Minority Television Project, Inc. v. Fed. Commc'ns Comm'n

• Citation: 736 F.3d 1192
• Decision Date: 02 December 2013
• Docket Number: No. 09–17311.,09–17311.
• Parties: MINORITY TELEVISION PROJECT, INC., Plaintiff–Appellant, v. FEDERAL COMMUNICATIONS COMMISSION; United States of America, Defendants–Appellees, and Lincoln Broadcasting Company, Intervenor.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

736 F.3d 1192

MINORITY TELEVISION PROJECT, INC., Plaintiff–Appellant,

v. FEDERAL COMMUNICATIONS COMMISSION; United States of America, Defendants–Appellees,andLincoln Broadcasting Company, Intervenor.

No. 09–17311.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted En Banc March 19, 2013.

Filed Dec. 2, 2013.

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.

Before: ALEX KOZINSKI, Chief Judge, and JOHN T. NOONAN, BARRY G. SILVERMAN, M. MARGARET McKEOWN, KIM McLANE WARDLAW, WILLIAM A. FLETCHER, RONALD M. GOULD, MARSHA S. BERZON, JOHNNIE B. RAWLINSON, CONSUELO M. CALLAHAN and ANDREW D. HURWITZ, Circuit Judges.

OPINION

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.

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).

Background

I. Noncommercial Educational Stations

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 also47 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. See86 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 essentiallycodified 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.

II. Minority TV Proceedings

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 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...