Caples Company v. United States, 13415.

• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)
• Citation: 243 F.2d 232
• Docket Number: No. 13415.,13415.
• Parties: The CAPLES COMPANY, a corporation, Petitioner, v. The UNITED STATES of America and the Federal Communications Commission, Respondents.
• Decision Date: 14 March 1957

243 F.2d 232 (1957)

The CAPLES COMPANY, a corporation, Petitioner,
v.
The UNITED STATES of America and the Federal Communications Commission, Respondents.

No. 13415.

United States Court of Appeals District of Columbia Circuit.

Argued January 7, 1957.

Decided March 14, 1957.

Mr. Leonard H. Steibel, of the bar of the Court of Appeals of New York, New York City, pro hac vice, by special leave of Court, with whom Messrs. D. F. Prince and Scott P. Crampton were on the brief, for petitioner.

Mr. Daniel R. Ohlbaum, Counsel, Federal Communications Commission, with whom Messrs. Warren E. Baker, Gen. Counsel, Federal Communications Commission, and Richard A. Solomon, Asst. Gen. Counsel, Federal Communications Commission, were on the brief, for respondent, Federal Communications Commission.

Mr. Daniel M. Friedman, Atty., Dept. of Justice, entered an appearance for respondent, United States of America.

Messrs. Robert L. Heald and Walter R. Powell, Jr., filed a brief on behalf of National Ass'n of Radio and Television Broadcasters, as amicus curiae, urging reversal.

Before BAZELON, FAHY and DANAHER, Circuit Judges.

BAZELON, Circuit Judge.

Upon "Application for a Declaratory Ruling," the Federal Communications Commission held that the television giveaway program known as "Play Marko" is a lottery under § 3.656 of the Commission's rules and regulations. The owner of the program, who filed the application, brought this petition for review of the ruling.

"Play Marko" is similar to the familiar game of "Bingo."¹ The participating viewers use cards which may be obtained

243 F.2d 233

free of charge in any quantity by any person, but only from "stores handling the sponsor's products."² The participant is not required to register or make a purchase

Petitioner contends that the Commission's ruling is contrary to the Supreme Court's decision in Federal Communications Comm. v. American Broadcasting Co., 1954, 347 U.S. 284, 74 S.Ct. 593, 98 L.Ed. 699, construing earlier anti-lottery regulations. The Court held that, since the regulations were bottomed squarely on a criminal statute, 18 U.S.C. § 1304 (based upon § 316 of the Communications Act of 1934, 47 U.S.C. § 316), the regulations must be as strictly construed as the statute.³ The statute, and therefore the regulations, said the Court, proscribe "(1) the distribution of prizes; (2) according to chance; (3) for a consideration." 347 U.S. at page 290, 74 S. Ct. at page 598, emphasis supplied. In that case, as in this, only the existence of consideration was in question. The Court found that, in the program there involved, "not a single home contestant is required to purchase anything or pay an admission price or leave his home to visit the promoter's place of business; the only effort required for participation is listening." Id. 347 U.S. at page 294, 74 S.Ct. at page 600, emphasis supplied. It held this effort alone insufficient consideration for the purposes of a penal statute.⁴

The Commission says American Broadcasting Co. is not controlling here because "Play Marko" requires something more than "listening," in that the cards necessary for participation can only be obtained from the sponsor's stores or outlets. The requirement of a visit by the participant, or someone on his behalf, is said to be a thing of value since it is of benefit to the sponsor.

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We agree that the requirement of obtaining the cards from the sponsor's stores or outlets is something more than "listening" and, perhaps, makes the program here more objectionable. But the Commission tells us that its ruling "is not an expression of the Commission's judgment as to the quality or desirability of the program but an interpretation of a Federal statute specifically prohibiting the broadcast of lotteries." When the test laid down by the Supreme Court is applied, we conclude that "it would still be stretching the statute to the breaking point to give it an interpretation that would make such programs a crime." Ibid. The undesirability of this type of programming is not enough to brand those responsible for it as criminals. Protection of the public interest will have to be sought by means not pegged so tightly to the criminal statute or in additional legislative authority.

Reversed.

DANAHER, Circuit Judge (dissenting).

The Caples Company filed an application with the Federal Communications Commission requesting a ruling "declaring that Marko is not a lottery as played on station KTLA-TV, Los Angeles, California, during the period from January 15, 1955 through May 28, 1955." Replying, the Commission stated that as a matter of general policy it had refrained from issuing advisory rulings pertaining to program content but, "it has been persuaded by the nationwide scope of the seriousness of the question involved, to depart from its policy in this case." After consideration of various aspects of the problem, the Commission's opinion concluded "that the television program `Play Marko' as broadcast by station KTLA, is a lottery, and its presentation over the facilities of a broadcast station would be in contravention of § 3.656 of the rules of the Commission."¹

The Caples Company alleged that it is engaged in business as an advertising agency and is the owner of a television program entitled "Play Marko." Prior to May 4, 1955, Caples "in connection with its business and as owner of Marko, had entered into contracts, either directly with sponsors or with television stations which in turn procured sponsors pursuant to the terms of which contracts the said sponsors were authorized to televise Marko for the purpose of advertising their respective products and services, over various television stations throughout the United States," Caples told the Commission. The terms of any such contract have not been disclosed to us.

The petition in this court asks us to review and set aside the action of the Commission and that we "thereupon hold that Play Marko is not a lottery and that petitioner is entitled to a declaratory ruling to that effect." My colleagues woud reverse the action of the Commission, and since I do not agree, I am impelled to submit the reasons for the view I take of the problem.

Although many states have said judicially that a scheme like that presented here constitutes a lottery, in the name of the federal government it would now be said not to be. Although in such states the playing of such a game as Marko would be deemed to violate the laws and the public policy of such states for which prosecution might follow, by television the game may be sent into every home which chooses to permit it.

"The Communications Act of 1934 applies to every phase of television and it is clear that Congress intended the regulatory scheme set out by it therein to be exclusive of State action. See Section 301, 47 U.S.C.A. § 301,

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which recites the purpose of the Act as, inter alia, the maintenance of `* * * the control of the United States over all the channels of interstate and foreign radio transmission * * *'".² Moreover, the Court has said, "The Act itself establishes that the Commission's powers are not limited to the engineering and technical aspects of regulation of radio communication. * * * But the Act does not restrict the Commission merely to supervision of the traffic. It puts upon the Commission the burden of determining the composition of that traffic."³ When the Act was adopted in 1934, Congress prohibited the broadcasting of "* * * any lottery, gift enterprise, or similar scheme, offering prizes dependent in whole or in part upon lot or chance. * * *." It authorized the Commission to promulgate rules governing the administration of the Act. "Indeed, the Commission would be remiss in its duties if it failed, in the exercise of its licensing authority, to aid in implementing the statute, either by general rule or by individual decisions."⁴

The Commission had adopted such rules and, by an individual decision, just as the Court instructed it to do, it has here decided that "Marko" as played over a particular station during a particular period, is inhibited by the statute and the rules.

My colleagues suggest that this case is controlled by the decision in the American Broadcasting Co. case, but as I read it, that is just such another "individual decision" within the Court's frame of reference, as the Commission is free to make in the individual case. The American Broadcasting Co. situation is definitely not like ours.

The Court told us that the "give-away" programs, there considered, were not to be "struck down as illegal devices appealing to cupidity and the gambling spirit."⁵ It recognized that whether a...