cable television systems operating in the State would be considered a violation of the advertising ban. 11 Op.Okla.Atty.Gen. No. 79-334, p. 550 (Mar.19,

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1980). Respondent Crisp, Director of the Oklahoma Alcoholic Beverage Control Board, thereafter warned Oklahoma cable operators, including petitioners, that they would be criminally prosecuted if they continued to carry such out-of-state advertisements over their systems. App. to Pet. for Cert. 41a; App. 11.3

Petitioners, operators of several cable television systems in Oklahoma, filed this suit in March, 1981, in the United States District Court for the Western District of Oklahoma, seeking declaratory and injunctive [104 S.Ct. 2699] relief. They alleged that the Oklahoma policy violated the Commerce and Supremacy Clauses, the First and Fourteenth Amendments, and the Equal Protection Clause of the Fourteenth Amendment. Following an evidentiary hearing, the District Court granted petitioners a preliminary injunction and subsequently entered summary judgment and a permanent injunction in December, 1981. In granting that relief, the District Court found that petitioners regularly carried out-of-state signals...

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