Playboy Enterprises, Inc. v. Public Service Com'n of Puerto Rico, 89-1026

• Decision Date: 12 September 1989
• Docket Number: No. 89-1026,89-1026
• Citation: 906 F.2d 25
• Parties: PLAYBOY ENTERPRISES, INC., et al., Plaintiffs, Appellees, v. PUBLIC SERVICE COMMISSION OF PUERTO RICO, et al., Defendants, Appellants. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 25

906 F.2d 25

59 USLW 2020

PLAYBOY ENTERPRISES, INC., et al., Plaintiffs, Appellees, v. PUBLIC SERVICE COMMISSION OF PUERTO RICO, et al.,

Defendants, Appellants.

No. 89-1026.

United States Court of Appeals, First Circuit.

Heard Sept. 12, 1989.

Decided June 21, 1990.

Carlos Del Valle with whom Hector Rivera Cruz, Secretary of Justice, Rafael Ortiz Carrion, Sol. Gen., and Ramirez & Ramirez, Hato Rey, P.R., were on brief for defendants, appellants.

David W. Ogden with whom Donald B. Verrilli, Jr., Bruce J. Ennis, Jenner & Block, Washington, D.C., Maria Emilia Pico and Rexach & Pico, Santurce, P.R., were on brief, for plaintiffs, appellees.

Before BREYER, Circuit Judge, COFFIN and FAIRCHILD, ^* Senior Circuit Judges.

FAIRCHILD, Senior Circuit Judge.

This is an appeal from a declaratory judgment and injunction entered by the district court. We borrow considerably from Judge Pieras' thorough opinion, published at 698 F.Supp. 401 (D. Puerto Rico 1988).

I. Introduction

These facts are undisputed: Cable operating companies, after securing monopoly franchises from local authorities, provide the channels and hardware over which cable programming is transmitted. In order to encourage programming diversity, which might otherwise be stifled by the cable operator's monopoly, the Cable Communications Policy Act of 1984, Pub.L. No. 98-549, 98 Stat. 2780, 47 U.S.C. Sec. 521, et seq. (the Cable Act), requires cable operators which provide thirty-six or more activated channels to designate a percentage of those channels for commercial use by persons unaffiliated with the operator. 47 U.S.C. Sec. 532. ¹ When a cable programmer requests access to channel capacity, and capacity so designated is available, the cable operator must provide it, subject to the cable operator's right to set a reasonable price, and reasonable terms and conditions of use of the channel (sometimes called a "leased access channel"). The operator may not exercise any editorial control over the programmer's choice of material. Sec. 532(b)-(e). In exchange for the loss of editorial control, Congress relieved cable operators of potential criminal and civil liability for the content of transmissions carried over these channels, including liability for transmissions of obscenity. 47 U.S.C. Sec. 558. See H.R.Rep. 934, 98th Cong., 2d Sess. 95 (House Report No. 84-934), 1984 U.S.Code Cong. & Admin.News 4655, 4732. ²

Puerto Rican law criminalizes the transmission or retransmission of obscene programming over cable television. P.R. Laws Ann. tit. 33, Secs. 4074(a) & (c); 4079a, as amended. The Commonwealth's cable television franchising authority, defendant Public Service Commission of Puerto Rico (the Commission), adopted in a document called "Agreement Number 2" the statutory definition of obscenity and the prohibition of obscene cable transmissions, and enumerated sanctions for violations by cable operating companies. The sanctions include fines and suspension or revocation of franchise licenses. 698 F.Supp. at 402-03.

In late March, 1987, defendant Angel E. Rosa, a prosecutor of Puerto Rico's Department of Justice, notified individual cable operating companies around the Commonwealth that he was preparing to file criminal obscenity charges against them for transmitting the Playboy Channel over their systems. By July, all cable operators except Teleponce, Inc., had stopped transmitting the Playboy Channel. 698 F.Supp. at 403; Supplemental Appendix (SA) at 91.

Playboy Enterprises, Inc. (PEI), through a wholly-owned subsidiary, distributes the Playboy Channel to cable operating companies. The Puerto Rico Cable Television Association (the Cable Association) is an unincorporated trade association representing a group of Puerto Rican cable operating companies. Both sued the defendants under 42 U.S.C. Sec. 1983, alleging that the Commonwealth's obscenity statute, the Commission's Agreement Number 2, and the Justice Department's threatened prosecutions all violated the First Amendment. They also alleged that any prosecution of the cable operators for obscenity was precluded by the Cable Act. ³

The district court entered an agreed order on June 3, 1987. Under this order, the defendants were temporarily enjoined from prosecuting, during the pendency of this suit, any member of the Cable Association for any Playboy Channel transmissions. The defendants were also permanently enjoined from

(a) imposing any administrative sanctions against cable operator members of the Cable Association based upon any transmissions of the Playboy Channel, except that the Commission remained free to enact and enforce new regulations, consistent with the Constitution, concerning obscene cable transmission (leaving the Cable Association members a thirty-day window to challenge the regulations in court before they are enforced against them);

(b) threatening to prosecute members of the Cable Association for any programming carried on the Playboy Channel, or taking any adverse actions against the members in reprisal for the exercise of their First Amendment rights;

(c) prosecuting or sanctioning in any way members of the Cable Association or any other person or entity for past programming on the Playboy Channel;

(d) interfering with any programming carried on the Playboy Channel by intimidating or putting coercive pressure on members of the Cable Association.

The order left the Secretary of Justice free to prosecute PEI for obscenity based on its distribution of the Playboy Channel, and free to prosecute cable operators for future transmissions of the Playboy Channel. 698 F.Supp. at 404-05. The plaintiffs' damage claims against the other defendants were "held in abeyance during the pendency of the equitable claims," by agreement of the parties and the court. 698 F.Supp. at 403. The plaintiffs also dropped their challenge to the constitutionality of Puerto Rico's obscenity statute, and agreed to the dismissal of the Commission as a party, leaving only the individual defendants. Addendum C to Appellants' Brief. The parties then each moved for summary judgment on the sole question of whether the federal Cable Act precludes local prosecution of the Puerto Rican cable operators for obscenity.

In an opinion and order dated October 31, 1988, Judge Pieras declared that one member of the Cable Association, the operating company Teleponce, Inc., carries the Playboy Channel on a channel obtained by PEI pursuant to 47 U.S.C. Sec. 532. The court declared that prosecution of Teleponce for transmitting the Playboy Channel is prevented by Sec. 558. The court also declared that should other members of the Cable Association likewise designate channel capacity under Sec. 532, they would similarly be free from criminal and civil liability. The court then enjoined the defendants from initiating any prosecution against any member of the Cable Association based upon any video programming carried on the Playboy Channel. 698 F.Supp. at 419 From this order, the defendants appeal. ⁴

The defendants do not challenge the district court's bedrock legal holding: that 47 U.S.C. Sec. 558 precludes local prosecution of a cable operator for obscenity, based on programming transmitted by that operator over a channel obtained under Sec. 532 or under similar arrangements. The defendants raise a host of preliminary issues, of which we address four, relying on Judge Pieras' fine opinion as adequate answer to the rest. Three issues are related: whether federal question jurisdiction exists over this suit, whether a private cause of action is available, and whether the plaintiffs have standing to bring this action. The defendants also challenge the district court's consideration on summary judgment of certain evidence that Teleponce had agreed to transmit the Playboy Channel on a channel obtained under Sec. 532 or similar arrangement.

II. Subject Matter Jurisdiction ⁵

The plaintiffs state that the district court had subject matter jurisdiction under 28 U.S.C. Secs. 1331 and 1343. It seems clear that jurisdiction is not available under Secs. 1343(a)(3) and (4), the only provisions of Sec. 1343 which might apply. These provisions do not provide jurisdiction for a Sec. 1983 action asserting the preemption of state law by federal statute, when the preempting federal law is not one providing for equal rights or the protection of civil rights. Chapman v. Houston Welfare Rights Org., 441 U.S. 600, 612-20, 99 S.Ct. 1905, 1913-17, 60 L.Ed.2d 508 (1979). The Cable Act probably does not qualify as a civil rights law. However, because Congress has eliminated the minimum amount in controversy requirement from the general federal question jurisdiction provision (Sec. 1331), there is no need to pursue an independent inquiry of the scope of Sec. 1343. See P. Bator, D. Meltzer, P. Mishkin, and D. Shapiro, Hart and Wechsler's The Federal Courts and the Federal System 1241 (3d ed. 1989) ("Hart and Wechsler's").

The defendants label the plaintiffs' suit an inappropriate attempt "to use the declaratory judgment mechanism as a defensive preemptive strike," citing, among other cases, Public Serv. Comm'n v. Wycoff Co., 344 U.S. 237, 73 S.Ct. 236, 97 L.Ed. 291 (1952). Although the defendants do not call it such, we consider this a challenge to the existence of federal question jurisdiction. The relevant language from Wycoff reads

Where the complaint in an action for declaratory judgment seeks in essence to assert a defense to an impending or threatened state court action, it is the character of the threatened action, and not the defense, which will determine whether there is federal-question jurisdiction in the District Court. If the cause of action, which the declaratory defendant threatens to assert, does not itself involve a claim under federal law, it is doubtful if a federal court may entertain an action for a declaratory judgment establishing a defense to that claim. This is dubious even though the declaratory complaint sets forth a...